267 + Mcqs in Auditing Page 4 McqOptions

151.	A number of checks and controls exercised in a business to ensure its efficient workingare known as ________.
A.	Internal Check
B.	Internal Control
C.	Internal Audit
D.	Interim Check
Answer» C. Internal Audit

Discussion

152.	This kind of audit is conducted generally between two annual audit ______.
A.	Internal Audit
B.	Interim audit
C.	Final Audit
D.	Continuous Audit
Answer» C. Final Audit

Discussion

153.	Management audit otherwise called as _______.
A.	Final audit
B.	Efficiency Audit
C.	Cost Audit
D.	Cash audit
Answer» C. Cost Audit

Discussion

154.	Before the work of audit is commenced, the auditor plans out the whole of audit work iscalled _________.
A.	Audit Plan
B.	Audit Note
C.	Audit Programme
D.	Audit Control
Answer» D. Audit Control

Discussion

155.	A Voucher is a _______.
A.	Document is support of an entry made in books of accounts
B.	Invoice received from suppliers
C.	Receipt issued to a customer for cash
D.	Dispatch Receipt
Answer» B. Invoice received from suppliers

Discussion

156.	Voucher relates to _________.
A.	Cash receipt & payments, credit transactions
B.	Cash payment only
C.	Credit transactions only
D.	Cash receipt only
Answer» B. Cash payment only

Discussion

157.	Internal check is meant for ___________.
A.	Prevention of frauds
B.	Detection of frauds
C.	Helping audit is depth
D.	Detection of errors
Answer» B. Detection of frauds

Discussion

158.	Purchase of machinery is a ____________.
A.	revenue receipt
B.	capital receipt
C.	capital expenditure
D.	revenue expenditure
Answer» D. revenue expenditure

Discussion

159.	Sale of land is a __________.
A.	revenue receipt
B.	capital receipt
C.	capital expenditure
D.	revenue expenditure
Answer» C. capital expenditure

Discussion

160.	When a transaction has not been recorded in the books of account either wholly orpartially such errors are called as _________.
A.	errors of commission
B.	errors of omission
C.	compensating error
D.	error of principle
Answer» C. compensating error

Discussion

161.	Verification of the value of assets, liabilities, the balance of reserves, provision and theamount of profit earned or loss suffered a firm is called _________.
A.	continuous audit
B.	balance sheet audit.
C.	interim audit
D.	partial audit
Answer» C. interim audit

Discussion

162.	A sale of Rs. 50000 to Mr. A was entered as a sale to Mr. B. This is an example of what?
A.	Error of omission
B.	Error of commission
C.	Compensating error
D.	Error of principle
Answer» C. Compensating error

Discussion

163.	Recording a transaction twice in the books of original entry is an error of __________.
A.	principle
B.	commission
C.	duplication
D.	omission
Answer» D. omission

Discussion

164.	Errors and frauds already committed can be discovered under the system of ________.
A.	internal audit, internal check, internal control
B.	external check
C.	statutory audit
D.	interim audit
Answer» B. external check

Discussion

165.	Treating revenue expenditure as capital expenditure is a case of _________.
A.	fraud
B.	misappropriation of cash
C.	misappropriation of goods
D.	manipulation of accounts
Answer» E.

Discussion

166.	/. Special audit is necessary for _________.
A.	inefficient concern
B.	processing concern
C.	trading concern
D.	manufacturing concern
Answer» B. processing concern

Discussion

167.	The first auditors appointed by head office ____________.
A.	for a period of one year
B.	for a period of two years
C.	for a period of three years
D.	till the conclusion of the first annual general meeting
Answer» E.

Discussion

168.	If a material financial fraud is detected, Auditor should ________________
A.	report it to police
B.	report it to the institute of ca of india
C.	ignore it
D.	report it to the owners or shareholders
Answer» E.

Discussion

169.	________________ should be checked by the Auditor in verification of Machinery
A.	all the above
B.	charge/line
C.	the possession
D.	ownership
Answer» B. charge/line

Discussion

170.	Closing stock with the consignee is to be shown as the Asset of ________________
A.	consignee
B.	customer
C.	all the above
D.	consignor
Answer» E.

