A: Vouching is the backbone of auditing. R: Vouching verifies the authenticity and accuracy of transactions. Choose the correct option. MCQ with Answer and Explanation

A: Vouching is the backbone of auditing. R: Vouching verifies the authenticity and accuracy of transactions. Choose the correct option.
A. Both A and R are true and R is the correct explanation of A
B. Both A and R are true but R is NOT the correct explanation of A
C. A is true but R is false
D. A is false but R is true
Answer: Option A
Solution (By JKSSB Mock Tests)
Vouching is considered the backbone of auditing because it provides the primary evidence for the transactions recorded. It verifies authenticity by checking supporting documents. R correctly explains why it is the backbone.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Country-by-Country Report' (CbCR) filing in India is required for MNE groups with consolidated revenue exceeding:
A. No threshold
B. ₹500 crore
C. ₹5,500 crore (€750 million)
D. ₹1,000 crore

Correct Answer: Option C


Explanation:
The threshold is aligned with BEPS Action 13, i.e., €750 million.

Question #2
If a manufacturing company adopts JIT (Just-in-Time) inventory, its main goal is to:
A. Increase production cycle time
B. Eliminate inventory carrying costs by receiving goods only as needed
C. Maximize raw material stock
D. Buy in bulk to get trade discounts

Correct Answer: Option B


Explanation:
JIT aligns raw-material orders directly with production schedules to reduce waste and eliminate warehouse holding costs.

Question #3
The threshold limit for paying Advance Tax is when the estimated tax liability for the year is:
A. Rs 10,000 or more
B. Rs 20,000 or more
C. Rs 50,000 or more
D. Rs 5,000 or more

Correct Answer: Option A


Explanation:
If the estimated tax liability (after TDS) exceeds Rs 10,000, the taxpayer is obligated to pay advance tax in installments.