The 'Tolerable Error' in audit sampling is: MCQ with Answer and Explanation
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Question #1
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A: The Trial Balance is a statement, not an account. R: It is prepared to check the arithmetical accuracy of the ledger. Choose the correct option.
Correct Answer: Option D
Explanation:
The Trial Balance is indeed a statement of ledger balances, and its primary purpose is to check arithmetical accuracy. However, the fact that it is a statement does not explain why it checks accuracy; the double-entry system does.
The Trial Balance is indeed a statement of ledger balances, and its primary purpose is to check arithmetical accuracy. However, the fact that it is a statement does not explain why it checks accuracy; the double-entry system does.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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Which audit is conducted by an organization's own employees to evaluate the effectiveness of its internal controls?
Correct Answer: Option D
Explanation:
Internal audit is an independent, objective assurance function within an organization, distinct from external statutory audits.
Internal audit is an independent, objective assurance function within an organization, distinct from external statutory audits.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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Which accounting concept prevents the anticipation of profits but allows recognition of all losses?
Correct Answer: Option B
Explanation:
Prudence concept states that one should not anticipate profits but provide for all possible losses.
Prudence concept states that one should not anticipate profits but provide for all possible losses.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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