The 'Test of Controls' is performed when: MCQ with Answer and Explanation

Question
The 'Test of Controls' is performed when:
A. Internal controls are weak
B. Auditor intends to rely on the entity's internal controls
C. Never performed
D. No controls exist
Answer: Option B
Solution (By JKSSB Mock Tests)
Test of controls evaluates the operating effectiveness of internal controls.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Discount Rate' for measuring defined benefit obligation under Ind AS 19 is determined by reference to:
A. Fixed rate
B. Incremental borrowing rate
C. Market yields on government bonds at the reporting date
D. Expected return on plan assets
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Correct Answer: Option C

Explanation:
The discount rate reflects the time value of money; usually based on high-quality corporate bonds or government bonds.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Anti-Profiteering' under GST ensures that:
A. Reduction in tax rates or benefit of ITC is passed on to consumers by reducing prices
B. Suppliers increase prices
C. Companies make no profit
D. No price change
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Correct Answer: Option A

Explanation:
Anti-profiteering provisions prevent unjust enrichment by suppliers.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Which of the following is a capital profit?
A. Profit on sale of investment (capital nature)
B. Profit on sale of goods
C. Discount received
D. Rent received
Discuss
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Correct Answer: Option A

Explanation:
Profit on sale of a capital asset (like long-term investment) is capital profit. Profit on sale of goods is revenue.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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