MCQOPTIONS
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MCQOPTIONS
This section includes 52 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Commerce (B Com) knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Professional judgment means a judgment taken by the auditor out of his ______ in an audit situation |
| A. | Past experience. |
| B. | Relation with the management |
| C. | Professional experience. |
| D. | Work experience. |
| Answer» D. Work experience. | |
| 2. |
Goods sent on approval basis have been recorded as Credit sales . This is an example of .. |
| A. | Error of principle. |
| B. | Error of commission. |
| C. | Error of omission. |
| D. | Error of duplication. |
| Answer» B. Error of commission. | |
| 3. |
State Government pays commission of Rs.20, 000/- to one of its agent on sale of Lottery Tickets. |
| A. | TDS is required to be made @ 5% on any amount paid as commission for sale of lottery tickets |
| B. | TDS is required to be made @ 5% if commission to a single person in a F.Y. exceeds 15,000/- |
| C. | TDS is required to be made @ 5% if commission to a single person in a F.Y. exceeds 30,000/- |
| D. | TDS shall not be deducted as payment is made by State Government |
| Answer» C. TDS is required to be made @ 5% if commission to a single person in a F.Y. exceeds 30,000/- | |
| 4. |
When the auditor is an employee of the organization being audited, the audit is classified as _____ |
| A. | Internal |
| B. | External |
| C. | Compliance |
| D. | Both A&B |
| Answer» B. External | |
| 5. |
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» D. Paid- up capital account | |
| 6. |
is the specific guidelines and directions for efficient and effective completion of the audit work on timely and daily basis, so as to minimise audit risk. |
| A. | Audit planning |
| B. | Audit report |
| C. | Audit programme |
| D. | Audit certificate |
| Answer» B. Audit report | |
| 7. |
Which of the following statements is, generally, correct about the reliability of audit evidence? |
| A. | To be reliable, evidence should conclusive rather than persuasive |
| B. | Effective internal control system provides reliable audit evidence |
| C. | Evidence obtained from outside sources routed through the client |
| D. | All of the Above. |
| Answer» D. All of the Above. | |
| 8. |
An auditor who accepts an audit but does not possess the industry expertise of the business entity should |
| A. | engage experts |
| B. | obtain knowledge of matters that relate to the nature of entity s business |
| C. | inform management about it |
| D. | take help of other auditors. |
| Answer» B. obtain knowledge of matters that relate to the nature of entity s business | |
| 9. |
Taxpayers opting for presumptive taxation scheme of Section 44AD are required to pay up to of advance tax by 15th June? |
| A. | 15% |
| B. | 45% |
| C. | 75% |
| D. | Nil |
| Answer» B. 45% | |
| 10. |
Calculate the Gross Annual value from the following details: Municipal Value - Rs. 45,000 Fair rental value - Rs. 50,000 Standard rent - Rs. 48,000 Actual Rent - Rs. 42,000 |
| A. | Rs. 50,000 |
| B. | Rs. 48,000 |
| C. | Rs. 45,000 |
| D. | Rs. 42,000 |
| Answer» C. Rs. 45,000 | |
| 11. |
Mr. DS during the previous year 2018-19 made a payment outside India to a nonresident on which TDS was not paid upto time allowed under section 200. However, such TDS was deducted and paid on 30th September 2019. When shall deduction of this expenditure be allowed to assessee? |
| A. | Previous Year 2018-19 |
| B. | Previous Year 2019-20 |
| C. | Previous Year 2017-18 |
| D. | Not allowed deduction |
| Answer» B. Previous Year 2019-20 | |
| 12. |
The auditor s _________ safeguards the auditor s ability to form an audit opinion without being affected by any influences. |
| A. | Objectivity. |
| B. | Independence. |
| C. | Confidentiality. |
| D. | Integrity. |
| Answer» E. | |
| 13. |
The house rent allowance (HRA) under the salary head of Income Tax Act is given by_____________. |
| A. | Section 10 |
| B. | Section 10(13A) |
| C. | Section11(13B) |
| D. | Section11 |
| Answer» C. Section11(13B) | |
| 14. |
Under the Head Income from House Property, the basis of charge is the ______________ of property. |
| A. | Annual value |
| B. | Quarterly value |
| C. | Half-quarterly value |
| D. | None of the above |
| Answer» B. Quarterly value | |
| 15. |
The return of income can be filed with the Income-tax Department in electronic mode only. |
| A. | True |
| B. | False |
| Answer» B. False | |
| 16. |
