Junior Auditor

8/18/2019 Junior Auditor

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Accounting & Auditing Mcqs From Past Papers

(1) Double entry book-keeping was fathered by:

(a) F.W.Taylor

(b) Henry Fayol

(c) Lucas Pacioli.

() Funds Flow !tate"ent and sour#es and appli#ation state"ent are:$

(a) Synonymous

(b) %ntagonisti#

(#) &one of these.

(') Depre#iation in spirit is si"ilar to:

(a) Depletion

(b) Amortization

(#) Depression.

) alan#e !heet is always prepared:

(a) for the year ended.

(b) As on a specifed date.

(#) &one of these.

(*) +n +nsuran#e, the following rot and /oss %##ounts are prepared:

(a) !eparate for Fire, 0arine, and %##idents et#.

(b) onsolidated !or Fire" Marine" and Accidents etc.(#) &one of these.

() artners in akistan #an today be 2ed at the following nu"bers:(a) #$

(b) *3

(#) 4*.

(4) Fle2ible budget is a budget with the following features:

(a) %anges it% 'olume o! production.

(b) 5hanges with 6ariable e2penses

(#) 5hanges in Dire#t "aterial.

(7) reak 86en #an be #al#ulated as under:

(a) 99999959999999 F5- T; T5

(b) F

* +,(#) &one of these.

(


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(b) =ui#k . /iabilities 5urrent %ssets

(c) urrent Assets- urrent Liabilities

(13) +n straight line "ethod of depre#iation, the written down 6alue of a 2ed asset will be at the

end of the life of the asset as under:

(a) ;upee one(b) ,upee zero (#) &one of these.

(11) !ales budget "ust be prepared:

(a) +ndependently

(b) Depending on produ#tion #apa#ity

(c) ased on Sales !orecasts o! mar/et.

(1) 5onsolidation of subsidiary a##ounts in the balan#e sheet of a unlisted Holding #o"pany is

at present in akistan:

(a) 5o"pulsory

(b) oluntary

(c) ,equired.

(1') ;etained earning is synony"ous to:

(a) Accumulated proft and loss account

(b) rot for the year

(#) &one of these.

(1) The re?uire"ents of an audit report for a anking 5o"pany in akistan is under:

(a) @nder the anking 5o"panies Ardinan#e, 1


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(17) 86ery li"ited 5o"pany in akistan is re?uired by law to in#lude the following along with

nan#ial reports:

(a) ;atio %nalysis

(b) %airman4s ,e'ie

(#) &one of these.

(1


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4. !tratied audit sa"ple "eans:

a. ,andomly selected items !or audit

b. urposi6ely sele#ted ite"s for audit

#. +te"s #arefully sele#ted fro" ea#h group

7. +nternal 5ontrol is totally synony"ous with:a. +nternal #he#k

b. +nternal audit

c. 3one o! abo'e


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1. 5urrent ;atio is #al#ulated as:

a. Fi2ed %ssets>5urrent /iabilities

b. 5urrent /iabilities>5urrent %ssets

c. urrent Assets-urrent Liabilities

14. !hort-ter" loan #an be des#ribed as:a. +f the period is three years

b. ! t%e period is less t%an one year

#. +f the period is o6er one year

17. % partnership, in today$s akistan, under the #urrent law #an ha6e the following nu"ber of

partners:

a. *3

b. #$

#. 133

1


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() %"ount, #ash, or other assets re"o6ed fro" business by owner is:

(a) 5apital

(b) 9raings

(#) %ssets

(d) &one of these

(*) @nder the di"inishing balan#e "ethod, depre#iation a"ount is:

(a) ay"ent

(b) ;e#eipt

(c) 26penditure

(d) &one of these

() @sers of a##ounting infor"ation in#lude:

(a) The ta2 authorities

(b) +n6estors

(#) 5reditors

(d) All o! t%ese

(4) The business for"(s) in whi#h the owner(s) is (are) personally liable is (are) the:

(a) artnership only

(b) roprietorship

(#) 5orporation only

(d) Partners%ip and proprietors%ip

(e) &one of these

(7) The in6est"ent of personal assets by the owner:

