i

PART 1:
ACCOUNTING TECHNICIANS SCHEME OF WEST AFRICA (ATSWA)
PRINCIPLES AND PRACTICE OF FINANCIAL ACCOUNTING
TIME ALLOWED - 3 HOURS
SECTION A: Attempt All Questions
MULTIPLE-CHOICE QUESTIONS (30 MARKS)
Write only alphabet (A, B, C, D or E) that corresponds to the correct option in each of the following questions.
1.
The accounting entries to be made in the consignor‟s books upon despatch of the consignment to the consignee are:
A.
Dr. Consignment to Consignee‟s account; Cr. Consignee‟s personal account with the selling price of the Consignment.
B.
Dr. Consignment to Consignee‟s account; Cr. Sales account with the selling price of the Consignment
C.
Dr. Consignment to Consignee‟s account; Cr. Consignment outwards account with the cost price of the Consignment
D.
Dr. Debtors account and Cr. Sales account with the cost price of the
Consignment
E.
Dr. Consignment to Consignee‟s account; Cr. Consignment outwards account with the selling price of the Consignment
2.
The minimum amount of royalty payable by the lessee irrespective of the level of activity or utilization is called
A.
Maximum rent
B.
Activity rent
C.
Utility rent
D.
Dead rent
E.
Economic rent
3. The accounting entries necessary to record and write-off lapsed short working in the books of the lessee are:
A.
Dr. Short workings Allowable Account; Cr. Income Statement
B.
Dr. Short workings receivable Account; Cr. Income Statement
1

C.
Dr. Short workings Allowable Account; Cr. Short workings irrecoupable
Account
D.
Dr. Income Statement; Cr. Short workings Receivable Account
E.
Dr. Short working Allowable Account; Cr. Short workings Receivable
Account
4. The responsibility for the preparation and presentation of Financial Statements to the shareholders at the Annual General Meeting of a Public Limited Liability company is that of
A.
Managing Director
B.
Board of Directors
C.
Director of Finance
D.
External Auditor
E.
Audit Committee
5. A temporary arrangement where two or more businesses pooled their economic resources together to attain a specific task is called
A.
Partnership
B.
Economic entity
C.
Amalgamation
D.
Joint Venture
E.
Merger
6. The following clauses are stated in Partnership Act 1890 EXCEPT:
A.
Pattern of sharing profits or losses among the partners
B.
Amount of capital to be contributed by the partners
C.
Nature of business to be engaged in by the partnership
D.
The rate of interest to be charged on drawings
E.
Rights and duties of each partner
7. The means of communicating to interested parties, information on the resources, obligations and performance of the reporting economic entity or enterprise is
A.
Statement of Comprehensive Income
B.
Statement of changes in financial position
C.
Statement of financial position
D.
Statement of Cash flows
E.
Financial Statements
2

8. Those bases, rules, principles, conventions and procedures adopted in preparing and presenting the financial statements of an economic entity or enterprise is called accounting
A.
Bases
B.
Policies
C.
Convention
D.
Principles
E.
Procedures
9. When preparing Statement of Cash Flows, the following items can be classified as investing activities EXCEPT:
A.
Proceeds from issue of shares, debentures and loan stock
B.
Dividends and interest received on investments
C.
Purchase of fixed assets
D.
Proceeds from sale of fixed assets and investments
E.
Purchase of investments
10. In the partnership books, the necessary accounting entries to record a creditor not taken over by a company acquiring a partnership business on dissolution, but is settled by one of the partners are:
A.
Dr. Creditors Account; Cr. Realisation Account
B.
Dr. Creditors Account; Cr. Partner‟s Capital Account
C.
Dr. Creditors Account; Cr. Partner‟s Current Account
D.
Dr. Creditors Account; Cr. Cash Book
E.
Dr. Cash Book; Cr. Creditors Account
11. Ade and Chukwu are in partnership sharing profits and losses in ratio 2:1. They decide to admit Musa, who will be entitled to 1 /
6 th of the profits or losses, while the old partners maintain their former sharing ratio. The new profits and losses ratio after the admission of Musa will be:
3

