Deloitte Full Test 1 A

SAPP Academy Tel: 0466 709 888
6th Floor, No. 2A Trai Ca alley, Truong Dinh St Web: sapp.edu.vn

No. 31, alley 56/34 Le Van Hien St, Ha Noi Hotline: 0969 729 463
DELOITTE – FULL TEST 1

Name
Time 120 minutes
SAPP Academy Tel 096 262 3203
Part Accounting, Auditing, Finance
6th floor, , Logical
No 2A Trai Ca alley,Thinking,
Truong DinhEssay
St Sapp.edu.vn
No 31, alley 56/34 Le Van Hien St, Ha Noi
Mark
No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
PART A: ACCOUNTING (15 MCQS – 2 POINTS)

Question 1: A company pays rent quarterly in arrears on 1 January, 1 April, 1 July and 1 October each
year. The rent was increased from $90,000 per year to $120,000 per year as from 1 October 20X2.
What rent expense and accrual should be included in the company's financial statements for
the year ended 31 January 20X3?
A. Rent expense: $100,000 and Accrual: $20,000
B. Rent expense: $100,000 and Accrual: $10,000
C. Rent expense: $97,500 and Accrual: $10,000
D. Rent expense: $97,500 and Accrual: $20,000
Question 2: The receivables ledger control account below contains several incorrect entries.
RECEIVABLES LEDGER CONTROL ACCOUNT
$ $
Opening balance 138,400 Credit sales 80,660
Cash received from credit 78,420 Contras against credit balances 1,000
customers in payables ledger
Discounts allowed to credit 1,950
customers
Irrecoverable debts written off 3,000
Dishonoured cheques from credit 850
customers
Closing balance 129,360
216,820 216,820
What should the closing balance be when all the errors are corrected?
A. $133,840
B. $135,540
C. $137,740
D. $139,840
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Question 3: Montague’s paint shop has suffered some bad publicity as a result of a customer claiming
to be suffering from skin rashes as a result of using a new brand of paint sold by Montague’s shop.
The customer launched a court action against Montague in November 20X3, claiming damages of
$5,000. Montague’s lawyer has advised him that the mostTelprobable
SAPP Academy outcome is that he will have
096 262 3203
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6 floor,
to pay the customer $3,000. No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
What amount should Montague include as a provision in his financial statements for the year
ended 31 December No. 20X3? 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
A. Nil
B. $5,000
C. $3,000
D. $8,000
Question 4: Part of the process of preparing a company's statement of cash flows is the calculation
of cash inflow from operating activities.
Which of the following statements about that calculation (using the indirect method) are
correct?
1. Loss on sale of operating non-current assets should be deducted from net profit before
taxation
2. Increase in inventory should be deducted from operating profits
3. Increase in payables should be added to operating profits.
4. Depreciation charges should be added to net profit before taxation.
A. 1, 2 and 3
B. 1, 2 and 4
C. 1, 3 and 4
D. 2, 3 and 4
Question 5: In the course of preparing a company's statement of cash flows, the following figures are
to be included in the calculation of net cash from operating activities.
$
Depreciation charges 980,000
Profit on sale of non-current assets 40,000
Increase in inventories 130,000
Decrease in receivables 100,000
Increase in payables 80,000
What will the net effect of these items be in the statement of cash flows?
A. Addition to operating profit: $890,000
B. Subtraction from operating profit: $890,000
C. Addition to operating profit: $1,070,000
D. Addition to operating profit: $990,000
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Question 6: The carrying amount of a company's non-current assets was $200,000 at 1 August 20X0.
During the year ended 31 July 20X1, the company sold non-current assets for $25,000 on which it
made a loss of $5,000. The depreciation charge for the year was $20,000.
What was the carryingSAPP amount
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A. $150,000 6 floor, No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
B. $155,000
C. $160,000 No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
D. $180,000
Question 7: Leclerc has borrowed $2.4 million to finance the building of a factory. Construction is
expected to take two years. The loan was drawn down and incurred on 1 January 20X9 and work
began on 1 March 20X9. $1 million of the loan was not utilised until 1 July 20X9 so Leclerc was
able to invest it until needed.
Leclerc is paying 8% on the loan and can invest surplus funds at 6%.
Calculate the borrowing costs to be capitalised for the year ended 31 December 20X9 in respect
of this project.
Answer: $130,000
Question 8: Wetherby purchased a machine on 1 July 20X7 for $500,000. It is being depreciated on
a straight line basis over its expected life of ten years. Residual value is estimated at $20,000. On
1 January 20X8, following a change in legislation, Wetherby fitted a safety guard to the machine.
The safety guard cost $25,000 and has a useful life of five years with no residual value.
What amount will be charged to profit or loss for the year ended 31 March 20X8 in respect of
depreciation on this machine?
Answer: $37,250
Question 9: On 1 January 20X6 Fellini hired a machine under a finance lease. The cash price of the
machine was $3.5 million and the present value of the minimum lease payments was $3.3 million.
Instalments of $700,000 are payable annually in advance with the first payment made on 1
January 20X6. The interest rate implicit in the lease is 6%.
What amount will appear under non-current liabilities in respect of this lease in the statement
of financial position of Fellini at 31 December 20X7?
A. $1,479,000
B. $2,179,000
C. $1,702,000
D. $2,266,000
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Question 10: Which of the following statement is not true about the reserve for inventory
price decrease?
A. When selling inventories, the original price of goods sold shall be recognized as production
and business expense
SAPP Academyin the period in consistence Tel with the3203
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B. All the difference between the higher inventory price decrease reserve to be set up at the end
of the current year’s
No. 20, 198accounting
alley, Xa Danperiod and
street, Ha Noi the lower inventory price decrease reserve
Sapp.edu.vn
already set up at the end of the previous year’s accounting period, volumes of damaged and
lost inventories, after subtracting the compensations paid by individuals due to their