(a) ncreases total assets and increases oner4s equity

(b) +n#reases total assets only

(#) Has no eGe#t on assets but in#reases owner$s e?uity

(d) +n#rease assets and liabilities

(e) &one of these

(


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(d) Assets

(e) &one of these

(11) %n owner in6est"ent of land into the business would:

(a) De#rease withdrawals

(b) +n#rease liabilities(c) ncrease oner4s equity

(d) De#rease assets

(e) &one of these

(1) % #ash pur#hase of supplies would:

(a) De#rease owner$s e?uity

(b) +n#rease liabilities

(c) :a'e no e7ect on total assets

(d) &one of these

(1') %n owner in6est"ent of ea#h into the business would:

(a) ncrease assets

(b) De#rease liabilities

(#) +n#rease withdrawals

(d) De#rease owner$s e?uity

(e) &one of these

(1) The pay"ent of rent ea#h "onth for oI#e spa#e would:

(a) 9ecrease total assets

(b) +n#rease liabilities

(#) +n#rease owner$s e?uity

(d) &one of these

(1*) ;eal a##ounts are related to:

(a) Assets

(b) 82penses and in#o"es

(#) 5usto"ers and 5reditors et#.

(d) &one of these

(1) Whi#h one of the following a##ounts would usually ha6e a debit balan#eJ

(a) as%

(b) 5reditors(#) %##ounts payable

(d) !alaries 82penses

(e) &one of these

(14) =ui#k assets in#lude whi#h of the followingJ

(a) 5ash

(b) %##ounts ;e#ei6able


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(#) +n6entories

(d) 1nly (a) and (b)

(e) &one of these

(17) &et in#o"e plus operating e2penses is e?ual to:

(a) &et sales(b) 5ost of goods a6ailable for sale

(#) 5ost of goods sold

(d) ;ross proft

(e) &one of these

(1


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(a) ;s. 3.33

(b) ,s. $.


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(b) D; FAH #ontrol KK..KKK.. 5; 5ost of goods sold

(#) D; FAH #ontrol KK..KKK.. 5; rot L loss a##ount

(d) &one of these

(11) ;e-order ?uantity KK '33 units

0a2i"u" #onsu"ption KK


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(d) %ll of these

(e) &one of these

(14) eri#ation in#ludes:

(a) 5he#king 6ou#hers

(b) 82a"ining audit report(c) 3one o! t%ese

(17) %udit of a bank is generally #ondu#ted through:

(a) ,outine c%ec/ing

(b) ou#hing

(#) alan#e sheet audit

(d) &one of these

(1


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() +n6entory turno6er is #al#ulated as under:

(a) ost o! ;oods sold-losing n'entory

(b) Cross prot>5losing +n6entory

(#) !ales>Apening +n6entory

(d) &one of these

(*) There is a diGeren#e between:

(a) Worksheet and alan#e !heet

(b) Worksheet and prot and loss a##ount

(#) Worksheet as #o"bination of results of prots and nan#ial positions

(d) &one of these

() Deferred ;e6enue is:

(a) Liability

(b) %sset

(#) &one of these

(4) reparation of annual report of a r" is go6erned under:

(a) artnership %#t 1


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(b) har"a#euti#al +ndustry

(#) %ir line #o"pany

(d) &one of these

(') The latest #o"putation of 6arian#es of "anufa#turing o6erheads is in one the following ways:

(a) Two 6arian#e approa#hes(b) Three 6arian#e approa#hes

(#) Four 6arian#e approa#hes

(d) &one of these

() ;ando" sa"pling in auditing "eans:

(a) !ele#tion through #on6enien#e sa"pling

(b) Selection t%roug% scientifc sampling approac%

(#) &one of these

(*) 82penditure in#urred in pro#uring "a#hinery is:

(a) %n ad"issible e2penditure for ta2 purposes

(b) &o ad"issible for ta2 purposes

(#) &one of these

() +n#rease in in#o"e #onstitutes:

(a) nCos

(b) AutMows

(#) &one of these

(4) 0 N % stands for:

