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15 April 2026

💦EXPENDITURE ACCOUNTS (100 MCQs)

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💦EXPENDITURE ACCOUNTS (100 MCQs)

(Includes conceptual + classification + practical accounting situations)

Expenditure means:
A) Income
B) Spending of funds
C) Profit
D) Liability
Answer: B
Government expenditure is classified into:
A) Capital & Revenue
B) Income & Expense
C) Asset & Liability
D) Debit & Credit
Answer: A
Revenue expenditure is:
A) Creates asset
B) Day-to-day expenses
C) Investment
D) Loan
Answer: B
Capital expenditure results in:
A) Expense
B) Asset creation
C) Loss
D) Liability
Answer: B
Charged expenditure is:
A) Voted by Parliament
B) Not voted
C) Optional
D) Conditional
Answer: B
Voted expenditure is:
A) Charged
B) Approved by Parliament
C) Optional
D) Audit
Answer: B
Budget includes:
A) Receipts only
B) Expenditure only
C) Both
D) None
Answer: C
Expenditure control ensures:
A) Overspending
B) Budget discipline
C) Delay
D) Bonus
Answer: B
Appropriation means:
A) Spending
B) Authorization
C) Payment
D) Audit
Answer: B
Excess expenditure requires:
A) Audit
B) Approval
C) Bonus
D) None
Answer: B
Re-appropriation means:
A) New budget
B) Transfer within budget
C) Payment
D) Audit
Answer: B
Expenditure is recorded in:
A) Cash book
B) Ledger
C) Both
D) None
Answer: C
Debit represents:
A) Income
B) Expenditure
C) Profit
D) Liability
Answer: B
Credit represents:
A) Expenditure
B) Income
C) Loss
D) Asset
Answer: B
Financial year is:
A) Jan–Dec
B) Apr–Mar
C) Jul–Jun
D) Mar–Feb
Answer: B
Expenditure sanction is given by:
A) Employee
B) Competent authority
C) Audit
D) Court
Answer: B
Expenditure must be:
A) Arbitrary
B) Sanctioned
C) Optional
D) Conditional
Answer: B
Budget head is:
A) Classification
B) Payment
C) Audit
D) None
Answer: A
Expenditure is subject to:
A) Audit
B) Rules
C) Both
D) None
Answer: C
Financial control ensures:
A) Waste
B) Efficiency
C) Delay
D) Bonus
Answer: B

Salary payment is:
A) Capital
B) Revenue
C) Loan
D) Asset
Answer: B
Purchase of building is:
A) Revenue
B) Capital
C) Expense
D) Liability
Answer: B
Repair of building is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Purchase of machinery is:
A) Revenue
B) Capital
C) Expense
D) Liability
Answer: B
Office electricity bill is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Loan repayment is:
A) Capital
B) Revenue
C) Asset
D) Expense
Answer: A
Interest payment is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Construction of railway track is:
A) Revenue
B) Capital
C) Expense
D) Liability
Answer: B
Maintenance of track is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Purchase of furniture is:
A) Revenue
B) Capital
C) Expense
D) Liability
Answer: B
Wages for daily work:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Depreciation is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Investment in project is:
A) Revenue
B) Capital
C) Expense
D) Liability
Answer: B
Audit objection relates to:
A) Income
B) Irregular expenditure
C) Asset
D) Liability
Answer: B
Suspense account is used for:
A) Final entry
B) Temporary booking
C) Income
D) Liability
Answer: B
Adjustment entry corrects:
A) Error
B) Income
C) Asset
D) Liability
Answer: A
Payment without sanction is:
A) Valid
B) Irregular
C) Capital
D) Revenue
Answer: B
Excess over budget is:
A) Allowed
B) Irregular
C) Capital
D) Revenue
Answer: B
Booking under wrong head is:
A) Correct
B) Misclassification
C) Asset
D) Liability
Answer: B
Advances adjusted under:
A) Final account
B) Suspense
C) Asset
D) Liability
Answer: B
Expenditure booked on cash basis means:
A) When incurred
B) When paid
C) When approved
D) When audited
Answer: B
Revenue receipt reduces:
A) Expenditure
B) Income
C) Asset
D) Liability
Answer: A
Capital receipt creates:
A) Liability
B) Asset
C) Expense
D) Income
Answer: A
Write-off is:
A) Capital
B) Revenue
C) Loss
D) Asset
Answer: C
Stores purchase booked under:
A) Capital
B) Suspense/store account
C) Revenue
D) Liability
Answer: B
Issue of stores charged to:
A) Capital
B) Revenue
C) Expense head
D) Liability
Answer: C
Deposit works are:
A) Govt expenditure
B) Third-party funded
C) Asset
D) Liability
Answer: B
Grant-in-aid is:
A) Capital
B) Revenue
C) Loan
D) Asset
Answer: B
Subsidy is:
A) Capital
B) Revenue
C) Asset
D) Liability
Answer: B
Refund of expenditure reduces:
A) Income
B) Expenditure
C) Asset
D) Liability
Answer: B

