Que. 1 : Q1) Stock in trade is to be recorded at cost or market price whichever is lower; this is based on the __________ principle.

   1.  a) Materiality

   2.  b) Going concern

   3.  c) Prudence

   4.  d) Consistency

Que. 2 : Q2) Rishita’s cash book shows a credit balance of Rs.8,700 for the month of January. The balance of the bank statement does not match with that of the cash book, due to the following reasons. i) Interest on an onverdraft of Rs.500 had been debited by the bank but not recorded in the cash book ii) Cheques of Rs.5,000 issued during the month, but were not presented in the bank until 31 January 2007. Cheques of Rs.3,500 were deposited but not cleared. iii) Interest on investments of Rs.1,000 was directly collected by the bank. iv) The bank had wrongly debited Rs.800. The balance per the bank statement is:

   1.  a) Rs.7,500(debit)

   2.  b) Rs.9,500(debit)

   3.  c) Rs.5,900(credit)

   4.  d) Rs.7,500(credit)

Que. 3 : Q3) Which of the following statements relating to advances is incorrect?

   1.  a) The internal auditor all advances paid to employees in respect travelling, LTS and other advances

   2.  b) All advances need to be deducted from salaries

   3.  c) Advance register should be examined thoroughly(by the internal auditor) for each advance and settlement thereof

   4.  d) All advances need to be sanctioned by the appropriate authority

Que. 4 : Q4) Accounting Standard AS 29 Deals with?

   1.  a) Accounting for investments

   2.  b) Accounting for the Effects of Change in Foreign Exchange Rates

   3.  c) Provisions, Contingent Liabilities and Contingent Assets

   4.  d) Earning Per Share

Que. 5 : Q5) The total remuneration payable to its directors and managers in respect of any financial year shall not exceed:

   1.  a) 11% of the net profits

   2.  b) 5% of the net profits

   3.  c) 3% of the net profits