Correct Answer:
A. Sending confirmation requests to a sample of customers
Confirmations of balances directly test account balances; the others are control-related procedures.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
Which of the following is an example of a substantive procedure?
Related MCQs
Computer-assisted audit techniques (CAATs) are used by auditors to:
A.
Replace professional judgment entirely
B.
Prepare the client's tax returns
C.
Avoid documenting the audit
D.
Analyze large volumes of electronic data and test systems and controls
Correct answer is:
D. Analyze large volumes of electronic data and test systems and controls
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A sunk cost is a cost that:
A.
Will be incurred in the future
B.
Differs between alternatives
C.
Is always variable
D.
Has already been incurred and cannot be recovered, so it is irrelevant to future decisions
Correct answer is:
D. Has already been incurred and cannot be recovered, so it is irrelevant to future decisions
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The four main stages of the budget cycle are:
A.
Printing, signing, filing and storing
B.
Taxation, borrowing, lending and spending
C.
Formulation, legislative approval, execution, and audit and evaluation
D.
Planning, hiring, training and retiring
Correct answer is:
C. Formulation, legislative approval, execution, and audit and evaluation
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Under Article 80 of the Constitution of Pakistan, the Federal Government is required to:
A.
Print currency notes
B.
Cause to be laid before the National Assembly a statement of estimated receipts and expenditure for each financial year (annual budget statement)
C.
Appoint provincial governors
D.
Hold national elections
Correct answer is:
B. Cause to be laid before the National Assembly a statement of estimated receipts and expenditure for each financial year (annual budget statement)
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Accounts receivable are Rs. 100,000 and annual credit sales are Rs. 730,000. Average collection period (365-day year) is:
A.
73 days
B.
50 days
C.
30 days
D.
7.3 days
Correct answer is:
B. 50 days
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Line-item budgeting is a budget format that:
A.
Lists expenditure by inputs such as salaries and supplies
B.
Links spending to results
C.
Starts from zero each year
D.
Excludes salaries
Correct answer is:
A. Lists expenditure by inputs such as salaries and supplies
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