EN OPEN COMPETITION EPSO/AST/43-44/07 ASSISTANTS (AST3) IN THE FIELD OF FINANCIAL MANAGEMENT Written test a) Test, in language 2, comprising a series of multiple-choice questions to assess your specific knowledge in the field Questions numbered from 1 to 40 This test will be marked out of 40 (pass mark: 20) Time allowed: 1 hour Incorrect answers will not be penalised. ‘The written test question papers may be taken away by those candidates present at the tests. ‘They are entitled to these copies as candidates of this open competition and are for their exclusive use only. © Buropean Communities 20084. In what currency (or currencies) is the budget of the European Communities established? a. ECU i b. euros c.the currencies of all the Member States 1. euros and the currencies of all the Member States 2. Which two Member States of the European Union joined the euro area on 1 January 2008? ‘a. United Kingdom and Cyprus b. Italy and Malta | Ireland and Denmark 4. Cyprus and Matta 3. What are the four basic principles of the European Union budget? @. unity, universality, specification and annuality b. surplus, unity, efficiency, annualty | . equilibrium, efficiency, sound financial management, ennuality | 4. universality, profitablity, transparency, efficiency. 4. Which of the following statements is true? | 2, Theil of equim means that xpendtre must qua revenue | BY The principle of sound fnancll management means that revenue must exceed | expenditure ce The principle of specificity means that certain items of revenue must be assigned to certain specific items of expenditure « | | | 4d. The principle of transparency means that the recipients of Community funds must be known 5, Which of the following statements is false? ‘a. Inaccrual aecounting; transactions are recorded when they occur b. Accrual accounting records operations only after cash is received or paid Accrual accounting is based on accounting principles defined by internationally recognised accounting standards 4. Accrual accounting allows the multiannual presentation of financial statements 6. Which ofthe following is not an accounting principle? a. consistency b. prudence ¢. double entry 4. comparability of information 7. Which EU institution shares decision-making power for the budget with the European Parliament? a. the Council b. the Commission c. the Court of Justice G. the Court of Auditors8. Which of the following statements is false? Depreciation is a technique for gradually converting an asset into revenue Depreciation is a means of spreading the cost of fixed assets over time Depreciation is @ technique that allows for the renewal of fixed assels Depreciation is the accounting entry that records the dectine in value of fixed assets as they wear out over time 8. Ina petiog of inflation, which stock valuation method has @ negative impact on (reduces) profit? b ©. 4 weighted average value standard value FIFO LIFO 10. The current ratio (current assets / current liabilities) measures: a business's profitability a business's gearing a business's ability to meet its short-term obligations a business's degree of financial autonomy 11. Which of the following ratios measures profitabilty? apam ‘owners’ equity /libilities assets / long-term debt net profit / purchases operating profit/ sales 12. Which of the folowing statements is false? Every business must keep accounts appropriate to its activities Every self-employed person (tradesman, shopkeeper) must keep double-entry accounts Apbusiness'’s accounts must be complete Every accounting entry must be based on a supporting document 43. What is the appropriate decision-making level in’a manufacturing firm for a decision that involves, rearranging the work area, altering production schedules, changing inventory methods, or ‘expanding quality control measures? a 8 © 4. operational tactical strategic financial14, An electronic payment costs the customier €0.25 per transaction. A cash withdrawal is free but 15, 17, 18, takes 15 minutes. Ben always withdraws enough money to be able to shop 5 times. Kari elways withdraws enough money to be able to shop 7 times. Ben's hourly wage is €10 and Kar'’s is €6 ‘Their employer decides to deduct from their wages an amount equivalent to the time it takes for them to withdraw money from the bank. Which option is financially most advantageous for them both? a. They will both pay electronically b. They