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. In a partnership, the amount invested by partners is called: Loan Capital Interest Dividend None 2. When a partner withdraws money for personal use, it is called: Salary Profit Drawings Commission None 3. Interest on capital is generally allowed if: The partnership agreement provides for it The firm incurs a loss A partner demands it It is approved by the government None 4. Goodwill is recorded in the books when: A new partner is admitted The firm makes losses The partners take loans The firm is dissolved None 5. Which accounting concept assumes that a business will continue to operate indefinitely? Consistency Concept Going Concern Concept Accrual Concept Matching Concept None 6. The cost concept states that assets should be recorded at: Their market value Their original purchase price Their replacement cost Their depreciated value None 7. Which accounting convention ensures that revenue and expenses are recorded in the correct period? Conservatism Accrual Materiality Prudence None 8. The primary role of an internal auditor is to: Prepare financial statements Detect fraud and errors Ensure compliance with internal controls Approve company accounts None 9. Which type of auditor is appointed by shareholders in a company? Internal Auditor External Auditor Tax Auditor Government Auditor None 10. A qualified audit report means: The financial statements are free from material misstatements The auditor found some issues but they are not serious The auditor refuses to express an opinion The company has committed fraud None 11. Which of the following is NOT a type of audit opinion? Unqualified Opinion Qualified Opinion Disclaimer of Opinion Comparative Opinion None 12. The Companies Act, 2013, mandates that every company must: Conduct an audit of its financial statements Avoid taxation Prepare accounts only for management Publish financial statements monthly None 13. Which regulatory body oversees financial reporting in India? SEBI RBI ICAI IRDA None 14. A tax audit is required for businesses with turnover exceeding: ₹50 lakh ₹1 crore ₹5 crore ₹10 crore None 15. When a partnership firm is dissolved, the balance in the capital accounts is transferred to: Realization Account Cash Account Partner’s Capital Account Profit & Loss Account None 16. A company’s capital is divided into: Shares Debentures Reserves Loans None 17. Which type of share gives voting rights to shareholders? Preference Shares Equity Shares Debentures Bonus Shares None 18. Which financial statement shows the company’s financial position at a particular date? Profit & Loss Account Cash Flow Statement Balance Sheet Trial Balance None 19. Which of the following activities is classified under "Operating Activities" in a Cash Flow Statement? Sale of fixed assets Issuing shares Payment to suppliers Purchasing land None 20. Debenture holders are: Owners of the company Creditors of the company Employees of the company Agents of the company None 21. Which account is credited when shares are issued at a premium? Share Capital A/c Securities Premium A/c Bank A/c None of the above None 22. Dividend received is classified under: Operating Activities Investing Activities Financing Activities None of the above None 23. Which of the following is a financing activity? Purchase of raw material Payment of interest Issue of shares Sale of investments None 24. Depreciation is considered a: Cash expense Non-cash expense Financing activity Liability None 25. The primary objective of auditing is to: Detect fraud Verify financial statements Reduce expenses Compute tax liability None 26. One of the advantages of auditing is: Helps in fraud detection Increases business expenses Reduces revenue Avoids taxation None 27. The final responsibility for the financial statements lies with: Auditor Management Shareholders Government None 28. A clerical mistake in accounting records is called: Fraud Misstatement Error Omission None 29. Which of the following is an example of fraud? Overstating revenue Mathematical error Omitting depreciation Incorrect classification of expenses None 30. Errors of omission occur when: A transaction is recorded in the wrong account A transaction is recorded partially or not recorded at all A transaction is recorded in the correct account but in the wrong amount . None of the above None 31. An auditor has the right to access: Financial records only All books of accounts and vouchers Only profit and loss account Shareholders’ personal records None 32. The duty of an auditor is to: Prepare financial statements Express an opinion on financial statements Manage business operations Approve financial transactions None 33. If an auditor finds fraud, they must: Ignore it Report it to management Approve the fraudulent transactions Do nothing None 34. Audit sampling means: Checking all transactions Checking a selected sample of transactions Avoiding testing altogether Preparing financial reports None 35. Which of the following is NOT an audit technique? Observation Inquiry Legal action Analytical procedures None 36. An auditor uses substantive testing to: Review accounting policies Check management’s decisions Verify transaction details Change financial statements None 37. Tax audits are conducted as per: Companies Act, 2013 Income Tax Act, 1961 SEBI Regulations ICAI Guidelines None 38. Cost audits focus on: Compliance with tax laws Verification of cost accounts Detection of fraud Shareholder satisfaction None 39. A forensic audit is used primarily for: Fraud investigation Cost reduction Employee training Preparing balance sheets None 40. Which of the following is an objective of due diligence audit? Identifying risks in business transactions Maximizing profits Reducing financial reporting Avoiding taxation 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!