A.
B.
C.
Ade
2
4
8
Chukwu
1
5
5
Musa
1
2
3
D. 10 5 3
E. 10 5 1
12. In the books of a company that acquired a partnership business, when the purchase consideration is less than the value of assets acquired, the difference is
A.
Good will
B.
General Reserve
C.
Capital Reserve
D.
Surplus Reserve
E.
Acquired Reserve
13. The contents of published financial statements of a public limited liability company include the following EXCEPT:
A.
Statement of Comprehensive Income
B.
Statement of financial Position
C.
Internal Auditors Reports
D.
External Auditors‟ Report
E.
Statement of Cashflows
14. In a Not-for-profit organization, policy decisions are taken by
A.
The Chairman
B.
Members
C.
Stakeholders
D.
Board of Trustees
E.
General Secretary
15. In considering changes in working capital as regards presenting statement of cash flows, the following statements are correct EXCPET:
A.
Increase in Inventories, Decreases in Working Capital
B.
Increase in Trade Receivables, Increases in working Capital
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C.
Increase in Trade Payables, Decreases in Working Capital
D.
Increase in Trade Receivables, Decreases in working Capital
E.
Increase in Prepayment, Decreases in working Capital
16. In preparing Farmer‟s Account, Gross output is defined as the difference between Group A items and Group B items. What are the items that make up
Group A?
A.
Sales + closing stock + subsidies
B.
Purchases + opening stock + own consumption
C.
Own consumption + subsides + opening stock
D.
Closing stock + opening stock + subsidies
E.
Sales + subsidies + own consumption
17. The trading result of a joint venture arrangement is determined in the
A.
Co-ventures‟ Account
B.
Ventures‟ Personal Account
C.
Income Statement
D.
Memorandum Joint Venture Account
E.
Joint Venture Account
18. The accounting ratio that measures the level of confidence the lenders have in the ability of a limited liability company to pay interest and repay loan granted to it is
A.
Gearing ratio
B.
Fixed Interest Cover
C.
Debt recovery ratio
D.
Fixed interest ratio
E.
Long term Debt ratio
19. In the books of the Lessee, the ledger account entries necessary to record unpaid instalmental lease rentals at due dates are:
A.
Dr. Lease Rental Account, Cr. Lessor Account
B.
Dr. Lease Rental Account, Cr. Income Statement
C.
Dr. Lease Rental Account, Cr. Accrued Lease Rental Account
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D.
Dr. Lease Rental Account, Cr. Cash Book
E.
Dr. Lease Rental Account, Cr. Lessee Account
20. Which of the following will not cause dissolution of a partnership?
A.
When a partner is bankrupt
B.
When a partner retires
C.
When a partner is handicapped
D.
When a partner is insane
E.
When a partner dies
Use the following to answer questions 21 to 23
Zenox social Club
Receipt and Payments Account for year 2010
Balance b/d
Subscriptions
Proceeds from Dance
Additional Information:
N
?? Equipment
286,000 Wages
40,000 Dance Expenses
??
A.
N283,000
B.
N286,000
C.
N291,000
D.
N300,000
E.
N320,000
N
85,200
20,000
19,000
??
Bank Balance
Subscriptions in Arrears
Furniture
Subscription in advance
Wages owing
January
2010
N
14,400
6,000
14,000
10,000
1,000
December
2010
N
-
9,000
14,000
8,000
1,200
21. How much could be recorded by the club as subscription for the year 2010?
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22. What was the bank balance of the organization as at 31 December, 2010
A.
N216,000
B.
N216,200
C.
N216,300
D.
N216,600
E.
N216,700
23. What was the accumulated fund of the organization as at 1ST January 2010?
A.
N22,400
B.
N22,500
C.
N23,200
D.
N23,400
E.
N23,500
24. In preparing Manufacturing Account of an economic entity, the understated value of closing work-in-progress will
A.
Understate the cost of goods manufactured
B.
Overstate the prime cost of goods manufactured
C.
Overstate cost of goods manufactured
D.
Understate prime cost of goods manufactured
E.
Overstate manufacturing overheads
Use the following information to answer questions 25 – 26.
Fancy Plc offered to the public 500,000 ordinary shares of 50k each at ¢2.50 per share.
The public applied for 1,500,000 ordinary shares and the company decided to issue the shares on pro-rata basis.
25. What is the basis of allotting the shares to the public?
1 /
3
2 /
3
A.
B.
C.
½
D.
E.
2 /
4
1 /
5
26. What will be the number of shares to be issued to a subscriber who applied for
30,000 shares?
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A.
5,000 shares
B.
10,000 shares
C.
15,000 shares
D.
20,000 shares
E.
25,000 shares
27. The membership of a professional partnership firm must be between
A.
2 and 7
B.
2 and 10
C.
2 and 50
D.
2 and any number
E.
2 and 20
Use the following information to answer questions 28 and 29.
Maxima Plc has authorized share capital of L$600,000 ordinary shares of L$1 each and the company issued 500,000 shares at L$1.30 each. All the shares were fully paid for. For the year ended 31 December 2010 the company declared and paid 5% dividend to the ordinary shares holders.
28. The total ordinary shares dividend declared by the company for the year ended
31 December, 2010 is
A.
L$22,000
B.
L$23,000
C.
L$24,000
D.
L$24,500
E.
L$25,000
29. How much dividend should a shareholder with 10,000 shares receive from the company?
A.
L$250
B.
L$350
C.
L$500
D.
L$650
E.
L$700
30. Which of the following is a current liability?
A.
Overdraft
B.
Proposed Dividend
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14.
D
15.
B
16.
E
17.
D
18.
B
19.
A
20.
C
21.
C
22.
B
23.
D
24.
C
C.
Debentures
D.
Trade Receivables
E.
Bills Receivable
SOLUTION TO MULTIPLE CHOICE QUESTIONS
1.
C
2.
D
3.
E
4.
B
5.
D
6.
C
7.
E
8.
B
9.
A
10.
B
11.
D
12.
C
13.
C
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25.
A
26.
B
27.
D
28.
E
29.
C
30.
A
Notes:
1.
Subscription Account
N N
Balance b/d 6,000 Balance b/d 10,000
Income & Exp. 291,000 Receipts & Payments 286,000
Balance c/d 8,000 Balance c/d 9,000
305,000 305,000
2.
Bank Balance
N N
Balance b/d 14,400
Subscriptions 286,000
Proceeds from Dance 40,000
340,400
Less: Equipment 85,200
Wages 20,000
Dance Expenses 19,000
124,200
216,200
23. Accumulated Fund
N
Balance b/d 14,400
Subscriptions in Arrears 6,000
Furniture 14,000
34,400
Subscriptions in Advance 10,000
Wages Owing 1,000
11,000
23,400
28. 500,000 Ordinary Shares x N 1 =N500,000
N500,000 x 5% = N 25,000
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29. N 25,000 : 500,000 Ordinary Shares =5k
5k x 10,000 Ordinary Shares =N500
SECTION A
PART II SHORT ANSWER QUESTIONS (20 Marks)
Write the answer that best completes each of the following questions/statements
1.
The accumulated fund of not-for-profit organisation is determined by preparing………………..
Use the following information to answer questions 2-4
Balances extracted from the books of SAQ Ltd for the year ended 31 December,
2010 are as follows:
Issued share Capital
Ordinary shares of 50k each
6% [preference shares
Profit and Loss
Proposed Dividend
Trade payables
Dr.
N
Cr.
N
1,000,000
400,000
300,000
100,000
600,000
Fixed Assets
Stock
Trade Receivable
1,500,000
600,000
300,000
2,400,000 2,400,000
Additional information
Preference shares dividends are yet to be paid but proposed.
2.
What was the Ordinary Share-holders Fund as at December 2010?
3.
What was the working Capital of the company as at December 2010?
4.
What was the dividend per ordinary share as proposed by the company as at
December 2010?
5.
Factory cost consists of……………………………….
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Use the following information to answer questions 6 to 8.
Balances extracted from the books of Warriors Ltd for the year ended 31 December,
2011 are as follows:
Opening inventories
Closing inventories
Opening trade payable
N
650,000
550,000
400,000
Closing trade payable 500,000
Payment to trade payable during the year 2,000,000
on selling price Gross profit is 1 /
3
6.
What was the company‟s total purchase for the year?
7.
What was the company‟s turnover for the year?
8.
What was the company‟s gross profit for the year?
9.
What was stock turnover rate?
10.
The membership of a private limited liability company is limited to……………….
Use the following information to answer question 11 and 12.
FA Ltd sent goods worth N1,125,000 at selling price to one of its branches. The goods are consigned to the branch at 25% on cost.
11.
What is the cost price of the goods sent to the branch?
12.
What is the profit on the goods sent to the branch?
13.
State the ledger account entries to record and write off cash stolen at the branch.
14.
State the necessary ledger account entries to record decrease in the value of assets due to revaluation on admission of a new partner.
15.
State the necessary ledger account entries to record partner share of loss.
16.
Raise the journal entries to record the refund of excess monies received by a public limited liability company on the application and allotment of shares
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17.
List the TWO recognized methods of preparing and presenting Statement of
Cash Flows.
18.
Profit on realization of business as may be determined in the Realization account will be recorded as………………..in the Purchase of Business Account.
19.
The parties involved in any joint venture arrangement are called the…………..
20.
State the necessary ledger account entries to record the purchase of containers on credit by a business entity.
SOLUTION TO SHORT-ANSWER QUESTIONS
1.
Statement of Affairs
2.
N1,400,000
3.
N300,000
4.
38k
5.
Direct materials, direct labour, direct expenses and factory overhead
6.
N2,100,000
7.
N3,300,000
8.
N1,100,000
9.
5.5 times
10.
50 members, excluding members who are staff
11.
N900,000
12.
N225,000
13.
Dr. Branch Profit and Loss Account; Cr. Branch Stock Account
14.
Dr. Revaluation Account and Cr. Asset Account
15.
Dr. Partners Current Account and Cr. Appropriation Account
16.
Dr. Application and allotment Account and Cr. Cash/Bank Account
17.
Direct and Indirect methods
18.
Goodwill
19.
Venturers
20.
Dr. Container Stock Account and Cr. Creditors Account
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NOTES
2. N1,000,000 + N300,000 + N100,000 = N1,400,000
The proposed dividend should be added back to the profit and loss
3. (N600,000 + N300,000) – N600,000 = N300,000
4. N100,000 –n (6% x N400,000) ÷ 2,000,000 ordinary shares = 0.038k
6. (N2,000,000 + N500,000) – N400,000 = N2,100,000
7. (N650,000 + N2,100,000) – N550,000 = N2,200,000
8. 50% x N2,200,000 = N1,100,000
9. Sales = 3,300,000
½(650,000 + 550,000) ½ )Opening Stock + Closing Stock)
11. 4 /
5
x N1,125,000 = N900,000
12. 1 /
5
x N1,125,000 =N225,000
= 5.5 times
SECTION B - Attempt Any FOUR QUESTIONS
QUESTION 1
(50 Marks)
Mr. Alfred, a Freetown-based sole proprietor, does not maintain proper accounting records. The following information have been obtained from him and other sources in respect of the year ended 31 December 2011.
Inventories in trade
Cash at bank
Trade receivable
Trade payable
Furniture
Motor vans
At 1 January 2011
¢‟000
58,912
20,704
15,040
34,368
12,800
296,000
At 31 December 2011
¢‟000
56,384
15,936
11,200
31,936
11,520
612,000
During the year, Alfred withdrew ¢800,000 from the business, every month. On
15 March 2011, he introduced additional capital of ¢200,000,000.
The following additional information should be taken into consideration:
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(a) Electricity bill of ¢3million was outstanding as at 31 December 2011
(b) Rates of ¢4.5million had been paid for the period 1 October 2011 to 31
March 2012
(c) A provision of ¢1,120,000 is to be made for doubtful debts.
You are required to ascertain the net profit or loss of the business for the year ended 31 December 2011 and prepare statement of financial position as at that date. (12½ Marks)
SOLUTION 1
MR ALFRED
Calculation of Net profit for the year ended 31 December 2011
Capital at 31 December 2011 (w.i)
Less Additional Capital introduced
Add Drawings (800,000 x12)
Less Capital at 1 January 2011
Net profit for the year
Statement of financial position as at 31 December 2011
¢
000
Non current assets
Furniture
Motor van
Current assets
Inventories
Trade perceeivables (11200-1120)
Prepayment (rates)
Bank
Less Current liabilities
Trade payables 31,936
Accruals 3,000
Financed by
Owner‟s Equity
Additional capital introduced
¢‟000
56,384
10,080
2,250
15,936
84,650
34,936
¢‟000
673,234
200,000
473,234
9,600
482,834
369,088
113,746
¢‟000
11,520
612,000
623,520
49,714
673,234
369,088
200,000
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Net profit
Less Drawings
Workings
(W.I) Calculation of capital at 31 December 2011
Assets
Furniture
Motor Van
Inventories
Trade receivables
Less Provision for doubtful debts
Prepayments ( 3 /
6
x c4,500,000)
Cash at bank
(W.2) Calculation of capital at 1 January 2011
Furniture
Motor Van
Inventories
Trade receivables
Cash at bank
Less liabilities
Trade payables
¢‟000
11,200
1,120
569,088
113,746
682,834
9,600
673,234
¢‟000
11,520
612,000
56,384
10,080
2,250
15,936
673,234
(12 1 /
12,800
296,000
58,912
15,040
20,704
403,456
34,368
2
369,088
Marks)
QUESTION 2
The Treasurer of Wazobia Footbal Club gave you the following summary of his cash book for the year ended 31 December 2011:
Wazobia Football Club
Summary of cash book
For the year ended 31 December 2011
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Balance b/f
At bank
In hand
Subscription
Supporters
Supporters
2012 session
Share of gate takings
Annual social events
N
126,000 Salaries and wages
20,000 Rent and rates
Printing
300,000 Affiliation fees
Paid to NFA
40,000 Treasurer‟s expenses
640,000 Refreshments
268,000 Annual social fund
Equipment purchased
Balance b/d
At bank
In hand
1,394,000
The Treasurer also gave you the following information
31 December
2010
N
28,000
N
24,000
156,000 106,000
12,000
N
392,000
76,000
36,000
24,000
74,000
122,000
204,000
52,000
398,000
16,000
1,394,000
2011
Amount due to the club:
Supporters‟ subscriptions
Share of gate takings
Re: Annual social fund (deficit)
Amount owing by the club:
Rent and rates
Printing
Treasurer‟s expenses
Refreshment
24,000
-
8,000
26,000
28,000
6,000
-
16,000
24,000
On 31 December 2010, the club‟s equipment appeared in the books as N300,000. It is the club‟s policy to provide for depreciation of 20% of the book value of the equipment on the date of statement of financial position.
You are required to prepare the Income and Expenditure account for the year ended
31 December 2011 and a statement of financial position as at that date.
(12 1 /
2
Marks)
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SOLUTION 2
WAZOBIA FOOTBALL CLUB
Income and Expenditure account for the year ended 31 December 2011
N N
Income:
Supporters‟ subscription
Gate takings
Less Expenditure
Salaries and wages
Rent and rates
Printing
Treasurer‟s expenses
Refreshments
Affiliation fees
Depreciation
Excess of Income over Expenditure
Annual social events fund:
Cash proceeds during the year
Less Cash disbursements
Add surplus for the year
Annual social funds
Non-current Assets
Equipment at lost
Less accumulated depreciation
Current assets
Accruals (24,000 + 106,000)
Cash – At bank
In hand
296,000
590,000 886,000
392,000
80,000
42,000
Less deficit b/f
Surplus on fund carried forward
Statement of financial position as at 31 December 2011
Funds:
Accumulated fund
82,000
120,000
24,000
70,400 810,400
75,600
268,000
204,000
64,000
12,000
52,000
N N
584,000
75,600 659,600
52,000
711,600
N N
352,000
70,400
281,600
130,000
398,000
16,000 414,000
825,600
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Less Liabilities
Subscription in advance
Accruals (28,000 + 6,000 + 16,000 + 24,000)
25 ticks of ½ mark each = 12 1 /
2
marks
Working
Accumulated fund as at 31 December 2010
40,000
74,000
114,000
711,600
Equipment
Accrual Income (28,000 + 156,000 + 12,000)
Cash at bank and in hand
Less Accruals (24,000 + 8,000 + 26,000)
QUESTION 3
N
300,000
196,000
146,000
642,000
58,000
584,000
According to the conceptual framework on financial reporting issued by the
International Accounting Standards Board (IASB) “Financial statements portray the framework effects of transactions and other events by grouping them into their broad classes according to their economic characteristics. These broad classes are termed elements of financial statements.”
Write brief notes on the following elements of financial statements as contained in the conceptual framework a) b) c) d) e)
Asset
Liabilities
Equity
Expenses
Capital maintenance adjustments
(2
(2
(2 1
1
1
/
/
/
2
(2 1 /
2
2
2
Marks)
Marks)
Marks)
Marks)
(2½ Marks)
(Total 12½ marks)
SOLUTION 3 a) Asset: An asset is a resource controlled by an entity as a result of past events and from which interim economic benefits expected to flow to the entity. The essential feature of recognition of an asset under IFRS is not so much about ownership and the probability of claiming future economic benefit therefore and of course reliability of measurement. (2 Marks)
19

b) Liability: A liability is a present obligation of an entity arising from past event, the settlement of which is expected to result in an outflow from the entity of resource, embodying economic benefits. Thus, for an item to qualify as a liability at a reporting date, there has to be an obligation on the entity to assume the liability as at that date. That is why proposed dividend does not qualify as a liability until it is endorsed at the annual general meeting normally subsequent to the year being reported upon. (2 Marks) c) Equity: Equity is the residual interest in the assets of the entity after deducting all liabilities. A simple equation is Equity = Assets less liabilities (2 Marks) d) Expenses: Expenses are economic benefits in the form of outflows or depletions of assets or incidence of liabilities that results in decreasing equity other than those relating to distributions to shareholders. (2 Marks) e) Capital maintenance adjustments: These are adjustments that arise as a result of the revaluation of assets and liabilities which gives rise to increases or decreases in equity. Whereas these increases meet the definition of income and expenses they are not included in income statement. (2 1 /
2 marks)
(Total 12½ marks)
QUESTION 4
The directors of a limited liability company asked for your advice on the following issues in respect of the proposed issue of redeemable preference shares.
(a) The procedure necessary before making the issue. (6 marks)
(b) The entries to be made in the books and the statement of financial position
(6 1 /
2
marks) when the issue is made.
Required:
State briefly your response to each of these questions
SOLUTION 4
(Total 12 1 /
2
marks)
4(a) A company limited by shares about to issue redeemable preference shares must have the necessary authority in its articles of association. If the articles do not contain such authority, it will be necessary to pass a special resolution of the company. For this purpose, it will be necessary to call a general meeting, giving at least 21-day notice of the intention to pass such resolution as a special resolution.
20

The proposed resolution must be passed by a majority of not less than threefourths of such members as being entitled to do so, vote in person, or, where proxies are allowed, by proxy. To become effective, a copy of such special resolution must be filed with the Registrar of Companies/Registrar General of the
CAC within 15 days of its being complied with, arrangements will be made to raise the capital privately or by public subscription. In the latter case, a prospectus has to be prepared and forwarded to the Registrar of
Companies/Registrar-General of the CAC, if a Stock Exchange quotation is desired, necessary request will be filed with the country‟s Stock Exchange in order to comply with the formalities laid down. Even if it is not intended to make a public issue, a public company has to forward to the Registrar of companies/Registrar
General of the CAC a statement in lieu of prospectus. (6 Marks)
(b) The entries in the books will depend upon the manner in which the capital is being raised but assuming the usual application, allotment and (say) one call, the entries in the financial books will be given in journal forms, thus:
Application and Allotment
Total Redeemable Preference share capital
Cash
To Application and allotment
Call
To Redeemable preference share capital
Cash
To call
Dr
Dr
N
Dr
Dr
There will be suitable entries in the Register of members, annual returns and notification to the Registrar of companies within one month of allotment.
The statement of financial position will contain
Authorised share capital
Cr
Cr
Cr
N
Cr
Issued share capital
% Redeemable Preference shares at a premium of x kobo on 31 December 2015
(6 1 /
(12 1 /
2
2
N
X
Marks)
marks)
21