Contribution was made by PFI towards Credit Guarantee Fund Trust. Such expenditure shall be considered as: |
| A. | Revenue expenditure |
| B. | Capital expenditure |
| C. | Deferred revenue expenditure |
| D. | Illegal expenditure |
| Answer» B. Capital expenditure | |
| 17. |
An assessee incurred expense of tax on non monetary perquisites of employees. Such expenditure shall be considered as: |
| A. | Revenue expenditure |
| B. | Deferred revenue |
| C. | Capital expenditure |
| D. | Expressly disallowed |
| Answer» E. | |
| 18. |
As per the requirements of section 226(3) and 226(4) a person is disqualified from being appointed as a statutory auditor if he holds |
| A. | Equity shares or debentures of the company. |
| B. | Equity shares carrying voting of the company. |
| C. | Shares carrying voting rights of the company. |
| D. | Security carrying voting rights of the company. |
| Answer» E. | |
| 19. |
An appeal to the Commissioner of Income-tax (Appeals) shall be filed in Form No. ________. |
| A. | 35 |
| B. | 36 |
| C. | 34C |
| D. | 35B |
| Answer» B. 36 | |
| 20. |
Who is responsible for the appointment of statutory auditor of a limited company ? |
| A. | Directors of the company. |
| B. | Members of the company. |
| C. | The Central Government. |
| D. | All of the above. |
| Answer» C. The Central Government. | |
| 21. |
Under the Income Tax Act, 1961, depreciation on machinery is charged on _______________. |
| A. | Purchase price of the machinery |
| B. | Written down value of the machinery |
| C. | Market price of the machinery |
| D. | All of the above |
| Answer» C. Market price of the machinery | |
| 22. |
Under Section 15 of Income Tax Act, the salary due in previous years and even if it is not received is _______________. |
| A. | Taxable |
| B. | Not taxable |
| C. | Partially taxable |
| D. | None of the above |
| Answer» C. Partially taxable | |
| 23. |
The death-cum-retirement gratuity received by the Government Employee or employee of local authority is _______________. |
| A. | Partially exempted |
| B. | Fully exempted |
| C. | Half taxable |
| D. | None of the above |
| Answer» C. Half taxable | |
| 24. |
Rent Free Accommodation given to an employee by the employer is a ____________. |
| A. | Allowance |
| B. | Perquisite |
| C. | Profit in lieu of salary |
| D. | None of the above |
| Answer» C. Profit in lieu of salary | |
| 25. |
For computation of Gross Annual Value, if actual rent is more than expected rent, then we select the ______________. |
| A. | Actual rent |
| B. | Expected rent |
| C. | Any of the above |
| D. | None of the above |
| Answer» B. Expected rent | |
| 26. |
ITAT all decisions are taken by majority of member s, if the Members are equally divided then the final vote will have of |
| A. | President |
| B. | Chairman |
| C. | Assessing officer |
| D. | Majority Of member |
| Answer» B. Chairman | |
| 27. |
The quality of information generated by the audited organization is directly related to the strength of the organization s ______ |
| A. | Internal check |
| B. | Internal control |
| C. | Internal audit |
| D. | All of the above |
| Answer» E. | |
| 28. |
E-filing of return in case of an office of the Government/company and a firm whose accounts are liable to be audited is: |
| A. | mandatory |
| B. | optional |
| C. | mandatory when its income exceeds Rs. `5,00,000 |
| D. | mandatory when its income exceeds Rs. 10,00,00 |
| Answer» B. optional | |
| 29. |
For ITAT special powers of stay is available and stay will automatically Get vacated if matter is not decided in time of. |
| A. | 6 months |
| B. | 9 months |
| C. | 12 months |
| D. | 18 months |
| Answer» B. 9 months | |
| 30. |
The auditor has to obtain _______ to substantiate his opinion on the financial statements. |
| A. | Internal evidence |
| B. | External evidence |
| C. | Internal and external evidence |
| D. | Sufficient and appropriate evidence |
| Answer» E. | |
| 31. |
.is the medium through which an auditor expresses his opinion on the state of affairs of the client s business. |
| A. | Audit report |
| B. | Audit certificate |
| C. | Audit programme |
| D. | Audit planning |
| Answer» B. Audit certificate | |
| 32. |
. is the examination of all documentary evidence which are available to support the authenticity of transactions entered in the client s records. |
| A. | Accounting |
| B. | Vouching |
| C. | Internal check |
| D. | None of the above |
| Answer» C. Internal check | |
| 33. |
Section ________ specifies the orders against which an appeal can be filed before the Commissioner of Income tax (Appeals). |
