A. Valuation
B. Existence
C. Disclosure
D. Possession
✅ The correct answer is option A.
Auditing
132. While vouching, how will the auditor ensure himself that all credit sales transactions have been recorded by the entity?
A. Examining cut-off points
B. Matching entries in the sales book against renumbered sales invoices and goods outward notes
C. Counting the number of invoices and matching the number with entries on sales book
D. Both (a) and (b)
✅ The correct answer is option D.
133. In order to vouch, which of the expenses, the auditor will examine Bill of Entry?
A. Custom
B. Excise duties
C. Sales tax
D. Income tax
✅ The correct answer is option A.
134. While vouching wages, auditor should examine whether there is proper segregation of duties. Which of the following activities should not be done by same department?
A. Maintaining personnel records and approving changing in wages rates
B. Proposing pay roll summary and disbursement of wages
C. Making salary statements and filing tax returns
D. Comparing time clock records with time reports prepared by supervisors and preparing list of workers employed along with the units of production for each one of them
✅ The correct answer is option B.
135. In case of unclaimed wages, the auditor should examine whether
A. The amount has been deposited in a separate bank account
B. Deposited with the cashier
C. Held in a safe deposit box
D. All of these
✅ The correct answer is option A.
136. Which of the following would prevent double payment of the same voucher?
A. The person signing the cheque should cancel the supporting documents
B. Cheques should be signed by at best two persons
C. The data of payment of vouchers of similar nature should be the same or close to each other
D. All of the above
✅ The correct answer is option A.
137. An auditor conducts a surprise check on the pay day (i.e) the day wages and salaries are paid. The primary purpose of this audit procedure is
A. To ensure that there are no ghost workers
B. To ensure the casual workers employed are authorized by the supervisor
C. To test procedures for distributing pay cheques
D. To obtain understanding of internal control system
✅ The correct answer is option C.
138. The “Guidance Note on Revenue” issued by the ICAI does not deal with
A. Sales revenue
B. Revenue rendering service
C. Revenue from sale of fixed assets
D. Income from interest, dividend
✅ The correct answer is option C.
139. Which of the following is not true with regard to verification of assets?
A. It invoices substantiation of occurrence of transactions
B. Its objective is to establish existence, ownership, possession, valuation and disclosure of assets
C. The auditor has to form an opinion on different aspects
D. All are true
✅ The correct answer is option A.
140. For vouching of which item, the auditor is most likely to examine cost records?
A. Commission earned
B. Bad debts recorded
C. Credit sales
D. Sale of scrap
✅ The correct answer is option D.