The 'Expected Error' in audit sampling is: MCQ with Answer and Explanation

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The 'Expected Error' in audit sampling is:

A. The maximum acceptable error

B. Error in the sample only

C. Actual error after testing

D. The error the auditor expects to find in the population

Answer: Option D

Solution (By JKSSB Mock Tests)

Expected error is estimated before testing; it affects sample size.

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

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Question #1

What is the correct journal entry for depreciation charged on machinery?

A. Debit Machinery A/c, Credit Depreciation A/c

B. Debit P&L A/c, Credit Machinery A/c

C. Debit Depreciation A/c, Credit Cash A/c

D. Debit Depreciation A/c, Credit Machinery A/c

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Correct Answer: Option D

Explanation:
Depreciation is an expense (Debit), and it reduces the value of the asset, so Machinery Account is credited.

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

Question #2

Which of the following statements about GST is/are correct? 1. It is a destination-based consumption tax. 2. It subsumes all central and state indirect taxes. 3. Petroleum products are presently outside GST. 4. The GST Council is a constitutional body.

A. All of the above

B. 1, 2 and 3

C. 1, 3 and 4

D. 2, 3 and 4

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Correct Answer: Option C

Explanation:
Statement 2 is incorrect because some taxes like basic customs duty, stamp duty are not subsumed. 1, 3, 4 are correct.

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

Question #3

In cost accounting, fixed cost per unit:

A. Fluctuates arbitrarily

B. Decreases with increase in production

C. Increases with increase in production

D. Remains constant

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Correct Answer: Option B

Explanation:
Total fixed cost remains constant within a relevant range, so per unit fixed cost decreases as production volume increases.

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

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