Myanmar Accountancy Council Diploma in Accountancy Part II Examination (MAC)

A sole trader keeps incomplete records. Opening capital was 20,000,000 MMK, closing capital was 32,000,000 MMK, drawings were 5,000,000 MMK, and additional capital introduced during the year was 3,000,000 MMK. What profit is derived from the capital-comparison method?

• A14,000,000 MMK
• B12,000,000 MMK
• C10,000,000 MMK
• D20,000,000 MMK

A receivables control account opens with 8,000,000 MMK. Credit sales are 30,000,000 MMK; cash received is 25,000,000 MMK; sales returns are 1,000,000 MMK; and discounts allowed are 500,000 MMK. What is the closing receivables balance?

• A11,500,000 MMK
• B12,500,000 MMK
• C13,500,000 MMK
• D4,500,000 MMK

A sole trader reports sales of 50,000,000 MMK, opening inventory of 5,000,000 MMK, purchases of 32,000,000 MMK, carriage inward of 1,000,000 MMK, and closing inventory of 8,000,000 MMK. What are cost of goods sold and gross profit?

• ACOGS 30,000,000 MMK; gross profit 20,000,000 MMK
• BCOGS 38,000,000 MMK; gross profit 12,000,000 MMK
• CCOGS 29,000,000 MMK; gross profit 21,000,000 MMK
• DCOGS 40,000,000 MMK; gross profit 10,000,000 MMK

A consignor sends 1,000 units costing 10,000,000 MMK and pays 2,000,000 MMK freight to bring them to the consignee. If 200 units remain unsold, what is closing consignment inventory before any abnormal loss?

• A2,400,000 MMK
• B2,000,000 MMK
• C1,600,000 MMK
• D12,000,000 MMK

Two venturers share profit equally. Goods used in their joint venture cost 24,000,000 MMK, direct venture expenses are 4,000,000 MMK, and all venture goods are sold for 40,000,000 MMK. What profit is credited to each venturer?

• A6,000,000 MMK
• B12,000,000 MMK
• C8,000,000 MMK
• D20,000,000 MMK

A construction contract certifies work of 60,000,000 MMK. The contract permits an immediate payment of 90% of work certified, with the balance retained by the customer. What cash becomes due and what retention remains?

• ACash due 54,000,000 MMK; retention 6,000,000 MMK
• BCash due 60,000,000 MMK; retention nil
• CCash due 6,000,000 MMK; retention 54,000,000 MMK
• DCash due 48,000,000 MMK; retention 12,000,000 MMK

A branch receives goods invoiced by head office at cost plus 25%. Closing branch stock at invoice price is 5,000,000 MMK. What are its cost and the unrealized loading included in that stock?

• ACost 4,000,000 MMK; loading 1,000,000 MMK
• BCost 3,750,000 MMK; loading 1,250,000 MMK
• CCost 5,000,000 MMK; loading nil
• DCost 6,250,000 MMK; loading 1,250,000 MMK

Equipment has a cash price of 20,000,000 MMK under a hire-purchase agreement. The buyer pays a 5,000,000 MMK deposit, and interest for the first year is 10% of the opening outstanding cash price. What is first-year interest?

• A1,500,000 MMK
• B2,000,000 MMK
• C500,000 MMK
• D15,000,000 MMK

An entity holds 10% debentures with a face value of 10,000,000 MMK for a full year. Ignoring tax, how much interest income accrues for the year?

• A1,000,000 MMK
• B100,000 MMK
• C9,000,000 MMK
• D10,000,000 MMK

A bill of exchange dated 1 January is payable three months after date. Allowing the customary three days of grace and assuming no public holiday changes the date, when does it mature?

• A4 April
• B1 April
• C3 April
• D4 March

A non-profit organization received 12,000,000 MMK of subscriptions in cash. Outstanding subscriptions were 1,000,000 MMK at the start and 1,500,000 MMK at the end; subscriptions received in advance were 500,000 MMK at the start and 800,000 MMK at the end. What subscription income belongs to the year?

• A12,200,000 MMK
• B11,800,000 MMK
• C12,800,000 MMK
• D13,200,000 MMK

Which cost is most appropriately charged directly to a seasonal crop account in agricultural accounting?

