McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
| 1. |
Auditing refers to |
| A. | Preparation and checking of account |
| B. | Examination of accounts of business units only |
| C. | Examination of accounts of professional accountants |
| D. | Checking of vouchers |
| Answer» C. Examination of accounts of professional accountants | |
| 2. |
Main object of auditing is |
| A. | Detection of errors |
| B. | To find out whether P&L a/c & B/S show true and fair state affairs |
| C. | Detection of frauds |
| D. | Detection and prevention of frauds and errors. |
| Answer» B. To find out whether P&L a/c & B/S show true and fair state affairs | |
| 3. |
Auditing is luxury for a |
| A. | Joint stock company |
| B. | Partnership firm |
| C. | Small shop-keeper |
| D. | Government company |
| Answer» C. Small shop-keeper | |
| 4. |
Auditing is compulsory for |
| A. | Small scale business enterprises |
| B. | All partnership firms |
| C. | All joint stock companies |
| D. | All proprietary concerns |
| Answer» C. All joint stock companies | |
| 5. |
Propriety audit refers to |
| A. | Verification of accounts |
| B. | Examination accounts of propriety concerns |
| C. | Enquiry against justification and necessity of expresses |
| D. | Audit of Govt. companies |
| Answer» C. Enquiry against justification and necessity of expresses | |
| 6. |
Propriety is normally undertaken in case of |
| A. | Joint stock company |
| B. | Government company |
| C. | Statutory corporation |
| D. | Govt. departments |
| Answer» D. Govt. departments | |
| 7. |
Interim audit refers to |
| A. | Examination of accounts continuously |
| B. | Examination of accounts intermittently |
| C. | Audit work to find out and check interim profits of a company |
| D. | Carrying on audit for bonus purposes at the end of the year |
| Answer» C. Audit work to find out and check interim profits of a company | |
| 8. |
Final audit implies |
| A. | Audit of accounts at the end of the year |
| B. | Finally checking of accounts to reveal frauds |
| C. | Audit for submitting report immediately at the end of the year |
| D. | Audit of banking companies |
| Answer» A. Audit of accounts at the end of the year | |
| 9. |
A continuous audit is specially needed for |
| A. | Any trading concern |
| B. | Smaller concerns |
| C. | Banking companies |
| D. | Any manufacturing companies |
| Answer» C. Banking companies | |
| 10. |
Joint audit implies |
| A. | Audit of two concerns together |
| B. | Audit of joint stock companies |
| C. | Audit of joint sector companies |
| D. | Audit by two firms of C.A |
| Answer» D. Audit by two firms of C.A | |
| 11. |
Management audit means |
| A. | Audit undertaken on behalf of the management |
| B. | Evaluating performance of various management processes and functions |
| C. | Audit undertaken on behalf of Govt. to punish management |
| D. | Compulsory audit |
| Answer» B. Evaluating performance of various management processes and functions | |
| 12. |
Systems audit implies |
| A. | Systematic examination of accounts |
| B. | Audit undertaken to improve auditing systems |
| C. | Enquiring accounting and control systems |
| D. | Checking the performance of management |
| Answer» C. Enquiring accounting and control systems | |
| 13. |
Internal audit means |
| A. | Audit undertaken to ascertain truth and fairness of state of affairs |
| B. | Audit undertaken internally to evaluate management functions |
| C. | Audit undertaken by employees of the organization to check financial irregularities |
| D. | Audit by independent auditor to improve internal affairs |
| Answer» C. Audit undertaken by employees of the organization to check financial irregularities | |
| 14. |
Internal audit is |
| A. | Compulsory for a company with paid-up capital of Rs. 25 lakh and above |
| B. | Voluntary for a company |
| C. | Not necessary for a company |
| D. | Necessary for a company |
| Answer» B. Voluntary for a company | |
