Correct Answer:
B. Will continue in operation for the foreseeable future
Financial statements are normally prepared on the assumption that the entity will continue operating for the foreseeable future.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
The going concern assumption means that the entity:
Related MCQs
Tracing from source documents (e.g. goods received notes) to the accounting records mainly tests:
A.
Occurrence
B.
Rights and obligations
C.
Presentation
D.
Completeness
Correct answer is:
D. Completeness
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Information is considered material if its omission or misstatement could:
A.
Change the audit fee
B.
Affect only the auditor's working papers
C.
Influence the economic decisions of users taken on the basis of the financial statements
D.
Be corrected without any disclosure
Correct answer is:
C. Influence the economic decisions of users taken on the basis of the financial statements
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Unearned (deferred) revenue is reported as:
A.
An asset
B.
Revenue of the current period
C.
An expense
D.
A liability
Correct answer is:
D. A liability
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Joint costs are costs:
A.
Incurred after the split-off point
B.
Of products sold separately by two firms
C.
Incurred up to the split-off point for products that are produced together
D.
Of selling and distribution only
Correct answer is:
C. Incurred up to the split-off point for products that are produced together
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Primary balance is the fiscal balance:
A.
Including interest payments
B.
Excluding interest payments
C.
Excluding revenue
D.
Including only capital expenditure
Correct answer is:
B. Excluding interest payments
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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
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