Discussion

171.	Confirmation is ________________
A.	a compliance procedure
B.	an audit technique
C.	a principle of audit
D.	none of the above
Answer» C. a principle of audit

Discussion

172.	Audit plan should be best on knowledge of the ________________
A.	client\s reputation
B.	client\s family
C.	client\s share capital
D.	client\s business
Answer» E.

Discussion

173.	________________ Asset, which is not subject to physical verification
A.	stock
B.	cash
C.	furniture
D.	debtors
Answer» E.

Discussion

174.	Goods sold but not recorded in Sales Register is ________________
A.	compensating error
B.	an error of commission
C.	an error of omission
D.	none of the above
Answer» C. an error of omission

Discussion

175.	The Auditor examines Bill of Lading in order to vouch ________________
A.	sales within the state
B.	all the above
C.	sales outside the state
D.	sales outside the country
Answer» E.

Discussion

176.	Telephone charges should be examine on the basis of ________________
A.	cash memo
B.	telephone bill
C.	all the above
D.	agreement with telephone department
Answer» C. all the above

Discussion

177.	________________ is not an error of Commission
A.	mathematical error
B.	compensating error
C.	posting error
D.	none of the above
Answer» C. posting error

Discussion

178.	Stock of goods on consignment should be valued at ________________
A.	none of the above
B.	invoice price
C.	cost of realizable value whichever is lower
D.	cost price
Answer» D. cost price

Discussion

179.	Secret reserves are shown on ________________
A.	assets side of balance sheet
B.	none of the above
C.	liabilities side of balance sheet
D.	credit side of trading account
Answer» C. liabilities side of balance sheet

Discussion

180.	To select a sample for Audit, the auditor should consider ________________
A.	all the above
B.	the size of the sample
C.	the volume of transactions
D.	adequacy of internal control system
Answer» B. the size of the sample

Discussion

181.	The main objective of Window Dressing is ________________
A.	increase liability
B.	to mislead investors
C.	to reduce tax liability
D.	to understate profits
Answer» C. to reduce tax liability

Discussion

182.	________________ document is not relevant for vouching cash purchases
A.	purchase order
B.	goods inward register
C.	purchase invoice
D.	attendance record of cashier
Answer» E.

Discussion

183.	________________ incorporates both Accounting and Administrative Controls.
A.	internal control
B.	internal check
C.	statutory audit
D.	internal audit
Answer» B. internal check

Discussion

184.	Debtors are valued at ________________
A.	realizable value
B.	as per articles of association
C.	book value
D.	decided by the customer
Answer» D. decided by the customer

Discussion

185.	Audit programme should be ________________
A.	flexible
B.	rigid
C.	oral and flexible
D.	oral
Answer» B. rigid

Discussion

186.	Audit in Depth means ________________
A.	none of the above
B.	detailed examination of all transactions
C.	investigation of all transactions
D.	detailed examination of selected transactions
Answer» E.

Discussion

187.	An Audit Programme must be prepared ________________
A.	before commencement of an audit
B.	after completion of an audit
C.	after submission of an audit report
D.	during the conduct of an audit
Answer» B. after completion of an audit

Discussion

188.	Analytical Review is ________________
A.	an audit technique
B.	audit in depth
C.	a compliance procedure
D.	reporting requirement
Answer» B. audit in depth

Discussion

189.	Which of the following documents is not relevant for vouching of sales ________________
A.	daily cash sales summary
B.	credit memos
C.	delivery challans
D.	sales department attendance record
Answer» E.

Discussion

190.	The main object of an Audit is ________________
A.	to ensure that final accounts are prepared
B.	expression of an opinion on true and fair view of accounts
C.	to ensure the future viability of the enterprise
D.	detection and prevention of frauds and errors
Answer» C. to ensure the future viability of the enterprise

Discussion

191.	Working papers are the property of the ________________
A.	client and auditor
B.	auditor
C.	client
D.	equity shareholders
Answer» C. client

Discussion

192.	Goods purchased but not recorded in the purchase register is ________________
A.	an error of omission
B.	to reduce profits
C.	an error of commission
D.	affect on agreement of trial balance
Answer» B. to reduce profits

Discussion

193.	An auditor is like a
A.	Blood haunt
B.	Watch dog
C.	May both according to situation
D.	None of these
Answer» C. May both according to situation

