Correct Answer:
A. Expenses are recorded in the same period as the revenues they helped to earn
Expenses are matched with the related revenue to measure profit properly.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
The matching principle requires that:
Related MCQs
A Draft Audit Para (DAP) or audit observation is:
A.
A final order of the court
B.
A budget estimate
C.
A finding sent by auditors to the department for reply before it is finalized
D.
A tax notice
Correct answer is:
C. A finding sent by auditors to the department for reply before it is finalized
Do you agree with this answer?
Stock audit in a government department is intended to:
A.
Verify the physical existence and proper record of stores and stock
B.
Count cash in the treasury
C.
Check payroll only
D.
Verify tax assessments
Correct answer is:
A. Verify the physical existence and proper record of stores and stock
Do you agree with this answer?
An audit engagement letter is mainly used to:
A.
Record the agreed terms of the audit engagement between auditor and client
B.
Report the audit findings to the public
C.
Confirm receivable balances
D.
Appoint the internal auditor
Correct answer is:
A. Record the agreed terms of the audit engagement between auditor and client
Do you agree with this answer?
Current assets are Rs. 300,000 and current liabilities are Rs. 150,000. The current ratio is:
A.
0.5 : 1
B.
3 : 1
C.
2 : 1
D.
1 : 2
Correct answer is:
C. 2 : 1
Do you agree with this answer?
An expansionary fiscal policy involves:
A.
Reducing government spending and raising taxes
B.
Increasing government spending or cutting taxes
C.
Raising interest rates
D.
Selling government bonds only
Correct answer is:
B. Increasing government spending or cutting taxes
Do you agree with this answer?
A manager who is responsible for both revenues and costs of a division is in charge of a:
A.
Cost center
B.
Profit center
C.
Revenue center only
D.
Investment center only
Correct answer is:
B. Profit center
Do you agree with this answer?
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