QUESTION 5
Kwasi consigned four crates of wine to John his agent in Obuasi at a value of N7,500 per crate during the Christmas period and each crate contained 24 bottles. He insured his drink and paid insurance fee N750 and transport of N1,250. John paid insurance fees on receiving them of N1,000, storage facilities fees of N1,500 and delivery charges of N250.
By the end of the quarter 31 March 2011, John had sold 72 bottles of wine for
N36,000. He sent a cheque for the amount to Kwasi after deducting his commission of
10%.
You are required to prepare the appropriate account for the quarter ended 31 March
2011 in the books of Kwasi and accounts sales to be submitted to Kwasi by John.
(12 1 /
2
marks)
SOLUTION 5
Kwasi books
Goods on consignment account
Trading
Goods on consignment
Insurance
Transport
John – Insurance
Storage
Delivery expenses
Commission (10% of N36,000)
N
30,000 Consignment to John
Consignment to John Account
N
30,000 Sales John
750 Closing stock
1,250
1,000
1,500
250
3,600
6,275
44,625
Income Statement
N
30,000
N
36,000
8,625
44,625
22

Consignment to John
Goods on consignment
Insurance
Transport
Insurance
Storage
Total (96 bottles wines)
x 34,500 = 8,625 Closing Stock 24 /
96
Account Sales
Sales
John
N
36,000 Insurance
Storage
Delivery expenses
Commission
Bank
36,000
Closing Stock Calculation
N
30,000
750
1,250
1,000
1,500
34,500
Charges:
Insurance
Storage
Delivery expenses
Commission
25 ticks of 1 /
2
mark each = 12 1 /
2
marks
N
1,000
1,500
250
3,600
N
1,000
1,500
250
3,600
29,650
36,000
(25 ticks of ½ mark each = 12
1
/
2
Marks)
N
36,000
(6,350)
29,650
QUESTION 6
Abakat leased an expanse of land from Jalloh for stone crushing. The terms of the lease provide that:
(a) The lessee should pay a royalty of Le100 for every ton of gravel produced
(b) The minimum royalty should be Le50,000 per annum
(c) The lessee could recoup in the second and third years any short workings in the first year of production
23

Details of production of Abakat for the first four years are as follows:
Year ended 31 December
2007
2008
2009
2010
Production (Tons)
180
590
700
900
You are required to prepare the necessary ledgers to record the above transactions in respect of royalties in the books of Abakat which are closed on 31 December of each year.
(12 1 /
2
Marks)
SOLUTION 6
2007
2008
2009
2010
Freetown
Freetown
Freetown
Freetown
Abakat‟s Records
Royalty Payable Account
Le
18,000 2007
59,000 2008
70,000 2009
90,000 2010
Production
Production
Production
Production
Le
18,000
59,000
70,000
90,000
2007 Bank
2008 Bank
Short workings
2009 Bank
Short workings
2010 Bank
Jalloh A/c
Le
50,000 2007 Royalty payable
50,000
Short workings
50,000 2008 Royalty payable
9,000
59,000
50,000 2009 Royalty payable
20,000
70,000
90,000 2010 Royalty payable
Le
18,000
32,000
50,000
59,000
59,000
70,000
70,000
90,000
24

2007
2009
Jalloh
Balance b/d
Short workings Account
Le
32,000 2008
32,000
23,000 2009
23,000
Jalloh
Balance c/d
Freetown
Income statement
Le
9,000
23,000
32,000
20,000
3,000
23,000
(25 ticks of 1 /
2
Mark each = 12 1 /
2
(Total 12 1 /
2
Marks)
Marks)
25

ACCOUNTING TECHNICIANS SCHEME WEST AFRICA (ATSWA)
PUBLIC SECTOR ACCOUNTING
Time allowed: 3hours
SECTION A: (Attempt all questions)
PART I: MULTIPLE – CHOICE QUESTIONS (30 marks)
Write only the alphabet (A, B, C, D, E) that corresponds to the correct option in each of the following questions.
1.
The objectives of Government Accounting include
(i) Fulfilment of legal requirements
(ii) Performance of stewardship function
(iii) Providing the means by which actual performance may be compared with the
target set
A.
i only
B.
ii only
C.
iii only
D.
i and ii
E.
i, ii and iii
2.
Which of the following is an internal user of government accounting information?
A.
Financial Institutions
B.
Executive Arm of Government
C.
Researchers
D.
Financial Journalists
E.
Members of the public
3.
The receipts and payments of government money are regulated by the following
EXCEPT
A.
Government Gazettes
B.
The 1999 Constitution of Nigeria
C.
Financial Circulars
D.
Treasury Circulars
E.
Finance and Control Management Ordinance of 1958
26

4.
Public sector undertakings are funded by the following, EXCEPT
A.
Philanthropists
B.
C.
Citizens
Federal Government
D.
E.
State Governments
Local Governments
5.
ONE of the following is NOT a public sector entity.
A.
Red Cross Society of Nigeria
B.
State Government
C.
Local Government
D.
Federal Government
E.
University of Ibadan
6.
What basis of accounting records that anticipates disbursements which have been sanctioned by the management?
A.
B.
C.
D.
E.
Cash Basis
Accrual Basis
Commitment Basis
Accrual Basis
Modified Accrual Basis
7.
The major law on which the foundation of government accounting rests is
A.
B.
C.
D.
The Public Procurement Act, 2007.
The Fiscal Responsibility Act, 2007.
The Appropriation Acts.
The Audit Ordinance (Act) of 1956.
E.
The Finance (Control and Management) Act, 1958 (Cap. 144, 1990).
8.
Which International Public Sector Accounting Standard (IPSAS) deals with the presentation of financial statements?
A.
IPSAS 3
B.
IPSAS 2
C.
IPSAS 4
27

D.
IPSAS 1
E.
IPSAS 5
9.
Under what International Public Sector Accounting Standard is Related Party
Disclosures treated?
A.
IPSAS 17
B.
IPSAS 18
C.
IPSAS 19
D.
IPSAS 20
E.
IPSAS 21
10.
The conditions for granting retirement benefits include
(i) On voluntary retirement, after a qualifying service of 10 years and above;
(ii) On compulsory retirement, having attained 50 years of age or 30 years in service;
(iii) Abolition of post.
A.
(i) only
B.
(ii) only
C.
(i) and (ii)
D.
(i) and (iii)
E.
(ii) and (iii)
11.
Under the Armed Forces Act 103 of 1979, all the following considerations count,
EXCEPT
A.
Period of war service which is more that 4 months but below 6 months, counts as 6 months
B.
Period of war service which is more than 4 months but below 10 months, count as 1 year
C.
Period of war service below 4 months is approximated to 6 months
D.
Period of war service which exceeds 6 months is counted as 1 year
E.
A period of service outside war service for a period which exceeds 6 months, is approximated to 1 year, provided the officer has served the qualifying service
28

12.
The following are functions of the Ministry of Finance Incorporated (MOFI)
EXCEPT:
A.
A legal entity which can sue and be sued
B.
manages government investments in quoted investments
C.
does not have to attend Annual General Meetings of companies on behalf of government
D.
encourages probity and accountability in the management of government investment portfolio
E.
encourages rendering of reports by companies in which government has interests
13.
The attributes of Financial Regulations include i.
Encouraging consistency in application ii.
Promoting rigidity iii.
Serving as training tools iv.
Serving as guides v.
Ensuring continuity
A. I, ii, iii, iv and v
B. I, ii, iii and v
C. I, iii, iv, and v
D. ii, iii, iv and v
E. v only
14.
The limitations of Financial Regulations manifest by ONE of the following.
A.
Discouraging users‟ initiative
B.
Being de-motivational
C.
Making job monotonous
D.
Being rigid
E.
Being a vengeance point
15.
From 1 January,1998 the Accounting Officers of Ministries are
A.
Directors of Finance and Accounts
B.
Chief Accountants
C.
Permanent Secretaries
29

D.
Commissioners of Finance
E.
The Officers controlling votes
16.
The International Public Sector Accounting Standards Board‟s objectives includes
(i) Serving the public interest by developing high quality public sector financial reporting standards;
(ii) Facilitating the convergence of international and national standards;
(iii) Facilitating the quality and uniformity of financial reporting standards throughout the world.
A.
i, ii, and iii
B.
i and ii
C.
i and iii
D.
ii and iii
E.
iii only
17.
The functions of the Director of Budget include
(i) Monitoring of revenue generation and collection by the agencies of
Government
(ii) Formulating fiscal, monetary and economic policies required to develop the economy
(iii) Establishing and maintaining a data bank in the budget office
A.
i only
B.
ii only
C.
i, ii and iii
D.
iii only
E.
ii and iii
18.
Who is the officer that has the responsibility for collecting a specified type of revenue for Government?
A.
Director of Finance
B.
Revenue Collector
C.
Bursar
D.
Chief Accountant
E.
Cashier
30

19.
ONE of the following officers is NOT part of the executive arm of the Government
A.
The President of the Senate
B.
The President
C.
Minister
D.
The Governor of a State
E.
A Council Treasurer
20.
Which of the following is NOT a revenue expenditure?
A.
Stationery cost
B.
Electricity charges
C.
Salaries
D.
Postal charges
E.
Building cost
21.
The fund provided for unbudgeted expenditure is
A.
Contingency Reserve Fund
B.
Trust and Agency Fund
C.
Sinking Fund
D.
Capital Project Fund
E.
Contingency Fund
22.
The advantages of Fund Accounting include the following EXCEPT
A.
It ensures financial control
B.
It does not provide information on debtors and creditors
C.
It is used to highlight government policy
D.
It is simple to operate
E.
It facilitates co-ordination and planning
23.
The following are sources of inflows for Development Funds EXCEPT
A.
External Grants for staff training
B.
Contributions from Consolidated Revenue Fund
C.
External Capital Grants
D.
Internally Generated Revenue
E.
External Capital Grants
31

24.
Which of the following is NOT public money ?
A.
Dividends from shares subscribed
B.
Government loans repaid
C.
Redemption of Bonds
D.
Sale proceeds of government property
E.
Interest earned on short-term deposits
25.
What fund is also known as Revenue Fund?
A.
Stabilisation Fund
B.
Asset Renewal Fund
C.
Contingencies Fund
D.
Trust fund
E.
Capital Project Fund
26.
Which of the following is NOT a Recurrent Expenditure Account?
A.
Supplementary General Warrant
B.
Supplementary Statutory Expenditure Warrant
C.
Reserve Expenditure Warrant
D.
Development Fund Supplementary Warrant
E.
Annual General Warrant
27.
Which Warrant permits an officer to utilize more money than he had budgeted for?
A.
Annual General Warrant
B.
Reserve Expenditure Warrant
C.
Provisional General Warrant
D.
Supplementary General Warrant
E.
Supplementary Statutory Expenditure Warrant
28.
Under what situation is a Supplementary Journal Voucher raised?
(i) When it is necessary to re-classify accounts into suitable heads and subheads before trial balance is prepared
(ii) When there are differences between the transcript of a Ministry or
Department and bank statement balance
32

(iii) When transfers and adjustments are to be made before the “below-theline” statement is extracted
A.
i, ii and iii
B.
ii and iii
C.
i, and ii
D.
i and iii
E.
iii only
29.
What document is used by the Personal Emolument Department of a Ministry to inform the Accounts section about changes in the salary position of an officer?
A.
Personal Emolument Record Card
B.
Variation Control sheet
C.
Payroll Summary Voucher
D.
Salary Variation Advice
E.
Salary Deduction Advice
30.
What factor among the following renders a voucher invalid?
A.
When prepared in ink
B.
When stamped “Entered in the Vote Book”
C.
When certified by the officer designated to do so
D.
When presented for payment after 90 days
E.
When certificate is signed separately
SOLUTIONS – MULTIPLE CHOICE QUESTIONS
1.
E
2.
B
3.
A
4.
A
5.
A
6.
C
7.
E
8.
D
33

22.
B
23.
B
24.
C
25.
A
26.
E
27.
E
28.
A
29.
D
30.
D
SECTION A
9.
D
10.
D
11.
B
12.
C
13.
B
14.
E
15.
C
16.
C
17.
C
18.
B
19.
A
20.
E
21.
E
PART II: SHORT ANSWER QUESTIONS (20 Marks)
Write the answer that best completes each of the following questions/statements
1. Principal Journal Voucher is used to effect month-end transfers from „Above-theline‟ Account to ………………………… Accounts
34

