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

A sole trader keeps incomplete records. For the financial year, trade receivables were MMK 4,200,000 at the beginning and MMK 5,800,000 at the end. During the year, cash and cheques received from credit customers amounted to MMK 36,400,000, discounts allowed were MMK 600,000, and bad debts written off were MMK 400,000. Cash sales banked were MMK 8,500,000. What is the total sales figure for the year?

• AMMK 47,500,000
• BMMK 39,000,000
• CMMK 46,500,000
• DMMK 48,500,000

A business maintaining single-entry records shows trade payables of MMK 3,100,000 on 1 January and MMK 2,700,000 on 31 December. Payments made to trade suppliers during the year totaled MMK 21,800,000, discounts received were MMK 500,000, and returns outward were MMK 900,000. Cash purchases of merchandise were MMK 4,200,000. What were the total purchases for the year?

• AMMK 22,800,000
• BMMK 27,000,000
• CMMK 25,600,000
• DMMK 28,400,000

Under the statement of affairs (capital comparison) method for incomplete records, a trader's net assets were MMK 18,000,000 on 1 January and MMK 26,500,000 on 31 December. During the year, the trader introduced MMK 4,000,000 of fresh capital and withdrew MMK 6,500,000 for personal living expenses. What was the net profit for the year?

• AMMK 6,000,000
• BMMK 8,500,000
• CMMK 11,000,000
• DMMK 16,000,000

A retail shop suffered a burglary where cash was stolen. Opening cash in hand was MMK 450,000. During the month, cash takings from customers totaled MMK 14,800,000. Verified cash disbursements were: wages MMK 3,200,000, direct payments to suppliers MMK 4,600,000, owner's cash drawings MMK 1,500,000, and cash banked MMK 5,000,000. The remaining cash counted in the till by investigators was MMK 150,000. How much cash was stolen?

• AMMK 650,000
• BMMK 800,000
• CMMK 950,000
• DMMK 1,100,000

A firm's Sales Ledger Control Account shows a debit balance of MMK 15,400,000. On investigation, two errors are identified: a customer's dishonoured cheque of MMK 350,000 was debited in the cash book but not posted to the control account, and a sales invoice of MMK 480,000 was entered in the sales daybook as MMK 840,000. What is the corrected Sales Ledger Control Account balance?

• AMMK 15,390,000
• BMMK 16,110,000
• CMMK 14,690,000
• DMMK 15,750,000

A trader has a business partner who is both a credit customer and a credit supplier. The parties agree to set off an agreed mutual balance of MMK 750,000 between the sales ledger and the purchase ledger. What is the correct journal entry to record this contra settlement in the general ledger control accounts?

• ADebit Purchases Ledger Control Account MMK 750,000; Credit Sales Ledger Control Account M…
• BDebit Sales Ledger Control Account MMK 750,000; Credit Purchases Ledger Control Account M…
• CDebit Bank Account MMK 750,000; Credit Sales Ledger Control Account MMK 750,000
• DDebit Purchases Ledger Control Account MMK 750,000; Credit Bank Account MMK 750,000

At year-end, a sole trader has trade receivables of MMK 18,500,000 before adjustments. A specific debt of MMK 500,000 is irrecoverable and must be written off immediately. The trader maintains an allowance for doubtful debts at 5% of remaining receivables. The existing allowance brought forward from the prior period is MMK 600,000. What is the total net charge to the profit and loss account for bad and doubtful debts?

• AMMK 300,000
• BMMK 500,000
• CMMK 800,000
• DMMK 1,400,000

A business paid MMK 3,600,000 for rent on 1 October for the twelve months ending 30 September of the following year. At the financial year-end on 31 December, what are the rent expense to be charged in the income statement and the prepaid rent shown in the statement of financial position?

• ARent expense MMK 900,000; Prepaid rent MMK 2,700,000
• BRent expense MMK 2,700,000; Prepaid rent MMK 900,000
• CRent expense MMK 3,600,000; Prepaid rent MMK 0
• DRent expense MMK 1,200,000; Prepaid rent MMK 2,400,000

In consignment transactions, what is the legal and accounting significance of a pro-forma invoice sent by the consignor to the consignee?

