Page 49 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

AIFS.28 N23M
CA Tarini is in process of formulating audit plan for conducting audit of a company engaged in
business of dealing in commodity futures. Which of the following is not likely to be an appropriate
audit procedure to be included in audit plan for the abovesaid company?
a) Verification of turnover of company
b) Verification of cost of raw material consumed
c) Examination of company’s accounting policy for revenue recognition
d) Verification of contract notes with brokers

AIFS.29 SM23
A company auditor receives external confirmation from an entity to whom company has sold goods.
The said amount is properly classified in financial statements of company. Which of the following
statements is not true in this regard?
a) It shows that said trade receivable exists.
b) It shows that said trade receivable is properly valued.
c) It shows that company has a right to said trade receivable.
d) It shows that amount of said trade receivable has been recorded in proper account.

AIFS.30 SM23
Which of the following statement is most appropriate as regards to disclosure of goods in transit in
financial statements of a company?

a) No separate disclosure of goods in transit is required.
b) Disclosure of total goods in transit under head of inventories is required.
c) Disclosure of goods in transit under each sub-head of inventories is required.
d) Disclosure of goods in transit for raw material and finished goods is required.

AIFS.31 SM23
Which of the following is not an element of cost of an item of machinery included under head
“Property, Plant and Equipment”?

a) Installation costs
b) Freight cost of bringing the item to its location
c) Inaugural costs
d) Employee benefit cost for making such an item suitable for production

AIFS.32 SM23
Which of the classification is not required by a company in respect of its “Cash and cash
equivalents?”

a) Balance with Banks
b) Balance with scheduled banks
c) Cash on hand
d) Cheques on hand

AIFS.33 N23M
Financial statements of a company have been put up for audit before the auditor. On going through
financial statements, he wants to verify some major bills debited in “Machinery repair” account.
The purpose of it is to ensure that bills are entered correctly and their classification is proper.
As regards verification of bills debited in “Machinery repair” account, identify what he intends to
perform?

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