Accountancy and Auditing Quiz No:3

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Welcome to your Accountancy and Auditing Quiz No:3

1. 
Which of the following is capital asset under the Income Tax Ordinance, 2001?

2. 
Which of the following list of accounts is used to compute the cost of goods sold?

3. 
The amount of overtime premium contained in direct wages would normally be classified as:

4. 
The Addition of Material and Labour is called:

5. 
Every limited company is legally required to get their account audited by a practicing Chartered Accountant

6. 
Which one of the following is to be repaid in the last in case of liquidation of company:

7. 
Assets would be overstated if necessary adjusting entry was omitted for:

8. 
Which of the following is not an acceptable inventory method?

9. 
The most important reason for having an annual audit is to:

10. 
Which of the following is not an intangible asset?

11. 
At the time of admission of a new partner, goodwill raised should be written off in:

12. 
One of the basic purposes of business combination is:

13. 
If cost of good sold Rs.600,000, Operating expenses 40,000, sales Rs.820,000, Sale return Rs.20,000 then operating ratio is:

14. 
Verification is carried out for:

15. 
A balance sheet is prepared to find out financial position of a firm

16. 
What percentage of profit a bank has to transfer to statutory reserve until it inflates to paid-up capital of the bank:

17. 
Which one of the following is not considered a legal document of Joint Stock Company:

18. 
The first auditor of a Public Limited Company is appointed by the directors with in:

19. 
The basic concept which recognizes that the cost of internal control should not exceed the benefits expected to be derived is known as:

20. 
Average, minimum and maximum daily usage is 400, 180 and 520 units Respectively. Lead time 10 to 15 days and reorder quantity 8000 units. What is reorder level:

21. 
Identify which items are subtracted from the list amount and not recorded when computing purchase price:

22. 
The predetermined overhead is:

23. 
The face values and market value of shares remain the same in case of:

24. 
Statutory meeting is necessary in case of:

25. 
Which of the following eliminates details from the working trial balance by classifying and summarizing similar or related items?

26. 
If sales increase by 10% from year 1 to 2 and cost of goods sold increases only 6%, the gross profit on sales will increase by:

27. 
Normally test checking is adopted in case of

28. 
Income and expenditure account in a non trading institution records transaction of:

29. 
Identify the item that is likely to serve as source document:

30. 
Second hand machinery worth Rs. 10, 000 was purchased, repairing of the machinery cost Rs. 1,000. The machinery was installed by own workers. Wage for this being Rs. 200, the machinery account should be debited for:

31. 
Which of the following best describes the nature of an asset?

32. 
Which of the following would be least likely to be considered an objective of a system of internal control:

33. 
Revenue is most commonly recognized at the time when:

34. 
Which of the following is a benefit of a just-in-time (JIT)inventory system?

35. 
The status of Chamber of Commerce and Industry in Pakistanis:

36. 
Cost Accounting and Financial Accounting can be never be reconciled.

37. 
Income Tax is livable on every person with an annual income of Rs. 80,000

38. 
When costs are rising, which method reports higher net income:

39. 
If annual requirement is 50,000 units, cost per unit Rs.15, ordering cost Rs.20 per order and holding cost 10% of the purchase price then what is economic order quantity?

40. 
Expenses can be called as:

41. 
A cooperative society is registered under cooperative society act of:

42. 
Both the accounts for depreciation expense and accumulated depreciation:

43. 
Current Companies Ordinance is that of:

44. 
Which of the following is a clearing account?

45. 
Of the following statements, which one is untrue for the corporate form of organization:

46. 
Which of the following is an agricultural income?

47. 
Tax deducted at source will be treated as:

48. 
Which of the following categories of accounts are closed at the end of an accounting period?

49. 
Markets are necessary because:

50. 
Audit working papers are the property of:

51. 
In Public Ltd. Company, minimum number of members is:

52. 
Actual overhead costs appear:

53. 
Short term finance can be arranged through:

54. 
Cost of Goods sold Rs.14,000. Purchases Rs.14,000 Carriage Inward Rs.1,000, carriage outward Rs.1,500 and closing inventory Rs.13,000. What is the opening inventory?

