Senior Auditor Test Sample Paper

Senior Auditor Test Sample Paper

1. A company is owned by its
(A) directors
(B) managers
(C) shareholders
(D) employs

2. Shares of listed companies are traded in the
(A) stock exchange
(B) option market
(C) future exchange
(D) none of these

3. What from the following is an integral part of business?
(A) Profit
(B) Risk
(C) Certainty
(D) Profit and Risk

4. A company sold goods of worth Rs.1 million, the manufacturing cost of the goods were Rs.600,000. The transport used in the sale cost Rs.100,000 and the wages paid during the process of sale were also Rs.100,000. What is the gross and net profit?

(A) Gross Profit = Rs.600,000 and Net Profit = Rs.400,000 

(B) Gross Profit = Rs.400,000 and Net Profit = Rs.600,000

(C) Gross Profit = Rs.200,000 and Net Profit = Rs.400,000

(D) Gross Profit = Rs.400,000 and Net Profit = Rs.200,000

5. Every transaction has a _____ effect.

(A) zero
(B) single
(C) double
(D) triple

6. The main source(s) of Generally Accepted Accounting Principles (GAAP) is/are:
(A) Company Law
(B) Accounting standards
(C) Both A and B
(D) None of these

7. What standards are used to prepare financial statements by most of the countries and companies
(A) International Financial Reporting Standards
(B) International Financial Accounting Standards
(C) International Accounting & Auditing Standards
(D) International Risk Reporting Standards

8. The correct form of Accounting equation is
(A) Assets + Liabilities = Equity
(B) Assets – Liabilities = Equity
(C) Assets – Receivable = Equity
(D) Assets + Receivable = Equity

9. A company sold goods worth $5,000 on 5 June and $10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?
(A) $0
(B) $5,000
(C) $10,000
(D) $15,000

10. Advance payments are recognized as
(A) receivable
(B) payable
(C) bad debt
(D) none of these

11. What from the following is NOT a current asset?
(A) Patent rights
(B) Inventory
(C) Cash
(D) Trade receivables

12. What from the following is NOT a non-current asset?
(A) Capital
(B) Property
(C) Patent rights
(D) Inventory

13. What from the following is/are NOT tangible asset(s)?
I. Patent rights
II. Goodwill
III. Land
(A) I only
(B) II only
(C) I and II only
(D) I, II and III

14. A machine price was $1,000 and was carried through a truck. The truck’s fares were $500. The engineers charged $500 for the installation. The cost of the machine is?
(A) $1,000
(B) $1,500
(C) $2,000
(D) $2,500

15. Depreciable amount =
(A) Cost of an asset + Residual value
(B) Cost of an asset – Residual value
(C) Residual value – Cost of an asset
(D) None of these

16. The accounting process of allocation cost of intangible assets is called
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

17. The process of recording consumption of natural resources (or wasting assets) is called
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

18. The concept that the enterprise will continue in a foreseeable future is known as
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

19. What from the following is NOT a capital expense?
(A) Purchase of property
(B) Purchase of office equipment
(C) Replacement of a vehicle,
(D) Repair of a vehicle

20. An item of equipment cost $300,000 and has a residual value of $50,000 at the end of its expected useful life of four years. What is the depreciable amount?
(A) $50,000
(B) $250,000
(C) $300,000
(D) $350,000