Correct Answer:
C. The entity holds or controls the rights to assets and liabilities are its obligations
This assertion addresses ownership or control of assets and the entity's obligations for liabilities.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
The assertion ‘rights and obligations’ means that:
Related MCQs
The Laffer curve shows the relationship between:
A.
Tax rates and tax revenue
B.
Inflation and unemployment
C.
Income and consumption
D.
Interest rates and investment
Correct answer is:
A. Tax rates and tax revenue
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The DuPont identity expresses ROE as:
A.
Net profit margin x total asset turnover x equity multiplier
B.
Gross margin x current ratio x debt ratio
C.
Sales / assets only
D.
EPS divided by dividend per share
Correct answer is:
A. Net profit margin x total asset turnover x equity multiplier
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The cut-off assertion is concerned with whether:
A.
Assets are properly insured
B.
Transactions and events are recorded in the correct accounting period
C.
Employees are paid on time
D.
Taxes are paid before the deadline
Correct answer is:
B. Transactions and events are recorded in the correct accounting period
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A stock split:
A.
Reduces the number of shares
B.
Raises new capital
C.
Distributes cash to shareholders
D.
Increases the number of shares and reduces the price per share without changing total equity
Correct answer is:
D. Increases the number of shares and reduces the price per share without changing total equity
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Sales tax in the form of a value added tax (VAT) is levied on:
A.
Final retail price only, once
B.
Profits of companies
C.
Value added at each stage of production and distribution
D.
Wealth of individuals
Correct answer is:
C. Value added at each stage of production and distribution
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A share buyback (repurchase) generally:
A.
Increases the number of shares outstanding
B.
Reduces the number of shares outstanding
C.
Raises new equity
D.
Has no effect on cash
Correct answer is:
B. Reduces the number of shares outstanding
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