Law’s Questions

Law’s Questions

“An auditor is a watch dog, not
the bloodhound.” This was commented by an honorable ]udge in the case of-                          (A) Kingston Cotton Mill C0.
(B) Imperial Tobacco Co.
(C) Mohri Bibi Vs. Dhanno Das Ghosh
(D) Keshav Bharti Vs. Govt. of India                                                                                 Answer.A

As per the rule of Garner v/s Murray, any loss that arises due to being insolvent of any partner should be divided among other partners in their
(A) Profit and loss sharing ratio
(B) Capital ratio
(C) Average of both ratios
(D) None of these
Anawer.B

The first auditors of the company are appointed-                                                                                            (A) By the Government
(B) By the Board of Directors
(C) ln the Statutory Meeting
(D) By the Shareholder having largest amount of capital invested in the company                                          Answer.B

ln the absence of any other agreement, the interest on the capital of partners-                                                  (A) ls not paid
(B) Is paid at bank rate if profit is available
(C) @ 6% profit or no profit
(D) @ 6% only if profit available                                                                                                             Answer.A

A partner of a firm has gone insolvent. The loss so caused according to Indian Partnership Act will be shared by solvent partners-                                                                                                                                         (A) Equally
(B) Profit Sharing Ratio
(C) Capital Ratio
(D) Agreement Basis                                                                                                                          Answer.B

On the death of a partner the amount of joint life insurance policy should be credited to the Capital A/ c of-                                                                                                                    (A) All partners (including deceased one) in their profit sharing ratio
(B) Remaining partners in their old profit sharing ratio
(C) Remaining partners equally
(D) All partners (including deceased) in their capital ratio                                                                        Answer.A

As per Indian Companies Act, 1956 the Balance Sheet of a Company shall be drawn in                                        (A) Horizontal order only        
(B) Vertical order only
(C) Either horizontal or vertical
(D) Horizontal and vertical both

Answer.C

Auditor submits his report to-                                                                                                                        (A) Chief Executive Officer of company
(B) Creditors of the company
(C) Shareholders of the company
(D) Company Registrar                                                                                                                               Answer.C

“Stock taking is not the liability of auditor”. ln which of the following cases was this decided ?                              (A) Kingston Cotton Mill Co. Ltd.
(B) The Westminster Road Construction and Engineering Co. Limited
(C) London and General Bank
(D) None of the above                                                                                                                                    Answer.A

Clauses of the Articles of Association can be altered-                                                                                          (A) By ordinary resolution in an Ordinary General Meeting
(B) By special resolution in the General Meeting
(C) By ordinary resolution in an Extraordinary General Meeting
(D) By special resolution in an Extraordinary General Meeting                                                                       Answer.B

Minutes should be signed by                                                                                                                         (A) Chairperson of the meeting
(B) Company Secretary
(C) Chairperson and Secretary both
(D) All members present in the meeting                                                                                                       Answer.C

lf a partner introduces additional capital over and above his normal share or gives loans to the firm he is entitled to get interest per annum at the rate of–                                                                                                           (A) 9%
(B) 6%
(C) 12%        
(D) Bank rate                                                                                                                                             Answer.B

Under which Section of Companies Act, has the remuneration Of the Auditor been discussed?   (A) Section 224(2)
(B) Section 224(8)
(C) Section 225
(D) Section 231
Answer.B

Working papers which contain a record of the audit work done, are the property of-
(A) The company
(B) The auditor
(C) The company and the auditor both
(D) The Company Law Board
Answer.B

The subsidiary voucher produced in the absence of primary voucher is called-
(A) General voucher
(B) Note-book voucher
(C) Counterfoil
(D) Collateral voucher
Answer.D

In how many days from the registration, the first Auditor of the company be appointed?
(A) 10                                                                                                                                                            (B) 20
(C) 30                                                                                                                                                          (D) 60
Answer.C

The main objective of Auditing 154
(A) To detect errors and fraud
(B) To prevent errors and fraud
(C) To find out accuracy, completeness and validity of accounts and documents
(D) All of these
Answer.C

Internal Auditor can be removed by the
(A) Management
(B) Shareholders
(C) Statutory Auditor
(D) Government
Answer.A

In his report the Auditor gives his-
(A) judgment
(B) Opinion
(C) Guarantee to correctness of accounts
(D) All of these
Answer.B

According to Section 227(1) of the Companies Act, 1956, the Auditor does not have the right—
(A) To sign the Audit Report
(B) To see the books, accounts and vouchers of die company
(C) To obtain information and explanation
(D) To correct any wrong statement
Answer.D