The audit report is addressed to: MCQ with Answer and Explanation
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Question #1
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The term 'FIFO' stands for:
Correct Answer: Option A
Explanation:
FIFO is an inventory valuation method where the cost of the earliest goods purchased is assigned to the cost of goods sold first.
FIFO is an inventory valuation method where the cost of the earliest goods purchased is assigned to the cost of goods sold first.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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Which of the following is/are correct regarding the accounting equation? 1. The equation always holds true under the double entry system. 2. Purchase of goods on credit increases assets and liabilities. 3. Payment to creditors decreases assets and increases liabilities. 4. Introduction of capital by the proprietor increases both assets and capital.
Correct Answer: Option C
Explanation:
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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A distributed ledger technology providing a secure and immutable record of transactions is:
Correct Answer: Option B
Explanation:
Blockchain creates decentralized, tamper-proof ledgers, significantly reducing the scope for fraud and simplifying the auditing process.
Blockchain creates decentralized, tamper-proof ledgers, significantly reducing the scope for fraud and simplifying the auditing process.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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