MCQs on Vouching and verification: A compilation

In this post, we have provided various multiple-choice questions (MCQs) on vouching and verification.

Vouching is also called the acid test of an audit. It verifies the accuracy and authenticity of the transactions recorded in the books of account. It is the examination of documentary evidence in order to determine that they substantiate the entries in the books of account.

When it comes to examining assets and liabilities, the process is termed “verification”. Verification is done to check whether the assets & liabilities shown in the Balance Sheet are related to the business of the client, belong to the company, exist in reality, and are properly authorized. In the process, their correct value is also ascertained.

Given below are the MCQs on vouching and verification. Both knowledge-based, as well as application-based MCQs, are included here.

MCQs on Vouching and verification

1. When an auditor inspects documentary evidence in support of a transaction, it is called:

A) Verification

B) Vouching

C) Test checking

D) Valuation

Answer: B) Vouching


2. The primary objective of vouching of transactions is:

A) To prepare the Trial Balance

B) To carry out the exercise of routine checking

C) Checking of accounting vouchers

D) To examine the authenticity and authority of transactions

Answer: D) To examine the authenticity and authority of transactions


3. Valuation is the basis of which of the following?

A) Vouching

B) Marketing

C) Verification

D) Internal checking

Answer: C) Verification


4. Which of the following is not a part of the balance sheet audit?

A) Verification of assets & liabilities

B) Vouching of income and expense accounts related to assets and liabilities

C) Routine checking

D) Scrutiny of adjustment entries and closing entries

Answer: C) Routine checking


5. Verification of assets is related to which of the following?

A) Physical inspection of assets

B) Verifying the legal and official documents of ownership and possession

C) Checking the classification of assets and their valuation

D) All of the above

Answer: D) All of the above


6. Verification deals with _____________.

A) Recording of business transactions in the books of account

B) Routine examination of books of account

C) Establishing the accuracy of entries made in the books of account

D) None of the above

Answer: D) None of the above


7. _______________ is said to be the essence of auditing.

A) Vouching

B) Verification

C) Internal check

D) None of the above

Answer: A) Vouching


8. Vouching is a form of examination that uses documentary evidence to prove the correctness of an entry in the books of account; however, the auditor should not go beyond the books of account for this purpose.

A) The statement is correct

B) The statement is false

C) The auditor may or may not go beyond the books of account

D) It is immaterial

Answer: B) The statement is false (The auditor should go to the very source of the transaction.)


9. _____________ cannot reveal serious discrepancies, errors of principle and carefully planned frauds. But vouching can.

A) Test checking

B) Detailed checking

C) Routine checking

D) None of the above

Answer: C) Routine checking


10. Which amongst the below documents is not a kind of voucher?

A) Copies of sales invoices

B) Purchase invoices

C) Cash memos

D) None of the above

Answer: D) None of the above


11. While vouching for cash receipts, the auditor should evaluate the system of Internal Check operating in the entity.

A) The statement is correct

B) The statement is false

C) It is left to the auditor to decide whether to study the system or not

D) It is immaterial

Answer: A) The statement is correct


12. Chances of fraud are ___________ in the case of cash sales.

A) Not at all

B) Minimum

C) Maximum

D) None of the above

Answer: C) Maximum (Because the salesmen may sell the goods and misappropriate the money collected. Therefore, an effective internal check system must be in place.)


13. While vouching receipts from debtors, the auditor need not take care of:

A) Amounts written off as bad debts

B) Discount allowed to customers

C) Depreciation charged

D) Counterfoils of receipts issued to customers and cash book

Answer: C) Depreciation charged


14. The documents that an auditor should check while vouching and verifying land and building are:

A) Lease deeds

B) Broker’s note

C) Architect’s certificates

D) All of the above

Answer: D) All of the above

MCQs on vouching and verification continued on next page……..

Ruchi Gandhi

The author enjoys to write informational content in the domain of company law and allied laws. She takes interest in doing thorough and analytical research on legal topics. She is a CA along with MBA (Fin) and M. Com.

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