To Measure How Effectively an Entity Employs Its Resources, an Auditor

question 306

Multiple Choice

To measure how effectively an entity employs its resources, an auditor calculates inventory turnover by dividing average inventory into:

• A) Net sales.
• B) Cost of goods sold.
• C) Operating income.
• D) Gross sales.

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Definitions:

Stem-and-Leaf Display

A method of displaying quantitative data to show its distribution by dividing each value into a "stem" (the leading digits) and a "leaf" (the last digit).

Diastolic Blood Pressures

The pressure in the arteries when the heart rests between beats, indicative of cardiovascular health and used in diagnosing hypertension.

Mm Hg

Millimeters of mercury; a unit of pressure commonly used in medicine and meteorology to measure blood pressure and atmospheric pressure, respectively.

Uniform

Characterized by being the same in all situations, without variation or diversity in detail or condition.