Expenditure control is exercised by:
A) Drawing officer
B) Accounts officer
C) Both
D) None
Answer: C
Audit ensures:
A) Compliance
B) Accuracy
C) Both
D) None
Answer: C
Internal control prevents:
A) Efficiency
B) Fraud
C) Audit
D) Delay
Answer: B
Misclassification affects:
A) Accounts
B) Budget
C) Both
D) None
Answer: C
Reconciliation ensures:
A) Matching records
B) Error
C) Delay
D) Bonus
Answer: A
Expenditure audit checks:
A) Legality
B) Regularity
C) Both
D) None
Answer: C
Budgetary control ensures:
A) Overspending
B) Discipline
C) Delay
D) Bonus
Answer: B
Financial rules ensure:
A) Compliance
B) Control
C) Both
D) None
Answer: C
Payment authority must ensure:
A) Sanction
B) Availability of funds
C) Both
D) None
Answer: C
Expenditure must be:
A) Necessary
B) Authorized
C) Reasonable
D) All
Answer: D
Audit objection raised for:
A) Regular expenditure
B) Irregularity
C) Income
D) Asset
Answer: B
Expenditure booked wrongly leads to:
A) Error
B) Audit issue
C) Both
D) None
Answer: C
Charged expenditure example:
A) Salary
B) Interest on debt
C) Office expense
D) Bonus
Answer: B
Voted expenditure example:
A) Interest
B) Salary
C) Court
D) Audit
Answer: B
Expenditure control ensures:
A) Efficiency
B) Economy
C) Both
D) None
Answer: C
Financial propriety means:
A) Waste
B) Prudence
C) Delay
D) Bonus
Answer: B
Expenditure should not be:
A) Wasteful
B) Necessary
C) Approved
D) Sanctioned
Answer: A
Audit trail means:
A) Record
B) Evidence
C) Both
D) None
Answer: C
Booking must follow:
A) Rules
B) Classification
C) Both
D) None
Answer: C
Expenditure records must be:
A) Accurate
B) Updated
C) Both
D) None
Answer: C
Budget variance shows:
A) Difference
B) Error
C) Delay
D) Bonus
Answer: A
Expenditure is part of:
A) Financial management
B) HR
C) Audit
D) Law
Answer: A
Control of expenditure ensures:
A) Accountability
B) Transparency
C) Both
D) None
Answer: C
Financial discipline requires:
A) Control
B) Compliance
C) Both
D) None
Answer: C
Expenditure is audited by:
A) Audit
B) Accounts
C) Both
D) None
Answer: A
Booking errors corrected by:
A) Adjustment
B) Audit
C) Authority
D) All
Answer: D
Expenditure classification ensures:
A) Clarity
B) Control
C) Both
D) None
Answer: C
Budget head ensures:
A) Proper booking
B) Control
C) Both
D) None
Answer: C
Expenditure system ensures:
A) Efficiency
B) Economy
C) Effectiveness
D) All
Answer: D
Financial rules are:
A) Mandatory
B) Optional
C) Flexible
D) None
Answer: A
Expenditure without sanction is:
A) Valid
B) Irregular
C) Capital
D) Revenue
Answer: B
Audit ensures:
A) Legality
B) Regularity
C) Both
D) None
Answer: C
Expenditure control is responsibility of:
A) Authority
B) Accounts
C) Both
D) None
Answer: C
Financial propriety ensures:
A) Economy
B) Efficiency
C) Both
D) None
Answer: C
Expenditure system ensures:
A) Accountability
B) Transparency
C) Both
D) None
Answer: C
Booking must be:
A) Correct
B) Timely
C) Both
D) None
Answer: C
Expenditure affects:
A) Budget
B) Accounts
C) Both
D) None
Answer: C
Audit objection resolves through:
A) Explanation
B) Correction
C) Both
D) None
Answer: C
Expenditure is core of:
A) Finance
B) Accounts
C) Both
D) None
Answer: C
Expenditure management ensures:
A) Control
B) Efficiency
C) Accountability
D) All
Answer: D

April 15, 2026

Accounts, Appendix-II, Expenditure, SAS

07 April 2026

📘 FULL MOCK TEST – FMT- 5 (100 MCQs – Final Level)

Posted by Bhupendra Lad with No comments

📘 FULL MOCK TEST – FMT- 5 (100 MCQs – Final Level)

If contribution is zero, the firm is at:
A. Profit
B. Loss
C. Break-even with zero fixed cost recovery
D. None
Answer: C
Major Head classification ensures:
A. Object grouping
B. Functional grouping
C. Scheme grouping
D. None
Answer: B
Delegation exceeding authority results in:
A. Valid sanction
B. Irregular expenditure
C. Profit
D. None
Answer: B
Acceptance of abnormally low tender without justification is:
A. Valid
B. Risky and irregular
C. Mandatory
D. None
Answer: B
Internal check failure primarily leads to:
A. Efficiency
B. Fraud risk
C. Profit
D. None
Answer: B
Contribution per unit = ₹0 implies:
A. SP > VC
B. SP < VC
C. SP = VC
D. None
Answer: C
Budget is prepared before:
A. Audit
B. Execution period
C. Accounting
D. None
Answer: B
Capital expenditure should not be:
A. Asset creating
B. Charged to revenue
C. Non-recurring
D. None
Answer: B
Object Head answers:
A. Why spent
B. Where spent
C. On what spent
D. None
Answer: C
Appropriation Accounts mainly detect:
A. Profit
B. Variances
C. Assets
D. None
Answer: B

