Commerce MCQ Question and Answer
Commerce MCQ Question and Answer
91. Which of the following is not a part of the usual contents of the current file and audit working papers ?
- A copy of accounts on which auditors are reporting
- Audit programme
- Minutes of the meetings
- Memorandum of Association and Articles of Association
92. Consider the following statements—
Audit working papers are maintained because
1. they act as a guide to subsequent audit.
2. they verify the arithmetical accuracy of the books of accounts.
3. they provide evidence of the work performed by the auditor.
Which of the statements given above are correct ?
Audit working papers are maintained because
1. they act as a guide to subsequent audit.
2. they verify the arithmetical accuracy of the books of accounts.
3. they provide evidence of the work performed by the auditor.
Which of the statements given above are correct ?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
93. Match List-I with List-II and select the correct answer using the code given below the Lists—
List-I (Technique)
(a) Rotation of Duties
(b) Random Sampling
(c) Trend Analysis
(d) Cash verification
List-II (Auditing Procedure)
(1) Internal control
(2) Physical examination
(3) Selective verification
(4) Overall assessment
Codes :
(a) (b) (c) (d)
List-I (Technique)
(a) Rotation of Duties
(b) Random Sampling
(c) Trend Analysis
(d) Cash verification
List-II (Auditing Procedure)
(1) Internal control
(2) Physical examination
(3) Selective verification
(4) Overall assessment
Codes :
(a) (b) (c) (d)
- 1 4 3 2
- 2 3 4 1
- 1 3 4 2
- 2 4 3 1
94. Consider the following stages an auditor has to undergo before commencing an audit—
1. Ascertaining the scope of audit work.
2. Gaining knowledge about business of the client.
3. Going through the agreement with the client.
4. Instructions to and information from the client.
What is the correct sequence of the above stages ?
1. Ascertaining the scope of audit work.
2. Gaining knowledge about business of the client.
3. Going through the agreement with the client.
4. Instructions to and information from the client.
What is the correct sequence of the above stages ?
- 2 - 1 - 3 - 4
- 3 - 4 - 2 - 1
- 2 - 4 - 3 - 1
- 3 - 1 - 2 – 4
95. Which one of the following statements is correct ?
- If an asset is used by a company, it should be owned by the company
- Verification of liabilities means that the amounts of current and long-term liabilities shown in the balance sheet are correct
- Vouching and verification means the same thing
- It is not the duty of an auditor to confirm the physical existence and ownership of an asset
96. The following steps should be adopted by an auditor for verification of land—
1. To examine that the land has been shown in the balance sheet at its original cost.
2. To ensure that the cost of land also includes the expenses like broker's commission, legal expenses, improvement
expenses etc.
3. To get a certificate from solicitor of the client regarding validity of the title deeds.
4. To examine that the land is not subject to any charge or mortgage.
What is the correct sequence of the above steps to be followed by an auditor during the course of auditing ?
1. To examine that the land has been shown in the balance sheet at its original cost.
2. To ensure that the cost of land also includes the expenses like broker's commission, legal expenses, improvement
expenses etc.
3. To get a certificate from solicitor of the client regarding validity of the title deeds.
4. To examine that the land is not subject to any charge or mortgage.
What is the correct sequence of the above steps to be followed by an auditor during the course of auditing ?
- 1 - 4 - 2 - 3
- 3 - 2 - 4 - 1
- 1 - 2 - 4 - 3
- 3 - 4 - 2 – 1
97. What does payout ratio mean ?
- Ratio of debtors to creditors
- Ratio of profit distributed to profit retained
- Ratio of dividends per share and earnings per share
- Retained earnings
98. Consider the following statements—
1. Premium on issue of shares is transferred to General Reserve Account.
2. For declaration of bonus shares out of General Reserve, a resolution in the shareholders' meeting is necessary.
Which of the statements given above is/are correct ?
1. Premium on issue of shares is transferred to General Reserve Account.
2. For declaration of bonus shares out of General Reserve, a resolution in the shareholders' meeting is necessary.
Which of the statements given above is/are correct ?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
99. How is ‘Calls in arrear’ shown in the balance sheet on the liability side ?
- By deducting the amount from the called up capital
- Under the heading ‘Reserves and Surplus’
- By deducting the amount from ‘Capital Reserve’
- By deducting the amount from the ‘Share Forfeited Account’
100. Match List-I with List-II and select the correct answer using the code given below the Lists—
List-I (Activity)
(a) Admission of a partner
(b) Partnership dissolution
(c) Rectification of errors
(d) Transfer of realization profit
List-II (Account)
(1) Capital Accounts
(2) Suspense Account
(3) Revaluation Account
(4) Realization Account
Codes :
(a) (b) (c) (d)
List-I (Activity)
(a) Admission of a partner
(b) Partnership dissolution
(c) Rectification of errors
(d) Transfer of realization profit
List-II (Account)
(1) Capital Accounts
(2) Suspense Account
(3) Revaluation Account
(4) Realization Account
Codes :
(a) (b) (c) (d)
- 3 4 2 1
- 2 1 3 4
- 3 1 2 4
- 2 4 3 1