The 'Audit Documentation' should be sufficient to: MCQ with Answer and Explanation

Question
The 'Audit Documentation' should be sufficient to:
A. Enable an experienced auditor, having no previous connection with the audit, to understand the nature, timing, extent of procedures, results, and conclusions
B. Meet legal requirement
C. Only remind the auditor
D. Satisfy management
Answer: Option A
Solution (By JKSSB Mock Tests)
As per SA 230, working papers must stand alone.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is a feature of cash-based accounting?
A. Recognizes revenue when earned
B. Simple to maintain
C. Provides a true and fair view of financial position
D. Records credit transactions
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Correct Answer: Option B

Explanation:
Cash-based accounting is very simple to maintain as it only records actual cash inflows and outflows, ignoring credit transactions and accruals.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
S1: GST is levied on the supply of goods and services. S2: GST subsumed all indirect taxes in India. Which statement(s) is/are correct?
A. S2 only
B. Both S1 and S2
C. Neither S1 nor S2
D. S1 only
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Correct Answer: Option D

Explanation:
GST is a comprehensive indirect tax levied on the supply of goods and services. However, it did not subsume *all* indirect taxes; for example, basic customs duty, stamp duty, and electricity duties are still outside GST. S1 is correct, S2 is incorrect.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
If closing stock is given inside the Trial Balance, it will be shown only in the:
A. Balance Sheet
B. Trading Account
C. P&L Account
D. Both Trading Account and Balance Sheet
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Correct Answer: Option A

Explanation:
If it appears inside the trial balance, the double entry is already complete (adjusted against purchases). It appears only as an asset in the Balance Sheet.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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