‘wre2i2020 ‘STUDENTS REGISTRATION STUDENTS REGISTRATION Gather information from students * Required 1. Email address * 2. Name* 3. Register number * 4, Mobile Number * 5. Date & Time of examination * Example: January 7, 2019 11:03 AM 6. BATCH: B.Sc* Mark only one oval. SRM IHM CYCLE TEST-2 HOTEL ACCOUNTANCY BHM18406 hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 128‘wre2i2020 ‘STUDENTS REGISTRATION 7. Name* 8. Email* 9. Register number * 10. Degree: B.Sc Batch: Mark only one oval. A B c D CHOOSE THE CORRECT ANSWER 11. _ Internal controls are grouped into the following categories: * point Mark only one oval. Efficient operations financial analysis and management reporting (— Production and operations, financial reporting, and management reporting ( Effective operations, financial reporting, and compliance. __) Efficient operations, financial analysis, and compliance. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 2128‘wre2i2020 12. 13. 14. ‘STUDENTS REGISTRATION Which of the following makes for an effective control environment with regards to commitment to competence? * Mark only one oval. 1 point (—) Increase interaction between senior management and operating management. —_) Its culture is one in which quality and competence are openly valued. (—_) Reduce pressure to meet unrealistic performance targets. (—_) Assure independence from management. Which of the following is the accounting equation for a non-profit organization? * Mark only one oval. (Asset = Capital + Liabilities. O capital + Liab (O Accumulated fund + Liabilities = Assets. ies = Assets. Liabities = asset + Accumulated fund. Control activities can be defined as: * Mark only one oval. (_) The particular category in which a control is placed. (—) The actions of people to help ensure that management directives necessary to address risks are carried out (_) Ameans to an end (—_) Authorized procedures hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point 1 point 3128‘wre2i2020 ‘STUDENTS REGISTRATION 15. The departmental accounting enables a business firm to maximize 1 point Mark only one oval. O profit losses. (CD) cash CO assets 16. The business policies and the administration of a branch are wholly 1 point controlled by the head office the type of branch is _ a Mark only one oval. (— ) independent branch. (—) dependent branch. c (_) local branch. (none of the above 17. Which of the following is responsible for establishing a private company’s 1 point internal control? * Mark only one oval. (—) Management (CD Auditors. (—) Management and auditors. Committee of Sponsoring Organizations. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 4128‘wre2i2020 ‘STUDENTS REGISTRATION 18. Which of the following is not one of the three primary objectives of 1 point effective internal control * Mark only one oval. (—) Reliability of financial reporting —__) Efficiency and effectiveness of operations (—) Compliance with laws and regulations ( Assurance of elimination of business risk 19. When the auditor attempts to understand the operation of the accounting 1 point system by tracing a few transactions through the accounting system, the auditor is said to be * Mark only one oval. tracing —) vouching. (—) performing a walk-through. O reesting controts. 20. Branches not keeping a full system of accounting are 1 point Mark only one oval. (—_) Foreign branch. (CJ local branch () independent branch, (—) dependent branch. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 5128‘wre2i2020 21. 22. 23. ‘STUDENTS REGISTRATION Under the branch accounts, debtors system, the depreciation of an asset 1 point is * Mark only one oval. (shown on credit side of branch account. not shown in branch account . (—) shown on the debit side of the branch account. (© show in debtors account. To determine a positive control environment, the auditor should consider 1 poin which of the following control environment actions for integrity and ethical values? * Mark only one oval. —_) Create formal or informal job descriptions or other means of defining tasks that ‘comprise particular jobs. —_) Remove incentives and temptations that prompt personnel to engage in fraudulent or unethical behaviour. ( Encourage independence from management. Review the nature of business risk accepted. Branch accounts debtors system, loading on goods sent to branch 1 point adjusted in * Mark only one oval. —) debit side. ) credit side. CD asset side. (liabilities side. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit e128‘wre2i2020 24. 25. 26. 27. ‘STUDENTS REGISTRATION Under branch accounts debtors system, closing balance of liabilities are recorded in * Mark only one oval. ( first credit and debit side. first debit and credit side. ) credit side. CD debit side. The basis for decision making by the management is * Mark only one oval. ( Accounting statements > Financial Statement (—) Bank statements (—) None of the above The combination of Selling Expenses and Administrative Expenses is referred to as * Mark only one oval. (_) General Expenses (C_) Operating Expenses () Total Expenses Gross Profit minus Operating Expenses is best defined as * Mark only one oval. (_) Net Income (net sales —_) Operating Income hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point 1 point 1 point 1 point 7128‘wre2i2020 ‘STUDENTS REGISTRATION 28. The act of buying an asset without having to make full payment in the immediate future is known as: * Mark only one oval. (_) Sale and leaseback (©) operating tease Finance lease (_) Hire purchase 29. Departments are located in * Mark only one oval. next city ©) same place (—) outside state (C ) ina foreign country 30. Which of management's concerns with respect to implementing internal controls is the auditor primarily concerned? * Mark only one oval. (_) Efficiency of operations. (_) Reliability of financial reporting () Effectiveness of operations. (—) Compliance with applicable laws and regulations. Untitled Section hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point point point 8128‘wre2i2020 31. 