Discussion

194.	The term ‘Audit’ is derived from a Latin word “audire” which means;
A.	To inspect
B.	To examine
C.	To hear
D.	To investigate
Answer» D. To investigate

Discussion

195.	Process of verifying the documentary evidences of transactions are known as:
A.	Auditing
B.	Testing
C.	Vouching
D.	Verification
Answer» D. Verification

Discussion

196.	Auditing is compulsory for
A.	Small scale business
B.	Partnership firms
C.	Joint stock Companies
D.	Proprietary Concerns
Answer» D. Proprietary Concerns

Discussion

197.	The title of AAS2 issued by Council of ICAI is ___
A.	Objective and Scope of the Financial Statements
B.	Objective and Scope of the Audit of Financial Statements
C.	Objective and Scope of Business of an Entity
D.	Objective and Scope of Financial Statements Audit
Answer» C. Objective and Scope of Business of an Entity

Discussion

198.	The main object of an audit is ___
A.	Expression of expert opinion
B.	Detection and Prevention of fraud and error
C.	Both (a) and (b)
D.	Depends on the type of audit.
Answer» E.

Discussion

199.	Concealment of shortage by delaying the recording of cash receipts is known as
A.	Embezzlement
B.	Misappropriation
C.	Lapping
D.	None of these
Answer» D. None of these

Discussion

200.	Which of the following is not true about opinion on financial statements?
A.	The auditor should express an opinion on financial statements.
B.	His opinion is no guarantee to future viability of business
C.	He is responsible for detection and prevention of frauds and errors in financial statements
D.	He should examine whether recognised accounting principle have been consistently
Answer» D. He should examine whether recognised accounting principle have been consistently

Discussion

Explore topic-wise MCQs in Finance & Accounting.

A number of checks and controls exercised in a business to ensure its efficient workingare known as ________.

This kind of audit is conducted generally between two annual audit ______.

Management audit otherwise called as _______.

Before the work of audit is commenced, the auditor plans out the whole of audit work iscalled _________.

A Voucher is a _______.

Voucher relates to _________.

Internal check is meant for ___________.

Purchase of machinery is a ____________.

Sale of land is a __________.

When a transaction has not been recorded in the books of account either wholly orpartially such errors are called as _________.

Verification of the value of assets, liabilities, the balance of reserves, provision and theamount of profit earned or loss suffered a firm is called _________.

A sale of Rs. 50000 to Mr. A was entered as a sale to Mr. B. This is an example of what?

Recording a transaction twice in the books of original entry is an error of __________.

Errors and frauds already committed can be discovered under the system of ________.

Treating revenue expenditure as capital expenditure is a case of _________.

/. Special audit is necessary for _________.

The first auditors appointed by head office ____________.

If a material financial fraud is detected, Auditor should ________________

________________ should be checked by the Auditor in verification of Machinery

Closing stock with the consignee is to be shown as the Asset of ________________

Confirmation is ________________

Audit plan should be best on knowledge of the ________________

________________ Asset, which is not subject to physical verification

Goods sold but not recorded in Sales Register is ________________

The Auditor examines Bill of Lading in order to vouch ________________

Telephone charges should be examine on the basis of ________________

________________ is not an error of Commission

Stock of goods on consignment should be valued at ________________

Secret reserves are shown on ________________

To select a sample for Audit, the auditor should consider ________________

The main objective of Window Dressing is ________________

________________ document is not relevant for vouching cash purchases

________________ incorporates both Accounting and Administrative Controls.

Debtors are valued at ________________

Audit programme should be ________________

Audit in Depth means ________________

An Audit Programme must be prepared ________________

Analytical Review is ________________

Which of the following documents is not relevant for vouching of sales ________________

The main object of an Audit is ________________

Working papers are the property of the ________________

Goods purchased but not recorded in the purchase register is ________________

An auditor is like a

The term ‘Audit’ is derived from a Latin word “audire” which means;

Process of verifying the documentary evidences of transactions are known as:

Auditing is compulsory for

The title of AAS2 issued by Council of ICAI is ___

The main object of an audit is ___

Concealment of shortage by delaying the recording of cash receipts is known as

Which of the following is not true about opinion on financial statements?