INSIGHT
EXAMINERS GENERAL COMMENTS
BREACH OF EXAMINATION INSTRUCTIONS
IN SPITE OF THE EXAMINERS’ GENERAL COMMENT IN PREVIOUS EDITIONS OF THE “INSIGHT”, IT WAS
OBSERVED THAT A NUMBER OF CANDIDATES HAVE CONTINUED TO BREACH EXAMINATION
INSTRUCTIONS AS STATED BELOW:
A)
BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH PAPER; AND
B)
BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH SECTION.
INADEQUATE COVERAGE OF THE SYLLABUS
IT HAS BECOME MANIFEST THAT MANY CANDIDATES DO NOT COVER THE SYLLABUS IN DEPTH
BEFORE PRESENTING THEMSELVES FOR THE EXAMINATION. CANDIDATES ARE THEREFORE ADVISED
TO BE ADEQUATELY CONVERSANT WITH ALL ASPECTS OF THE SYLLABUS.
ATSWA PART II - MARCH 2010
INSIGHT
FOREWORD
This issue of INSIGHT is published principally, in response to a growing demand, as an aid to:
(i)
Candidates preparing to write future examinations of the Institute of Chartered
Accountants of Nigeria (ICAN) at an equivalent level;
(ii)
Unsuccessful candidates in the identification of those areas in which they lost marks
and need to improve their knowledge and presentation;
(iii)
Lecturers and students interested in acquisition of knowledge in the relevant
subjects contained therein; and
(iv)
The profession in improving pre-examination and screening processes, and so the
professional performance.
The answers provided in this book do not exhaust all possible alternative approaches to solving
the questions. Efforts have been made to use methods, which will save much of the scarce
examination time.
It is hoped that the suggested answers will prove of tremendous assistance to students and
those who assist them in their preparations for the Institute’s Examinations.
NOTE
Although these suggested solutions have been published under the
Institute’s name, they do not represent the views of the Council of the
Institute. They are entirely the responsibility of their authors and the
Institute will not enter into any correspondence about them.
CONTENTS
PAGE
PRINCIPLES AND PRACTICE OF FINANCIAL ACCOUNTING
ATSWA PART II - MARCH 2010
INSIGHT
GOVERNMENT ACCOUNTING
QUANTITATIVE ANALYSIS
INFORMATION TECHNOLOGY
ATSWA PART II - MARCH 2010
INSIGHT
AT/101/PII.5
EXAMINATION NO:………………………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART II EXAMINATION – MARCH 2010
PRINCIPLES AND PRACTICE OF FINANCIAL ACCOUNTING
Time allowed: 3 hours
Insert your examination number in the space provided above
SECTION A - Attempt All Questions
PART I
1.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
The proportion which the current assets of a firm bears with the current liabilities is called?
A.
B.
C.
D.
E.
Gearing ratio
Acid test ratio
Liquidity ratio
Assets and liability ratio
Working capital ratio.
2.
The excess of the nominal value of a debenture issued over the cash received is called
A.
Real value
B.
Debenture discount
C.
Debenture premium
D.
Issued debenture
E.
Debenture price.
3.
The following are recorded in the profit and loss account EXCEPT
A.
Debenture interest
B.
Wages and salaries
C.
Discount allowed
D.
Commission receiver
E.
Rent and rates.
4.
Which of the following can result in the revaluation of the asset of a partnership firm?
A.
When a partner is paid salary
B.
When a partner earns bonus
C.
When there is a change in the profit sharing ratio of the firm
D.
When a partner contributed additional capital to the firm
E.
When a son of a partner dies.
ATSWA PART II - MARCH 2010
INSIGHT
5.
Prime cost is
A.
Direct materials + Direct labour
B.
Total production cost – Direct labour
C.
Total variable overheads only
D.
Total of all direct materials, direct labour and direct expenses
E.
Direct materials + Cost of sales.
Use the information below to answer questions 6 and 7:
Gigabite Limited paid ¢850,000 to acquire the assets of a partnership firm valued as follows:
¢
Land and Building
450,000
Equipment
280,000
Stock
400,000
Creditors
195,000
6.
What is the technical term given to the amount of ¢850,000 paid by Gigabite Limited?
A.
Market value
B.
Bought value
C.
Capital
D.
Purchase consideration
E.
Average valuation.
7.
Gigabite Limited will record ¢85,000 in its accounting record as ...........
A.
capital reserve
B.
total assets
C.
goodwill
D.
total fixed asset
E.
liquid assets.
8.
The system of stock valuation which ensures that issues of stock are made from the latest receipts is
known as ..............
A.
Last-in-first-out
B.
First-in-first-out
Average cost pricing
C.
First-in-first-priced
D.
Last-in-last-out.
9.
When a debt previously written-off is subsequently recovered, the accountant re-instates the debt by
raising the following entry:
A.
Dr. Cash a/c Cr. Debtors
B.
Dr. Cash a/c Cr. Bad debt recovered
C.
Dr. Debtors a/c Cr. Bad debt recovered
D.
Dr. Debtors a/c Cr. Profit & loss a/c
E.
Dr. Provision for bad debt Cr. Cash a/c.
10.
The constitution that governs the relationship of partners in a partnership firm is called
A.
Articles of association
ATSWA PART II - MARCH 2010
INSIGHT
B.
C.
D.
E.
PART II
The regulation
Memorandum of Association
Partnership resolution agreement
Partnership deed.
SHORT-ANSWER QUESTIONS (30 Marks)
1.
Inventories must be valued at ...............
2.
A company with a gearing ratio of 6:4 is said to be ................. company.
3.
Give TWO bases on which the head office may transfer goods to a branch.
4.
Working capital is calculated as ..............
5.
Where there exists no partnership agreement the partners must pay themselves equal salary (True or
false).
6.
What effect does losses have on the capital of a business?
7.
State the double entry required if a company under-provides for tax in the previous year.
8.
The formulae for Earnings Per Share (EPS) is ...........
9.
Preference shareholders receive ................ of dividend.
10.
The difference between total assets and liabilities is referred to as ...........
11.
The excess of the cash received over the nominal value of preference shares issued is called .............
12.
The amount by which the net asset of a business exceeds its purchase consideration is called ..............
13.
An agent is paid commission of 50% of net profit after charging such commission. If the profit of a
business is N150,000 before commission, calculate the commission payable to the agent.
14.
The depreciation method that applies a percentage to the cost of an asset each year until it is
reduced to zero is called ..............
15.
Balance sheet is defined as ................
16.
Define purchase Goodwill of a business.
17.
State TWO circumstances that will give rise to the determination of goodwill in a partnership
business.
18.
The closing balance on the purchases ledger control account represents .....
19.
Which accounting ratio is calculated to show the ability of a business to pay its debt when called
upon?
ATSWA PART II - MARCH 2010
INSIGHT
20.
According to the International Financial Reporting Standards, cash flow statements should be
prepared under three main headings. State them.
21.
State the TWO main methods used in the preparation of Cash Flow statement.
22.
What is Authorised Share Capital?
23.
What is a provision in accounting?
24.
Give any ONE situation that will necessitate the revaluation of a partnership.
25.
If company A sells goods to company B on sale or return basis, what is the effect of the closing stock
of company B on the sales of company A?
26.
What is the effect on profit if a company over-states its opening stock figures?
27.
Write an expression to calculate the net realisable value of a stock.
28.