• ASeeds, fertilizer, and direct field labor used for that crop
• BThe proprietor's personal household expenditure
• CThe purchase price of permanent farmland
• DA dividend paid to the owner's family

A machine cost 10,000,000 MMK and has accumulated depreciation of 6,000,000 MMK when sold for 3,000,000 MMK. What disposal result should the asset records show?

• ALoss on disposal of 1,000,000 MMK
• BProfit on disposal of 1,000,000 MMK
• CLoss on disposal of 3,000,000 MMK
• DNo profit or loss

A payables control account opens at 4,000,000 MMK and closes at 6,000,000 MMK. Payments to suppliers were 18,000,000 MMK and purchase returns were 1,000,000 MMK. What were credit purchases for the period?

• A21,000,000 MMK
• B19,000,000 MMK
• C23,000,000 MMK
• D15,000,000 MMK

Under corporate accounting principles and the Myanmar Companies Law 2017, what is an absolute statutory prerequisite before any company can proceed to redeem its redeemable preference shares?

• AThe shares must have been issued at least five years prior to the redemption date
• BThe company must obtain explicit approval from the Myanmar Union Parliament
• CThe redeemable preference shares must be fully paid-up prior to redemption
• DThe redemption must be financed exclusively through the proceeds of an issue of debentures

How is interest payable on debentures classified and treated in corporate financial accounting?

• AAn appropriation of distributable profits payable only when approved at the Annual Genera…
• BA charge against profit that must be paid regardless of whether the company makes a profi…
• CA direct debit to retained earnings recorded only if the company achieves positive cash f…
• DA contingent payment dependent upon the recommendation of the Board of Directors

When a shareholder remits money to a company in advance of a call being formally made, how should this 'Calls-in-Advance' balance be presented in the company's financial statements?

• AAdded to the Paid-up Share Capital figure on the face of the balance sheet
• BPresented as a current liability under other financial liabilities until the call becomes…
• CCredited directly to the General Reserve Account as non-distributable equity
• DTreated as an offset against trade receivables

What is the primary overarching objective of an independent statutory audit of financial statements conducted under International Standards on Auditing (ISA)?

• ATo discover and prevent every instance of fraud and clerical error within the entity
• BTo certify with 100% mathematical certainty that the books of account are error-free
• CTo obtain reasonable assurance that the financial statements as a whole are free from mat…
• DTo assess the commercial wisdom and future profitability of management's operational deci…

Which of the following best describes why an independent auditor cannot provide absolute assurance regarding the accuracy of financial statements?

• AAuditors are legally forbidden from inspecting original paper invoices and vouchers
• BInherent limitations of an audit, including selective sampling, management estimates, int…
• CAudit engagements must be completed within 48 hours following the balance sheet date
• DThe auditor's professional liability insurance explicitly disallows comprehensive testing

Under the Myanmar Companies Law 2017, what statutory right does an auditor possess regarding access to the records of the company being audited?

• ARight of access only during normal office hours upon giving 14 days' written notice to th…
• BRight of access at all times to the books, accounts, and vouchers of the company, and rig…
• CRight of access restricted strictly to the general ledger and audited tax filings
• DRight of access conditional upon obtaining prior written authorization from the Directora…

Which of the following individuals is legally disqualified from appointment as the statutory auditor of a company under corporate governance legislation and ethical standards?

• AA qualified certified public accountant who owns zero shares in the company
• BAn independent external audit practitioner who previously audited a competing enterprise
• CA person who is an officer or employee of the company, or a partner or employee of such o…
• DA registered audit firm that has operated in Myanmar for less than ten years

In the context of audit planning under ISA 320, how is 'Performance Materiality' defined and what is its operational purpose?

• AThe overall profit target established by management to evaluate executive bonuses
• BThe amount set by the auditor at less than financial statement materiality to reduce the…
• CThe total monetary value of all misstatements uncovered during the previous financial yea…
• DThe maximum audit fee that an auditor can bill based on staff hours worked

According to the Audit Risk Model (Audit Risk = Inherent Risk * Control Risk * Detection Risk), if an auditor assesses the Risk of Material Misstatement (Inherent Risk * Control Risk) as high, how must the auditor respond regarding Detection Risk and substantive procedures?

• AAccept a higher detection risk and reduce substantive testing to save audit costs
• BSet acceptable detection risk lower and increase the nature, timing, and extent of substa…
• CMaintain detection risk unchanged and rely entirely on management's representation letter
• DIncrease materiality to eliminate the necessity of performing substantive tests

Under the COSO Internal Control Integrated Framework and ISA 315, which component of internal control establishes the 'tone at the top' and provides the foundational discipline for all other control elements?

