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Sapp - Ey Entrance Test Answer
Sapp - Ey Entrance Test Answer
2. The following bank reconciliation statement has been prepared by a trainee accountant:
$
Overdraft per bank statement 3,860
Less: Unpresented cheques 9,160
5,300
Add: Outstanding lodgements 16,690
Cash at bank 21,990
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How much should Gareth capitalise as a non-current asset in relation to the purchase?
A. $1,193
B. $1,040
C. $1,222
D. $1,015
Answer: 1040 – 25 = 1015
4. Prior to the financial year end of 31 July 20X7, Canon Co has received a claim of
$100,000 from a supplier for providing poor quality goods which have damaged the
supplier’s plant and equipment. Canon Co’s lawyers have stated that there is a 20%
chance that Canon will successfully defend the claim.
Which of the following is the correct accounting treatment for the claim in the financial
statements for the year ended 31 July 20X7?
A. Canon should neither provide for nor disclose the claim
B. Canon should disclose a contingent liability of $100,000
C. Canon should provide for the expected cost of the claim of $100,000
D. Canon should provide for an expected cost of $20,000
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SAPP Academy Tel 096 972 94 63
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The company’s policy is to charge depreciation at 20% per year on the straight line basis,
with proportionate depreciation in the years of purchase and disposal.
What should be the depreciation charge for the year ended 31 December 20X6?
A. $68,000
B. $64,000
C. $61,000
D. $55,000
Answer:
Depreciation
$
Jan – Mar 240000 x 20% x 3/12 12000
Apr – Jun (240000 – 60000) x 20% x 3/12 9000
Jul – Dec (180000 + 160000) x 20% x 6/12 34000
55000
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In the year ended 31 December 20X6 the company made a rights issue of 1 share for
every 2 held at $1 per share and this was taken up in full. Later in the year the company
made a bonus issue of 1 share for every 5 held, using the share premium account for the
purpose.
What was the company’s capital structure at 31 December 20X6?
Ordinary share Share premium
capital account
A. $450,000 $25,000
B. $225,000 $250,000
C. $225,000 $325,500
D. $212,500 $262,500
Answer:
Share capital Share premium
$ $
Balance b/f 125000 100000
Rights issue 62500 187500
Bonus issue 37500 (37500)
225000 250000
11. Bumbly Co extracted the trial balance for the year ended 31 December 20X6. The total
of the debits exceeded the credits by $300.
Which of the following could explain the imbalance?
A. Sales of $300 were omitted from the sales day book
B. Returns inward of $150 were extracted to the debit column of the trial balance
C. Discounts received of $150 were extracted to the debit column of the trial balance
D. The bank ledger account did not agree with the bank statement by a debit of $300
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13. A company values its inventory using the FIFO method. At 1 May 20X6 the company had
700 engines in inventory, valued at $190 each. During the year ended 30 April 20X7 the
following transactions took place:
20X5
1 July Purchased 500 engines at $220 each
1 November Sold 400 engines for $160,000
20X6
1 February Purchased 300 engines at $230 each
15 April Sold 250 engines for $125,000
What is the value of the company’s closing inventory of engines at 30 April 20X7?
A. $188,500
B. $195,500
C. $166,000
D. $106,000
Answer: The value of closing inventory is:
Opening: 700 x 190 = 133000 1 May 20X5
Plus: 500 x 220 = 110000 1 July 20X5
Less: 400 x 190 = 76000 1 November 20X5
Plus: 300 x 230 = 69000 1 February 20X6
Less: 250 x 190 = 47500 15 April 20X6
Closing: 188,500
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14. Which of the following material events after the reporting date andTel:
SAPP Academy before the493financial
0166 7703
No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
statements are approved are adjusting events?
(i) A valuation of property providing evidence of impairment in value at the reporting
date.
(ii) Sale of inventory held at the reporting date for less than cost.
(iii) Discovery of fraud or error affecting the financial statements.
(iv) The insolvency of a customer with a debt owing at the reporting date which is still
outstanding.