Error of principles is where ..........
29.
Explain the term “dormant Partner.”
30.
Another term for loan stock or loan capital is ...................
ATSWA PART II - MARCH 2010
INSIGHT
SECTION B - Attempt any FOUR questions (60 Marks)
QUESTION 1
The Trial Balance as at 30 April 2008, given by your clerk is as stated below:
DEBIT
N
Share Capital
Profit & Loss A/c
Stock – opening
Purchases
Returns – Outwards
Discount – Allowed
Received
Sales
Electricity
Rent
Commission – Sales
Selling & Distribution Exp.
Admin. Expenses
Finance charges: Bank charges
Interest on loan
Loan – XYB Bank
Debtors & prepayments
Creditors & Accruals
6% Debentures
Fixed Assets:
Land
Building
Motor Vehicle
Equipment
Provision of depreciation - Building
Motor vehicle
Equipment
CREDIT
N
1,000,000
5,648,800
1,251,900
15,444,500
257,250
114,300
412,600
33,425,800
750,300
1,249,200
334,258
4,426,666
3,876,222
1,671,290
2,100,000
10,000,000
4,228,214
875,000
2,000,000
525,000
4,252,000
3,000,000
1,774,800
50,647,450
1,000,000
1,442,300
234,500
50,647,450
Other relevant information:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Closing stock N6,339,472.
Rent in the Trial Balance runs from 1/5/07 – 30/4/2010.
Provision for doubtful debt at 1%.
Provision for depreciation - Motor & Equipment 20%
Building 5%
Debenture interest yet to be charged.
Electricity owing N40,500.
You are required to prepare:
(a)
Extended Trial balance.
(11 Marks)
ATSWA PART II - MARCH 2010
INSIGHT
(b)
Journals for necessary entries.
(4 Marks)
(Total 15 Marks)
QUESTION 2
(a)
Explain the following terms as defined in International Accounting Standards (IAS 16) – Accounting
for Property, Plant and Equipment:
(i)
Property, plant and equipment.
(4 Marks)
(ii) Fair value
(2 Marks)
(iii) Recoverable amount
(2 Marks)
(iv) Improvements
(4 Marks)
(b)
List further disclosures that are sometimes made in the financial statements.
(3 Marks)
(Total 15 Marks)
QUESTION 3
The following balances were extracted from the ledger of Sosoko Limited for the year ended 30 June 2008.
CFA
‘000
Stock of raw materials 01/07/2007
320
Work-in-progress 01/07/2007
146
Stock of finished goods 01/07/2007
1,400
Sales
10,000
Purchases of raw materials
3,500
Printing and stationery
72
General expenses
60
Other administrative expenses
132
Factory rent
80
Depreciation of delivery van
500
Depreciation of plant
668
Carriage inwards of raw materials
150
Advertising expenses
100
Bad debts
85
Indirect wages
1,000
Direct wages
1,600
Direct expenses
400
Additional information:
(i)
Stock as at 30/06/2008 were:
Raw materials
Finished goods
Work-in-progress
(ii)
CFA
450
1,800
168
The following expenses are to be apportioned as follows:
ATSWA PART II - MARCH 2010
INSIGHT
Factory
Printing and stationery
General expenses
(iii)
¼
/3
1
Administrative &
selling
¾
2
/3
Direct wages outstanding as at 30 June 2008 were CFA 50.
Required:
Prepare the manufacturing, trading and profit and loss account for the year ended 30 June 2008. Show
clearly the prime cost, the cost of production and gross profit and net profit.
(15 Marks)
QUESTION 4
(a)
(b)
Briefly state the contents of a value added statement.
(3 Marks)
Given below is the summarised information of Glotech Technologies Limited in respect of the year
ended 30 June 2008.
L$
Salaries and wages
3,918,000
Purchased materials used in production
9,180,000
Turnover
16,804,500
Company tax for the year
510,000
Dividends to shareholders
280,500
Services purchased
1,810,500
Depreciation of fixed assets
306,000
Loan interest paid and payable
229,500
Using the above information, you are required to prepare the following:
(i)
(ii)
A value added statement showing the relevant percentage.
(7 Marks)
A conventional profit statement of the Company.
(5 Marks)
(Total 15 Marks)
ATSWA PART II - MARCH 2010
INSIGHT
QUESTION 5
The following balances were extracted from the books of Bongai Limited after the preparation of the trading
accounts at 31 December 2007.
N
Share capital authorised and issued
1,000,000 N1 Ordinary shares
200,000 10% N1 preference shares
Stocks at 31 December 2006
Debtors and prepayment
Creditors and accruals
Bank balance
10% Debenture
General reserve
Bad debts
Gross profit for the period
Wages and salaries
Rates and insurances
Postages and telephone
Electricity
Debenture interest (½ year to 30 June 2007)
Directors’ fees
Sundry expenses
Vehicles (at cost N1,212,500)
Office fittings and equipment (at cost N2,790,000)
Land and buildings at cost
Profit and loss account at 1 January 2007
1,000,000
200,000
5,240,750
1,700,000
857,625
487,250
1,000,000
8,250,000
21,250
7,394,250
1,762,500
88,125
38,750
76,000
50,000
156,250
194,250
425,000
1,715,000
8,262,500
1,515,750
The following information is also available:
(i)
Office fittings and equipment are to be depreciated at 15% of cost and vehicles at 20% of cost.
(ii)
A bill for N34,250 in respect of electricity consumed up to 31 December 2007 has not been entered
in the ledger.
(iii)
The amount for insurance includes a premium of N18,750 paid in December 2006 to cover the
company against fire loss for the year 31 December 2006 to 31 December 2007.
(iv)
Provisions are to be made for:
Directors’ fees
Audit fees
N312,500
N75,000
(10 Marks)
The outstanding debenture interest
ATSWA PART II - MARCH 2010
INSIGHT
(v)
The directors have recommended that:
-
N750,000 be transferred to general reserve
the preference dividend be paid
a 10% ordinary dividend be paid
You are required to:
(a)
Prepare the income statement (profit and loss and appropriation accounts) for the period ended 31
December 2007.
(8 Marks)
(b)
A Balance Sheet (Statement of Financial position) as at that date.
(7 Marks)
(Total 15 Marks)
QUESTION 6
Jemmy Enterprises has a branch in Zaso Town which trades on its own account. The following is a summary
of the transaction of the branch for the year ended 31 December 2008.
¢
Goods from Head office
240,000
Purchases from suppliers – credit
202,500
Cash
67,500
Sales - Credit
495,000
Cash
405,000
Cash received from Debtors
420,000
Cash paid to creditors
142,500
Expenses paid by Branch
150,000
Expenses paid Head office for branch
45,000
Cash received from Head office
30,000
Cash remitted to Head office
420,000
The branch prepares its own final accounts.
You are required to:
Record the above transaction in the ledger accounts with the branch.
SECTION A
ATSWA PART II - MARCH 2010
(15 Marks)
INSIGHT
PART I - MULTIPLE CHOICE QUESTIONS
1.
E
2.
B
3.
D
4.
C
5.
D
6.
D
7.
A
8.
A
9.
C
10.
E
EXAMINER’S COMMENT
Many of the candidates scored above 50% marks in this part.
PART II - SHORT ANSWER QUESTIONS
1.
the lower of cost and net realizable value
2.
highly geared company
3.
i)
ii)
iii)
4.
Current assets less current liabilities
5.
False
6.
It decreases capital
7.
Debit profit and loss appropriation account Credit IRS account
8.
Earnings per share (EPS) = Net profit after tax and preference dividend
Number of ordinary shares issued
9.
A fixed rate of dividend
10.
Capital employed or shareholders fund
At cost
At selling price by the branch
At cost plus a predetermined percentage
ATSWA PART II - MARCH 2010
INSIGHT
11.
Premium on preference shares
12.
Capital reserve
13.
50%
x
100% + 50%
N150,000
= N50,000
14.
Straight line method
15.
Balance sheet is the statement that shows the financial position of a business as at a particular time.
16.
Purchase Goodwill is the excess of price or purchase consideration over the value of net identifiable
assets acquired.
17.
Where there is a change in profit or loss sharing ratio



on death or retirement of a partner
admission of a new partner
dissolution of the partnership
18.
Trade Creditors
19.
Acid test ratio or liquid ratio
20.
Operating activities, investing activities and financing activities
21.
Direct method and indirect method
22.
Authorised share capital is the maximum number of shares that company’s regulations or
memorandum of association allows it to issue to the public.
23.
Provision is an expenditure that has occurred but cannot be calculated with substantial accuracy.
24.
a partner is admitted
a partner leaves the firm
there is a change in the profit and loss sharing ratio
25.
No effect
26.
The profit figure will decrease
27.
Saleable value – anticipated cost before sale
28.
Error of principles occurs where the wrong class of account is used
29.
A dormant partner is a general partner who takes no part in the management of the firm.
30.
Debenture
EXAMINER’S COMMENT
The candidates put up average performance generally in this part.
ATSWA PART II - MARCH 2010
INSIGHT
QUESTION 1 (LANDSCAPE TABLE)
JOURNAL ENTRIES
i
ii
iii
iv
Dr. Debtors and prepayments
Cr. Rent
Dr. Bad and doubtful debt
Cr. Provision for doubtful debt
Depreciation (P & L a/c)
Provision for depreciation – Motor vehicle
Provision for depreciation – Equipment
Provision for depreciation – Building
Interest on debenture
Electricity
Creditors and accruals
DR
N
832,800
CR
N
832,800
42,282
42,282
1,167,560
600,000
354,960
212,600
120,000
40,500
160,500
EXAMINER’S COMMENT
ATSWA PART II - MARCH 2010
INSIGHT
The question on extended trial balance was attempted by 90% of the candidates and many of them put up
poor performance. 80% of the candidates who attempted the question could not raise the required journal
entries.
SECTION B
SOLUTION 2
a)
(i)
Property, plant and equipment are tangible assets that:



are held by an enterprise for use in the production or supply of goods and service,
for rental to others or for administrative purposes and may include items held for
the maintenance or repair of such assets
have been acquired or constructed with the intention of being used on a continuing
basis, and
are not intended for sale in the ordinary course of business
(ii)
Fair value is the amount for which an asset could be exchanged between a knowledgeable,
willing buyer and a knowledgeable, willing seller in an arm’s length transaction.
(iii)
Recoverable amount is that part of the net carrying amount of an asset that the enterprise
can recover from the future use of the asset, including its net realisable value on disposal.
(iv)
Improvements are expenditures that increase the future benefits from the existing asset
beyond its previously assessed standard of performance is included in the gross carrying
amount. Examples of these future benefits include:



an extension in the assets estimated useful life
an increase in capacity
a substantial improvement in the quality of output or a reduction in previously assessed
operating costs
Expenses on improvements should be added to the gross carrying amount.
b)
The following are further disclosures in financial statements



a reconciliation of the amounts of property, plant and equipment at the beginning and end of an
accounting period showing additions, disposals, acquisitions through business combinations and other
movements.
the amount of payments on account of property, plant and equipment in the course of construction
or acquisition.
the carrying amount of temporarily idle property plant and equipment.
EXAMINER’S COMMENT
The question tests the candidates’ knowledge of IAS 16 – property, plant and equipment. 70% of the
candidates attempted the question and many of them scored less than 50 marks.
SOLUTION 3
S O S O K O LTD
MANUFACTURING, TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2008
CFA
CFA
ATSWA PART II - MARCH 2010
INSIGHT
‘000
Opening stock of raw materials
Purchases of raw materials
Carriage inwards
‘000
320
3,500
150
3,650
3,970
450
3,520
Less closing stock of materials
Cost of materials used
Add direct cost:
Wages
Add owing
1,600
50
1,650
400
Direct expenses
Prime cost
Factory overheads:
Factory rent
Depreciation – plant
General expenses (60 x 1/3)
Printing & stationery (¼ x 72)
Indirect wages
2,050
5,570
80
668
20
18
1,000
Add work-in- progress at 01/07/07
Less work-in-progress at 30/06/2008
Cost of production
Sales
Less cost of sales:
Opening stock of finished goods
Add cost of production
1,786
7,356
CFA
‘000
146
168
CFA
‘000
(22)
7,334
10,000
1,400
7,334
8,734
1,800
Less closing stock of finished goods
Gross profit
Less: General, selling and administrative expenses
Printing and stationery (72 x ¾ )
General Expenses (60 x 2/3)
Other administrative expenses
Depreciation – delivery van
Advertising expenses
Bad debts
Net profit
54
40
132
500
100
85
6,934
3,066
911
2,155
EXAMINER’S COMMENT
The question in manufacturing, trading profit and loss account was attempted by 95% of the candidates and
they put up good performance. The only pitfall is their inability to determine prime cost and cost of
production.
ATSWA PART II - MARCH 2010
INSIGHT
SOLUTION 4
a)









bi)
Turnover
Bought out materials and services used in production
Value added
Employees pay and contributions
Government company tax
Interest on borrowing
Dividend to shareholders
Depreciation
Profit
GLOTECH TECHNOLOGIES LTD
VALUE ADDED STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008
Turnover
Bought out materials and services used in production
Value added
Applied to
Employees pay and contribution
Government – company tax
Providers of capital
Interest on borrowing
Dividend to shareholders
Retained in business
Depreciation of fixed assets
Profit to reserve
(bi)
N
16,804,500
10,990,500
5,814,000
%
3,918,000
520,000
67.39
8.77
229,500
280,500
3.95
4.83
306,000
570,000
5,814,000
5.26
9.8
100
100
GLOTECH TECHNOLOGIES LTD
CONVENTIONAL PROFIT STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008
N
Turnover
Bought out materials used in production
Salaries and wages
Bought out services
Depreciation of fixed assets
Loan interest
Profit before tax
9,180,000
3,918,000
1,810,500
306,000
229,500
N
16,804,500
15,444,000
1,360,500
ATSWA PART II - MARCH 2010
INSIGHT
Taxation
Profit after tax
Dividends
Retained profit of the year
510,000
850,500
280,500
570,000
EXAMINER’S COMMENT
The question which tests the candidates’ knowledge in preparation of value added statement was attempted
by 60% of the candidates. Many of them scored above 50 marks, while few candidates lack the
understanding of the difference between value added statement and cash flow statement in part (a) of the
question.
SOLUTION 5
BONGAI LIMITED
PROFIT AND LOSS AND APPROPRIATION ACCOUNT FOR THE PERIOD ENDED
31 DECEMBER 2007
N
Gross profit for the period
Less:
Bad Debts
Wages and Salaries
Rates and insurance
Postages and telephone
Electricity
Debentures interest
Directors’ fees
Audit fee
Sundry expenses
Depreciation:
Office fittings
Vehicles
Net profit for the period
Profit and loss account at 31 Jan 2007
Profit available for distribution
N
7,394,250
21,250
1,762,500
88,125
38,750
110,250
100,000
468,750
75,000
194,250
418,500
242,000
Dividend proposed:
10% ordinary
10% preference
Transfer to general reserve
Undistributed profit at 31 Dec 2007
3,519,875
3,874,375
1,515,750
5,390,125
100,000
20,000
120,000
750,000
4,520,125
5,390,125
BONGAI LIMITED
BALANCE SHEET AT 31 DECEMBER 2007
N
N
ATSWA PART II - MARCH 2010
N
INSIGHT
Authorized and issued share capital
1,000,00 N1 ordinary shares
2,000,000 10% N1 preference shares
Reserves:
General reserve
Undistributed profit
Shareholders’ funds
Loan capital:
10% debentures
Net capital employed
1,000,000
200,000
9,000,000
4,520,125
13,520,125
14,720,125
1,000,000
15,720,125
Represented by:
Fixed assets
Land and building (cost)
Office fittings and equipment (cost)
Less: Depreciation
2,790,000
1,493,500
Vehicles (cost)
Less: Depreciation
1,212,5000
1,030,000
8,262,500
Current assets:
Stock
Debtors
Bank
Less
Current liabilities:
Creditors and accrual
Debenture interest
Dividend proposed
1,200,000
1,296,500
182,500
9,741,500
5,240,750
1,700,000
487,250
7,428,000
1,279,375
50,000
120,000
1,449,375
5,978,625
15,720,125
EXAMINER’S COMMENT
The question on income statement and balance sheet was attempted by 70% of the candidates. Candidates’
performance in part (a) was okay, while many of them performed poorly in part (b).
SOLUTION 6

30,000
240,000
45,000
105,000
420,000
Balance b/d
Head office current Account

420,000 Cash
Goods
Expenses
Balances c/d
420,000
105,000
Head office
Creditors
Purchases Account

240,000
Trading Account
202,500

510,000
Cash
ATSWA PART II - MARCH 2010
INSIGHT
Cash
Trading Account
Cash
Balance c/d
Sales
Cash
Head office
67,500
510,000
510,000
Sales Account

900,000 Sundry debtors
Cash
900,000
Sundry Creditors Account

142,500 Purchases
60,000
202,500
Sundry Debtors Account

495,000 Cash
Balance c/d
495,000
Expenses Account

150,000
45,000
195,000
Profit and loss

495,000
405,000
900,000

202,500
202,500

420,000
75,000
495,000

195,000
195,000
Cash Book
Head office
Sundry Debtors
Sales

30,000 Sundry creditors
420,000 Head office
405,500 Purchases
Expenses
Bal c/d
855,000
Bal b/d 75,000

142,500
420,000
67,500
150,000
75,000
855,000
EXAMINER’S COMMENT
The question test candidates’ knowledge of branch account 60% of the candidates attempted the question
and many of them scored above 50 marks. The common pitfall is that most of them could not post entries
correctly into the ledger accounts.
ATSWA PART II - MARCH 2010
INSIGHT
AT101/PII.6
EXAMINATION NO:………………………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART II EXAMINATION – MARCH 2010
GOVERNMENT ACCOUNTING
Time allowed: 3 hours
Insert your Examination number in the space provided above
SECTION A
PART I
1.
Advances granted to staff
Refund of unspent touring advance
Payment for utilities
Purchases of motor vehicle
Construction of access road.
An example of ‘below the line” account is ........................
A.
B.
C.
D.
E.
4.
revenue control
cash control
expenditure control
payment control
budgetary control.
Which of the following is an example of recurrent expenditure?
A.
B.
C.
D.
E.
3.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
The coordinated actions which have to be taken to ensure that funds available are adequately
controlled and effectively utilised are known as
............................
A.
B.
C.
D.
E.
2.
(Attempt all questions)
housing loan
electricity bill
purchases of plant and machinery
salaries
cash received from the ministry of finance
A Non –Expendable store is a ...........................
A. stationery item
ATSWA PART II - MARCH 2010
INSIGHT
B.
C.
D.
E.
5.
Store purchased for general stock rather than for a particular service for which the final vote of
charge cannot be stated at the time of purchase is called ...................................
A.
B.
C.
D.
E.
6.
Licensing of bicycles, trucks, motors vehicles etc
Naming of roads and numbering of houses
Registration of deaths and marriages
Provision of security for the entire local government council area
Construction and maintenance of roads
ONE of the following budgets shows the total basic salaries and allowances of various categories of
staff in each ministry or department
A.
B.
C.
D.
E.
10.
Government Development Stocks
Treasury Bills
Government Revenue Bonds
Paris Club rescheduling
Treasury certificates
All the items listed below are the functions of the Local Government, EXCEPT:
A.
B.
C.
D.
E.
9.
The president and not less than two members
The president and not less than four members
The president and not less than six members
The president and not less than three members
The president and not less than one member
All of the following are debt instruments of foreign borrowing EXCEPT:
A.
B.
C.
D.
E.
8.
allocated of store
non-expendable store
expendable store
unallocated store
general store
Which of these best describes the composition of the Board of Survey?
A.
B.
C.
D.
E.
7.
food stuff item
shovel
motor vehicle
brush
Salaries and wages commission budget
Personnel Cost Budget
Total Cost budget
Manpower Planning Budget
Human Resources Cost Budget
Where income is distributed in the economy evenly, this is referred to as:
A. Equitable income distribution
B. Inequitable distribution
ATSWA PART II - MARCH 2010
INSIGHT
C. Income distribution
D. Equity and Income distribution
E. Proportionate income distribution
F.
PART II
SHORT-ANSWER QUESTIONS (30 MARKS)
1.
A radical approach of a country’s refusal to pay back its debt is termed........................
2.
The Government Agency responsible for the administration and collection of Value Added Tax (VAT)
in your country is ..........................
3.
A form of taxation which is fixed lump sum per head is termed ...........................
4.
State TWO types of imprest you know.
5.
The type of loan that can be sought by a country having persistent balance of payment deficit is
called...............................
6.
A grant that is tied to a specific project is called ...........................
7.
Items of revenue received to finance projects are called...........................
8.
Funds that accrue to the Local Government Councils from the Federation/Consolidated Accounts and
other constitutional releases are from ..................... sources.
9.
The cardinal objectives of Internal Audit is to ensure that funds are not .........................
10.
The name of fund whose assets are held by the government as trustee for application to purposes
stated in the trust deed is called.........................
11.
That voucher used in transferring money from one department to the other without physical cash
changing hands is called..............................
12.
Incomes and expenditure not budgeted for but listed are called ...........................
13.
All financial warrants must be issued and signed by the ............................
14.
The control book that highlights the uncommitted balance at a glance is called ...........................
15.
The government expenditure on roads, bridges, buildings etc is called ...............................
16.
On what date does the authority of the warrant issued expire?
17.
What legal authority enables the government to incur expenditure before the passenger of the
Appropriation Bill.
18.
State the TWO ways in which a spoilt cheque is treated.
19.
Who is responsible for the control of treasury and revenue collector receipt books in public sector
accounting.
ATSWA PART II - MARCH 2010
INSIGHT
20.
What is the name of the document used by the revenue collector to record all the cash received and
paid or transferred by him.
21.
All receipt books, licences etc issued from the main stocks for use under the relevant Financial
Regulation must be recorded in a ..................... by the receiving officer.
22.
The Committee that examines all cases of audit alarm raised and brought before it is called
............................
23.
In government accounting “Revolving Fund” is also known as .....................
24.
The transfer of funds to lower levels of government either directly or indirectly is referred to as
..........................
25.
What is the official name of the external auditor to the Local Government?
26.
How is the outstanding balance of motor vehicle advance taken by a retiring officer treated?
27.
What is the name of the document issued by the Accountant General for the submission of Budget
Estimate?
28.
Which budget is prepared in the Public Sector for construction of bridges, schools and roads?
29.
The budget technique that present public expenditure by referring to function and projects is
called..........................
30.
The type of budget that can be used to reflate an ailing economy is a(n) ....................
ATSWA PART II - MARCH 2010
INSIGHT
SECTION B – Attempt any Four Questions (60 Marks)
QUESTION 1
You are required to enter the following transactions in cash book which was carried out by John Kente for
the month of December 2009.
December 1
December 3
December 4
December 5
December 12
December 15
December 17
December 19
December 21
December 23
December 25
December 27
December 28
December 29
December 31
John commenced business with N480,000 cash
Paid into bank N280,000
Purchased office equipment by cheques N100,000
Cash sales N16,000 paid cash for wages N6,000
Sent Peter sale cheque in settlement of his account of
N40,000 – Discount received 2%
Cash sales N60,000
Received cheque from Adebayo N76,000 being full settlement
of his account N80,000
Paid Tola N2,000 cash
Sent Abubakar a cheque for N40,000
Received cheque from Paul N40,000
Paid staff wage in cash N8,000
Sent cheque to Kanu in settlement of his account of N48,000
less 5% discount
Paid electric bill N8,400 cash
Paid N20,000 into cash
Paid into bank N8,000
(15 Marks)
QUESTION 2
The following balances are in the records of the Ministry of Water Resources for the month of October,
2009.
Head &
Subhead
2/1
2/3
2/4
5/3
10/6
10/7
12/5
2001
5001
Description
Receipt:
VAT
Companies Income Tax
Capital Gain Tax
Petroleum Profit Tax
Stamp duties
Sales of government properties
Sundries
Below –the- line
Deposits
Advances
Amount
¢’000
40,700
7,500
1,250
4,735
1,200
21,000
7,000
5,000
3,700
Payments:
ATSWA PART II - MARCH 2010
INSIGHT
8/1
8/2
8/3
8/4
8/5
8/6
8/7
8/8
8/9
2001
5001
Personnel Cost
Local Transport
Stationery
Printing
Utility Service
Maintenance of Properties
