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 Area Pin Code 1. Which of the following is a liability of a company? Share capital Debentures Reserves Fixed assets None 2. Equity shareholders are also known as: Owners Creditors Debenture holders Employees None 3. Which of the following is shown under "Reserves and Surplus" in the balance sheet? Share capital Loans Securities premium Trade payables None 4. Which type of preference shares participate in additional profits after equity shareholders receive their dividends? Convertible preference shares Redeemable preference shares Participating preference shares Non-cumulative preference shares None 5. Capital redemption reserve is created when: Equity shares are issued Preference shares are redeemed Debentures are issued Bonus shares are issued None 6. Which of the following is an example of fictitious assets? Building Trademark Preliminary expenses Cash in hand None 7. A holding company holds at least ___% of the total voting power in a subsidiary company. 25% 50% 51% 75% None 8. Which of the following is prepared only by a company? Trading account Profit and loss account Balance sheet Cash flow statement None 9. Which accounting standard deals with revenue recognition? AS 2 AS 6 AS 9 AS 10 None 10. Which of the following expenses is treated as a capital expenditure? Repair of machinery Salaries paid to employees Purchase of a new machine Rent paid for office None 11. The amount received over and above the face value of shares is credited to: Share capital account Securities premium account Profit and loss account Capital reserve account None 12. A company can issue bonus shares out of Loan funds Debentures Capital reserves Preliminary expenses None 13. Which of the following is an intangible asset? Land Machinery Patents Cash None 14. If a company purchases its own shares, it is called: Buyback of shares Rights issue Bonus issue Conversion of shares None 15. Who is responsible for the appointment of the auditor in a private company? Board of Directors Shareholders Government SEBI None 16. Which of the following audits is conducted by an external auditor? Statutory audit Internal audit Performance audit Operational audit None 17. An auditor's primary duty is to report on: Company's financial position Management decisions Internal policies Marketing strategy None 18. Which of the following is not an audit evidence? Vouchers Bank statement Memorandum of Association Invoice None 19. The term “substantive audit procedures” refers to: Routine checking Compliance testing Verification of transactions and balances Audit documentation None 20. The audit report is issued by the auditor to: The government The management The shareholders The tax authorities None 21. Which audit ensures that financial transactions comply with laws and regulations? Internal audit Statutory audit Compliance audit Tax audit None 22. The primary objective of internal audit is to: Detect fraud Ensure operational efficiency Verify financial statements Review marketing strategy None 23. What does "going concern" mean in auditing? The company is facing losses The company will continue its operations in the foreseeable future The company is going into liquidation The company is planning a merger None 24. Which of the following is a limitation of an audit? Absolute assurance of accuracy Dependence on estimates Identification of all frauds Elimination of financial risks None 25. What is the main purpose of vouching? Checking the accuracy of books of accounts Preventing frauds Ensuring physical verification of assets Preparing final accounts None 26. A surprise cash verification is a part of: Statutory audit Internal audit Cost audit Tax audit None 27. Which of the following is an example of preventive control? Segregation of duties Internal audit Bank reconciliation Physical verification of assets None 28. The final audit is conducted: At the end of the financial year Every month At the beginning of the financial year Before preparing trial balance None 29. Which of the following is an advantage of an independent audit? Detects all frauds and errors Ensures 100% accuracy in financial statements Enhances the reliability of financial statements Replaces the role of management None 30. The primary responsibility for the preparation and presentation of financial statements lies with: The auditor The government The company's management Shareholders None 31. Which of the following is an essential characteristic of audit evidence? It must be conclusive It must be sufficient and appropriate It must be given by the management It must be written in detail None 32. Which of the following is not a type of audit opinion? Unqualified opinion Qualified opinion Adverse opinion Tentative opinion None 33. An auditor can be removed before the expiry of his term by: The Board of Directors The Audit Committee The Shareholders with approval from the Central Government The Finance Manager None 34. The term "forensic audit" is associated with: Investigating fraud and financial irregularities Verifying cash transactions Examining tax returns Evaluating employee performance None 35. Which of the following reports is submitted by an auditor after a fraud investigation? Internal audit report Statutory audit report Forensic audit report Compliance audit report None 36. Which of the following is an example of an internal control system? External audit Segregation of duties Filing of tax returns Publishing financial statements None 37. An auditor evaluates internal controls primarily to: Detect frauds Express an opinion on financial statements Ensure tax compliance Prepare the balance sheet None 38. Audit sampling is used when: The entire population must be examined The auditor does not have access to financial records A full audit is impractical There are no transactions to verify None 39. As per the Companies Act, 2013, the maximum tenure of an individual auditor in a listed company is: 5 years 10 years 15 years 20 years None 40. Which of the following is prepared only by a company? Trading account Profit and loss account Balance sheet Cash flow statement 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 !! Your quiz time is about to finish. Few seconds left. 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