Limited tender reduces:
A. Competition
B. Transparency
C. Both
D. None
Answer: C
Performance guarantee is generally:
A. Optional
B. Mandatory for contracts
C. Audit tool
D. None
Answer: B
Accrued income increases:
A. Liability
B. Asset
C. Expense
D. None
Answer: B
Outstanding expenses increase:
A. Asset
B. Liability
C. Income
D. None
Answer: B
Prepaid expenses decrease:
A. Asset
B. Liability
C. Expense of current period
D. None
Answer: C
Re-appropriation without authority is:
A. Valid
B. Irregular
C. Profit
D. None
Answer: B
Excess expenditure indicates:
A. Efficient budgeting
B. Lack of control
C. Profit
D. None
Answer: B
Contract variation beyond limit requires:
A. Ignoring
B. Higher approval
C. Audit only
D. None
Answer: B
Internal check fails when:
A. Duties segregated
B. Duties combined
C. Supervision exists
D. None
Answer: B
Tender process without transparency leads to:
A. Efficiency
B. Bias
C. Profit
D. None
Answer: B

SP ₹300, VC ₹180 → contribution =
A. 120
B. 180
C. 300
D. None
Answer: A
FC ₹1,20,000, contribution ₹60 → BE units =
A. 2,000
B. 3,000
C. 1,000
D. None
Answer: A
Budget ₹50L, actual ₹65L →
A. Saving
B. Excess ₹15L
C. Profit
D. None
Answer: B
Contract ₹60L, completed ₹45L →
A. ₹60L
B. ₹45L
C. ₹15L
D. None
Answer: B
Cash ₹3,00,000, found ₹2,70,000 → shortage =
A. ₹30,000
B. ₹2,70,000
C. ₹3,00,000
D. None
Answer: A
Bids ₹35L, ₹32L, ₹30L → L1 =
A. ₹35L
B. ₹32L
C. ₹30L
D. None
Answer: C
Limit ₹1 Cr, sanction ₹1.2 Cr → excess =
A. ₹20L
B. ₹1 Cr
C. ₹1.2 Cr
D. None
Answer: A
Margin of safety = 0 means:
A. Profit
B. Loss
C. Break-even
D. None
Answer: C
If SP < VC → contribution:
A. Positive
B. Negative
C. Zero
D. None
Answer: B
Contribution ₹50,000, FC ₹60,000 →
A. Profit ₹10,000
B. Loss ₹10,000
C. BE
D. None
Answer: B

Audit detects:
A. Future risk
B. Past errors
C. Profit
D. None
Answer: B
Financial propriety prohibits:
A. Necessary expenditure
B. Excessive expenditure
C. Budgeted expenditure
D. None
Answer: B
Suspense account must be:
A. Permanent
B. Cleared
C. Ignored
D. None
Answer: B
Deposit head indicates:
A. Govt income
B. Liability
C. Asset
D. None
Answer: B
Contract enforceability requires:
A. Legal validity
B. Profit
C. Audit
D. None
Answer: A
Delegation improves:
A. Centralization
B. Decentralization
C. Delay
D. None
Answer: B
Internal check is strongest when:
A. Same person handles all
B. Duties divided
C. No supervision
D. None
Answer: B
Tender system ensures:
A. Favoritism
B. Competition
C. Monopoly
D. None
Answer: B
Budget control failure leads to:
A. Overspending
B. Profit
C. Accuracy
D. None
Answer: A
Appropriation Accounts ensure:
A. Budget compliance
B. Profit
C. Asset valuation
D. None
Answer: A
Railway finance ensures:
A. Transparency
B. Accountability
C. Control
D. All
Answer: D
Marginal costing ignores:
A. Variable cost
B. Fixed cost
C. Total cost
D. None
Answer: B
Contribution is useful for:
A. BEP
B. Decision making
C. Profit planning
D. All
Answer: D
Financial rules ensure:
A. Discipline
B. Control
C. Efficiency
D. All
Answer: D
Railway accounts ensure:
A. Accuracy
B. Control
C. Compliance
D. All
Answer: D
Misclassification leads to:
A. Audit objection
B. Profit
C. Loss
D. None
Answer: A
Internal check avoids:
A. Fraud
B. Error
C. Both
D. None
Answer: C
Contract management ensures:
A. Compliance
B. Control
C. Efficiency
D. All
Answer: D
Tender evaluation ensures:
A. Value for money
B. Quality
C. Price
D. All
Answer: D
Budget is essential for:
A. Planning
B. Control
C. Decision
D. All
Answer: D
Railway financial system ensures:
A. Transparency
B. Accountability
C. Control
D. All
Answer: D
BEP is influenced by:
A. SP
B. VC
C. FC
D. All
Answer: D
Delegation ensures:
A. Efficiency
B. Accountability
C. Control
D. All
Answer: D
Internal check is:
A. Continuous
B. One-time
C. Optional
D. None
Answer: A
Financial discipline ensures:
A. Control
B. Efficiency
C. Transparency
D. All
Answer: D

