Test 451 Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Corporate Accounting and AuditingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is a method of valuation of goodwill? Annuity Method Average Profit Method Discounted Cash Flow Method Super Profit Method None 2. Which accounting standard deals with the treatment of contingencies and events occurring after the balance sheet date? AS 2 AS 3 AS 4 AS 5 None 3. Which of the following is shown in the equity and liabilities side of the balance sheet? Fixed assets Non-current liabilities Inventories Cash and Cash Equivalents None 4. Interim audit is generally conducted by a company for which of the following purposes? Reducing the workload at the year-end Checking compliance with taxation rules Preparing financial statements for tax returns Valuation of inventory None 5. The primary purpose of an audit is to Detect fraud Express an opinion on the financial statements Prepare financial statements Determine tax liability None 6. The Companies Act requires companies to maintain books of accounts for a minimum period of 2 years 3 years 5 years 8 years None 7. In which method of depreciation, the amount of depreciation remains constant every year? Straight Line Method Written Down Value Method Sum of the Years' Digits Method Units of Production Method None 8. Which of the following ratios is used to measure the profitability of a business? Current Ratio Debt Equity Ratio Gross Profit Ratio Quick Ratio None 9. Dividend paid by a company is shown under Financing Activities Investing Activities Operating Activities Non-current Liabilities None 10. Which audit technique involves verifying every item recorded in the books of accounts? Test Checking Complete Checking Sampling Internal Control Review None 11. The concept of "Materiality" in auditing implies Accuracy in all transactions Disclosure of all items regardless of size Significance of information for decision-making Completeness of information None 12. What does the term "window dressing" in financial reporting mean? True representation of financial statements Manipulating financial statements to appear better Calculating the balance sheet figures Preparing bank reconciliation statements None 13. AS 10 deals with Accounting for Investments b) c)d) Property, Plant, and Equipment Borrowing Costs Revenue Recognition None 14. Which of the following is not a type of audit? Statutory Audit Internal Audit Forensic Audit Production Audit None 15. Which of the following represents the auditor's independence? Auditor employed by the company Auditor having financial interest in the company Auditor being a family member of the management Auditor having no relationship with the company None 16. Which of the following is a capital expenditure? Salaries of employees Purchase of raw materials Installation of machinery Rent expenses None 17. Provision for doubtful debts is an example of Capital Expenditure Revenue Expenditure Appropriation of Profit Provision for Liability None 18. The auditor’s working papers are the property of The client The management The auditor The government None 19. Capital reserve is created out of Profits from sale of fixed assets Revenue profits Premium on the issue of shares Normal business income None 20. The primary objective of cost audit is to Detect errors Verify financial records Ascertain cost and efficiency Certify annual accounts None 21. Under which method, the auditor divides the population into groups for audit sampling? Stratified Sampling Random Sampling Cluster Sampling d) Systematic Sampling Systematic Sampling None 22. The depreciation method where depreciation is higher in earlier years is known as Straight Line Method Declining Balance Method c) Units of Production Method Units of Production Method Annuity Method None 23. The objective of vouching in audit is to Verify arithmetical accuracy Verify the existence of assets Verify accuracy and genuineness of transactions Prepare the final accounts None 24. Amortization is used for which of the following assets? Fixed assets Current assets Intangible assets Financial assets None 25. An audit trail is A summary of all audit procedures A chain of evidence that auditors use A document prepared for internal use A report for external parties None 26. Which concept implies that the same accounting methods are followed over time? Prudence Consistency Matching Conservatism None 27. Which type of audit is conducted to ensure efficiency and effectiveness in the use of resources? Operational Audit Tax Audit Forensic Audit Financial Audit None 28. Which of the following is an intangible asset? Cash in hand Land Trademark Inventory None 29. The process of recording transactions in a systematic manner is called Auditing Bookkeeping Financial Analysis Management Accounting None 30. An audit conducted after the close of the financial year is called Concurrent Audit Final Audit Continuous Audit Interim Audit None 31. The independent examination of financial information is termed as Costing Auditing Budgeting Analysis None 32. Preliminary expenses are shown under Fixed Assets Investments Current Liabilities Other Assets None 33. Which of the following items is deducted from gross profit to calculate net profit? Sales Depreciation Closing Stock Opening Stock None 34. An auditor appointed to conduct a special audit must Express an opinion on overall financial statements Investigate specific areas or issues Prepare management reports Handle tax assessments None 35. Audit risk is the risk that an auditor may issue an unqualified report when There is no material misstatement al control is effective The financial statements are materially misstated Internal control is effective The management is honest None 36. Which of the following methods of depreciation considers the value reduction due to usage rather than the passage of time? Straight Line Method Units of Production Method Reducing Balance Method Annuity Method None 37. Going concern" assumption means The business will continue to operate indefinitely The business is planning to shut down The assets are to be valued at market value Profits will not be made None 38. The primary duty of an auditor is to Detect fraud and errors Assess the risk of material misstatement Report to the shareholders Prepare financial statements None 39. Contingent liabilities are disclosed in The profit and loss account The notes to financial statements The cash flow statement The capital account None 40. Which audit procedure involves examining documents that support recorded transactions? Inspection Inquiry Confirmation Observation 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 !! Time's upTime is Up!
