The term 'Substantive Testing' in audit refers to: MCQ with Answer and Explanation

The term 'Substantive Testing' in audit refers to:

A. Testing the details of balances and transactions

B. Planning the audit

C. Issuing the audit report

D. Testing the internal controls

Answer: Option A

Substantive testing involves detailed testing of transactions and balances to detect material misstatements in the financial statements.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1 Report Error

A company uses 'Economic Order Quantity' (EOQ) of 500 units. Annual demand is 5,000 units. Number of orders per year will be:

A. 500

B. 5

C. 10

D. 100

Correct Answer: Option C

Explanation:
Number of orders = Annual demand / EOQ = 5,000 / 500 = 10.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

The use of 'Smart Contracts' in accounting is a direct result of development in:

A. Blockchain Technology

B. Cost Control

C. Double Entry System

D. PFMS

Correct Answer: Option A

Explanation:
Smart contracts are self-executing contracts with terms written into lines of code, running on blockchain networks.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3 Report Error

The 'Related Party Disclosures' standard is:

A. AS 18

B. AS 19

C. AS 21

D. AS 17

Correct Answer: Option A

Explanation:
AS 18 requires disclosure of transactions with related parties.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping