MCQ Bank

A purchase system begins with raising a purchase order and ultimately results in recording and controlling payable information. The payable ledger control account summarizes amounts owed to suppliers.

ACC311 Final Term AI Solved

Q81

Mr. Ali works in an organization on piece rate system. The pay he received monthly is best described by the term:

A) Wages.
B) Salary.
C) Remuneration.
D) All of the given.

AI Explanation

Payment based on a piece rate system is classified as wages because it is calculated according to the quantity of work performed. Salaries are generally fixed periodic payments.

ACC311 Final Term AI Solved

Q82

According to the requirements of auditing standards, the record of cash receipts by post should be made immediately for which one of the following items?

A) Cheques, cash and postal orders received
B) Cash, cheque and goods received
C) Cash and cheque received
D) Postal orders received

AI Explanation

Cash receipts received by post should be recorded immediately for all forms of money received, including cheques, cash, and postal orders. This ensures proper control and reduces the risk of misappropriation.

ACC311 Final Term AI Solved

Q83

Control procedures are developed mainly upon which one of the following basis?

A) Control objectives
B) Scope of the audit
C) Tests of control
D) Internal control

AI Explanation

Control procedures are designed to achieve specific control objectives established by an organization. They help ensure that risks are managed and desired outcomes are achieved.

ACC311 Final Term AI Solved

Q84

Which one of the following is an example of designing control procedure for achieving control objectives?

A) List all the invoices in a transaction cycle & generate appropriate test of details
B) List all the documents in a transaction cycle & generate appropriate test of controls
C) List all the orders in a transaction cycle & generate appropriate test of skills
D) List all the returns in a transaction cycle & generate appropriate evidence for their existence

AI Explanation

Designing control procedures involves identifying documents and processes within a transaction cycle and creating tests to evaluate whether controls are working effectively. Test of controls assesses the implementation and operation of internal controls.

ACC311 Final Term AI Solved

Q85

Following aspects of assets must be verified EXCEPT:

A) Presentation in the accounts
B) Cost and authorization
C) Beneficial investment
D) Value and existence

AI Explanation

Asset verification focuses on aspects such as existence, ownership, valuation, authorization, cost, and presentation in accounts. Beneficial investment is not a standard verification aspect for assets.

ACC311 Final Term AI Solved

Q86

Which one of the following may not be any matter relevant to verification of assets?

A) Vouching
B) The letter of representation
C) Insurance
D) Taxation

AI Explanation

Asset verification commonly involves procedures such as vouching, reviewing representation letters, and checking insurance coverage. Taxation is generally not a direct matter related to verification of assets.

ACC311 Final Term AI Solved

Q87

Which one from the following is an example of designing control procedure for achieving control objectives?

A) List all the orders in a transaction cycle & generate appropriate test of skills
B) List all the invoices in a transaction cycle & generate appropriate test of details
C) List all the returns in a transaction cycle & generate appropriate evidence for their existence
D) List all the documents in a transaction cycle & generate appropriate test of controls

AI Explanation

An example of designing control procedures is identifying documents involved in a transaction cycle and developing tests of controls to assess their effectiveness. This helps auditors evaluate whether internal controls are properly operating.

ACC311 Final Term AI Solved

Q88

What the auditor should perceive about a situation when management refuses to provide necessary representations?

A) For auditor, it constitutes a scope limitation
B) The auditor should try to obtain alternative audit evidence
C) The auditor should resign from the management
D) For auditor, this situation could lead to give qualified opinion

AI Explanation

If management refuses to provide necessary representations, the auditor may be unable to obtain sufficient appropriate audit evidence. This is considered a limitation on the scope of the audit.

ACC311 Final Term AI Solved

Q89

Which of the following element is NOT considerd while preparing payslip of any worker?

A) Tax paid
B) Details of expected pension
C) Deductions paid
D) Gross wages

AI Explanation

A payslip normally includes gross wages, deductions, and taxes paid. Details of expected pension are not usually included as a basic element of a worker's payslip.

ACC311 Final Term AI Solved

Q90

While verifying the assets of a company, auditors may examine documentation, verify reasonableness of the proceeds, pay special attention to scrapings, and note accounting treatment. It refers to which one of the following scheduling methods of assets?

