The 'External Confirmation' from a bank is an example of: MCQ with Answer and Explanation

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The 'External Confirmation' from a bank is an example of:

A. Analytical procedure

B. Oral evidence

C. External evidence obtained directly by the auditor

D. Internal evidence

Answer: Option C

Solution (By JKSSB Mock Tests)

Direct confirmation from bank is highly reliable.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

A Cash Book with Cash, Bank, and Discount columns is called a:

A. Three-column Cash Book

B. Petty Cash Book

C. Two-column Cash Book

D. Simple Cash Book

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Correct Answer: Option A

Explanation:
A three-column cash book tracks cash transactions, bank transactions, and discounts allowed/received simultaneously.

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

Question #2

In the financial statements of a sole trader, drawings are deducted from:

A. Capital

B. Net profit

C. Gross profit

D. Sales

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Correct Answer: Option A

Explanation:
Drawings are not an expense; they reduce the owner's capital directly in the balance sheet.

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

Question #3

Accounting data is considered 'Relevant' if it:

A. Influences the economic decisions of users

B. Can be verified by an auditor

C. Is completely free from errors

D. Is presented in a standardized format

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Correct Answer: Option A

Explanation:
Relevance is a qualitative characteristic implying the information has predictive or confirmatory value for decision-makers.

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

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