Entertainment
Motor Vehicle expenses
Miscellaneous expenses
Below -the- line:
Deposits
Advances
Opening balance as at 1 October year 2009
27,500
3,500
2,750
2,100
9,500
3,150
1,750
2,500
850
8,500
3,500
1,200
Required:
Prepare the Transcript of the Ministry for the month of October 2009.
(15 Marks)
QUESTION 3
The following information was extracted from the accounting records of Ministry of Transportation during
the month ended August 2007. The Treasury Cashbook showed a debit balance of L$11,200,000 as against
the balance as per bank statement that showed a credit balance of L$8,050,000. On investigation, it was
revealed that:
(a)
Cheques issued to suppliers but not presented to bank are:
L$
(i)
2604001
1,450,000
(ii)
2604040
800,000
(iii)
2604102
750,000
(b) An investment income of L$2,450,000 was received directly by the bank but no entry in the
cash book.
(c) Standing order of L$2,600,000 to Virgin Liberia made by bank but no entry in the Cashbook.
(d) A cheque of L$2,750,000 received from a Tender was duly entered into the cash book but no
entry was made in bank.
(e) Bank charges of L$1,350,000 had been deducted by the bank but no entry was made in the #
cashbook.
Required:
(i)
Prepare the bank reconciliation statement for August 2007.
(12 Marks)
(ii)
State THREE financial items that require entries in the cashbook but not featured
in the bank reconciliation.
(3 marks)
(Total 15 Marks)
QUESTION 4
From the Ministry of Industry the following information were extracted from the ledger:
ATSWA PART II - MARCH 2010
INSIGHT
Values of stores as per stock Account
Value of store issued during the year as abstract
PAYMENTS
Payment as per abstract
Payment in respect of change previous year
Expenditure credit from claim met
Store taken on change at the fixed price as per stock account
Total Price Deficiencies
Value of claims raised 2006
Transfer to unallocated stock net
N
1,307,000
1,407,500
3,007,500
2,075,000
790,000
4,500,000
890,000
750,000
950,000
You are required to:Prepare Unallocated Store Reconciliation Account Issue and Payment.
(15 Marks)
QUESTION 5
(a)
What is Incremental Budgeting System?
(3 marks)
(b)
The Ministry of Agriculture of Tema State provided the following information about budgeted and
actual overhead and personnel in respect of year 2007.
Head
Subhead
Title/Particular
35
35
35
35
35
35
35
35
35
35
35
35
01
02
03
04
05
06
07
08
09
10
11
12
Contribution, Subvention & Grants
Maintenance of capital assets
Maintenance Motor vehicle
Office furniture & Maintenance
Stationery
Telephone Services
Utility
Travel & Tours
Personnel Costs
Staff Training & Development
Contributions to Foreign Bodies
Miscellaneous Expenses
Previous
Actual
¢’000
¢’000
600
600
1,575
1,183
605
635
400
364
1,160
986
210
263
355
318
875
1,030
2,600
2,490
203
173
430
430
650
553
The following information are also relevant:
(i) Increase in activities in 2008 will attract 30% of overhead cost.
(ii) 20% of total salaries for 2007 is required to meet the additional personnel cost 2008. The
personnel costs for the year 2007 include ¢945,000 spent on staff allowance.
(iii) The staff allowance will be 50% of the year 2008 staff salaries.
(iv) An inflation factor of 20% on overhead cost is recognised in the computation
of 2008 budget.
ATSWA PART II - MARCH 2010
INSIGHT
You are required to:
Prepare an incremental budget for the year. Show all workings.
(15 Marks)
QUESTION 6
(i)
The Auditor General for FREETOWN STATE observed the following anomalies on Treasury Clearance Fund
(Statement 5.1) as at 31 December 2005.
(a)
Account No
Description
Amount in Trial
balance
Amount in Statement Difference
Le
Le
Le
1100 - 1199
Excess Cash
Account
CR
160,559,146
1300 – 1399
Clearance
Account SAD
DR
553,475
79,703,159 CR
553,275
80,855,987
CR
200
DR
DR
(b) The total debit figures in the statement should be Le26,202,854 instead of
Le26,202,654 while the total credit figure should be Le227,700,535 instead of
Le146,884,548.
(c) The net balance as at 31 December 2005 should be Le201,497,681 instead of
Le120,641,894.
You are required to effect the correction through the use of the Journal.
(10 Marks)
(ii) State FIVE particulars that a good Advances Voucher should disclose.
(5 Marks)
(Total 15 Marks)
MULTIPLE CHOICE QUESTIONS
1.
C
2.
C
3.
A
4.
D
5.
D
6.
A
7.
D
ATSWA PART II - MARCH 2010
INSIGHT
8.
D
9.
B
10.
A
SHORT ANSWER QUESTIONS
1.
Debt repudiation
2.
Federal Inland Revenue Service (FIRS)
3.
Poll Tax
4.
Standing and Special Imprest
5.
Balance of payment support loan
6.
Specific grant
7.
Capital receipts
8.
Statutory
9.
Mismanaged or misappropriated
10.
Trust funds
11.
Adjustment voucher
12.
Below-the-line account
13.
Minister of Finance
14.
Vote book
15.
Capital expenditure
16.
31st December (the end of the year)
17.
Provisional general warrant
18.
(i)
(ii)
(iii)
(iv)
19.
The Accountant-General
Spoilt cheque must be cancelled
Spoilt cheque to be affixed to the counterfoil
The designated bank is promptly informed
Corresponding cheque number cancelled in cheque delivery register
ATSWA PART II - MARCH 2010
INSIGHT
20.
Revenue collector cash book
21.
Receipt Book Register
22.
Audit Alarm Committee
23.
Working capital fund
24.
Intergovernment transfer
25.
Auditor-General for local government
26.
The outstanding balance of advance is deducted from the retiring officer’s gratuity embloc. However,
if the gratuity is not adequate to recoup the outstanding amounts, the vehicle is seized by court
action, sold and necessary set-off exercised.
27.
28.
Call circular
Capital budget
29.
Performance budgeting
30.
Deficit budget
SOLUTION 1
SECTION B
Date
Dec 3
Dec 5
Dec 15
Dec 17
Dec 23
Dec 9
Dec 31
Particular
Cash
Cash ¢
Sales
Adebayo
Paul
Bank ¢
Cash ¢
Discount
Allowed
JOHN KENTE CASH BOOK FOR DECEMBER 2009
Cash
Bank
Date
Particular
Discount
received
Cash
480,000
280,000
16,000
60,000
4,000
20,000
_____
4,000
Bal b/d
_______
576,000
263,600
Dec. 3
280,000 Dec. 4
Dec. 5
Dec. 12
76,000 Dec. 19
40,000 Dec. 21
Dec. 25
8,000 Dec. 27
Dec. 28
Dec. 29
Dec. 31
Dec. 31
_______
404,000
159,700
Bank ¢
Bank
100,000
Wages
Prefer
Tola
Abubakar
Wages
Kanu
Electric Bill
Cash ¢
Bank ¢
Bal c/d
6,000
800
39,200
2,000
40,000
8,000
2,400
45,600
8,400
20,000
_____
3,200
EXAMINER’S COMMENT
ATSWA PART II - MARCH 2010
8,000
263,600
_______
576,000
159,200
_______
404,000
INSIGHT
Question 1 is on cash book of transactions for a month in a three column cash book. More than 99% of the
candidates attempted this question. 70% of the candidates that attempted the question scored above 50%.
Confusion of between cash and bank columns were faced by candidates.
SOLUTION 3
(a)
MINISTRY OF TRANSPORTATION
BANK RECOCILIATION STATEMENT FOR THE MONTH OF AUGUST 2007
N
Treasury cash book balance 31/8/07
Add Unpresented cheques
2604001
2604040
2604102
Investment income
1,450,000
800,000
750,000
Less: Uncredited cheque
Standing orders
Tender
Bank charges
Bank error
Balance per bank statement
N
11,200,000
3,000,000
2,450,000
16,650,000
2,600,000
2,750,000
1,350,000 (6,700,000)
1,900,000
8,050,000
(b)
i)
ii)
iii)
iv)
v)
Bank charges
Dishoured cheques
Standing order
Clerical errors in the cash book
Errors, omission and irregularities such as casting errors
EXAMINER’S COMMENT
Question 3 is a question on bank reconciliation statement for a month. About 95% of the candidates
attempted this question. Majority of the candidates understand the topic hence 80% of those that attempted
it scored over 50%.
SOLUTION 4
UNALLOCATED STORES
RECONCILIATION ACCOUNT
ISSUE
N
Value of store issue as per
store account
Adjustment
N
Value of store as
1,307,000 per abstract
100,500
1,407,500
1,407,500
1,407,500
PAYMENTS
N
N
ATSWA PART II - MARCH 2010
INSIGHT
Payment as per abstract 2006
Less payment in respect 2005
Less expenditure credit
Less transfer unallocated deficiencies
Sub head price excess
Sub-Total
Adjustment
3,007,500 Stock taken on
2,075,000 Change fixed
790,000 Total price deficiencies
Value of claim
4,500.000
890,000
750,000
950,000
807,500
5,332,500
6,140,000
6,140,000
EXAMINER’S COMMENT
Question 4 is on unallocated store accounts. Only about 40% of the candidates attempted this question and
about 10% of them scored pass marks. Generally they performed woefully. This indicated that candidates
did not prepare for this topic. This is a potential future topic for reexamination.
SOLUTION 5
(a)
Incremental budgeting system is a technique by which a particular percentage of last year’s budget is
added to obtain this year’s budget.
(b)
MINISTRY OF AGRICULTURE, TEMA STATE
INCREMENT BUDGET FOR THE YEAR 2008
Head – 35
Sub- heads
01
02
03
04
05
06
07
08
09
10
11
12
Particulars/titles
Contribution, subvention & grants
Maintenance of capital assets
Maintenance of motor vehicle
Office furniture & maintenance
Stationery
Telephone services
Utilities
Travel & tours
Personnel costs
Staff training & developments
Contribution to foreign bodies
Miscellaneous expenses
To budget cost
Notes
1
2
3
4
5
6
7
8
9
10
11
12
¢’000
936.00
1,845.48
990.60
567.84
1,538.16
410.28
496.08
1,606.80