55. 
A transaction caused Rs. 20,000 decrease in both total assets and total liabilities. This transaction could have been:

56. 
Audit programme is prepared by:

57. 
A company has current ratio of 2 to 1 at the end of year 1. Which one of the following transactions will increase this ratio?

58. 
Bonus payable only on the maturity of the policy is termed as:

59. 
Identify which of the normal balances (in parentheses) assigned to the following accounts is incorrect:

60. 
EOQ is adopted to have efficient:

61. 
Which of the following combination of business makes different types of goods and have in common either raw material or final product?

62. 
When a partnership is liquidated:

63. 
Which of the following is principle purpose of evaluation on internal control?

64. 
Audit Engagement letter is always obtained after the end of the audit.

65. 
Which of the following expenditures is admissible under the head income from Business?

66. 
Rebate on bill discounted (unearned discount) is:

67. 
The formula (Cost less salvage value/Total capacity in units x units extracted) refers to which depreciation method:

68. 
Comparison of a company’s financial condition and performance across time is a:

69. 
Average relief is allowed on the following expenditures except:

70. 
If cost of goods sold Rs.450,000, Opening stock Rs.125,000 and Closing stock Rs.175,000 then inventory turnover ratio is:

71. 
The book value of the depreciable asset is best defined as:

72. 
Which of the following is ascertained by drawing up an income and expenditure account?

73. 
Conversion Cost consists of Director Material

74. 
Which one of the following statements is incorrect with respect to external auditors:

75. 
A loan taken from a bank for a period longer than two years is known as short-term loan

76. 
A retail store had current assets of Rs.72,000 and a current ratio of 2 to 1. The amount of working capital must have been:

77. 
If net sales Rs. 100,000 cost of goods sold Rs. 55,000, administrative expenses Rs. 5300, selling expenses Rs. 4375, Interest expense Rs. 500, the operating profit is:

78. 
In partnership minimum number of members is:

79. 
Bond holders would be most interested in which of the following?

80. 
A and B are partners in the ratio of 2:1. They admit C for ¼ shares who contribute Rs. 3000 for his share of goodwill. Total value of the goodwill of the firm is:

81. 
The preparation of work sheet:

82. 
Unqualified report is favorable for:

83. 
Discovery of business opportunities and arrangement of property, funds, and management ability to set up a business is called:

84. 
While passing adjusting entries for what type of transactions expenses are debited and assets are credited:

85. 
Which of the following amounts appears in both the income statement and balance sheet?

86. 
Identify the correct answer with regards to depreciation expense:

87. 
On April 1, Hassan & Company received and paid a Rs.700 bill for the advertising done in March. In addition to this bill the company paid Rs. 6,100 during April for expenses incurred in that month. Hassan & Company paid Rs.3,600 as salary to employees for work done in April. Based on these facts, total expenses for the mont h of April were:

88. 
Second Schedule is annexed to the Income Tax ordinance, 2001 and deals with exemptions from income tax

89. 
Which of the following would be least likely to be considered a control objective?

90. 
Which of the ratio best reflects a company’s ability to meet immediate interest payment?

91. 
Which of the following assets is not eligible for initial depreciation allowance?

92. 
Standard Costing Procedures are not relevant in job costing

93. 
For each transaction, double-entry accounting requires which of the following:

94. 
Benchmark rate of interest for the tax year 2006 was:

95. 
If rent received is Rs.1000 per month, token money forfeited Rs.500, insurance premium paid Rs.100, water charges Rs.100, the net property income will be:

96. 
Which of the following statements is false?

97. 
In projecting the future profitability of a trading company, investors will be least concerned with changes in:

98. 
Retiring auditor can be appointed at:

99. 
Which of the following rental income is exempted from tax under the head Income from Property?

100. 
A job-order costing system is most appropriate for which of the following types of manufacturing?


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