Correct Answer:
C. Receipts and expenditure of local bodies for compliance with applicable laws and rules
Local fund audit covers funds of local councils and similar bodies.
November 13, 2026 · Accounting and Finance MCQs, Public Sector Accounting & Auditing MCQs
Audit of local government (local fund) accounts mainly examines:
Related MCQs
Annual demand is 10,000 units, ordering cost is Rs. 50 per order and holding cost is Rs. 4 per unit per year. The Economic Order Quantity (EOQ) is:
A.
250 units
B.
1,000 units
C.
500 units
D.
5,000 units
Correct answer is:
C. 500 units
Do you agree with this answer?
Incremental budgeting means:
A.
Preparing every budget from zero
B.
Adjusting the previous year's budget by a certain percentage or amount
C.
Using only actual expenditure
D.
Ignoring last year's figures
Correct answer is:
B. Adjusting the previous year's budget by a certain percentage or amount
Do you agree with this answer?
According to Modigliani and Miller (no taxes), the value of a firm:
A.
Increases as debt increases
B.
Decreases as debt increases
C.
Depends on the dividend policy only
D.
Is independent of its capital structure
Correct answer is:
D. Is independent of its capital structure
Do you agree with this answer?
A prepaid expense is shown in the statement of financial position as:
A.
A current liability
B.
A current asset
C.
Equity
D.
Revenue
Correct answer is:
B. A current asset
Do you agree with this answer?
A cost driver is:
A.
A factor that causes the cost of an activity to change
B.
A person who drives the delivery vehicle
C.
A fixed cost per unit
D.
A sunk cost
Correct answer is:
A. A factor that causes the cost of an activity to change
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Appropriation audit is carried out to ensure that:
A.
Revenue is maximized
B.
Expenditure is within the grant and incurred for the purpose approved by the legislature
C.
Employees are paid on time
D.
The accounts are printed neatly
Correct answer is:
B. Expenditure is within the grant and incurred for the purpose approved by the legislature
Do you agree with this answer?
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