• AInformation and Communication
• BControl Environment
• CMonitoring of Controls
• DControl Activities

What is the key theoretical and operational distinction between 'Tests of Controls' and 'Substantive Procedures' in financial statement auditing?

• ATests of controls are performed by internal auditors, while substantive procedures are pe…
• BTests of controls evaluate the operating effectiveness of controls in preventing or detec…
• CTests of controls evaluate the balance sheet, while substantive procedures evaluate the c…
• DTests of controls are conducted only after the final audit report has been issued

While testing a Myanmar entity's bank balance under ISA 500, which form of evidence would generally give the auditor the greatest reliability?

• AOral representations obtained from the client's internal accounting staff
• BPhotocopies of sales invoices generated and retained internally by the client
• CDirect external documentary confirmation received by the auditor directly from an indepen…
• DAn unverified computer spreadsheet prepared by the client's credit manager

An auditor applies a procedure to a sample of payment vouchers rather than the entire population. Under ISA 530, which description captures the resulting sampling risk?

• AThe risk that the auditor selects an inappropriate mathematical formula to calculate audi…
• BThe risk that the auditor's conclusion based on a sample may be different from the conclu…
• CThe risk that the audit team misplaces physical working papers during field visits
• DThe risk that the client's accounting software crashes during sample extraction

What is the primary difference in scope between 'Vouching' and 'Verification' in auditing practice?

• AVouching examines the authorization and documentary support of book entries of transactio…
• BVouching is restricted to computerized systems, whereas verification applies only to manu…
• CVouching evaluates post-balance-sheet events, whereas verification evaluates opening bala…
• DVouching is performed exclusively on revenue reserves, whereas verification is performed…

In the audit of cash transactions, what fraud scheme is described by 'Teeming and Lading' (also known as lapping), and how can the auditor best detect it?

• AIssuing duplicate cheques to fictitious vendors; detected by checking bank reconciliation…
• BMisappropriating a customer's cash receipt and concealing the shortage by crediting that…
• CForging payroll signatures of terminated workers; detected by physical inspection of fact…
• DInflating petty cash vouchers for personal travel; detected by counting physical petty ca…

Under ISA 501, when inventory is material to the financial statements, what mandatory audit procedure must the auditor perform regarding the verification of inventory existence?

• AObtain an unverified written confirmation letter from the warehouse supervisor and accept…
• BAttend the physical inventory count to inspect the inventory, observe compliance with man…
• CRely entirely on the client's automated inventory valuation report without visiting physi…
• DConduct a comprehensive 100% count of all inventory items personally without client parti…

During the audit of property, plant, and equipment, an enterprise states that title deeds for its factory land in an industrial zone in Yangon are pledged with a commercial bank as collateral for credit facilities. How should the auditor verify ownership and existence of these title deeds?

• AAssume the deeds exist without further inquiry because banks only lend against valid coll…
• BObtain a direct written certificate from the bank confirming that it holds the original t…
• CDemand that the bank immediately surrender the original title deeds to the auditor's offi…
• DRely solely on an oral statement provided by the company's chief financial officer

What primary substantive audit procedure is conducted during the verification of trade liabilities to test the 'Completeness' assertion (the search for unrecorded liabilities)?

• AVouching debit balances in the sales ledger to dispatch notes
• BInspecting cash disbursements, receiving reports, and vendor invoices recorded after the…
• CRecalculating depreciation rates applied to manufacturing machinery
• DConfirming that total share capital does not exceed authorized capital in the constitution

When an auditor concludes that financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework, what type of audit opinion is issued?

• AUnmodified (Clean) opinion
• BQualified opinion
• CAdverse opinion
• DDisclaimer of opinion

Under ISA 705, which modified audit opinion must an auditor express when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are BOTH material and pervasive to the financial statements?

• AQualified opinion with an Emphasis of Matter paragraph
• BAdverse opinion
• CDisclaimer of opinion
• DUnmodified opinion with a Key Audit Matter disclosure

In a manufacturing enterprise operating during an inflationary environment with steadily rising material prices, which inventory pricing method will result in the lowest cost of goods sold and consequently the highest reported net profit and ending inventory valuation?