A. i, ii and iv only
B. i, ii, iii and iv
C. i and iv only
D. ii and iii only
15. The following control account has been prepared by a trainee accountant:
Receivables ledger control account
$ $
Opening balance 308,600 Cash 147,200
Credit sales 154,200 Discounts allowed 1,400
Cash sales 88,100 Interest charged on overdue 2,400
accounts
Contras 4,600 Irrecoverable debts 4,900
Allowance for receivables 2,800
Closing balance 396,800
Total 555,500 555,500
What should the closing balance be when all the errors made in preparing the
receivables ledger control account have been corrected?
A. $395,200
B. $304,300
C. $309,500
D. $307,100
Answer:
Receivables ledger control account
$ $
Opening balance 308,600 Cash 147,200
Credit sales 154,200 Discounts allowed 1,400
Interest charged on overdue 2,400 Contras 4,600
accounts
Irrecoverable debts 4,900
Closing balance 307100
Total 465,200 465,200
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17. Hywel plc's trial balance includes a total for all the receivables ledger accounts as listed
out at the year end. The receivables ledger is part of the double entry system. The trial
balance fails to agree and a suspense account is opened. The difference is due to the
following errors in Hywel plc's ledger accounts:
(i) The balance on Markham plc's receivables ledger account is £9,890. This is
incorrectly recorded in the trial balance as £9,980
(ii) A discount allowed to Umberto of £33 was debited to his receivables ledger account
(iii) The sales account is overcast by £110. Three journals are drafted to correct these
errors.
Together these journals should:
A. Credit the suspense account with £110
B. Debit the suspense account with £86
C. Credit the suspense account with £46
D. Debit the suspense account with £46
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20. Which of the following definitions for the 'going concern' concept in accounting is the
most accurate in the light of IAS 1 Presentation of Financial Statements?
A. The directors do not intend to liquidate the entity or to cease trading in the
foreseeable future
B. The entity is able to pay its debts as and when they fall due
C. The directors expect the entity’s assets to yield future economic benefits
D. Financial statements have been prepared on the assumption that the entity is
solvent and would be able to pay all creditors in full in the event of being wound
up.
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22. Which of the following audit phases would generally be conducted before all of the
others listed below?
A. Auditing business processes and related accounts.
B. Evaluation of audit evidence.
C. Gaining an understanding of the client's industry.
D. Consideration of internal control systems.
23. An auditor's evaluation of the reasonableness of a client's loan loss reserve would
normally be made during which phase of the audit?
A. Gaining an understanding of the client's industry.
B. Client acceptance/pre-planning.
C. Consideration of internal control systems.
D. Auditing business processes and related accounts.
24. What is the essential meaning of the generally accepted auditing standard that requires
that the auditor be independent?
A. The auditor must be without bias with respect to the client under audit.
B. The auditor must adopt a critical attitude during the audit.
C. The auditor's sole obligation is to third parties.
D. The auditor may have a direct ownership interest in his client's business if it is not
material.
25. The responsibility for implementing sound accounting practices and principles,
maintaining an adequate internal control structure, and making fair representations in
the financial statements rests primarily with the:
A. Senior management
B. External auditors
C. Internal audit department
D. Shareholders
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27. The existence of audit risk is recognized by the statement in the auditor's standard
report that the:
A. Auditor obtains reasonable assurance about whether the financial statements are
free of material misstatements.
B. Auditor is responsible for expressing an opinion on the financial statements, which
are the responsibility of management.
C. Financial statements are presented fairly, in all material respects, in conformity with
VAS.
D. Audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.
28. Which of the following factors would an auditor least likely consider when assessing the
inherent risk associated with client sales transactions?
A. Billings are made using the percentage-of-completion method of revenue
recognition.
B. The nature of the credit authorization process.
C. Some invoices are normally billed prior to shipments [which occur at a later date].
D. The conditions of the sale allow for a right of return or the right to modify the
purchase agreement.
