Auditing MCQs

Page No. 4

In case the directions fail to appoint first auditor (s), the shareholders shall appoint them at_________by passing a resolution.


aa general meeting


bfirst annual general meeting


cstatutory meeting


dannual general meeting


View Answer a general meeting

The term of the auditor ship of first auditor would be from the date of appointment till________?


athe conclusion of statutory meeting


bthe conclusion of first annual general meeting


c the conclusion of next annual general meeting


dthe date of removal



The board of directors shall appoint first auditor of a company


aWith in one month of completion of capital subscription state of the company


b With in one month of the promotion of the company


cWith in one month of the commencement of the business of the company


dWith in one month of incorporation of the company



Who is responsible for the appointment of statutory auditor of a limited company ?


aDirectors of the company


bMembers of the company


cThe Central Government


dAll of the above



Which of the following expenses should not be treated as capital expenditure?


aExpenses paid on installation of a plant.


bCost of dismantling a building in case a new building is to be constructed on the land


c Legal expenses incurred to defend a suit related to title of patent.


dThe fees paid to engineer who constructed the plant.



If the book value of an asset stands at________per cent of the original cost, a company need not provide depreciation on it.


atwo


bfifteen


cfive


dten


View Answer five

Which of the following is a revenue reserve?


aCapital redemption reserve


bSecurity premium account


cDebenture redemption reserve


dCapital reserve



Which of the following will not lead to creation of secret reserve?


a Undervaluation of closing stock


bCharging capital expenditure to revenue


cGoods sent on consignment being shown as actual sales


dCharging higher rates of depreciation on fixed assets than actually required



Depreciation does not arise form _______


aeffluxion of time


buse


cobsolescence through technology be market changes


dremarket expectation


View Answer remarket expectation

Which of the following is not a revenue expense?


aCost of raising a loan


bCost of accessories of motor vehicles spent at the time of purchase


cExpenses incurred for laying of sewers on land purchased


dInsurance premium paid at the time of registration of the ship



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