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Question Bank Corporate Accounting And Auditing

1. Which of the following is/are not characteristic of a company?

It is a distinct legal entity existing independent of its members. It has a perpetual succession. The shares of a company are freely transferable except in case of a Private limited Company. It is a voluntary association of persons usually for social upliftment without expectation of any profit.

2. Which of the following is/are the important feature/s of a company?

Accounting process is highly regulated and guided by regulatory pronouncements. Constituents of periodical accounts (i.e., income statement, balance sheet etc.) are specified by the law. Importance of compliance to the prescribed rules and regulations is paramount. All of these.

3. In India, accounting in of a company form is guided by which of the following regulatory sources?

Companies Act, 2013 Company Rules Accounting Standards All of these.

4. Which of the following is not a statutory book of a company?

Register of Investments held and their names Annual returns Register of Officers Register of shareholdings of the directors.

5. Which of the following is/are not a feature/s of Shares have the following features?

It represents the biggest unit of ownership. Shares of a specific series must have the same face value. Share represents only a partial ownership of Share Capital of the company. Each share has a distinct number.

6. In case of ___________________ issue the shares are offered to the existing shareholders of the company without any consideration.

Private Placement Rights Issue Bonus Issue Offers for sale.

7. When share is issued at a price equal to its face value , it is called issue _____________.

at Par Issue at a Premium Issue at a Discount at Bonus.

8. Provisions relating to buy back of securities are contained in __________________ of the Companies Act, 2013.

Section 77 Section 77A Section 68 Section 63.

9. Buy-back of equity shares in any financial year should not exceed ______________.

10% of net worth 25% of the aggregate of paid-up capital and free reserves of the company 25% of the paid-up equity capital 25% of the aggregate of paid-up equity capital and preference capital.

10. Company may purchase its own shares or other specified securities out of – A. Free reserves B. Securities premium account C. Proceeds of issue of any shares D. Proceeds of issue of specified securities

A and C only A, B and C only A, C and D only A or B or C or D.

11. Section 68 of the Companies Act, 2013 provides that no buy-back of any kind of shares or other specified securities shall be made out of the _________________.

Securities premium balance as it stood before buy back Proceeds of an earlier issue of the same kind of shares or same kind of other specified securities General reserve in excess of 15% balance as per latest audited balance sheet Proceeds of issue of specified securities.

12. For the purpose of calculating debt equity ratio which of the following debts are considered_________________.

Secured debts Unsecured debts Current liabilities All of the above.

13. Where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to the ___________________.

Capital Reserve Account General Reserve Account Capital Redemption Reserve Account Equity Shares Redemption Account.

14. No offer of buy-back shall be made within a period of reckoned from the date of the closure of the preceding offer of buy-back ______________.

6 months 1 year 2 years 10 months.

15. Equity shares amounting to Rs.2,00,000 are brought back at a premium of 5%, by issue of preference shares amounting to Rs.1,00,000 at a premium of 10%. Compute the amount to be transferred to Capital Redemption Reserve.

Rs.1,00,000 Rs.90,000 Rs.1,50,000 Rs.50,000.

16. Following are the extract of balance sheet of Light Co. Ltd. Equity share of Rs.10 each - Rs.10,00,000 Security Premium – Rs.2,40,000 Reserve – Rs.7,50,000 Profit & Loss Account – Rs.2,80,000 Bank - Rs.9,10,000 Non Trading Investments – Rs.4,20,000 Company brought back 15,000 shares at Rs.40 each. The transaction in respect of buy back was financed by sale of 2/3rd of non-trade investment for Rs.5,90,000 Amount to be transferred to capital redemption reserve is _______________.

Rs.6,00,000 Rs.1,00,000 Rs.4,50,000 Rs.1,50,000.

17. Following information is available from the audited balance sheet of TH Ltd.: Equity Shares Capital (3,000 lakh share of Rs.10 each) – Rs.30,000 Securities Premium Account - Rs.3,000 General Reserve – Rs.10,000 Secured Loans – Rs.40,000 Unsecured Loans - Rs.22,000 Compute the maximum limits up to which buy back is permitted in the financial year 2022 – 23.

800 lakh shares 1075 lakh shares 500 lakh shares 400 lakh shares

18. The notice of the meeting at which the special resolution is proposed to be passed relating to buy back of shares shall be accompanied by an explanatory statement stating –

Full and complete disclosure of all material facts Analysis of debt equity Gross profit ratio before buy back Chairman’s view on buy back.