liabilities, and unallocated general production costs, shall be recognized as production and
business expense in the period.
C. Where there appear decreases in the prices of raw materials, materials, tools and/or
instruments but the production costs of products are higher than their net realizable value,
the raw materials, materials, tools and instruments left in stock may have their value
lowered to be equal to their net realizable value.
D. Where the inventory price decrease reserve to be set up at the end of the current year’s
accounting period is lower than the inventory price decrease reserve already set up at the
end of the previous year’s accounting period, the difference thereof must be added and
recorded as decrease in production and business expense.
Question 11: Carter vacated an office building and let it out to a third party on 30 June 20X8.
The building had an original cost of $900,000 on 1 January 20X0 and was being depreciated over
50 years. It was judged to have a fair value on 30 June 20X8 of $950,000. At the year end date of
31 December 20X8 the fair value of the building was estimated at $1.2 million.
Carter uses the fair value model for investment property.
What amount will be shown in revaluation surplus at 31 December 20X8 in respect of this
building?
Answer: $203,000
Question 12: Yling entered into a contract in respect of which performance obligations are
satisfied over time on 1 January 20X4. The contract is expected to last 24 months. The price which
has been agreed for the contract is $5 million. At 30 September 20X4 the costs incurred on the
contract were $1.6 million and the estimated remaining costs to complete were $2.4 million. On
20 September 20X4 Yling received a payment from the customer of $1.8 million which was equal
to the total of the amounts invoiced. Yling calculates the stage of completion of its performance
obligations on contracts on the basis of amounts invoiced to the contract price.
What amount would be reported in Yling's statement of financial position as at 30 September
20X4 as the contract asset arising from the above contract?
A. Nil
B. $160,000
C. $800,000
D. $200,000
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Question 13: Riley acquired a non-current asset on 1 October 20W9 (ie 10 years before 20X9)
at a cost of $100,000 which had a useful life of ten years and a nil residual value. The asset had
been correctly depreciated up to 30 September 20X4. At that date the asset was damaged and an
impairment review was SAPP performed.
Academy On 30 September 20X4, the262
Tel 096 fair value of the asset less costs
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6 floor, No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
of disposal was $30,000 and the expected future cash flows were $8,500 per annum for the next
five years. The current cost of capital is 10% and a five-year annuity of $1 per annum at 10% would
have a present value No.
of $3.79.
20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
What amount would be charged to profit or loss for the impairment of this asset for the year
ended 30 September 20X4?
A. $17,785
B. $20,000
C. $30,000
D. $32,215
Question 14: Which TWO of the following events which occur after the reporting date of a
company but before the financial statements are authorised for issue are classified as adjusting
events in accordance with IAS 10 Events after the reporting period?
A. A change in tax rate announced after the reporting date, but affecting the current tax liability
B. The discovery of a fraud which had occurred during the year
C. The determination of the sale proceeds of an item of plant sold before the year end
D. The destruction of a factory by fire
Question 15: The inventory value for the financial statements of Q for the year ended 31
December 20X4 was based on an inventory count on 4 January 20X5, which gave a total inventory
value of $836,200. Between 31 December and 4 January 20X5, the following transactions took
place:
$
Purchases of goods 8,600
Sales of goods (profit margin 30% on sales) 14,000
Goods returned by Q to supplier 700
What adjusted figure should be included in the financial statements for inventories at 31
December 20X4?
A. $838,100
B. $853,900
C. $818,500
D. $834,300
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PART 2: AUDITING (15 MCQS – 2 POINTS)
Question 1: Which of the following statements most accurately describes substantive audit
procedures? SAPP Academy Tel 096 262 3203
A. Substantive audit6thprocedures
floor, No 2A Trai Ca alley,of
consist Truong Dinh St procedures
analytical Sapp.edu.vnand tests of controls.
B. Substantive audit procedures are tests to obtain audit evidence about the design and
operation of an entity's internal
No. 20, 198 alley, Xacontrol system.
Dan street, Ha Noi Sapp.edu.vn
C. Substantive audit procedures are tests to obtain audit evidence to detect material
misstatements in the financial statements.
D. Substantive audit procedures are only carried out when the internal control system is
assessed as being strong.
Question 2: You are an audit manager in a medium-sized audit firm. You are currently planning the
audit of Flowers Anytime (‘Flowers’) for the year ended 31 March 20X7. Flowers, a traditional
flower wholesaler, is a new audit client for your firm. As this is the first year you are auditing
Flowers, it is necessary to understand and evaluate the company’s system of internal control. The
audit firm’s policy requires the following steps to be taken when performing first year audits:
1. Perform walkthrough tests
2. Complete flowcharts and internal control evaluation questionnaires
3. Revise the audit strategy and audit plan
4. Perform tests of control
Which of the following correctly summarises the order in which the above steps would take
place?
A. 1, 2, 3, 4
B. 3, 2, 1, 4
C. 1, 2, 4, 3
D. 2, 1, 4, 3
Question 3: As part of your audit of the procurement system, you have recommended that the goods
inwards department should ensure that the goods received are valid business purchases, by
matching all deliveries to an authorised order form before issuing a GRN.
Which of the following would be an appropriate test of control to confirm that the control is
operating effectively?
A. For a sample of orders, check that there is a matching goods received note
B. Check that the numerical sequence of purchase orders is complete
C. For a sample of goods received notes check that there is an authorised purchase order