2. What documents are used in the Ministries and other public corporations to effect transfer between accounts without resorting to any movement of physical cash?
3. A document by which self-accounting units transmit information on their financial transactions to the office of the Accountant-General is known as
……………………..
4. What is the form used to sum up the amounts stated in separate payrolls?
5. What form confirms that an officer is still in service at the beginning of a year?
6. What document evidences a payment or receipt of government money?
7. The memorandum book used to record expenditure and liabilities incurred is……………
8. What instruments do the Ministry of Finance use to authorize money for spending?
9. Revolving Fund is also known as…………………………..
10. Who formulates the accounting policy of the Federal Government?
11. Who is responsible for the audit of the financial statements of Local
Governments?
12. The remuneration of the Auditor-General shall be drawn from the
…………….Fund of the Federation
13. Who is the Chief Accounting Officer of the receipts and payments of all government money?
14. Who has the power of unlimited access to all financial documents and records of all Ministries and agencies of Government?
15. What are the specific conventions, bases, principles, etc operated by a public sector organization called?
16. The supervision of the activities of a public entity by a superior body is……………………..
17. A lump sum of money paid once to a retiring officer is………………………….
35

18. What are current debts or obligations owing which arise from past business transactions?
19. Under the terminology of International Public Sector Accounting Standards, what is the entity which the investor has great influence on?
20. What is the accounting basis, under IPSAS, where transactions are given effect immediately they occur, rather than when cash or its equivalent is received or paid?
SOLUTIONS - SHORT ANSWER QUESTIONS
1.
„Below-the-line‟
2.
Adjustment Vouchers
3.
Transcript
4.
Payroll Summary Voucher
5.
Personal Emolument Form
6.
Voucher
7.
Vote book
8.
Warrants
9.
Working Capital
10.
Accountant-General
11.
Auditor-General for Local Governments
12.
Consolidated Revenue
13.
Accountant-General of the Federation
14.
Accountant-General of the Federation
15.
Accounting Policies
16.
Oversight
17.
Gratuity
18.
Liabilities
19.
Associate
20.
Accrual basis
36

SECTION B
ATTEMPT ANY FOUR QUESTIONS (50 MARKS)
QUESTION 1
Control measures which organisations install do not of themselves assure that they are fool proof. Nonetheless, they at least minimise the incidence of fraud commission.
One such critical area to watch and safeguard is cash. Consequently, cash book postings should be updated and bank reconciliation of cash balance and that of the bank effected from time to time.
Onaniyi Local Government had the following balances as at 02 November 2010:
Cash in hand
Cash at bank
N27,000
N473,000
The transactions of the local government for the month of November, 2010 were as follows:
03/11/2010 Miscellaneous revenue
04/11/2010 Cash taken to bank
05/11/2010 Settlement of electricity bills by cheque
06/11/2010 Revenue from lease of landed property
08/11/2010 Refund of transport fare to staff
10/11/2010 Fines collected by revenue officer
12/11/2010 Reimbursement of imprest by cheque
15/11/2010 Market fees
20/11/2010 Purchase of stationery by cheque
21/11/2010 Payment by cheque to contractor
21/11/2010 Purchase of petrol
24/11/2010 Market fees
24/11/2010 Cash taken to bank
25/11/2010 Payment of staff salaries by cheque
(after deducting tax of N2,100)
27/11/2010 Fines collected by the revenue officer
28/11/2010 Market fees
29/11/2010 Fines collected by the revenue officer
Cash taken to bank
(12 1 /
2
N
27,010
22,000
5,400
36,000
3,100
65,000
10,000
18,900
2,500
18,100
3,250
17,000
76,000
36,000
47,000
15,000
47,000
60,000
You are required to prepare the Local Government‟s Treasury Cash Book for the month of November, 2010. Marks)
37

SOLUTION 1
ONANIYI LOCAL GOVERNMENT TREASURY CASH BOOK FOR NOVEMBER 2010
Date Particulars Gross (N)
02/11/2010 Balances b/f -
Cash (N)
1 /
4
27,000
Bank (N) Date Particulars
1 /
4
473,000 04/11/2010 Bank
03/11/2010 Miscellaneo us Revenue
1 /
4
27,010 1 /
4
27,010 - 05/11/2010 Electricity charges
Gross (N)
-
1 /
4
5,400
1
Cash (N)
-
/
4
Bank (N)
22,000 -
1 /
4
5,400
04/11/2010 Cash
06/11/2010 Property
Rate
10/11/2010 Fines
1
-
/
4
36,000 -
1 /
4
65,000
-
1 /
4
1
1 /
4
22,000 08/11/2010 Transport fare
/
4
36,000
65,000 - 12/11/2010 Imprest
1 /
4
2,100 -
1 /
4
10,000 -
1
1 /
/
4
4
2,100
10,000
15/11/2010 Market fees
24/11/2010 Market fees
27/11/2010
28/11/2010
Cash
Fines
Market fees
1
1
-
/
/
4
4
18,900
17,000
1 /
4
47,000
1
1
-
1 /
/
/
4
4
4
18,900 -
17,000 -
1 /
47,000 -
4
20/11/2010 Purchase of stationery
21/11/2010 Contractor
1 /
4
2,500 -
1 /
4
18,100 -
76,000 21/11/2010 Purchase of
Petrol
24/11/2010 Bank
1
-
/
4
3,250
1
1
/
4
76,000 -
/
4
2,500
1 /
4
18,100
1 /
4
3,250 -
1 /
4
15,000 1 /
4
15,000 - 25/11/2010 Salaries 1 /
4
36,000 1 /
4
2,100 1 /
4
33,900
29/11/2010 Fines 1 /
4
7,200 1 /
4
7,200 - 29/11/2010 Bank
29/11/2010 Cash
TOTAL
- - 1 /
4
60,000
1 /
4
233,110 1 /
4
224,110 1 /
4
667,000
Balances b/d
TOTAL
Balances b/d
1 /
4
155,760 60,760 1 /
4
595,000
(Award ¼ Marks to each of the 50 ticks, i.e ticks x ¼ =12 ½ Marks)
- 1 /
4
60,000 -
1 /
4
155,760 1 /
4
60,700 1 /
4
595,000
1 /
4
233,110 1 /
4
224,110 1 /
4
667,000
38

QUESTION 2
The basis of accounting of any enterprise has to be explicitly stated to facilitate comparison of performance results from year to year and inform members of the public accurately. Public sector entities are no exception to accurate and consistent presentation of information for appraisal purposes.
The Government of Freedom County of Liberia has settled for the accrual basis of accounting. As the recently appointed Accounts Officer in the Accountant-General‟s
Office, you are required to:
(a) List out the FIVE bases of accounting.
(b) Briefly discuss the accrual basis of accounting.
(2½ Marks)
(10 Marks)
(Total-12½ Marks)
SOLUTION 2
(a) FIVE bases of accounting: i.
Cash basis ii.
Accrual Basis iii.
Modified Accrual Basis iv.
Modified Cash Basis v.
Commitment Basis
(Award ½ mark for each correct point) (2 1 /
2
Marks)
(b) The accrual basis of accounting recognises the idea of contractual obligation to record financial transactions as they occur. Once there is a legally binding contract for the collection of money or the rendering of service, it is feasible to prepare an income and expenditure account and a balance sheet (statement of assets and liabilities)
The basis of accounting states that financial transactions of entities should be recorded in the periods in which the various goods are sold or services are rendered or received, rather than when cash is received or paid.
The accrual basis of accounting gives room for the creation of accounts for debtors and creditors, and year-end adjustments for prepayments and accruals.
The use of accruals basis of accounting will give rise to the preparation of trial balance to determine the accuracy of the ledger postings, and the need to make bad debts provision. (10 Marks)
(Award 2 1 /
2
marks for each correct point) (Total 12 1 /
2
Marks)
39

QUESTION 3
Transcripts are the only means which self accounting ministries employ to communicate information on their cash transactions in each month to the treasury.
The following information has been extracted from the books of the Ministry of Finance on the transactions for the month of August, 2010:
Balances b/f at 1/8/2010
Debit balances – Bank N8,700,000
- Cash N250,400
Revenue realized during the month:
CLASSIFICATION
Head Subhead
DESCRIPTION
6
7
9
5
8
5
13
13
2
4
3
1
5
7
11
12
Registration of contractors
Fees
Companies Income Tax
Proceeds of VAT
Proceeds of Investments Sold
Interest
Rent of Government property
Renewal of Licences
AMOUNT N
420,000
5,000,000
7,200,000
8,400,000
2,000,000
140,000
1,500,000
2,841,400
9
11
4
6
Mining Royalty
Registration fees of institutions
2,400,000
600,000
BELOW-THE-LINE REVENUE
1017 Motor Cycle Advance Repayment 250,000
2141 Miscellaneous Deposit 150,000
1430 Repayment of Motor Vehicle 500,000
40

PAYMENTS
CLASSIFICATION
Head Subhead
20
20
20
1
2
3
DESCRIPTION
Personnel cost
Transport and Travelling
Telephone and Postage
20
20
20
20
20
20
20
20
4
5
6
7
8
9
10
11
Utility
Office Furniture Maintenance
Maintenance of Assets
Consultancy Services
Grants and Subventions
Training
Hospitality
Other Expenses
401
BELOW-THE-LINE PAYMENTS
Salary Advance
402 Motor cycle Advance
705
650
Correspondence Advance
Miscellaneous Deposits
AMOUNT N
12,400,050
2,470,000
95,000
502,000
205,110
528,000
222,000
2,180,000
229,000
150,000
75,000
70,000
50,000
320,000
180,000
Required:
Prepare the Ministry‟s Transcript for the month of August 2010
(Total 12 ½ Marks)
41

2141
1430
5
13
13
9
11
1017
6
7
11
12
4
9
5
6
7
8
HEAD SUB
HEAD
3
1
2
4
5
SOLUTION 3
MINISTRY OF FINANCE
DESCRIPTION
Balance b/f
Registration of Contractors
Fees
Companies Income Tax
Proceeds of VAT
Proceeds of Investment Sale
Interest
Rent of Government Property
Renewal of Licences
Mining Royalty
Registration Fees of Institutions
BELOW-THE-LINE
Motor Cycle Advance Repayment
140,000
1,500,000
2,841,400
2,400,000
600,000
250,000
AMOUNT N SUB-TOTAL
N
TOTAL
N
8,950,400
420,000
5,000,000
7,200,000
8,400,000
2,000,000
30,501,400
Miscellaneous Deposits 150,000
Repayment of Motor vehicle Advance 500,000 900,000 31,401,400
40,351,800
1/3 for each of the 36 ticks (Additional ½ Mark for the last tick)
TRANSCRIPT FOR THE MONTH OF AUGUST 2010
20
20
20
20
20
20
20
20
20
HEAD SUB
HEAD
20
20
1
2
3
4
5
10
11
8
9
6
7
DESCRIPTION AMOUNT N SUB-TOTAL TOTAL N
N
Personal cost
Transport and travelling
Telephone and postage
Utility
12,400,050
2,470,000
95,000
502,000
Office Furniture Maintenance 205,110
Maintenance of Assets
Consultancy Services
Grant and subventures
Training
528,000
222,000
2,180,000
229,000
Hospitality
Other Expenses
BELOW-THE-LINE PAYMENTS
150,000
75,000 19,056,160
Salary Advance
Motor Cycle Advance
Correspondence Advance
Miscellaneous Deposit
Balance c/f
70,000
50,000
320,000
180,000 620,000
(Total 12 ½ Marks)
19,676,160
20,675,640
40,351,800
42