19. The balance appearing in the books of a company at the end of year were: CRR A/c = Rs.50,000 Securities Premium = Rs.5,000 Revaluation Reserve = Rs.20,000 Profit & Loss A/c (Dr.) = Rs.10,000 Maximum amount available for bonus shares will be ______________________.

Rs.50,000 Rs.55,000 Rs.45,000 Rs.57,000.

20. ______________ is the amount of share capital that a company is permitted to issue.

Issued Share Capital Authorized Share Capital Subscribed Capital Paid up Capital.

21. When shares are forfeited, the share capital account is debited with ______.

Called-up value of shares Nominal value of shares Market value of shares Paid-up value of shares.

22. Forfeiture of shares results in the reduction of____.

Authorised capital Reserve capital Paid-up capital Fixed assets.

23. Shares can be forfeited ________.

For failure to attend meetings For failure to repay the loan to the bank For non-payment of call money For which shares are pledged as a security.

24. Redeemable Preference Shares of Rs. 1,00,000 are redeemed at a premium of 5% for which purpose fresh equity capital of Rs. 40,000 is issued at par. What amount should be transferred to Capital Redemption Reserve account?

Rs.40,000 Rs.1,05,000 Rs.65,000 Rs.60,000.

25. The financial statements of company shall be in the form provided in ____________.

Schedule IV Schedule III Schedule V Schedule VI.

26. Part I of the Schedule III to the Companies Act, 2013 gives the ______________.

Format of Profit & Loss Account General instructions for preparation of Profit & Loss Account Format of Balance Sheet Format of Comparative Statements.

27. Where the company covered under section 135 of the Companies Act, 2013, which of the following shall be disclosed with regard to CSR activities?

Amount of expenditure incurred Shortfall at the end of the year Shortfall at the end of the year All of these.

28. Which of the following is/are not a criteria to classify a liability as current liability?

It is expected to be settled in the company’s normal operating cycle It is held primarily not for the purpose of being traded It is due to be settled within twelve months after the reporting date The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

29. What are the major types of financial statements prepared by entities?

(a) Statement of Financial Performance or Income Statement (b) Statement of Financial State of Affairs or Balance Sheet (c) Statement of Changes in Financial Position (d) Statement of Inflow and Outflow of Cash (a) Statement of Trial Balance (b) Statement of Financial State of Affairs or Balance Sheet (c) Statement of Changes in Financial Position (d) Statement of Inflow and Outflow of Cash (a) Statement of Financial Performance or Income Statement (b) Statement of Financial State of Affairs or Balance Sheet (c) Statement of Changes in Financial Position (d) Statement of Fund Flows (a) Statement of Financial Performance or Income Statement (b) Statement of Financial State of Affairs or Balance Sheet (c) Statement of Changes in Financial Position (d) Cash Book 30 If the turnover of the company is less than Rs.100 Crore, the figures appearing in the Financial Statements shall be rounded off to nearest – To the nearest hundreds To the nearest hundreds and thousands To the nearest hundred, thousands, lakh or million thereof To the nearest

30. If the turnover of the company is less than Rs.100 Crore, the figures appearing in the Financial Statements shall be rounded off to nearest –

To the nearest hundreds To the nearest hundreds and thousands To the nearest hundred, thousands, lakh or million thereof To the nearest hundreds, thousands, lakhs or millions, or decimals thereof.

31. Under which heading the Deferred Tax Liabilities appears in the balance sheet ________________.

Current Liabilities Non-Current Liabilities Deferred Liabilities Contingent Liabilities.

32. As asset shall be classified as current ------------------------ If it is held primarily for the purpose of being traded.

If it is held primarily for the purpose of being traded If it is not possible to classify such asset as non-current asset It or the asset normal operating cycle cannot be identified All of the above

33. A liability shall be classified as current when it satisfies any of the following criteria:

It is expected to be settled in the Company’s normal operating cycle It is due to be settled within twelve months after the reporting date The company does not have an unconditional right to defer settlement of the liability of at least twelve months after the reporting date. Any of the above.

34. Which of the following appears under the heading ‘Reserve & Surplus’ in the balance sheet?

Share Options Outstanding Account Share Application Money Pending Allotment Long Term Provisions Share Application Money due for refund.

