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. A is false but R is true
C. Both A and R are true but R is NOT the correct explanation of A
D. A is true but R is false
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.
Explanation:
Recognizing revenue when earned is a principle of accrual accounting. Cash-based accounting only recognizes revenue when cash is actually received.
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