Auditing - Questions and Answers for Competitive Exams | GkSeries

13. Audit means ___________.

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

Answer: Option [C]

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

• [A] to the shareholders.
• [B] to the court.
• [C] to the bank.
• [D] to the general public.

Answer: Option [A]

15. Sale of land is a __________.

• [A] revenue receipt.
• [B] capital receipt.
• [C] capital expenditure.
• [D] revenue expenditure

Answer: Option [B]

16. Secret reserve can be created by _______________.

• [A] public limited company only
• [B] banking and financial companies only.
• [C] private limited company only.
• [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 _________.

• [A] Error of commission
• [B] Error of omission.
• [C] Compensating error.
• [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 _________.

• [A] Continuous audit.
• [B] Balance sheet audit.
• [C] Interim audit.
• [D] Partial audit.

Answer: Option [B]

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

• [A] Personal ledger.
• [B] Impersonal ledger.
• [C] Cash
• [D] Sales

Answer: Option [B]

20. Preliminary expenses are the best example for _________.

• [A] fictitious asset.
• [B] intangible asset.
• [C] wasting asset.
• [D] floating asset.

Answer: Option [A]

21. Periodical audit is also called as _________.

• [A] Final audit.
• [B] Interim audit.
• [C] Balance sheet audit.
• [D] Income statement audit.

Answer: Option [C]

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

• [A] the government company itself.
• [B] the central government.
• [C] the share holders.
• [D] the debenture holders.

Answer: Option [B]

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

• [A] to verify the assets and liabilities.
• [B] to know that all receipts and payments have been properly recorded.
• [C] to check the internal control system in business.
• [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 __________.

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

Answer: Option [A]