QUESTION 4
Budgetary control, with its continuous appraisal procedure, holds the key to the realization of the target set by any public sector undertaking.
You are required to:
(c) Discuss in outline the place of budgetary control in a Presidential System of Government
(7 1 /
2
Marks)
(d) List FIVE essential features of an efficient and effective Budgetary Control System.
(5 Marks)
(Total 12 ½ Marks)
SOLUTION 4
4(a) i.
Budgetary Control ensures that members of top management make specific pronouncements as regards government policies and objectives. ii.
It ensures that all corporate assets are effectively deployed in consonance with budgetary statements. iii.
Budgetary Control enhances coordination and communication among the various units of government. iv.
The system of recording and comparing actual performance with targets set pinpoints variances in good time for corrective actions to be taken promptly. v.
The control mechanism brings about co-operation at all levels, resulting in effective management being attained. vi.
There is the feeling of self-fulfillment in top management with the attainment of specific expenditure targets vii.
It ensures the prudent management of scarce resources. (7 ½ Marks)
(Award 1 1 /
2 marks to every correct solution, subject to a maximum of 5 solutions 7 1 /
2
marks)
(b) Essential features of an Efficient and Effective Budgetary Control System i.
There is a programme of actions which the entity will pursue during the succeeding year. ii.
Setting standards which relate to the responsibilities of top management to the identifiable requirements of the programme of action. iii.
Resources actually consumed and output achieved are monitored. iv.
There is continuous comparison of actual results achieved with the budget, so as to achieve either, by individual action, the objectives of that policy and to provide a basis for its review. v.
Ensuring that prompt corrective action is taken by the responsible official. (5 Marks)
(Award 1 mark for every correct solution 5 marks) (Total12 1 /
2
Marks)
43

5.
Having got the annual budget approved, there is the need to keep track of spending so as to avoid extra-budgetary disbursements and ensure accountability. Keeping a
Departmental Expenditure Allocation Book (DVEA Book ) becomes a necessity.
The following information were extracted from the records of the Federal Ministry of
Education, for the month of September,2011:
01/09/2011 : N5,000,000 was received for stationery purchase. The Head and Subhead of expenditure are 402 and 005.
03/09/2011: N300,000 was paid on voucher 02 for the supply of hard cover notebooks and biro pens, by Alma Bookshop.
11/09/2011: A payment of N350,000 was effected to Ensan Bookshop for the supply of mathematical sets, eraser and rulers. Payment voucher no.006 was raised.
13/09/2011: Paid N400,000 to Oluguda Bookshop for the delivery of stencils and typing sheets. Voucher No. 009 was issued.
16/09/2011: LPO no.2004 was issued to Fortune Ventures for the supply of computer software, for N350,000.
19/09/2011: LPO no.2005 was issued in favour of oluguda Bookshop, for
N400,000,for the supply of gums, perforators and foolscap sheets.
23/09/2011: Oluguda Bookshop supplied the items requested for. Invoice was received and payment of N390,000 effected on voucher no.12.
25/09/2011: Payment of N350,000 was made to Fortune Ventures for the delivery of computer software. Voucher No. 17 was raised.
27/09/2011: Paid N300,000 on Voucher No. 21 to Omooba Bookshop for the supply of file jackets and biro pens.
28/09/2011: LPO no.2010 was issued to Ori Olowo Enterprises for the supply of interior decoration materials, for N300,000.
29/09/2011: Paid N300,000 to Ori Olowo Enterprises for the materials delivered, on voucher no.27.
30/09/2011: LPO no.2015 was issued to Fortune Ventures for the supply of computer accessories, for N250,000.
As the Ministry‟s Accounts Officer, you are required to post the transaction in the
D.V.E.A. Book, for the month of September,2011. (Total 12 ½ Marks)
44

Suggested Solution Service Head Stationery
Question :5 Sub-head 402
005
Ministry Of Education Authorised Amount
Month: September 2011 N5,000,000
Line1
No
Date P.V
NO
Particulars Payments
N
Cumulative
Payments
#
Balance
#
Liability
Ref
Liabilities
Incurred
#
Liabilities
Cleared
#
Outstanding
Liabilities
#
Remarks Uncommitted
Balance
#
1 2 3 4 5 6 7 8 9 10 11 12 13
1
2
3
4
5
6
7
8
9
01/09/2011
03/09/2011 FME
02
11/09/2011 FME
006
13/09/2011 FME
009
16/09/2011
19/09/2011
23/09/2011 FME
12
25/09/2011 FME
17
27/09/2011 FME
21
Authorised
Appreciation
Alma
Bookshop
Ensor
Bookshop
Oluguda
Bookshop
Oluguda
Bookshop
Fortune
Ventures
Omo oba
Bookshop
¼ 300,000 ¼
300,000
¼ 350,000 ¼
650,000
¼ 400,000 ¼
1,050,000
¼ 390,000 ¼
1,440,000
¼ 350,000 ¼
1,790,000
¼ 300,000 ¼
2,090,000
¼
5,000,000
¼
4,700,000
¼
4,350,000
¼
3,950,000
¼
3,950,000
¼
3,950,000
¼
3,560,000
¼
3,210,000
¼
2,910,000
LPO NO
2004
LPO NO
2005
¼
350,000
¼
400,000
¼
400,000
¼
300,000
¼
350,000
¼
750,000
¼
350,000
¼ 5,000,000
1
¼ 4,700,000
2
¼ 4,350,000
¼ 3,950,000
Fortune
Ventures
Oluguda
Bookshop
Payment to Oluguda
Bookshop
Payment to
Fortune
Ventures
¼ 3,600,000
¼ 3,200,000
¼ 3,200,000
¼ 2,850,000
Payment to to
Omooba
Bookshop
¼ 2,550,000
Ori olowo
Enterprises
¼ 2,250,000
6
5
10 28/09/2011 LPO NO
2010
¼
300,000
¼
300,000
11
12
29/09/2011 FME
27
30/09/2011
Ori olowo
Enterprises
¼ 300,000 ¼
2,390,000
¼
2,610,000
LPO NO
2015
¼
250,000
¼
550,000
¼ 1,950,000
¼ 1,700,000
( ½ Mark for correct format. Award others as indicated: (Total 12 ½ Marks)
14 15
3
4
5
6
1
2
7
8
9
10
11
12
45

QUESTION 6
The liquidity position of a public sector organisation is crucial to prevent industrial actions by the labour unions, for failure to pay workers‟ salaries as and when due, and avoid public ridicule in the hands of creditors. Diligent management of corporate cash position is therefore a necessity.
You were recently promoted Accounts Supervisor. Your employer, Inagije Local
Government, had furnished the following information for the month ended 30
November 2011.
¢
Internally generated revenue 2,500,000
Subventions from the Federation(Accounts Allocation committee 17,520,000
Contribution from Value-Added Tax
Grants from State Government
Miscellaneous Receipts
1,280,000
2,450,000
250,000
Payments
Building Construction
Personal Emoluments
Pension and Gratuities
Overhead Costs
750,000
1,650,000
250,000
870,000
Miscellaneous Expenses
Purchase of Shares in Tokus Plc
55,000
5,000,000
Proceeds from Sale of Property
Repayment of loan
125,000
2,000,000
You are required to prepare a cashflow statement for the Council, for the month of
November, 2010, using the format of the International Public Sector Accounting
Standard (IPSAS No. 2.). 12 1/
2
Marks
46

SOLUTION 6
INAGIJE LOCAL GOVERNMENT OF NIGERIA
CASHFLOW STATEMENT ½ Marks
For the month of November, 2011 ½ Marks
CASH FLOWS FROM OPERATING ACTIVITIES ½ Marks
Receipts ½ Marks
¢ ¢
Internally Generated Revenue
Subventions
VAT
Grants
2,500,000 ½ Marks
17,520,000 ½ Marks
1,280,000 ½ Marks
2,450,000 ½ Marks
Miscellaneous
Total Receipts
Payments
Personal Emoluments
Pensions and Gratuities
250,000 ½ Marks
24,000,000
Overhead Costs
Miscellaneous Expenses
1,650,000 ½ Marks
250,000 ½ Marks
870,000 ½ Marks
55,000 ½ Marks
(2,825,000)
Net Cashflow from Operatiing Activities 21,175,000
CASHFLOW FROM INVESTING ACTIVITIES
Building Construction Cost
Purchase of shares
Proceeds from sale of property
Net Cashflow from Investing Activities
(750,000) ½ Marks
(5,000,000) ½ Marks
125,000 ½ Marks
(5,625,000)
CASHFLOWS FROM FINANCING ACTIVITIES 15,550,000
Repayment of loan (2,000,000)
Net Cashflow from All Activities and Operations 13,300,000
(Award as indicated above: 12 1/
2
Marks)
(Total 12 ½ Marks)
47

ACCOUNTING TECHNICIANS SCHEME WEST AFRICA (ATSWA)
QUANTITATIVE ANALYSIS
Time allowed: 3 hours
SECTION A (Attempt All Questions)
PART I MULTIPLE-CHOICE QUESTIONS (30 Marks)
Write only the alphabet (A, B, C, D, E) that corresponds to the correct option in each of the following questions.
1. Which of the following is NOT a measure of central tendency?
A.
Mean
B.
Mode
C.
Range
D.
Median
E.
First quartile
2. The following pieces of information are obtained from a paired data set: n = 5; ∑xy = 2000; ∑x = 20; ∑y = 70; ∑x 2 = 130;
∑y 2 = 1195. If the regression model of y = α + β x + e is used then β is
A.
-1.6
B.
-1.0
C.
0.7
D.
1.0
E.
1.6
3. The following are uses of index numbers EXCEPT:
A.
To deflate a value series in order to convert it into physical terms
B.
To keep abreast of current business condition
C.
To forecast by using series of the indices
D.
To compare the standard of living in various areas
E.
To monitor the quality of goods
4. The following are properties of a good estimator EXCEPT:
A.
Completeness
B.
Unbiasedness
48

C.
Consistency
D.
Efficiency
E.
Sufficiency
5. Type 1 error is associated with
A.
Power of a test
B.
Acceptance level of test
C.
Significance level of a test
D.
Proportion test
E.
Sampling distribution test
6. In time series analysis, only two components are estimable because
A.
The other components are not important
B.
The type of data available is not good enough
C.
The type of data available is not adequate enough
D.
The other components are not needed
E.
The other components cannot be estimated
7. Which of the following is NOT a method of data collection in Statistics?
A.
Interview
B.
Measurement
C.
Experiment
D.
Questionnaire
E.
Observation
Use the following information to answer questions 8 and 9:
The table below shows the sample space when three coins are tossed together once.
H
T
HH HT TH TT
HHH HHT HTH HTT
THH THT TTH TTT
8. The probability of at least ONE tail is
A.
¼
B.
⅜
C.
⅝
D.
¾
E.
⅞
49

9. The probability of at least TWO heads is
A.
¼
B.
⅜
C.
½
D.
⅝
E.
⅞
10. Which of the following sampling methods is regarded as “marginalization” method?
A.
Cluster sampling
B.
Systematic sampling
C.
Simple random sampling
D.
Quota sampling
E.
Stratified sampling
11. If 41,823 is approximated to 41,000, then the relative error (approximated to three significant figures) is
A.
0.019
B.
0.0196
C.
0.0197
D.
0.0198
E.
0.020
12. A man spends 30% of his salary on feeding, 10% on dresses, 20% on bills, 15% on miscellaneous expenses and the rest is saved. If the information is to be represented on a pie chart, then the angle corresponding to his savings is
A.
25
B.
30 o
o
C.
60 o
D.
75 o
E.
90 o
13. If a sum of
¢
200,000 is invested for 2 years at the rate of 10% compounded semi-annually, the amount that will accrue is
A.
¢208,120.80
B.
¢242,000.00
C.
¢243,101.25
50

D.
¢253,101.30
E.
¢292,820.00
14. If the marginal cost of a commodity is 2x + 5 and the corresponding marginal revenue is 6x, find the total profit when x = 8
A.
27
B.
37
C.
69
D.
88
E.
104
15. The scrap value of a machine is N100,000 after 15 years. If the machine costs
N2.8 million now and depreciation is on the straight line, the amount of money to be provided each year is
A.
N19,280.25
B.
N19,285.14
C.
N180,000.00
D.
N192,857.14
E.
N2,700,000.00
16. The selling price of a commodity is N10. If the total overhead cost is N504 and the cost per unit is N4, then the number of units that must be provided and sold for the company to break even is
A.
80
B.
83
C.
84
D.
90
E.
500
17. If the price function is revenue at q = 20 is
A.
1,000
B.
1,200
C.
1,800
D.
3,000
2 / q
+ 3q 2 , where q is the quantity, then the marginal
E.
3,600
18. Given the demand function, P = 120e 0.03q
, where q is the number of units produced, then the total revenue at q = 100 is
51

