The 'Dual-purpose Test' in audit is: MCQ with Answer and Explanation

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The 'Dual-purpose Test' in audit is:

A. A test that serves both as a test of control and a substantive test

B. Only substantive

C. Two separate tests

D. Only compliance

Answer: Option A

Solution (By JKSSB Mock Tests)

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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Question #1

The 'HSN Code' requirement for invoices under GST for turnover above ₹5 crore:

A. 6-digit HSN

B. 2-digit HSN

C. 8-digit HSN

D. 4-digit HSN

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Correct Answer: Option A

Explanation:
Taxpayers with turnover > ₹5 crore must mention 6-digit HSN on invoices.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'Section 40A(3)' disallows expenditure in excess of:

A. No limit

B. ₹10,000 paid in cash per day to a person

C. ₹2,000

D. ₹1,00,000

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Correct Answer: Option B

Explanation:
Payment exceeding ₹10,000 in cash for expenses is disallowed, with certain exceptions.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

Under the 'Net Profit Method' of goodwill valuation, goodwill is:

A. Number of years purchase of super profits

B. Capitalised value of average profits less net tangible assets

C. Capitalised value of super profits

D. Number of years purchase of average profits

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Correct Answer: Option D

Explanation:
The net profit method uses a multiplier on average profits, not super profits. Capitalisation of super profits is different.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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