Quiznetik

Practical Auditing | Set 2

1. Examination of accounting records undertaken for a special purpose is called

Correct : C. Investigation

2. The prime importance of investigation on behalf of an individual or firm intending to purchase an existing business is to

Correct : B. Ascertain the earning capacity of the concern

3. Inflation of closing stock results is :-

Correct : C. Inflation of profit

4. Inflation of profit is possible due to :

Correct : A. Overvaluation of closing stock

5. Charging excessive provision for depreciation results in

Correct : A. Less profit

6. The main purpose of management audit is to

Correct : A. Review the management operations

7. Management audit is

Correct : B. Not compulsory

8. Special resolution means -------------------

Correct : B. 2/3 majority

9. Ordinary resolution means -----------------------

Correct : C. More than 1/2

10. The chartered Accountants Act is in -----------------

Correct : B. 1959

11. Section 633 of the companies Act deals with

Correct : B. Relief to the auditor

12. Auditor is an --------------- of a shareholder

Correct : B. Agent

13. Cost audit means audit of --------------- records

Correct : B. Cost

14. Financial auditor submits reports to the ----------------

Correct : A. Shareholder

15. Cost auditor submits reports to the ---------------

Correct : B. Board of directors

16. --------------- audit is forward looking -

Correct : B. Cost

17. Cost auditor of a company is -----------

Correct : B. Cost Accountant

18. Auditor finds that there is change in the method of valuation of stock whether he should

Correct : C. Allow it with a note to this effect

19. Audit under any statute in a country is called ------------------

Correct : C. Statutory audit

20. Books of Accounts are prepared and audited as per the provisions of the ---------------

Correct : B. Companies Act 1956

21. CAATTS is also known as -----------

Correct : B. Computer Assisted Audit Tools and Techniques

22. Auditor has got no lien on -------------

Correct : C. Books to Accounts of Client

23. Statutory Report should be sent to registrar before ------------------- days of statutory meeting

Correct : C. 21 days

24. The meeting held by the company with in a period of not less than one month and not more than 6 months is called -------------

Correct : A. Statutory

25. -------------------- audit is not a statuary requirement

Correct : A. Management

26. ----------------- audit refers to the evaluation of company’s performance against planned goals in the areas of social responsibility.

Correct : B. Social audit

27. Bonus shares are issued to ----------------

Correct : B. Existing share holders

28. -------- Section of the Companies Act deals with Appointment of Company auditor.

Correct : B. Sec-224

29. -------- Section of the Companies Act deals with qualification of Company auditor.

