Correct Answer:
B. Original documents obtained directly from an independent external party
Evidence from independent external sources and in original form is more reliable than internal or oral evidence.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
Which type of audit evidence is generally the most reliable?
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?
The internal rate of return (IRR) is the discount rate at which:
A.
NPV is maximum
B.
Payback period is one year
C.
Accounting profit is zero
D.
NPV of the project equals zero
Correct answer is:
D. NPV of the project equals zero
Do you agree with this answer?
Lapse of appropriation means that:
A.
Unspent funds carry forward automatically
B.
The budget is increased
C.
Unspent budget allocations expire at the end of the fiscal year
D.
Audit is cancelled
Correct answer is:
C. Unspent budget allocations expire at the end of the fiscal year
Do you agree with this answer?
Cost of goods sold is calculated as:
A.
Opening inventory - purchases + closing inventory
B.
Opening inventory + purchases - closing inventory
C.
Purchases + sales - closing inventory
D.
Sales - closing inventory
Correct answer is:
B. Opening inventory + purchases - closing inventory
Do you agree with this answer?
A by-product is a product that:
A.
Has the greatest sales value of all products
B.
Is produced after the split-off by choice
C.
Cannot be sold
D.
Has a relatively minor sales value compared with the main product
Correct answer is:
D. Has a relatively minor sales value compared with the main product
Do you agree with this answer?
The Lima Declaration of 1977 is concerned with:
A.
Guidelines on auditing precepts for public sector auditing
B.
Rules for the accounting of private companies
C.
Banking supervision
D.
Tax treaties
Correct answer is:
A. Guidelines on auditing precepts for public sector auditing
Do you agree with this answer?
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