Explore topic-wise MCQs in Finance & Accounting.

This section includes 267 Mcqs, each offering curated multiple-choice questions to sharpen your Finance & Accounting knowledge and support exam preparation. Choose a topic below to get started.

201.

Lapping is also known as:

A. Teeming and lading
B. Embezzlement
C. Looping
D. Hacking
Answer» B. Embezzlement
Discussion
202.

A sale of Rs. 25,000 to A was entered as a sale to B. This is an example of _

A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle
Answer» C. Compensating error
Discussion
203.

‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an exampleof _

A. Error of principle
B. Error of commission
C. Error of omission
D. Error of duplication
Answer» B. Error of commission
Discussion
204.

Which of the following is not a limitation of audit as per AAS4?

A. Objectivity of auditor’s judgment
B. Selective testing
C. Persuasiveness of evidence
D. Limitations of internal control system.
Answer» B. Selective testing
Discussion
205.

As per AAS4, if auditor detects an error then –

A. He should inform the management.
B. He should communicate it to the management if it is material
C. The auditor should ensure financial statements are adjusted for detected errors.
D. Both (b) and (c)
Answer» E.
Discussion
206.

Internal audit is undertaken

A. By independent auditor
B. Statutorily appointed auditor
C. By a person appointed by the management
D. By a government auditor
Answer» D. By a government auditor
Discussion
207.

The scope of internal audit is decided by the :

A. Shareholders
B. Management
C. Government
D. Law
Answer» C. Government
Discussion
208.

Audit of banks is an example of –

A. Statutory audit
B. Balance sheet audit
C. Concurrent audit
D. All of the above
Answer» E.
Discussion
209.

Concurrent audit is a part of

A. Internal check system
B. Continuous audit
C. Internal audit system
D. None
Answer» D. None
Discussion
210.

In India, balance sheet audit is synonymous to

A. Annual audit
B. Continuous audit
C. Detailed audit
D. Statutory audit
Answer» B. Continuous audit
Discussion
211.

Audit in depth is synonymous for

A. Complete audit
B. Completed audit
C. Final audit
D. Detailed audit
Answer» E.
Discussion
212.

Institute of Chartered Accountants of India was established

A. 1956
B. 1949
C. 1956
D. 1948
Answer» C. 1956
Discussion
213.

Which of the following statements is not true about continuous audit?

A. It is conducted at regular interval
B. It may be carried out on daily basis
C. It is needed when the organization has a good internal control system
D. It is expensive
Answer» D. It is expensive
Discussion
214.

Internal check is carried on by

A. Staff specially appointed for the purpose
B. Internal auditor
C. Supervisor of the staff
D. Members of the staff
Answer» E.
Discussion
215.

Errors of Omission are

A. Technical errors
B. Errors of principle
C. Compensating errors
D. None of the above
Answer» B. Errors of principle
Discussion
216.

Window dressing implies:

A. Curtailment of expenses
B. Checking of Wastages
C. Under valuation of assets
D. Over Valuation of assets
Answer» E.
Discussion
217.

If at an annual general meeting, no auditors are appointed or reappointed,

A. The board of directors appoint a person to fill the vacancy
B. The union government appoints an auditor
C. The managing director appoints an auditor
D. An extraordinary meeting is called
Answer» B. The union government appoints an auditor
Discussion
218.

In which year the Charted Accountants Act was passed?

A. 1947
B. 1948
C. 1949
D. 1950
Answer» D. 1950
Discussion
219.

During the course of an audit, the auditor stumbled upon a balance of Rs.12,500 in the Goodwill A/c and ascertained that it had not been written off over a long period. What may the auditor do with it?

A. Advise the concern to write it off
B. Hide it from the management
C. Insist that it be written off the same year
D. Recommend to the concern that it be written off over a period of five years
Answer» B. Hide it from the management
Discussion
220.

The board of directors shall appoint first auditor of a company ___________.
A. within one month of completion of capital subscription state of the company
B. within one month of the promotion of the company.
C. within one month of the commencement of the business of the company.
D. within one month of incorporation of the company.
Answer» E.
Discussion
221.

Which of the following sections deals with qualification of the auditor?
A. Section 226(1) and Section 226(2).
B. Section 224(1) and Section 224(2).
C. Section 226(3) and Section 226(4).
D. Section 224(3) and Section 224(4)
Answer» B. Section 224(1) and Section 224(2).
Discussion
222.

Which of the following is not an advantage of the preparation of working paper?
A. To provide a basis for review of audit work.
B. To provide a basis for subsequent audits
C. To ensure audit work is being carried out as per Programme
D. To provide a guide for advising another client on similar issues.
Answer» E.
Discussion
223.

The quantity of audit working papers complied on engagement would most be affected by _________________.
A. management integrity.
B. auditor experience and professional judgement.
C. Auditor qualification.
D. control risk.
Answer» B. auditor experience and professional judgement.
Discussion
224.

Audit Programme is prepared by ___________.
A. the auditor.
B. the client.
C. the audit assistants.
D. the auditor and his audit assistants.
Answer» E.
Discussion
225.

Which of the following Auditing Assurance Standard deals with Audit planning?
A. AAS-7.
B. AAS-8.
C. AAS-9.
D. AAS-3.
Answer» C. AAS-9.
Discussion
226.

