Audit of Cash Transactions MCQs

NOTE: Attempt all Questions to see the Result at the bottom of this page.

  1. 1)

    Which of the following documents is not relevant for vouching cash sales?

    • A) Daily cash sales summary
    • B) Salesmen’s summary
    • C) Monthly statements sent to customers
    • D) Bank statement

  2. 2)

    The auditor should examine subsequent realization of revenue such as dividends, interest, commission, etc to

    • A) identify cases of unrecorded revenue
    • B) ensure proper disclosure in the balance sheet
    • C) recompute accrued income on the data of balance sheet
    • D) Any of these

  3. 3)

    To test whether sales have been recorded, the auditor should draw a sample from a file of

    • A) purchase orders
    • B) sales orders
    • C) sales invoices
    • D) bill of loading

  4. 4)

    For vouching of which item, the auditor is most likely to examine cost records?

    • A) Commission earned
    • B) Bad debts recorded
    • C) Credit sales
    • D) Sale of scrap

  5. 5)

    An auditor conducts a surprise check on the pay day (i.e) the day wages and salaries are paid. The primary purpose of this audit procedures is

    • A) to ensure that there are no ghost workers
    • B) to ensure the casual workers employed are authorized by the supervisor
    • C) to ensure the casual workers employed are authorized by the supervisor
    • D) to obtain understanding of internal control system

  6. 6)

    Which of the following would prevent double payment of the same voucher?

    • A) The person signing the cheque should cancel the supporting documents
    • B) Cheques should be signed by at best two persons
    • C) The data of payment of vouchers of similar nature should be the same or close to each other
    • D) All of the above

  7. 7)

    In case of unclaimed wages, the auditor should examine whether

    • A) the amount has been deposited in a separate bank account
    • B) deposited with the cashier
    • C) held in a safe deposit box
    • D) All of these

  8. 8)

    While vouching wages, auditor should examine whether there is proper segregation of duties. Which of the following activities should not be done by same department?

    • A) Maintaining personnel records and approving changing in wages rates
    • B) Proposing pay roll summary and disbursement of wages
    • C) Making salary statements and filing tax returns
    • D) Comparing time clock records with time reports prepared by supervisors and preparing list of workers employed along with the units of production for each one of them

  9. 9)

    In order to vouch, which of the expenses, the auditor will examine Bill of Entry?

    • A) Custom
    • B) Excise duties
    • C) Sales tax
    • D) Income tax

  10. 10)

    While vouching, how will the auditor ensure himself that all credit sales transactions have been recorded by the entity?

    • A) Examining cutoff points
    • B) Matching entries in the sales book against renumbered sales invoices and goods outward notes
    • C) Counting the number of invoices and matching the number with entries on sales book
    • D) Both (a) and (b)