Goods sold on the basis of ‘sales or return ‘ should:

Related Mcqs:

1. Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________?

   A. Error of principle
   B. Error of commission
   C. Error of omission
   D. Error of duplication

2. Which of the following documents is not relevant for vouching cash sales?

   A. Daily cash sales summary
   B. Salesmen’s summary
   C. Monthly statements sent to customers
   D. Bank statement

3. To test whether sales have been recorded, the auditor should draw a sample from a file of__________?

   A. purchase orders
   B. sales orders
   C. sales invoices
   D. bill of loading

4. Internal check is carried on by___________?

   A. Staff specially appointed for the purpose
   B. Internal auditor
   C. Supervisor of the staff
   D. Members of the staff

5. When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the___________?

   A. Amount of known misstatement is documented in working papers
   B. Estimates of the total likely misstatement is less than materiality level
   C. Estimate of the total likely misstatement is more than materially level
   D. Estimates of the total likely misstatement cannot be made

6. In determining the level of materiality for an audit, what should not be considered?

   A. Prior year’s errors
   B. The auditor’s remuneration
   C. Adjusted interim financial statements
   D. Prior year’s financial statements

7. Of the following, which is the least persuasive type of audit evidence?

   A. Bank statements obtained from the client
   B. Documents obtained by auditor from third parties directly.
   C. Carbon copies of sales invoices inspected by the auditor
   D. Computations made by the auditor

8. Which of the following is not corroborative evidence?

   A. Minutes of meetings
   B. Confirmations from debtors
   C. Information gathered by auditor through observation
   D. Worksheet supporting consolidated financial statements

9. Which of the following best describes the primary purpose of audit programme preparation?

   A. To detect errors or fraud
   B. To comply with GAAP appropriate evidence
   C. To gather sufficient
   D. To assess audit risk

10. Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

    A. The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation
    B. The safe custody of working papers is the responsibility of client, if kept at his premises
    C. The working papers must be retained by an audit firm for a period of 10 years
    D. Successor auditors may have access to working papers of the predecessor auditors. The approval of client is not required.