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

According to the Conceptual Framework for Financial Reporting, what is the primary objective of general purpose financial reporting?

• ATo provide financial information about the reporting entity that is useful to existing an…
• BTo calculate the definitive taxable income and statutory tax liability payable to the Int…
• CTo verify whether management has complied with all internal operating procedures and empl…
• DTo establish the exact liquidation breakup value of the entity's individual assets in the…

Under the Conceptual Framework for Financial Reporting, which two qualitative characteristics are identified as the fundamental qualitative characteristics of useful financial information?

• AComparability and verifiability
• BRelevance and faithful representation
• CTimeliness and understandability
• DPrudence and historical cost measurement

Which set of qualitative characteristics enhances the usefulness of financial information that is already relevant and faithfully represented?

• AMateriality, conservatism, consistency, and completeness
• BRealization, entity concept, periodicity, and duality
• CComparability, verifiability, timeliness, and understandability
• DGoing concern, accrual basis, substance over form, and prudence

How is an 'asset' defined in the revised Conceptual Framework for Financial Reporting?

• AAny physical item owned with legal title that generated net cash inflows during the prior…
• BA present economic resource controlled by the entity as a result of past events
• CFuture expected cash inflows that management intends to collect from normal business oper…
• DA tangible or intangible expenditure whose historical acquisition invoice has been fully…

Which of the following correctly distinguishes the historical cost measurement basis from current value measurement bases under the Conceptual Framework?

• AHistorical cost measures assets at the present value of future cash flows, whereas curren…
• BHistorical cost provides monetary information using information derived at least partly f…
• CHistorical cost requires annual upward revaluation to net realizable value, whereas curre…
• DHistorical cost is only permitted for intangible assets, whereas current value must be ap…

In financial reporting measurement, how does 'value in use' differ from 'fair value'?

• AValue in use reflects current replacement cost from an external supplier, whereas fair va…
• BValue in use is determined using quoted stock exchange prices, whereas fair value is an u…
• CValue in use is an entity-specific measure reflecting the present value of cash flows exp…
• DValue in use excludes any discounting of cash flows, whereas fair value always includes a…

According to IAS 1 (Presentation of Financial Statements), what components constitute a complete set of financial statements?

• AStatement of financial position, statement of profit or loss and OCI, statement of change…
• BTrial balance, director's report, statutory tax return, and independent auditor's report…
• CStatement of financial position, cash book ledger, bank reconciliation statement, and lis…
• DManufacturing account, trading account, profit and loss account, and value added statemen…

When assessing whether an entity is a going concern under IAS 1, management is required to evaluate information covering a minimum period of:

• AAt least three months from the date the audit commenced
• BAt least twelve months from the end of the reporting period
• CExactly five financial years from the incorporation date
• DThe operating cycle of competitors within the same commercial sector

What is the general principle regarding the offsetting of financial items under IAS 1?

• AEntities must offset all trade receivables against trade payables to present net exposure…
• BAssets and liabilities, and income and expenses, shall not be offset unless required or p…
• CManagement has complete discretion to offset any revenue item against related operating o…
• DOffsetting is mandatory whenever the net amount is less than 10% of total equity

Under IAS 2 (Inventories), inventories must be measured at:

• AThe lower of cost and net realizable value
• BThe higher of historical cost and current market replacement cost
• CThe original purchase price plus expected gross profit margin
• DNet realizable value less standard sales commission only

A trading firm holds 500 units of finished goods costing MMK 40,000 each. At year-end, the estimated selling price is MMK 45,000 per unit, estimated finishing costs are MMK 3,000 per unit, and selling distribution costs are MMK 4,000 per unit. What is the total carrying value of inventory on the statement of financial position?

• AMMK 19,000,000
• BMMK 20,000,000
• CMMK 21,000,000
• DMMK 22,500,000

Which of the following cost formulas is explicitly PROHIBITED for interchangeable inventory items under IAS 2?

• AFirst-in, first-out (FIFO)
• BWeighted average cost formula
• CSpecific identification for specialized non-interchangeable items
• DLast-in, first-out (LIFO)

How should abnormal amounts of wasted materials, labor, and other production costs be treated under IAS 2?

• ACapitalized into the cost of inventory and carried forward to future accounting periods
• BRecognized as an expense in profit or loss in the period in which they are incurred
• CDeferred as a non-current prepayments asset until finished goods are delivered
• DCharged directly against equity as an adjustment to retained earnings

Under IAS 7 (Statement of Cash Flows), into which three distinct categories must all cash flows be classified?