| 15. |
Internal audit is undertaken |
| A. | By independent auditor |
| B. | Statutorily appointed auditor |
| C. | By a person appointed by the management |
| D. | By Government auditor |
| Answer» C. By a person appointed by the management | |
| 16. |
Internal auditor is appointed by the |
| A. | Management |
| B. | Shareholders |
| C. | Government |
| D. | C & A-G |
| Answer» A. Management | |
| 17. |
The object of internal check is to |
| A. | Control wastage of resources |
| B. | Prevent errors and frauds |
| C. | Verify the cash receipts and payments |
| D. | Facilitate quick decision by the management |
| Answer» B. Prevent errors and frauds | |
| 18. |
Effective internal check system reduces |
| A. | The liability of auditor |
| B. | Work of auditor |
| C. | Both work as well as auditor |
| D. | Responsibilities of an auditor |
| Answer» B. Work of auditor | |
| 19. |
Internal check is a part of |
| A. | Internal audit |
| B. | Internal accounting |
| C. | External audit |
| D. | Internal control |
| Answer» D. Internal control | |
| 20. |
Internal check is carried on by |
| A. | Special staff |
| B. | Internal auditor |
| C. | Accountant |
| D. | None of the above |
| Answer» D. None of the above | |
| 21. |
Internal check is suitable for |
| A. | Larger concerns |
| B. | Smaller concerns |
| C. | Petty shop- keepers |
| D. | None of the above |
| Answer» A. Larger concerns | |
| 22. |
Internal check is carried on by |
| A. | Staff specially appointed for the purpose |
| B. | Internal auditor |
| C. | The members of the staff among themselves |
| D. | Supervisor of the staff |
| Answer» C. The members of the staff among themselves | |
| 23. |
Internal check is essential for |
| A. | Petty traders |
| B. | Cash transactions in a large concern |
| C. | A concern using automatic equipments |
| D. | None of the above |
| Answer» B. Cash transactions in a large concern | |
| 24. |
Misappropriation of goods may be checked by |
| A. | Proper supervision over stock |
| B. | Checking of employees |
| C. | Punishment of employees |
| D. | None of the above |
| Answer» A. Proper supervision over stock | |
| 25. |
Window dressing implies |
| A. | Curtailment of expenses |
| B. | Checking wastages |
| C. | Under- valuation of assets |
| D. | Over- valuation of assets |
| Answer» D. Over- valuation of assets | |
| 26. |
Falsification of accounts is undertaken by |
| A. | Auditors |
| B. | Clerks |
| C. | Accountants |
| D. | Responsible officials |
| Answer» D. Responsible officials | |
| 27. |
Errors of omission are |
| A. | Technical errors |
| B. | Error of principle |
| C. | Compensating errors |
| D. | None of the above |
| Answer» A. Technical errors | |
| 28. |
Test checking refers to |
| A. | Testing of accounting records |
| B. | Testing of honesty of employees |
| C. | Intensive checking of a selected number of transactions |
| D. | Checking of all transactions recorded |
| Answer» C. Intensive checking of a selected number of transactions | |
| 29. |
Test checking should not be applied to |
| A. | Sales book |
| B. | Purchase book |
| C. | Bank reconciliation statement |
| D. | Bills book |
| Answer» C. Bank reconciliation statement | |
| 30. |
Test checking should not be applied to |
| A. | Purchase book |
| B. | Sales book |
| C. | Stock book |
| D. | Cash book |
| Answer» D. Cash book | |
| 31. |
Vouching implies |
| A. | Inspection of receipts |
| B. | Examination of vouchers to check authenticity of records |
| C. | Surprise checking of accounting records |
| D. | Examining the various assets |
| Answer» B. Examination of vouchers to check authenticity of records | |
| 32. |
Payment for goods purchased should be vouched with the help of |
| A. | Creditors statement |
| B. | Correspondence with suppliers |
| C. | Cash memos |
| D. | Ledger accounts |
| Answer» A. Creditors statement | |
| 33. |
Payment for wages should be vouched with the help of |
