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)
81. Interest on calls paid in advance, according to Table A, should not exceed
a) 6%
b) 5%
c) 10%
d) 14%
Answer:- a) 6%
82. Shares can be issued at premium, under section
a) 76
b) 75
c) 78
d) 79
Answer:- c) 78
83. A company can accept calls in advance from its shareholders under section
a) 82
b) 79
c) 92
d) 78
Answer:- c) 92
84. Shares can be issued at discount only after
a) 2 years of the commencement of the business
b) 1 year of the commencement of the business
c) 3 years of the commencement of the business
d) 5 years of the commencement of the business
Answer:- b) 1 year of the commencement of the business
85. With regard to issue of share warrants to the bearers, the auditor should see that is it
a) Permitted by Memorandum of Association
b) Sanctioned by the Central Government
c) Permitted by the Board of Directors
d) None of the above
Answer:- b) Sanctioned by the Central Government
86. For the for festure of shares, the auditor should check that it is permitted
a) by Memorandum of Association
b) by articles of association
c) under Companies Act, 1956
d) None of the above
Answer:- b) by articles of association
87. Premium received on issue of shares, later forfeited, should be transferred to
a) Capital reserve
b) Shares forfeited Account
c) Capital Account
d) None of the above
Answer:- d) None of the above
88. With regard to issue of share certificates, the auditor should refer to section
a) 110
b) 113
c) 114
d) 123
Answer:- b) 113
89. Increase in share capital is permitted by
a) Memorandum of Association
b) Articles of association
c) Court
d) Companies Act, 1956
Answer:- b) Articles of association
90. Divisible profit should not include
a) Interest on capital
b) Capital
c) Depreciation
d) None of the above
Answer:- d) None of the above