• AOperating, investing, and financing activities
• BDirect, indirect, and extraordinary activities
• CRevenue, capital, and deferred activities
• DAdministrative, selling, and manufacturing activities

A company reports profit before tax of MMK 25,000,000. The accounts include depreciation expense of MMK 6,000,000 and a gain on disposal of equipment of MMK 2,000,000. Working capital movements show an increase in inventories of MMK 3,000,000, an increase in trade receivables of MMK 4,000,000, and an increase in trade payables of MMK 1,500,000. Income taxes paid during the year were MMK 5,000,000. What is the net cash generated from operating activities?

• AMMK 18,500,000
• BMMK 23,500,000
• CMMK 20,500,000
• DMMK 27,500,000

In a statement of cash flows prepared under IAS 7, how should the cash proceeds from issuing new ordinary share capital and the cash outflow to redeem long-term debentures be classified?

• ABoth as investing activities
• BShare proceeds as operating activities and debenture redemption as financing activities
• CBoth as financing activities
• DShare proceeds as financing activities and debenture redemption as investing activities

What is the standard accounting treatment under IAS 8 for a change in accounting policy versus a change in accounting estimate?

• AA change in accounting policy is applied retrospectively, whereas a change in accounting…
• BBoth changes in accounting policy and changes in estimates must be applied retrospectivel…
• CA change in accounting policy is applied prospectively, whereas a change in estimate is a…
• DBoth changes are recognized directly in other comprehensive income in the current year on…

An entity purchased specialized manufacturing equipment on 1 January 2023 for MMK 60,000,000 with an estimated useful life of 10 years and zero residual value. Depreciation was charged on a straight-line basis. On 1 January 2025, management re-evaluated the equipment and determined that its remaining useful life from that date was only 4 years with no residual value. What is the depreciation expense for the year ended 31 December 2025?

• AMMK 6,000,000
• BMMK 12,000,000
• CMMK 15,000,000
• DMMK 10,000,000

Which of the following describes an 'adjusting event after the reporting period' according to IAS 10?

• AAn event that provides evidence of conditions that existed at the end of the reporting pe…
• BAn event that indicates conditions that arose entirely after the end of the reporting per…
• CA major decline in market share caused by a competitor launching a new product in the sub…
• DA fire that destroys an entity's primary warehouse two weeks after the reporting period

If an entity declares dividends to holders of equity instruments after the reporting period but before the financial statements are authorized for issue, how should these dividends be treated under IAS 10?

• ARecognized as a current liability at the reporting date
• BNot recognized as a liability at the reporting date, but disclosed in the notes
• CRecognized as an expense in the statement of profit or loss for the reporting year
• DOffset directly against trade receivables on the balance sheet

A company's reporting date is 31 December 2025. On 20 January 2026, before the financial statements are authorized for issue, a major customer carrying an outstanding receivable balance of MMK 15,000,000 went into liquidation following an unexpected flash flood that completely destroyed its uninsured inventory and premises on 15 January 2026. How should this event be treated in the 2025 financial statements?

• AAs an adjusting event: write off the MMK 15,000,000 receivable in the 2025 financial stat…
• BAs a non-adjusting event: do not adjust the 2025 carrying amount, but disclose the nature…
• CAs a prior period error requiring retrospective restatement of 2024 opening reserves
• DAs a contingent asset to be recognized in other comprehensive income

Under IFRS 15 (Revenue from Contracts with Customers), what is the correct order of the five-step model for revenue recognition?

• A1. Identify performance obligations; 2. Determine price; 3. Identify contract; 4. Allocat…
• B1. Identify contract; 2. Identify performance obligations; 3. Determine transaction price…
• C1. Receive cash; 2. Issue tax invoice; 3. Deliver goods; 4. Determine cost; 5. Recognize…
• D1. Determine transaction price; 2. Identify contract; 3. Allocate cost; 4. Deliver produc…

Under IFRS 15, which of the following criteria indicates that an entity satisfies a performance obligation and recognizes revenue 'over time' rather than at a point in time?