| A. | Piece work statement |
| B. | Wage sheets |
| C. | Minute book |
| D. | Bank pass book |
| Answer» B. Wage sheets | |
| 34. |
Payment for building purchased should be vouched with the help of |
| A. | Title deed |
| B. | Correspondence with Brokers |
| C. | Building account |
| D. | Cash book |
| Answer» A. Title deed | |
| 35. |
Investment should be vouched with the help of |
| A. | Commission book |
| B. | Brokers book |
| C. | Sales deeds |
| D. | Minute book |
| Answer» B. Brokers book | |
| 36. |
Receipt from debtors should be vouched with the help of |
| A. | Counterfoil Receipts cash book |
| B. | Suppliers statement |
| C. | Sales Deeds |
| D. | General Ledger |
| Answer» A. Counterfoil Receipts cash book | |
| 37. |
Receipt from sale of investment should be vouched with the help of |
| A. | Brokers Budget Notes |
| B. | Brokers Sold Notes |
| C. | Minute Book |
| D. | Inventory of investment |
| Answer» B. Brokers Sold Notes | |
| 38. |
Purchases returns should be vouched with the help of |
| A. | Bought Notes |
| B. | Credit Notes |
| C. | Goods inward Book |
| D. | Cash Book |
| Answer» B. Credit Notes | |
| 39. |
Verification refers to |
| A. | Examination of journal and ledger |
| B. | Examination of vouchers related to assets |
| C. | Examining the physical existence and valuation of assets |
| D. | Calculation of value of assets |
| Answer» C. Examining the physical existence and valuation of assets | |
| 40. |
Object of verification of assets |
| A. | Physical verification of assets |
| B. | Checking value of assets |
| C. | Examining the authority of their acquisition |
| D. | All of the above |
| Answer» D. All of the above | |
| 41. |
Which of the following statements is correct? |
| A. | Valuation is a part of verification |
| B. | Verification is a part of valuation |
| C. | Valuation has nothing to do with verification |
| D. | Auditor is a valuer |
| Answer» A. Valuation is a part of verification | |
| 42. |
Stock should be valued at |
| A. | Cost |
| B. | Market price |
| C. | Cost price or market price whichever is lower |
| D. | Cost less depreciation |
| Answer» C. Cost price or market price whichever is lower | |
| 43. |
Valuation of Fixed Assets is based on the concept |
| A. | Going concern |
| B. | Conservation |
| C. | Money measurement |
| D. | Dual aspect |
| Answer» A. Going concern | |
| 44. |
Valuation means |
| A. | Calculating value of assets |
| B. | Checking the value of assets |
| C. | Checking the physical existence of assets |
| D. | Examining the authenticity of assets |
| Answer» B. Checking the value of assets | |
| 45. |
“ Auditor is not valuer” was stated in |
| A. | Kingston Cotton Mills case |
| B. | London & General Bank case |
| C. | Lee . V . Neuchatel Co. Ltd case |
| D. | London oil Storage Co. case |
| Answer» A. Kingston Cotton Mills case | |
| 46. |
Fixed assets are valued at |
| A. | Cost |
| B. | Market price |
| C. | Cost price or market price whichever is less |
| D. | Cost less depreciation |
| Answer» D. Cost less depreciation | |
| 47. |
Floating assets are valued at |
| A. | Cost |
| B. | Market price |
| C. | Cost price or market price whichever is less |
| D. | Cost less depreciation |
| Answer» C. Cost price or market price whichever is less | |
| 48. |
The scope of work of internal audit is decided by the |
| A. | Share holders |
| B. | Management |
| C. | To improve financial control |
| D. | All of the above |
| Answer» D. All of the above | |
| 49. |
Outstanding expenses should be verified with the help of |
| A. | Cash book |
| B. | Balance book |
| C. | Journal proper |
| D. | None of the above |
| Answer» C. Journal proper | |
| 50. |
Book debts should be verified with the help of |
| A. | Balance sheet |
| B. | Amount received from Debtors |
| C. | Debtors schedule |
| D. | Certificate from the management |
| Answer» C. Debtors schedule | |
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