35. In the Balance Sheet Bank Overdraft will be shown as a liability under the heading –

Other Current Liabilities Short Term Borrowings Current Liabilities Cash & Cash Equivalent.

36. In the Balance Sheet Calls in Arrears will be shown in -

Liabilities Side Assets Side Assets or Liabilities Side None of the above.

37. Futura Ltd had the following items under the head “Reserves and Surplus” in the Balance Sheet as on 31st March: (Rs. in Lakhs) Securities Premium Account - 80, Capital Reserve – 60, General Reserve – 90. The Company had an Accumulated Loss of Rs250 Lakhs on the same date. Reserves & Surplus to be disclosed in B/S is _______________.

Rs.250 Lakhs Rs.230 Lakhs Rs.20 Lakhs Rs.(20 Lakhs).

38. In the Notes to Accounts a Contingent liabilities shall be classified as ____________.

Claims against the company not acknowledged as debt Guarantees Other money for which the company is contingently liable All of these.

39. In case of purchase of assets under instalment payment system, instalments due after 12 months from the reporting date are shown as

Current liability Current assets Non-current liability Non-current assets.

40. As per Schedule III of Companies Act 2013, while preparing the financial statements in case of a Finance Company, interest received from borrowers should be shown under

Revenue from operation Other Income Current assets Non-current assets.

41. Inventories are valued at the lower of _________________ or the net realizable value.

Fair Value Historical cost Current value None of these.

42. The amount of Calls-in-Advance not yet adjusted till the Balance Sheet date is shown under ___________ under the head Current Liabilities

Other Current Liabilities Inventories Trade Receivables Trade Payables.

43. Proposed Dividend is treated as a _____________________________ and is shown as a deduction in Reserve and Surplus.

Contingent Liabilities Current Assets Current Liabilities None of these.

44. Cash receipts from disposal of shares is classified under

Investing Activity Operating Activity Financing Activity Cash Equivalent.

45. The main difference in direct and indirect method is to calculate the

Cash Flows from Investing Activity Cash Flows from Operating Activity Cash Flows from Financing Activity All of these.

46. What is/are objective/s of preparing Cash Flow Statement?

To determine ability of the entity to generate cash and cash equivalents To meet the needs of the entity to utilise the cash flows To ascertain gross inflows and outflows of cash All of these.

47. When company repurchases its own shares it records a ____________

Cash inflow Cash outflow No effect on cash None of these.

48. A Cash Flow Statement begins with ____________.

Investing Activity Operating Activity Financing Activity Cash Equivalent.

49. Which of the following item is not considered as Cash Equivalent?

Short term deposits in Banks Bill Receivables Commercial Papers

50. Which of the following is an example of Non-cash Expenses?

Depreciation Wages and Salaries Payment of Dividend All of these.

51. If the Net Operating Profit is Rs.90,000 and the Debtors are decreased by Rs.20,000 during the year. Then Cash from Operation will be ____________.

Rs.70,000 Rs.1,10,000 Rs.90,000 None of these.

52. Increase of Bills Receivable by Rs.30,000 results in

Decrease in Cash Increase in Cash No effect on cash All of these.

53. Marketable securities are treated as _________________ in Cash Flow Statement

Cash Cash equivalent Current Asset Non-cash Equivalent.

54. An example of Cash Flow from Financing Activity is ________________

Payment of Dividend Receipt of dividend on investment Cash received from customer Purchase of Fixed Assets.

55. Which of the following is a source of Cash?

Cash deposited into Bank Cash withdrawn from Bank Sale of Goods Costing Rs.20,000 Rs.15,000 Depreciation charged on Fixed Assets.

56. Interest on Long term borrowing is an expense relating to _____________

Investing Activity Operating Activity Financing Activity All of these.

57. A company received dividend of Rs.1,00,000 on its investment in other company's share. In case of a Finance company it will be classified as ____________

Cash Flows from Investing Activity Cash Flows from Operating Activity Cash Flows from Financing Activity None of these.

58. Advance received from customers is classified as ______________________.

Cash Flows from Investing Activity Cash Flows from Operating Activity Cash Flows from Financing Activity None of these.

59. Acquired the assets of a company through issue of equity shares is classified as __________________.

Cash Flows from Investing Activity Cash Flows from Operating Activity Cash Flows from Financing Activity None of these.