• AThe entity has a present right to payment for the asset upon shipment only
• BThe customer simultaneously receives and consumes the benefits provided by the entity's p…
• CThe customer obtains legal title to the completed physical asset immediately at contract…
• DThe transaction price is fixed and contains no variable consideration component

A supplier enters into a commercial contract to deliver industrial machinery and provide two years of maintenance servicing for a bundled total contract price of MMK 36,000,000. When sold separately, the stand-alone selling price of the machine is MMK 30,000,000 and the stand-alone selling price of two years of maintenance is MMK 10,000,000. Under IFRS 15, how much of the transaction price should be allocated to the machine?

• AMMK 30,000,000
• BMMK 27,000,000
• CMMK 26,000,000
• DMMK 36,000,000

Under section 60(b) of the Myanmar Companies Law 2017, how is the value of a company share expressed?

• AEvery share must carry the nominal value fixed in the company's constitution
• BA share has no nominal or par value
• COnly preference shares have par value; ordinary shares do not
• DShares issued before the Law permanently retain their former par value

Under section 71 of the Myanmar Companies Law 2017, what must a company do within 21 days after issuing shares or other securities?

• AWait until the next annual return before recording the issue
• BUpdate the relevant company register and file the prescribed notice with the Registrar
• CRecognize the entire issue proceeds as operating revenue
• DObtain a court order confirming the issue price

A company proposes a class of non-voting preference shares. Which statement best reflects sections 61 and 62 of the Myanmar Companies Law 2017?

• AEvery share must carry identical voting, dividend, and capital rights without exception
• BDefault share rights may be altered by the constitution or issue terms, and the Law permi…
• COnly ordinary shares may be issued by a company registered under the Law
• DVoting rights may be varied informally by directors without regard to the constitution, i…

Under section 74 of the Myanmar Companies Law 2017, which condition must be satisfied before a company redeems redeemable preference shares?

• AThe shares must have traded publicly for at least one year
• BThe shares must be fully paid up
• CEvery ordinary shareholder must surrender an equal number of shares
• DThe redemption must be charged to revaluation surplus

How must periodic interest payable on corporate debentures or loan notes be presented in company financial statements?

• AAs an appropriation of profit in the statement of changes in equity, payable only if prof…
• BAs a finance cost recognized in the statement of profit or loss regardless of profitabili…
• CAs a direct debit to the share premium account
• DAs an addition to the nominal value of debentures on the balance sheet

Under IAS 12 (Income Taxes), what is the definition of a 'temporary difference'?

• AThe variance between estimated sales revenues and actual audited turnover
• BThe difference between the carrying amount of an asset or liability in the statement of f…
• CThe difference between statutory corporate tax rates across two consecutive calendar years
• DThe total penalty assessed by the tax authority for late filing of returns

Under IAS 12, when does a taxable temporary difference arise, resulting in the recognition of a deferred tax liability?

• AWhen the carrying amount of an asset is greater than its tax base
• BWhen the carrying amount of an asset is less than its tax base
• CWhen the carrying amount of a liability is greater than its tax base
• DWhen an entity incurs an unutilized tax loss that will expire in the next 30 days

On 1 January 2025, an enterprise purchased production plant for MMK 50,000,000. In the financial accounts, depreciation is calculated on a straight-line basis at 20% per annum (zero residual value). For tax purposes, tax depreciation (capital allowance) is granted at 40% in 2025. Assuming an applicable corporate income tax rate of 25%, what deferred tax balance should be recognized at 31 December 2025?

• ADeferred tax asset of MMK 2,500,000
• BDeferred tax liability of MMK 2,500,000
• CDeferred tax liability of MMK 10,000,000
• DDeferred tax asset of MMK 5,000,000

Under IAS 1, which of the following criteria requires a liability to be classified as a current liability?

• AIt is due to be settled more than 36 months after the reporting period under a non-cancel…
• BAt the reporting date, the entity has a substantive right to defer settlement for at leas…
• CThe entity expects to settle the liability in its normal operating cycle, or it is due to…
• DThe liability represents a contingent provision that will only be settled upon company wi…

Which of the following items is properly recognized in Other Comprehensive Income (OCI) rather than in profit or loss under MFRS / IFRS standards?

• AGains on the revaluation of property, plant, and equipment under IAS 16
• BGross profit from the sale of retail merchandise to customers
• CRoutine annual straight-line depreciation charged on delivery vans
• DInterest received on government treasury bonds held for liquidity management

Which central constitutional authority is responsible for the recruitment, selection, and overall regulation of Union civil service personnel in Myanmar under the Civil Service Personnel Law?

