Senior Auditor Test For 100+Important Auditing, Accounting, Finance Solved (MCQs) Part-1

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Hi, Student Here I Am provide Senior Auditor Test 100+Important Mcqs For Accounting, Finance Solved Part-1. I Hope This txt Help Your Senior Auditor Test Exam.

100+Important MCQs For Senior Auditor Test Here:

Auditing MCQS, Part-1

1. The main object of an audit is ___
a) Expression of opinion b) Detection and Prevention of fraud and error
c) Both (a) and (b)           d) Depends on the type of audit.

2. The title of AAS­2 issued by Council of ICAI is ___
a) Objective and Scope of the Financial Statements
b) Objective and Scope of the Audit of Financial Statements
c) Objective and Scope of Business of an Entity
d) Objective and Scope of Financial Statements Audit

3. Which of the following is not true about opinion on financial statements?
a) The auditor should express an opinion on financial statements.
b) His opinion is no guarantee to future viability of business
c) He is responsible for detection and prevention of frauds and errors in financial statements
d) He should examine whether recognised accounting principle have been consistently

4. A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of _

a) Error of omission b) Error of commission c) Compensating error d) Error of principle

5. ‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of _

a) Error of principle b) Error of commission c) Error of omission d) Error of duplication

6. Which of the following statements is not true?
a) Management fraud is more difficult to detect than employee fraud
b) Internal control system reduces the possibility of occurrence of employee fraud and
management fraud
c) The auditor’s responsibility for detection and prevention of errors and frauds is similar. d) All statements are correct.

7. As per AAS­4 if auditor detects an error then – a) He should inform the management.
b) He should communicate it to the management if it is material
c) The auditor should ensure financial statements are adjusted for detected errors.
d) Both (b) and (c)

8. Which of the following is not a limitation of audit as per AAS­4?
a) Objectivity of auditor’s judgment b) Selective testing
c) Persuasiveness of evidence d) Limitations of internal control system.

9. How many principles are listed in AAS­1 which govern auditor’s professional obligation?
a) Nine b) Fourteen c) Seven d) Eight

10. Both auditing and accounting are concerned with financial statements. Which of the following?
a) Auditing uses the theory of evidence to verify the financial information made available by
Accountancy
b) Auditing lends credibility dimension and quality dimension to the financial statements
prepared by the accountant.

c) Auditor should have through knowledge of accounting concepts and convention to enable
him to express an opinion on financial statements
d) All of the above.

11.The risk of management fraud increases in the presence of :
a) Frequent changes in supplies b) Improved internal control system
c) Substantial increases in sales
d) Management incentive system based on sales done in a quarter

12.Auditing standards differ from audit procedures in that procedures relate to
a) Audit assumptions b) acts to be performed c) quality criterion d) methods of work

13. Which of the following factors likely to be identified as a fraud factor by the auditor?
a) The company is planning a initial public offer of quality shares to raise additional capital
for expansion.
b) Bank reconciliation statement includes deposits­in­transit.
c) Plant and machinery is sold at a loss. d) The company has made political contributions.

14.The most difficult type of misstatement to detect fraud is based on:
a) Related party purchases b) Related party sales
c) The restatement of sales d) Omission of a sales transaction from being recorded.

15.Which of the following statements is correct concerning the required documentation in working papers of fraud risk assessment undertaken by the auditor?
a) All risk factors as mentioned in AAS­4, should be considered and documented along with
response to them. b) Document the identification of fraud risk factors along with response to them. c) Document material fraud, risk factors and response to them. d) No documentation in required.

16.Which of the following is the most appropriate potential reaction of the auditor to his assessment that the risk of material misstatement due to fraud is high in relation to existence of inventory?
a) Visit location on surprise basis to observe test counts
b) Request inventory count at a date close to year­end
c) Vouch goods sent on approval very carefully
d) Perform analytical procedures.

17.Which of the following is not likely to be a fraud risk factor relating to management’s characteristics?
a) Tax evasion b) Failure to correct known weakness in internal control system
c) Adoption of conservative accounting principles
d) High management turnover

18.Professional skepticism requires that the auditor assume that management is—
a) reasonably honest b) Neither honest nor dishonest
c) Not necessarily honest d) Dishonest unless proved otherwise

19.Which of the following information should a successor auditor obtain during the inquiry of the predecessor auditor before accepting engagement?
i) Information about integrity of management
ii) Disagreement with management concerning auditing procedures
iii) Review of internal control system.
iv) Organisation structure
a) (i) and (ii) b) (ii) and (iii) c) (i) , (ii) and (iii) d) i) and (iii)

20.The audit engagement letter, generally, should include a reference to each of the following except —
a) limitations of auditing b) responsibilities of management with respect to audit work
c) expectation of receiving a written management representation letter. d) a description of the auditor’s method of sample selection.