2,781.00
269.88
670.80
862.68
12,975.60
Working:
Notes
1
2
3
4
5
6
Sub Heads
01
02
03
04
05
06
Particulars
Contribution etc
Maintenance of capital assets
Maintenance of motor vehicle
Office furniture & maintenance
Stationery
Telephone services
Workings
600 x 1.20 x 1.3
¢
1,193 x 1.20 x 1.30
635 x 1.20 x 1.30
364 x 1.20 x 1.30
986 x 1.20 x 1.30
263 x 1.20 x 1.30
ATSWA PART II - MARCH 2010
936.00
1,845.48
990.60
567.84
1,538.16
410.28
INSIGHT
7
8
9
07
08
09
10
11
12
Utilities
Travel & tours
Personnel cost:
Salaries = (2,490 – 945) x 1.20
Staff allowance (1,854 x 50%)
Staff training & development
Contribution of foreign bodies
Miscellaneous expenses
10
11
12
318 x 1.20 x 1.30
1,030 x 1.20 x 1.30
496.08
1,606.80
1,854
927
173 x 1.20 x 1.30
430 x 1.20 x 1.30
553 x 1.20 x 1.30
2,78100
269.88
670.80
862.68
EXAMINER’S COMMENT
Question 5 deals with budgeting in governmental establishment. Around 65% of the candidates attempted
this question where about 10% of them scored pass marks. Candidates should realize the importance of
budgeting in organizations and should understand it properly, theory and practice.
SOLUTION 6
(a)
i
ii
iii
Iv
DR
CR
DR
CR
Difference account
Clearance state net
Clearance statement
Difference account
80,855,987
80,855,987
200
200
(b)
DR
CR
DR
CR
(c)
a)
b)
c)
d)
e)
f)
g)
h)
i)
DR
CR
Clearance statement
Difference account
Difference account
Clearance statement
200
200
80,815, 989
80, 815, 987
Difference account
Statement clearance
280,855.787
80,855,787
Voucher relating to advance must indicate:
Name of the officer collecting the advance
Designation of officer collecting the advance
Below the line code
Nature of advance
Term of recovery
The authority for the advance
Approving office
Ledger reference
Officer entry into the ledger
EXAMINER’S COMMENT
ATSWA PART II - MARCH 2010
INSIGHT
Question 6 deals with anomalies in Auditor-General is Treasury Clearance Fund, which requires journal
entry. The question is meant to test the candidate’s knowledge of application of journal in correcting
accounts. About 20% of candidates attempted this question where only 30% of them scored pass marks.
The correction of accounts is important, candidates should prepare for it.
AT/101/PII.7
EXAMINATION NO:……………………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART II EXAMINATION – MARCH 2010
QUANTITATIVE ANALYSIS
Time allowed: 3 hours
Insert your examination number in the space provided above
SECTION A - Attempt All Questions
PART I
1.
When a fair coin is tossed once, a boy wins ¢100 if head shows up and loses ¢50 if tail shows up.
Find his expected income
A.
B.
C.
D.
E.
2.
High correlation
Negative correlation
Non-sense correlation
Positive correlation
Low correlation.
How many samples of size 2 can be chosen from 5 numbers without replacement?
A.
B.
C.
D.
E.
4.
¢25.00
¢50.00
¢55.00
¢75.00
¢150.00.
If the regression coefficient is positive, this indicates
A.
B.
C.
D.
E.
3.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
32
25
20
10
7
If the marginal cost of a product is given by MC = 9 + 3q2, then the total cost is
ATSWA PART II - MARCH 2010
INSIGHT
A.
B.
C.
D.
E.
5.
6q + C
9q + 6q2 + C
q3 + C
9q + q3 + C
9q + 6 + C.
If Matrix P of dimension 2 x 2 is multiplied by I =
1 0
0
A.
B.
C.
D.
E.
6.
Observation method
Personal interview method
Panel method
Telephone method
Registration method.
The head and the tail of an arrow in a network respectively indicate the
A.
B.
C.
D.
E.
10.
Arithmetic mean < Geometric mean < Harmonic mean
Arithmetic mean = Geometric mean = Harmonic mean
Arithmetic mean > Geometric mean > Harmonic mean
Harmonic mean > Geometric mean > Arithmetic mean
Geometric mean > Harmonic mean > Arithmetic mean
Data obtained from these methods can be regarded as primary source of data EXCEPT:
A.
B.
C.
D.
E.
9.
N12,979.20
N14,038.30
N13,920.00
N13,996.80
N14,480.00
Which of these statements is correct?
A.
B.
C.
D.
E.
8.
P -1
P
PT
PPT
I.
If a sum of N12,000 is invested for two years at 8% compounded semi-annually, the amount is
A.
B.
C.
D.
E.
7.
the result is
1 ,
beginning and the end of a task
end and beginning of a task
head event and tail event
tail event and head event
end task and tail event.
The minimum duration of a project equals the sum of the
A.
durations of all possible paths in the network
ATSWA PART II - MARCH 2010
INSIGHT
B.
C.
D.
E.
PART II
durations of the longest and the shortest activities
durations of activities on the longest non-critical path
durations of activities connecting events where the earliest start time equals latest start time
optimistic and the pessimistic time estimates of activities along the critical path.
SHORT- ANSWER QUESTIONS (30 Marks)
1.
The TWO main aspects of statistics are ............... and ..................
2.
The difference between the upper and lower class boundaries of a grouped data is called .................
3.
A table containing variable values in one column and the number of times these values repeat
themselves in adjoining column is known as .................
4.
The value in the data set which lies in such a position that half of the observations are below it and
the remaining half above it is known as the ................
5.
The arithmetic mean of the absolute values of the deviations of the individual values from the mean
in a data set is ..................
6.
The probability of an event which cannot occur is ..............
7.
Given that the mean and variance of a set of data are 25 and 16 respectively, then the coefficient of
variation is ..................
8.
9.
The type of interest that accrues only on the principal is known as ...........
A null set is a subset of every defined set. True or False?
10.
The profit is zero when revenue ...............
11.
If x represents the number of oranges, and y stands for the number of apples and if the two items
are related as follows:
2x + y < 40
x + y = 22
then x is .......................
12.
A set with four elements or members has .......... subsets.
13.
The set that contains all the elements in the universal set but are not found in sets A nor set B is
written in notation form as ..................
Use information in the diagram below to answer questions 14 and 15.
A(28)
B
5
y
x
U
9
2x
15
ATSWA PART II - MARCH 2010
INSIGHT
8
C(32)
14.
From the Euler-Venn diagram shown above, the total number of elements in set B (i.e. n (B)) is
.....................
15.
The size of the universal set n(U) in the Euler-Venn diagram is ............
16.
The list of every member of a population is called the ..................
17.
The normal distribution reasonably approximates the binomial distribution when the number of trials
is ............ and the probability of success is not close to ..............
18.
Regression establishes a ............ between two variables while correlation measures the strength of the
...............
19.
The mean of a sample of size 100 is 20 while the population mean and standard deviation are 18 and
6.8 respectively. Calculate the test statistic.
20.
If Kofi expects 400 cedis from his brother with probability 0.6 and 300 cedis from his sister with
probability 0.5, how much money is he likely to have?
21.
If the null and alternative hypotheses are stated as Ho: µ = 0; Hi: µ > 0, then the test is said to be a
............. test.
22.
The feasible region in any Linear programming problem is always in the first quadrant because the
variables cannot be ...............
23.
In transportation problems, the cost of transporting one unit of a commodity must be ..............
24.
An activity in a process is represented on the network by ..............
25.
The shortest time period in which a whole project can be completed equals the duration of the
...............
26.
The correct presentation of the network shown below is .......
B
1
A
2
3
D
4
C
27.
The revenue (in Naira) from the sales of x units of a product is represented by R(x) = 7x 3 + 4x2 + 7√x.
Then the marginal revenue is ...............
28.
The rate of increase of the revenue in question 27 when 50 units of the product are sold is ............
29.
TWO types of models that are used for inventory control are deterministic and ...............
30.
The level of stock at which a further replenishment order should be placed is ...............
ATSWA PART II - MARCH 2010
INSIGHT
SECTION B – Attempt Any Four Questions out of which at Least one Must Come From Each
Sub-Section (60 Marks)
STATISTICS
QUESTION 1
The daily profits (in N’000) made by an accounting consulting company in a season are given below:
20
15
40
28
38
30
a)
b)
32
23
31
33
27
20
45
12
24
35
26
40
50
36
36
25
24
43
18
38
37
49
27
27
18
16
43
22
29
41
24
44
30
26
34
28
28
48
21
33
37
31
By the aid of Tally method, use the classes 10-14, 15-19, etc., to construct the frequency distribution
table for the data.
(8 Marks)
Determine the,
(i)
Number of days the company operated.
(ii)
Number of days the company made a daily profit of less than N30,000.
(iii)
Proportion of the days under consideration in which the company made a daily profit of at
