Competitive Exams: Commerce MCQs (Practice-Test 66 of 99)

  1. Match List-I (Explanation) with List-II (Types of Audit) and select the correct answer using the code given below

    List-I List-II
    1. Audit work is carried on almost simultaneously with recording transaction

    2. Auditor starts his work after the final accounts have been prepared

    3. Audit conducted in between two annual audits

    4. Some of the books & records of the whole period or specific period are audited

    1. Balance Sheet Audit

    2. Continuous Audit

    3. Interim Audit

    4. Partial Audit

    • A
    • B
    • C
    • D
      • 2
      • 4
      • 3
      • 1
      • 3
      • 1
      • 2
      • 4
      • 2
      • 1
      • 3
      • 4
      • 3
      • 4
      • 2
      • 1
  2. What is/are the purpose (s) of using working papers prepared by an auditor?

    1. Planning and conduct of the audit efficiently

    2. Supervision and review of audit work performed by the juniors.

    3. Producing the working papers as evidence of the audit work performed by him

    Select the correct answer using the code given below.

    1. 1, 2 and 3

    2. 2 only

    3. 2 and 3 only

    4. 1 and 3 only

  3. Match List-I (Method of Collecting Audit Evidence) with List-II (Example) and select the correct answer using the code given below the Lists

    List-I List-II
    1. Observation

    2. Correlation with related information

    3. Enquiry

    4. Scanning

    1. Auditor finds that although there is no increase in salaries and wages, contribution to Provident Fund has increased

    2. On a thorough Scrutiny of payroll auditor comes across 13 entries instead of 12 entries, one extra entry being for the succeeding month of next year

    3. Auditor, on a visit of company's godowns, finds that there is a huge pile of damaged and obsolete stock. On investigation he is told that the same are not shown as such in the inventory sheets

    4. On a prolonged interaction with various persons connected with cash transactions auditors find that there is system of internal check in regard to cash transactions

    • A
    • B
    • C
    • D
      • 3
      • 2
      • 4
      • 1
      • 4
      • 1
      • 3
      • 2
      • 3
      • 1
      • 4
      • 2
      • 4
      • 2
      • 3
      • 1
  4. Match List-I (Specific Item) with List-II (Relevant internal Control Query) and select the correct answer using the code given below the Lists:

    List-I List-II
    1. Fixed assets

    2. Purchase

    3. Sales

    4. Disbursement

    1. Are bank reconciliation statements prepared from time to time?

    2. Are invoices checked and verified in regard to description of materials, terms of payments, etc?

    3. Are all invoices duly approved for payment?

    4. Who authorises for the sale of scraps?

    5. Who prepares payroll?

    • A
    • B
    • C
    • D
      • 2
      • 3
      • 4
      • 1
      • 4
      • 1
      • 2
      • 5
      • 2
      • 1
      • 4
      • 5
      • 4
      • 3
      • 2
      • 1
  5. What is an independent appraisal function established with in an organisation to examine and evaluate its activities as a service to the organisation called?

    1. Internal auditing

    2. Internal Check

    3. Internal Control

    4. Adminstrative Control

  6. Consider the following statements: The techniques of auditing include

    1. physical examination of tangible assets

    2. confirmation from third parties

    3. interview with the article clerk

    4. study of the type of the organization

    Which of the statements given above are correct?

    1. 1 and 4 only

    2. 2, 3 and 4 only

    3. 1, 2 and 3 only

    4. 1 and 2 only

  7. Match List-I (Accounting Standard) with List-II (Subject) and select the correct answer using the code given below:

    List-I List-II
    1. AS-13

    2. AS-2

    3. AS-3

    4. AS-12

    1. Consolidated Financial Statements

    2. Accounting for Investments

    3. Cash Flow Statements

    4. Valuation of Inventories

    5. Accounting for Government

    • A
    • B
    • C
    • D
      • 3
      • 4
      • 2
      • 5
      • 2
      • 1
      • 3
      • 4
      • 3
      • 1
      • 2
      • 4
      • 2
      • 4
      • 3
      • 5
  8. A company purchased a machine for Rs. 30 lakhs on 1st April, 2002. The estimated life of the machine is 9 years and scrap value is Rs. 3 lakhs. The company follows straigh~ line method for charging depreciation. If the method of depreciation is changed from straight line method (SLM) to written down method, what is the depreciation provided on the machine in the financial year 2003 − 04?

    1. Rs. 3, 00, 000

    2. Rs. 2, 70, 000

    3. Rs. 2, 40, 000

    4. Rs. 2, 43, 000

  9. Which one of the following reasons provides the best theoretical support for accelerated depreciation?

    1. Assets are more efficient in early years and initialiy generate more revenue

    2. Expenses should be allocated in a manner so as to smoothen earnings

    3. Repairs and maintenance costs will increase in later years so depreciation should decline

    4. Accelerated depreciation provides earlier replacement because of time value of money

  10. Which one of the following is the correct statement? Drawings by proprietor in anticipation of future profit, made during the year would

    1. reduce owner's equity and increase assets

    2. reduce owner's equity and increase liabilities

    3. reduce both owner's equity and assets

    4. increase liabilities and assets and reduce owner's equity