MCQ Bank

The non-current asset register should contain details of each asset, its original cost, and accumulated depreciation. This information helps auditors verify existence, valuation, and depreciation calculations.

ACC311 Final Term AI Solved

Q141

Mathematical accuracy of documents or records can be performed for the purpose of obtaining audit evidence with which one of the following resources?

A) Company resources
B) Auditor resources
C) Information technology
D) Mechanical devices

AI Explanation

Auditors perform mathematical accuracy checks themselves as part of audit procedures using their own resources and expertise. These checks help verify the accuracy of accounting records and documents.

ACC311 Final Term AI Solved

Q142

According to the requirements of auditing standards, the opening of the significant cash receipts by post should be done in the presence of how many responsible officials(s)?

A) Two individuals
B) Three individuals
C) Four individuals
D) One official

AI Explanation

Significant cash receipts received by post should be opened in the presence of two responsible officials to maintain proper segregation of duties and reduce the risk of fraud or misappropriation.

ACC311 Final Term AI Solved

Q143

Work in process inventory is directly comparable with;

A) Total capacity of machine
B) Total units produced in actual
C) Input supplied
D) Required output

AI Explanation

Work in process inventory represents partially completed units and is directly related to the actual production output. It is measured in relation to units produced rather than machine capacity or required output.

ACC311 Final Term AI Solved

Q144

Verification of equity is done according to which one of the following law?

A) International accounting laws
B) Companies ordinance, 1984
C) Generally accepted accounting principles
D) International auditing laws

AI Explanation

Verification of equity is performed according to the relevant corporate laws and regulations governing companies. In this context, the Companies Ordinance, 1984 provides the legal framework for company equity matters.

ACC311 Final Term AI Solved

Q145

Which one from the following is a most convenient method to pay salaries and wages of an employee electronically?

A) All of them
B) Bank transfer
C) By cheque
D) By cash

AI Explanation

Bank transfer is the most convenient electronic method for paying employee salaries and wages. It provides secure, efficient, and traceable payment processing compared with cash or cheques.

ACC311 Final Term AI Solved

Q146

Which one of the following tests may be applied to the goods returned notes?

A) Evidence of approval of requisitions
B) Evidence of a sequence check
C) Proof of issuance date
D) Adherence to authority limits

AI Explanation

Goods returned notes are controlled documents and auditors may check their numerical sequence to ensure completeness and proper recording. Sequence checks help identify missing or unauthorized documents.

ACC311 Final Term AI Solved

Q147

According to the requirements of International Auditing Standards (ISAs), the authority to write off a bad debt should be in which form?

A) Verbal
B) Using a legal paper
C) Photo copied
D) Written

AI Explanation

According to auditing requirements, authorization to write off bad debts should be documented in writing. Written approval provides reliable evidence that the write-off was properly authorized.

ACC311 Final Term AI Solved

Q148

For getting strong control over cash system salesmen and other personals are required to remit cash and report sales at:

A) Regular intervals
B) The end of month
C) The end of sales target achieved
D) The end of fulfills the order by customer

AI Explanation

For strong cash control, salesmen and other personnel should remit cash and report sales at regular intervals. Frequent reporting reduces the risk of cash misappropriation and improves monitoring.

ACC311 Final Term AI Solved

Q149

Types of control procedures over purchases and payables include the following EXCEPT:

A) Receipt of goods
B) Invoicing and returns
C) Purchase ledger and suppliers
D) Dispatch of goods

AI Explanation

Dispatch of goods is related to the sales cycle rather than the purchases and payables cycle. Purchase and payable controls include receipt of goods, invoicing, returns, and supplier ledger procedures.

ACC311 Final Term AI Solved

Q150

Which of the following should be done with the copies of cancelled invoices in sales system?

A) Should be dispatched to the customers
B) Should be discarded
C) Should be retained
D) Should be dispatched to the suppliers

AI Explanation

Cancelled invoices should be retained to maintain a complete audit trail and provide evidence of sales documentation. Discarding them could weaken internal controls and audit verification.

ACC311 Final Term AI Solved

Q151

Which one of the following control tests may be applied by the auditors to the Payables Ledgers Control Account while testing the purchase system of an entity?

A) Evidence of authorization of adjustments to payables ledger
B) Evidence of authorization of controlling transactions
C) Evidence of authorization of preparing payable ledger entries
D) Evidence of authorization of adjustments to purchase ledger control account

AI Explanation

Auditors test payables ledger control accounts by checking that adjustments are properly authorized. This ensures changes to supplier balances are valid and approved.

ACC311 Final Term AI Solved

Q152

For maintaining strong inventory control many procedures were adopted. Highlight the procedure which is NOT valid for maintaining strong inventory control;

A) Control over goods inwards
B) Control over goods outwards
C) Control over inventory level
D) Control over the person who counts the inventory daily

AI Explanation

Strong inventory control focuses on goods inwards, goods outwards, and inventory levels. Controlling the person who counts inventory daily is not a standard inventory control procedure and is impractical as a primary control.

ACC311 Final Term AI Solved

Q153

Pay slip of an employee could also show some additional information such as:

A) All of them
B) Employee’s social security number
C) Employee’s National tax number
D) Employee’s payroll number

AI Explanation

An employee payslip may include additional identifying information such as social security number, national tax number, and payroll number. These details help ensure accurate payroll processing and record keeping.

ACC311 Final Term AI Solved

Q154

When it is more reliable to perform substantive procedures?

A) Monthly
B) Weekly
C) Year end
D) Bi-monthly

AI Explanation

Substantive procedures are generally more reliable when performed at year end because they directly relate to the final balances and transactions reported in financial statements. This reduces the risk of changes occurring after testing.

ACC311 Final Term AI Solved

Q155

Copies of Purchase order should be retained by the company with the purpose:

A) To ensure that goods has been properly received
B) To ensure the “follow up method” in case of late deliveries
C) Of setting the re-order level
D) Of evidence used for sales cycle

AI Explanation

Retaining copies of purchase orders allows the company to monitor outstanding orders and follow up with suppliers when deliveries are delayed. It also supports proper purchasing control.

ACC311 Final Term AI Solved

Q156

The letter of representation should be signed by which one of the following authorities?

A) Chief executive
B) Finance manager
C) Chartered accountants
D) Accounts manager

AI Explanation

The letter of representation is normally signed by senior management, such as the chief executive, who has overall responsibility for the financial statements and representations provided to auditors.

ACC311 Final Term AI Solved

Q157

How often the Bank reconciliations should be prepared?

A) On a regular basis, at least monthly
B) On a regular basis, at least weekly
C) On annual basis
D) On an interim basis, at least after four months

AI Explanation

Bank reconciliations should be prepared regularly, at least monthly, to identify errors, omissions, or unauthorized transactions promptly. Frequent reconciliation strengthens cash controls.

ACC311 Final Term AI Solved

Q158

Which of the following is an integral part of audit at the stage of checking and evaluation of information?

A) Final report
B) Internal control questionnaire
C) Plan of the audit task
D) None of the given options

AI Explanation

The internal control questionnaire is an integral audit tool used during the checking and evaluation stage to assess the effectiveness of internal controls. It helps auditors gather and evaluate information about the control system.

ACC311 Final Term AI Solved

Q159

If an auditor perform a process such as “compares the production cost with previous month’s cost” than this process is called as;

A) Test of details
B) Test of control
C) Walk through tests
D) Analytical procedures

AI Explanation

Comparing production costs with previous months' costs is an analytical procedure because it involves evaluating trends and relationships in financial information. It helps identify unusual changes requiring further investigation.