will both pay cash ©. Ben will pay electronically and Katt will pay cash d._ Kari wil pay electronically and Ben will pay cash Product A is @ substitution produat for product B but is of lower quailty. Ifa sudden rise in demahg for product A is observed, it will nat be due to: - 2 reduction In tho price of product 8 a b. an increase in the price of product B reports in the media of a scandal involving the use of banned substances in the manufacture of product B d. a drop in consumers’ incomes What is the amount of VAT in a transaction totalling €1 983 (including 12% VAT)? “a. there is no 12% VAT rate b. €212.46 c €237.96 dé. €177.00 Which of the following statements is true? ‘a. Abusiness must make a profit from day ono . Abusiness must have liquid assets from day one ‘The volume of a business's liquid assets Is a very Importary raurys ws «nalysing its future d. Gash flow is not an important indicator when conducting a Zitencier us. ysis. of & business What is the amount of liquid assets (bank and cash) after the following operations? - purchase of goods ‘€500 000 = cash receipts €460 000 - sales €720 000 = depreciation €280 000, = payments by customers €100 000 = payments to suppliers €180 000 €330 000 -€ 60 000 € 50.000 110 000,26. Which EU institution takes the final decision on the discharge for the budget of the Institutions? a. Commission b. Council & Court of Auditors d. Parliament 27. The independent department within the Europeen Commission that is responsible for investigating and combating fraud is called: PILAF las OLAF ECHO 28. What is the value of a firm's stock at 31/12/2007 after the following operations (FIFO - first in first out) = _ initial stock at 01/01/2007: 500 units @ € 100 each + purchase 14/02/2007: 100 units @ € 80 each ~ purchase 15/10/2007: 200 units @ € 100 each = sale 25/09/2007: 300 units @ € 180 each € 48 000 € 33.000 € 50000 € 45.000 es ee 28, Which of the following countries is due to join the euro area from 1/1/2000? Poland Estonia Slovakia Latvia aelew 30. Which of the 4 items below is not one of the European Union's own resources? customs duties public audiovisual taxes value added tax (VAT) sugar levies 31, Any depreciation of @ security at the end of the year is recognised by entry of: a. awrite-up b. an amortisation charge ©. an exceptional loss d._aprovision 32, The European Central Bank is located in a. Bertin bo” Frankfurt c Brussels d. Bonn238. Mr Jewel buys some goods for €120000 inl. VAT on 01.08.2007. The goods are subject 20% var Atthe end of 2007, he has slat the goods for €180 000 inl. VAT. He winds up his business ane Keeps the uncle goods, Flow much VAT does fe oe? €8 000 €5.000 | 11.000 €7 500 . 34. A customer who pays in advance can be granted: a bonus ‘a premium a sales discount a volume discount 36, Which of the following statements is true? The break-even point: a._may be negative | b. indicates @ maximum level of activity c._ is expressed solely in terms of value d. maybe expressed in terms of value or as @ quantity 36. The mutual exchange of goods and/or services between two businesses in the EU without invoicing is a practice which: a. amounts to tax fraud b. is used in historic cost aocounting systems . is used to achieve savings on administrative costs 4d. Is considered a normal accounting practice 37. Which of the following is not part of assets: a. patents b. machinery stocks 4d. buildings 38, Which of the folowing statements is false? Introducing @ mandatory minimum price mekes no sense except at a price level where the volume produced is ower than the volume of demend i b. The volume that producers are prepared to supply st 2 mandatory minimum pic i | ofeater than atthe market price fa mandatory minimum price system, demand determines supply & Introducing a mandatory minimum erice can encourage the emergence of a black market a39. Valuing assels at historic cost means that: a. assets are valued at acquisition cost b. assets cannot be revalued in any circumstances c._ assets are always undervalued because of inflation 4G. ifassets are sold, a profit will always be made 40. What will be the balance of the profit and loss account in the following case: ~ purchases €100 000 (excl. VAT) = payments by customers €320 000 = wages €150 000 sales € 600 000 (incl. 20% VAT) + - depreciation €110 000 payments fo suppliers €120 000 - a. €140000 b. €340000 ©. €470.000 4. -€250000