21.The use of an audit engagement letter is the best method of assuring the auditor will have which of the following?
a) Auditor will obtain sufficient appropriate audit evidence. b) Management representation letter
c) Access to all books, accounts and vouchers required for audit purpose
d) Cooperation from other auditors

22.The use of an audit engagement letter is the best method of documenting
i) the required communication of significant deficiencies in internal control
ii) significantly higher control risk than that assessed in prior audit.
iii) Objective and scope of auditor’s work
iv) Notification of any changes in the original arrangements of the audit.
a) (i) and (ii) b) (i) and (iii) c) ii and (iv) d) (iii and (iv)

23.An auditor who accepts an audit but does not possess the industry expertise of the business entity should
a) engage experts
b) obtain knowledge of matters that relate to the nature of entity’s business
c) inform management about it d) take help of other auditors

24.The least important element in the evaluation of an audit firm’s system of quality control would relate to­ 

a) assignment of audit assistants b) system of determining audit fees
c) consultation with experts d) confidentiality of client’s information

25.The primary purpose of establishing quality control policies and procedures for deciding on client evaluation is to­ 

a) ensure adherence to generally accepted auditing standards
b) acceptance or retention of clients whose management does not lack integrity
c) ensure audit fees is charged according to the type of audit work assigned
d) all of the above

Accounting MCQS, Part-1

  1. ——– are the third persons/parties, who owe money from the business.

  •                 Business partner
  •                 Debtor
  •                 Customer

2. At times, we receive discounts from our creditors. This discount is either treated as  ——–   income of the business or as a reduction in the cost of

  •                 Income
  •                 Balance
  •                 Stock
  •                 Returned

 3. When an expense or other payable is accrued it is

  •                 current liability
  •                 Assets
  •                 Income
  •                 current assets

4. ———— is made when it is known that an expense will arise but the exact amount is not known.

  •                 Accrual
  •                 Provision
  •                 Reserves
  •                 Goodwill

5. Accounting Treatment of Provision

  •                 Relevant Expense Account (Dr) Provisions (Cr)
  •                 cash (Dr) Provisions (Cr)
  •                 Account payable (Dr) Provisions (Cr)
  •                 Provisions (Dr) Relevant Expense Account (Cr)

6. Debtors is also called

  •                 Provisions
  •                 Stock
  •                 Receivables
  •                 none of them

7. Receivables are the ———-

  •                 current assets
  •                 Fixed assets
  •                 long term assets
  •                 all of the above

8. When a debtor does not pay the amount due to him, it is said

  •                 Provision
  •                 Accrual
  •                 Debt
  •                 Bad Debts

9. Recording of Bad Debts

  •                 Bad Debts (Dr) Debtors a/c (Cr)
  •                 Drawings (Dr) Debtors a/c (Cr)
  •                 Bad Debts (Dr) Drawings (Dr)
  •                 Debtors a/c(Dr) Bad Debts (Cr)

10. Debtors 100,000 Provision for Bad Debts 5,000 so the net receivable income is

  •                 100000
  •                 105000
  •                 95000
  •                 none of them

11. Provision for bad debts is also ——— debaters

  •                 add
  •                 less
  •                 save
  •                 recorded

12. Debtors are 15000 and the provision is 37% calculate net Debtors

  •                 15000
  •                  9400
  •                  11000
  •                  9450

13. which one of them is the current asset

  •                 cash
  •                 land
  •                 bill paid
  •                 advance income

14. Sales Ledger Control Account is also called

  •                 Debtors Control Account
  •                 Creditors Control Account

15. In General Ledger one account is kept for all the ——– Creditors Control Account.

  •                 Debtors Control Account,
  •                 Creditors Control Account.

