The formula to calculate quick ratio is:
A. Quick ratio = (Credit + Securities + Receivables) / Current liabilities
B. Quick ratio = (Cash + Securities + Payables) / Final liabilities
C. Quick ratio = (Credit + Securities + Payables) / Final liabilities
D. Quick ratio = (Cash + Securities + Receivables) / Current liabilities
The receivable turnover can be calculated by which of the following formula:
A. Receivable turnover = Net Sales on Account / Average Net Receivables
B. Receivable turnover = Gross Sales on Account / Average Gross Receivables
C. Receivable turnover = Net Sales on Receivables / Average Net Account
D. Receivable turnover = Gross Sales on Receivables / Average Gross Account
A fraction analysis is a means of measuring the relationship between two different financial statement amounts.
A. True
B. False
A technique for analyzing the percentage change in individual financial statement items from one year to the next in known as:
A. Vertical analysis
B. Horizontal analysis
C. Fraction analysis
D. Ratio analysis
A technique for analyzing the relationships between the items on an income statement, balance sheet, or statement of cash flows by expressing components as percentages is called:
A. Vertical analysis
B. Horizontal analysis
C. Fraction analysis
D. Ratio analysis
Which of the following is NOT included in financial statement analysis?
A. Vertical analysis
B. Horizontal analysis
C. Fraction analysis
D. Ratio analysis
In identifying risks that may result in material misstatements sue to fraud, auditors should consider:
A. type of risk
B. significance of risk
C. pervasiveness of risk
D. All of the above
Judgments about the risk of material misstatement due to fraud have an overall effect on how the audit is concluded in what ways?
A. Assignment of personnel and supervision
B. Accounting principles
C. Predictability of auditing procedures
D. All of the above
Which type of misstatements are considered relevant fro audit purpose?
A. Misstatements arising from fraudulent financial reporting
B. Misstatements arising from misappropriation of assets
C. Both A and B
D. Neither A nor B
Which of the following is NOT the scheme of fixed assets that are subject to manipulation?
A. Related party transactions
B. Booking fictitious assets
C. Misrepresentation asset valuation
D. Improperly capitalizing inventory and start-up costs
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