Correct : A. Sec-226

30. Amount of Share premium may be utilized for

Correct : B. Writing of preliminary expenses

31. Share Premium Account should be shown in Balance sheet under

Correct : C. Reserves and surpluses

32. Auditor should see that amount received for premium on issue of shares should be shown in

Correct : C. Share Premium Account

33. A company can issue redeemable preference shares if authorized by

Correct : B. Articles of Association

34. A company can issue bonus shares if authorized by

Correct : B. Articles of Association

35. Interest on calls paid in advance according to table A, should not exceed

Correct : A. 6%

36. For the forfeiture of shares, the auditor should check that it is permitted

Correct : B. By articles of association

37. Profits on reissue of forfeited Shares should be transferred to

Correct : B. Capital Reserve Account

38. Shares issued for consideration other than cash should be vouched with the help of

Correct : C. Contact with the party concerned

39. While checking the allotment of shares, the auditor should see that it is made within

Correct : B. 120 days of issue of prospectus

40. Which of the following percentage of nominal amount of shares should be received with application

Correct : C. 5

41. Accounting standards are prepared by

Correct : C. ICAI

42. Which of the following is referred to confirm the allotment of shares to the vendor

Correct : C. Director’s minute

43. Share premium Account is shown on the _______________

Correct : B. Liability side of Balance sheet

44. Issue of shares at discount should be sanctioned by the ________________

Correct : C. Company Law Board

45. The maximum rate of discount on shares shall not exceed________________

Correct : C. 10%

46. Discount on issue of shares not written of is shown separately in Balance sheet under the head_____________

Correct : A. Miscellaneous expenditure

47. __________________section of Companies Act deals with share Capital

Correct : A. 69

48. Which among the following is not a function of the author

Correct : C. Preparing final Accounts

49. Audit conducted as per the provisions of law is _____________

Correct : A. Statutory Audit

50. The scope of auditing does not cover.

Correct : C. Ledger posting

51. Internal audit is conducted

Correct : B. Throughout the year

52. The amount of application money received shall be deposited in a scheduled bank until________

Correct : C. Certificate to commencement obtained

53. Amount received as premium can be used to ___________

Correct : C. Issue bonus shares

54. The auditors are liable under

Correct : C. All above

55. The maximum number of audit assignment an auditor can accept is limited to -------------- companies

Correct : C. 20

56. Auditors can be appointed by -------------- when the shareholders fail to appoint auditors at the general meeting

Correct : B. Central government

57. The examinations of financial transactions with supporting evidences is called

Correct : B. Vouching

58. Which among the following is an example of intangible asset?

Correct : C. All of these

59. Which of the following is not an item current asset?

Correct : C. Furniture

60. The term inventories stands for

Correct : C. All of these

61. Sales day book is used for recording

Correct : A. Credit sales

62. --------------- audit is more suitable for small business houses

Correct : B. Annual

63. Vouching is an examination of ----------- to ascertain the accuracy and authenticity of transactions in the book of accounts

Correct : C. Documents

64. --------------- is a written plan containing details with regard to the conduct of a particular audit

Correct : B. Audit programme

65. --------------- is the verification of books of accounts from Income tax point of view

Correct : B. Tax audit

66. Investigation is conducted

Correct : C. As and when required

67. Investigation is required when

Correct : C. All of them

68. Which among the following is not a right of company auditors

Correct : C. Right to lies on books of accounts

69. Test checking is done when there is an effective system of --------------

Correct : C. Internal check

70. Test checking means

Correct : C. Checking of selected items

71. Audit working papers are --------------------------

Correct : A. Important information about audit

72. Current audit file consists of

Correct : C. Matters relating to the year of audit

73. ------------------- begins where accounting ends

Correct : B. Auditing

74. ---------------- audit is compulsory for joint stock companies

Correct : A. Statutory

75. Treating revenue expenditure as capital expenditure is an example of error of -------------------

Correct : A. Principle

76. Financial statements are prepared by

Correct : A. The accountant

77. Preliminary expanses not written off are treated as

Correct : C. Fictitious assets

78. Verification of assets involves a critical examination of

Correct : C. All of these

79. Finished goods are valued for a balance sheet purpose

Correct : C. At lower of cost or market price

80. ---------------- includes financial and non-financial control

Correct : B. Internal control

81. ---------------- is concerned with the allocation of work among employees

Correct : B. Internal check

82. The duties of internal auditor is prescribed by

Correct : C. Management

83. Internal audit is considered as a service to -------------------

Correct : C. Management

84. Pre-arranging and coordinating the audit work is called ------------------

Correct : A. Audit planning

85. A fixed audit programme is also called a --------- programme

Correct : A. Tailor made

86. Share holders minute book should be vouched for

Correct : C. Issue of bonus shares

87. ---------------- is deducted from called up capital to get paid up capital

Correct : C. Calls in arrears

88. Discount on issue of shares is shown under the --------------- lead

Correct : C. Miscellaneous expanses

89. To forfeit shares --------------- days notice to the share holder’s given

Correct : B. 14

90. -------------- of the companies Act 1956 prescribes the duty of preparing a report by an auditor

Correct : A. Sec-227(2)

91. A --------------- report is one which contains the opinion of the auditor subject to certain conditions

Correct : B. Qualified

92. --------------- is made out of reserves or share premium

Correct : B. Bonus shares

93. ---------------- shares cannot be issued if the company makes any default in the payment of its obligation

Correct : C. Bonus

94. Capitalization of reserves means -------------------------

Correct : C. Issue of bonus shares

95. Provisions regarding bonus issue should be given in -------------------- document

Correct : B. Articles of association

96. Balance remaining in the forfeited Account after reissue is transferred to --------------- account

Correct : B. Capital reserve

97. If reissue of shares are more than face value of shares, the excess amount is transferred to ---------- account.

Correct : C. Premium account

98. Share call amount due is credited to ------------------ account

Correct : C. Share capital account

99. When excess applications money is refunded to applicants it is vouched with cash book and -------

Correct : C. Letter of regreat

100. Partial auditing is usually done by

Correct : A. Sole trading concern