32. 33, 34, ‘STUDENTS REGISTRATION Departmental Accounting refers to maintaining accounts for one or more branches or departments of the company. * Mark only one oval. Tne O False Non-departmental expenses are charged to the General Profit and Loss Account. * Mark only one oval. (CD TRUE © False Repairs to Machinery are allocated, to different departments on the b&is of the number of machines in each department. * Mark only one oval. —) True False A flow chart, made by the auditor, of an entity's internal control system is a graphic representation that depicts the auditor's understanding of the system * Mark only one oval. ©) Tne ) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit point point point point 9128‘wre2i2020 35. 36. 37. 38, ‘STUDENTS REGISTRATION Two key concepts that underlie the management's design and point implementation of internal control are costs and materiality. * Mark only one oval. Tne O False Internal controls can never be considered as absolutely effective because 1 point their effectiveness is limited by the competency and dependability of employees. * Mark only one oval. ©) Tue © False A major control available in a small company, which might not be feasible 1 point in a big company, is wider segregation of duties. * Mark only one oval. —_) True False Management is responsible for establishing internal controls for a public 1 point company. * Mark only one oval. ©) Tne ) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 10128‘wre2i2020 39. 40. a. 42. ‘STUDENTS REGISTRATION Anact of two or more employees to steal assets or misstate records is frequently referred to as collusion. * Mark only one oval. Tne Oralse Departmental accounting is of calculating for various departments at different location * Mark only one oval. ©) Te __) False The initial presumption in the audit of a public company is that control risk is low.* Mark only one oval. True False When auditing a private company, the auditor should obtain an understanding of internal control sufficient to provide reasonable protection against client fraud and defalcations by client employees. * Mark only one oval. © Tne ) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit point point point point wee‘wre2i2020 ‘STUDENTS REGISTRATION 43. The auditor's study of a public company’s internal control is required by 1 point GAAS. * Mark only one oval. Tne O ralse 44. The essence of an effectively controlled organization lies in the point effectiveness of its independent auditor. * Mark only one oval. ©) Te © False 45. Monitoring activities deal with ongoing or periodic assessment of the point quality of internal control by management. * Mark only one oval. —) True —_) False FILL UP THE BLANKS 46. A statement of affairs is just like a * point Mark only one oval. (_) balance sheet, ( profit and loss account. —_) cash account, —_) None of the above hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 12128‘wre2i2020 ‘STUDENTS REGISTRATION 47. Tests of control are not concerned with_ * point Mark only one oval. (—) Existence of controls (CD Continuity of controls Designing of controls (_) Effectiveness of controls 48. Under the branch accounts, debtors system, the closing balance of assets are recorded in * point Mark only one oval. (_) First debit and credit side. ( first credit and debit side. (CD debit side. —) credit side. 49. The difference between goods sent by the head office and received by point the branch is known as * Mark only one oval. —) Goods in transit. (—) Goods in godown. © Goods in production (_) None of the above. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 13128‘wre2i2020 ‘STUDENTS REGISTRATION 50. is not an inherent limitation of internal control system. * point Mark only one oval. () Management override (Collusion among employees Inefficiency of internal auditor (_) Abuse of authority 51. The primary purpose of performing tests of control is to provide point reasonable assurance that. Mark only one oval. (there are no material misstatements due to fraud or error in financial statement. (—) accounting system is well documented (C_) Written evidence is there to support transactions () if internal control is effective 52. Departmental Accounting is a vital one for__prosperous business point organizations. * Mark only one oval. CD large 53. Tests of control are not concerned with_, * 1 point Mark only one oval. (1. Existence of controls (—_) 2. Effectiveness of controls (_) 3. Continuity of controls () 4, Designing of controls hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 4128‘wre2i2020 ‘STUDENTS REGISTRATION 54. The sequence of steps in the auditor's consideration of internal control is 1 point as follows * Mark only one oval. —) Obtain an understanding, design substantive test, perform tests of control, make a preliminary assessment ofcontrol risk Design substantive tests, obtain an understanding, perform tests of control, make a preliminary assessment ofcontrol risk __) Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, designsubstantive —) Perform tests of control, obtain and understanding, make a preliminary assessment of control risk, design 55. The performance of tests of control is documented int. 2. 