Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Fundamentals of 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 accounting principle states that revenue should be recognized when it is earned? Going Concern Consistency Accrual Prudence None 2. The "dual aspect" concept in accounting states that: Every transaction affects two accounts Only expenses are recorded Liabilities are ignored Only revenues are recorded None 3. The branch of accounting that focuses on providing information to external users is: Cost Accounting Management Accounting Financial Accounting Tax Accounting None 4. Which of the following is not a financial statement? Balance Sheet Profit and Loss Account Trial Balance Cash Flow Statement None 5. What is the purpose of the "Going Concern" concept? To assume that a business will continue indefinitely To measure profit accurately To record all transactions in historical cost To allocate expenses to the right period None 6. Which book is considered the "original book of entry"? Ledger Trial Balance Journal Balance Sheet None 7. A credit balance in a ledger account generally represents: An asset An expense A liability or income A withdrawal None 8. Which error is revealed by a Trial Balance? Compensating error Omission error Arithmetical error Error of principle None 9. A debit entry in an asset account represents: A decrease in asset An increase in asset A liability A revenue None 10. When the total of the debit column in the trial balance is more than the credit column, it indicates: An error in balancing A net loss A net profit An increase in capital None 11. Prepaid expenses are classified under: Assets Liabilities Capital Revenue None 12. The balance sheet shows: Financial position of a business Profitability of a business Cash flow of a business None of the above None 13. Closing stock is shown in: Trading Account Profit and Loss Account Balance Sheet Both a and c None 14. Outstanding expenses are classified as: Asset Liability Equity Income None 15. A contingent liability is recorded: In the Balance Sheet as an asset In the Profit & Loss Account In the footnotes of financial statements Nowhere in the accounts None 16. The primary objective of an audit is to: Detect fraud Express an opinion on financial statements Prepare financial statements Maintain accounts None 17. Which type of audit is conducted for a government department? Internal Audit Statutory Audit Compliance Audit Government Audit None 18. Who appoints the first auditor of a company? Shareholders Board of Directors Company Secretary Government None 19. Which document is prepared at the end of an audit? Balance Sheet Audit Report Cash Flow Statement Journal Entry None 20. Vouching in auditing means: Examining transactions with supporting documents Checking profit and loss account Preparing financial statements Verifying internal controls None 21. The Companies Act requires the auditor to report to: The Board of Directors The Shareholders The Tax Authorities The Employees None 22. Internal audit is conducted by: External auditor Company’s own staff Government officials Tax authorities None 23. An auditor detects fraud primarily through: Sampling Internal controls Detailed checking Surprise audits None 24. The scope of an audit is determined by: The auditor’s discretion The terms of engagement The government regulations The finance department None 25. The term ‘true and fair view’ relates to: Balance Sheet only Profit and Loss Account only Financial Statements as a whole Bank statements None 26. Which of the following errors will NOT affect the Trial Balance? Error of omission Error of principle Error of commission Error of posting to the wrong account with the correct amount None 27. If a company purchases machinery worth ₹50,000, which account is debited? Purchases Account Machinery Account Capital Account Cash Account None 28. Depreciation is charged due to which accounting principle? Consistency Matching Business Entity Money Measurement None 29. Which account is not considered a real account? Machinery Account Cash Account Sales Account Land Account None 30. In case of bad debts recovered, the correct journal entry is: Debit Bad Debts Account, Credit Cash Account Debit Cash Account, Credit Bad Debts Recovered Account Debit Debtors Account, Credit Bad Debts Account Debit Profit & Loss Account, Credit Cash Account None 31. Bank reconciliation statement is prepared to: Know the bank balance Compare cash book with bank statement Record all cash transactions Detect fraud None 32. Which of the following is NOT a part of working capital? Cash Debtors Fixed Assets Inventory None 33. A company’s paid-up share capital consists of: Called-up capital minus calls in arrears Subscribed capital minus calls in arrears Authorized capital Issued capital minus unpaid portion None 34. Which accounting standard deals with "Accounting for Fixed Assets"? AS-6 AS-9 AS-10 AS-3 None 35. When a company issues shares at a price higher than the face value, the excess amount is credited to: Share Capital Account Securities Premium Account Profit and Loss Account General Reserve None 36. Which of the following is an example of an intangible asset? Land Goodwill Machinery Inventory None 37. Internal check is a part of: Internal audit External audit Statutory audit Government audit None 38. Which of the following is NOT a type of audit? Operational Audit Tax Audit Market Audit Management Audit None 39. Who appoints the statutory auditor of a public company? Board of Directors Government Shareholders Managing Director None 40. The main objective of vouching in auditing is to: Detect fraud Verify transactions with supporting documents Check profit calculation Maintain books of accounts 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!
