How many sentences are TRUE?

Q1 (I) If financial statements are audited, then the responsibility for those financial statements instead falls on the audi
(II) The directors of a company are ultimately respinsible for the preparation of financial statements, even if the maj
performed by the finance department.
(III) The concept of accruals requires transactions to be reflected in the financial statements once the cash or its quiv
(IV) Information is material if its omissions or missatatement could influence the economic decisions of users taken o
statements.
A. 1
B. 2
C. 3
D. 4

Answer B

Solution
(I) is false. The responsibility for those financial statements falls on the directors, whether or not the financial statem
(III) is false. The concept of accruals requires transactions to be reflected in the financial statements when a transac
(II) and (IV) are true.
ments instead falls on the auditors instead of the directors.
al statements, even if the majority of the work on them is

ments once the cash or its quivalent is received or paid.

omic decisions of users taken on the basis of the financial

ther or not the financial statements are audited.

ial statements when a transaction occurs rather than when payment is received or made.
 The closing inventory of X amounted to $116,400 excluding the following two inventory lines:
Q2 1 400 items which had cost $4 each. All were sold after the reporting period for $3 each, with selling expenses
2 200 different items which had cost $30 each. These items were found to be defective at the end of the repor
after the statement of financial position amounted to $1,200, after which they were sold for $35 each, with sellin
Which of the following total figures should appear in the statement of financial position of X for inventory?
A. $ 122,300
B. $ 121,900
C. $ 122,900
D. $ 123,300

Answer C

Solution
$ 116,400
Line 1 : (400*$3) - $200 $ 1,000
Line 2: (200*$35) - $300 - $1,200 $ 5,500
$ 122,900
ntory lines:
$3 each, with selling expenses of $200 for the batch.
fective at the end of the reporting period. Rectification work
e sold for $35 each, with selling expenses totalling $300.
sition of X for inventory?
 Which of the following items are intangible fixed assets?
(I) Computer hardware owned by a business
(II) Operating software that operates the computer hardware in (I)
Q3 (III) A patent bought by a business
(IV) An extension to an office building owned bt a business

A. All four items

B. (I), (II) and (IV) only
C. (I) and (II) only
D. (III) only

Answer D
 Which of the following events occuring after the reporting period are classified as adjusting, if material?
Q4 (I) The sale of inventories valued at cost at the end of the reporting period for a figure in excess of cost
(II) A valuation of land and buildings providing evidence of an impairment in value at the year
(III) The issue of shares and loan notes
(IV) The insolvency of a customer with a balance outstanding at the year end.
A. (I) and (III)
B. (II) and (IV)
C. (II) and (III)
D. (I) and (IV)

Answer B
djusting, if material?
e in excess of cost
the year
 A company purchased an asset on 1 January 20x3 at a cost of $1,000,000. It is depreciated over 50 years by the st
residual value), with a proportionate charge for depreciation in the year of acquisition and the year of disposal. A
Q5 assets was revalued to $1,200,000. There was no change in the expected useful life of the asset.
The asset was sold on 30 June 20x5 for $1,195,000.
What profit or loss on disposal of the asset will be reported in the statement of profit or loss of the company for
20x5?
A. Profit of $7,500
B. Profit of $235,000
C. Profit of $247,500
D. Loss of $5,000

Answer A

Solution
Annual depreciation was initially $1,000,000/50 years = $20,000.
After revaluation, annual depreciation is $1,200,000/ 48 years = $25,000.
Valuation, 1 January 20x5 $ 1,200,000
Accumulated depreciation to 30 June 20x5 = $25,000*6/12 $ 12,500
Carrying amount at 30 June 20x5 $ 1,187,500
Sale/disposal price $ 1,195,000
Profit on disposal in statement of profit or loss $ 7,500
epreciated over 50 years by the straight line method (nil
isition and the year of disposal. At 31 December 20x4, the
ife of the asset.

profit or loss of the company for the year ended 31 December

 A business compiling its financial statements for the year to 31 January each year pays rent quarterly in advance
Q6 and 1 October each year. After remaining unchanged for some years, the rent was increased from $24,000 per ye
from 1 July 20x0.
Which of the following figures is the rent expense which should appear in the statement of profit or loss for year
A. $ 27,500
B. $ 29,500
C. $ 28,000
D. $ 29,000

Answer A

Solution
Total rent = (5 months/12 months * $24,000) + (7 months/12 months * $30,000) = $27,500
ays rent quarterly in advance on 1 January, 1 April, 1 July
ncreased from $24,000 per year to $30,000 per year as

ment of profit or loss for year ended 31 January 20x1?

