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MOCK EXAMINATION – KPMG

Total questions: 20 MCQs (1 points each) and 1 Essay (30 points)
Total marks: 50 points
Time: 1 hours

SECTION A - ACCOUNTING

1. The profit earned by a business in 20X7 was $72,500. The proprietor injected new capital of $8,000
during the year and withdrew goods for his private use which had cost $2,200.
If net assets at the beginning of 20X7 were $101,700, what were the closing net assets?

A. $35,000 C. $168,400
B. $39,400 D. $180,000

2. The profit made by a business in 20X7 was $35,400. The proprietor injected new capital of $10,200
during the year and withdrew a monthly salary of $500.
If net assets at the end of 20X7 were $95,100, what was the proprietor's capital at the beginning of
the year?

A. $50,000 C. $63,900
B. $55,500 D. $134,700

3. A sole trader took some goods costing $800 from inventory for his own use. The normal selling price of
the goods is $1,600.
Which of the following journal entries would correctly record this?

A. Dr: Inventory account 800 C. Dr: Sales account 1,600

Cr:Purchases account 800 Cr: Drawings account 1,600
B. Dr: Drawings account 800 D. Dr: Drawings account 800
Cr: Purchases account 800 Cr: Sales account 800

4. A business sells $100 worth of goods to a customer, the customer pays $50 in cash immediately and
will pay the remaining $50 in 30 days' time.
What is the double entry to record the purchase in the customer’s accounting records?

A. Debit cash $50, credit payables $50, credit purchases $50

B. Debit payables $50, debit cash $50, credit purchases $100
C. Debit purchases $100, credit payables $50, credit cash $50
D. Debit purchases $100, credit cash $100

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5. Tin Co purchases $250 worth of metal from Steel Co. Tin Co agrees to pay Steel Co in 60days time.
What is the double entry to record the purchase in Steel Co’s books?

A. Debit sales $250, credit receivables $250

B. Debit purchases $250, credit payables $250
C. Debit receivables $250, credit sales $250
D. Debit payables $250, credit purchases $250

6. William's trial balance at 30 September 20X5 includes the following balances:

Trade receivables $75,943
Receivables allowance $4,751

How should these balances be reported in William's statement of financial position as at 30

September 20X5?

A. An asset of $71,192
B. An asset of $75,943 and a liability of $4,751
C. A liability of $71,192
D. A liability of $75,943 and an asset of $4,751

7. A trial balance is made up of a list of debit balances and credit balances.

Which of the following statements is correct?

A. Every debit balance represents an expense.

B. Assets are represented by debit balances.
C. Liabilities are represented by debit balances.
D. Income is included in the list of debit balances

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SECTION B - AUDITING

8. Which of the following amendments to the audit approach would reduce detection risk?

A. Decrease in sample sizes

B. Decrease the materiality level
C. Decrease supervision
D. Increase the materiality level

9. Which of the following assertions are relevant to the audit of tangible non-current assets?

(1) Existence
(2) Occurrence
(3) Classification
(4) Presentation

A. 1 only C. 2, 3 and 4
B. 1, 3 and 4 D. 1, 2, 3 and 4

10. Is the following statement true or false?

Audit risk is a function of two components, inherent risk and control risk.

A. True B. False

11. You have set the level of materiality for the financial statements as a whole, and now need to
determine performance materiality.
Which of the following statements about performance materiality is NOT true?

A. Performance materiality is used to reduce the risk that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a whole to an
acceptable level

B. Performance materiality refers to the amounts set by the auditor at higher than the materiality
level for particular classes of transactions, account balances or disclosures where the materiality
level might otherwise mean that such items are not tested.

C. Once the materiality for the financial statements as whole has been set, a lower level of
performance materiality is determined by the auditor using his or her professional judgement.

D. The performance materiality level is affected by the auditor's understanding of the entity and the
nature and extent of misstatements identified in prior audits.

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12. Which of the following circumstances would increase control risk?

