Correct Answer:
C. A finding sent by auditors to the department for reply before it is finalized
The department is given an opportunity to respond to audit observations.
November 13, 2026 · Accounting and Finance MCQs, Public Sector Accounting & Auditing MCQs
A Draft Audit Para (DAP) or audit observation is:
Related MCQs
Sampling risk is the risk that:
A.
The sample size is too large
B.
The auditor's conclusion based on a sample may differ from the conclusion if the whole population were tested
C.
The auditor selects items at random
D.
The entity refuses to give a sample
Correct answer is:
B. The auditor's conclusion based on a sample may differ from the conclusion if the whole population were tested
Do you agree with this answer?
A trial balance is prepared mainly to:
A.
Prove that the accounts are free from all errors
B.
Calculate the tax payable
C.
Replace the balance sheet
D.
Check the arithmetical accuracy of the ledger by comparing total debit and credit balances
Correct answer is:
D. Check the arithmetical accuracy of the ledger by comparing total debit and credit balances
Do you agree with this answer?
The cost of a machine bought last year and already paid for is, in a new investment decision:
A.
A relevant cash outflow
B.
A future opportunity cost
C.
Added to the project cost
D.
A sunk cost and ignored
Correct answer is:
D. A sunk cost and ignored
Do you agree with this answer?
Net working capital is calculated as:
A.
Total assets minus total liabilities
B.
Current assets plus current liabilities
C.
Current assets minus current liabilities
D.
Fixed assets minus long-term debt
Correct answer is:
C. Current assets minus current liabilities
Do you agree with this answer?
Fund accounting is commonly used in the public sector because:
A.
Government has no assets
B.
All money is treated as one pool
C.
It avoids the need for budgets
D.
Resources are separated into funds according to purposes or legal restrictions
Correct answer is:
D. Resources are separated into funds according to purposes or legal restrictions
Do you agree with this answer?
During a period of rising prices, the FIFO method gives:
A.
Lower closing inventory value and lower profit
B.
The same profit as LIFO
C.
Higher closing inventory value and higher profit compared with weighted average
D.
No effect on profit
Correct answer is:
C. Higher closing inventory value and higher profit compared with weighted average
Do you agree with this answer?
Leave a Reply