Practice Test

Q1) The term 'Audit' originated from the Latin word ________. Show Answer

Q2) The term 'Audit' originated from the Latin word "audire" which means to ________. Show Answer

Q3) Audit is performed to ascertain the _______ of information. Show Answer

Q4) Which of the following is the main function of auditing? Show Answer

Q5) Accounts maintenance is the function of _______. Show Answer

Q6) The objective of an audit of financial statement is to enable an auditor to _______ on financial statements. Show Answer

Q7) The main object of an audit is ________. Show Answer

Q8) Auditor has to give its opinion whether the financial statement depicts _______. Show Answer

Q9) Which of the following statement is correct? Show Answer

Q10) An audit seeks to provide ________ that the financial statements are free from material error. Show Answer

Q11) Audit deals with _________. Show Answer

Q12) The audit can be ______ only when the accounting ________. Show Answer

Q13) Auditing is a systematic examination of accounts by ________. Show Answer

Q14) Time, extent and nature of audit depend upon effectiveness of _________. Show Answer

Q15) Time, extent and _______ of audit depend upon effectiveness of internal control. Show Answer

Q16) Auditing may be done on _______ examination of accounts. Show Answer

Q17) Maintenance of accounts is the function of auditing. Show Answer

Q18) Auditor has to report that accounts have been prepared as per _______. Show Answer

Q19) Auditing can be defined as an independent examination of records whether ________ maintained by the entity to express an opinion whether they comply with applicable laws & regulations. Show Answer

Q20) Which of the following is/are principal function of audit? Show Answer

Q21) Which of the following is/are principal function of audit? Show Answer

Q22) Which of the following is/are not principal function of audit? Show Answer

Q23) It is the _______ of the auditor to physically inspect the assets and their recording in the books of account and verify the legal and official documents Show Answer

Q24) Auditor has to ensure that all the statutory requirements has been complied by the entity like provisions of ________. Show Answer

Q25) The auditor has to report to the _______ for conducting audit whether the financial statements reveals true and fair view of the state of affairs and of the profit or loss earned during the period by the organization. Show Answer

Q26) Which of the following can be treated as benefit of auditing? Show Answer

Q27) One of the following is not an advantage of audit: __________. Show Answer

Q28) Which of the following cannot be treated as benefit of auditing? Show Answer

Q29) Which of the following can be treated as benefit of auditing? Show Answer

Q30) Which of the following can be treated as benefit of auditing? Show Answer

Q31) Which of the following can be treated as benefit of auditing? Show Answer

Q32) Which of the following cannot be treated as benefit of auditing? Show Answer

Q33) Which of the following can be treated as limitation of auditing? Show Answer

Q34) Which of the following can be treated as limitation of auditing? Show Answer

Q35) The evidences obtained by an auditor are ________. Show Answer

Q36) The _______ is related to critical checking of particular records. Show Answer

Q37) _______ implies systematic, critical and special examination of the records of a business for a specific purpose. Show Answer

Q38) _________ is independent examination of financial information of any entity, when such an examination is conducted with a view to expressing an opinion thereon. Show Answer

Q39) Investigation i.e critical checking of particular records is ______ for companies. Show Answer

Q40) Auditing is _______ for companies. Show Answer

Q41) Investigation is conducted by any person, who _________. Show Answer

Q42) Financial audit is conducted by _______ in case of companies. Show Answer

Q43) _______ may appoint the investigator. Show Answer

Q44) Auditor is appointed by ________. Show Answer

Q45) ________ not necessarily restricted to a financial year. It can extend for a period consisting of a number of years. Show Answer

Q46) ________ is generally conducted for a financial year. Show Answer

Q47) Investigation seeks ________ evidence. Show Answer

Q48) Audit evidences are _________. Show Answer

Q49) Which of the following can be treated as limitation of auditing?
Show Answer

Q50) Financial statements need to be prepared in accordance with : Show Answer

Q51) Objective of an audit of financial statements is to enable the auditor to express an opinion. Show Answer

Q52) If the financial statements are prepared as per the financial reporting framework the auditor gives an opinion that the financial statements Show Answer

Q53) The term 'General Purpose Financial Statements' never includes Show Answer

Q54) Which of the following errors is an error of omission. Show Answer

Q55) Which of the following errors is an error of principle ? Show Answer

Q56) Errors of recording do not allow Show Answer

Q57) Which of the following errors will affect the Trial Balance ? Show Answer

Q58) Which of the following errors will not affect the Trial Balance ? Show Answer