• AIt represents a legally enforceable sales invoice creating an immediate debtor balance in…
• BIt is an informational memorandum detailing description, quantity, and indicative selling…
• CIt is a formal debit note demanding immediate reimbursement of all forwarding freight cha…
• DIt represents an account sales documenting net revenue received after deducting agent com…

A consignor sends 500 cases of goods costing MMK 80,000 per case, incurring freight of MMK 2,500,000 and transit insurance of MMK 1,500,000. The consignee incurs unloading charges of MMK 500,000, godown rent of MMK 1,200,000, and advertising of MMK 800,000. If 100 cases remain unsold at year-end, what is the value of the closing consignment inventory?

• AMMK 8,000,000
• BMMK 8,900,000
• CMMK 9,300,000
• DMMK 9,100,000

A consignor forwards 1,000 crates of glassware costing MMK 30,000 each and pays transport of MMK 2,000,000. During transit, 100 crates are completely destroyed by an accident. The insurance company admits an indemnity claim of MMK 2,400,000. What is the net abnormal loss to be debited to the General Profit and Loss Account?

• AMMK 600,000
• BMMK 800,000
• CMMK 3,200,000
• DMMK 0

When a consignor pays an agreed del credere commission to the consignee, who bears the loss arising from bad debts on credit sales, and how is it reflected in the consignor's books?

• AThe consignee bears the loss; no entry for bad debts is made in the consignor's Consignme…
• BThe consignor bears the loss; bad debts are debited to the Consignment Account
• CThe bad debt loss is shared equally between consignor and consignee in the Profit and Los…
• DThe consignee debits the bad debt directly to the consignor's personal ledger account

Co-venturers Ko Aye and Ko Hla enter into a joint venture sharing profits in the ratio 3:2, opening a separate Joint Bank Account. Ko Aye contributes MMK 12,000,000 and Ko Hla contributes MMK 8,000,000. Venture goods costing MMK 15,000,000 and venture expenses of MMK 2,000,000 are paid from the Joint Bank Account. All goods are sold for MMK 23,000,000 and deposited into the Joint Bank Account. What is Ko Aye's share of profit, and what final cash amount will Ko Aye receive on venture closure?

• AProfit share MMK 3,600,000; Final settlement MMK 15,600,000
• BProfit share MMK 2,400,000; Final settlement MMK 10,400,000
• CProfit share MMK 3,000,000; Final settlement MMK 15,000,000
• DProfit share MMK 3,600,000; Final settlement MMK 12,000,000

In joint venture accounting where no separate joint books are maintained and each co-venturer records only their own transactions, what is the role and nature of the Memorandum Joint Venture Account?

• AIt is a formal double-entry ledger account maintained in each party's primary general led…
• BIt is an informal non-ledger worksheet combining all venture transactions of all co-ventu…
• CIt is a legally required statutory document submitted to company registrars
• DIt is an audited bank statement reconciling joint venture deposits with personal withdraw…

Daw Nu and Daw Win participate in a joint venture without a separate bank account, sharing profits equally. Daw Nu bought merchandise for MMK 14,000,000 and incurred expenses of MMK 1,000,000. Daw Win paid transport of MMK 600,000 and sold all goods for MMK 20,000,000, receiving all proceeds. How much cash must Daw Win pay to Daw Nu to effect final venture settlement?

• AMMK 15,000,000
• BMMK 17,200,000
• CMMK 17,800,000
• DMMK 19,400,000

A contractor undertakes a construction project for a contract price of MMK 120,000,000. At year-end, the architect certifies work valued at MMK 80,000,000. The contract specifies a retention money clause of 10% on work certified. Work completed but uncertified at cost amounts to MMK 5,000,000. What is the cash received from the contractee and what total work-in-progress value is credited to the Contract Account?

• ACash received MMK 72,000,000; Total WIP MMK 85,000,000
• BCash received MMK 80,000,000; Total WIP MMK 85,000,000
• CCash received MMK 72,000,000; Total WIP MMK 80,000,000
• DCash received MMK 76,500,000; Total WIP MMK 85,000,000

A long-term contract has a contract price of MMK 100,000,000. At the end of year 1, work certified is MMK 60,000,000 (60% completion), work uncertified is MMK 4,000,000, and total costs incurred to date are MMK 46,000,000. Cash received from the client is 80% of work certified. Under the conservative contract accounting convention for contracts 50% to 90% complete, profit credited to Profit and Loss is calculated as (2/3) * Notional Profit * (Cash Received / Work Certified). What profit should be recognized in Profit and Loss?

