Which of the following is a test of audit? MCQ with Answer and Explanation

Question
Which of the following is a test of audit?
A. Vouching
B. Verification
C. Planning
D. Reporting
Answer: Option A
Solution (By JKSSB Mock Tests)
Vouching is the primary test of audit, involving the examination of documentary evidence to support the transactions recorded in the books of accounts.
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 'Provision for Bad Debts' is created by:
A. Debiting Debtors Account
B. Crediting Cash Account
C. Debiting Profit & Loss Account and crediting Provision for Bad Debts
D. Debiting Sales Account
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Correct Answer: Option C

Explanation:
The adjusting entry: P&L A/c Dr. To Provision for Bad Debts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In a manufacturing account, 'Prime Cost' includes:
A. Direct materials, direct labour, direct expenses
B. Selling overheads
C. Administration overheads
D. All factory overheads
Discuss
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Correct Answer: Option A

Explanation:
Prime cost is the sum of all direct costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
A 'Compound Journal Entry' may include:
A. Only personal accounts
B. Only one debit and one credit
C. Only nominal accounts
D. Multiple debits and multiple credits
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Correct Answer: Option D

Explanation:
It can have several accounts affected.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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