Q59) The total of Sales Book was not posted to the ledger. This is Show Answer

Q60) Sales Book was overcast by Rs.500. This is Show Answer

Q61) The total of a folio in the Sales Book Rs.1,000 was carried forward as Rs.100. This is Show Answer

Q62) Sales to Ram Rs.143 posted to his account as Rs.134. This is Show Answer

Q63) Sales to Meena Rs.143 posted to Meenu as Rs. 143. This is Show Answer

Q64) Goods of the value of Rs.376 were returned by Ram and were taken into stock on the same date but no entry was made in the books. This is Show Answer

Q65) A credit sale wrongly passed through the purchases book. This is Show Answer

Q66) Repairs of newly purchased second-hand machinery debited to Repairs Expenses Account. This is Show Answer

Q67) Repairs to Machinery had been charged to Machinery A/c. This is Show Answer

Q68) Cartage paid for newly purchased machinery, posted to Cartage Account. This is. Show Answer

Q69) Goods taken away by the proprietor for personal use not recorded anywhere. This is Show Answer

Q70) Which of the following errors will affect the trial balance? Show Answer

Q71) If a purchase return of Rs.84 has been wrongly posted to the debit of the sales return account but had been correctly entered in the suppliers account, the total if the trial balance would show Show Answer

Q72) A purchase of Rs.1870 by cheque has been wrongly posted in the cash book as Rs.1780. This has the effect of Show Answer

Q73) After preparing the trial balance the accountant finds that the total of the credit side is short by Rs.1500 . this difference will be Show Answer

Q74) _________ is basically responsible for prevention and detection of errors and frauds. Show Answer

Q75) Which of the following is not true about opinion on financial statement? Show Answer

Q76) Which of the following statement is not true? Show Answer

Q77) As per AAS-4, if auditor detects an error then Show Answer

Q78) Which of the following is not a limitation of audit as per AAS 4? Show Answer

Q79) How many principles are listed in AAS 1 which govern auditor's professional obligation ? Show Answer

Q80) The risk of fraud increases when Show Answer

Q81) Which of the following factors likely to identified as a fraud factor by the auditor ? Show Answer

Q82) Professional skepticism requires that the auditor assume that management is Show Answer

Q83) Audit of banks is an example of- Show Answer

Q84) Balance sheet audit includes verification of Show Answer

Q85) Which of the following statements is not true about continuous audit Show Answer

Q86) Balance sheet audit does not include Show Answer

Q87) Which of the following statements is not correct about materiality? Show Answer

Q88) State which of the following statements is false Show Answer

Q89) Audit under statute means: Show Answer

Q90) In case of audit of partnership or sole proprietorship: Show Answer

Q91) 'Error' means a __________mistake in financial information. Show Answer

Q92) 'Fraud' means a _________ mistake in financial information Show Answer

Q93) _______ audit means an audit at regular intervals throughout the accounting year Show Answer

Q94) ______ audit means an audit taken up after the end of the accounting year. Show Answer

Q95) An audit of accounts prepared for the period of six months from 1st April to 30th September, would be called _____ audit. Show Answer

Q96) ___audit is an audit of transactions as soon as a transaction takes place. Show Answer

Q97) Auditing and assurance standard ___issued by the ICAI deals with the concept of materiality Show Answer

Q98) Information is material if its _______could influence the economic decisions of users Show Answer

Q99) AAS _______ deals with 'going concern' concept Show Answer

Q100) Negative net worth ___ an indicator that the concern is not a going concern Show Answer

Q101) Inability to pay the creditors is an indicator that the concern ______ a Going Concern Show Answer

Q102) The total of sales book was not posted to the ledger. This_________affect the trial balance. Show Answer

Q103) Sales book was overcast by Rs.500. this _____affect the trial balance. Show Answer

Q104) The total of a folio in the sales book Rs. 1,000 was carried forward as Rs. 100. this ____ affect the trial balance Show Answer

Q105) Sales to Ram Rs.143 posted to his account as Rs.134. this ____affect the trial balance. Show Answer

Q106) Sales to Meena Rs.143 posted to Meenu as Rs.143. this _______ affect the trial balance. Show Answer

Q107) Goods of the value of Rs.376 were returned by ram and were taken into stock on the same date but no entry was made in the books. This ________affect the trial balance Show Answer