D. Check that the numerical sequence of goods received notes is complete
Question 4: While reviewing Cherry’s purchases cycle, you identified that goods received notes for
raw material purchases are not sequentially numbered.
Which of the following areas would you consider to be most at risk of material misstatement,
as a result of this internal control deficiency?
A. Rights and obligations of inventory
B. Valuation of payables
C. Existence of inventory
D. Completeness of payables
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Question 5: At which of the following stages of the audit MUST analytical procedures be used?
1. Interim audit
2. Audit planning SAPP Academy Tel 096 262 3203
3. Audit fieldwork 6th floor, No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
4. Final review
A. 2 only No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
B. 2 and 3
C. 2 and 4
D. 1, 2, 3 and 4
Question 6: It is now 13 December 20X1. The auditor’s report has been signed. The financial
statements are due to be issued on 25 December 20X1.
Which of the following statements correctly describes the auditor’s responsibility in relation to
subsequent events occurring between now and 25 December?
A. The auditor must design procedures to obtain sufficient appropriate audit evidence that all
events up to that date that may require adjustment or disclosure have been identified
B. The auditor must perform procedures on matters examined during the audit, which may be
susceptible to change after the year-end.
C. The auditor has no obligation to perform procedures, or make enquiries regarding the
financial statements. Any subsequent events should be noted and considered in the next
period’s audit.
D. If the auditor becomes aware of a fact that, had it been known to the auditor at the date of
the auditor's report, may have caused the auditor to amend the auditor's report, the auditor
shall discuss the need for any adjustments with management.
Question 7: Which of the following is the distinguishing factor of the systematic sample selection
method?
A. All items in the population under review have the same statistical probability of being
selected.
B. The currency unit value rather than the items is used as the sampling population.
C. A uniform sampling interval is calculated by dividing the population size by the sample size.
D. None of the above.
7 of 13
Question 8: Which of the following questions would you expect to find on an Internal Control
Evaluation Questionnaire (ICEQ) for the area of purchases when auditing a company’s financial
statements?
1. Can goods or services be received without a liability being
SAPP Academy Tel 096recorded?
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2. Can a liability be recorded for unauthorised items? Sapp.edu.vn
6 floor, No 2A Trai Ca alley, Truong Dinh St
3. Can payments be made without proper authorisation?
4. Are purchase invoices
No. 20,checked toDan
198 alley, Xa Goods
street,Received
Ha Noi Notes before being passed for payment?
Sapp.edu.vn
A. 1, 2 and 3
B. 1, 2, 3 and 4
C. 1, 2 and 4
D. 2 and 3
Question 9: Which of the following audit procedures is a valid test for the existence of tangible non-
current assets?
A. Inspecting title deeds to buildings
B. Agreeing figures on the valuation certificate for a building to the general ledger
C. Agreeing a sample of assets selected by physical inspection back to the non-current assets
register
D. Physically inspecting a sample of assets selected from the non-current assets register
Question 10: Which of the following procedures carried out at an inventory count by an
auditor is a test primarily for overstatement of inventory?
A. Ensure completeness of sequence of pre-numbered inventory sheets at the conclusion of the
count.
B. Check valuation of slow-moving or obsolete inventory lines
C. Check that inventory held at third party locations are included in the count
D. Agree items that have been counted (including items of high value) to inventory sheets.
Question 11: The auditor of Four Co, a manufacturing company, has noted an increase in total
sales value but a decrease in the company’s gross profit percentage for 20X9 as compared to the
previous year.
Which of the following is consistent with and adequately explains the decrease?
A. Sales commission payable to the company’s sales force increased in relation to sales values
as compared to 20X8.
B. Sales volumes have decreased as compared to 20X8.
C. During 20X9, due to a scarcity of supply the company had to pay higher prices when
purchasing components.
D. During 20X9 a major component supplier withdrew the settlement discounts previously
granted.
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Question 12: Which of the following statements describes the auditor's responsibility for
events occurring after the year-end but before the date of the audit report?
A. The auditor has no responsibility to consider events that have occurred after the year-end.
B. The auditor only SAPP
has to consider adjusting events because
Academy Tel 096non-adjusting
262 3203 events do not need
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to be reflected in the financial statements.alley, Truong Dinh St Sapp.edu.vn
C. The auditor is responsible for carrying out procedures to obtain audit evidence that all
events occurringNo.after thealley,
20, 198 year-end and before
Xa Dan street, Ha Noi the date of the audit report which need to
Sapp.edu.vn
be reflected in the financial statements are identified.
D. The auditor only has to consider events occurring after the year-end which occur between
the date of the audit report and the date the financial statements are issued.
Question 13: Which of the following statements best reflects the auditor's duty of
confidentiality?
A. Auditors must never, under any circumstances, disclose any matters of which they become
aware during the course of the audit to third parties, without the permission of the client.
B. Auditors may disclose any matters in relation to criminal activities to the police or taxation
authorities, if requested to do so by the police or a tax inspector.
C. Auditors may disclose matters to third parties without their client's consent if it is in the
public interest, and they must do so if there is a statutory duty to do so.
D. Auditors may only disclose matters to third parties without their client's consent if the public
interest or national security is involved.
Question 14: Which of the following is an example of an inherent risk factor?

