PRACTICAL AUDITING MCQ
Auditing typically refers to financial statement audits or an objective examination and evaluation of a company’s financial statements – usually performed by an external third party. Audits can be performed by internal parties and a government entity, such as the Internal Revenue Service (IRS)
101. Examination of accounting records undertaken for a special purpose is called
a. Auditing
b. Internal check
c. Investigation
d. Internal control
Answer:- c. Investigation
102. The prime importance of investigation on behalf of an individual or firm intending to purchase an existing business is to
a. Ascertain value of asset
b. Ascertain the earning capacity of the concern
c. Estimation of value of good will
d. Extend of liabilities
Answer:- b. Ascertain the earning capacity of the concern
103. Inflation of closing stock results is :-
a. Inflation of loss
b. Deflation of loss
c. Inflation of profit
d. Deflation of profit
Answer:- c. Inflation of profit
104. Inflation of profit is possible due to :
a. Overvaluation of closing stock
b. Overstating purchase
c. Overstating opening stock
d. Overstating expenses
Answer:- a. Overvaluation of closing stock
105. Charging excessive provision for depreciation results in
a. Less profit
b. More profit
c. No change in profit
d. No change in loss
Answer:- a. Less profit
106. The main purpose of management audit is to
a. Review the management operations
b. Check arithmetical accuracy
c. Prevent travel
d. Prevent error
Answer:- a. Review the management operations
107. Management audit is
a. Compulsory
b. Not compulsory
c. Compulsory under Income Tax Act
d. Compulsory under Indian Contract Act.
Answer:- b. Not compulsory
108. Special resolution means ——————-
a. 1/3 majority
b. 2/3 majority
c. ½ majority
Answer:- b. 2/3 majority
109. Ordinary resolution means ———————–
a. 1/3 majority
b. 2/3 majority
c. More than 1/2
Answer:- c. More than 1/2
110. The chartered Accountants Act is in —————–
a. 1956
b. 1959
c. 1949
Answer:- b. 1959