Q108) A credit sale was wrongly passed through the purchases book. This ___ affect the trial balance Show Answer

Q109) Repairs of newly purchased second-hand machinery were debited to repairs expenses account. This _______ affect the trial balance Show Answer

Q110) Repairs to machinery had been charged to machinery A/c. this _______ affect the trial balance Show Answer

Q111) Cartage paid for newly purchased machinery was posted to cartage account. This _____affect the trial balance Show Answer

Q112) Goods taken away by the proprietor for personal use were not recorded anywhere. This ___________ affect the trial balance Show Answer

Q113) Recording a transaction in a wrong book of original entry with wrong amount but not posted in Journal ____affect the trial balance Show Answer

Q114) Recording a transaction in a correct book of original entry with wrong amount but not posted in Journal ____affect the trial balance Show Answer

Q115) Wrong carrying forward of a balance to next page ______ affect the trial balance Show Answer

Q116) Writing an amount in the wrong account but on the correct side _____ affect the trial balance Show Answer

Q117) Wrong balancing of an account ____ affect the trial balance Show Answer

Q118) Wrong totaling of an account _____affect the trial balance Show Answer

Q119) Treating a capital item as a revenue item ______affect the trial balance Show Answer

Q120) Audit of co-operative societies is _____audit Show Answer

Q121) In _______audit the final accounts can be prepared immediately after the year end. Show Answer

Q122) ______ is known as audit in installments Show Answer

Q123) Public limited companies listed on the stock exchange have to declare their quarterly results. It is preferable to declare such results on the basis of _____ audit. Show Answer

Q124) Balance sheet audit is done if the internal control system is very _____. Show Answer

Q125) ________audit is less expensive and suitable for a small business Show Answer

Q126) The term General purpose financial statement includes a cash flow statement (wherever applicable). Show Answer

Q127) The term general purpose financial statements includes statement and explanatory note which form part thereof. Show Answer

Q128) The term general purpose financial statement does not include supplementary schedules and information based on such statements. Show Answer

Q129) The term general purpose financial statements does not include directors report. Show Answer

Q130) According to AAS-1, auditing is the independent examination of financial information of any profit oriented entity. Show Answer

Q131) It is not the objective of the audit to give an opinion on the future prospects of business. Show Answer

Q132) It is the objective of the audit to give an opinion on the efficiency of effectiveness of the management. Show Answer

Q133) A clean audit report indicated that the business will continue to be profitable in future Show Answer

Q134) An agreed trial balance indicated error-free books Show Answer

Q135) Any type of error causes difference in the trial balance. Show Answer

Q136) Two sided errors do not affect the agreement of trial balance. Show Answer

Q137) Casting error is a type of two sided error. Show Answer

Q138) Compensating error causes difference in the trial balance. Show Answer

Q139) In book keeping errors are rectified by erasing the wrong figures and writing the correct figures instead. Show Answer

Q140) Errors of omission do not allow the trial balance to agree. Show Answer

Q141) Posting a correct amount in the wrong account on correct side does not affect the trial balance. Show Answer

Q142) Errors of recording in the books of original entry will affect the trial balance. Show Answer

Q143) Correct recording in the journal proper but not posted in the ledger will affect the trial balance. Show Answer

Q144) Correct recording in the cash book but not posted in the ledger will affect the trial balance. Show Answer

Q145) Errors of principle will affect the trial balance. Show Answer

Q146) If the amount is posted in the wrong account or it is written on the wrong side of an account it is called an error of commission. Show Answer

Q147) The trial balance ensures the arithmetical accuracy of the book. Show Answer

Q148) Wrong casting of subsidiary books does not affect the trial balance. Show Answer

Q149) Rectification of errors will not necessarily balance a trial balance. Show Answer

Q150) A tallied trial balance will not reveal compensating errors. Show Answer

Q151) In window dressing the net worth in understated in the final accounts. Show Answer

Q152) Secret reserves arise when the profits are understated in the final accounts. Show Answer

Q153) A secret reserve is legally allowed to be created by banks. Show Answer

Q154) Balance sheet audit does not involve an examination of the various items in the profit and loss account. Show Answer

Q155) Audit evidence is not conclusive in nature. Show Answer

Q156) An auditor cannot be expected to discover deeply laid frauds. Show Answer

Q157) An auditor cannot take the help of experts such as valuers etc. Show Answer