 A business had a balance at the bank of $2,500 at the start of the month. During the following month, it paid for
Q7 $1,000 less trade discount of 20% and settlement discount of 10%. It received a cheque from a customer in respe
subject to settlement discount of 5%. What was the balance at the bank at the end of the month?
A. $ 1,970
B. $ 1,980
C. $ 1,990
D. $ 2,000

Answer A

Solution
Opening bank balance $ 2,500
Payment $1000*80%*90% $ (720)
Receipt $200*95% $ 190
Closing banl balance $ 1,970
ollowing month, it paid for materials invoiced at
e from a customer in respect of an invoice for $200,
the month?
 At 31 December 20x1, the capital structure of a company was as follows:
Ordinary share capital
Q8 100,000 shares of 50c each $50,000
Share premium account $180,000
During 20x2, the company made a bonus issue of one share for every two held, using the share premium account
issued for cash another 60,000 shares at 80c per share.
What is the company's capital structure at 31 December 20x2?
Ordinary share capital Share premium account
A. $ 130,000 173,000
B. $ 105,000 173,000
C. $ 130,000 137,000
D. $ 105,000 137,000

Answer B

Solution
Ordinary shares at start of year $ 50,000
Add: bonus issue 50,000*50c $ 25,000
Add: new issue 60,000 * 50c $ 30,000
Ordinary shares at end of year $ 105,000

Premium shares at start of year $ 180,000

Less: bonus issue 50,000*50c $ (25,000)
Add: new issue 60,000 * (80c-50c) $ 18,000
Premium shares at end of year $ 173,000
e share premium account for the purpose, and later
 Which of the following items does the statement below describe?
Q9 According to IAS 37 Provisions, Contigent Liabilities and Contigent Assets, ' A possible obligation that arises from
existence will be confirmed only by the occurrence or non-occurence of one or more uncertain future events not
entity's control'
A. A provision
B. A current liability
C. A contigent liability
D. A contigent asset

Answer C
le obligation that arises from past events and whose
e uncertain future events not wholly within the
Q10 Which of the following is not true?
A. Related party relationships are questionable feature of business.
B. Related party relationship could affect the net income of an entity.
C. In considering each possible related party relationship, attention is directed to the substance of the relati
D. The entity’s financial performance may be affected by a related party relationship even if there is no tran

Answer A

VAS 26, Artircle 07-09

 d to the substance of the relationship and not merely the legal form.
tionship even if there is no transaction between them.
Q11 Misstatements, including omissions, are considered to be material if, individually or in the aggregate:
A. They result in a significant change in the financial statements.
B. They could reasonably be expected to influence the economic decisions of users taken on the basis of th
C. They resulted from mismanagement of those in charge of governance.
D. They are not a result of procedures to uncover fraud.

Answer B
in the aggregate:

users taken on the basis of the financial statements

Q12 Professional judgement is defined as:
A. An attitude to avoid significant mistakes which could influence the economic decisions of users taken on
B. An attitude that includes a questioning mind, being alert to conditions which may indicate possible misst
C. The application of relevant training, knowledge and experience, within the context provided by auditing,
D. Decision making about the requirements of the accounting profession.

Answer C
mic decisions of users taken on the basis of the financial statements.
ch may indicate possible misstatement due to error or fraud, and a critical assessment of evidence.
context provided by auditing, accounting and ethical standards, in making informed decisions about the courses of action that are approp
urses of action that are appropriate in the circumstances of the audit engagement.
Q13 Which of the following would be considered a self-interest threat?
A. When a member of the assurance team was previously a director or officer of the assurance client.
B. Acting as the client’s advocate in a legal proceeding.
C. A member of the assurance team has a close family member who is a director or officer of the assurance
D. Potential employment with an assurance client.

Answer D
r of the assurance client.

ctor or officer of the assurance client.

Q14 In a limited assurance engagement, the practitioner:
A. Expresses the conclusion in a positive form.
B. Conveys reasonable assurance.
C. Expresses the conclusion in the negative form.
D. Has obtained sufficient appropriate evidence to reduce assurance engagement risk to an acceptably low

Answer C
ment risk to an acceptably low level.
Q15 Which of the following is not one of the components of internal control according to COSO?
A. Monitoring of controls.
B. Risk assessment process.
C. Control procedures.
D. Communication processes related to stakeholders.

Answer D
o COSO?
Q16 The auditor should apply analytical procedures at the planning stage to:
A. Assist the auditor in assessing that all significant fluctuations and other unusual items have been adequa
B. Assist the auditor in assessing that the overall financial statement presentation makes sense based on th
C. Obtain assurance that financial statement account balances do not contain material misstatements.
D. Assist in understanding the business and in identifying areas of potential risk.

Answer D
usual items have been adequately explained.
ation makes sense based on the audit results and an understanding of the business.
n material misstatements.
Q17 Which of the following is a procedure to verify the completeness of management information on related parties?
A. Review country marriage records for vendors who are relatives of company officers.
B. Review minutes of the meetings of shareholders and the board of directors.
C. Review credit history of large stockholders.
D. Review working papers five years back for names of known related parties.

Answer B
formation on related parties?
 Sampling risk is the risk that the auditor’s conclusion based on a sample may __________ the conclusion if the en
Q18 subjected to the same audit procedure.
A. Be different from.
B. Be the same as.
C. Not be material to.
D. be material to.

Answer A
_____ the conclusion if the entire population were
Q19 An alternate procedure for attending physical inventory is:
A. Inspection of documentation of the subsequent sale of specific inventory items acquired or purchased p
B. Take an interim inventory and roll it backwards.
C. Take the averages of the last interim inventories and calculate what ending inventory should be.
D. Take an interim inventory and using statistics predict the period ending inventory.

Answer A
tems acquired or purchased prior to the physical inventory counting.

g inventory should be.