3. working point papers4. any of the above * Mark only one oval. flow charts ( working papers audit programme (—_) any of the above 56. Control risk is assessed at. * point Mark only one oval. —) Overall financial statements level (_) Fraud risk factor level —_) Financial statement assertion level () Control environment level hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 19128‘wre2i2020 57. 58. 59. ‘STUDENTS REGISTRATION The primary purpose of performing tests of control is to provide reasonable assurance that, * Mark only one oval. 1 point ( there are no material misstatements due to fraud or error in financial statement -) accounting system is well documented (—) written evidence is there to support transactions (—_) if internal control is effective If the auditor assesses control risk as high, . Mark only one oval. (—_) Document the conclusions () documents the reasons along with conclusions —_) perform tests of control (—) perform walkthrough tests The overall attitude and awareness of an entity's board of directors concerning the importance of internal control are reflected in Mark only one oval. (—_) accounting controls control environment (_) control procedures supervision hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point 1 point 16128‘wre2i2020 60. ‘STUDENTS REGISTRATION Proper segregation of duties reduces the opportunities in which a person would both, * Mark only one oval. (—) establish controls and executes them —_) records cash receipts and cash payments (—) perpetuate errors and frauds and conceals them (record the transaction in journal MULTIPLE CHOICE QUESTIONS 61. 62. The income statement shows * Mark only one oval. () the financial position of the business —) the financial performance and the financial position of the business (_) the financial performance of the business (—) the cash flow of the business The profit of a business during an accounting period is equal to * Mark only one oval. (—_) total revenues less total cash payments (— ) total revenues less total expenses (C_) total cash receipts less total expenses () total cash receipts less total cash payments hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit point point 1 point 728‘wre2i2020 ‘STUDENTS REGISTRATION 63. Interest earned on investments would appear in which section of a retailer's multiple-step income statement? * Mark only one oval. (Non-operating Operating (—) Would Not Appear 64. The heading of a balance sheet indicate a * Mark only one oval. Period Of Time Point in Time 65. The term current asset doesn't cover * Mark only one oval. Prepaid expenses (_) Debtors C_) Stock 66. Notes Payable could not appear as a line on the balance sheet in which classification? * Mark only one oval. Current Assets ( current Liabilities (_) Long-term Liabilities hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point point 1 point 1 point 18128‘wre2i2020 ‘STUDENTS REGISTRATION 67. Internal controls are grouped into the following categories: * 1 point Mark only one oval. () Efficient operations, financial analysis and management reporting. . (—_) Production and operations, financial reporting, and management reporting Effective operations, financial reporting, and compliance. ( Efficient operations, financial analysis, and compliance. 68. Which of the following makes for an effective control environment with regards to commitment to competence? * point Mark only one oval. () Increase interaction between senior management and operating management. () ts culture is one in which quality and competence are openly valued. (_) Reduce pressure to meet unrealistic performance targets. (_) Assure independence from management. 69. To determine a positive control environment, the auditor should consider which of the following control environment actions for integrity and ethical values? * point Mark only one oval. ( Create formal or informal job descriptions or other means of defining tasks that comprise particular jobs ~) Remove incentives and temptations that prompt personnel to engage in fraudulent or unethical behaviour. (—_) Encourage independence from management. (C_) Review the nature of business risk accepted. hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 19128‘wre2i2020 70. 71. 72. 