| A. | 246A |
| B. | 260A |
| C. | 253 |
| D. | 261 |
| Answer» B. 260A | |
| 34. |
When a transaction has not been recorded in the books of account either wholly or partially such errors are called _______. |
| A. | Error of commission |
| B. | Error of omission |
| C. | Compensating error |
| D. | None of the above |
| Answer» C. Compensating error | |
| 35. |
Income by way of royalty in respect of a patent developed and registered in India in respect of person who is resident in India is chargeable to tax at rate of - |
| A. | 10% |
| B. | 15% |
| C. | 20% |
| D. | 30% |
| Answer» E. | |
| 36. |
All companies other than those covered u/s 25 are required to file return of Income in: |
| A. | Form ITR6 |
| B. | Form ITR5 |
| C. | Form ITR4 |
| D. | Form ITR7 |
| Answer» B. Form ITR5 | |
| 37. |
Income chargeable under the head Profits and Gains from Business or Profession is covered under _______________. |
| A. | Section 23 |
| B. | Section 24 |
| C. | Section 28 |
| D. | Section 27 |
| Answer» D. Section 27 | |
| 38. |
Rental income from the business of leasing out properties would be taxable under the head_______ |
| A. | Income from house property |
| B. | Income from other sources |
| C. | Income from PGBP |
| D. | Income from Capital gain |
| Answer» D. Income from Capital gain | |
| 39. |
The salary, remuneration or compensation received by the partners is taxable under the head _______________. |
| A. | Income from Other Sources |
| B. | Income from Business |
| C. | Salary |
| D. | None of the above |
| Answer» C. Salary | |
| 40. |
Sole proprietary concerns are ______ to get their financial statements audited by independent financial auditors. |
| A. | Legally required |
| B. | Not legally required |
| C. | Ethically required |
| D. | Not ethically required |
| Answer» C. Ethically required | |
| 41. |
In case the Key man insurance policy is taken in name of any other person any sum received on its maturity by such person shall be taxable under the head - |
| A. | Salaries |
| B. | Profits & Gains of Business or Profession |
| C. | Capital Gains |
| D. | Income from Other Sources |
| Answer» E. | |
| 42. |
In case the directions fail to appoint first auditor (s), the shareholders shall appoint them at ..by passing a resolution |
| A. | a general meeting. |
| B. | first annual general meeting. |
| C. | statutory meeting. |
| D. | annual general meeting. |
| Answer» B. first annual general meeting. | |
| 43. |
For an employee in receipt of hostel expenditure allowance for his three children, the maximum annual allowance exempt under section 10(14) is |
| A. | Rs.10, 800 |
| B. | Rs.7,200 |
| C. | Rs.9,600 |
| D. | Rs.3,600 |
| Answer» C. Rs.9,600 | |
| 44. |
_______ are the documents prepared or obtained by the auditors in connection with the audit. |
| A. | Audit notes |
| B. | Audit working papers |
| C. | Audit report |
| D. | All of the above |
| Answer» E. | |
| 45. |
An assessee incurred a sum of Rs.1,10,000 for alteration of the memorandum and articles of association. Such expenditure shall be considered as: |
| A. | Revenue expenditure |
| B. | Deferred revenue expenditure |
| C. | Capital expenditure |
| D. | Non-deductible expenditure |
| Answer» B. Deferred revenue expenditure | |
| 46. |
The term of the auditor ship of first auditor would be from the date of appointment till . |
| A. | the conclusion of statutory meeting. |
| B. | the conclusion of first annual general meeting. |
| C. | the conclusion of next annual general meeting. |
| D. | the date of removal. |
| Answer» C. the conclusion of next annual general meeting. | |
| 47. |
Challan No . is used by all categories of tax payers for payment of income tax. |
| A. | Challan no.280 |
| B. | Challan no.282 |
| C. | Challan no.281 |
| D. | Challan no.281(A) |
| Answer» B. Challan no.282 | |
| 48. |
While framing an audit plan auditor should ascertain his _____ cast by various legislations on him. |
| A. | Limitations |
| B. | Duties and obligations |
| C. | Rights and powers |
| D. | Term of appointment & responsibilities |
| Answer» E. | |
| 49. |
An individual needs to pay Rs. 1,00,000 as advance tax. By 15th of December, how much amount must be paid by the individual: |
| A. | Rs. 30,000 |
| B. | Rs. 60,000 |
| C. | Rs. 1,00,000 |
| D. | Nil |
| Answer» C. Rs. 1,00,000 | |
| 50. |
An audit programme is a set of _______ which are to be followed for proper execution of audit. |
| A. | Rules |
| B. | Policies |
| C. | Instructions |
| D. | Actions |
| Answer» D. Actions | |