29. The risk that an auditor's procedures will lead to a conclusion that a material
misstatement in an account balance does not exist, when in fact a misstatement did
occur, is known as:
A. Audit risk
B. Detection risk
C. Inherent risk
D. Business risk
30. Which of the following factors is least likely to represent an opportunity to commit
fraud?
A. The audit committee is ineffective.
B. Poor internal controls over cash transactions
C. The existence of highly complex transactions
D. Operating losses make a hostile takeover imminent.
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III. TAX (10 questions) SAPP Academy Tel: 0166 7703 493
No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
31. On 1 July 2012, NLAM Co leased an asset for four years and paid the whole rent of
VND600 million in advance. On 1 July 2014, NLAM Co decided to shorten the lease
period to three years. The company expects that it will have to pay a penalty of VND60
million when it terminates the lease in 2015 in order to receive a refund of one year of
the original lease payment.
What is the deductible expense for NLAM Co with regard to the lease in the year ended
31 December 2014?
A. VND150 million
B. VND75 million
C. VND165 million
D. VND170 million
Answer: Only the original lease allocation per the lease period is allowed – point 2.16
Article 6 of Circular 78/2014. 600 mil/4 = 150 mil.
32. NEI Co, a foreign contractor, entered into a contract with PVN, a Vietnamese company,
to supply services in relation to oil exploration. NEI Co wants to apply the deduction
method for the declaration of value added tax (VAT) in Vietnam. In November 2014
when the tax code application was still in progress, NEI Co incurred input VAT of
USD15,000 for its operations in Vietnam. Also during that time, PVN made a progress
payment to NEI Co of USD200,000 (net of VAT at 10%) for the services. In December
2014 when the tax code was available, NEI Co incurred a further USD28,000 input VAT
for its operations in Vietnam.
What is the amount of NEI Co’s deductible input value added tax (VAT) in 2014?
A. USD63,000
B. USD28,000
C. USD35,000
D. USD15,000
Answer: Only the input VAT incurred when a tax code has been obtained is deductible –
point 3.b, Article 12 of Circular 103/2014.
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34. Mr Tomaz is a Hong Kong citizen and tax resident. He arrived in Vietnam to work on 21
April 2014 and on completion of his employment contract, he left Vietnam on 31
October 2015. In the years 2014 and 2015, he spent the following numbers of days in
Vietnam:
– From 21 April to 31 December 2014 – 130 days
– From 1 January to 20 April 2015 – 64 days
– From 21 April to 31 October 2015 – 110 days
Based solely on the above information, what is Mr Tomaz’s tax residency status in his
first and second tax year in Vietnam?
First year Second year
A Resident Resident
B Resident Non-resident
C Non-resident Resident
D Non-resident Non-resident
Answer: First tax year: 21 April 2014–20 April 2015: 130 + 64 = 194 days (more than 183
days): resident Second tax year: 1 January–31 October 2015: 64 + 110 = 174 days (less
than 183 days): non-resident.
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36. SWR Co, a Vietnamese company, has three separate sales outlets. In December 2014,
each of the outlets issued an invoice for the sale of one ton of construction materials to
three separate customers as follows. The sale of construction materials is subject to
value added tax (VAT) at the rate of 10%.
– Invoice 1: selling price VND20 million, VAT VND2 million
– Invoice 2: selling price VND22 million, no VAT as the selling price is inclusive
– Invoice 3: selling price VND20 million, no VAT because the construction materials
were given to the customer for free as part of a promotion which has been
registered with the authorities
What is the output value added tax (VAT) which SWR Co should have declared in
December 2014, if no amendments were made to the invoices?
A. VND4 million
B. VND2 million
C. VND4.2 million
D. VND6.2 million
Answer: VND4.2 million (2 million + 22 * 10% + 0). The taxable revenue when VAT is not
separated, as for Invoice 2, must be the whole of the selling price.
37. Ms Hoai Pham has two dependants. In 2014, her monthly gross salary was VND50
million and she was responsible for paying 8% social insurance and 1.5% health
insurance.
What is Ms Hoai Pham’s monthly tax liability (to the nearest VND10,000)?