A. The client operates in a highly regulated industry

B. The auditor is relying on tests of controls and reducing substantive procedures accordingly
C. There is a high turnover of staff in the finance department

Question 1: You are an audit senior of TEY & Co and are responsible for planning the audit of EuKaRe
for the year ended 30 September 20X8.

EuKaRe is a charity which was established over five years ago. The charity's aim is to provide support to
children from disadvantaged backgrounds who wish to take part in sports such as tennis, badminton
and football. EuKaRe has a detailed constitution which explains how the charity's income can be spent.
The constitution also notes that expenditure relating to the administration of the charity cannot
exceed 10% of the charity's income in any year. EuKaRe currently employs three permanent members
of staff. At present, 100 volunteers work for EuKaRe: some commit up to three days a week and others
help out on an ad hoc basis. The organisation, including its finance department, is primarily run by
volunteers.

The charity's income is derived wholly from voluntary donations. Sources of donations include the
public in the form of cash collected in buckets by volunteers in shopping areas, and from generous
individuals.

13. Based on your understanding of the nature of EuKaRe you have identified that income is primarily in
the form of cash. Which element of audit risk is increased by this fact?

A. Detection risk C. Control risk

B. Inherent risk D. Business risk

14. Your audit partner has highlighted to you that it is imperative that TEY & Co acts in line with ISA 315
Identifying and assessing the risks of material misstatement through understanding the entity and its
environment. This means it must identify and assess the risks of material misstatement at both the
financial statements level and at the assertion level, for classes of transactions, events and their related
disclosures, and account balances and their related disclosures.

Which of the following statements is NOT an explanation of why ISA 315 Identifying and assessing
the risks of material misstatement through understanding the entity and its environment requires a
risk assessment to be carried out at the planning stage?

A. The risk assessment will help the audit team gain an understanding of the entity for audit purposes
B. The risk assessment will enable the audit senior to produce an accurate budget for the audit
assignment
C. The risk assessment will form the basis of the audit strategy and the detailed audit plan
D. Once the risks have been assessed, TEY & Co can select audit team members with sufficient skill
and experience to maximise the chance of those risks being addressed

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SECTION C – GENERAL KNOWLEDGE

15. The first female Chairman of National Assembly of Vietnam is

A. Nguyen Thi Kim Ngan C. Truong My Hoa

B. Tong Thi Phong D. Nguyen Thi Doan

16. Seagame 30 will be hosted in?

A. Vietnam C. Philippines
B. Cambodia D. Malaysia

17. Who is the minister of Industry and Trade in Vietnam?

A. Truong Minh Tuan C. Dinh Tien Dung

B. Vu Huy Hoang D. Tran Tuan Anh

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SECTION E – IQ TEST

18. How many lines appear above?

19. A man has 53 socks in his drawer: 21 identical blue, 15 identical black and 17 identical red. The lights
are fused and he is completely in the dark.
How many socks must he take out to make 100 per cent certain he has a pair of black socks?

20. What number should replace the question mark?

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8th Floor, Sinh Plaza Tower, No. 261 Pham Van Dong Str 0969 729 463
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SECTION D – WRITING

In many countries, very few young people read newspapers or follow the news on TV. What do you think are
the causes of this? What solutions can you suggest?

Answer:

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8th Floor, Sinh Plaza Tower, No. 261 Pham Van Dong Str 0969 729 463
3Ard Floor, No. 374 – 374B, Vo Van Tan Str, Ward 05, Dist 03, HCM

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 SAPP Academy support@sapp.edu.vn
8th Floor, No. 54 Le Thanh Nghi Str Sapp.edu.vn
8th Floor, Sinh Plaza Tower, No. 261 Pham Van Dong Str 0969 729 463
3Ard Floor, No. 374 – 374B, Vo Van Tan Str, Ward 05, Dist 03, HCM

MOCK EXAMINATION – KPMG

ANSWER SHEET

Full Name: Mark:

Class Code: Examination Date:
Teacher: Feedback Turnaround Date:

A B C D A B C D A B C D
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