Q20 The auditor shall disclaim an opinion when the following conditions occur except:
A. The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion.
B. The auditor concludes that the possible effects on the financial statements of undetected misstatements
C. It is not possible to form an opinion on the financial statements due to the potential interaction of the un
D. The auditor concludes that the possible effects on the financial statements of undetected misstatements

Answer D
hich to base the opinion.
of undetected misstatements, if any, could be both material and pervasive.
potential interaction of the uncertainties and their possible cumulative effect on the financial statements.
of undetected misstatements, if any, could be material but not pervasive.
Q21 A company makes chairs and tables. Which TWO of the following items would be treated as an indirect cost?
A. Wood used to make a chair
B. Metal used for the legs of a chair
C. Staple to attach fire retardant labels to chairs
D. Fabric to cover the seat of a chair
E. The salary of the sales director of the company

Answer C, E

Solution

The correct answers are: Staple to attach fire retardant labels to chairs and The salary of the sales director
Rather than each staple being allocated to a particular product, a box of staples would be treated as a general prod
salary of the sales director is a selling overhead.
eated as an indirect cost?

of the sales director

d be treated as a general production overhead. The
 When total purchases of raw material exceed 30,000 units in any one period, then all units purchased,
Q22 including the initial 30,000, are invoiced at a lower cost per unit. Which of the following graphs is consistent with
total materials cost in a period?

Answer D

Answer A

Solution

Graph A shows that up to 30,000 units, each unit costs a constant price per unit. After 30,000 units, the gradient of
variable cost line is more gentle which indicates that the cost per unit is lower than the cost when 0 – 30,000 units
purchased.
 ll units purchased,
wing graphs is consistent with the behaviour of the

r 30,000 units, the gradient of the new

he cost when 0 – 30,000 units are
 The following data relates to a company's overhead cost. Using the high low technique, what is the variable cost
Q23 current year prices?
Time Output Overhead cost ($) Price index
2 years ago 1000 3700 121
current year 3000 13000 155
A. 3.22
B. 4.13
C. 4.65
D. 5.06

Answer B

Solution
This is calculated by firstly adjusting the overhead cost from 2 years ago to current price levels by multiplying by 15
This figure is then used in a high low calculation (change in cost divided by change in activity) to obtain the variable
(($13,000 - $4,740) / (3,000 units – 1,000 units) = $4.13).
que, what is the variable cost per unit (to the nearest $0.01) expressed in

ice levels by multiplying by 155/121, to obtain a cost of $4,740.

activity) to obtain the variable cost per unit
 The material stores control account for a company for March looks like this:

Q24 Which of the following statements are correct?

(i) Issues of direct materials during March were $18,000
(ii) Issues of direct materials during March were $40,000
(iii) Issues of indirect materials during March were $12,000
(iv) Purchases of materials during March were $49,000

A. (i) and (iv) only

B. (ii) and (iv) only
C. (ii), (iii) and (iv) only
D. All of them

Answer C

Solution

Statement (i) is not correct. A debit to stores with a corresponding credit to work in progress (WIP) indicates that di
from production were $18,000.
Statement (ii) is correct. Direct costs of production are 'collected' in the WIP account.
Statement (iii) is correct. Indirect costs of production or overhead are 'collected' in the overhead control account.
Statement (iv) is correct. The purchases of materials on credit are credited to the creditors account and debited to
control account.
Therefore the correct answer is (ii), (iii) and (iv) only.
rogress (WIP) indicates that direct materials returned

e overhead control account.

ditors account and debited to the material stores
Q25 Which TWO of the following statements about group bonus schemes are true?
A. Group bonus schemes are appropriate when increased output depends on a number of people all makin
B. With a group bonus scheme, it is easier to award each individual's performance
C. Non-production employees can be rewarded as part of a group incentive scheme
D. Compared with individual schemes, group bonus schemes are difficult to administer

Answer A, C

Solution

Group bonus schemes are useful to reward performance when production is integrated so that all members of the
to increase output, for example in production line manufacture. 'Group bonus schemes are appropriate when incre
on a number of people all making extra effort' is therefore true.
Group bonus schemes are not effective in linking the reward to a particular individual's performance. Even if one in
supreme effort, this can be negated by poor performance from other members of the group. Therefore 'With a gro
easier to award each individual's performance' is not true.
Non-production employees can be included in a group incentive scheme, for example when all employees in a man
department must work harder to produce prompt budgetary control reports. 'Non-production employees can be re
group incentive scheme' is therefore true.
Group bonus schemes are easier to administer because they reduce clerical effort required to measure output and
bonuses. 'Compared with individual schemes, group bonus schemes are difficult to administer' is therefore false.
 a number of people all making extra effort
ance
cheme
dminister

ed so that all members of the group must work harder

es are appropriate when increased output depends

's performance. Even if one individual makes a

e group. Therefore 'With a group bonus scheme, it is

when all employees in a management accounting

oduction employees can be rewarded as part of a

quired to measure output and calculate individual

dminister' is therefore false.
 Factory overheads can be absorbed by which of the following methods?
(i) Direct labour hours
(ii) Machine hours
Q26 (iii) As a percentage of prime cost
(iv) $x per unit

A. (i), (ii), (iii) and (iv)

B. (i) and (ii) only
C. (i), (ii) and (iii) only
D. (ii), (iii) and (iv) only

Answer A
 In a period, a company had opening inventory of 31,000 units and closing inventory of 34,000 units. Profits based
$850,500 and on absorption costing were $955,500. If the budgeted total fixed costs for the company was $1,837
Q27
budgeted level of activity in units?

