The Multiple Choice Questions Blog

Tick and Bash Partners, the auditors of Alex Manufacturing Ltd, are performing a test to ensure that there are no omissions from the non-current asset register.

With respect to which one of the following assertions will this procedure provide audit evidence?

Select ONE answer:

1. Completeness
2. Accuracy, valuation and allocation
3. Existence
4. Classification

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Testing for omissions is the same as testing for completeness (i.e., saying that nothing has been omitted from the register means the same as saying the register is complete).
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following assertions is the auditor most concerned with when testing property, plant and equipment?

Select ONE answer:

1. Occurrence
2. Cut-off
3. Health and safety obligations
4. Existence

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Only existence and rights and obligations are assertions about account balances. Occurrence and cut-off are assertions in respect of classes of transactions and events for the period.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following assertions is the auditor most concerned with when testing property, plant and equipment?

Select ONE answer:

1. Occurrence
2. Cut-off
3. Rights and obligations
4. Non-Existence

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Only existence and rights and obligations are assertions about account balances. Occurrence and cut-off are assertions in respect of classes of transactions and events for the period.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Lucy, an audit junior, has been asked to test the completeness of certain items in the income statement.

She has carried out the following tests.

For each test carried out, select whether that test proves the assertion of completeness, does NOT prove the assertion of completeness, it depends on the size of the business, or needs to be referred to a senior colleague for approval.

• Tracing a sample of entries on the payroll to individual HR records

Select ONE answer:

1. Proves completeness
2. Does not prove completeness
3. Consult a senior colleague
4. Depends on the size of the business

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Tracing a sample of entries on the payroll to HR records does not test completeness as the direction of testing is from the payroll balance to the source documentation.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Lucy, an audit junior, has been asked to test the completeness of certain items in the income statement.

She has carried out the following tests.

For each test carried out, select whether that test proves the assertion of completeness, does NOT prove the assertion of completeness, it depends on the size of the business, or needs to be referred to a senior colleague for approval.

• Tracing a sample of goods received notes to payables ledger and financial statements

Select ONE answer:

1. Proves completeness
2. Does not prove completeness
3. Consult a senior colleague
4. Depends on the size of the business

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Tracing from GRNs to the payables ledger and financial statements proves the completeness of purchases/payables (i.e., that all goods received have been recorded as purchase/payables).
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.