Q158) Auditing of accounts is compulsory In partnership firm. Show Answer

Q159) Auditing of accounts is undertaken to detect frauds in the books of accounts. Show Answer

Q160) Audited accounts are free from errors and frauds. Show Answer

Q161) Audit of accounts is optional in case of a private limited company. Show Answer

Q162) The auditor must not disclose any information acquired by him in the course of his work without the written permission of the institute of CA of India Show Answer

Q163) The phrase used to express the auditor's opinion is give a true and correct view. Show Answer

Q164) Unless an auditor is able to discover all frauds and errors he has not performed its main function. Show Answer

Q165) There is little difference between auditing and accounting as both deal with financial statements. Show Answer

Q166) The auditor compares entries in the books of account with the vouchers;and if the two agree then his work is done. Show Answer

Q167) Safeguarding the company's property is the function of management; hence the auditor is not concerned with verification of assets and liabilities. Show Answer

Q168) Auditor is not concerned with the compliance with the accounting principles. Show Answer

Q169) Accounts become incorrect when the principle of double entry is not followed. Show Answer

Q170) The auditor should act like a bloodhound and not a watch dog. Show Answer

Q171) Interim audit of a company is compulsory under Indian Companie Act, 1956. Show Answer

Q172) Continuous audit helps the company to present its audited accounts to the shareholders immediately after the close of the financial year. Show Answer

Q173) The main object of audit is Show Answer

Q174) _______ audit is less expensive and suitable for a small business. Show Answer

Q175) A sales of RS.1,00,000 to Deepali was entered as sale to Rupali. This is an example of Show Answer

Q176) ________ audit is very expensive but is reliable. Show Answer

Q177) salary paid to Ranjita RS.50,000 is debited to her account. It is an example of error of Show Answer

Q178) Auditor audits the book of account from last 6 months then it is which type of audit he is doing? Show Answer

Q179) How many principles are listed in AAS1 / SA 200 which govern auditor's professional obligation ? Show Answer

Q180) A sale of Rs.1,00,000 to A was entered as sale to B this is an example of Show Answer

Q181) After examination of records the statutory auditor has to Communicate his judgement to Show Answer

Q182) When the account are manipulated to show a better position then it is Show Answer

Q183) Fraud through defalcation is an Show Answer

Q184) The balance sheet audit should be conducted only if Show Answer

Q185) Audited statement can be used for Show Answer

Q186) Goods sent on approval have been recorded as credit sale. This is an example of Show Answer

Q187) Hidden reserve can be done by Show Answer

Q188) Main object of audit is Show Answer

Q189) Auditor can give ________ opinion in the report Show Answer

Q190) Misappropriation of goods is conducted by Show Answer

Q191) A person may defraud his owners at the time of receipt of cash by way of Show Answer

Q192) Payment of salary to Mr.X is debited to X's A/C is an error of Show Answer

Q193) Disadvantages of continuous audit Show Answer

Q194) Manipulation of accounts to show a beter position is called as: Show Answer

Q195) Which audit is conducted in between two annual audits? Show Answer

Q196) Who should act like a watchdog but not blood hound? Show Answer

Q197) Manipulation of accounts is a Show Answer

Q198) The most difficult to detect fraud is based on Show Answer

Q199) An auditor is a watch dog and not a blood hound this decision is given in Show Answer

Q200) The risk of fraud increases when Show Answer

Q201) Audit of banks is an example of Show Answer

Q202) Concurrent audit is a part of Show Answer

Q203) Balance sheet audit is Show Answer

Q204) Audit in depth is a Show Answer

Q205) Balance sheet audit includes verification of Show Answer

Q206) Which of the following statement is not true about continuous audit Show Answer

Q207) Which of the following is not fact of Efficiency cum performance audit Show Answer

Q208) Balance sheet audit does not include Show Answer

Q209) Manufacture and other companies (Audit report) order 1988 is replaced by Show Answer

Q210) Special audit can be ordered by Show Answer

Q211) Cost audit is compulsory for Show Answer

Q212) Internal audit is same as interim audit Show Answer

Q213) Internal audit is compulsory to all companies Show Answer

Q214) Statutory audit is not applicable to Pvt. Ltd. company Show Answer

Q215) Continuous audit is day to day audit Show Answer

Q216) Balance sheet audit should be used in addition to final audit. Show Answer