Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Corporate Accounting and Auditing Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. Which of the following is not a characteristic of a company? Separate legal entity Perpetual succession Unlimited liability Common seal None 2. Which accounting standard deals with the presentation of financial statements? AS 1 AS 3 AS 9 AS 22 None 3. . A company issues shares at a premium. The premium amount is credited to Share Capital Account Securities Premium Account Profit & Loss Account Capital Reserve Account None 4. The balance of Forfeited Shares Account is shown in the: Profit & Loss Account Share Capital Account General Reserve Balance Sheet under Shareholders' Equity None 5. As per Companies Act, 2013, the maximum number of members in a private company is: 50 100 200 500 None 6. Which of the following is an intangible asset? Land Goodwill Building Cash None 7. Debenture holders are: Owners of the company Creditors of the company Employees of the company Agents of the company None 8. Which statement is true about preference shares? They carry voting rights They have priority over equity shares in dividend payment They can never be redeemed They always carry a fixed rate of dividend None 9. Which of the following reserves is created out of profits? Capital Reserve General Reserve Share Premium Reserve Revaluation Reserve None 10. Which financial statement presents a company’s financial position as on a particular date? Profit & Loss Account Balance Sheet Cash Flow Statement Trial Balance None 11. As per AS-3, which method is not used for preparing a cash flow statement? Direct method Indirect method Hybrid method None of the above None 12. A company’s liquid assets exclude: Cash Bank balance Inventory Marketable securities None 13. Which of the following is a contingent liability? Outstanding expenses Bills payable Bank overdraft Claims against the company not acknowledged as debt None 14. Bonus shares are issued from: Capital reserve General reserve Securities premium reserve Any of the above None 15. Dividend is declared out of: Capital reserve Profit & Loss Account Securities premium reserve Revaluation reserve None 16. Buy-back of shares means: Selling shares in the market Purchasing shares from shareholders Issuing bonus shares Issuing right shares None 17. Which method is used to calculate goodwill under Super Profit Method? Average profit × No. of years’ purchase Normal profit × No. of years’ purchase Super profit × No. of years’ purchase None of the above None 18. Depreciation on fixed assets is charged as per: AS 3 AS 6 AS 9 AS 22 None 19. Right shares are issued to: General public Existing shareholders Directors Debenture holders None 20. The minimum subscription amount as per SEBI guidelines is: 50% of the issue 75% of the issue 90% of the issue 100% of the issue None 21. Auditing is conducted to verify: Financial position Transactions Financial statements All of the above None 22. An auditor is appointed by: Shareholders Board of Directors Government Company Secretary None 23. Which audit is mandatory for companies? Internal audit Statutory audit Tax audit Cost audit None 24. The main objective of an audit is to: Detect fraud Check financial statements Prevent errors Evaluate employees None 25. Auditor’s report is addressed to: Board of Directors Shareholders Management Employees None 26. Internal audit is conducted by: External auditor Government auditor Employee of the company None of the above None 27. Vouching is concerned with: Cash transactions Internal control Bookkeeping Budgeting None 28. A qualified audit report means: Everything is correct Some reservations by the auditor No reservations No financial statements audited None 29. Fraud detection is the primary responsibility of: Auditor Management Shareholders Government None 30. Which of the following is not a type of audit opinion? Unqualified opinion Qualified opinion Adverse opinion Financial opinion None 31. Which document serves as the primary evidence for financial transactions in an audit? Bank statement Vouchers Trial balance Ledger None 32. Test checking in auditing means: Checking all transactions Checking selected transactions Ignoring transactions below a certain value Checking only cash transactions None 33. Who appoints the first auditor of a company? Shareholders Board of Directors Company Secretary Government None 34. The primary objective of cost audit is to ensure: Compliance with financial regulations Cost efficiency in production Accuracy of tax calculations Proper internal controls None 35. An auditor’s working papers should be retained for at least: 1 year 3 years 7 years 10 years None 36. Which of the following is an example of an internal check? Independent audit Division of duties External verification Auditor’s report None 37. Which of the following is a limitation of auditing? Prevents fraud Provides absolute assurance Only reasonable assurance is given Identifies all errors None 38. The Companies Act, 2013 requires listed companies to have: Internal audit External audit Both internal and external audit No mandatory audit None 39. In which type of audit does the auditor express an opinion on the fairness of financial statements? Cost audit Statutory audit Internal audit Performance audit None 40. Which accounting standard deals with the presentation of financial statements? AS 1 AS 3 AS 9 AS 22 None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! 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