Test 452 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 State 1. Which of the following is an external user of financial statements? Management Employees Shareholders Internal Auditors None 2. A company can issue shares at a discount under which of the following conditions? Never With prior approval of SEBI Only during the Initial Public Offer (IPO) Under special circumstances allowed by law None 3. Capital Reserve is created out of: Profit from operations Premium on issue of shares Revaluation of assets Sale of fixed assets None 4. Pre-incorporation profit is: Capital Profit Revenue Profit Deferred Revenue Expenditure General Reserve None 5. Which of the following is shown under "Reserves and Surplus"? Dividend Payable Securities Premium Share Capital Bank Overdraft None 6. The schedule for the preparation of Balance Sheet in a company is prescribed under: Schedule III of the Companies Act, 2013 Schedule II of the Companies Act, 2013 Section 129 of the Companies Act, 2013 Section 123 of the Companies Act, 2013 None 7. The term "Window Dressing" in financial statements refers to: Honest reporting Manipulation to show better results Providing additional disclosures None of the above None 8. An intangible asset with an indefinite life is: Patent Goodwill Building Prepaid Expenses None 9. While valuing goodwill by the Super Profits Method, the formula is: Super Profits × Normal Rate of Return Super Profits / Normal Rate of Return Super Profits × Number of Years’ Purchase Average Profits × Number of Years’ Purchase None 10. Liquidation value of a company refers to: The market value of shares Value realizable in case of liquidation Book value of assets Historical cost None 11. Which of the following is the primary objective of an audit? Detection of fraud Expression of opinion on financial statements Preparation of accounts To verify payment of taxes None 12. An audit plan includes: Overall strategy Specific guidelines for audit procedures A detailed timeline All of the above None 13. Audit evidence refers to: Information obtained during the audit Evidence presented by management Auditor's working papers None of the above None 14. A statutory audit is: Voluntary Compulsory for all companies Only for listed companies Required for partnership firms None 15. Performance audits are primarily concerned with: Compliance with accounting standards Assessment of efficiency and effectiveness Detection of fraud None of the above None 16. SA 700 pertains to: The Auditor's Responsibility for Fraud Forming an Opinion and Reporting Quality Control for Audit Audit Evidence None 17. An audit report disclaimer is issued when: The auditor concludes the financial statements are free from material misstatement The auditor is unable to form an opinion The auditor identifies fraud There are no issues at all None 18. In case of an amalgamation in the nature of merger, which method is used for accounting? Purchase Method Pooling of Interests Method Net Realizable Value Method None of the above None 19. Minority interest in consolidated financial statements is shown under: Current Liabilities Non-Current Liabilities Shareholders’ Funds None of the above None 20. The premium on redemption of preference shares is debited to: Profit and Loss Account General Reserve Securities Premium Account Share Capital Account None 21. Which account is credited when forfeited shares are reissued? Share Capital Account Forfeited Shares Account Securities Premium Account General Reserve Account None 22. Debenture Redemption Reserve (DRR) is required to be created as per: SEBI Regulations Companies Act, 2013 Income Tax Act, 1961 Banking Regulation Act, 1949 None 23. Profit on redemption of debentures is transferred to: Profit and Loss Account General Reserve Debenture Redemption Reserve Capital Reserve None 24. Which of the following is a method of capital reduction? Issue of bonus shares Buy-back of shares Rights issue Amalgamation None 25. When a company reduces its share capital, it must obtain approval from: SEBI Shareholders and NCLT Board of Directors only Creditors None 26. The purchase consideration in an amalgamation is calculated based on: Fair value of assets taken over Agreed amount between parties Market value of shares issued All of the above None 27. In case of absorption, the transferee company is: The company being absorbed The company that absorbs another company A joint venture company None of the above None 28. Interim dividend is declared by: Board of Directors Shareholders in general meeting Audit Committee SEBI None 29. The maximum permissible time for issuing bonus shares after approval is: 3 months 6 months 1 year No such time limit None 30. Which of the following is a contingent liability? Outstanding expenses Bank overdraft Guarantee given to a bank for a loan taken by another party Prepaid expenses None 31. Dividend is payable only on: Paid-up capital Subscribed capital Authorized capital Reserve capital None 32. A sound internal control system is essential for: Proper allocation of profits Ensuring operational efficiency Reporting only to external auditors Reducing employee benefits None 33. An inherent limitation of internal controls is: Segregation of duties Possibility of human error Defined authority limits Audit trail None 34. Risk of material misstatement exists at: Overall financial statement level Assertion level Both a and b None of the above None 35. The primary legislation governing audits in India is: SEBI Act Companies Act, 2013 Income Tax Act, 1961 RBI Act, 1934 None 36. SA 315 deals with: Identifying and assessing the risks of material misstatement Planning an audit External confirmations Related party disclosures None 37. Tax audit is applicable if the turnover of a business exceeds: ₹50 lakhs ₹1 crore ₹5 crore ₹10 crore None 38. Audit under Section 44AB of the Income Tax Act is required for: Only individuals Companies with business income exceeding the specified threshold All registered companies None of the above None 39. A "qualified opinion" in an audit report is issued when: The auditor is unable to express an opinion There is a material misstatement that is not pervasive Financial statements are free from material misstatement None of the above None 40. A "material weakness" in internal control is: A minor error in documentation A deficiency that results in a material misstatement A delay in preparation of financial statements None of the above 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!