16. List of debtors balances drawn up to the end of the previous period is ——–

                Opening balance of debtors

                Opening balance of account payable

                Closing Balance of debtors

                none of these

17. Opening balance of recorded on the ———- side of Debtors Control Accounts

                Dr

                Cr

18. Credit Sales ———- the debtors balance

                equal to

                decrease

                no effect on

                increase

19. Sales Return means

                customer returned the goods

                Supplier returned the goods

                Store returned the goods

                all of these

20. Cheques/Cash Received from the customer —— the debter balance

                increased

                no affect

                decreased

                A & C

21. Which is the simple formula of calculating closing balance of deboter

                Opening balance + Credit Sales +(Sales Return + Cheques/Cash Received)=

                Opening balance + Credit Sales – (Sales Return – Cheques/Cash Received)=

                Opening balance – Credit Sales – (Sales Return + Cheques/Cash Received)=

                Opening balance + Credit Sales – (Sales Return + Cheques/Cash Received)= 

22. List of creditors balances drawn up to the end of previous period is ———— balance of creditor for this year

                Closing

                Opening

23. Cheques/Cash Paid — the creditor balance

                increase

                decrease

24. The formula for calculating closing balance of creditor is

                Opening balance + Credit Purchases – (Purchase Return- Cheques/Cash Paid)

                Opening balance – Credit Purchases – (Purchase Return + Cheques/Cash Paid)

                Opening balance + Credit Purchases + (Purchase Return + Cheques/Cash Paid)

                Opening balance + Credit Purchases – (Purchase Return + Cheques/Cash)

 25. calculate closing balance of debter Opening Balance 50000 cash received 70000 Opening balance 30000 sale returned 2000

                72000

                80000

                8000

                32000

 26. Prepare a Creditors Control Account from the following data Opening Balance 40000 Purchase Return 6000 Cheques and Cash paid 34000 Discounts received 2000 Total Credit Purchases 32,000

                32000

                72000

                3000

                30000

27. A number of books are opened in connection with control accounts to reduce the volume of general ledger these books are called

                Purchase book

                Sales book

                Subsidiary Books

                A & C

28. Sale return is recorded on the —— of Debtors control Account

                Debit Side

                Credit Side

                —

                —

29. Discounts allowed is ——

                Income

                Good will

                Asset

                Expense

30. In Debtors control Account the Debit Side is greater then—-

                Debtors control Account

                Credit Sales

                Credit Side

                Cheques and Cash received

31. Debtor 45,000, amount received ——- closing balance is 19825

                25175

                21752

                25751

                22751

32. Individual purchases are recorded in ——

                Purchase Journal / Purchase Day Book

                Purchase Return / Return outward Journal

                Creditors Ledger

                all of these

33. ——– ledger maintains record of individual creditors

                Purchase Journal / Purchase Day Book

                Purchase Return / Return outward Journal

                Creditors Ledger

                none of these

34.Purchase Return is recorded on the ——- side of creditor control account.

                Cr

                Dr

                —

                —

35. Bad Debts are ——- expenses

                General

                Financial

                Selling

                Administration

36. When the Provision for Bad Debts increases Debtors

                increased

                decreases

                remain constant

                none of these

37. Individual invoice wise sales are recorded in this Journal. This book serves as source for all the recording of Credit sales.

                Sales Return / Return Inward

                Sales Journal / Sales Day Book

                Debtors Ledger

                none of above

38. which one of them is current asset

                Insurance expenses

                prepaid expenses

                Rent expenses

                all of the following

39. which one is current liability?

                land

                income

                Debtor

                Creditors

40. which one is long term liability?

  •                 creditors
  •                 a loan from Mr. A
  •                 bank loan
  •                 all of these

41. which one is a liability?

  •                 UN earned income
  •                 furniture
  •                 account receivable
  •                 none of these

 42. Creditor account increase with

  •                 credit
  •                 credit sale
  •                 credit purchase
  •                 A & B`

43. Debtor account increase with

  •                 Debit
  •                 Credit
  •                 Credit income
  •                 Credit sale

44. Creditor control account decreased when

  •                 Purchase Return
  •                 Cheques / Cash paid
  •                 Cheques / Cash received
  •                 A & B

45. Debtors control account decreased with

  •                 Opening balance of debtors
  •                 Cheques / Cash Received
  •                 Sales Return
  •                 purchase Return

46. Discount allowed showed on the ——– of debtors control account

  •                 Credit side
  •                 Debit side

47. sales return is also called

  •                 return inward
  •                 return outward
  •                 return to supplier
  •                 none of these

48. —— this ledger maintains a record of individual creditors.

  •                 Purchase Day Book
  •                 Purchase Journal
  •                 Creditors Ledger
  •                 Return outward Journal

49. 2nd name of Purchase Return is

  •                 return to customer
  •                 Creditors
  •                 Purchases inward
  •                 Return outward

50. —– this ledger maintains a record of an individual debtor.

  •                 Debtors Ledger
  •                 Sales Journal
  •                 Sales Return
  •                 Sales Day Book

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Senior Auditor Test For 100+Important Auditing, Accounting, Finance Solved (MCQs) Part-2

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