A. 32,500
B. 52,500
C. 65,000
D. 105,000

Answer B
34,000 units. Profits based on marginal costing were
r the company was $1,837,500, what was the
 A process produces two joint products A and B in equal physical quantities. A and B are sold at split off point for $
Q28 respectively. There are no further costs after the split off point. If joint costs are apportioned on a relative sales v
following statements is true?

A. Both products will have the same return on sales ratio (operating margin)
B. Product A will have the higher return on sales ratio (operating margin)
C. The cost per kg will be the same for both products
D. The cost per kg of product A will be higher than that of product B

Answer A

Solution
If joint costs are apportioned on a relative sales value basis and there are no further costs after split off point then a
have the same amount of profits per $ of sales. This is arguably the major benefit of this method. Because one prod
without the other, it makes sense to make them appear equally profitable. This means that the first statement is co
are sold at split off point for $5 per kg and $8 per kg
ortioned on a relative sales value basis, which of the

osts after split off point then all joint products will
his method. Because one product cannot be produced
s that the first statement is correct.
 Which of the following would be part of the capital expenditure budget?
(i) Purchase of a new factory premises
(ii) Replacement of existing machinery
Q29 (iii) Refurbishment of existing factory premises
(iv) Purchases of raw materials

A. (i) and (ii) only

B. (iii) and (iv) only
C. (i), (ii) and (iii) only
D. (ii) and (iv) only

Answer C

Purchases of raw materials would be classed as revenue expenditure, not capital expenditure.
enditure.
Q30 Which of the following describes the role of strategic objectives?
A. Middle tier' objectives to facilitate the planning and control of individual functions within the organisatio
B. Day-to-day performance targets related to the organisation's operations
C. A clear vision of the organisation's reason for existing
D. Long-term objectives for the organisation as a whole

Answer D
unctions within the organisation
Q31 Which of the following are not general IT controls?
A. Back-up and recovery.
B. Controls over data centre and network operations.
C. Edit checks of input data.
D. System software acquisition.

Answer C

https://www.accountinghub-online.com/general-control-vs-application-control/
Q32 Which of the following are not application controls?
A. Access security.
B. Numerical sequence checks.
C. Manual follow-up of exception reports.
D. Chart of accounts.

Answer A
 The chart of accounts is an important application control because it provides the framework for determining the
Q33 on financial statements and budgets.
A. 1
B. 0

Answer A
mework for determining the information presented
Q34 To determine that user ID and password controls are functioning, an auditor would most likely:
A. attempt to sign on to the system using invalid user identifications and passwords.
B. write a computer program that simulates the logic of the client’s access control software.
C. extract a random sample of processed transactions and ensure that the transactions were appropriately
D. examine statements signed by employees stating that they have not divulged their user identifications a

Answer A
most likely:

ntrol software.
ansactions were appropriately authorized.
ged their user identifications and passwords to any other person
Q35 Which of the following statements related to application controls is correct?
A. Application controls relate to various aspects of the IT function including software acquisition and the pr
B. Application controls relate to various aspects of the IT function including physical security and the proce
C. Application controls relate to all aspects of the IT function.
D. Application controls relate to the processing of individual transactions.

Answer D
oftware acquisition and the processing of transactions.
hysical security and the processing of transactions in various cycles.
Q36 An individual transferred technology in Vietnam and earned royalty income of VND70 million.What is the PIT liab
A. VND3 million
B. VND 3.5 million
C. VND 6 million
D. VND 7 million

Answer A

(70 million - 10 million) * 5%

70 million.What is the PIT liability of this transaction?
 Ms. Nga Le is a Vietnamese national with two dependents. On 1 January 2017, she signed a gross employment co
Q37 million per month. Her employer is not required to withhold compulsory insurance from her income.
What is the amount of Ms. Nga Le’s monthly net take home income?

A. VND 81.15 million

B. VND 78 million
C. VND 178.85 million
D. VND 184.52 million

Answer D

Solution
VND
Salary 260,000,000 A
Self relief 9,000,000 B
Dependant 7,200,000 C
Assessable income 243,800,000 D=A-B-C
PIT 75,480,000 Đ = D*35% - 9,850,000
>>> Net take home 184,520,000 E =C - D
e signed a gross employment contract with salary of VND260
e from her income.
 In 2018, SPTF Co incurred losses of VND10 billion from incentive activities which were subject to a tax rate of 10%
Q38 transferring of real estate of VND3 billion and had other income of VND8 billion. What is the minimum tax liabilit
A. VND2,420 million
B. VND600 million
C. VND660 million
D. VND0 million

Answer B

Solution
Refer to Article 18, Circular 11/VBHN-BTC >>> The loss from incentive activities (VND10 billion) shall be used to offs
(VND8 billion). The loss could not be used to offset against income from the transferring of real estate (VND3 billion
>>> CIT liability = 20% * VND3 billion = VND600 million.

