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B Com Exam  >  B Com Tests  >  Auditing and Secretarial Practice  >  Test: Vouching- 4 - B Com MCQ

Test: Vouching- 4 - B Com MCQ


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10 Questions MCQ Test Auditing and Secretarial Practice - Test: Vouching- 4

Test: Vouching- 4 for B Com 2024 is part of Auditing and Secretarial Practice preparation. The Test: Vouching- 4 questions and answers have been prepared according to the B Com exam syllabus.The Test: Vouching- 4 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Vouching- 4 below.
Solutions of Test: Vouching- 4 questions in English are available as part of our Auditing and Secretarial Practice for B Com & Test: Vouching- 4 solutions in Hindi for Auditing and Secretarial Practice course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Vouching- 4 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Auditing and Secretarial Practice for B Com Exam | Download free PDF with solutions
Test: Vouching- 4 - Question 1
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What is the purpose of verifying and valuing goodwill during an audit?

Detailed Solution for Test: Vouching- 4 - Question 1
The purpose of verifying and valuing goodwill during an audit is to ensure that the goodwill is shown in the balance sheet at its proper value. Goodwill is the value of an organization's reputation, which can enable the business to earn more than the normal rate of profit. While auditors cannot interfere in the management's valuation decisions, they do need to ensure that the valuation is accurate and appropriate according to the financial policy of the organization.
Test: Vouching- 4 - Question 2
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When can an auditor insist on writing off goodwill?

Detailed Solution for Test: Vouching- 4 - Question 2
An auditor can insist on writing off goodwill when they believe that the future benefits associated with the goodwill no longer exist. Goodwill is an intangible asset that represents the value of an organization's reputation, and if the anticipated benefits from that reputation cease to exist, it's important to reflect this accurately in the financial statements.
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Test: Vouching- 4 - Question 3
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Which method is NOT used for valuing stock in trade?

Detailed Solution for Test: Vouching- 4 - Question 3
The credit valuation method is not used for valuing stock in trade. The methods mentioned in the other options (Simple average cost, FIFO, LIFO) are commonly used for valuing different types of stock.
Test: Vouching- 4 - Question 4
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What is the principal basis for valuing raw materials in stock?
Detailed Solution for Test: Vouching- 4 - Question 4
The principal basis for valuing raw materials in stock is their historical cost price plus transportation costs. This is the cost at which the raw materials were acquired and transported to the organization's premises.
Test: Vouching- 4 - Question 5
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What is the key purpose of verifying and valuing liabilities during an audit?
Detailed Solution for Test: Vouching- 4 - Question 5
The key purpose of verifying and valuing liabilities during an audit is to verify the correctness of the amount of different liabilities. This ensures that the financial statements accurately represent the organization's obligations and commitments.
Test: Vouching- 4 - Question 6
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Which type of loan security involves another party's promise to repay if the borrower defaults?
Detailed Solution for Test: Vouching- 4 - Question 6
An unsecured loan involves another party's promise to repay if the borrower defaults. It's not backed by specific collateral and relies on the borrower's creditworthiness.
Test: Vouching- 4 - Question 7
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Which type of expense is likely to be converted into cash and should be physically counted during the audit?
Detailed Solution for Test: Vouching- 4 - Question 7
Outstanding expenses, which represent liabilities that will be settled in cash, should be physically counted during the audit as they are likely to be converted into cash.
Test: Vouching- 4 - Question 8
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What is the basis for valuing finished goods in stock?
Detailed Solution for Test: Vouching- 4 - Question 8
The basis for valuing finished goods in stock is the net realizable value. This is the expected selling price minus the costs necessary to make the sale.
Test: Vouching- 4 - Question 9
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In case of joint stock companies, how should book debts be classified for balance sheet purposes?
Detailed Solution for Test: Vouching- 4 - Question 9
In case of joint stock companies, book debts should be classified for balance sheet purposes based on the age of the debt and creditworthiness of the debtor. This classification helps in assessing the likelihood of recovery accurately.
Test: Vouching- 4 - Question 10
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What is the primary objective of verifying and valuing cash at bank during an audit?
Detailed Solution for Test: Vouching- 4 - Question 10
The primary objective of verifying and valuing cash at bank during an audit is to verify that the cash at bank is correctly recorded and accounted for. This includes reconciling the bank balance with the cash book and ensuring the accuracy of financial records.
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Vouching- 4 MCQs with Answers

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