McqMate
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 |
51. |
Investments in hand should be verified with the help of |
A. | Schedule of investments |
B. | Balance sheet |
C. | Inspection of securities |
D. | Certificate from the bank |
Answer» C. Inspection of securities |
52. |
First auditor of a company is appointed by the |
A. | Shareholders |
B. | Central Govt. |
C. | Company Law Board |
D. | Board of Directors |
Answer» D. Board of Directors |
53. |
Which of the following persons is qualified to be a company auditor? |
A. | An employee of the company |
B. | A body corporate |
C. | A person who is indebted to the company for an amount exceeding Rs. 1000 |
D. | A practicing chartered accountant |
Answer» D. A practicing chartered accountant |
54. |
The first auditor of a company will hold office |
A. | For a period of one year |
B. | Till holding of statutory meeting |
C. | Till the conclusion of first annual general meeting |
D. | Till a new auditor is appointed |
Answer» C. Till the conclusion of first annual general meeting |
55. |
Normally, a company auditor is appointed by the |
A. | Central Government |
B. | Shareholders |
C. | Board of Directors |
D. | Company Law board |
Answer» B. Shareholders |
56. |
An auditor in a casual vacancy is appointed by the |
A. | Board of Directors |
B. | Shareholders |
C. | Central Government |
D. | Company Law board |
Answer» A. Board of Directors |
57. |
If an auditor is not appointed at annual general meeting, he is appointed by the |
A. | The Central Government |
B. | Board of Directors |
C. | Shareholders |
D. | Company Law board |
Answer» A. The Central Government |
58. |
A vacancy caused by resignation of the auditor is filled by |
A. | Board of Directors |
B. | At the general meeting of shareholders |
C. | By the Central Government |
D. | By the Company Law board |
Answer» B. At the general meeting of shareholders |
59. |
A special auditor is appointed by the |
A. | Shareholders |
B. | Board of Directors |
C. | Central Government |
D. | C & A - G |
Answer» C. Central Government |
60. |
A government Co. auditor may be appointed by the |
A. | C & A – G |
B. | Shareholders |
C. | Central Government |
D. | None of the above |
Answer» A. C & A – G |
61. |
A company auditor can be removed before expiry of his term by |
A. | Shareholders |
B. | Board of Directors |
C. | Central Government |
D. | State Government |
Answer» B. Board of Directors |
62. |
Remuneration of a company auditor is fixed by the |
A. | Shareholders |
B. | Board of Directors |
C. | Central Government |
D. | Appointing authority |
Answer» D. Appointing authority |
63. |
A company auditor, in general has to submit his report to |
A. | Shareholders |
B. | Board of Directors |
C. | Central Government |
D. | C & A – G |
Answer» A. Shareholders |
64. |
An auditor of Government company has to submit his report to the |
A. | Shareholders |
B. | Central Government |
C. | C & A – G |
D. | Ministry concerned |
Answer» B. Central Government |
65. |
Internal auditor has to submit report to |
A. | Shareholders |
B. | Government |
C. | Company Law board |
D. | None of the above |
Answer» D. None of the above |
66. |
Auditor should be dutiful like a |
A. | A watch dog |
B. | A blood hound |
C. | A detective |
D. | An insurer |
Answer» A. A watch dog |
67. |
Auditor, in general is an |
A. | Employee of the company |
B. | Agent of the company |
C. | Agent of the shareholders |
D. | None of the above |
Answer» C. Agent of the shareholders |
68. |
While checking allotment of shares the auditor should see that it is made within |
A. | 100 days of issue of prospectus |
B. | 120 days of issue of prospectus |
C. | 150 days of issue of prospectus |
D. | 80 days of issue of prospectus |
Answer» B. 120 days of issue of prospectus |
69. |
Which of the following percentage of nominal amount of shares should be received with application |
A. | 10 |
B. | 15 |
C. | 5 |
D. | 6 |
Answer» C. 5 |
70. |
While checking allotment, auditor should see that amount |
A. | Equal to estimated fixed capital is received |
B. | Equal to estimated working capital is received |
C. | Necessary for purchase of land & building has been received |
D. | None of the above |
Answer» D. None of the above |
71. |
For restriction regarding allotment of shares, the auditor should refer to section |
A. | 25 |
B. | 75 |
C. | 64 |
D. | 69 |
Answer» D. 69 |
72. |
For checking that allotment of shares has been properly made, an auditor should refer to |
A. | Cash Book |
B. | Shares Ledger |
C. | Directors minutes book |
D. | Shareholders minutes Book |
Answer» C. Directors minutes book |
73. |
Auditor should see that the return of allotment has been sent to Registrar within |
A. | 1 month |
B. | 2 months |
C. | 3 months |
D. | 40 days |
Answer» A. 1 month |
74. |
Application money should not be withdrawn unless |
A. | Allotment is made |
B. | Cash book has been prepared |
C. | Certificate to commence business obtained |
D. | Certificate of incorporation obtained |
Answer» C. Certificate to commence business obtained |
75. |
Shares issued for consideration other than cash should be vouched with the help of |
A. | Directors minutes book |
B. | Shareholders minutes book |