Of the following, which is the least persuasive type of audit evidence?
A. Bank statements obtained from the client
B. Documents obtained by auditor from third parties directly.
C. Carbon copies of sales invoices inspected by the auditor
D. Computations made by the auditor.
Answer» D. Computations made by the auditor.
Discussion
227.

 Which of the following statement is most closely associated with analytical procedure applied at substantive stage?
A. It helps to study relationship among balance sheet accounts.
B. It helps to discover material misstatements in the financial statements.
C. It helps to identify possible oversights.
D. It helps to accumulate evidence supporting the validity of a specific account balance
Answer» E.
Discussion
228.

In determining the level of materiality for an audit what should not be considered?
A. Prior years errors.
B. The auditor remuneration.
C. Adjusted interim financial statement.
D. Prior year financial statements.
Answer» C. Adjusted interim financial statement.
Discussion
229.

Which of the following is not a fact of EPA?
A. Economic audit.
B. Efficiency audit.
C. Expenditure audit.
D. Effectiveness audit.
Answer» D. Effectiveness audit.
Discussion
230.

Balance sheet audit included verification of ________.
A. assets
B. liabilities
C. income and expenditure accounts where appropriate.
D. all of the above.
Answer» E.
Discussion
231.

 In India balance sheet audit is synonymous to _______________.
A. Annual audit.
B. Continuous audit.
C. Detailed audit.
D. Statutory audit.
Answer» B. Continuous audit.
Discussion
232.

 Audit of banks is an example of __________.
A. Statutory audit.
B. Balance sheet audit.
C. Concurrent audit.
D. All of the above.
Answer» E.
Discussion
233.

The use of an audit engagement letter is the best method of assuring the auditor will have which of the following?
A. Auditor will obtain sufficient appropriate audit evidence.
B. Management representation letter.
C. Access to all books, accounts and vouchers required for audit purpose.
D. Co-operation from other auditors
Answer» D. Co-operation from other auditors
Discussion
234.

Professional skepticism requires that the auditor assume that management is _________.
A. reasonably honest.
B. neither honest nor dishonest.
C. not necessarily honest.
D. dishonest unless proved otherwise.
Answer» C. not necessarily honest.
Discussion
235.

The most difficult type of misstatement to detect fraud is based on __________.
A. related party purchases.
B. related party sales.
C. the restatement of sales.
D. omission of a sales transaction from being recorded.
Answer» E.
Discussion
236.

When at an annual general meeting of a company no auditor is appointed or reappointed. In that case ________
A. the central government appoints a person to fill the vacancy
B. the board of directors appoints a person to fill the vacancy.
C. the managing director of the company appoints a person to fill the vacancy.
D. none of these can appoint a person to fill the vacancy.
Answer» B. the board of directors appoints a person to fill the vacancy.
Discussion
237.

 Cost audit under section 233(b) of the companies act is ___________.
A. voluntary
B. compulsory
C. advisable
D. avoidable
Answer» D. avoidable
Discussion
238.

A vacancy caused by resignation of an auditor is filled by _________.
A. board of directors.
B. managing director.
C. general meeting.
D. central government.
Answer» D. central government.
Discussion
239.

Internal auditor of a company must be _______________.
A. Cost accountant.
B. Chartered accountant.
C. ICWA
D. need not possess any professional qualification.
Answer» C. ICWA
Discussion
240.

The liabilities of an auditor can be _________.
A. Civil
B. Criminal
C. Civil and Criminal.
D. Official
Answer» D. Official
Discussion
241.

 Share may be issued _____________.
A. at par.
B. at premium.
C. at discount.
D. all the above.
Answer» E.
Discussion
242.

The main objects of investigation is _________.
A. to discover errors and frauds.
B. to prevent errors and frauds.
C. to verify statements.
D. all the above
Answer» E.
Discussion
243.

The owners of the company are called __________.
A. Debenture holders.
B. Debtors
C. Shareholders
D. None of the above.
Answer» D. None of the above.
Discussion
244.

The work of one clerk is automatically check by another clerk is called _________.
A. Internal control.
B. Internal check.
C. Internal audit.
D. None of the above.
Answer» C. Internal audit.
Discussion
245.

One of the audit procedures to check the issue of share capital of the newly formed company is __________.
A. the memorandum of association and articles of association.
B. the share transfer register.
C. the issue of debenture.
D. none of the above.
Answer» B. the share transfer register.
Discussion
246.

The main object of the audit of the cash book may be ________.
A. to verify the assets and liabilities.
B. to know that all receipts and payments have been properly recorded.
C. to check the internal control system in business.
D. to check the bank balance.
Answer» C. to check the internal control system in business.
Discussion
247.

The auditor of a government company shall be appointed by ________.
A. the government company itself.
B. the central government.
C. the share holders.
D. the debenture holders.
Answer» C. the share holders.
Discussion
248.

 Periodical audit is also called as _________.
A. Final audit.
B. Interim audit.
C. Balance sheet audit.
D. Income statement audit.
Answer» D. Income statement audit.
Discussion
249.

 

 Preliminary expenses are the best example for _________.
A. fictitious asset.
B. intangible asset.
C. wasting asset.
D. floating asset.
Answer» B. intangible asset.
Discussion
250.

Vouching of the balances of all incomes and expenses account is known as vouching of ______.
A. Personal ledger.
B. Impersonal ledger.
C. Cash
D. Sales
Answer» C. Cash
Discussion