A. The company is rapidly expanding.
B. There is no log in or password required to access the accounting system.
C. The company does not maintain a non-current asset register to record its assets.
D. No backups are taken of the computer system at the end of each day.
Question 15: Which of the following would provide the most persuasive evidence of a
company’s ownership of a freehold office building?
A. Inspection of the purchase documentation
B. Inspection of recent expense invoices for extensive repairs to the building, paid for by the
company
C. Inspection of the title deeds to the building
D. Inspection of a directors’ board minute confirming ownership of the building
9 of 13
PART 3: FINANCE (10 MCQs – 2 points)
Question 1: Return on Assets and Return on Investment Ratios belong to:

A. Liquidity Ratios SAPP Academy Tel 096 262 3203
6th floor, No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
B. Profitability Ratios
C. Solvency Ratios SAPP Academy Tel: 0166 7703 493
D. Turnover.
Question 2: Which of the following would cause a company's gearing ratio to rise?
A. A decrease in long-term loans is less than a decrease in shareholders' funds
B. A decrease in long-term loans is more than a decrease in shareholders' funds
C. Interest rates rose
D. Dividends were paid
Question 3: An increase in selling prices may lead to which of the following effects?
A. Asset turnover will increase
B. Profit margins will fall
C. Profit margins may increase subject to a fall in asset turnover
D. Return on capital employed will increase
Question 4: Which of the following is not an element of working capital?

