Correct Answer:
B. Dishonest use of public money for purposes other than intended
It involves intentional diversion or misuse of funds.
November 13, 2026 · Accounting and Finance MCQs, Public Sector Accounting & Auditing MCQs
Misappropriation of public funds is:
Related MCQs
Under the accrual basis of accounting in the public sector, transactions are recognized when:
A.
Cash is received only
B.
Cash is paid only
C.
They occur, regardless of when cash is received or paid
D.
The budget is approved
Correct answer is:
C. They occur, regardless of when cash is received or paid
Do you agree with this answer?
Auditor independence consists of:
A.
Independence of audit fees only
B.
Independence from the auditing standards
C.
Independence of mind and independence in appearance
D.
Independence from the audit working papers
Correct answer is:
C. Independence of mind and independence in appearance
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The present value of future cash flows is Rs. 150,000 and the initial investment is Rs. 100,000. The profitability index is:
A.
1.5
B.
0.67
C.
50,000
D.
2.5
Correct answer is:
A. 1.5
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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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If production exceeds sales in a period, profit under absorption costing compared with variable costing will be:
A.
Lower
B.
Higher
C.
The same
D.
Zero
Correct answer is:
B. Higher
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Audit sampling means applying audit procedures to:
A.
Every item in the population
B.
Only the largest item in the population
C.
Less than 100% of items in a population so that all sampling units have a chance of selection
D.
Items chosen by management
Correct answer is:
C. Less than 100% of items in a population so that all sampling units have a chance of selection
Do you agree with this answer?
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