1. Which of the following is not purpose of capital expenditure

A) For acquiring fixed assets
B) For maintaining the fixed assets
C) For making additions/ enhancements to the existing fixed assets
D) Minimizing cost of production



2. Vendors should be approved by Management before purchase department executes an order, if this is not done, then which of the following situation may arise:

A) Purchases could be made from vendors whose product quality may not be good
B) Purchases may be made from related parties without managementâ??s knowledge
C) Purchase could be made from vendors who sells goods at excessive price
D) All of the above



3. Which of the following factor should be considered for examining validity of transactions

A) Transactions should be take place in compliance with terms and conditions of the agreement, if any
B) If there legal requirements, transaction should take place in compliance with legal requirements
C) Transactions should take place in compliance with internal rules and regulations
D) All of the above.



4. The creditorâ??s accounts, generally, have credited balance. Debit balance may be due to

A) Advance paid against an order
B) Goods returned
C) Wrong debit to supplier account
D) Any of the above



5. During the course of audit of intangible assets, expenditure incurred during following phase is generally not capitalized:

A) Development phase
B) Research phase
C) None of the above
D) Both (a) & (b)