60. A Ltd. paid an advance tax amounting to Rs.3,65,000 out of which Rs.15,000 is relating to a short-term capital gain on sale of securities. How will A Ltd. report the payment of advance tax in its Cash Flow Statement?

Cash Flows from Operating Activity Cash Flows from Investing Activity Cash Flows from Financing Activity None of these.

61. Cash flows from operating activities (Rs.550) Lakhs Cash flows from investment activities (Rs.1,250) Lakhs Cash flows from financing activities Rs.1,750 Lakhs Determine the change in cash and cash equivalents is _______________.

Decrease in Cash and Cash Equivalent by Rs.50 Lakhs Increase in Cash and Cash Equivalent by Rs.50 Lakhs No change in Cash and Cash Equivalent It is a non-Cash item.

62. The method for presenting Net cash provided by operating activities that starts with net income and adjusts it for items that affected reported net income but that did not affect cash is called as ____________.

Direct method Working capital method Indirect method Cost-benefit method.

63. B. X Ltd. purchased machinery of Rs.10,00,000 issuing a cheque of Rs.2,50,000 and 10% Debentures of Rs.7,50,000. In the cash flow statement, the transaction will be shown as .

Outflow under investing activity Rs.10,00,000, inflow under financing activity as receipt for debentures Rs.7,50,000 Outflow under investing activity Rs.2,50,000, Inflow of Rs.7,50,000 as financing activity. None of the above

64. From the following information presented by P Ltd. ascertain the Net Realisable Value of stock: Cost Price of certain stock amounted to Rs.60,000; being obsolete, it can be used for production purposes after incurring Rs.10,000 for modification. The same could be used as a raw material for an existing product, the purchase price for the same amounts to Rs.40,000.

Rs.60,000 Rs.40,000 Rs.30,000 Rs.10,000.

65. Objectives of Bank’s Bookkeeping system is/are________________.

To keep up-to-date detailed ledgers To balance the trial balance every day To keep all control accounts in agreement with the detailed ledgers All of these.

66. Which of the following

66. Which of the following is/are not Subsidiary Register of a banking company?

Demand Drafts, Telegraphic Transfers and Mail Transfers issued on Branches and Agencies Demand Drafts, Telegraphic Transfers and Mail Transfers received from Branches and Agencies Letters of Indemnity Letters of Credit.

67. Some of the common purposes are of a Bank's Statistical Books is/are ______________.

To record Average Balance in Loan and Advances etc. To record Deposits received and amount paid out each month in the various departments To record Average Balance of Assets Both 1 and 2.

68. __________________________ = Amount of Bill × Rate of Discount × Unexpired period (in months)/12

Rebate on Bills Discounted Discount on Bills Interest Loan Amount.

69. The status of securities and the value of such securities must be mentioned by every bank in Schedule ___________.

2 4 7 9.

70. The Electricity Act, 2003 replaced which of the following erstwhile existing legislations?

The Indian Electricity Act, 1910 The Electricity (Supply) Act, 1948 The Electricity Regulatory Commissions Act, 1998 All of these.

71. Which of the following is/are main feature of Electricity Act, 2003?

The activities like generation, transmission and distribution of power have been separately identified. Power generation has partially been de-licensed. 20% of the power supplied by suppliers and distributors to the consumers has to be generated using renewable and non-conventional sources of energy. All of these.

72. The Central Commission shall consist of which of the following Members?

A chairperson and 3 Members The Chairperson of the Authority who shall be the Member, ex-officio. Both 1 and 2 None of them.

73. Rate of provisioning for advances doubtful for more than 1 year but less than 3 years is ____________.

25% 40% 60% 100%.

74. Which of the following is a principle of insurance?

Principle of indemnity Insurable interest. Principle of uberrimae fidei. All of the above.

75. Rate of provision on advances doubtful for more than 3 years is___________.

40% 25% 100% Nil.

76. Which of the following is not a mandatory financial statement of a General Insurance Company as per IRDA regulations?

Revenue Account Profit and Loss Account Balance Sheet Cash Flow Statement.

77. For Marine Insurance: Premia collected from - (a) Insured (other than insurance companies) in respect of policies issued is Rs.45 Cr. (b) Other insurance companies in respect of risks undertaken is Rs. 17.5 Cr. (c) Premia paid/payable to other insurance companies on business ceded is Rs.16.75 Cr. Compute the closing balance in Unexpired Risks Reserve Account.

