The 'Roll-forward Procedures' in audit are performed to: MCQ with Answer and Explanation

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The 'Roll-forward Procedures' in audit are performed to:

A. Postpone audit

B. Start audit early

C. Replace interim testing

D. Update audit findings from an interim date to the period end

Answer: Option D

Solution (By JKSSB Mock Tests)

Roll-forward extends the conclusions from interim date to year-end.

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

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Question #1

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The journal entry for income tax paid by a sole proprietor from the business bank account is:

A. Debit Income Tax, Credit Bank

B. Debit Drawings, Credit Bank

C. Debit Capital, Credit Income Tax

D. Debit P&L Account, Credit Bank

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Correct Answer: Option B

Explanation:
For a sole trader, income tax is a personal expense. Paying it from business funds is treated as Drawings.

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

Question #2

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In Balance Sheet, 'Bills Receivable' is a:

A. Fixed asset

B. Intangible asset

C. Current asset

D. Current liability

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Correct Answer: Option C

Explanation:
Bills receivable are amounts due from debtors within a short period, hence current assets.

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

Question #3

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Interest on drawings is charged to partners' capital/current accounts because:

A. It is an expense for the firm

B. It is an income for the firm

C. It reduces partners' capital

D. It is a liability

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Correct Answer: Option B

Explanation:
Interest on drawings is a gain for the firm, so it is credited to Profit & Loss Appropriation Account and debited to partners' capital accounts.

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

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