A.
1,000
B.
1,200
C.
2,000
D.
2,140
E.
2,410
19. What is the present value of N2.5 million at 10% simple interest over 6 years?
A.
N1.41 million
B.
N1.42 million
C.
N1.50 million
D.
N1.55 million
E.
N1.56 million
20. The function estimating the annual income of a firm is given by f(x) = 4x 3 + 69x + 345, then the annual income of the firm when 8 units of the products are produced is
A.
1,300
B.
1,645
C.
1,860
D.
2,600
E.
2,945
21. Degeneracy occurs in transportation problem when
A.
All the cells are used
B.
Demand exceeds supply
C.
The number of cells used equals the sum of the rows and columns
D.
Supply equals demand
E.
The number of cells used is one less than the sum of the rows and columns
Use the following information to answer questions 22 and 23
400 while The demand for an item is 78,000 units per annum. The ordering cost is the holding cost per item for a year is
5.
22. The quantity that minimizes the total costs per annum is
A.
2,497
52

B.
2,498
C.
3,521
D.
3,532
E.
3,533
23. The length of the inventory cycle is
A.
2.26 weeks
B.
2.36 weeks
C.
0.50 month
D.
0.51 months
E.
2.26 months
24. In the graphical solution of a typical linear programming problem, the optimal solution for a minimization problem is the point with the …………………. value of the objective function.
A.
Zero
B.
Single
C.
Lowest
D.
Multiple
E.
Highest
25. The difference between the earliest start time and latest start time for each event is known as
A.
Path
B.
Slack
C.
Float
D.
Activity
E.
Node
26. The policy where an en-masse replacement of items is made is known as
A.
Ordinary policy
B.
Group policy
C.
Company policy
D.
Individual policy
E.
Maintenance policy
27. The following are the reasons for holding stock EXCEPT
A.
To act as a buffer for variations in demand and usage
53

B.
To take advantage of bulk purchasing discounts
C.
To enable production processes to flow smoothly and efficiently
D.
To ensure that the store is filled up at all times
E.
To absorb variation in production and demand
28. The expression that states the determinant of the quantity to be optimized, either to maximize profit or to minimize cost is known as
A.
Decision function
B.
Constraints function
C.
Objective function
D.
Linear programming function
E.
Surplus function
29. In ensuring that no two activities have the same start and end events, a
……………….. is usually introduced
A.
Slack variable
B.
Critical path
C.
Surplus variable
D.
Dummy branch
E.
Free float
30. The failure rate of an essential component in a warship construction is shown in the table below:
Cumulative percentage failure
Month after replacement
1
15
2
50
3
80
4
100
The sum of percentage failures in the second month and fourth month is
A.
15
B.
55
C.
65
D.
100
E.
115
54

SOLUTIONS- MULTIPLE-CHOICE QUESTIONS
1.
C
2.
A = n∑xy - ∑x ∑y = 5(200) – (20) (70)
n∑x 2 - (∑x) 2 5 (130) - (20)
= - 4000
250 = -1.6
2
3.
E
4.
A
5.
C
6.
C
7.
B
8.
E
9.
C
P (at least 1 tail) = P (≥ 1 tail)
= P (HHT, HTH, HTT, THH, THT, TTH, TTT)
= 7/8
P (at least 2 heads) = P (≥ 2 Heads)
= P (HHH, HHT, HTH, THH)
= 4/8
= ½
10.
D
11.
C
12.
13.
E
C
Relative error = 41823 - 41000 = 823
41823 41823
= 0.0196782
= 0.01967
Savings = 100 - (30 + 10 + 20 + 15) = 25%
∴ angle = 25 x 360
100 1 = 90 0
A = P (1 + r) n n = 2 x 2 = 4, r = 10%
2 = 0.05
55

17.
E
18.
E
19.
E
14.
D
15.
16.
C
C
TC = ∫(2x + 5) dx
TC = x 2 + 5x
TR = ∫ 6x dx
TR = 3x 2
TP = TR - TC = 3x 2 - (x 2 + 5x)
TP = 2x 2 - 5x
At x = 8; TP = 2(8 2 ) - 5(8) = 128 - 40 = 88
A.P is to be used n = 16 since the machine can last for 15 years
100000 = a + (n - 1) d
100000 = 2800000 + 15d
15d = 2700000
d = 180,000
Let x ne no of units produced and sold to break even
FC = N504
VC = 4x
TC = FC + VC = 4x + 504
TR = 10x
Breakeven ≈ TR = TC
∴ 10x = 4x + 504
6x = 504
x = 84
P = 2/q = 3q 2
R = pq = (2/q + 3q
2
2 )q = 2 + 3q 2
MR = dR = 9q
dq at q = 20, MR = q (20) 2 = 3600
P = 120 ℮ 0.03q
At q = 100, P = 120 ℮ 0.03(100)
P = 120 ℮ 3
P = 2410.26
P = 2410
A n
= P (1 +rn)
P = A n
= 2.5 = 2.5
1 + rn 1 + 6(0.1) 1.6 = N1.56 million
56

20.
E
21.
E
22.
E
23.
A
24.
C
25.
B
26.
B
27.
D
28.
C
29.
D
30.
B
F (x) = 4x 3
3
+ 69x + 345
F (8) = 4(8 ) + 69(8) + 345
F (8) = 2048 + 552 + 345 = 2945
Q=
2 cd
=
2

400

78000
= 3533 n 5
d = 78000
Q 3533 = 23
Length of inventory circle = 52
23 = 2.26 weeks
No of Percentage of Failure failures
1
2
3
4
15% = 0.15
50 – 15 = 35% = 0.35
80 – 50 = 30% = 0.30
100 – 80 = 20% = 0.20
Sum of percentage failures in the second month and fourth month is
= 0.35 + 0.20 = 0.55 (55%)
57

SECTION A
PART II - SHORT ANSWERS QUESTIONS (20 Marks)
Write the answers that best complete each of the following questions/statements
1.
TWO main sources of statistical data are…………………… and……………………
2.
A company hires a set of 20 part-time workers paid N500 per day and another set of 30 casual workers paid N600 per day. Then the daily mean wage of all the workers is …………………………….
3.
There are 60 accountants, 30 bankers, 50 computer analysts and 40 economists.
If a committee of 12 members is to be selected by quota sampling, how many accountants will be in the committee?
4.
Given the following set of data: 4, 12, 6, 8, 10, the standard deviation is…………………
5.
Relative error is the………………………error divided by the ………………value.
6.
A measure of location that divides a distribution into 10 equal parts is known as…………………………….
7.
A graph of a bi-variate data in which the independent variable is on the horizontal axis and the dependent variable is on the vertical axis is known as………………………….
8.
If ∑d 2 = 10, where d is the difference between the pairs of ranked values, and there are 10 pairs of observations, then the Spearman‟s Rank Correlation coefficient is……………………………….
9.
An annuity that is paid at the end of the payment period is……………………….annuity.
10.
If the marginals are known…………………………..is used to obtain the totals.
11.
The rate of change of consumption with respect to income is known as……………………………….
58

12.
If the total cost function of a product is TC = q is…………………………..
3 – 10q 2 + 25q (in Naira), then the quantity at the turning point of the average cost function
13.
A business or project………………………..when the revenue function is equal to the cost function.
14.
In the financial circle, for…………………………rationing.
Operations Research is used
15.
When the number of decision variables in a linear programming problem is at most two, then the problem can best be solved by the…………………………….
16.
The conversion of a linear programming problem of a maximization type to a standard form will require the addition of……………………………
17.
The Operations Research team should consist of………………….on various…………………………
18.
In funding the critical path, the………………….pass determines the earliest occurrence times while the……………….pass determines the latest occurrences times of the events.
19.
The TWO main costs which increase with time in the replacement of items that wear out gradually are……………….. and…………………………….
20.
The TWO most commonly encountered replacement situations are…………………………and………………………..items.
SOLUTION - SHORT-ANSWER QUESTIONS
1.
Primary, secondary (or vice – versa)
2.
N560 mean wage = (20 x 500) + (30 x 600)
50
4.
6.3
3.
3 there are four groups and quota sampling does not recognize size of a group.
∴
= 28000 = 560
50
No of accountants is 12
4 = 3
59

Mean = 8
Standard deviation =
8.
r s
= =

( 4

8 )
= 0.94
2

( 12

=
16

16

4

0

4
= √40 = 6.3
5.
Absolute, true (in that order)
6.
Deciles
7.
Scatter diagram
8 ) 2

( 6

8 ) 2

( 8

8 ) 2

( 10

8 ) 2
9.
Ordinary
10.
Integration
11.
Marginal propensity to consume
12.
TC = q3 – 10q2 + 25q
ATC = =
= q 2 – 10q + 25
= 0
13.
Break even
14.
Capital
15.
Graphical method
16.
Slack variables i.e 2q – 10 = 0 q = 5
17.
Experts, discipline (in that order)
18.
Forward, backward (in that order)
60

19.
Maintenance, repair (vice – versa)
20.
Sudden failure, deteriorating.
SECTION B
QUESTIONS 1
Attempt any FOUR questions (50 Marks)
The monthly salary (
‟000) of 50 workers in OYEA bank are given as follows:
131 95 101 128 119 140 130 127 107 97
122 141 133 117 124 149 116 129 118 138
115 100 121 130 111 105 125 118 126 110
117 123 112 136 148 124 114 113 135 117
127 93 145 129 109 139 124 130 108 125
Required:
(a) Use the tally method and class interval of 91 – 100, 101 – 110 etc. to construct the frequency distribution for the salaries of workers. (6 Marks)
(b) Use your table to draw the Ogive for the distribution of salaries (3½ Marks)
(c) Use your Ogive to estimate the upper quartile for the distribution and interprete what it indicates.
(Total12
(3 marks)
1 /
2
Marks)
SOLUTION 1
(a)
Class interval
91 – 100
101 – 110
111 – 120
121 – 130
131 – 140
141 – 150
Tally
////
//// /
//// //// //
//// //// //// //
//// //
//// M
2
Frequency Cumulative frequency
4
6
12
17
7
4 A
2
4
10
22
39 MIAI
46
50
(6 Marks)
61

(b)
(3Marks)
(a) Upper quartile: 50 x ¾ = 37.5
th Obs
See graph, q2 ‡ 130 ± 0.5 MIAI
It indicates that 75% of the workers earn more)
130,000 or less (25% earn
130,000 or
(3 Marks)
(Total 12 1 /
2
Marks)
62

QUESTION 2
The distribution of 100 customers according to the amount of money deposited on a particular day in a micro-finance bank is as follows:
Amount deposited (N‟000)
10 but nor more than 20
20 but nor more than 30
30 but nor more than 40
40 but nor more than 50
50 but nor more than 60
60 but nor more than 70
70 but nor more than 80
80 but nor more than 90
Number of customers
3
7
10
21
29
13
11
6
You are required to
(a) Compute the approximate total deposit.
(b) Compute the mean deposit
(c) Compute the model deposit
(3 Marks)
(2 Marks)
(2 Marks)
(d) Compute the median deposit (3 Marks)
(e) Comment on the results in (ii) and (iii). (2 Marks)
(Total 12½ Marks)
SOLUTION 2
Class Interval F
10 - 20
20 – 30
30 – 40
40 – 50
50 – 60
60 – 70
70 – 80
80 – 90
3
7
10
21
29
13
11
6
100
∑f
45
55
65
75 x
15
25
35
85 fx
45
175
350
945 41
1595 70
845
825 cf
3
10
20
510
5,290
100
∑fx
83
94 i) The approximate total deposit
= 5,290 x 1000 = N5,290,000 ii) Mean
(3½ Marks)
= = = 52.9 (2 Marks)
63

Mean deposit = 52.9 x 1000= N52,900 iii) Mode
= L m
C
= 50 10
= 50 10 iv) median
= 50 + 3.333
= 53.333
∴ Modal deposit = 53.333 x 1000 = N53,333
= L m
C
∴ Median class = = =50 th
Median = 50
= 50 + 10
= 50 + 3.1
10
(2 Marks)
∴ Median deposit =53.1 x 1000 = N53,100 (3 Marks) v) The result in (ii) and (iii) show that on the average the amount deposited on that day is N52,900 and more customers deposited the sum of
N53,333. (2 Marks)
64

