Accounting and Auditing — Practice

Question 1

Under the accrual basis of accounting, revenue is recognised

Accepted Answer

B

Question 2

The going concern assumption in accounting means that

Accepted Answer

C

Question 3

The matching concept in accounting requires that

Accepted Answer

D

Question 4

The conservatism (prudence) concept in accounting advises that

Accepted Answer

A

Question 5

As per AS 1 (Disclosure of Accounting Policies) and its Ind AS successor, which three assumptions are treated as 'fundamental accounting assumptions' that need not be separately disclosed if they are followed?

Accepted Answer

B

Question 6

A machine costs ₹3,60,000, has an estimated scrap value of ₹30,000, and a useful life of 5 years. Using the Straight-Line Method, what is the annual depreciation charge?

Accepted Answer

C

Question 7

An asset has an opening book value of ₹80,000 at the start of the year and is depreciated at 25% per annum under the Written-Down-Value method. What is the depreciation charge for that year?

Accepted Answer

D

Question 8

Applicability of Ind AS (Indian Accounting Standards) to a company is primarily determined by

Accepted Answer

A

Question 9

Opening stock is 80 units at ₹15 each; a subsequent purchase adds 120 units at ₹18 each. If 130 units are issued during the period, what is the value of the closing stock under the FIFO method?

Accepted Answer

B

Question 10

Opening stock is 100 units at ₹10 each; a subsequent purchase adds 100 units at ₹14 each. If 150 units are sold during the period, what is the value of the closing stock under the weighted average method?

Accepted Answer

C

Question 11

A firm has fixed costs of ₹1,20,000, a selling price of ₹40 per unit, and a variable cost of ₹25 per unit. What is the break-even point in units?

Accepted Answer

D

Question 12

A firm's Current Assets are ₹4,50,000, including Inventory of ₹90,000 and Prepaid Expenses of ₹10,000, against Current Liabilities of ₹2,00,000. What is the firm's Quick (Acid-Test) Ratio?

Accepted Answer

A

Question 13

A company's Net Profit is ₹3,60,000; its Shareholders' Equity is ₹12,00,000 and its long-term Debt is ₹6,00,000. What is the company's Return on Investment (ROI)?

Accepted Answer

B

Question 14

Which financial statement is mandatory under Ind AS 7 / AS 3, and strictly classifies all cash movements into operating, investing, and financing activities?

Accepted Answer

C

Question 15

Which type of audit is legally mandatory for every company registered under the Companies Act, 2013, conducted by an independent chartered accountant appointed by the shareholders and reporting to them?

Accepted Answer

D

Question 16

The audit procedure of examining documentary evidence such as invoices and receipts to confirm that individual recorded transactions actually occurred and were correctly entered in the books is known as

Accepted Answer

A

Practice — Accounting and Auditing

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