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This set of Practical Auditing Multiple Choice Questions & Answers (MCQs) focuses on Practical Auditing Set 2
Q1 | Falsification of accounts is undertaken by
- Auditors
- Clerks
- Accountants
- Responsible officials
Q2 | Errors of omission are
- Technical errors
- Error of principle
- Compensating errors
- None of the above
Q3 | Test checking refers to
- Testing of accounting records
- Testing of honesty of employees
- Intensive checking of a selected number of transactions
- Checking of all transactions recorded
Q4 | Test checking should not be applied to
- Sales book
- Purchase book
- Bank reconciliation statement
- Bills book
Q5 | Test checking should not be applied to
- Purchase book
- Sales book
- Stock book
- Cash book
Q6 | Vouching implies
- Inspection of receipts
- Examination of vouchers to check authenticity of records
- Surprise checking of accounting records
- Examining the various assets
Q7 | Payment for goods purchased should be vouched with the help of
- Creditors statement
- Correspondence with suppliers
- Cash memos
- Ledger accounts
Q8 | Payment for wages should be vouched with the help of
- Piece work statement
- Wage sheets
- Minute book
- Bank pass book
Q9 | Payment for building purchased should be vouched with the help of
- Title deed
- Correspondence with Brokers
- Building account
- Cash book
Q10 | Investment should be vouched with the help of
- Commission book
- Brokers book
- Sales deeds
- Minute book
Q11 | Receipt from debtors should be vouched with the help of
- Counterfoil Receipts cash book
- Suppliers statement
- Sales Deeds
- General Ledger
Q12 | Receipt from sale of investment should be vouched with the help of
- Brokers Budget Notes
- Brokers Sold Notes
- Minute Book
- Inventory of investment
Q13 | Purchases returns should be vouched with the help of
- Bought Notes
- Credit Notes
- Goods inward Book
- Cash Book
Q14 | Verification refers to
- Examination of journal and ledger
- Examination of vouchers related to assets
- Examining the physical existence and valuation of assets
- Calculation of value of assets
Q15 | Object of verification of assets
- Physical verification of assets
- Checking value of assets
- Examining the authority of their acquisition
- All of the above
Q16 | Which of the following statements is correct?
- Valuation is a part of verification
- Verification is a part of valuation
- Valuation has nothing to do with verification
- Auditor is a valuer
Q17 | Stock should be valued at
- Cost
- Market price
- Cost price or market price whichever is lower
- Cost less depreciation
Q18 | Valuation of Fixed Assets is based on the concept
- Going concern
- Conservation
- Money measurement
- Dual aspect
Q19 | Valuation means
- Calculating value of assets
- Checking the value of assets
- Checking the physical existence of assets
- Examining the authenticity of assets
Q20 | “ Auditor is not valuer” was stated in
- Kingston Cotton Mills case
- London & General Bank case
- Lee . V . Neuchatel Co. Ltd case
- London oil Storage Co. case
Q21 | Fixed assets are valued at
- Cost
- Market price
- Cost price or market price whichever is less
- Cost less depreciation
Q22 | Floating assets are valued at
- Cost
- Market price
- Cost price or market price whichever is less
- Cost less depreciation
Q23 | The scope of work of internal audit is decided by the
- Share holders
- Management
- To improve financial control
- All of the above
Q24 | Outstanding expenses should be verified with the help of
- Cash book
- Balance book
- Journal proper
- None of the above
Q25 | Book debts should be verified with the help of
- Balance sheet
- Amount received from Debtors
- Debtors schedule
- Certificate from the management