April 07, 2026

Accounts, Appendix-II, Appendix-II -Paper-1, Appendix-III, CPD, Mock Test, Model Papers, Sample Test Paper

📘 FULL MOCK TEST – FMT- 3 (100 MCQs – Advanced & Case-Based)

Posted by Bhupendra Lad with No comments

📘 FULL MOCK TEST – FMT- 3 (100 MCQs – Advanced & Case-Based)

If fixed cost increases while contribution remains constant, BEP will:
A. Decrease
B. Increase
C. Remain same
D. Zero
Answer: B
Major Head classification is primarily based on:
A. Nature
B. Function
C. Object
D. Scheme
Answer: B
Delegation of power without written authority is:
A. Valid
B. Irregular
C. Acceptable
D. None
Answer: B
A tender with unrealistic low rates is:
A. Always accepted
B. Always rejected
C. Subject to scrutiny
D. Ignored
Answer: C
Internal check primarily prevents:
A. Past errors
B. Future errors
C. Audit
D. Budget
Answer: B
Contribution per unit decreases when:
A. SP increases
B. VC increases
C. FC increases
D. Sales increase
Answer: B
Budgetary control focuses on:
A. Past data
B. Future planning
C. Both
D. None
Answer: C
Capital expenditure is characterized by:
A. Recurring nature
B. Asset creation
C. Expense only
D. None
Answer: B
Object Head classification relates to:
A. Function
B. Nature of expense
C. Scheme
D. None
Answer: B
Appropriation Accounts highlight:
A. Profit
B. Budget compliance
C. Revenue
D. None
Answer: B

Limited tender is used when:
A. High competition needed
B. Limited suppliers available
C. Public bidding
D. None
Answer: B
Performance guarantee is forfeited when:
A. Work completed
B. Contractor fails
C. Audit done
D. None
Answer: B
Accrued income affects:
A. Asset
B. Liability
C. Expense
D. None
Answer: A
Outstanding expenses affect:
A. Asset
B. Liability
C. Income
D. None
Answer: B
Prepaid expenses result in:
A. Asset
B. Liability
C. Income
D. None
Answer: A
Re-appropriation is allowed within:
A. Same grant
B. Different grant
C. No grant
D. None
Answer: A
Excess expenditure requires:
A. Ignoring
B. Regularization
C. Audit only
D. None
Answer: B
Contract variation without approval is:
A. Valid
B. Irregular
C. Profit
D. None
Answer: B
Internal check is strengthened by:
A. Segregation of duties
B. Combining duties
C. Ignoring control
D. None
Answer: A
Tender committee ensures:
A. Bias
B. Fair evaluation
C. Delay
D. None
Answer: B

SP ₹150, VC ₹90 → contribution =
A. 60
B. 90
C. 150
D. None
Answer: A
FC ₹60,000, contribution ₹30 → BE units =
A. 2,000
B. 3,000
C. 1,000
D. None
Answer: A
Budget ₹20L, actual ₹25L →
A. Saving
B. Excess ₹5L
C. Profit
D. None
Answer: B
Contract ₹30L, completed ₹24L →
A. ₹30L
B. ₹24L
C. ₹6L
D. None
Answer: B
Cash ₹80,000, found ₹70,000 → shortage =
A. 10,000
B. 70,000
C. 80,000
D. None
Answer: A
Bids ₹15L, ₹12L, ₹18L, ₹10L → L1 =
A. ₹15L
B. ₹12L
C. ₹10L
D. None
Answer: C
Limit ₹25L, sanction ₹30L → excess =
A. ₹5L
B. ₹25L
C. ₹30L
D. None
Answer: A
Margin of safety decreases when:
A. Sales increase
B. BE increases
C. VC decreases
D. None
Answer: B
If VC = SP → contribution =
A. Positive
B. Zero
C. Negative
D. None
Answer: B
If contribution < FC →
A. Profit
B. Loss
C. BE
D. None
Answer: B