QUESTION 3
(a) Mr. KOFIOYE plans to make some savings towards his retirement in 5 years time. If he saves Le400,000 yearly and the rate is 12% per year, how much will his savings be by the time he retires? (6 marks)
(b) The probability that Mr. Chukwu secures a loan from a bank is 0.52 while Mr.
Kofi secures a loan from the same bank with a probability of 0.68. if the securing of the loans is independent of each other, find the probability that i) At least one of them secures the loan ii) None of them secures the loan
(4 marks)
(2½ marks)
(Total 12 1 /
2
Marks)
SOLUTION 3 a) This is a sinking fund problem where
S n
= A [ (1 + r) n - 1 ]
A = 400000, r = 0.12, n = 5
∴ S n
= 400000 [(1.12) 5 - 1]
=
‡
Le2,541,138.94
Le2,541,139.00 (6 Marks) b) Let C rep. Chukwu and K rep. Kofi i) P (at least one of them) = P (C U K)
= P(C) + P(K) – P (C ∩ K)
= 0.52 + 0.68 – (0.52) (0.68)
= 0.8464 (4 Marks) ii) P (none of them) = P (C
= P (C
1 ∩ K 1
1 ) P (K
)
1 )
= (0.48) (0.32)
= 0.1536 (2
(Total 12
1 /
2
Marks)
1 /
2
Marks)
65

QUESTION 4
(a) The supply and demand functions of one of the commodities produced by a OAS manufacturing Company are given respectively by
– 7p – 500 and D(P) = 250 – 2(P) (where P is in Naira) S(P) = P 2
You are required to calculate:
(i) Price (4 Marks)
(ii) The corresponding number of units supplied and demanded (2½ Marks)
(a) Emomboh Printing Press gives the following information on the production of books: the total cost of producing 2000 books isL$¢420,000 and the total cost of producing 4000 books is L$340,000. If the cost function is linear.
You are required to determine:
(i) The relationship between the cost (y) and the number of books (x)
(ii) The cost of producing 1100 books
(4 Marks)
(2 Marks)
(Total 12 ½ Marks)
SOLUTION 4
(i) At equilibrium
S (P) = ∆ (P)
P 2 – 7p – 500 = 250 – 2p
P 2
∴
– 7p + 2p – 500 – 250 = 0
P 2 – 5p – 750 = 0 a = 1, b = -5, c = -750 p = p = p = = = p = - 25 or 30 since price cannot be negative, therefore equilibrium price is N30
(4 Marks)
66

(ii) When P = 30, S(30)
= 30 2 – 7(30) – 500
= 900 – 210 – 500
= 190 d(30) = 250 – 2(30) = 190
At equilibrium price of N30, the corresponding number or units supplied and demanded is 190 (2 1 /
2
Marks)
(b) let (y) represent cost and (x ) represent number of books produced
When x x
1
2
= 2000, y
= 4000, y since the cost function is linear
1
= 420,000
2
= 340,00o0 using the formular,
=
=
At x = 1100
2000 (y – 420,000) = - 80,000 (x – 2000) y – 420,000 =
y + 40x = y + 40 (1100) y + 44000 = y y
-40x + 80000
500000
= 500,000
500,000
= 500,000 – 44,000
(4 Marks)
= 456,000 (2 Marks)
(Total 12 1 /
2
Marks)
QUESTION 5
An agricultural machine cost N60,000. The following data have been estimated:
Year 1 2 3 4 5 6
Resale value at year end (N)
44,000 36,000 30,500 25,500 21,000 18,000
Annual maintenance cost (N)
2,440 3,040 3,640 5,040 7,440 11,440
67

Required:
Find the least cost point to replace it with a new one.
(12½ marks)
SOLUTION 5
Year
1
2 a b c
10,000 16,000 2,440
8,000 24,000 3,040 d
2,440
5,480 e F
18,440 18,440
29,480 14,740
3
4
5
6
5,500 29,500 3,640 9,120 38,620 12,873.3
5,000 34,500 5,040 14,160 48,660 12,165
4,500 39,000 7,440 21,600 60,600 12,120
3,000 42,000 11,440 33,040 75,040 12,506.7
Note that: a.
- Annual capital loss, 1 st entry = 60,000 – 44,000 = 16,000 b.
- Cumulative Capital loss c.
- Annual Maintenance Cost d.
- Cumulative Maintenance Cost e.
- Cumulative total = b + d
From the calculation, the best replacement point is at the end of year 5.
(Total 12 1 /
2
Marks)
QUESTION 6
A company has decided to manufacture its own items of stock (i.e. stock holder manufacturer) at the rate of 64000 items per month. Demand for the item is at the rate of 30,000 in a month and production run cost N4,500 while holding cost per item per month is N100
Required Calculate the:
(a) Economic Production Run
(b) Number of Production Runs per month
(c) Total cost of Production per month
(6 marks)
(3½ marks)
(3 Marks)
(Total12½Marks)
68

SOLUTION 6
(a) Economic Production Run is given by
Q = c = 4,500, d = 30,000, h = 100, r = 64,000
∴ Q =
= √ 5,082, 352.941
= 2,254.41
= 2,255
(b) Number of production runs per month is
=
(6 Marks)
= 13.3
14
Note that the approximation for this type problem is rounding up.
(3½ Marks)
(c) Production Cost =
+
= N4500 x 14 + 2255
= 63,000 + 59,898.44
= N122,898.44
100
(3 Marks)
(Total 12 1 /
2
Marks)
69

ACCOUNTING TECHNICIANS SCHEME WEST AFRICA (ATSWA)
INFORMATION TECHNOLOGY
Time allowed: 3hours
SECTION A (Attempt All Questions)
PART I MULTIPLE-CHOICE QUESTIONS (30 Marks)
Write only the alphabet (A, B, C, D, E) that corresponds to the correct option in each of the following questions.
1. Which ONE of the following is NOT an example of Systems?
A. Business Systems
B. Profit and Loss Systems
C. Information Systems
D.
E.
Manufacturing Systems
Stock Control Systems
2. Logical components of a system include the following i. ii. iii. iv. v.
Data
Input
Information
Process
Output
A. ii only
B. iv only
C. i, ii, and iii
D. ii, iv and v
E. iii, iv and v
3. Information Systems can help an organisation in the following ways EXCEPT.
A. Operational Efficiency
B. Functional Effectiveness
C. Better Improved Services
D. Storage Advantage
E. Competitive Advantage
70

4. Decision taking by a Manager or a Chief Executive Officer of an organisation depends mainly on i. Data ii. Computer iii. Information
A.
i only
B.
ii only
C.
iii only
D.
i and iii
E.
ii and iii
5. The key elements in the definition of a computer consist of the following
EXCEPT.
A. Acceptance of data
B. Storage of data
C. Processing of data
D.
E.
Benefit of data
Supply of information
6. The following are the classification of computers by the signals produced: i. ii. iii. iv. v.
Analog computer
Digital computer
Micro computer
Mainframe computer
Hybrid computer
A. i and ii
B. iii and v
C. i, ii and iii
D. i, ii and iv
E. i, ii and v
7. Digital General Purpose Computers can be classified into the following EXCEPT:
A.
Mainframe computer
B.
Hybrid computer
C.
Mini computer
D.
Super computer
71

E.
Micro computer
8. The following are examples of input devices that use optical phenomena
EXCEPT:
A.
Optical Magnetic Stripe Card
B.
Optical Character Recognition
C.
Optical Mark Recognition
D.
Scanner
E.
Light Pen
9. Examples of Systems Software include the following i.
Operating System ii.
Language Processor iii.
Utility routines iv.
Loaders v.
Editors
A. i, ii, iii, iv and v
B. i and ii
C. iv and v
D. i, ii and iii
E. ii, iii and v
10. The main components of an operating system are the following EXCEPT:
A.
Supervisor
B.
Disk Operating System
C.
Input/Output control system
D.
Command Language Translator
E.
Librarian
11. A program that converts the user‟s code into the machine code is called
A.
Source code
B.
Object code
C.
Language processor
D.
Machine translator
E.
Source processor
12. Which ONE of the following operations is NOT performed by Utility programs?
72

A.
File copy
B.
File maintenance
C.
File sorting
D.
Disk formatting
E.
Disk conversion
13. Which ONE of the following is NOT a requirement in a Multi-user application?
A.
Terminal
B.
Communication lines
C.
Optical Input Device
D.
Processor
E.
Large memory capacity
14. Which ONE of the following is NOT an example of Electronic spreadsheet?
A.
Excel
B.
Multiplan
C.
MultiMate
D.
Supercals
E.
Quattro
15. These are examples of application packages EXCEPT:
A.
Word Processors
B.
Spreadsheet
C.
Graphics generators
D.
Utility program
E.
Desktop Publishing
16. An Operating System that is a Graphical User Interface and Menu Driven describes.....................Operating System.
A.
Disk
B.
Microsoft Windows
C.
Xenix
D.
UNIX
E.
NOVEL
17. A hand held pointing device used in clicking options and making selections on the Micro Computer is called.
73

A.
Joystick
B.
Mouse
C.
Scanner
D.
Light pen
E.
Touch screen
18. Any set of interconnected points describes a
A.
Computer Network
B.
Network
C.
Distributed Network
D.
Centralised Processing
E.
Decentralised Processing
19. A System of computers and workstations connected together is called
A.
Network
B.
Computer Network
C.
Wireless Network
D.
Metropolitan Area Network
E.
Wide Area Network
20. Computers that are part of a Network can share the following EXCEPT:
A.
Data
B.
Topology
C.
Graphics
D.
Printers
E.
Fax Machines
21. The following are features of a star network topology EXCEPT:
A.
The Network has a central controller
B.
A number of devices are connected directly to it.
C.
All information transfer pass through the file server
D.
All the workstations connected to it are intelligent.
E.
It is very slow in operation
22. In the Open System Interconnection Model Protocol, the layer which provides access to the telecommunication medium and ensures transmission of the bit stream over it is called:
A.
Application
74

B.
Physical
C.
Data link
D.
Network
E.
Transport
23. A network which connects large number of Computers and workstations over a long distance describes
A.
Local Area Network
B.
Metropolitan Area Network
C.
Wide Area Network
D.
Peer-To-Peer Network
E.
Client-server Network
24. A Preliminary Study undertaken by an organisation to find out if it will be feasible for them to acquire, maintain, and profit from the use of Computer system is called
A.
Systems Analysis
B.
System investigation
C.
Feasibility study
D.
System Development
E.
Systems study
25. The following are the qualities of a Systems Analyst EXCEPT:
A.
Must be above average intelligence
B.
Must possess a logical mind
C.
Must be self-confident and assertive in personality
D.
Must have the usual Management skill
E.
Must possess Numerical and Verbal ability
26. Direct hands on the use of computers through Systems Processing staff is called
A.
End-User Computing
B.
Joint Application Development
C.
Structured System Methodologies
D.
User Groups
E.
End-User Programming
27. A maintenance activity carried out in response to hardware or software failure is called.......................maintenance.
75

A.
Corrective
B.
Perfective
C.
Adaptive
D.
Preventive
E.
Routine
28. In Systems Development Life Cycle, the following criteria will lead to Cost
Benefit analysis EXCEPT:
A.
Actual cost
B.
Realized benefits
C.
Timing
D.
User satisfaction
E.
Error Rates
29. The following are problems associated with Outsourcing EXCEPT:
A.
Dependency on supplier
B.
Loss of Confidentiality
C.
Length of contract being locked in
D.
Loss of expertise
E.
Easy contract terms
30. Outsourcing services include the following EXCEPT:
A.
Computer
B.
Network operations
C.
Application Management
D.
Systems integration
E.
Acquiring a public quoted company
SOLUTIONS TO MULTIPLE CHOICE QUESTIONS
1. B
2. D
3. D
4. C
5. D
76

6. E
7. B
8. A
9. A
10. B
11. C
12. E
13. C
14. C
15. D
16. B
17. B
18. B
19. B
20. B
21. D
22. B
23. C
24. C
25. D
26. A
27. A
28. E
29. E
30. E
77