Điều 18. Điều kiện áp dụng ưu đãi thuế thu nhập doanh nghi ệp
9. Trường hợp trong cùng kỳ tính thuế, doanh nghiệp có phát sinh ho ạt đ ộng kinh doanh đ ược h ưởng ưu đãi thu ế b ị l ỗ, ho ạt đ ộng
kinh doanh không được hưởng ưu đãi thuế, thu nhập khác của các hoạt động kinh doanh (không bao g ồm thu nh ập t ừ ho ạt đ ộng
chuyển nhượng bất động sản, chuyển nhượng dự án đầu tư; thu nh ập t ừ chuy ển nh ượng quy ền tham gia d ự án đ ầu t ư, chuy ển
nhượng quyền thăm dò, khai thác, chế biến khoáng sản theo quy đ ịnh c ủa pháp lu ật) có thu nh ập (ho ặc ng ược l ại) thì doanh
nghiệp bù trừ vào thu nhập chịu thuế của các ho ạt động có thu nh ập do doanh nghi ệp l ựa ch ọn. Ph ần thu nh ập còn l ại sau khi bù
trừ áp dụng mức thuế suất thuế thu nhập doanh nghiệp theo m ức thu ế su ất c ủa ho ạt đ ộng còn thu nh ập.
Trường hợp trong các kỳ tính thuế trước, doanh nghiệp đang b ị l ỗ (n ếu còn trong th ời h ạn chuy ển l ỗ) thì doanh nghi ệp ph ải
chuyển lỗ tương ứng với các hoạt động có thu nhập. Nếu doanh nghi ệp không tách riêng đ ược l ỗ c ủa t ừng ho ạt đ ộng thì doanh
nghiệp chuyển lỗ vào thu nhập của hoạt động được hưởng ưu đãi thu ế thu nh ập doanh nghi ệp tr ước sau đó v ẫn còn l ỗ thì chuy ển
vào thu nhập của hoạt động không được hưởng ưu đãi thuế thu nh ập doanh nghi ệp (không bao g ồm thu nh ập t ừ ho ạt đ ộng
chuyển nhượng bất động sản, chuyển nhượng dự án đầu tư; thu nh ập t ừ chuy ển nh ượng quy ền tham gia d ự án đ ầu t ư, chuy ển
nhượng quyền thăm dò, khai thác khoáng sản theo quy đ ịnh c ủa pháp lu ật).
re subject to a tax rate of 10%, made gains from the
hat is the minimum tax liability of SPTF Co in 2018?

10 billion) shall be used to offset against other income

ng of real estate (VND3 billion).

u đãi thu ế b ị l ỗ, ho ạt đ ộng

ồm thu nh ập t ừ ho ạt đ ộng
ia d ự án đ ầu t ư, chuy ển
ng ược l ại) thì doanh
hu nh ập còn l ại sau khi bù
p.
doanh nghi ệp ph ải
ừng ho ạt đ ộng thì doanh
u đó v ẫn còn l ỗ thì chuy ển
u nh ập t ừ ho ạt đ ộng
ia d ự án đ ầu t ư, chuy ển
Q39 FCT rate for transfer of the right to use of trademark
A. 10% CIT, 5% VAT
B. 5% CIT, 5% CIT
C. 10% CIT
D. 2% CIT

Answer A
 Company Y is a bottled water manufacturer applying the VAT credit method. In May, company Y used 200 bottles
served for internal and external meetings of the company. 120 bottles were also used in the staff charity event. T
Q40 COGS of a bottle of bottled water is VND 5k and VND 2k, respectively.
What are the amount of output VAT in these transactions?

Bottled waterserved for meetings Bottled water used in staff charity event
A. VND 100k VND 60k
B. VND 0k VND 60k
C. VND 40k VND 24k
D. VND 0k VND 24k

Answer B

Solution
Goods manufactured and used for internal consumption served for business purposes is not subject to VAT.
Charity event : 120 bottles * 5k * 10%
y, company Y used 200 bottles of bottled water
ed in the staff charity event. The selling price and
 You have collected the following information regarding Companies C and D:
• The two companies have the same total assets.
• The two companies have the same operating income (EBIT).
• The two companies have the same tax rate.
Q41 • Company C has a higher debt ratio and a higher interest expense than Company D.
• Company C has a lower profit margin than Company D.
Based on this information, which of the following statements is most correct?

A. Company C must have a higher level of sales.

B. Company C must have a lower ROE.
C. Company C must have a higher times-interest-earned (TIE) ratio. TIE = EBIT/ Interest
D. Company C must have a lower ROA. ROA = Net profit/ Total asset
E. Company C must have a higher basic earning power (BEP) ratio. BEP = EBIT/ Total assets

Answer D

The two companies have the same total assets.

The two companies have the same operating income (EBIT).
The two companies have the same tax rate.
Company C has a higher debt ratio and a higher interest expense than Company D.
+ C Higher debt ratio than D and same total assets => debt C > debt D, equity C < equity D
+ C higher interest expense than D and same EBIT => EBT C < EBT D (EBT = EBIT - I)
+ EBT C < EBT D and same tax rate => Net profit C < Net profit D

Company C has a lower profit margin than Company D.

y D.

TIE = EBIT/ Interest

ROA = Net profit/ Total assets
BEP = EBIT/ Total assets

ity C < equity D

 The Meryl Corporation's common stock is currently selling at $100 per share, which represents a P/E ratio of 10.
42 stock outstanding, a return on equity of 20 percent, and a debt ratio of 60 percent, what is its return on total ass
A. 8%
B. 10%
C. 12%
D. 16.7%

Answer A

Equity multiplier = 1/(1 - D/A) = 1/(1 - 0.60) = 2.5.