Rs.45 Cr. Rs.45.75 Cr. Rs.12.50 Cr. Rs.8.25 Cr.

78. _____________ is a reserve which should be created by the insurers towards losses which might arise due to entirely unexpected set of events and not for any specific known purpose.

General Reserve Catastrophe Reserve Revenue Reserve Surplus.

79. Date of bill 15.01.2022 Period 5 months Rate of discount 8% Calculate rebate on bill discounted, if accounting year ends on 31.03.22.

Rs.852.46 Rs.818.85 Rs.873.22 Rs.825.45.

80. Information provided by General Purpose Financial Reporting are as follows:

Economic resources i.e., assets Claims against the entity i.e., liabilities Changes in economic resources and claims All of these.

81. Which of the following does not encompass Enhancing Qualitative Characteristics?

Comparability Verifiability Uniformity Understandability.

82. ________________ measures provide monetary information about assets, liabilities and related income and expenses, using information updated to reflect conditions at the measurement date.

Historical Cost Current Value Notional Value Net Realisable Value.

83. A complete set of financial statements comprises which of the following?

A balance sheet as at the end of the period Statement of changes in equity for the period Both 1 and 2 A statement of fund flows for the period.

84. From the following information presented by P Ltd. ascertain the Net Realisable Value of stock: Cost Price of certain stock amounted to Rs.60,000; being obsolete, it can be used for production purposes after incurring Rs. 10,000 for modification. The same could be used as a raw material for an existing product, the purchase price for the same amounts to Rs.40,000.

Rs.60,000 Rs.40,000 Rs.30,000 Rs.10,000.

85. Z Co. Ltd. purchased goods at the cost of Rs.40 lakhs in October 2021. Till March 2022, 75% of the stocks were sold. The company wants to disclose closing stock at Rs.10 lakhs. The expected sales value is Rs.11 lakhs and a commission at 10% on sale is payable to the agent. What is the correct closing stock value to be disclosed as at 31.3.2022?

Rs.11,00,000 Rs.9,90,000 Rs.10,00,000 Rs.40,00,000.

86. Mr. X is an employee of ABC Ltd. His annual salary is Rs.15 lakh. The company follows a 300 working days policy. As per the policy of the company, Mr. X is entitled to a leave of 10 days for 2022-23. He, however, utilises 8 days leave. The unutilised leaves are not allowed to be carried forward but are settled by way of payment to the employee. Compute the amount to be paid for unutilised leaves.

Rs.5,000 Rs.10,000 Rs.15,00,000 Rs.1,50,000.

87. 01.04.2022 B Ltd. has 3600 ordinary shares outstanding. On 31.08.2023 it issued 1200 ordinary shares for cash. On 31.01.23 it bought back 600 ordinary shares. Calculate weighted average number of shares as on 31.03.23.

4200 shares 4800 shares 3600 shares 1200 shares.

88. C Ltd. had 10,00,000 ordinary shares outstanding as on 01.04.2022. On 01.01.2023 it issued 2 ordinary shares bonus for each share outstanding on 31.12.2022, Profit for the year 2021-22 was Rs.9,00,000. Profit for 2022-23 was Rs.30,00,000. Calculate the adjusted EPS for the year 2021-22.

Rs.1.00 Rs.0.30 Rs.3.00 Rs.3.33.

89. An entity has an obligation to restore an asset for the damage it has in the past. It has Rs.20 lakh cash to pay on 31.03.2022 relating to this liability. The entity considers that 15% is an appropriate discount rate. The time value of money is considered material. Calculate the amount to be provided.

Rs.15.12 lakh Rs.20 lakh Rs.3.00 lakh None of these.

90. Ind AS 1 “Presentation of financial statements” applies to _____________

Consolidated financial statements in accordance with Ind AS 110, Consolidated Financial Statements Separate financial statements in accordance with Ind AS 27, Separate Financial Statements Both of the above All of these.

91. Which of the following is not a part of other long-term benefits?

Long-term disability benefits Retirement benefits Profit-sharing and bonuses Deferred remuneration.

92. Ind AS 2, Inventories, does not apply to____________.

Financial Instruments Biological Assets Both 1 and 2 1 but not 2.

93. Which of the following is a defined contribution plan?

Multi-employer plan State plan Insured benefits All of the above.

94. Ordinary shares are 1,00,000 of Rs.1.00; 10% Preference shares are 200000 of Rs.1.00; PAT Rs.10,00,000. Calculate basic EPS.