(a) 0ergers N %nalysis

(b) Mergers & Acquisitions

(#) 0ergers N %llo#ation

(d) &one of these

(7) %n endow"ent insuran#e poli#y #an be taken in respe#t of:

(a) Fire insuran#e

(b) %##ident insuran#e

(c) Li!e insurance

(d) &one of these

(


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(b) /i?uid test

(#) &one of these

(1) %#id Test ;atio is #al#ulated as under:

(a) 5urrent %ssets>5urrent /iabilities

(b) Fi2ed %ssets>5urrent /iabilities(c) Liquid Assets-urrent Liabilities

(d) &one of these

() Deferred #ost is a:

(a) /iability

(b)Asset

(#) &one of these

(') Work !heet is:

(a) alan#e !heet

(b) Fund Flows !tate"ent

(c) A combination o! Proft and Loss Account and alance S%eet items

(d) &one of these

() anks, for the preparation of nan#ial state"ents, are go6erned under:

(a) an/ing ompanies 1rdinance" @E#

(b) !tate ank of akistan %#t

(#) &one of these

(*) ;eturn on in6est"ent is #o"puted:

(a) +n6est"ent>rot 2 133

(b) Proft 6 @$$-n'estment

(#) &one of these

(1) ;ent of the pre"ises #onstitutes 6ariable e2penses for #ost allo#ation:

(a) +rue

(b) False() !ugar used in a sugar#ane #o"pany is:

(a) *ariable cost

(b) Fi2ed #ost

(#) &one of these

(') %n auditor is liable under the following #ir#u"stan#es:(a) Third arty /iabilities

(b) Fraud perpetrated in %ig%ly sop%isticated circumstances

(#) &one of these

() %gri#ultural in#o"e is ta2able under the +n#o"e Ta2 /aws of akistan:

(a) True

(b) False


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(*) rin#ipal and "arkup pay"ent within one year #onstitutes long ter" liability for dis#losure in

the balan#e sheet of a #o"pany.

(a) True

(b) False

() Ardinarily one #an ha6e the following partners in a partnership in akistan under theartnership %#t 1


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) alan#e !heet is always prepared:(a) for the year ended.(b) As on a specified date.(#) &one of these.

(*) +n +nsuran#e, the following rofit and oss %##ounts are prepared:(a) !eparate for Fire, /arine, and %##idents et#.

(b) Consolidated for Fire, Marine, and Accidents etc.(#) &one of these.

(0) artners in akistan #an today be fied at the following nu"bers:(a) 2(b) *2(#) 3*.

(3) Fleible budget is a budget with the following features:(a) C!an"es #it! $olume of production.

(b) 4hanges with 5ariable epenses(#) 4hanges in Dire#t "aterial.

(6) reak 75en #an be #al#ulated as under:(a) 888888948888888

F4- T T4 (b) FC

%& 'C (#) &one of these.

(;) uire"ents of an audit report for a anking 4o"pany in akistan is under:

(a) ?nder the anking 4o"panies @rdinan#e, 1;0.(b) ?nder the 4o"panies @rdinan#e, 1;6.(c) nder (a) and (b) abo$e.

(1*) Deferred Taation is:(a) Fied asset (b) Fied liabilities


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(c) Part of /#ners 0-uity.

(10) +n5est"ent 4orporation of akistan follows:(a) @pen-end "utual funds(b) 4losed-end "utual funds(c) 1one of t!ese.

(13) Dire#tors eport is ---- in respe#t of finan#ial report #onstituent.(a) Mandatory for a limited Company (b) 9oluntary for a li"ited 4o"pany (#) &one of these.

(16) 75ery li"ited 4o"pany in akistan is re>uired by law to in#lude the following along with finan#ialreports:(a) atio %nalysis(b) C!airmans e$ie#

(#) &one of these.

(1;) 4ash budget e#ludes the following:(a) 1on&Cas! items(b) 4ash ite"s

(#) ur#hase on 4redit ite"s.

(2) &A@s are legally re>uired to:(a) Prepare accounts in a prescribed manner under t!e la#.(b) repare a##ounts as desired bydonors.(#) &one of these.

