In Order to Assess If a Company Is a Going

question 62

Multiple Choice

In order to assess if a company is a going concern,the auditor can calculate which of the following ratios during the audit planning and compare with previous years and successful companies in the industry?

• A)debt to equity ratio.
• B)accounts receivable turnover ratio.
• C)percent of interest expense to sales.
• D)inventory turnover ratio.

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Definitions:

Carbon Dioxide

An invisible, scentless gas formed from the combustion of carbon-based substances and breathing.

Oxygen

A colorless, odorless reactive gas, the life-supporting component of the air.

Erythropoiesis

The process by which red blood cells (erythrocytes) are produced, which occurs in the bone marrow.

Erythropoietin

A hormone produced primarily by the kidneys that stimulates the production of red blood cells in response to low oxygen levels in tissues.