Rs.9.80 Rs.9.60 Rs.9.40 Rs.9.20.

95. The expected sales value of stock is Rs.20 lakhs and a commission at 10% on sale is payable to the agent. Calculate NRV.

Rs.12 lakh Rs.14 lakh Rs.16 lakh Rs.18 lakh.

96. The method for presenting Net cash provided by operating activities that starts with net income and adjusts it for items that affected reported net income but that did not affect cash is called as ____________.

Direct method Working capital method Indirect method Cost-benefit method.

97. Given salary expenses Rs.40,000, Outstanding in the beginning of the year Rs.5,000 and outstanding at the end of the year Rs.10,000. Cash outflow on salary will be.

Rs.55,000 Rs.45,000 Rs.35,000 Rs.15,000.

98. Which of the following is outside the scope of Ind AS 1?

Financial Review by Management Environmental Reports Value Added Statements All of these.

99. Which of the following is included in cost of inventory as per Ind AS 2?

Duties and taxes subsequently recoverable from taxing authorities Freight inward Rebates Duty drawbacks.

100. Y Ltd. supplied the following information: Net Profit for 2021-22 = Rs.10,00,000 Net Profit for 2022-23 = Rs.15,00,000 No. of shares prior to right issue = 5,00,000 Terms of right issue: 1 new share for every 4 shares held; right issue price = Rs.20 Fair value of 1 ordinary share immediately prior to exercise of right = Rs.25. Compute the Right Factor.

2.5 1.92 1.04 2.00.

101. ________________________is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Fair Value Value in use Current Cost Net Realisable Value.

102. Which of the following is included in cost of inventory as per IND AS 2?

Duties and Taxes subsequently recoverable from taxing authorities Freight inwards Rebates Duty drawbacks.

103. Events occurring after the Reporting Period are those events that occur between ---

reporting date and issue date reporting date and approval date finalisation date and approval date finalisation date and issue date.

104. How many types of Employee Benefits are there as per Ind AS 19?

1 2 3 4.

105. Which of the following is not an essential feature of auditing?

It involves evaluation & verification of the relevance, reliability and adequacy of evidence in support of verifiable information such as vouchers, documents, explanations. It is analytical, critical and investigative review of systems of Accounting & Internal Controls. The information audited are non-financial in nature. There should be standards or criteria for evaluation of the information in a systematic & scientific manner.

106. The word “Auditing” has been derived from Latin word “audiere” which means_________________.

To Hear To verify To Examine To Identify.

107. Management is interested in the Financial Statements for __________________.

For day-to-day decision-making For Collection of Taxes For research purpose None of the above.

108. Government is interested in the Financial Statements for____________________.

For day-to-day decision-making For Collection of Taxes For research purpose None of the above.

109. Verification of the value of assets, liabilities, and the balance of reserves, provision and the amount of profit earned or loss suffered by an entity is called as ____________.

Continuous audit Balance sheet audit Interim audit Partial audit.

110. Audit in depth synonymous for _______________.

Examination in Depth Completed audit Final audit Internal audit.

111. Test Checking reduces the __________.

Power of an auditor Expenses of auditor Work of an auditor Liability of an auditor.

112. A flow chart, made by the auditor, of an entity’s internal control system is a graphic representation that depicts the auditor’s ____________________.

Understanding of the system Understanding of fraud risk factors Documentation of assessment of control risk Both 1 and 3.

113. Internal auditor is appointed by ________.

The Management The Shareholders The Government The Statutory Body.

114. The work of one clerk is automatically checked by another clerk is called ___________.

Internal control Internal check Internal audit None of the above.

115. An internal control includes ____________.

Internal Audit Internal Check Both 1 and 2 None of the above.

116. The most important objective of internal audit is ____________.

Early detection of errors and fraud Facilitating final audit Early finalization of annual account Ensuring systematic accounting.

117. Internal check is meant for _______________.

Prevention of frauds Detection of frauds Helping audit in depth Detection of errors.

118. Cut-off testing is performed during audit of sales to address the following assertion_______________.

Occurrence Measurement Cut-off All of these.

119. Which of the following is/are advantage/s of audit?

Audit is a tool, which different stakeholders can use to protect their interests in the enterprise Audit is not only a corrective measure but has a deterrent effect. It serves as a moral check on the employees from committing defalcations or embezzlements The employees of the organisation remain alert and vigilant as regards the updating of books of accounts and other records All of these.

