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 financial statement shows a company's financial position at a specific point in time? Income statement Balance sheet Cash flow statement Statement of changes in equity None 2. Which of the following statements is true regarding debentures? Debentures represent ownership in the company Debenture holders are creditors of the company Debentures are always secured Only equity shareholders can buy debentures None 3. Which section of the Companies Act, 2013 deals with the issue of shares at a discount? Section 53 Section 61 Section 70 Section 80 None 4. Which of the following is an example of a contingent liability? Bank loan Bills payable Outstanding expenses Guarantee given for a loan taken by another company None 5. As per the Companies Act, 2013, which of the following reserves can be used for issuing bonus shares? Capital redemption reserve Securities premium reserve General reserve All of the above None 6. Which method of depreciation results in equal charges each year? Straight-line method Reducing balance method Sum of years' digits method Double declining balance method None 7. Goodwill is classified as a(n): Fictitious asset Current asset Intangible asset Fixed liability None 8. Which of the following represents a company's accumulated profits not distributed as dividends? Capital reserve Securities premium Retained earnings Share capital None 9. Which accounting standard deals with the treatment of borrowing costs? AS 9 AS 10 AS 16 AS 22 None 10. If a company issues shares to existing shareholders at a lower price than market value, it is called: Bonus issue Right issue Private placement Public offering None 11. Premium on redemption of debentures is shown under which head in the balance sheet? Current liabilities Share capital Reserves and surplus Other non-current liabilities None 12. When a company repurchases its own shares, it is called: Bonus issue Rights issue Buyback of shares Convertible debenture issue None 13. Which of the following is not an example of fictitious assets? Preliminary expenses Goodwill Discount on issue of shares Cash balance None 14. Which of the following is not included in cash and cash equivalents? Fixed deposits with a maturity of 3 months Bank overdraft Cash in hand Marketable securities None 15. Dividend is usually paid on: Authorized capital Issued capital Paid-up capital Reserve capital None 16. Which of the following is an example of an analytical procedure in auditing? Checking invoices Physical verification of inventory Comparing current financial ratios with prior years Confirming balances with creditors None 17. Which of the following is an objective of internal audit? Detecting frauds and errors Verifying tax payments Checking financial statements Conducting statutory audit None 18. Audit risk consists of which three components? Control risk, compliance risk, and fraud risk Inherent risk, control risk, and detection risk Material misstatement risk, compliance risk, and detection risk Inherent risk, operational risk, and liquidity risk None 19. Which of the following is a limitation of an audit? It provides absolute assurance It detects all errors and frauds It depends on audit sampling and judgment It is only applicable to large companies None 20. A forensic audit is primarily conducted to: Improve operational efficiency Detect fraud and financial irregularities Verify tax returns Evaluate management policies None 21. Which of the following statements is correct about an auditor’s report? It must be verbal It contains the auditor’s opinion on financial statements It is issued only to tax authorities It guarantees the accuracy of accounts None 22. Which of the following is a compliance audit? Checking internal controls Reviewing management efficiency Ensuring statutory requirements are followed Investigating fraud None 23. Which of the following is an example of an operational audit? Examining sales invoices Reviewing production efficiency Checking inventory records Verifying bank balances None 24. The auditor of a government company is appointed by: Board of Directors Shareholders Comptroller and Auditor General of India (CAG) Securities and Exchange Board of India (SEBI) None 25. An audit working paper serves as: A permanent record of all business transactions The basis for the audit opinion A legal document for tax authorities A substitute for financial statements None 26. An auditor expresses an adverse opinion when: The financial statements present a true and fair view The company has minor errors The financial statements contain material misstatements The audit report is delayed None 27. Which of the following is a part of an auditor’s responsibility? Preparing financial statements Detecting all frauds and errors Expressing an opinion on financial statements Ensuring profitability of the company None 28. Which of the following best describes "professional skepticism" in auditing? Accepting management's explanations without verification Maintaining a questioning mindset and critically assessing audit evidence Assuming all financial statements contain fraud Avoiding asking questions to management None 29. The primary objective of an external audit is to: Detect all errors in the books of accounts Provide absolute assurance Express an independent opinion on financial statements Ensure the company earns profits None 30. Which of the following is an example of an inherent limitation of an audit? Dependence on evidence that is persuasive rather than conclusive Use of internal control procedures 100% accuracy in detecting frauds External confirmation of all transactions None 31. Which of the following best describes "substantive procedures" in auditing? Procedures performed to obtain audit evidence regarding accuracy of transactions Policies for internal audit Ethical guidelines for auditors Compliance procedures for tax audits None 32. Audit risk is the risk that the auditor may: Issue a qualified audit report Fail to detect a material misstatement Perform substantive procedures Conduct a compliance audit None 33. In audit sampling, "sampling risk" refers to: The risk of selecting a non-representative sample The risk of detecting all errors The risk of over-auditing The risk of not completing the audit None 34. Which of the following is an example of a detective control in internal auditing? Segregation of duties Physical verification of assets Preventing unauthorized access Automatic rejection of duplicate invoices None 35. The responsibility for fraud prevention and detection rests with: The external auditor The internal auditor The management and those charged with governance The shareholders None 36. An audit engagement letter is issued by the auditor to: The tax authorities The shareholders The client before commencing the audit The company's suppliers None 37. Which of the following factors influences the nature and extent of audit evidence? The size of the audit team The availability of financial records The risk of material misstatement The number of shareholders None 38. An auditor provides a "qualified opinion" when: The financial statements contain material misstatements The financial statements are completely misstated The financial statements present a true and fair view There is a minor misstatement that does not affect overall fairness None 39. Which of the following is an objective of compliance auditing? Detecting fraud Checking adherence to laws and regulations Verifying tax calculations Assessing profitability of the business None 40. Which of the following is a key feature of forensic auditing? Routine verification of accounting records Investigating fraud and financial crimes Preparing financial statements Issuing an unqualified audit opinion 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. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