SECTION A
PART II - SHORT -ANSWER QUESTIONS 20 Marks
Write the answer that best Completes each of the following questions/statements
1. Raw facts, events, numbers and transactions, which have been collected, recorded, stored but are not yet processed are called............................
2. Convert 4903 ten
to a binary number.
3. The number of bits of data that can be processed in one cycle is called.............................
4. Background programs that enable application software to run smoothly on a specific set of hardware is.......................
5. High level language can also be called..........................because it is written in the programmer‟s language.
6. A control system which allows feed back into the system as input is called..........................
7. First generation computer language developed around 1945 – 1955 is referred to as..............................
8. Computer Operations that compare two data items are called.....................Operations.
9. Input, Process and............................are the three logical components of a system.
10. Computer output devices that produce hardcopy are called............................
11. A Service provided by a Vendor that includes hardware and software and involves the process of only having to turn a key to start working at the computer is called.......................
12. A sequence of characters which must be presented to a computer system before it will allow access to the system or parts of the system e.g. particular files is called...............................
78

13. The science of designing equipment for comfortable, safe and healthy working environment is called..........................
14. A Computer Crime that involves falsifying data at the entry point is called.............................
15. A program that propagates itself by attaching Codes to other Programs or data files is called............................
16. A cross-section of the internet that consists of all the resources that can be reached by means of the HTTP Protocol describes the.................................
17. Internet capability that provides person-to-person messaging, document sharing is called........................
18. Internet capability that provides interactive conversation is called......................
19. The transformation of key business processes through the use of internet technologies describes...............................
20. E-commerce which involves companies doing business with each other such as when manufacturers sell to distributors and whole salers sell to retailers describes......................................
SOLUTIONS TO SHORT-ANSWERS QUESTIONS
1. Data
2. 1001100100111 two
3. Word Size
4. System Software/Operating System
5. Natural Language
6. Closed loop
7. Machine language
8. Logical
79

9. Output
10. Printers
11. Turnkey systems
12. Passwords
13. Ergonomics
14. Data swindling
15. Computer virus
16. World wide web (WWW)
17. E-mail
18. Chatting
19. E-Business
20. Business-To-Business (B2B)
SECTION B ESSAY QUESTIONS
Instruction:
QUESTION 1
Attempt any four questions
(50 Marks)
(a) Define an Operating System.
(b) List SIX functions of an Operating System.
(1½ Marks)
(6 Marks)
(c) List FOUR main components of an Operating System. (2Marks)
(d) List SIX different examples of Operating Systems. (3Marks)
(Total12½ Marks)
80

SOLUTION 1
(a) An Operating System is a collection of programs that manage the Computerbased Management Information System (CBIS) resources in the best manner possible. (1 1 /
2
Marks)
(b) The functions of an Operating System (OS) include: i.
Resources Sharing ii.
Provision of a Virtual Machine iii.
Input and Output handling iv.
Memory Management v.
Filing System vi.
Protection and Error handling vii.
Program control viii.
Initial Set-up of the Computer (booting)
(c) The components of an Operating System are i. A Supervisor ii. A command language translator iii. An Input/Output Control System (IOCS) iv. A Librarian
(d) Examples of Operating Systems are
(6 Marks)
(2Marks) i. Disk Operating System (DOS) ii. Unix iii. WINDOWS iv. OS/2 v. MVS vi. Novell‟s Netware vii. WINDOWS NT
QUESTION 2
(a) Explain the following terms in reference to Number Systems i. Binary ii. Octal iii. Decimal iv. Hexadecimal
ANY 6 = (3Marks)
(Total 12 1 /
2
Marks)
(4 Marks)
81

(b) Convert the decimal number 598 to a binary number.
(C) Convert 10011101 to a decimal number.
(d) Convert 0.1101 to a decimal fraction.
(e) Convert the decimal fraction 0.625 to a binary fraction.
(2½ Marks)
(2 Marks)
(2 Marks)
(2 Marks)
(Total = 12½ Marks)
SOLUTION 2
(a) i. Binary is a number system that uses two digits represented by 0 and 1 and is called a base 2 number system. ii. Octal is a number system that uses eight digits represented by 0, 1, 2, 3,
4, 5, 6 and 7 and is called a base 8 number system. iii. Decimal is a number system that uses ten digits represented by 0, 1, 2, 3,
4, 5, 6, 7, 8 and 9 and is called a base 10 number system. iv. Hexadecimal is a number system that uses sixteen digits represented by
O,1, 2, 3, 4, 5, 6, 7, 8, 9, A, B, C, D, E and F, and is called a base 16 number system. (4 Marks)
(b)
2
2
598
299 R 0
2 149 R 1
2 74 R 1
2 37 R 0
2 18 R 1
2 9 R 0
2 4 R 1
2 2 R 0
2 1 R 0
0 R 1
(2 1 /
2
Marks)
598
10
= 1001010110
2
82

(c)
7 6 5 4 3 2 1 0
1 0 0 1 1 1 0 1
i.e. 1 x 2 7 + 0 x 2 6
= 157
10
+ 0 x 2 5 + 1 x 2 4 +1 x 2
= 128 + 0 + 0 + 16 + 8 + 4 + 0 + 1
3 + 1 x 2 2 + 0 x 2 1 + 1 x 2 0
(2 Marks)
(d) -
1 -2 -3 -4
0. 1 1 0 1
Binary point
(e) 0.625
QUESTION 3
= 1 x 2 -1 + 1 x 2 -2 + 0 x 2 -3 + 1 x 2 -4
= 1 /
2
+ ¼ + 0 /
8 ten
= 0.5 + 0.125
+
= 0.5 + 0 + 0.125
= 2
=
-1 + 0 + 2 -3
0.101
two
1 /
16
= 0.5 + 0.25 + 0 x 2
= 0.8125
-3 + 1 x 0.0625
(2 Marks)
(2 Marks)
(12 1 /
2
Marks)
(a) Explain the term Open System Interconnection (OSI) model protocol
(b) Describe any FIVE layers of the OSI model.
(2
(10 Marks)
(Total 12 1 /
2
1 /
2
Marks)
Marks)
SOLUTION 3
(a) Open System Interconnection Model Protocol is a seven layer architecture for communicating system designed by International Standard Organisation.
(2 1 /
2
Marks)
83

(b) The layers of the OSI Model are:
(i) Physical layer: This provides access to the telecommunication medium and ensures transmission of the bit stream over it.
(ii) Data Link Layer: This ensures error-free transmission of frame (block) of data over a network link.
(iii) Network layer: This routes messages (packets) from source to destination by selecting connecting links.
(iv) Transport Layer: This provides reliable end-to-end communication between two communicating nodes.
(v) Session Layer: This establishes, maintains and terminates a connection(session) between two applications running on communicating nodes.
(vi) Presentation Layer: This provides any necessary conversions of the characters being sent (encryption/decryption, compression/decompression, character code conversion). Issues requests from establishing and terminating a session to the session layer.
(vii) Application Layer: This provides services to Communicating application programs e.g. includes file transfer, running a remote program, allocating remote peripheral and ensuring integrity of remote databases.
(2 Marks x any 5 points = 10 Marks)
(Total 12 1 /
2
Marks)
QUESTION 4
(a) Identify any FIVE steps or phases involved in System Development Life Cycle technique employed in Systems Development. (5 Marks)
(b) Briefly describe a function of each of these steps in (a) above.
(5Marks)
(c) List any FIVE methods of fact finding available to the systems analyst.
(2
(Total 12
1
1 /
/
2
2
Marks)
Marks)
84

SOLUTION 4
(a) Steps involved in Systems Development Life Cycle are as follows: i. Preliminary study ii. Feasibility study iii. Investigation and facts recording iv. Systems Analysis v. Systems Design vi. Systems implementation i.
Systems maintenance and Review
(1 mark x any 5 points) (5Marks)
(b) The function of each of these Steps/Stages is as described below: i.
Preliminary Study:- The systems analyst and the user will agree on an area of the system to be studied or computerised. The user gives the analyst, terms of reference which specify the requirements of the system and the funds available for the system. ii.
Feasibility Study:- The Systems analyst and Feasibility Committee members carry out feasibility study which determines the feasibility and viability of introducing computerisation within the organisation. iii.
Investigation and fact recording:- Detailed fact finding are carried out on the system using fact recording methods such as observation, record inspection, questionnaire and interviews. iv.
Systems Analysis: The current system is analysed based on its potentials and weaknesses relating to omissions, duplications and redundant elements in the system. v.
System Design:- This involves input design, output design, File design,
Procedures and processing techniques. vi.
Systems Implementation:- This involves the following activities programming, system testing, Documentation, Staff training, change over etc. vii.
Systems Maintenance & Review:- Throughout the life of a system it requires maintenance, so that the system can continue to operate effectively and efficiently. System maintenance may involve change of data, change of
85

personnel, Change of hardware, Change of software and updating documentations. ( 1 mark x any 5 points = 5 Marks) ( 5Marks)
(c) Methods of fact finding available to the system analyst are: i.
Observation ii.
Record inspection and examination iii.
Questionnaires iv.
Interviews v.
Experimentation
(2 1 /
2
for 5 points) (2 ½ Marks)
(Total 12 1 /
2
Marks)
QUESTION 5
(a) Define the term Systems Specification (2 1 /
2
Marks)
(b) List THREE functions of Systems Specification (3 Marks)
(c) Identify any FIVE contents of Systems Specification
(d) State TWO components of a Systems Design
(5 Marks)
(2 Marks)
(TOTAL 12½ Marks)
SOLUTION 5
(a) Systems Specification: is a formal document prepared by a systems analyst after the design of a system. It specifies the requirement of the system in terms of inputs, processes, outputs, costs, hardware, software and documentations.
(2½ Mark)
(b) Functions of Systems Specification include:
(i) It serves as a contract document between the EDP and user department.
(ii) It acts as a reference document during system development testing and implementation stages.
(iii) It serves as an operating manual for users and operators.
(iv) It is needed by programmers and systems analysts to enable them write programs and design systems.
(1 mark x any 3 points = 3 marks) (3Marks)
86

(c) Contents of Systems Specification include:
(i) Introduction:- This highlights the role of the particular system in the organisation total system.
(ii) Justification:- This provides names of user departments that are to be computerised and quantify their costs and benefits.
(iii) System Description:- This describes clerical, manual, procedures used for the system, and computer flow charts used if any.
(iv) Detailed specifications of:
 Input files
 Output files
 Master files
 Source Documents
(v) Controls:- This highlights controls built into the system to detect errors and report on errors.
(vi) Changeover:- This highlights changeover procedures used, cost of implementation and cost of training users.
(vii) Equipment used:- This provides a list of all the peripherals used.
(viii) Glossary:- This provides a glossary or a list of all the technical terms used or expressed by the systems analyst.
(1 mark x any 5 points) (5Marks)
(d) Components of systems Design
(i) Input Design
(ii) Output Design
(iii) File Design
(v) Procedures/processing technique
(1 mark x any 2 points = 2 marks) (2 Marks)
(Total 12 1 /
2
Marks)
QUESTION 6
(a) Briefly explain the following terms in relation to Systems Software
87

i.
Language Processor ii.
Assemblers iii.
Compilers iv.
Interpreters v.
Editor
(b) List FOUR advantages and ONE disadvantage of Interpreters in relation to
Compilers.
(7½ Marks)
(5 Marks)
(Total 12½ Marks)
SOLUTION 6
(a) i. Language processor is a program that converts the user‟s code that is source code into the machine code (object code)
Source Code Language Processor ii. Assembler is a language processor programs which translates a source programs written in low-level language (i.e. Assembly language) into the machine code object program.
Low-level language
Assembler Object Code
(1½ Marks) iii. Compilers are programs which convert a source program written in a high level language into a machine code object program all at once before the programs are run. (1 1 /
2
Marks) iv. Interpreters convert high level languages into machine code object programs a line at a time as they are being run. (1 1 /
2
Marks) v. Editor converts input into a particular output format, based on the editing commands which accompany the input. (1 1 /
2
Marks)
88

(b) Advantages of Interpreters over Compilers i. Easier to use ii. Produce superior error messages which are easy to trace. iii. Require less RAM space than compilers iv. Suitable for interactive work v. Very useful for writing small programs.
(4 Points, 1 Mark per point = 4 Marks)
Disadvantages of Interpreters over Compilers i. Longer time for a program to run ii. During re-run, the process starts all over again.
½ mark each for any point (1Mark)
(Total 12 1 /
2
marks)
89