Auditing - Questions and Answers for Competitive Exams | GkSeries

13. Audit means ___________.

1. [A] recording business transactions.
2. [B] preparing the final accounts.
3. [C] examination of books, accounts, vouchers etc.
4. [D] preparing final accounts.

Answer: Option [C]

14. Auditor shall report on the accounts examined by him __________.

1. [A] to the shareholders.
2. [B] to the court.
3. [C] to the bank.
4. [D] to the general public.

Answer: Option [A]

15. Sale of land is a __________.

1. [A] revenue receipt.
2. [B] capital receipt.
3. [C] capital expenditure.
4. [D] revenue expenditure

Answer: Option [B]

16. Secret reserve can be created by _______________.

1. [A] public limited company only
2. [B] banking and financial companies only.
3. [C] private limited company only.
4. [D] co-operative societies

Answer: Option [B]

17. When a transaction has not been recorded in the books of account either wholly or partially such errors are called as _________.

1. [A] Error of commission
2. [B] Error of omission.
3. [C] Compensating error.
4. [D] Error of principle.

Answer: Option [B]

18. Verification of the value of assets, liabilities, the balance of reserves, provision and the amount of profit earned or loss suffered a firm is called _________.

1. [A] Continuous audit.
2. [B] Balance sheet audit.
3. [C] Interim audit.
4. [D] Partial audit.

Answer: Option [B]

19. Vouching of the balances of all incomes and expenses account is known as vouching of ______.

1. [A] Personal ledger.
2. [B] Impersonal ledger.
3. [C] Cash
4. [D] Sales

Answer: Option [B]

20. Preliminary expenses are the best example for _________.

1. [A] fictitious asset.
2. [B] intangible asset.
3. [C] wasting asset.
4. [D] floating asset.

Answer: Option [A]

21. Periodical audit is also called as _________.

1. [A] Final audit.
2. [B] Interim audit.
3. [C] Balance sheet audit.
4. [D] Income statement audit.

Answer: Option [C]

22. The auditor of a government company shall be appointed by ________.

1. [A] the government company itself.
2. [B] the central government.
3. [C] the share holders.
4. [D] the debenture holders.

Answer: Option [B]

23. The main object of the audit of the cash book may be ________.

1. [A] to verify the assets and liabilities.
2. [B] to know that all receipts and payments have been properly recorded.
3. [C] to check the internal control system in business.
4. [D] to check the bank balance.

Answer: Option [B]

24. One of the audit procedures to check the issue of share capital of the newly formed company is __________.

1. [A] the memorandum of association and articles of association.
2. [B] the share transfer register.
3. [C] the issue of debenture.
4. [D] none of the above.

Answer: Option [A]