A. VND4.16 million
B. VND4.67 million
C. VND6.26 million
D. VND5.20 million
Answer: VND4.67 million [(50 million – (9 million + 3.6 million * 2 + 23 million * (8% +
1.5%))) * 20% – 1.65 million]
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39. HNKV Co is a one-member limited liability company, which is wholly own by HKV, a
company incorporated in Bermuda. In 2014, HKV decided to convert HNKV Co into a
joint stock company by selling the shares of HNKV Co to two local Vietnamese entities.
The sale of the shares and the conversion of the company was completed in August
2014. Which combination of the following statements correctly describes the reporting
requirements for capital gains tax and corporate income tax (CIT) finalisation under the
current regulations?
(i) HNKV Co is required to file a capital gains tax declaration
(ii) The buyers are required to file a capital gains tax declaration
(iii) HNKV Co is required to file a CIT finalisation return at the time of conversion and at
the year end
(iv) HNKV Co is required to file a CIT finalisation return at the year end only
A. i and iii
B. i and iv
C. ii and iii
D. ii and iv
Answer: The buyers will be responsible for making a capital gains tax declaration since
they are local entities. According to point 2, Article 16 of Circular 151, HNKV Co is not
required to file a corporate income tax (CIT) finalisation at the time of conversion when
it is a conversion from a limited liability company to a joint stock company.
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Page 16 of 21
SAPP Academy Tel 096 972 94 63
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44. How many floors does Keangnam Hanoi Landmark Tower have?
A. 90
B. 72
C. 46
D. 16
45. How many countries are in European Union (EU) in August 2017?
A. 25
B. 26
C. 27
D. 28
46. Which movie is dominated for Best Picture for Oscar 2017?
A. Moonlight
B. La La Land
C. The Salesman
D. Manchester of the Sea
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Page 18 of 21
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Answer: -6. In each row, the first column minus the second column is equal to the sum
of the digit of the last column. (4-(-6) = 2+8)
3. Fill in the blank in the middle of the series. P5QR, P4QS, P3QT, ...., P1QV
Answer: P2QJ
4. Currently Mark Zuckerberg is 31 years old, 9 more years his age doubles his sister’s
currently. So how old is Mark’s sister?
Answer: 20
Answer: 69877689
6. Today Erik goes to market for the first time, his mother told him to buy a few PEARS
giving $23. How many PEARS can Erik buy maximum with the given money? Knowing
that:
- Apple + Apple + Pear + Peach = $23
- Peach + Apple + Orange + Apple = $22
- Apple + Orange + Apple + Apple = $16
- Apple + Apple + Apple + Apple = $12
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SAPP Academy Tel 096 972 94 63
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7. 12593 is to 35291
SAPP Academy Tel: 0166 7703 493
No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
And 29684 is to 46982
Therefore 72936 is to ?
Answer: 47632. All the others are three-digit numbers followed by their square root,
eg 361 followed by its square root, 19.
9. AZBYDWGT??
Answer: KP. There are two alternate sequences. Starting at A, AbcDefGhijK; starting at Z,
ZyvuTsrqP
10. How many cases do you need if you have to pack 112 pairs of shoes into cases that each
hold 28 shoes?
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VI. ESSAY (250 words) SAPP Academy Tel: 0166 7703 493
No. 20, 198 alley, Xa Dan street, Ha Noi Sapp.edu.vn
Parents often give children everything they ask for and do what they like. Is it good for
children? What are the consequences when they grow up?
- An essay needs to have a good structure, including Introduction, Discussion (2-3
paragraphs) and Conclusion.
- In the Discussion part, candidates need to provide their ideas and examples/evidences
in each graph. Each idea is corresponding to a paragraph. For example:
The first reason is that children could depend on their parents instead of being
independent when they grow up. Subsequently, it could affect their moral in
studying and working. In particular, children know their parents could support the
tuition fee so that they would probably not focus on the learning process... (this
example is extremely effortless that equivalent to 6.0 IELTS)
- Additionally, candidates should use academic words and synonyms (consequences =
repercussions)
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