A. Cash float
B. Account receivables
C. Credit sales
D. A new personal computer for the office
Question 5: How many kind of personal income tax rate are there in Vietnam?
A. 6
B. 7
C. 8
D. 9
Question 6: A business operates on a gross profit margin of 33 and 1/3%. Gross profit on a sale was
$800, and expenses were $680.
What is the net profit margin?
A. 3.75%
B. 5.00%
C. 11.25%
D. 22.67%
10 of 13
Question 7: What is the difference between the current ratio and the quick ratio?
A. The current ratio includes inventories and the quick ratio does not.
B. The current ratio does not include inventories and the quick ratio does.
C. The current ratioSAPP
includes physical capital and the quick
Academy ratio
Tel 096 262does
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6 floor, No 2A Trai Ca alley, Truong Dinh St Sapp.edu.vn
D. The current ratio includes physical capital and the quick ratio does not.
Question 8: Which one of the following would help a company with high gearing to reduce its
gearing ratio? No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
A. Making a rights issue of equity shares
B. Issuing further long-term loan notes
C. Making a bonus issue of shares
D. Paying dividends on its equity shares
Question 9: An increase in selling prices may lead to which of the following effects?
A. Asset turnover will increase
B. Profit margins will fall
C. Profit margins may increase subject to a fall in asset turnover
D. Return on capital employed will increase
Question 10: Which one of the following would cause a company's gross profit percentage
on sales to fall?
A. Sales volume has declined.
B. Closing inventory is lower than opening inventory.
C. Some closing inventory items were included at less than cost.
D. Selling and distribution costs have risen.
11 of 13
PART 4: LOGICAL THINKING (6 IQs + 1 short question – 2 points)

Question 1: The numbers in the grid to together in a certain way.
Which number should be in the square marked by the question mark?
SAPP Academy Tel 096 262 3203
6th floor,35 30alley, Truong
No 2A Trai Ca 27Dinh St Sapp.edu.vn
31 26 23
28 23 ?
Answer: 20
Question 2: The present age of Ram is 20 years and of his father is 40 years. How many years ago the
age of his father was three times of his age?
Answer: 10 years
Question 3: Diophantus passed one sixth of his life in childhood, one twelfth in youth, and one seventh
more as a bachelor; five years after his marriage a son was born who died four years before his
father at half his final age. How old is Diophantus?
Answer: 84 years
Question 4: Out of 90 coins, one is counterfeit. What is the minimum number of weightings needed
to find out the counterfeit coin?
Answer: 5
Question 5: What belongs only to you but it is used more by others than yourself?
Answer: Name
Question 6: If 7 +3 = 41021; 8 + 3 = 51124, then 9 +3 =?

Answer: 61227
Question 7: Imagine there is no automobile in the future?
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PART 5: ESSAY (no more than 250 words – 2 points)

What are the challenges for audit in the future and how to overcome these problems?”
12 of 13

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SAPP Academy Tel: 0466 709 888

6th Floor, No. 2A Trai Ca alley, Truong Dinh St Web: sapp.edu.vn

DELOITTE – FULL TEST 1

PART A: ACCOUNTING (15 MCQS – 2 POINTS)

PART 2: AUDITING (15 MCQS – 2 POINTS)

Question 14: Which of the following is an example of an inherent risk factor?

PART 3: FINANCE (10 MCQs – 2 points)

Question 1: Return on Assets and Return on Investment Ratios belong to:

Question 4: Which of the following is not an element of working capital?

PART 4: LOGICAL THINKING (6 IQs + 1 short question – 2 points)

Question 6: If 7 +3 = 41021; 8 + 3 = 51124, then 9 +3 =?

PART 5: ESSAY (no more than 250 words – 2 points)

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