• AMMK 9,600,000
• BMMK 12,000,000
• CMMK 14,400,000
• DMMK 18,000,000

A construction contract with a fixed price of MMK 50,000,000 has incurred costs of MMK 32,000,000 to date. Reliable engineering estimates indicate that further costs to complete will be MMK 24,000,000. How should the resulting expected loss be treated under standard construction accounting principles?

• ARecognize the entire expected loss of MMK 6,000,000 immediately as an expense in profit a…
• BDefer recognition of the loss until the project reaches physical completion
• CRecognize only a proportionate loss based on the current percentage of completion
• DCapitalize the anticipated loss as an asset to be amortized over the subsequent operating…

A head office operates a dependent branch using the Debtors Method. At the start of the year, Branch Debtors were MMK 3,500,000 and Branch Stock was MMK 5,000,000. During the year, goods sent to the branch at cost totaled MMK 24,000,000, cash sent for branch operating expenses was MMK 4,000,000, and remittances received from the branch amounted to MMK 31,000,000. At year-end, Branch Debtors are MMK 4,200,000 and Branch Stock is MMK 6,100,000. What is the branch profit for the year?

• AMMK 3,000,000
• BMMK 4,800,000
• CMMK 5,500,000
• DMMK 7,000,000

A head office invoices merchandise to its retail branch at cost plus 25%. During the year, goods sent to the branch at invoice price totaled MMK 25,000,000. At year-end, closing branch stock valued at invoice price was MMK 5,000,000. What is the loading included in goods sent to the branch, and what is the closing stock reserve required to eliminate unrealized profit?

• ALoading on goods sent MMK 5,000,000; Closing stock reserve MMK 1,000,000
• BLoading on goods sent MMK 6,250,000; Closing stock reserve MMK 1,250,000
• CLoading on goods sent MMK 5,000,000; Closing stock reserve MMK 600,000
• DLoading on goods sent MMK 4,000,000; Closing stock reserve MMK 800,000

Under the Stock and Debtors Method of branch accounting, which ledger account is specifically used to record the mark-up (loading) on goods invoiced to the branch and to determine the branch gross profit?

• ABranch Cash Account
• BBranch Adjustment Account
• CBranch Debtors Account
• DGoods Sent to Branch Account

A head office invoices goods to its domestic branch at 25% above cost. The branch's closing inventory includes goods at an invoice price of MMK 6,000,000. What unrealized loading must be removed from group profit?

• AMMK 1,500,000
• BMMK 1,200,000
• CMMK 4,800,000
• DMMK 7,500,000

A transport firm purchases a commercial vehicle on hire purchase on 1 January. The cash price is MMK 30,000,000. An initial deposit of MMK 6,000,000 is paid immediately, and the balance is settled in three annual installments of MMK 10,000,000 each. What is the total hire purchase interest, and what is the hire purchase price?

• ATotal interest MMK 6,000,000; Hire purchase price MMK 36,000,000
• BTotal interest MMK 4,000,000; Hire purchase price MMK 34,000,000
• CTotal interest MMK 10,000,000; Hire purchase price MMK 40,000,000
• DTotal interest MMK 6,000,000; Hire purchase price MMK 30,000,000

Under the full cash price method of hire purchase accounting in the buyer's books, at what initial value is the acquired asset recorded at the date of agreement?

• AAt the full cash price of the asset
• BAt the total hire purchase price including all future finance charges
• CAt the amount of the initial cash down payment only
• DAt the discounted net salvage value of the asset

A hire vendor sold equipment with a cash price of MMK 20,000,000. After paying installments totaling MMK 12,000,000, the hirer defaulted. The vendor repossessed the equipment, valuing it at MMK 9,000,000 on the repossession date. Just before repossession, the hirer's ledger balance was MMK 11,000,000. The vendor incurred MMK 500,000 on reconditioning and sold it for MMK 11,200,000. What was the loss on repossession and the profit on subsequent resale in the vendor's books?

• ALoss on repossession MMK 2,000,000; Profit on resale MMK 1,700,000
• BLoss on repossession MMK 1,000,000; Profit on resale MMK 2,200,000
• CLoss on repossession MMK 2,000,000; Profit on resale MMK 1,200,000
• DGain on repossession MMK 1,000,000; Profit on resale MMK 1,700,000

On 1 April, an investor purchases 1,000 12% Government Bonds of face value MMK 10,000 each (total nominal value MMK 10,000,000) at MMK 10,500 each cum-interest. Interest on the bonds is payable half-yearly on 30 June and 31 December. What amounts should be entered in the Interest column and the Capital (Cost) column of the Investment Account on acquisition?

