The 'Substantive Analytical Procedure' involves: MCQ with Answer and Explanation

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The 'Substantive Analytical Procedure' involves:

A. Detailed testing of samples

B. Inquiry only

C. Evaluating financial information through analysis of plausible relationships

D. Physical verification only

Answer: Option C

Solution (By JKSSB Mock Tests)

Substantive analytical procedures use ratios, trends, and relationships to detect misstatements.

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

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Question #1

An item of 'Outstanding Income' is shown in Balance Sheet as:

A. Expense

B. Asset

C. Income

D. Liability

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Correct Answer: Option B

Explanation:
Outstanding income is receivable, hence a current asset.

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

Question #2

The 'Ind AS 24' on Related Party Disclosures requires disclosure of:

A. Relationships, transactions, and outstanding balances with related parties

B. Only parent-subsidiary relationships

C. Only compensation of key management personnel

D. Only transactions with key management personnel

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Correct Answer: Option A

Explanation:
Ind AS 24 requires disclosure of related party relationships, transactions, and balances.

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

Question #3

In a partnership, 'Profit and Loss Appropriation Account' is a part of:

A. Trading Account

B. Double entry system, prepared after P&L Account

C. Profit and Loss Account

D. Balance Sheet

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Correct Answer: Option B

Explanation:
It is prepared after determining net profit to show its distribution among partners.

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

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