The 'Physical Verification' of inventory is a part of: MCQ with Answer and Explanation

Question
The 'Physical Verification' of inventory is a part of:
A. Substantive procedure
B. Compliance procedure
C. Internal control evaluation
D. None
Answer: Option A
Solution (By JKSSB Mock Tests)
Physical verification is a substantive audit procedure to verify existence of inventory.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
What is the rule of Double Entry for Real Accounts?
A. Debit what comes in, Credit what goes out
B. Debit the increase, Credit the decrease
C. Debit all expenses, Credit all incomes
D. Debit the receiver, Credit the giver
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Correct Answer: Option A

Explanation:
Real accounts relate to tangible or intangible assets. The golden rule is 'Debit what comes in, Credit what goes out'.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
A 'Voucher' that records a transaction involving both cash and bank is called:
A. Payment voucher
B. Contra voucher
C. Receipt voucher
D. Journal voucher
Discuss
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Correct Answer: Option B

Explanation:
Contra vouchers record transactions like cash deposited into bank or withdrawn from bank.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Notes to Accounts are provided to:
A. Replace the Trial Balance
B. Calculate daily cash flow
C. Provide detailed disclosures and accounting policies
D. Make the balance sheet look longer
Discuss
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Correct Answer: Option C

Explanation:
Notes to Accounts offer detailed breakdowns, accounting policies, and explanatory information supporting the numbers in the financial statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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