ROE = ROA  Equity multiplier.
20% = (ROA)(2.5).
ROA = 8.0%.
esents a P/E ratio of 10. If the firm has 100 shares of common
is its return on total assets (ROA)?
Q43 When the price of a bond is above the face value, the bond is said to be
A. Trading at par
B. Trading at a premium
C. Trading at a discount
D. Trading below par

Answer B
Q44 All of the following are true of stock splits EXCEPT:
A. market price per share is reduced after the split.
B. the number of outstanding shares is increased.
C. retained earnings are changed.
D. proportional ownership is unchanged.

Answer C
Q45 If the intrinsic value of a stock is greater than its market value, which of the following is a reasonable conclusion?
A. The stock offers a high dividend payout ratio.
B. The market is undervaluing the stock.
C. The stock has a low level of risk.
D. The market is overvaluing the stock.

Answer B
ng is a reasonable conclusion?
 Direction: Study the following data carefully and answer the questions accordingly.
Statements:
Only a few Turkey is Japan.
No China is Turkey.
All Japan is Nepal.
No Nepal is Sudan.
Q46 Conclusions:
I. Some Turkey can never be Sudan.
II. Some China is Sudan.

A. Only conclusion I follows

B. Only conclusion II follows
C. Neither conclusions I nor II follows
D. Both conclusions I and II follow

Answer A
 JA is married to PA, who is the father of OA and has only one daughter. XA is the sister of OA. QA is the father-in-
Q47 are kids of QA and WA, who has only one son and one daughter. BA is the father of SA. How is BA related to OA?
A. Brother
B. Paternal uncle
C. Marternal uncle
D. Grandfather

Answer C
ter of OA. QA is the father-in-law of PA. BA and JA
SA. How is BA related to OA?
Q48 Direction: Find the wrong term in the given series: 6 , 55 , 91 , 116 , 132 , 143
A. 6
B. 55
C. 91
D. 116
E. 143
F. 132

Answer E
 What replaces the question mark?

Q49

Answer A
Q50 A product is 60% discounted, how many % does that product need to be increased to get back to its original price
A. 50%
B. 60%
C. 66.77%
D. 150%

Answer D

40% -> 100%

o get back to its original price?
Q51 Which province does Tam Chuc Pagoda belong to in our country?
A. Ninh Binh
B. Ha Nam
C. Nam Dinh
D. Quang Ninh

Answer B
Q52 The first country to host the World Cup is :
A. France
B. Uruguay
C. Italia
D. Brazin

Answer B
Q53 What is the hottest continent in the world?
A. Asia
B. Africa
C. North America
D. Europe

Answer B

https://www.countries-ofthe-world.com/continents-of-the-world.html
Q54 Convex mirrors are used for rear-view mirrors of vehicles. What is the advantage of using a convex mirror instead
A. It provides a clearer reflection
B. It has a more accurate reflection
C. The wider angle of view reduces blind spots
D. It is easier to clean a convex mirror

Answer C
using a convex mirror instead of a flat mirror?
Q55 What is a Firewall in Computer Network?
A. An operating system of Computer Network
B. The physical boundary of Network
C. A web browsing Software
D. A system designed to prevent unauthorized access

Answer D
 You are a Retail Assistant working in the Saldringham branch of More Than Pens plc, a national stationer's chain.
1000 stores, primarily in the UK, including 451 travel outlets at airports, train stations and motorway service area
More Than Pens sells a wide range of newspapers, magazines, books, stationery and impulse products; most bran
between 8.30am and 5.30pm. As a Retail Assistant you are responsible for providing exceptional customer servic
product knowledge to maximise sales. You work primarily in the book section of the Saldringham branch, howev
Q56 as a unified team and therefore you are often required to work in other sections throughout the store.

It is a Tuesday morning and a colleague in the stationery section is away on sick leave. At 11am you are on your w
a quick tea break when, passing through the stationery section, you notice that it is in a reasonable amount of dis
on the floor and been left lying there, shelves are untidy and some products are on the wrong shelves.

Review the responses A to D and indicate which one you believe to be the response to the situation you would be

A. Take your tea break and then on the way back quickly tidy up a few bits and pieces if it's still in a state.
Go back to your section and ask your team leader whether you can be spared for 10 or 15 minutes to he
B. offer your help to the stationery team leader to quickly tidy up the area and take your tea break at 11.30
Do nothing. The stationery team leader probably has it all under control and will deal with it soon. It's un
C. bit of a mess as someone is away and you don't want to insult the stationery team by mentioning anythi
D. Inform the stationery team leader that there is a problem with the presentation of the section.

