Cisco
CompTIA
ISC
EC-Council
EXIN
Fortinet
ITIL
Juniper
Microsoft
VMware
Avaya
SAP
Google
NVIDIA
Salesforce
Amazon
Palo Alto Networks
ISC2
Splunk
ServiceNow
All Vendors
  2. Home
  3. Exams
  4. IIA
  5. CIA

IIA CIA Exam
Certified Internal Auditor Exam (Page 38 )

Updated On: 12-Jan-2026
Page 38 of 342
PDF with 1702 Questions

For the year just ended the entity has times-interest-earned of

  1. 3.375 times.
  2. 6.75 times.
  3. 7.75 times.
  4. 9.5 times.

Answer(s): C

Explanation:

The TIE ratio is a leverage ratio_ It emphasizes the ability to pay interest expense. The ratio equals profit before interest and taxes divided by interest


The market value of RST's ordinary stock at the end of Year 6 was US $100.00 per share.



A service entity's working capital at the beginning of January was 70, 000. The following transactions occurred during January.

What is the amount of working capital at the end of January?

  1. US $80, 500
  2. US $78, 500
  3. US $50, 500
  4. US $47, 500

Answer(s): A

Explanation:

Working capital is the excess of total current assets CA) over total current liabilities CL). Thus, working capital at the end of January equais US $80, 500 computed as follows.



The opening balance of ordinary shares was US $100, 000. The opening balance of ordinary earning was US $82, 500. The entity had 10, 000 ordinary shares outstanding all year. No dividends were paid during the year.



Based on 365 days per year. B. has days' sales outstanding to the nearest full day of

  1. 0 days
  2. 3 days
  3. 6 days
  4. 7 days

Answer(s): C

Explanation:

Days' sales of receivables days' sales outstanding) equals the days in the year divided by the receivables turnover ratio net credit sales - average accounts receivable). Assuming sales are net credit sales and that ending accounts receivable equals average accounts receivable, the turnover ratio is 58 US $5, 800 - $100), and the days' sales of receivables equals 6 days 365 - 58) rounded).



At year-end, the entity has a book value per share of

  1. US $10.00
  2. US $15.00
  3. US $21.63
  4. US $25.00

Answer(s): D

Explanation:

Book value per share based, on balance sheet amounts, measures the per share amount
that would be received if the entry were liquidated. The ratio is calculated as ordinary equity divided by the number of outstanding shares.



The opening balance of ordinary shares was US $100, 000. The opening balance of ordinary earning was US $82, 500. The entity had 10, 000 ordinary shares outstanding all year. No dividends were paid during the year.



Participating preference shareholders are entitled to

  1. Monitor any sinking funds for the purchase and retirement of debt.
  2. Vote at all annual meetings.
  3. Convert their shares into ordinary shares.
  4. Share in the entity's earnings beyond the stated dividend level.

Answer(s): D

Explanation:

Participating preference shareholders are entitled to share in the earnings of the entity. They participate in earnings distributions under set terms and conditions. Hence, after the
stated preference dividend is paid, and ordinary shareholders receive an equal dividend, any remaining dividends are allocated to all shareholders in proportion to the par values of their shares.



Viewing page 38 of 342
Viewing questions 186 - 190 out of 1702 questions



Post your Comments and Discuss IIA CIA exam prep with other Community members:

Join the CIA Discussion