Audit primarily ensures:
A. Profit
B. Compliance
C. Loss
D. None
Answer: B
Financial propriety emphasizes:
A. Waste
B. Prudence
C. Excess
D. None
Answer: B
Suspense account is cleared by:
A. Final classification
B. Audit
C. Payment
D. None
Answer: A
Deposit account represents:
A. Asset
B. Liability
C. Income
D. None
Answer: B
Contract must satisfy:
A. Legal enforceability
B. Profit
C. Audit
D. None
Answer: A
Delegation reduces:
A. Delay
B. Efficiency
C. Control
D. None
Answer: A
Internal check is effective when:
A. Duties segregated
B. Duties combined
C. No control
D. None
Answer: A
Tender system prevents:
A. Competition
B. Bias
C. Profit
D. None
Answer: B
Budget control ensures:
A. Overspending
B. Discipline
C. Loss
D. None
Answer: B
Appropriation Accounts help in:
A. Profit calculation
B. Control
C. Loss
D. None
Answer: B
Railway finance system ensures:
A. Transparency
B. Accountability
C. Control
D. All
Answer: D
Marginal costing ignores:
A. Variable cost
B. Fixed cost
C. Total cost
D. None
Answer: B
Contribution is key for:
A. Profit planning
B. BEP
C. Decision making
D. All
Answer: D
Financial rules ensure:
A. Discipline
B. Control
C. Efficiency
D. All
Answer: D
Railway accounts depend on:
A. Budget
B. Audit
C. Control
D. All
Answer: D
Misclassification leads to:
A. Audit objection
B. Profit
C. Loss
D. None
Answer: A
Internal check avoids:
A. Fraud
B. Error
C. Both
D. None
Answer: C
Contract management ensures:
A. Compliance
B. Control
C. Efficiency
D. All
Answer: D
Tender evaluation ensures:
A. Value for money
B. Quality
C. Price
D. All
Answer: D
Budget is essential for:
A. Planning
B. Control
C. Decision
D. All
Answer: D
Railway financial system ensures:
A. Transparency
B. Accountability
C. Control
D. All
Answer: D
BEP depends on:
A. SP
B. VC
C. FC
D. All
Answer: D
Delegation ensures:
A. Efficiency
B. Accountability
C. Control
D. All
Answer: D
Internal check is:
A. Continuous
B. One-time
C. Optional
D. None
Answer: A
Financial discipline ensures:
A. Control
B. Efficiency
C. Transparency
D. All
Answer: D

April 07, 2026

Accounts, Appendix-II, Appendix-II -Paper-1, Appendix-III, CPD, Mock Test, Model Papers, Sample Test Paper

14 August 2023

🌀Advanced Accountancy-Auditing - 100 MCQ on

Posted by Bhupendra Lad with No comments

🌀Advanced Accountancy-Auditing 100 MCQ

(options in bold are the answer)

1) Audit Note Book contains: ---------------------------------------------------------

(A) Various dates of reference.

(B) Details of work done.

(D) All of the above.

Ans. : (D) All of the above.

2) Which of the following has a broader scope?

(A) Internal Control.

(B) Internal Audit.

(D) None of the above.

Ans. : (D) None of the above.

3) An internal auditor is :

(A) Temporary Employee.

(B) Permanent Employee.

(D) None of the above.

Ans.: (B) Permanent Employee.

4) The main object of vouching is :

(A) To prepare trial balance.

(B) Conduct routine checking.

(D) Checking of vouchers

Ans.: (D) Checking of vouchers

5) Valuation is the base of:

(A) Verification.

(B) Marketing.

(D) Vouching.

Ans. : (A) Verification.

6) The first auditor or auditors are appointed by :

(A) Central Government.

(B) Company Law Board.

(D) Shareholders.

Ans. : (C) Board of Directors.

7) A number of checks & controls exercised in a business to ensure its efficient working is known as :

(A) Internal check.

(B) Internal control.

(D) Interim check.

Ans. : (A) Internal check

8) Voucher relates to :

(A) Cash receipt.

(B) Cash payment.

(D) All the above.

Ans. : (D) All the above.

9) Internal check is meant for :

(A) Prevention of frauds.

(B) Detection of frauds.

(D) Detection of errors.

Ans. : (C) Helping audit in depth.

10) Internal auditor is appointed by :

(A) The management.

(B) The shareholders.

(D) The statutory body.

Ans. : (A) The management.

11) Auditing begins where -------- ends.

(A) Selling.

(B) Inventory valuation.

(D) Purchases.

12) A good audit report must at least meet one of the following qualifications:

(A) It should offer constructive and timely suggestions to the management.

(B) It should not point out mistakes.

(D) It should not be based on balance sheet.

Ans. : (A) It should offer constructive and timely suggestions to the management.

13) The work of one clerk is automatically check by another clerk is called :

(A) Internal control.

(B) Internal check.

(D) None of the above.

Ans.: (B) Internal check.

14) The owners of the company are called:

(A) Debenture holders.

(B) Debtors.

(D) None of the above.

Ans. : (C) Shareholders.

15) Verification is :

(A) The art of recording the business transactions.

(B) An examination of the books of accounts.

Ans. : (C) The act of establishing the accuracy of entries in the books of accounts.

16) The main object of investigation is :

(A) To discover errors and frauds.

(B) To prevent errors and frauds.

(D) All the above.

Ans. :(D) All the above.

17) Internal controls and internal check are :

(A) One and the same.

(B) Different.

(D) None of the above.

Ans. : (C) Internal control includes internal check.

18) An auditor is like a :

(A) Watchman.

(B) Foolish dog.

(D) Watch dog.

Ans. : . (D) Watch dog.

19) Special audit is necessary for:

(A) Inefficient concern.

(B) Processing concern.

(D) Manufacturing concern.

Ans.: (A) Inefficient concern.

20) The company’s auditor is expected to give:

(A) His expert opinion about the accounts.