73. STUDENTS REGISTRATION The term “Audit” originated from the Latin word. * Mark only one oval. ©) Audire () Adhere Adihere (_) None of the above The basis for decision making by the management is * Mark only one oval. © Accounting statements (—) Financial Statement Bank statements (_) None of the above The combination of Selling Expenses and Administrative Expenses is referred to as * Mark only one oval. —_) General Expenses ( operating Expenses (_) Total Expenses () other: Gross Profit minus Operating Expenses is best defined as * Mark only one oval. () Net Income —_) Net Sales (—) Operating Income hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 1 point 1 point 1 point 1 point 20128‘wre2i2020 ‘STUDENTS REGISTRATION 74, The act of buying an asset without having to make full payment in the point immediate future is known as: * Mark only one oval. Sale and leaseback Operating lease Finance lease Hire purchase 75. Departments are located in * point Mark only one oval. O next city ( same place outside state ina foreign country Option 5 TICK WETHER TRUE OR FALSE 76. fa company’s stock is publicly traded, is it a requirement that the point earnings per share appear on the income statement? * Mark only one oval. —_) True Oralse hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 21128‘wre2i2020 ‘STUDENTS REGISTRATION 77. \sit acceptable that some of the expenses reported on the income point statement be estimates? * Mark only one oval. Tne O False 78. Are the notes to the financial statements considered to be an integral part 1 point of the financial statements? * Mark only one oval. ©) Tue __) False 79. The book value of a corporation is the total amount of stockholders’ point equity reported on the balance sheet * Mark only one oval. True False 80. The amount reported on the balance sheet for Property, Plant and point Equipment is the company's estimate of the fair market value as of the balance sheet date. * Mark only one oval. © Tne ) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 22128‘wre2i2020 81. 82. 83. 84. ‘STUDENTS REGISTRATION Departmental Accounting refers to maintaining accounts for one or more branches or departments of the company. * Mark only one oval. Tne ©) False Non-departmental expenses are charged to the General Profit and Loss Account. * Mark only one oval. (CD TRUE © false Repairs to Machinery are allocated, to different departments on the b&is of the number of machines in each department. * Mark only one oval. —) True False A flow chart, made by the auditor, of an entity's internal control system is a graphic representation that depicts the auditor's understanding of the system * Mark only one oval. © Tne ) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit point point point point 23128‘wre2i2020 85. 86. 87. 88. 89. STUDENTS REGISTRATION If the auditor assesses control risk as high document the conclusions * Mark only one oval. Tne False The independence of an internal auditor will most likely be assured if he reports to the President Finance. * Mark only one oval. True > False Proper segregation of duties reduces the opportunities in which a person would both establish controls and executes them * Mark only one oval. Tne © False Networth is also called liabilities net of assets * Mark only one oval. Te —_) False The best time to run the night audit is before 12am * Mark only one oval. True —) False hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit point point point point point 24128‘wre2i2020 ‘STUDENTS REGISTRATION 90. The main reason why night audit should run daily is to have the system roll. 1 point over to the next business day to match the business date * Mark only one oval. Tne Oralse FILL IN THE BLANKS WITH BEST OPTION 91. Tests of control are not concerned with_ * point Mark only one oval. —_) Existence of controls —_) Continuity of controls —) Designing of controls ( Effectiveness of controls 92. is not an inherent limitation of internal control system. * point Mark only one oval. ~_) Management override Collusion among employees (—) Inefficiency of internal auditor (Abuse of authority hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 25128‘wre2i2020 ‘STUDENTS REGISTRATION 93. An auditor should study and evaluate internal controls point to. Mark only one oval. (—) determine whether assets are safeguarded Suggest improvements in internal control (—) Plan audit procedures (—-) express and opinion 94. The primary purpose of performing tests of control is to provide 1 point reasonable assurance that, Mark only one oval. (—) there are no material misstatements due to fraud or error in financial statement. accounting system is well documented (_) Written evidence is there to support transactions (_) if internal control is effective 95. A financial statement that summarizes company revenue and expenses 1 point is, * Mark only one oval. (—_) Balance sheet (_) Statement of owner equity () Income statement Cash flow statement hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 26128‘wre2i2020 ‘STUDENTS REGISTRATION 96. The report of company that shows overall profit on the sale of their goods 1 point or the provision of their services. * Mark only one oval. (\ Trading and Profit & loss account Cash flow statement (© income Statement (_) Botha andc 97. Which of the following financial statements is also known as financial 1 point condition * Mark only one oval. (—_) Balance Sheet (—) Income Statement (_) Statement of Cash flows (_) Bank Statement 98. The normal balance for an asset account is * 1 point Mark only one oval. CD debit ©) credit 99. Deferred credits will appear on the balance sheet with 1 point Mark only one oval. Assets ( thetiabilities (_) Owner's/Stockholders’ Equity hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 27128‘wre2i2020 ‘STUDENTS REGISTRATION 100. Departmental Accounting is a vital one for___ prosperous business 1 point organizations. * Mark only one oval. large ‘This content is neither created nor endorsed by Google hitpsiidocs google. comformsiRpSm 01 9qEES|SxZe VacUT aS. 59F J6T2T1ySvAKCGMiedit 28128