Day: June 30, 2026

Accounting Multiple Choice Question – 30 June 2026

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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For the procedure below, select whether the auditor will be testing primarily for an overstatement or primarily for an understatement.

  • Reviewing the aged inventory analysis to identify old/obsolete inventory

Select ONE answer:

  1. Primarily for the overstatement of provisions
  2. Primarily for the understatement of provisions
  3. Primarily for the overstatement of inventory
  4. Primarily for the understatement of inventory

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 – The auditor’s main concern in testing assets is that they might be overstated whereas he will be concerned that liabilities might be understated. Reviewing the aged inventory analysis is testing for overstatement in the valuation of inventories, as the existence of old/obsolete inventory may require a write-down to net realisable value.
  4. Not correct

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