A) Ownership
B) Existence
C) Acquisitions
D) Disposals

AI Explanation

The procedures described involve checking proceeds from asset sales, scrap values, and accounting treatment, which are related to the disposal of assets. Auditors verify that disposals are properly authorized and recorded.

ACC311 Final Term AI Solved

Q91

The sales ledger personal should not have access to the receipts before maintaining of record. This method is used to applied;

A) Control procedures on payments
B) Control procedures on receipts
C) Control procedures on documents & records
D) Control procedures on cash

AI Explanation

Restricting sales ledger personnel from accessing receipts before records are maintained is a control over cash receipts. It helps prevent unauthorized alteration or misappropriation of incoming payments.

ACC311 Final Term AI Solved

Q92

“Take home pay” of a worker consists of which of the followings:

A) Gross pay minus benefits received
B) Gross pay
C) Gross pay plus benefits received
D) Gross pay minus deduction made

AI Explanation

Take-home pay is the amount an employee receives after deductions such as taxes and other authorized deductions are subtracted from gross pay. It represents the net amount paid to the worker.

ACC311 Final Term AI Solved

Q93

Compensating balance of cash can be easily described with the help of following statement;

A) Carry forward amount of deposit
B) Amount that is used to maintain service charges by bank from deposit
C) Amount that is required for opening a new account in the bank
D) Amount that must be left on deposit and cannot be withdrawn

AI Explanation

A compensating balance is a minimum balance that a borrower or account holder must maintain in a bank account. It cannot be withdrawn freely and is often required as part of banking arrangements.

ACC311 Final Term AI Solved

Q94

Which one of the following is an appropriate evidence for verifying the existence of inventory?

A) Observing the counting of inventory
B) Identifying the slow-moving inventory
C) Obtaining a letter of representation from the management of the entity about it
D) Checking valuation of that inventory

AI Explanation

Observing the physical inventory count provides direct audit evidence about the existence of inventory. It allows auditors to verify that recorded inventory is physically present.

ACC311 Final Term AI Solved

Q95

Law says that the general ledger account of petty cash will remain dormant at a set amount. It means that the custodian should maintain the petty cash balance equal to opening balance. This theory is named as;

A) Imprest system
B) Petty cash system
C) Explicit system
D) Control system

AI Explanation

The imprest system maintains petty cash at a fixed amount, with reimbursements made to restore the balance to its original level. The petty cash ledger therefore remains at a predetermined balance.

ACC311 Final Term AI Solved

Q96

“Grid stamp” is a term which is used to describe that:

A) Several signature by different authorities present on the face of document
B) Specific authority has checked the accuracy of document itself
C) All calculation were rechecked again
D) Nominee of specific authority checked the accuracy of document

AI Explanation

A grid stamp indicates that a document has been reviewed and approved by multiple authorized individuals. It provides evidence of checks and authorization procedures.

ACC311 Final Term AI Solved

Q97

Following are usual methods of recording workers attendance EXCEPT:

A) Technical method
B) Manual method
C) Mechanical method
D) Electronic method

AI Explanation

Common methods of recording attendance include manual, mechanical, and electronic methods. Technical method is not generally recognized as a standard attendance recording method.

ACC311 Final Term AI Solved

Q98

Which one of the following best describes the auditors’ aim of testing a sales system of a company?

A) It is aimed at providing guidance for sales strategies and its management
B) It is aimed at providing effective guidance for conducting the audit of Sales
C) It is aimed at providing guidance for meeting the sales target
D) It is aimed at providing guidance for conducting the sales audit according to the management view of the company

AI Explanation

Testing a sales system helps auditors evaluate controls and procedures related to sales transactions. Its purpose is to support an effective and properly planned sales audit, not to guide sales management strategies.

ACC311 Final Term AI Solved

Q99

An input VAT tax should be recorded in the following manner

A) Included in sales tax paid
B) Included in expenses
C) Recorded separately from the expense element of invoice total
D) Recorded separately from the ledger

AI Explanation

Input VAT should be separately identified from the expense or purchase amount because it is recoverable tax. Separating it ensures accurate accounting and tax reporting.