C. | Contract with the party concerned |
D. | Cash book |
Answer» C. Contract with the party concerned |
76. |
A company can issue Redeemable Preference shares, if authorized by |
A. | Memorandum of association |
B. | Articles of association |
C. | Companies Act, 1956 |
D. | None of the above |
Answer» B. Articles of association |
77. |
Auditor should see that amount received for premium on issue of shares should be shown in |
A. | Subscribed capital |
B. | Capital Reserve Account |
C. | Share Premium account |
D. | Paid- up capital account |
Answer» C. Share Premium account |
78. |
Share premium account should be shown in the Balance sheet under |
A. | Paid-up capital |
B. | Subscribed capital |
C. | Reserves & surplus |
D. | Reserved capital |
Answer» C. Reserves & surplus |
79. |
Amount of share premium may be utilized for |
A. | Payment of dividend |
B. | Writing of preliminary expenses |
C. | Routine expenses |
D. | Purchase of fixed assets |
Answer» B. Writing of preliminary expenses |
80. |
Shares can be issued at discount under section |
A. | 76 |
B. | 75 |
C. | 79 |
D. | 89 |
Answer» C. 79 |
81. |
Interest on calls paid in advance, according to Table A, should not exceed |
A. | 6% |
B. | 5% |
C. | 10% |
D. | 14% |
Answer» A. 6% |
82. |
Shares can be issued at premium, under section |
A. | 76 |
B. | 75 |
C. | 78 |
D. | 79 |
Answer» C. 78 |
83. |
A company can accept calls in advance from its shareholders under section |
A. | 82 |
B. | 79 |
C. | 92 |
D. | 78 |
Answer» C. 92 |
84. |
Shares can be issued at discount only after |
A. | 2 years of the commencement of the business |
B. | 1 year of the commencement of the business |
C. | 3 years of the commencement of the business |
D. | 5 years of the commencement of the business |
Answer» B. 1 year of the commencement of the business |
85. |
With regard to issue of share warrants to the bearers, the auditor should see that is it |
A. | Permitted by Memorandum of Association |
B. | Sanctioned by the Central Government |
C. | Permitted by the Board of Directors |
D. | None of the above |
Answer» B. Sanctioned by the Central Government |
86. |
For the for festure of shares, the auditor should check that it is permitted |
A. | by Memorandum of Association |
B. | by articles of association |
C. | under Companies Act, 1956 |
D. | None of the above |
Answer» B. by articles of association |
87. |
Premium received on issue of shares, later forfeited, should be transferred to |
A. | Capital reserve |
B. | Shares forfeited Account |
C. | Capital Account |
D. | None of the above |
Answer» D. None of the above |
88. |
With regard to issue of share certificates, the auditor should refer to section |
A. | 110 |
B. | 113 |
C. | 114 |
D. | 123 |
Answer» B. 113 |
89. |
Increase in share capital is permitted by |
A. | Memorandum of Association |
B. | Articles of association |
C. | Court |
D. | Companies Act, 1956 |
Answer» B. Articles of association |
90. |
Divisible profit should not include |
A. | Interest on capital |
B. | Capital |
C. | Depreciation |
D. | None of the above |
Answer» D. None of the above |
91. |
Dividend can not be paid out of |
A. | Capital profit |
B. | Capital receipts |
C. | Revenue receipts |
D. | None of the above |
Answer» B. Capital receipts |
92. |
Capital profit imply profit earned |
A. | Through business transaction |
B. | From capital |
C. | From sale of fixed assets |
D. | From sale of current assets |
Answer» C. From sale of fixed assets |
93. |
Capital profits |
A. | Can be paid by way of dividends |
B. | Cannot paid by way of dividends |
C. | Can be paid by way of dividend under certain conditions |
D. | None of the above |
Answer» C. Can be paid by way of dividend under certain conditions |
94. |
If there is capital loss, the auditor should |
A. | Not allow payment of dividend |
B. | Allow payment of dividends |
C. | Allow payment of dividends after making such losses good |
D. | None of the above |
Answer» B. Allow payment of dividends |
95. |
A company auditor should see that the dividend should be paid |
A. | After charging depreciation |
B. | Without charging depreciation |
C. | Out of capital |
D. | None of the above |
Answer» A. After charging depreciation |
96. |
In his report, the auditor gives his |
A. | Judgment |
B. | Opinion |
C. | Guarantee to correctness of accounts |
D. | True state of affairs |
Answer» B. Opinion |
97. |
Civil liability of an auditor implies liability for |
A. | Misappropriation of cash |
B. | Misappropriation of goods |
C. | Fraud |
D. | Misfeasance |
Answer» D. Misfeasance |
98. |
An auditor can be held liable under companies Act 1949 for |
A. | Negligence |
B. | Criminal offence |
C. | Professional misconduct |
D. | Breach of contract |
Answer» C. Professional misconduct |
99. |
Investigation of books of accounts and records is : |
A. | Not legally compulsory |
B. | Compulsory |
C. | Compulsory as per companies act |
D. | Compulsory as Income Tax Act |
Answer» A. Not legally compulsory |
100. |
Investigation is carries on behalf of |
A. | Manager |
B. | Employee |
C. | Client |
D. | On behalf of owner and third parties |
Answer» D. On behalf of owner and third parties |
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