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Exam Review

Key Facts: SIDC Module 7 Exam

60 questions

Module 7 is a multiple-choice paper of 60 questions

SIDC - SC Licensing Examinations

90 minutes

Time allowed to complete the Module 7 examination

SIDC - Modules Description

60% pass mark

Candidates must score at least 60% to pass Module 7

SIDC - SC Licensing Examinations

About 80 hours

Minimum study time SIDC estimates for Module 7

SIDC - Modules Description

RM1,250

FY2026 SC Licensing Examination fee per module

SIDC - Revised fee structure

6 topic areas

Module 7 covers six syllabus areas from financial statements to valuation

SIDC - Module 7 study outline

Securities Commission Malaysia

Module 7 is a licensing examination of the Securities Commission Malaysia

Securities Commission Malaysia

100

Free original practice questions here

OpenExamPrep

SC Licensing Examination Module 7 - Financial Statement Analysis and Asset Valuation is administered by SIDC for the Securities Commission Malaysia. It is a computer-based multiple-choice paper of 60 questions to be answered in 90 minutes, with a passing mark of 60%. The syllabus covers financial statements and reporting quality, ratio and cash flow analysis, time value of money, fixed income and money market valuation, equity and company valuation, and structured products and investment risks. SIDC estimates a minimum of about 80 hours of study, and the FY2026 fee is RM1,250 per module. This 100-question bank provides original practice across the full Module 7 outline with explanations for every option.

Sample SIDC Module 7 Practice Questions

Try these sample questions to review concepts for the SIDC Module 7 exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which financial statement reports a company's assets, liabilities and equity at a single point in time?
A.Statement of profit or loss
B.Statement of financial position
C.Statement of cash flows
D.Statement of changes in equity
Explanation: The statement of financial position (balance sheet) shows assets, liabilities and equity as at a specific date, giving a snapshot of financial position. The other statements cover a period rather than a point in time.
2The accounting equation underlying the statement of financial position is best expressed as:
A.Assets = Liabilities - Equity
B.Assets = Liabilities + Equity
C.Equity = Assets + Liabilities
D.Assets + Equity = Liabilities
Explanation: The fundamental accounting equation is Assets = Liabilities + Equity, so the resources a firm controls are financed by either creditors or owners. Equity is therefore the residual interest after deducting liabilities from assets.
3Which item would normally be classified as a current asset on the statement of financial position?
A.Property, plant and equipment
B.Goodwill
C.Trade receivables
D.Long-term borrowings
Explanation: Trade receivables are expected to be collected within the normal operating cycle or twelve months, so they are current assets. Property, plant and equipment and goodwill are non-current assets, and long-term borrowings are a non-current liability.
4A company reports revenue of RM500,000, cost of sales of RM300,000 and operating expenses of RM120,000. What is its operating profit?
A.RM80,000
B.RM200,000
C.RM380,000
D.RM120,000
Explanation: Gross profit is RM500,000 - RM300,000 = RM200,000. Operating profit is gross profit less operating expenses: RM200,000 - RM120,000 = RM80,000.
5Under the accrual basis of accounting, revenue is generally recognised when:
A.Cash is received from the customer
B.Performance obligations are satisfied and control transfers
C.The invoice is paid
D.The financial year ends
Explanation: Accrual accounting recognises revenue when performance obligations are satisfied and control of goods or services transfers to the customer, regardless of when cash is received. This is the core difference from cash-basis accounting.
6Depreciation of a manufacturing machine is best described as:
A.A cash outflow each period
B.The systematic allocation of an asset's cost over its useful life
C.A reduction in the asset's market value to fair value
D.A liability owed to suppliers
Explanation: Depreciation systematically allocates the cost of a tangible asset over its useful life to match expense with the periods that benefit. It is a non-cash expense and is not a remeasurement to market value.
7Which of the following is reported in other comprehensive income rather than in profit or loss?
A.Cost of goods sold
B.Revaluation surplus on property
C.Interest expense
D.Sales revenue
Explanation: A revaluation surplus on property is recognised in other comprehensive income and accumulated in equity, not in profit or loss. Cost of goods sold, interest expense and sales revenue all flow through profit or loss.
8The notes to the financial statements are primarily intended to:
A.Replace the primary statements
B.Provide disclosures, accounting policies and supporting detail
C.Report only future forecasts
D.Show the share price history
Explanation: The notes disclose accounting policies, judgements and estimates, and provide breakdowns that support and explain the primary statements. They are an integral part of the financial statements, not a replacement for them.
9An increase in an allowance for doubtful debts will, all else equal:
A.Increase net trade receivables
B.Decrease profit for the period
C.Increase cash from operations
D.Have no effect on profit
Explanation: Increasing the allowance for doubtful debts records an expense (impairment loss), which reduces profit for the period and lowers net receivables. It is a non-cash adjustment and does not increase operating cash flow.
10Which statement explains why reported earnings may be of lower quality than cash flow?
A.Earnings are always equal to operating cash flow
B.Earnings can be affected by accounting estimates and accruals that involve judgement
C.Cash flow is more easily manipulated than earnings
D.Earnings exclude all non-cash items
Explanation: Earnings depend on accruals and estimates such as depreciation, provisions and revenue timing, which involve management judgement and can reduce earnings quality. Analysts therefore compare earnings with operating cash flow as a quality check.

