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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