Answer B
 , a national stationer's chain. More Than Pens has over
ns and motorway service areas and 627 high street stores.
d impulse products; most branches are open 7 days a week
g exceptional customer service whilst demonstrating
e Saldringham branch, however all the branch staff work
oughout the store.

ve. At 11am you are on your way to the staff room to take
in a reasonable amount of disarray. Products have fallen
the wrong shelves.

to the situation you would be " Most likely to make"

d pieces if it's still in a state.

red for 10 or 15 minutes to help out in stationery. If agreed,
d take your tea break at 11.30am.
nd will deal with it soon. It's understandable that there's a
ry team by mentioning anything.
ation of the section.
 You are a Human Resources (HR) Assistant working in the HR Department of a busy NHS Hospital Trust. The hosp
Aurora General in Saldringham City. Your role is to carry out administrative tasks to support the HR activities requ
organise and support recruitment, book training courses, provide secretarial support at disciplinary investigation
records for all medical and non-medical staff up-to-date including pay and conditions information.You report to o
who in turn report to the HR Director. Your manager is called Fiona Potter.

It is three days after an interview process was held to appoint a new Consultant Ophthalmologist for the hospital
the most senior medical person in the Ophthalmology (eye) department and in charge of three Senior Registrars,
House Officers - these are all junior doctors. Consultant posts are rarely available as once people gain such a post
until they retire. This is particularly true at the Princess Aurora as Saldringham is a great place to live and there is
Q57 gain a medical post at the Trust, let alone a Consultant post with its associated security, status and generous pay.
candidates plus an external candidate were interviewed for the post and the role was given to one of the interna
person appointed was less experienced, in terms of their years as a Senior Registrar, than the other two candidat
considered to be more 'high-flying', academically gifted and to possess more impressive leadership skills than the

Mr Brian Bowler, the internal rejected candidate, has come to your office this morning and is complaining bitterly
decision. You were the one who wrote the letters informing candidates of the decision. Mr Bowler is angry and fe
he has more experience than Vijay Singh, the appointed candidate.

Review the responses A to D and indicate which one you believe to be the least effective response.

Tell Mr Bowler that the process was fair and the hospital has to make sure that it appoints the right pers
A. one who has been around the longest.
Say that the interview board felt that Mr Singh was better academically and had better leadership skills a
B. decision wasn't based on experience alone.

Say to Mr Bowler that you can see why he is disappointed. State that the process was stringently fair and
C. details of the reason for the decision and other developmental feedback from the interviewers if he wou
Offer him a cup of tea and say that you can understand why he is upset. Let him have a bit of a moan to
D. system.

Answer B
 NHS Hospital Trust. The hospital is the Princess
support the HR activities required in the Trust. You
t at disciplinary investigations and keep personnel
ns information.You report to one of two HR Managers

hthalmologist for the hospital. This Consultant will be

ge of three Senior Registrars, two Registrars and two
once people gain such a post they often stay there
reat place to live and there is lots of competition to
rity, status and generous pay. Two internal
as given to one of the internal candidates. The
, than the other two candidates but they were
sive leadership skills than the other two.

ng and is complaining bitterly to you about this

on. Mr Bowler is angry and feels unfairly treated as

ctive response.

that it appoints the right person for the job, not the

d had better leadership skills and that the final

rocess was stringently fair and that he could seek full

om the interviewers if he would like to.
t him have a bit of a moan to you and get it out of his
 You are working as a Graduate Trainee for Sutton & Sykes, a manufacturer of domestic electrical goods for the UK
You are on a rotational placement programme spending 6 months in each of 4 different departments of the comp
the ropes' before being assessed for a permanent management position. You have completed your placements in
Facilities Services. You are half-way through your 6 months in the Human Resources (HR) department. The HR tea
Hampshire at Sutton & Sykes HQ. The other company sites are located around the SE of England, including a large
assembly plant on the Isle of Wight and a research division in Southampton. Your final placement will be with the
and is due to commence upon completion of your 6 months in HR.

One of the first projects allocated to you upon joining the HR department is to run a review of recruitment servic
& Sykes. You have been asked to allocate a new 12 month contract to the supplier(s) who you believe will provid
Q58 money'. Today you are attending a brief meeting with other members of the review team to make a decision bas
will be meeting with a colleague from finance, a senior manager from the research division and the HR business p
manufacturing & assembly.

From your analysis of the range of suppliers available in the recruitment market you have arrived at a shortlist of
consultancies. You believe that these are the only ones who have the expertise and understanding required to re
engineering and research staff required. You know that your finance colleague favours supplier A as they are the
senior manager favours supplier B as he has a good relationship with their lead consultant and the HR business p
C as they are considered to be the 'gold standard' in the industry in terms of best practice. You need to come to a
of this one hour meeting.

Review the responses A to D and indicate which one you believe to be the most effective response.

Open the meeting by asking for your colleagues views and then allow a free-flowing debate in which a na
A. arise by the end of the meeting.
Allow a free-flowing debate for the first 15 minutes and then gradually suggest some structure (for exam
B. systematically analysing the options against these criteria) in order to reach a decision in a timely manne

At the outset, suggest that you use set criteria to analyse the three options, that the group agrees these
C. and that you divide the hour into three sections - agreement of criteria, discussion of options against crit

Set out your opinion quite clearly and confidently at the beginning of the meeting, listing pros and cons f
D. stating which consultancy you feel is the best for Sutton & Sykes. Then ask your colleagues for their opin

Answer B
stic electrical goods for the UK and European market.
rent departments of the company in order to 'learn
ompleted your placements in Manufacturing and in
(HR) department. The HR team are based in Alton,
E of England, including a large manufacturing and
nal placement will be with the Finance department

review of recruitment services purchased by Sutton

) who you believe will provide the best 'value for
team to make a decision based on your findings. You
division and the HR business partner for

u have arrived at a shortlist of three large recruitment

understanding required to recruit the specialist
urs supplier A as they are the least expensive, the
sultant and the HR business partner favours supplier
actice. You need to come to a conclusion by the end

ective response.