120. ________________________involves examination of legalities by blending the techniques of propriety audit, regularity, investigative and financial audits.

Forensic audit Tax audit Cost audit Human Resource Audit.

121. Audit Documentation is related to

SA 300 SA 230 SA 250 SA 310.

122. _________________ is a detailed plan of the auditing work to be performed, specifying the procedures to be followed in verification of each item and the financial statements and the estimated time required.

Audit programme Flow-chart Audit Documentation Audit Working Papers.

123. _____________refers to the possibility of material misstatement due to complex transactions or even due to organised fraud.

Control Risk Inherent Risk Detection Risk None of these.

124. Benefits of Audit Sampling are ____________________.

It reduces the workload of the auditor It saves time and cost It gives dependable result as it is based on statistical sampling methods All of these.

125. The main role of _____________ is the following: A. Recommending Auditing Standards, B. Monitoring and Enforcing Compliance with Auditing Standards and C. Power to Investigate.

NFRA NACAS IFC None of these.

126. NFRA consists of which of the following?

Accounting Standards Committee Auditing Standards Committee Enforcement Committee All of these.

127. The term ‘________________________’ means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Enforcement Committee Internal Financial Controls National Advisory Committee on Accounting Standards National Financial Reporting Authority.

128. Which of the following is not a duty of the NFRA?

Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government. Monitor and enforce compliance with Income Tax Act and auditing standards. Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties. Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service.

129. An auditor expresses _____________ opinion on financial statements when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, either individually or in aggregate, are both material and pervasive to the financial statements.

Qualified Disclaimer Adverse None of these.

130. Some situations when an auditor should express a qualified opinion is/are ______________________________.

Non-adherence to AS-2 with regard to inventory valuation at the lower of cost and net realizable value. Auditor being prevented by the management from observing the counting of physical inventory where such action is material to the financial statements. Both 1 and 2 Non-receipt of branch audit reports from a significant number of branches.

131. An audit report with an unmodified opinion is also known as ‘____________________’ or ‘Unqualified Report’.

Clean Report Clear Report Neat Report Honest Report.

132. Basic Elements of Audit Report as per Standards on Auditing are_________________________________________.

Key Audit Matters Auditor’s Opinion Basis for Opinion All of these.

133. As per Rule 11 of Companies (Audit and Auditors) Rules 2014, the auditor’s report shall also include his views and comments on which of the following matters?

Whether the company has disclosed the impact, if any, of pending litigations on its financial position in its financial statement; Whether the company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts; Whether there has been any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company. All of these.

134. Essential Characteristics of a Good Audit Report are_______________________________.

Simplicity, Clarity, Brevity, Firmness, Objectivity, Disclosure, Impartiality, Information-based and Timeliness Simplicity, Clarity, Brevity, Firmness, Objectivity, Disclosure, Impartiality, Information-based and Popularity Simplicity, Clarity, Brevity, Firmness, Objectivity, Disclosure, Impartiality, Information-based and Ambiguity None of these.

135. Auditor shall verify whether the unpaid dividend has been transferred to the Unpaid Dividend Account within _______ days from the expiry of ___________ days allowed for declaration and payment of dividend.

7, 20 7, 30 15, 20 15, 15.

136. If debentures are redeemable, it can be redeemed in which of the following ways?

By way of payment as donation By payment whenever the company desires to do so By way of personal drawing By way of payment as shares without consideration.

137. The audit procedure to be applied in this context of Splitting of Shares are _________________

The auditor shall confirm that alteration was authorised by articles He should verify the minutes of the Board meeting and ordinary resolution passed in the general meeting in which the approval of members is obtained He should verify that alteration had been effected in copies of Memorandum, Articles, etc. All of these.

138. The term ‘____________________’ comprises both trade creditors (i.e., sundry creditors) as well as bills payable. This represents the liability of an organisation to its suppliers.

Trade Payable Rights and Obligations 1 and 2 1 or 2

139. Audit Report contains ______________.

Details of Facts Details of Frauds Expression of Opinion Expression of Suggestions.

140. Audit Certificate contains ____________.

Details of Facts Details of Frauds Expression of Opinion Expression of Suggestions.

141. An auditor expresses ___________ opinion on financial statements when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, either individually or in aggregate, are both material and pervasive to the financial statements.

Qualified Adverse Modified Disclaimer.

