Introduction to Auditing: Financial Statements and Users

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10 Questions

Which type of error occurs due to wrong allocation between capital and revenue expenditure?

Errors of Principle

What type of error is committed by not recording a transaction either in the book of original entry or in the ledger book?

Error of Omission

What are errors of duplication primarily caused by?

Double posting of a transaction from journal to ledger

What is the term for two or more errors which mutually compensate the effects of one another?

Compensating Errors

What is the term for errors committed while recording or posting a transaction, such as posting wrong amounts or posting on the wrong side?

Error of Commission

What is the primary objective of auditing?

To express an opinion on the true and fair view of the financial position and results

According to Prof. L.R. Dicksee, how does he define auditing?

An examination of accounting records to correctly and completely reflect transactions

What are the secondary/Incidental objects of auditing?

Examination of internal controls to avoid errors and frauds

What is the definition of auditing according to International Auditing Guidelines?

An independent examination of financial information with a view to expressing an opinion

What are the different types of errors in accounting?

Errors of Principle, Casting Error, Compensating Error, Posting Error

This quiz covers the basics of financial statements and introduces the concept of auditing. It discusses the users of financial statements and provides an explanation of auditing according to Prof. L.R. Dicksee.

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