e-flowing debate in which a natural consensus should

gest some structure (for example: agreeing criteria,

h a decision in a timely manner.

s, that the group agrees these criteria to begin with

scussion of options against criteria and final decision.

meeting, listing pros and cons for each option and then
your colleagues for their opinions.
 You are working as a Graduate Trainee for Sutton & Sykes, a manufacturer of domestic electrical goods for the UK
You are on a rotational placement programme spending 6 months in each of 4 different departments of the comp
the ropes' before being assessed for a permanent management position. You have completed your placements in
Facilities Services. You are half-way through your 6 months in the Human Resources (HR) department. The HR tea
Hampshire at Sutton & Sykes HQ. The other company sites are located around the SE of England, including a large
assembly plant on the Isle of Wight and a research division in Southampton. Your final placement will be with the
and is due to commence upon completion of your 6 months in HR.
Q59

You have had an email from a senior manager in the Finance department, Sally Arkwright, who will be your place
you join the team in 3 months' time. She is keen that you are aware that you will be joining the department at th
are due to start in Finance in January which is the peak financial planning season. The staff will be working flat ou
business plans and budget allocations for each department in Sutton & Sykes and to align this with the projection
the business. Your supervisor feels that it is very important you are aware of this so you can 'hit the ground runni
team. You have never worked in a finance role before.
Review the responses A to D and indicate which one you believe to be the least effective response.

A. Search on the internet for information about business planning, budgeting and profit & loss calculation.
Email Sally and ask whether it would be possible to have a one-to-one meeting with her before you begi
B. out as much as possible about the projects on which you might be working.
Thank Sally and say that you will contact her in December, a few weeks before your placement, and ask
C. your projects.
Email Sally thanking her for her early warning. Ask her whether she can provide any information on the p
D. might be working in January.

Answer C
stic electrical goods for the UK and European market.
rent departments of the company in order to 'learn
ompleted your placements in Manufacturing and in
(HR) department. The HR team are based in Alton,
E of England, including a large manufacturing and
nal placement will be with the Finance department

wright, who will be your placement supervisor when

joining the department at their busiest time. You
he staff will be working flat out to produce the annual
o align this with the projections of profit & loss for
you can 'hit the ground running' when you join the

ctive response.

and profit & loss calculation.

eting with her before you begin your placement to find
.
fore your placement, and ask for specific details of

ovide any information on the projects on which you

 You are a retail assistant in the kitchenware department of the Jack Lanis Stores branch in Leamouth-on-Sea. Jack
large chain of department stores which has built a strong brand as an ethical and responsible retailer. The chain p
British-made, eco-friendly and responsibly-sourced products to market in the UK high street.
Your role is:
To meet and greet customers
To give customers detailed information and advice about products
To maintain stock levels by re-filling from the stock room as necessary or flagging up larger items that need re-ord
warehouse or the manufacturer
To keep the shop floor presentable and tidy
Q60 To operate the electronic till for cash, credit card and store card sale transactions, refunds and exchanges.

It is 10am. A customer has been in the department for the past 45 minutes looking at dishwashers and asking you
information on makes and models. She has three children and her husband works from home so she needs a mac
and can endure a lot of use. She has a budget of £300. You have shown her the two most suitable machines. One
costing £299 which is fine but will probably last only 2 or 3 years with the high level of use she is describing. Ther
is of far superior quality which came on the market at an introductory offer price of £350 two weeks ago; the offe
model will revert to its normal price of £499 when the shop closes today. You believe that this model will last her
5 and 8 years of use. The customer is unsure about the extra £50 over her budget allocation and says she feels un
the higher price without consulting her husband.
Review the responses A to D and indicate which one you believe to be counterproductive.

Say that you can understand her worries and perhaps she should give her husband a call to discuss it wi
the savings on the 'offer' machine, in that its longevity will be twice that of the cheaper model. So, in oth
spend nearly £600 for 6 years' use with the other model (as she'll have to replace it after 3 years) or £35
A. the superior model.
B. Say that you are very worried she will miss out on this deal if she doesn't make a decision soon.
C. Leave the customer to ponder her decision.
D. Say that it is often better to buy a quality item than a 'cheap and cheerful' one.
Remind the customer of the 'real' savings she would make if she purchased the more expensive but bett
E. Over 6 years she would be paying £350 instead of £600 for two cheaper machines.

Answer B
nch in Leamouth-on-Sea. Jack Lanis Stores (JLS) is a
ponsible retailer. The chain prides itself on bringing
h street.

larger items that need re-ordering from the

funds and exchanges.

t dishwashers and asking you for advice and

om home so she needs a machine that will be robust
most suitable machines. One is a cheaper model
of use she is describing. There is also a model which
£350 two weeks ago; the offer ends today and the
e that this model will last her and her family between
ocation and says she feels uncomfortable buying at

ctive.

husband a call to discuss it with him. Remind her of

the cheaper model. So, in other words, she could
eplace it after 3 years) or £350 for 6 years' use with

make a decision soon.

one.
d the more expensive but better quality machine.
achines.