(B) A factual position about the accounts.

(D) Financial assistance.

Ans.: (B) A factual position about the accounts.

21) Auditors of a joint stock company are appointed by :

(A) Directors of the company.

(B) Annual general meeting.

(D) Debenture holders.

Ans.: (C) Election at the annual general meeting.

22) A company auditor can be removed by :

(A) Board of directors.

(B) Managing director.

(D) General Meeting.

Ans. : (D) General Meeting.

23) A vacancy caused by resignation of an auditor is filled by :

(A) Board of directors.

(B) Managing director.

(D) Central government.

Ans. : (C) General meeting

24) Audit in depth means :

(A) Audit of each and every item.

(B) Intensive audit of each and every item.

(D) Audit of a few selected items.

Ans. : (B) Intensive audit of each and every item.

25) Concurrent audit is a part of :

(A) Internal check system.

(B) Continuous audit.

(D) Final audit.

Ans. (C) Internal audit system.

26) Audit in depth is synonymous for:

(A) Complete audit.

(B) Completed audit.

(D) Detailed audit.

Ans. : (D) Detailed audit.

27) Balance sheet audit included verification of :

(A) Assets.

(B) Liabilities.

(D) All of the above.

Ans. : (D) All of the above.

28) Which of the following statements is not true about continuous audit?

(A) It is conducted at regular interval.

(B) It may be carried out on daily basis.

(D) It is expensive.

Ans. : (C) It is needed when the organization has a good internal control system.

29) Which of the following is not a fact of EPA ?

(A) Economic audit.

(B) Efficiency audit.

(D) Effectiveness audit.

Ans.: (C) Expenditure audit.

30) Balance sheet does not include :

(A) Verification of assets & liabilities.

(B) Vouching of income & expense accounts related to assets and liabilities.

(D) Routine checks.

Ans.: (D) Routine checks.

31) When issuing unqualified opinion the auditor who evaluates the audit findings should be satisfied that the :

(A) Amount of known miss-statement is documented in working papers.

(B) Estimates of the total likely misstatement are less than materiality level.

(D) Estimates of the total likely misstatement cannot be made.

Ans. : (B) Estimates of the total likely misstatement are less than materiality level.

32) Under check system principle of_________ is followed.

(A) Division of labour

(B) Division of work

(D) Accountancy

.ANS : (A) Division of labour

33) This kind of audit is generally conducted between two annual audits.

(A) Internal audit

(B) Interim audit

(D) Continuous audit

Ans. : (B) Interim audit.

34) Before the work of audit is commenced, the auditor plans out the whole of audit work is known as –

(A) Audit plan

(B) Audit note

(D) Audit program

Ans. : (D) Audit program.

35) Internal auditor is appointed by –

(A) The management

(B) The shareholders

(D) statutory body

Ans. : (A) The management.

36) The audit that is made compulsory under the statute is called –

(A) Statuary audit

(B) Partial audit

(D) Continues audit

Ans. : (A) Statuary audit.

37) Who among the following can be appointed as the auditor of company?

(A) A partner or the director of the company

(B) A person of unsound mind

(D) Mr. ‘Z’ who holds the ‘CA’ Certificate

Ans. : Mr. ‘Z’ who holds the ‘CA’ Certificate.

38) ___ is documentary evidence by which the accuracy in the books of accounts may be proved.

(A) Cheque

(B) Receipt

(D) Statement

Ans. : (C) Voucher.

39) 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

(D) Error of Principle.

Ans. : (B) Error of commission.

40) In comparison to the independent auditor an internal auditor is more likely to be concerned with –

(A) Cost accountancy system

(B) Internal control system

D) Accounting system

Ans. : (B) Internal control system.

41) The audit program is prepared by –

(A) The auditor

(B) The client

(D) Auditor & his assistants

Ans. : (D) Auditor & his assistants.

42) Interim audit refers to –

(A) Examination of accounts continuously

(B) Examination of accounts intermittently

(D) Carrying on audit for bonus purposes at the end of year

Ans. : (C) Audit work to find out & check interim profits of a company .

43) A company auditor should see that the dividend is paid –

(A) After charging depreciation

(B) Without charging depreciation

(D) None of the above.

Ans. : (A) After charging depreciation.

44) Errors of omission are –

(A) Technical errors

(B) Error of principle

(D) none of these

Ans.: (A) Technical errors.

45) Vouching implies –

(A) Inspection of receipts

(B) Examination of vouchers to check authenticity of records

(D) Examining the various assets

Ans. : (B) Examination of vouchers to check authenticity of records.

46) Undervaluation of stock is –

(A) Technical error

(B) Compensatory error

(D) none of these

Ans. : (C) Error of principle.

47) Verification refers to –

(A) Examination of journal & ledger

(B) Examination of vouchers related to assets

(D) Calculation of valuation of assets

Ans. : (C) Examining the physical existence & valuation of assets.

48) Valuation of fixed assets is based on the concept –

(A) Going concern

(B) Money measurement

(D) Cost concept.

Ans. : (A) Going concern.

