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This set of Practical Auditing Multiple Choice Questions & Answers (MCQs) focuses on Practical Auditing Set 6

Q1 | ----------------- audit refers to the evaluation of company’s performance against plannedgoals in the areas of social responsibility.
  • Cost audit
  • Social audit
  • Management audit
  • none
Q2 | Bonus shares are issued to ----------------
  • New members
  • Existing share holders
  • Employees
  • none
Q3 | -------- Section of the Companies Act deals with Appointment of Company auditor.
  • Sec-226
  • Sec-224
  • Sec-227
  • none
Q4 | -------- Section of the Companies Act deals with qualification of Company auditor.
  • Sec-226
  • Sec-224
  • Sec-227
  • none
Q5 | Amount of Share premium may be utilized for
  • Payment of dividend
  • Writing of preliminary expenses
  • Routine expense
  • none
Q6 | Share Premium Account should be shown in Balance sheet under
  • Paid-up capital
  • Subscribed capital
  • Reserves and surpluses
  • none
Q7 | Auditor should see that amount received for premium on issue of shares should be shown in
  • Subscribed capital
  • Capital Reserve Account
  • Share Premium Account
  • none
Q8 | A company can issue redeemable preference shares if authorized by
  • Memorandum of Association
  • Articles of Association
  • Companies Act-1956
  • none
Q9 | A company can issue bonus shares if authorized by
  • Memorandum of Association
  • Articles of Association
  • Companies Act-1956
  • none
Q10 | Interest on calls paid in advance according to table A, should not exceed
  • 6%
  • 5%
  • 10%
  • none
Q11 | For the forfeiture of shares, the auditor should check that it is permitted
  • Memorandum of Association
  • By articles of association
  • Under Companies Act 1956
  • none
Q12 | Profits on reissue of forfeited Shares should be transferred to
  • Share forfeited Account
  • Capital Reserve Account
  • Profit and Loss Account
  • none
Q13 | Shares issued for consideration other than cash should be vouched with the help of
  • Director’s minute Book
  • Shareholder’s minute Book
  • Contact with the party concerned
  • none
Q14 | While checking the allotment of shares, the auditor should see that it is made within
  • 100 days of issue of prospectus
  • 120 days of issue of prospectus
  • 150 days of issue of prospectus
  • none
Q15 | Which of the following percentage of nominal amount of shares should be received withapplication
  • 10
  • 15
  • 5
  • none
Q16 | Accounting standards are prepared by
  • SEBI
  • RBI
  • ICAI
  • ITA
Q17 | Which of the following is referred to confirm the allotment of shares to the vendor
  • Cash book
  • Pass book
  • Director’s minute
  • none
Q18 | Share premium Account is shown on the _______________
  • Asset side of Balance sheet
  • Liability side of Balance sheet
  • Credit side of profit and loss Account
  • none
Q19 | Issue of shares at discount should be sanctioned by the ________________
  • Board of directors
  • Share holders
  • Company Law Board
  • none
Q20 | The maximum rate of discount on shares shall not exceed________________
  • 20%
  • 15%
  • 10%
  • none
Q21 | Discount on issue of shares not written of is shown separately in Balance sheet under thehead_____________
  • Miscellaneous expenditure
  • Preliminary expanses
  • Current assets
  • none
Q22 | __________________section of Companies Act deals with share Capital
  • 69
  • 60
  • 50
  • none
Q23 | Which among the following is not a function of the author
  • Checking errors and frauds
  • Vouching with original documents
  • Preparing final Accounts
  • none
Q24 | Audit conducted as per the provisions of law is _____________
  • Statutory Audit
  • Continuous Audit
  • Social Audit
  • none
Q25 | The scope of auditing does not cover.
  • Vouching
  • Checking arithmetical accuracy
  • Ledger posting
  • none