142. Any casual vacancy in a govt. company is filled by the CAG of India within days.

15 30 45 60.

143. A cost auditor submits his report along with reservations and observations in Form No.___________________

CRA 1 CRA 2 CRA 3 CRA 4.

144. Secretarial Audit is covered under section _________________.

204 148 139 133.

145. An auditor shall submit an unmodified report when ________________________.

The financial statements exhibit true and fair view The financial statements are partially correct The financial statements are incomplete The financial statements are unavailable.

146. Which of the following is not a content of audit report as per CARO?

Inventory Acceptance of deposit Recruitment of employees Repayment of loan.

147. Which of the following are the essential characteristics of a good audit report?

Simplicity Clarity Objectivity All of these.

148. Auditor of a company appointed u/s ____________shall not act as the cost auditor of the company.

139 148 204 141.

149. As per Section 139(9), a retiring auditor may be re-appointed at an annual general meeting, if:

he is not disqualified for re-appointment he has not given the company a notice in writing of his unwillingness to be re-appointed a special resolution has not been passed at that meeting appointing some other auditor or providing expressly that he shall not be re-appointed All of these.

150. The first auditor of a company, other than a Government company, shall be appointed by the __________________________ within thirty days from the date of registration of the company.

Shareholders Board of Directors Government Employees.

151. The company shall inform the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within fifteen days of the meeting in which the auditor is appointed in Form ____________.

ADT 1 ADT 2 ADT 3 ADT 4.

152. No individual shall be appointed or reappointed as auditor for more than one term of _______ consecutive years.

4 5 6 3.

153. Section ___________ of Companies Act, 2013 contains the statutory provisions in relation to remuneration of auditors.

139 148 142 141.

154. _________________refers to the process of conducting the audit of a single organisation by more than one auditor.

Joint audit Cost audit Internal audit Continuous audit.

155. The amendments that gave the local self-governance in India the constitutional protection are and _____________________.

53 and 54 63 and 64 73 and 74 83 and 84.

156. According to the Central Co-operatives Societies Act, ____________% of the profits of a co-operative society should be transferred to a Reserve Fund before distribution of dividend or payment of bonus to its members.

20% 25% 30% 35%.

157. The major objective of audit of Municipalities and Panchayats are _________________________.

To ensure on the fairness and correctness of contents in the Financial Statement To report on adequacy of Internal control To ensure value of money is fully received on amount spent. All of these.

158. Which of the following records are not maintained by a co-operative societies as accounting records?

Cash book Memorandum of Association Register of assets and investments Register of sureties.

159. According to the Central Co-operatives Societies Act, ____________% of the profits of a co-operative society should be transferred to a Reserve Fund before distribution of dividend or payment of bonus to its members.

25% 20% 30% 15%.

160. Which of the following is not falling under the broad category of Banks?

Commercial Banks Regional Rural Banks Co-operative Banks None of these.

161. The auditor of a nationalised bank is primarily required to comment on which the following aspects in its report to the Central Government?

Whether the financial statements present a true and fair view of the affairs of the bank and whether all necessary explanation and information has been made available to him Whether or not the monetary supports received from the offices and branches of the bank have been found adequate for the purpose of his audit Whether or not the transactions of the bank, which have come to his notice, have been within the powers of that bank Both 1 and 3.

162. In relation to advances made by bank an auditor needs to review which of the followings?

Scrutinise the subsidiary, ledger, & control accounts Scrutinise the overdue account and scheme for recovery of such amount. Ensure the proper documentation of account. All of these.

163. Hospitality sector covers a wide range of organisations which can broadly be divided into _____categories.

4 3 2 1.

164. Steps common for the category of Restaurants in relation to Hospitality Sector is/are ________________.

Vouch revenue out of commissions from various companies and tour partners. Verify the total revenue recognised based on the daily and monthly sales report. Check that the revenue has been realised in cash based on bank statements. Check whether arrears written off, if any, has been duly approved by the person responsible.

165. Regarding which category of Hospitality Sector, the following steps are taken for auditing purposes?

Amusement Park Cinema Halls Hotels and Guest Houses Travel and Tourism.

166. Steps of audit common for all organisations are ________________.

Understand the ownership structure of the organisation Evaluate the internal control system and determine the nature, timing and the extent of the audit procedures Check that the organisation has a valid licence from an appropriate authority to run the business All of these.