49) “Auditor is not valuer.” This statement was stated in –

(A)Kingston Cotton Mill Case (B) London & General Bank Case

Ans. :(A)Kingston Cotton Mill Case.

50) Floating assets are valued at –

(A) Cost

(B) Market price

(D) Cost less than depreciation

Ans. : (C) Cost price or market price whichever is less.

51) Outstanding expenses should be verified with the help of –

(A) Cashbook

(B) Balance book

(D)None of above.

Ans. : (C) Journal proper

52) First auditor of the company is appointed by the –

(A) Shareholders

(B) Central government

(D) Board of directors

Ans. :(D) Board of directors.

53) The vacancy caused by resignation at a auditor is filled by –

(A) Board of directors

(B) At the general meeting of shareholders

(D) By the company law board

Ans. : (B) At the general meeting of shareholders

54) A special auditor is appointed by the –

(A) Shareholders

(B) Board of directors

(D) CAG

Ans. : (C) Central government.

55) A remuneration of a company auditor is fixed by the –

(A) Shareholders

(B) Board of directors

(D) Appointing authority

Ans. : (D) Appointing authority.

56) Internal auditor has to submit report to –

(A) Shareholders

(B) Government

(D) none of above

Ans. : D) none of above.

57) Auditor in general is –

(A) Employee of the company

(B) Agent of the company

Ans. : (C) Agent of the shareholders.

58) Shares issued for consideration other than cash should be vouched with help of –

(A) Directors minutes book

(B) Shareholders minute’s book

(D) Cash book

Ans. : (C) Contract with the party concerned.

59) The term Standard Auditing Practices refers –

(A) Auditing techniques adopted by auditor for collecting & vouching evidences

(B) Test checking

(D) True & fair view

Ans. : (A) Auditing techniques adopted by auditor for collecting & vouching evidences.

60) AAS refers to –

(A) Audit evidence

(B) Audit Planning

(D) Knowledge of business

Ans. :(D) Knowledge of business.

61) The panel of Auditors of cooperative society is maintained by –

(A) Charted Accountant

(B) Central Government

(D) Shareholders

Ans. : (C) Registrar.

62) Banking Regulation Act was passed in the year–

(A) 1912

(B) 1949

(D) 1955.

Ans. : (B) 1949.

63) Which of the following statements is not correct regarding removal of first auditor before expiry of the term?

(A) He is removed at general meeting

(B) Shareholders are authorized to do so

(D) The provision for such removal is contained in Section 224 (7)

Ans. : (C) The approval of central government is required for such removal

64) Retiring auditor does not have right to –

(A) Make written representations

(B) Get his representation circulated

(D) Speak as member of company

Ans. :(A) Make written representations

65) According to Section ___ Special Audit is conducted at the central government

(A) Section 233(A)

(B) Section 233(B)

(D) Section 242(B)

Ans. : (C) Section 242(A).

66) Audit of Banks is an example of –

(A) Statutory Audit

(B) Balance Sheet Audit

(D) All of above

Ans. : (D) All of above.

67) Auditor of a _____ company does not have right to visit foreign branches of company.

(A) Unlimited Company

(B) Manufacturing Company

(D) Non-Profit making company

Ans. : (B) Manufacturing Company.

68) Cost Audit under Section 233(B) of The Company Act is _____

(A) Voluntary

(B) Compulsory

(D) Avoidable

Ans. : (C) Avoidable.

69) Internal Auditing Standards are issued by the –

(A) International Accounting Standard Board

(B) Financial Accounting Standard Board

(D) Auditing Practices Board

Ans. : (C) International Audit & Assurance Standard Board

70) Which of the following is not a duty of an auditor?

(A) Duty to report company’s banker

(B) Duty to report to the members

(D) Duty to report on any violation of law

Ans. : (A) Duty to report company’s banker.

71) The main object of vouching is :

(A) To prepare trial balance.

(B) Conduct routine checking.

(D) Checking of vouchers.

Ans. : (C) Verify authenticity & authority of transactions

72) Valuation is the basis of :

(A) Verification.

(B) Marketing.

(D) Vouching.

Ans. : (A) Verification

73) The first auditor or auditors are appointed by :

(A) Central Government.

(B) Company Law Board.

(D) Shareholders.

Ans.: (C) Board Of Directors

74) Voucher relates to:

(A) Cash receipt.

(B) Cash payment.

(D) All the above.

Ans. : All of the above.

75) Internal auditor is appointed by :

(A) The management.

(B) The shareholders.

(D) The statutory body.

Ans. : (A) The management

76) Auditing begins where -------- ends.

(A) Selling.

(B) Inventory valuation.

(D) Purchases.

Ans. : (C) Accounting

77) The work of one clerk is automatically check by another clerk is called :

(A) Internal control.

(B) Internal check.

(D) None of the above.

Ans. : (B) Internal Check

78) The owners of the company are called:

(A) Debenture holders.

(B) Debtors.

(D) None of the above.

Ans.: (C) Shareholders

79) An auditor is like a :

(A) Watchman.

(B) Foolish dog.

(D) Watch dog.

