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 concept states that business transactions should be recorded separately from the owner's personal transactions? Consistency Concept Business Entity Concept Going Concern Concept Money Measurement Concept None 2. The principle of recording expenses in the period in which they are incurred, regardless of when payment is made, is called: Accrual Concept Matching Concept Consistency Concept Dual Aspect Concept None 3. The double-entry system of accounting is based on which of the following principles? Business Entity Concept Dual Aspect Concept Cost Concept Money Measurement Concept None 4. Which financial statement summarizes the financial position of an entity at a specific point in time? Profit and Loss Account Trial Balance Balance Sheet Cash Flow Statement None 5. Depreciation is recorded as: An asset A liability An expense A capital reserve None 6. The book where all journal entries are first recorded is called: Ledger Trial Balance Journal Balance Sheet None 7. A credit balance in the bank column of the cash book represents: Bank Overdraft Cash in Hand Net Profit Capital Account None 8. If a business purchases furniture for ₹10,000, how will it be recorded in the books? Debit Furniture A/c, Credit Cash A/c Debit Cash A/c, Credit Furniture A/c Debit Purchases A/c, Credit Cash A/c Debit Cash A/c, Credit Purchases A/c None 9. The total of the debit side of the trial balance is ₹50,000 and the credit side is ₹48,000. The difference of ₹2,000 should be: Posted to the suspense account Adjusted in capital account Transferred to the profit and loss account Ignored None 10. Which of the following is an example of a real account? Capital Account Sales Account Rent Account Wages Account None 11. If a purchase of ₹5,000 is wrongly recorded as ₹500, it is an error of: Omission Commission Principle Compensating None 12. Prepaid expenses appear in the balance sheet under: Current Assets Current Liabilities Long-term Liabilities Capital Account None 13. Which of the following is an intangible asset? Machinery Stock Goodwill Cash None 14. Which statement is correct? Profit = Revenue - Expenses Liabilities = Assets + Capital Revenue = Profit + Expenses Assets = Liabilities - Capital None 15. Closing stock is shown in: Trading Account Profit and Loss Account Balance Sheet All of the above None 16. The primary objective of auditing is to: Detect fraud Verify financial statements Help management Check tax compliance None 17. Internal audit is conducted by: Government Auditors External Auditors Company’s Own Staff SEBI Officials None 18. The first step in an audit process is: Checking vouchers Verification of assets Understanding internal controls Checking financial statements None 19. An auditor’s opinion on financial statements is presented in: Balance Sheet Auditor’s Report Notes to Accounts Profit and Loss Account None 20. The term vouching means: Checking physical stock Examining invoices and receipts Preparing financial statements Checking bank statements None 21. Which type of audit is required for listed companies? Statutory Audit Internal Audit Tax Audit Cost Audit None 22. The Companies Act requires the auditor to be: A Cost Accountant A Company Secretary A Chartered Accountant A Businessman None 23. Audit conducted at regular intervals throughout the year is called: Continuous Audit Final Audit Internal Audit Government Audit None 24. Auditors should comply with: Financial Reporting Standards Auditing Standards Income Tax Act SEBI Guidelines None 25. The audit process generally starts with: Appointment of an Auditor Issuance of an Audit Report Physical Verification of Stock Checking Bank Reconciliation None 26. The main purpose of audit working papers is to: Maintain secrecy Provide evidence for audit conclusions Help tax authorities Prepare final accounts None 27. A qualified audit report indicates: A clean opinion Discrepancies in accounts No issues in financial statements No errors in books None 28. If an auditor finds fraud, he should: Ignore it Report it to management Modify financial statements Destroy records None 29. The main focus of forensic auditing is: Tax Evasion Fraud Detection Cost Reduction Preparing Accounts None 30. Who appoints the auditor of a public company? Shareholders Board of Directors SEBI Government None 31. Which of the following is considered a real account? Capital Account Cash Account Rent Account Salary Account None 32. The accounting equation is expressed as: Assets = Liabilities + Owner's Equity Assets = Liabilities - Owner's Equity Assets + Liabilities = Owner's Equity Assets - Liabilities = Owner's Equity None 33. Which financial statement summarizes the financial position of a company at a specific point in time? Income Statement Cash Flow Statement Balance Sheet Statement of Retained Earnings None 34. Depreciation is recorded to: Allocate the cost of an asset over its useful life Value the asset at current market price Accumulate funds for asset replacement None of the above None 35. Which of the following errors will not affect the trial balance agreement? Omission of a transaction Recording a transaction twice Posting a debit as credit Errors of principle None 36. In accounting, goodwill is classified as: Current Asset Tangible Asset Intangible Asset Liability None 37. The process of transferring journal entries to ledger accounts is known as: Journalizing Posting Balancing Summarizing None 38. Which of the following is not a method of inventory valuation? First-In, First-Out (FIFO) Last-In, First-Out (LIFO) Highest In, First Out (HIFO) Weighted Average Cost None 39. The primary objective of financial accounting is to: Assist in management decision-making Provide financial information to external users Aid in tax computation Control costs None 40. Which accounting concept dictates that expenses should be matched with the revenues they help to generate? Going Concern Concept Matching Concept Consistency Concept Prudence Concept 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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