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Accounting & Auditing Mcqs from FPSC Past Papers

Accounting & Auditing Mcqs from FPSC Past Papers

1) Double entry book-keeping was fathered by:
(a) F.W.Taylor
(b) Henry Fayol
(c) Lucas Pacioli.

(2) Funds Flow Statement and sources and application statement are:’
(a) Synonymous
(b) Antagonistic
(c) None of these.

(3) Depreciation in spirit is similar to:
(a) Depletion
(b) Amortization
(c) Depression.

4) Balance Sheet is always prepared:
(a) for the year ended.
(b) As on a specified date.
(c) None of these.

(5) In Insurance, the following Profit and Loss Accounts are prepared:
(a) Separate for Fire, Marine, and Accidents etc.
(b) Consolidated for Fire, Marine, and Accidents etc.(c) None of these.

(6) Partners in Pakistan can today be fixed at the following numbers:
(a) 20
(b) 50
(c) 75.

(7) Flexible budget is a budget with the following features:
(a) Changes with volume of production.
(b) Changes with variable expenses
(c) Changes in Direct material.

(8) Break Even can be calculated as under:
(a) ______VC_______
(b) FC
I- VC TR(c) None of these.

(9) Quick Ratio can be computed as under:
(a) Quick . Assets/Quick Liabilities
(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities

(10) In straight line method of depreciation, the written down value of a fixed asset will be at the end of the life of the asset as under:
(a) Rupee one
(b) Rupee zero (c) None of these.

(11) Sales budget must be prepared:
(a) Independently
(b) Depending on production capacity
(c) Based on Sales forecasts of market.

(12) Consolidation of subsidiary accounts in the balance sheet of a unlisted Holding company is at present in Pakistan:
(a) Compulsory
(b) Voluntary
(c) Required.

(13) Retained earning is synonymous to:
(a) Accumulated profit and loss account
(b) Profit for the year
(c) None of these.

(14) The requirements of an audit report for a Banking Company in Pakistan is under:
(a) Under the Banking Companies Ordinance, 1962.
(b) Under the Companies Ordinance, 1984.
(c) Under (a) and (b) above.

(15) Deferred Taxation is:
(a) Fixed asset
(b) Fixed liabilities
(c) Part of Owners Equity.

(16) Investment Corporation of Pakistan follows:
(a) Open-end mutual funds
(b) Closed-end mutual funds
(c) None of these.

(17) Directors Report is —- in respect of financial report constituent.
(a) Mandatory for a limited Company
(b) Voluntary for a limited Company
(c) None of these.

(18) Every limited Company in Pakistan is required by law to include the following along with financial reports:
(a) Ratio Analysis
(b) Chairman’s Review
(c) None of these.

(19) Cash budget excludes the following:
(a) Non-Cash items
(b) Cash items
(c) Purchase on Credit items.

(20) NGOs are legally required to:
(a) Prepare accounts in a prescribed manner under the law.(b) Prepare accounts as desired by donors.
(c) None of these.

1. Fixed Cost:
a. Changes with production
b. Never changes even if production capacity is doubled
c. None of the above

2. Conversion cost is:
a. Material Cost + Overhead Cost
b. Direct Labour + Material Cost
c. Labour Cost + Overhead Cost

3. Process Costing is relevant to:
a. Cement industry
b. Job Order cost oriented Projects
c. None of the above

4. Operating Profit is:
a. Profit after deducting financial costs
b. Profit after deducting taxes
c. Profit after deducting normal operating expenses including depreciation

5. A good Cost Accounting System is:
a. If it computes estimated cost only
b. If it cannot be reconciled with financial accounts
c. If it enables management to increase productivity and rationalize cost structure

6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above

7. Stratified audit sample means:
a. Randomly selected items for audit
b. Purposively selected items for audit
c. Items carefully selected from each group

8. Internal Control is totally synonymous with:
a. Internal check
b. Internal audit
c. None of above

9. Audit of a bank is generally conducted through:
a. Routine checking
b. Couching
c. Balance sheet audit

10. An auditor is liable for his annual audit of accounts o:
a. Creditors
b. Bankers
c. Owners

11. Income Tax is levied on:
a. Agricultural Income
b. Presumptive Income
c. None of above

12. If a firm has paid super-tax, its partners may follow any one of the following behaviours:
a. No need to pay income tax, even if the income exceeds the taxable limit.
b. Pay income tax, even if the income does not exceed the taxable income.
c. Pay income tax as required under the law.

13. A resident multinational company need not:
a. Pay income tax, if it s caused under Double Taxation agreement.
b. If it is not enjoying tax exemption under the Income Tax Ordinance, 1979 (Second Schedule).
c. None of above

14. Income Tax rates are the same for:
a. Limited Companies
b. Banking Companies
c. None of above

15. Super Tax on companies is:
a. In vogue in Pakistan
b. Not in vogue in Pakistan
c. None of above

16. Current Ratio is calculated as:
a. Fixed Assets/Current Liabilities
b. Current Liabilities/Current Assets
c. Current Assets/Current Liabilities

17. Short-term loan can be described as:
a. If the period is three years
b. If the period is less than one year
c. If the period is over one year

18. A partnership, in today’s Pakistan, under the current law can have the following number of partners:
a. 50
b. 20
c. 100

19. Combination can be best described as:
a. Restructuring of Capital of a Company
b. Reduction of Capital of a Company
c. Amalgamation of two different types of businesses

20. Sources of funds can be increased by:
a. Describing selling prices
b. Increasing expenditure
c. None of above


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