The 'Audit Evidence' is more reliable if: MCQ with Answer and Explanation

Question
The 'Audit Evidence' is more reliable if:
A. Obtained from management
B. Obtained from independent external sources
C. Oral
D. Internally generated
Answer: Option B
Solution (By JKSSB Mock Tests)
External evidence is generally more reliable than internal evidence.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
In financial management, the 'Degree of Operating Leverage' (DOL) at a given level of sales is calculated as:
A. EBIT / Net Profit
B. Sales / Contribution
C. Contribution / EBIT
D. Contribution / Net Profit
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Correct Answer: Option C

Explanation:
The Degree of Operating Leverage (DOL) measures the sensitivity of EBIT to changes in sales. It is calculated as Contribution divided by EBIT (Earnings Before Interest and Taxes).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is a technique of cost management?
A. Standard costing
B. Tax planning
C. Ratio analysis
D. Fund flow analysis
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Correct Answer: Option A

Explanation:
Standard costing is a cost management technique for controlling costs through variance analysis.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Dual-purpose Test' in audit is:
A. Only compliance
B. A test that serves both as a test of control and a substantive test
C. Two separate tests
D. Only substantive
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Correct Answer: Option B

Explanation:
A single procedure can provide evidence on both controls and substantive assertions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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