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

Question
Which of the following is a type of audit risk?
A. Control Risk
B. Inherent Risk
C. Detection Risk
D. All of the above
Answer: Option D
Solution (By JKSSB Mock Tests)
Audit risk comprises Inherent Risk, Control Risk, and Detection Risk, which together determine the overall risk of an incorrect audit opinion.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is NOT a component of the cost of production?
A. Factory overheads
B. Selling and distribution overheads
C. Direct materials
D. Office and administration overheads
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Correct Answer: Option B

Explanation:
Cost of production includes prime cost, factory overheads, and office/admin overheads. Selling and distribution overheads are added to arrive at the Cost of Sales, not Cost of Production.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is NOT a feature of cash basis accounting?
A. Used by small professionals
B. Records only cash transactions
C. Simple to maintain
D. Complies with matching principle
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Correct Answer: Option D

Explanation:
Cash basis does not follow the matching principle, as revenues and expenses are recorded only when cash is exchanged.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Full Disclosure Principle' requires:
A. Disclosure of all material information in financial statements
B. No disclosure
C. Disclosure of only profits
D. Disclosure of only assets
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Correct Answer: Option A

Explanation:
Full disclosure means all significant information should be reported in financial statements and notes.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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