• AInterest column MMK 300,000; Capital column MMK 10,200,000
• BInterest column MMK 0; Capital column MMK 10,500,000
• CInterest column MMK 600,000; Capital column MMK 9,900,000
• DInterest column MMK 300,000; Capital column MMK 10,500,000

An investor holds 500 10% debentures of MMK 10,000 face value each, carried on the books at a cost of MMK 4,900,000. On 1 November, the investor sells all 500 debentures at MMK 10,200 each ex-interest. What is the net capital consideration received and the gain or loss on disposal?

• ACapital proceeds MMK 5,100,000; Gain on disposal MMK 200,000
• BCapital proceeds MMK 4,683,333; Loss on disposal MMK 216,667
• CCapital proceeds MMK 5,516,667; Gain on disposal MMK 616,667
• DCapital proceeds MMK 5,000,000; Gain on disposal MMK 100,000

When an investor receives fully paid bonus shares on equity shares held as an investment, what is the appropriate accounting recording in the investor's Investment Account?

• AEnter the number of bonus shares in the quantity/nominal column only without extending an…
• BDebit the capital value column with the par value of the bonus shares and credit Dividend…
• CDebit Bank Account and credit Investment Account with the market value of the bonus shares
• DCredit the quantity column and debit Retained Earnings

A bill of exchange with a face value of MMK 6,000,000 is expressly due on 1 June. The holder discounts it with a bank on 1 April at 12% per annum. Using the exact two-month unexpired term stated, what cash is received and what discount expense is incurred?

• ACash received MMK 5,880,000; Discount expense MMK 120,000
• BCash received MMK 5,820,000; Discount expense MMK 180,000
• CCash received MMK 5,940,000; Discount expense MMK 60,000
• DCash received MMK 6,000,000; Discount expense MMK 0

A customer is unable to pay an acceptance of MMK 4,000,000 at maturity. The creditor agrees to cancel the old dishonoured bill, receive MMK 1,000,000 in cash, and draw a renewed bill for the remaining balance plus interest at 12% per annum for 3 months. What is the face value of the renewed bill?

• AMMK 3,000,000
• BMMK 3,090,000
• CMMK 3,120,000
• DMMK 4,090,000

What is the meaning and accounting implication of the term 'retirement of a bill of exchange under rebate'?

• AThe drawee pays the bill prior to its scheduled maturity date, receiving an agreed discou…
• BThe holder writes off the bill as uncollectible following the formal bankruptcy of the dr…
• CThe drawer issues an accommodation bill to finance the drawee's commercial debt
• DThe paying banker returns the bill unpaid due to technical defects in the indorsement

How does a non-profit entity's Receipts and Payments Account differ fundamentally from its Income and Expenditure Account?

• AReceipts and Payments is a summarized cash book recording all actual cash transactions on…
• BReceipts and Payments includes non-cash depreciation, while Income and Expenditure exclud…
• CReceipts and Payments reflects only revenue transactions, while Income and Expenditure re…
• DReceipts and Payments concludes with an accumulated surplus or deficit, while Income and…

A recreational club received MMK 9,500,000 in member subscriptions during the year. Subscription ledger balances were: - Outstanding subscriptions on 1 January: MMK 800,000 - Subscriptions received in advance on 1 January: MMK 500,000 - Outstanding subscriptions on 31 December: MMK 1,100,000 - Subscriptions received in advance on 31 December: MMK 700,000 What subscription income should be recognized in the Income and Expenditure Account?

• AMMK 9,200,000
• BMMK 9,500,000
• CMMK 9,600,000
• DMMK 10,000,000

In non-profit accounting, how are life membership subscriptions received from members normally treated in the financial statements?

• ATreated as capital receipts, credited to a Life Membership Fund or Capital Fund on the ba…
• BCredited immediately and entirely as current revenue income in the Income and Expenditure…
• CRecorded as an operating expenditure item in the Receipts and Payments Account
• DDisclosed solely as an off-balance-sheet contingent liability in the explanatory notes

What is the primary statutory objective of an independent financial statement audit conducted under corporate legislation?

• ATo prevent and detect all instances of operational fraud and minor clerical book-keeping…
• BTo obtain reasonable assurance about whether the financial statements as a whole are free…
• CTo assess managerial commercial effectiveness and formulate corporate growth strategies
• DTo guarantee the ongoing financial viability and absolute future solvency of the enterpri…

How do the reporting line and primary objective of an internal auditor differ from those of an external statutory auditor?