Ans.: (D) Watch dog

80) A company auditor can be removed by :

(A) Board of directors.

(B) Managing director.

(D) General Meeting.

Ans. : (D) General Meeting

81) This kind of audit is generally conducted between two annual audits.

(A) Internal audit

(B) Interim audit

(D) Continuous audit

Ans.: (B) Interim audit.

82) Before the work of audit is commenced, the auditor plans out the whole of audit work is known as –

(A) Audit plan

(B) Audit note

(D) Audit program

Ans. : (D) Audit program.

83) Internal auditor is appointed by –

(A) The management

(B) The shareholders

(D) statutory body

Ans. : (A) The management.

84) The audit that is made compulsory under the statute is called –

(A) Statuary audit

(B) Partial audit

(D) Continues audit

Ans. : (A) Statuary audit.

85) Who among the following can be appointed as the auditor of company?

(A) A partner or the director of the company

(B) A person of unsound mind

Ans. : Mr. ‘Z’ who holds the ‘CA’ Certificate.

86) ___ is documentary evidence by which the accuracy in the books of accounts may be proved.

(A) Cheque

(B) Receipt

(D) StatementAns. : (C) Voucher.

87) 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.

Ans. : (B) Error of commission.

88) In comparison to the independent auditor an internal auditor is more likely to be concerned with –

(A) Cost accountancy system

(B) Internal control system

D) Accounting system

Ans. : (B) Internal control system.

89) The audit program is prepared by –

(A) The auditor (B) The client (C) The audit assistants (D) Auditor & his assistants

Ans. : (D) Auditor & his assistants.

90) Interim audit refers to –

(A) Examination of accounts continuously

(B) Examination of accounts intermittently

(D) Carrying on audit for bonus purposes at the end of year

Ans. : (C) Audit work to find out & check interim profits of a company .

91) A company auditor should see that the dividend is paid –

(A) After charging depreciation

(B) Without charging depreciation

(D) None of the above.

Ans. : (A) After charging depreciation.

92) Errors of omission are –

(A) Technical errors

(B) Error of principle

(D) None of these

Ans.: (A) Technical errors.

93) Vouching implies –

(A) Inspection of receipts

(B) Examination of vouchers to check authenticity of records

(D) Examining the various assets

Ans. : (B) Examination of vouchers to check authenticity of records.

94) Undervaluation of stock is –

(A) Technical error

(B) Compensatory error

(D) none of these

Ans. : (C) Error of principle.

95) Verification refers to –

(A) Examination of journal & ledger

(B) Examination of vouchers related to assets

(D) Calculation of valuation of assets

Ans. : (C) Examining the physical existence & valuation of assets.

96) Valuation of fixed assets is based on the concept –

(A) Going concern

(B) Money measurement

(D) Cost concept.

Ans. : (A) Going concern.

97) “Auditor is not valuer.” This statement was stated in – (A)Kingston Cotton Mill Case

(B) London & General Bank Case

(D) London Oil Storage Co.LTD Case

Ans. : (A)Kingston Cotton Mill Case.

98) Floating assets are valued at –

(A) Cost

(B) Market price

(D) Cost less than depreciation

Ans. : (C) Cost price or market price whichever is less.

99) Outstanding expenses should be verified with the help of –

(A) Cashbook

(B) Balance book

(D) None of above.

Ans. : (C) Journal proper

100) First auditor of the company is appointed by the –

(A) Shareholders

(B) Central government

(D) Board of directors

Ans. : (D) Board of directors.

101) Thevacancy caused by resignation of an auditor is filled by –

(A) Board of directors

(B) At the general meeting of shareholders

(D) By the company law board

Ans. : (B) At the general meeting of shareholders

102) A special auditor is appointed by the –

(A) Shareholders

(B) Board of directors

(D) CAG

Ans. : (C) Central government.

103) A remuneration of a company auditor is fixed by the – (A) Shareholders

(B) Board of directors

(D) Appointing authority

Ans. : (D) Appointing authority.

104) Internal auditor has to submit report to –

(A) Shareholders

(B) Government

(D) None of above

Ans. : D) none of above.

105) Auditor in general is –

(A) Employee of the company

(B) Agent of the company

(D) None of the above

Ans. : (C) Agent of the shareholders.

106) Shares issued for consideration other than cash should be vouched with help

of –

(A) Directors minutes book

(B) Shareholders minute’s book

(D) Cash book

Ans. : (C) Contract with the party concerned.

107) The term Standard Auditing Practices refers –

(A) Auditing techniques adopted by auditor for collecting & vouching evidences

(B) Test checking

(D) True & fair view

Ans. : (A) Auditing techniques adopted by auditor for collecting & vouching evidences.

108) AAS refers to –

(A) Audit evidence

(B) Audit Planning

(D) Knowledge of business

Ans. : (D) Knowledge of business .

109) The panel of Auditors of cooperative society is maintained by –

(A) Charted Accountant

(B) Central Government

(D) Shareholders

Ans. : (C) Registrar.

August 14, 2023

Accounts, Advanced Accountancy, SAS-Group-II

15 April 2026