Accountin" 3 Auditin" Paper &%% (2)

1. Fied 4ost:

a. 4hanges with produ#tion

b. 1e$er c!an"es e$en if production capacity is doubled

#. &one of the abo5e

. 4on5ersion #ost is:

a. /aterial 4ost B @5erhead 4ost

b. Dire#t abour B /aterial 4ost

c. Labour Cost 4 /$er!ead Cost

'. ro#ess 4osting is rele5ant to:

a. Cement industry

b. Cob @rder #ost oriented roe#ts#. &one of the abo5e

. @perating rofit is:

a. rofit after dedu#ting finan#ial #osts

b. rofit after dedu#ting taes

c. Profit after deductin" normal operatin" e5penses includin" depreciation

*. % good 4ost %##ounting !yste" is:


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a. +f it #o"putes esti"ated #ost only

b. +f it #annot be re#on#iled with finan#ial a##ounts

c. %f it enables mana"ement to increase producti$ity and rationalize cost structure

0. 9erifi#ation in#ludes:

a. 4he#king 9ou#hers

b. 7a"ining audit report c. 1one of t!e abo$e

3. !tratified audit sa"ple "eans:

a. andomly selected items for audit

b. urposi5ely sele#ted ite"s for audit

#. +te"s #arefully sele#ted fro" ea#h group

6. +nternal 4ontrol is totally synony"ous with:

a. +nternal #he#k

b. +nternal audit

c. 1one of abo$e

;. %udit of a bank is generally #ondu#ted through:

a. outine c!ecin"

b. 4ou#hing

#. alan#e sheet audit

12. %n auditor is liable for his annual audit of a##ounts o:

a. 4reditors

b. ankers

c. /#ners

11. +n#o"e Ta is le5ied on:

a. %gri#ultural +n#o"eb. Presumpti$e %ncome

#. &one of abo5e

1. +f a fir" has paid super-ta, its partners "ay follow any one of the following beha5iours:

a. &o need to pay in#o"e ta, e5en if the in#o"e e#eeds the taable li"it.

b. ay in#o"e ta, e5en if the in#o"e does not e#eed the taable in#o"e.

c. Pay income ta5 as re-uired under t!e la#.

1'. % resident "ultinational #o"pany need not:

a. ay in#o"e ta, if it s #aused under Double Taation agree"ent.

b. +f it is not enoying ta ee"ption under the +n#o"e Ta @rdinan#e, 1;3; (!e#ond !#hedule).

c. 1one of abo$e

1. +n#o"e Ta rates are the sa"e for:

a. i"ited 4o"panies

b. +anin" Companies

#. &one of abo5e

1*. !uper Ta on #o"panies is:

a. +n 5ogue in akistan


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b. 1ot in $o"ue in Paistan

#. &one of abo5e

10. 4urrent atio is #al#ulated as:

a. Fied %ssets=4urrent iabilities

b. 4urrent iabilities=4urrent %ssets

c. Current Assets*Current Liabilities

13. !hort-ter" loan #an be des#ribed as:

a. +f the period is three years

b. %f t!e period is less t!an one year

#. +f the period is o5er one year

16. % partnership, in today$s akistan, under the #urrent law #an ha5e the following nu"ber of

partners:

a. *2

b. 2

#. 122

1;. 4o"bination #an be best des#ribed as:

a. estru#turing of 4apital of a 4o"pany

b. edu#tion of 4apital of a 4o"pany

c. Amal"amation of t#o different types of businesses

2. !our#es of funds #an be in#reased by:

a. Des#ribing selling pri#es

b. +n#reasing ependiture

c. 1one of abo$e

(1) Books of original entry are called:

(a) Ledger(b) Work sheets

(c) Journal

(d) None of these

(2) For preparing balance sheets prepaid expenses are shown as part of:

(a) Liability

(b) !"ities

(c) Assets

(d) None of these

(#) $npaid and "nrecorded expenses are called:

(a) %repaid expenses

(b) Accrued expenses

(c) &dditional expenses

(d) None of these

(') &o"nt cash or other assets reo*ed fro b"siness by owner is:


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(a) +apital

(b) Drawings

(c) &ssets

(d) None of these

(,) $nder the diinishing balance ethod depreciation ao"nt is:(a) %ayent

(b) -eceipt

(c) Expenditure

(d) None of these

(.) $sers of acco"nting inforation incl"de:

(a) /he tax a"thorities

(b) 0n*estors

(c) +reditors

(d) All of these

() /he b"siness for(s) in which the owner(s) is (are) personally liable is (are) the:

(a) %artnership only

(b) %roprietorship

(c) +orporation only

(d) Partnership and proprietorship

(e) None of these

() /he in*estent of personal assets by the owner:

(a) Increases total assets and increases owner’s equity

(b) 0ncreases total assets only

(c) 3as no e4ect on assets b"t increases owner5s e!"ity

(d) 0ncrease assets and liabilities

(e) None of these

(6) &ll of the following are fors of organi7ations except:

(a) %roprietorship

(b) +orporation

(c) etailer

(d) %artnership

(e) None of these

(18) conoic reso"rces of a b"siness that are expected to be of bene9t in the f"t"re are referred to as:

(a) Liabilities

(b) wner5s e!"ity

(c) Withdrawals

(d) Assets


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(e) None of these

(11) &n owner in*estent of land into the b"siness wo"ld:

(a) ;ecrease withdrawals

(b) 0ncrease liabilities

(c) Increase owner’s equity(d) ;ecrease assets

(e) None of these

(12) & cash p"rchase of s"pplies wo"ld:

(a) ;ecrease owner5s e!"ity

(b) 0ncrease liabilities

(c) !a"e no e#ect on total assets

(d) None of these

(1#) &n owner in*estent of each into the b"siness wo"ld:(a) Increase assets

(b) ;ecrease liabilities

(c) 0ncrease withdrawals

(d) ;ecrease owner5s e!"ity

(e) None of these

(1') /he payent of rent each onth for o

(a) $ash

(b) +reditors

(c) &cco"nts payable

(d) ?alaries xpenses

(e) None of these

(1) @"ick assets incl"de which of the following>

(a) +ash


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(b) &cco"nts -ecei*able

(c) 0n*entories

(d) %nly (a) and (b)

(e) None of these

(1) Net incoe pl"s operating expenses is e!"al to:(a) Net sales

(b) +ost of goods a*ailable for sale

(c) +ost of goods sold

(d) &ross pro't

(e) None of these

(16) /he axi" n"ber of partners in %akistan can be 9xed at the following:

(a)

(b) ,8

(c) ,(d) None of these

(28) Balance sheet is always prepared:

(a) For the year ended

(b) As on a speci'c date

(c) None of these

aper 1

(1) %##ounting prin#iples are generally based on

(a) Practicability (b) !ube#ti5ity (#) 4on5enien#e in re#ording() eal a##ounts are related to(a) Assets (b) 7pense and in#o"es (#) 4usto"ers and #reditor et# (') ent paid to the land lord should be #redited to(a) Landlord Account (b) ent a##ount (#) 4ash %##ount ) +n the e5ent of dissolution of a partnership fir" the pro5ision for doubtful debts is transferred to(a) ealization Account (b) artner #apital a##ounts (#) sundry debtors %##ounts(*) % prospe#tus for share #an be issued only by (a) A public company (b) % pri5ate #o"pany (#) &one of these.(0) reli"inary epense is(a) 4urrent asset (b) 4urrent iability (c) Fictitious asset (3) The 5aluation of #losing sto#k is at (a) 4ost pri#e (b) /arket pri#e(c) Cost or Maret price #!ic!e$er is lo#er

(6) The "aster budget in#ludes(a) as in#o"e state"ent (b) a balan#e sheet (#) a #ash budget (d)these all of t!ese

(;) 4ost 5olu"e profit analysis is the "ethod used to esti"ate the i"pa#t on profit is of #hanges in(a) ?nit 5ariable #ost (b) unit sales pri#e (#) !ale 5olu"e (d) All of t!ese(12) +n a "anufa#turing #o"pany produ#t #ost in#lude(a) /aterial #ost only (b) /aterial and labour (#) abour #ost only (d) material labour ando$er!ead cost (11) % liability in the a"ount of s *22 is paid in #ash whi#h of the fallowing is true(a) %sset is in#reased and liability is de#reased (b) %sset is in#reased and liability is in#reased (b) Asset is decreased and liability is decreased (b) iability is de#reased and owner$s e>uity is