• AThe internal auditor reports to management and the audit committee to evaluate governance…
• BThe internal auditor reports exclusively to external regulatory bodies, whereas the exter…
• CThe internal auditor is appointed directly by company shareholders at the AGM, whereas th…
• DThe internal auditor issues a legally binding public audit certificate, whereas the exter…

Under the Code of Ethics for Professional Accountants, which fundamental ethical principle requires an auditor not to compromise professional or business judgment because of bias, conflict of interest, or undue influence of others?

• AIntegrity
• BObjectivity
• CProfessional competence and due care
• DConfidentiality

An audit partner on an engagement holds a direct material financial investment (shares) in the audit client entity. What category of threat to auditor independence is created?

• AFamiliarity threat
• BAdvocacy threat
• CSelf-interest threat
• DIntimidation threat

What is the structural relationship between the overall audit strategy and the detailed audit plan during audit planning?

• AThe audit plan sets the general scope and direction, while the audit strategy details ind…
• BThe overall audit strategy sets the scope, timing, and direction of the audit, which guid…
• CThe audit strategy is prepared only after the detailed audit plan has been executed in th…
• DThe audit strategy covers compliance with tax statutes, while the audit plan covers book-…

Which of the following documents is correctly classified as part of the Permanent Audit File rather than the Current Audit File?

• ABank confirmation certificates for the current fiscal period
• BCompany Memorandum and Articles of Association (or Constitution) and historical title dee…
• CCurrent year trial balance and audit adjusting entries
• DYear-end inventory count sheets and cutoff testing schedules

Under widely recognized internal control frameworks such as COSO, which core component establishes the tone at the top, influencing the ethical values and control consciousness of company personnel?

• AInformation and communication
• BControl environment
• CControl activities
• DMonitoring of controls

What is considered a significant limitation when an auditor uses a standard pre-printed Internal Control Questionnaire (ICQ) to evaluate a client's control system?

• AIt requires excessive time and graphic design expertise compared to flowcharting
• BStaff may routinely supply affirmative responses without thorough verification, and stand…
• CIt cannot be reviewed or approved by the audit engagement partner
• DIt legally precludes the auditor from performing substantive analytical testing

What is the primary objective of an auditor performing tests of controls during an audit engagement?

• ATo discover dollar-for-dollar misstatements directly in monetary account balances
• BTo evaluate the operating effectiveness of internal controls in preventing, or detecting…
• CTo verify that all corporate income tax filings have been agreed by government tax revenu…
• DTo guarantee that the entity operates at optimal commercial profit margins

In an audit of internal controls, what is the specific purpose of performing a 'walkthrough test' on a transaction cycle?

• ATo conduct a physical tour of all operating plant locations and warehouses
• BTo trace a single transaction from origination through each processing step to its record…
• CTo test a statistical sample of 100 transactions to assess control failure rates
• DTo inspect employee attendance records for payroll authorization

In the audit risk model (Audit Risk = Inherent Risk * Control Risk * Detection Risk), if an auditor assesses the combined Risk of Material Misstatement (Inherent Risk * Control Risk) as high, how must the auditor set acceptable Detection Risk and adjust substantive procedures?

• ASet acceptable Detection Risk high and decrease the extent of substantive testing
• BSet acceptable Detection Risk low and increase the nature, timing, and extent of substant…
• CMaintain Detection Risk at medium and eliminate tests of details
• DSet Detection Risk to zero and issue an immediate disclaimer of opinion

Why does an auditor establish 'performance materiality' at an amount lower than materiality for the financial statements as a whole?

• ATo reduce to an appropriately low level the probability that the aggregate of uncorrected…
• BTo meet statutory minimum audit fee thresholds established by professional accountancy co…
• CTo eliminate the possibility of any undetected fraud occurring within the reporting period
• DTo allow management to deliberately omit minor accounting disclosures

What fundamental characteristic distinguishes statistical audit sampling from non-statistical audit sampling?

• AStatistical sampling involves random item selection and the use of probability mathematic…
• BStatistical sampling requires auditing 100% of high-value population transactions, wherea…
• CStatistical sampling is legally permissible only for publicly listed banking corporations
• DNon-statistical sampling provides mathematical confidence intervals while statistical sam…