• AUnion Civil Service Board (UCSB)
• BCentral Bank of Myanmar
• CInternal Revenue Department
• DDirectorate of Investment and Company Administration (DICA)

Under the Myanmar Civil Service Personnel Rules, what does 'probation' mean?

• AA disciplinary suspension imposed after an offence is proved
• BInitial appointment to a category of post for a period with conditions intended to develo…
• CTemporary transfer to another ministry while retaining a confirmed post
• DTraining undertaken only after a confirmed employee is promoted

What is the mandatory conduct rule regarding political activities and party politics for civil service personnel under Myanmar civil service regulations?

• ACivil service personnel may take an active party role provided that all activity occurs o…
• BCivil service personnel must maintain political neutrality and are strictly prohibited fr…
• CCivil service personnel may join party activities after notifying their department head,…
• DCivil service personnel may campaign for a party provided that no government property or…

Under rule 210 of the Myanmar Civil Service Personnel Rules, what does the penalty 'withholding of increment' do?

• AIt permanently reduces the employee to a lower post
• BIt records a written warning that automatically ends after six months
• CIt postpones the next increment for a specified period within the pay scale, with any eff…
• DIt postpones promotion but leaves the due date of the next increment unchanged

Under government service disciplinary rules, what is the crucial legal distinction between 'dismissal from service' and 'removal from service'?

• ADismissal grants full pension rights, whereas removal forfeits all pension benefits
• BDismissal disqualifies the individual from future government employment, whereas removal…
• CDismissal is awarded by the branch supervisor, whereas removal requires Supreme Court app…
• DDismissal applies only to non-gazetted staff, whereas removal applies only to ministry pe…

Before an appointing authority can lawfully impose a major penalty on a permanent civil servant, which procedural requirement is mandatory under the principles of natural justice and service rules?

• AImmediate verbal suspension followed by public notification without right of reply
• BIssuing a formal charge sheet with statement of allegations, holding an inquiry, and givi…
• CObtaining an ex parte administrative resolution without disclosing witness statements to…
• DDeducting three months' salary automatically prior to examining departmental evidence

Under fundamental service regulations, how is the legal entitlement to 'leave' defined?

• ALeave is an absolute legal right that cannot be refused, altered, or revoked under any ci…
• BLeave cannot be claimed as of right; the sanctioning authority has discretionary power to…
• CLeave is granted automatically whenever an employee's accumulated leave balance exceeds 3…
• DLeave is a commercial commodity that can be traded or transferred between civil servants

Which of the following is a distinctive operational rule governing 'Casual Leave' in government service?

• AIt is debited against the employee's formal earned leave ledger and reduces pensionable s…
• BIt cannot be combined with ordinary earned leave, study leave, or medical leave, and an e…
• CIt can be accumulated indefinitely up to a maximum of 300 days across a civil servant's c…
• DIt is only admissible if supported by a certificate signed by a civil surgeon

Under rule 84 of the Myanmar Civil Service Personnel Rules, what is the ordinary annual limit for casual leave?

• AOrdinarily no more than 10 days in a calendar year, although a longer grant may be made f…
• BExactly 30 consecutive days, with no discretion to grant a shorter period
• CAn unlimited number of days so long as the employee remains at the duty station
• DThe balance of earned leave standing to the employee's credit

Under rule 99 of the Myanmar Civil Service Personnel Rules, how does leave without pay affect leave salary and service used to calculate retirement salary?

• AFull leave salary is paid and the period always counts as double service
• BNo leave salary is paid and the period is not included in the service term used for retir…
• CHalf leave salary is paid and the period always counts in full
• DThe period cancels all qualifying service completed before the leave began

Under civil service personnel regulations, what is the standard paid maternity leave entitlement provided to female civil servants?

• AFourteen weeks divided into six weeks before and eight weeks after delivery
• BSix months from the starting date of maternity leave
• CFour months, reduced by any medical leave taken during pregnancy
• DThe employee's remaining earned-leave balance only

What is the basis of leave salary payable to a civil servant during an authorized period of 'Half-Pay Leave'?

• ANo leave salary, because every period of medical leave is treated as extraordinary leave…
• BAn amount equal to half the substantive pay or average pay drawn by the employee prior to…
• CFull substantive pay, provided that the employee has sufficient leave standing to their c…
• DHalf of the employee's total gross remuneration, including every allowance paid immediate…