The term 'Substantive Testing' in audit refers to: MCQ with Answer and Explanation

Question

Share Report Error

The term 'Substantive Testing' in audit refers to:

A. Planning the audit

B. Testing the details of balances and transactions

C. Testing the internal controls

D. Issuing the audit report

Answer: Option B

Solution (By JKSSB Mock Tests)

Substantive testing involves detailed testing of transactions and balances to detect material misstatements in the financial statements.

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

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

A petty cash voucher is authorized by:

A. The petty cashier or an authorized manager

B. The external auditor

C. The payee

D. The bank manager

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
For internal control, petty cash vouchers must be authorized by a responsible official before disbursement is made.

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

Question #2

Which of the following is an example of an 'Error of Commission'?

A. Entering Rs 4,500 instead of Rs 5,400 in an account

B. Two errors cancelling each other out

C. Recording a machinery purchase in the Purchases Account

D. Failing to record a transaction entirely

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
An error of commission involves incorrect casting, posting, or carry-forward, such as writing the wrong numerical amount.

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

Question #3

A company uses 'Economic Order Quantity' (EOQ) of 500 units. Annual demand is 5,000 units. Number of orders per year will be:

A. 100

B. 500

C. 10

D. 5

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Number of orders = Annual demand / EOQ = 5,000 / 500 = 10.

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

Explore All Accountancy and Book Keeping MCQs