PRACTICAL AUDITING MCQ
Auditing typically refers to financial statement audits or an objective examination and evaluation of a company’s financial statements – usually performed by an external third party. Audits can be performed by internal parties and a government entity, such as the Internal Revenue Service (IRS)
41. Which of the following statements is correct?
a) Valuation is a part of verification
b) Verification is a part of valuation
c) Valuation has nothing to do with verification
d) Auditor is a valuer
Answer:- a) Valuation is a part of verification
42. Stock should be valued at
a) Cost
b) Market price
c) Cost price or market price whichever is lower
d) Cost less depreciation
Answer:- c) Cost price or market price whichever is lower
43. Valuation of Fixed Assets is based on the concept
a) Going concern
b) Conservation
c) Money measurement
d) Dual aspect
Answer:- a) Going concern
44. Valuation means
a) Calculating value of assets
b) Checking the value of assets
c) Checking the physical existence of assets
d) Examining the authenticity of assets
Answer:- b) Checking the value of assets
45. “ Auditor is not valuer” was stated in
a) Kingston Cotton Mills case
b) London & General Bank case
c) Lee . V . Neuchatel Co. Ltd case
d) London oil Storage Co. case
Answer:- a) Kingston Cotton Mills case
46. Fixed assets are valued at
a) Cost
b) Market price
c) Cost price or market price whichever is less
d) Cost less depreciation
Answer:- d) Cost less depreciation
47. Floating assets are valued at
a) Cost
b) Market price
c) Cost price or market price whichever is less
d) Cost less depreciation
Answer:- c) Cost price or market price whichever is less
48. The scope of work of internal audit is decided by the
a) Share holders
b) Management
c) To improve financial control
d) All of the above
Answer:- d) All of the above
49. Outstanding expenses should be verified with the help of
a) Cash book
b) Balance book
c) Journal proper
d) None of the above
Answer:- c) Journal proper
50. Book debts should be verified with the help of
a) Balance sheet
b) Amount received from Debtors
c) Debtors schedule
d) Certificate from the management
Answer:- c) Debtors schedule