• ALast-In, First-Out (LIFO)
• BFirst-In, First-Out (FIFO)
• CWeighted Average Cost Method
• DStandard Costing Method

A production plant in Mandalay holds an opening raw material stock of 100 units at 1,000 MMK per unit. On 10 October, it purchases 200 units at 1,300 MMK per unit. On 15 October, the factory issues 150 units to production Job #401. Using the Periodic Weighted Average Cost method, what is the valuation of the ending inventory of 150 units remaining in store?

• A150,000 MMK
• B180,000 MMK
• C195,000 MMK
• D165,000 MMK

A manufacturing firm requires 10,000 units of component X annually. The cost to place a single purchase order is 5,000 MMK, and the annual inventory carrying/holding cost per unit is 100 MMK. Applying the Economic Order Quantity (EOQ) model, what is the optimal order quantity?

• A500 units
• B1,000 units
• C1,414 units
• D2,000 units

In storekeeping and inventory control, how is the 'Reorder Level' (ordering point) determined when consumption rates and lead times fluctuate?

• AMinimum consumption * Minimum lead time
• BAverage consumption * Average lead time
• CMaximum consumption * Maximum lead time
• DSafety stock + (Minimum consumption * Maximum lead time)

A factory consumes raw material Alpha with the following parameters: Maximum consumption = 400 units/day; Normal consumption = 300 units/day; Minimum consumption = 200 units/day; Maximum lead time = 8 days; Normal lead time = 6 days; Minimum lead time = 4 days; Reorder Quantity = 2,000 units. What is the calculated Minimum Stock Level (safety buffer)?

• A1,400 units
• B1,800 units
• C3,200 units
• D1,200 units

How is the bonus wage under the standard Halsey Premium Plan calculated when a worker completes a job in less than the standard time allowed?

• ABonus = Time Saved * Hourly Wage Rate
• BBonus = 50% * Time Saved * Hourly Wage Rate
• CBonus = (Time Saved / Standard Time) * Actual Time Taken * Hourly Wage Rate
• DBonus = (Actual Time Taken / Standard Time) * 50% * Total Standard Cost

Under the Rowan Premium Scheme, a technician is assigned a standard time of 10 hours to assemble an equipment unit. The technician completes the task in 8 hours. The basic hourly wage rate is 1,500 MMK per hour. What are the total earnings (basic wage plus bonus) earned by the technician for this job?

• A12,000 MMK
• B13,500 MMK
• C14,400 MMK
• D15,000 MMK

In the primary apportionment of factory overheads, which of the following is the most appropriate and equitable basis for apportioning factory canteen and staff welfare expenses across production and service cost centers?

• AFloor space occupied by each department in square meters
• BBook value of machinery installed in each department
• CNumber of employees (headcount) in each department
• DDirect machine hours logged by each department

When service departments render reciprocal services to one another in addition to serving production departments, which method of secondary overhead distribution fully recognizes this mutual inter-dependence using simultaneous algebraic equations?

• ADirect Re-apportionment Method
• BStep-Down (Sequential) Method
• CReciprocal Allocation (Simultaneous Equation) Method
• DPrime Cost Allocation Method

A production department budgeted factory overheads at 12,000,000 MMK based on an estimated activity level of 6,000 direct machine hours. During the year, the department actually operated 6,200 machine hours and incurred actual production overheads of 12,600,000 MMK. What was the overhead under- or over-absorption for the period?

• A200,000 MMK under-absorbed
• B200,000 MMK over-absorbed
• C600,000 MMK under-absorbed
• D400,000 MMK over-absorbed

When a significant portion of under-absorbed overhead at the close of an accounting year is caused by abnormal factors, such as an extended major plant shutdown or catastrophic equipment failure, what is the required cost accounting treatment?

• ACarried forward to next year's statement of financial position as an intangible deferred…
• BCharged to the Costing Profit and Loss Account as an abnormal period loss
• CDistributed across closing inventory and cost of goods sold using a supplementary overhea…
• DDebited to the Factory Equipment Asset Account to increase machinery carrying value

In batch costing, what fundamental cost trade-off is balanced by the Economic Batch Quantity (EBQ) formula?

• ADirect material costs versus direct labor wage rates
• BMachine setup and preparation costs per batch versus inventory carrying and holding costs
• CFactory rent versus administrative selling expenses
• DTransportation freight-in costs versus export duties