About the SIDC Module 7 Exam

SC Licensing Examination Module 7, Financial Statement Analysis and Asset Valuation, is one of the licensing examinations administered by the Securities Industry Development Corporation (SIDC) on behalf of the Securities Commission Malaysia. It conveys the essentials of financial statement analysis together with fixed income and equity securities and markets in the context of investment analysis at undergraduate level. Candidates learn to read and interpret the statement of financial position, the statement of profit or loss and the statement of cash flows, to compute and interpret financial ratios, to apply the time value of money, and to value bonds, money market instruments and equities using discounted cash flow, dividend and multiples approaches. The revised edition of the module provides greater detail and more comprehensive coverage than the earlier edition. Module 7 is commonly taken by candidates working toward a Capital Markets Services Representative's Licence in dealing in securities or investment advice.

Exam sponsor: Securities Industry Development Corporation (SIDC) for the Securities Commission Malaysia.. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

60 multiple-choice questions covering financial statements and reporting quality, ratio and cash flow analysis, time value of money, fixed income and money market valuation, equity and company valuation, and structured products and investment risks.

Time Limit

90 minutes.

Passing Score

60%.

Exam / Certification Fees

RM1,250 per module in FY2026 under the phased revised fee structure (rising to RM1,500 in FY2027), paid to SIDC at registration.

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

20%

Financial Statements and Reporting Quality

The statement of financial position, statement of profit or loss and other comprehensive income, and statement of cash flows, plus notes, accounting policies and estimates. Practice here covers how transactions flow through the statements, the accounting equation, accrual versus cash accounting, and the quality and limitations of reported financial information.

20%

Ratio and Cash Flow Analysis

Liquidity, solvency, profitability, activity and efficiency ratios, DuPont decomposition of return on equity, and the interpretation of operating, investing and financing cash flows. Practice here covers ratio computation, common-size analysis, working-capital signals and the relationship between earnings and cash flow.

10%

Time Value of Money

Compounding and discounting, present and future value of single sums and annuities, perpetuities, and the difference between nominal and effective interest rates. Practice here covers discount-rate selection and the use of present value as the basis for bond and equity valuation.

20%

Fixed Income and Money Market Valuation

Bond pricing as the present value of coupons and principal, current yield and yield to maturity, the inverse price-yield relationship, accrued interest, duration and interest-rate risk, and money market instruments. Practice here covers premium and discount bonds and basic credit and reinvestment risk.

25%

Equity and Company Valuation

Dividend discount and Gordon constant-growth models, free cash flow to equity and to the firm, price multiples such as P/E, P/B, P/S and EV/EBITDA, enterprise value, and earnings normalisation. Practice here covers choosing an appropriate model and reconciling intrinsic value with market price.

5%

Structured Products and Investment Risks

Components and payoff profiles of structured products combining debt and derivative elements, and the issuer, market, liquidity and credit risks relevant to investment analysis. Practice here covers capital protection features and how structured products differ from plain bonds and equities.

Preparing for the SIDC Module 7 Exam

What You Need to Know

  • Passing score: 60%.
  • Assessment: 60 multiple-choice questions covering financial statements and reporting quality, ratio and cash flow analysis, time value of money, fixed income and money market valuation, equity and company valuation, and structured products and investment risks.
  • Time limit: 90 minutes.
  • Exam / certification fees: RM1,250 per module in FY2026 under the phased revised fee structure (rising to RM1,500 in FY2027), paid to SIDC at registration. Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

SIDC Module 7: Suggested Study Strategy

1Master the three core financial statements and how a transaction flows through them; many Module 7 questions test whether an item belongs on the balance sheet, income statement or cash flow statement.
2Memorise the standard ratio formulas and what each one signals, then practise interpreting them rather than only calculating, because the exam often asks what a ratio means.
3Get fluent with present value: most valuation questions, for both bonds and equities, reduce to discounting future cash flows at an appropriate rate.
4Learn the inverse relationship between bond prices and yields, and how a bond trades at a premium or discount relative to its coupon versus market yield.
5Practise the dividend discount and Gordon growth models and the main price multiples, and know when each valuation approach is appropriate.
6Work timed sets at roughly 90 seconds per question so you can finish 60 questions within the 90-minute limit and still review flagged items.

Frequently Asked Questions

How many questions are on SIDC Module 7 and how long is the exam?

Module 7 has 60 multiple-choice questions and you are given 90 minutes to complete the paper. Each question has a single best answer.

What is the passing mark for Module 7?

The passing mark for SC Licensing Examination Module 7 is 60%, meaning you must answer at least 36 of the 60 questions correctly.

What does Module 7 cover?

Module 7, Financial Statement Analysis and Asset Valuation, covers financial statements and reporting quality, ratio and cash flow analysis, time value of money, fixed income and money market valuation, equity and company valuation, and structured products and investment risks.

Who administers the SC Licensing Examination Module 7?

The examination is administered by the Securities Industry Development Corporation (SIDC) on behalf of the Securities Commission Malaysia. SIDC handles registration, study materials and the examination itself.

How much does Module 7 cost and how long should I study?

The FY2026 fee is RM1,250 per module under the phased revised fee structure, paid to SIDC at registration. SIDC estimates a minimum of about 80 hours of study, depending on your accounting and finance background.

Are these official SIDC practice questions?

No. These are original OpenExamPrep questions modelled on the published Module 7 syllabus. SIDC provides official study guides and registration separately through its website.