Audit Deck 4 (Audit Procedures, Financial Ratios)

Question 1

What is the acronym for audit procedures to collect audit evidence?

Answer 1

C FIVE CARROT WARS

Question 2

What procedure does the C stand for C FIVE CARROT WARS?

Answer 2

Confirmation

Question 3

What procedures are a part of the FIVE in C FIVE CARROT WARS?

Answer 3

FOOTING, Cross-Footing, and Recalculation
INQUIRY
VOUCHING
EXAMINATION/Inspection

Question 4

What procedures are a part of the CARROT in C FIVE CARROT WARS?

Answer 4

CUTOFF Review
ANALYTICAL Procedures
REPERFORMANCE
RECONCILIATION
OBSERVATION
TRACING

Question 5

What procedures are a part of the WARS in C FIVE CARROT WARS?

Answer 5

WALK-THROUGH
AUDITING Related Accounts Simultaneously
REPRESENTATION Letter
SUBSEQUENT Events Review

Question 6

Accounts receivable turnover = Sales (net) / ______

Answer 6

Average Accounts Receivable (net)

Question 7

Days Sales in Accounts Receivable = Ending Accounts Receivable (net) / ( _______ / 365)

Answer 7

Sales (net)

Question 8

Days in Inventory = Ending Inventory / ( ______ / 365)

Answer 8

COGS

Question 9

Accounts Payable Turnover = COGS / ________

Answer 9

Average Accounts Payable

Question 10

Days of Payables Outstanding = Ending Accounts Payable / ( ______ / 365)

Answer 10

COGS

Question 11

CASH CONVERSION CYCLE = Days sales in accounts recievable + Days in Inventory - ____________

Answer 11

Days of Payables Outstanding

Question 12

Asset Turnover = Sales (net) / ___________

Answer 12

Average Total Assets

Question 13

Profit Margin = _______ / Sales(net)

Answer 13

Net Income

Question 14

Return on Assets = Net Income / _________

Answer 14

Average Total Assets

Question 15

Return on Sales = Income before interest income, interest expense, and taxes / ________

Answer 15

Sales (net)

Question 16

Return on Equity = Net Income / __________

Answer 16

Average Total Equity

Question 17

Gross (profit) margin = (Sales (net) - _______ ) / Sales (net)

Answer 17

COGS

Question 18

Operating Cash Flow Ratio = Cash Flow from Operations / _________

Answer 18

Ending Current Liabilities

Question 19

Basic Earnings per Share = Income available to common shareholders / weighted average _______ shares outstanding

Answer 19

Common

Question 20

Price-earnings ratio = Price per share / ______________

Answer 20

Basic Earnings per share

Question 21

Dividend Payout = Cash Dividends / ________

Answer 21

Net Income

Question 22

Debt to Equity = _________ / Total Equity

Answer 22

Total Liabilities

Question 23

Total Debt Ratio = Total Liabilities / ___________

Answer 23

Total Assets

Question 24

Equity Multiplier = _______ / Total Equity

Answer 24

Total Assets

Question 25

Times interest earned = Income before Interest expenses and taxes / ________

Answer 25

Interest Expense