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in#reased (1) Whi#h one of the following a##ount would usually ha5e #redit balan#eE (a) Cas! (b) %##ount payable (#) 7>uip"ent (d) !alaries epense(1') % #o"pany #olle#ted one year$s rent in ad5an#e on @#tober 1st ,1;;3 the entries s 122 was#redited to unearned re5enue a##ount the adusting entry at the De#e"ber '1,1;;3 year ended would in#lude(a) A debit to unearned re$enue for s 6 (b) % debit to unearned re5enue for s ;22 (#) %

#redit to unearned re5enue for s '22 (d) % debit to rent earned for s ;22(1) &et in#o"e plus operating epense is e>ual to(a) &et sale (b) 4ost of good a5ailable for sales (#) 4ost of good sold (d) 7ross profit (1*) When pur#hase "er#handise is returned under a perpetual in5entory syste" a #redit would be"ade to(a) +n5entory (b) Freight in (#) ur#hases (d) Purc!ase return(10) Whi#h of the fallowing a##ounts would not be in#luded in the #o"putation of the #ost of goodssold (a) ur#hase returns (b) Frei"!t in (#) ur#hase dis#ount lost (d) ur#hase dis#ounts

(13) Total "anufa#turing #ost for a period in#ludes all of the fallowing e#ept (a) aw "aterial used (b) Dire#t labour #ost (#) 4ost of good #o"pleted (d) Factory o$er!ead cost (16)


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(a) Paid less t!an t!e income ta5 e5pense repotted (b) aid "ore than the in#o"e ta epense

reported (#) aid the sa"e as the in#o"e ta epense reported (d) +s not paying any in#o"e taes

(11) % 4ash sale of "er#handise should be re#orded in the

(a) !ales ournal (b) Aeneral Cournal (c) Cas! receipt ues

(1') The in5entory "ethod that assigns the "ost re#ent #osts to the #ost of goods sold is(a) F%F/ (b) +F@ (#) Weight a5erage (d) !pe#ifi# +dentifi#ation

(1) +n finan#e Working #apital "eans the sa"e things as

(a) Total assets (b) Fied assets (#) 4urrent assets (d) Current assets minus current liabilities

(1*) The "ore basi# re>uire"ent for a fir"$s "arketable se#urities

(a) !afety (b) yield (#) /arketability

(10) artnership for"s of organiation

( a) A$oids t!e double ta5ation of earnin"s and di$idends found in t!e corporate form of a

or"anization (b) ?sually pro5ides li"ited liability to the partners (#) Has unli"ited life

(13) % #orporate buy ba#k or the repur#hasing of share is

(a) %n ea"ple of balan#e sheet restru#turing (b) %n e#ellent sour#e of profit when the fir" sto#k is

o5erpri#ed

( c) A met!od of reducin" t!e debt to e-uity ratio (d) %ll of the abo5e(16) % state"ent of #ash flows #an be prepaid using a ful T a##ount analysis This appro#h

(a) ser a detail accounts for eac! balance s!eet account (b) Di5idend the #ash T a##ount

into #ash inflow and #ash outflows (#) 4lassifies ite" into operating, in5esting ,finan#ing (d) %ll the

abo5e are true

(1;) +f the beginning in5entory of the finished good is '222 units, planned sales are *222 units and

planned produ#tions is 3222 units the in5entory of finished goods on the budgeted balan#e sheet

would be

(a) '222 (b) 8 (#) *222 (d) &one of these

(2) +f working #apital in#reased during the period

(a) Current assets must be increased (b) 4urrent liabilities "ust be de#reased (#) !our#e of

working #apital "ust ha5e been greater than uses of working #apital (d) ?ser of working #apital "ust

ha5e been greater than sour#es of working #apital

#. Accumulated loss of a company is shown in the balance sheet as:

(a) Liability (b) As an asset (c) As foot note to balance sheet (d) None of these

Junior Auditor

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