least N40,000.
(iv)
Percentage of the days under consideration in which the company made profit of at least
N20,000 but less than N30,000. (7 Marks)
(Total 15 Marks)
ATSWA PART II - MARCH 2010
INSIGHT
QUESTION 2
TWO out of every FIVE students from JAYEB’s local government council in tertiary institutions are awarded
scholarships.
If 400 students from the local government are randomly selected, calculate the probability that
(a)
at least 150
(8 Marks)
(b)
between 140 and 175
(4 Marks)
(c)
at most 135
(3 Marks)
of the students are awarded scholarships
(Total 15 Marks)
QUESTION 3
The auditors’ report of a company provides the following data for the management to take valuable decisions
on weekly expenses.
Week
Expenses (¢’m)
(a)
2
4
3
10
4
12
5
8
6
6
7
6
8
5
Calculate the
(i)
(ii)
(iii)
(b)
1
5
Mean weekly expenses
Variance of the weekly expenses
Co-efficient of variation of the weekly expenses.
(4 Marks)
(5 Marks)
(4 Marks)
Based on your result in (a)(iii) above only, comment, in not more than one sentence, on the stability
of the weekly expenses.
(2 Marks)
(Total 15 Marks)
BUSINESS MATHEMATICS
QUESTION 4
In a manufacturing company, the demand and total cost functions are respectively p = 36 – q2 and C = 2q2 +
4q, where q is the number of quantities produced and sold.
3
a)
Determine the number of quantity that will
(i)
maximise the profit of the company and hence determine the maximum profit.
(ii)
make the company to break even.
(11 Marks)
(b)
Determine the elasticity of demand when the profit is maximum and comment on your result.
(4 Marks)
(Total 15 Marks)
QUESTION 5
ATSWA PART II - MARCH 2010
INSIGHT
Madam Love operates a Beauty Salon in Akoka. She specialises in Afro (x), Jerry Curl (y) and Perming (z)
hair styles. To service each customer, she makes use of dryer, washer and stylists. To do an afro hair style
requires 1 hour in the dryer, 2 hours in the washer and 2 hours with the stylist. The jerry curl hair style
requires 4 hours in the dryer, 2 hours in the washer and 3 hours with the stylist. And the perming hair style
requires 2 hours in the dryer, 1 hour in the washer and 3 hours with the stylist. She has available 220 dryer
hours, 200 washer hours and 330 stylists’ hours.
Required:
a)
Obtain the system of linear equations for Madam Love’s problem.
(3 Marks)
b)
Use the Cramer’s rule to determine how many Afro (x), Jerry curl (y) and Perming (z) hair styles she
can do given her available resources.
(12
Marks)
(Total 15 Marks)
OPERATIONS RESEARCH
QUESTION 6
An organisation has just established a canteen outfit for its staff members where they are to take free meals.
The staff members are entitled to breakfast, lunch and dinner. The organisation has two main cadres of staff,
management staff (M) and operating employees (O). In order to minimise costs, the organisation has
decided to encourage its staff to skip either lunch or dinner.
The table below gives the information pertaining to the decision problem.
M
x1
O
x2
Lower Limits of
Availability
B
5
5
1000
L
3
2
600
D
2
3
800
Contribution to cost
N1,200
N800
Resources
Activities
Activity Levels
where:
x1 denotes the number of management staff members to be given meals.
x1 denotes the number of operating employees to be given meals.
Required:
(a)
(b)
(c)
Formulate the problem as a Linear Program.
(3 Marks)
Plot the Primal Model on a graph and identify the feasible region
Obtain the Dual of the problem.
(10 Marks)
(2 Marks)
(Total 15 Marks)
QUESTION 7
The demand for an item is 160,000 per quarter at a constant rate. The ordering cost is L$120 while holding
cost per item is L$3.75 per annum.
You are required to find the:
ATSWA PART II - MARCH 2010
INSIGHT
(a)
Economic Order Quantity.
(6 Marks)
(b)
number of orders per year and the associated ordering cost.
(5 Marks)
(c)
total cost per annum.
(4 Marks)
(Total 15 Marks)
ATSWA PART II - MARCH 2010
INSIGHT
SECTION A
PART I
MULTIPLE-CHOICE QUESTIONS
1.
A
2.
D
3.
D
4.
D
5.
B
6.
B
7.
C
8.
E
9.
B
10
D
Workings
1.
Expected income = ½ x 100 + ½ x (-50) = N25
3.
5
4.
C = (9 + 3q2) dq = 9q + q3 + c
C2 = 5 x 4 = 10
2
6.
A = P (1 + r)n in 2x2 = 4; n = 2x 2 = 4 r = 0.4 (i.e. 8% ÷2 for semi annually)
= 12,000 (1 + 0.04)4
= N14,038.30
7.
Out of the three, Arithmetic mean is the highest while the Harmonic mean is the smallest.
8.
Here Registration method is the most appropriate and correct option .
ATSWA PART II - MARCH 2010
INSIGHT
SHORT - ANSWER QUESTIONS
1.
Descriptive and inferential
2.
Class width or class size
3.
Frequency table
4.
Median
5.
Mean Absolute Deviation or MAD
6.
0.0 or zero
7.
x
8.
x
simple interest
9.
True
10.
equals cost or is equal to cost
11.
y = 22 –x
2x + 22 –x  40
x  40 – 22 = 18
;. x  18
12.
24 or 16
13.
(AB)1 or A1B1
14.
8 + 15+x + 2x = 32  x = 3
5 + y + x + 2x = 28
 5 + 3 (3) + y + 28  y = 14
: . n (B) = 9 + 15 + (2(3) + 14 = 44
15.
n(U) = 44 + 3 + 5 + 8 = 60
16.
Sampling frame
17.
large, zero (in that order)
18.
relationship, relationship (association)
19.
z = x –µ
100
/1 = 4/25 x 100/1 = 16%
=
20 – 18
= 2.94
ATSWA PART II - MARCH 2010
INSIGHT
/n =
6.8/ 100
20.
0.6 x 400 + 0.5 x 300 = 390 cedis
21.
one tailed or one sided
22.
negative or less than zero
23.
constant
24.
an arrowed line or
25.
critical path
26.
1
B
A
3
2
C
D
4
OR
1
A
B
2
3
D
4
C
27.
R (x) = 7x3 + 4x2 + 7x
:. MR = dR (x) = 21x2 + 8x + 7
dx
2(x)
28. MR = 21x2 + 8x + 7
2x
at x =50
MR = Rate of increase = 21(50)2 + 8(50) + 7
250
=N52,900.49
29.
Stochastic in probabilistic model
30.
Re-order level
EXAMINER’S COMMENT
The entire syllabus is fairly covered in which the three sections of the syllabus (i.e. Statistics, Business
Mathematics and Operations Research) are adequately represented. The performance of candidates was fair.
ATSWA PART II - MARCH 2010
INSIGHT
SOLUTION 1
a)
Profit (N’000)
10-14
15-19
20-24
25-29
30 - 34
35 - 39
40-49
45 -49
50 - 54
b)
I
III
IIII
IIII
IIII
IIII
IIII
III
1
III
IIII
III
III
I
Number of
days
1
4
8
10
8
7
6
3
1
48
(i)
Number of days of operation = f = 48 days
(ii)
Number of days with daily profit less than N30,000
= 1 + 4 + 8 + 10 = 23 days
(iii)
Number of days with daily profit of N40,000 or more
= 6 + 3 + 1 = 10 days
:- proportion of the total days = 10/48 = 5/24 or 0.208
(iv)
Number of days with daily profit more or equal to N20,000 but less than N30,000
= 8 + 10 = 18 days
:- percentage of the total days
= 18/48 x 100/1 = 37.50%
EXAMINER’S COMMENT
This question tested the candidates’ knowledge of constructing frequency distribution table from the given
set of data using the Tally Method.
Majority of the candidates attempted the question and not less than 70% of the candidates did fairly well.
The only pitfall identified was the inability of a few candidates to correctly use the Tally Method to capture
the total daily profits.
SOLUTION 2
P = 2/5 = 0.4
:- q = 0.6
np =
400 x 0.4 = 160
 npq =  400 x 0.4 x 0.6 = 9.8
Calculate the various Z – values as follows:
(a)
150 – 160 = - 1.02
ATSWA PART II - MARCH 2010
INSIGHT
9.8
A = 0.3461 from the table and B= 0.5
:- the required probability (shaded) = 0.5 + 0.3461 = 0.8461
A
B
-1.02
b)
175 – 160 = 1.53
9.8
140 – 160 = -2.04
9.8
A is 0.4793 and B is 0.4370 from the tables
:- required probability (shaded) = 0.4793 + 0.4370 = 0.9163
A
-2.04
B
1.53
ATSWA PART II - MARCH 2010
INSIGHT
c)
135 – 160 = -2.55
9.8
A is 0.4946 from the tables
:- required probability = 0.5 – 0 .4946 = 0.0054
A
-2.55
EXAMINER’S COMMENT
This question is on probability distribution using Normal approximation to Binomial.
Very few of the candidates attempted the question and their performance was fair. The main pitfall
identified was the inability of most of those who attempted it to correctly use the Normal Distribution
Tables.
SOLUTION 3
X
5
4
10
12
8
6
6
5
56
X2
25
16
100
144
64
36
36
25
446
(i)
mean = x = 56
n
8
=7.0 = 7m
(ii)
variance = 2 = x2 – (x)2/n
n
= 446 – (56)2/8
8
= 54/8 = 6.75
ATSWA PART II - MARCH 2010
INSIGHT
C.V. =  x 100
x
1
(iii)
b)
=6.75 x 100
7
1
= 2.5598 x 100
7
1 = 37.12%
Since, the coefficient of variation is a little above 30%, one can conclude that the weekly expenses are
fairly stable.
ALITER
X
5
4
10
12
8
6
6
6
5
Variance =  (x – x)2
n
(X – X)2
4
9
9
25
1
1
1
1
4
54
(X – X)
-2
-3
3
5
1
1
-1
-1
-2
= 54
8
= 6.75
EXAMINER’S COMMENT
The question is set to test candidates’ ability to identify discrete data. Majority of the candidates failed to
recognise this aspect of the question and hence made blunders by using wrong set of data as variates i.e. they
were using the real figures i.e. the expenses as frequencies and the time (given in weeks) as variables.
Generally, the performance was very poor. More than 95% of the candidates attempted the question.
SOLUTION 4
a)
(i)
Profit (
Revenue – Cost
= q (36 – q2) - (2q2 + 4q)
3
=36q – q3 – 2q2 – 4q
3
 = 32q – q3/3 – 2q2
d /dq = 32 – q2 – 4q
At the turning point, d /dq = 0, then
i. e.
32 – q2 – 4q = 0
q2 + 4q – 32 = 0
(q-4) (q+8) =0 gives q= 4 or -8
At this point, q = -8 is rejected since quantities cannot be negative.
d2 = -2q - 4
dq2
ATSWA PART II - MARCH 2010
INSIGHT
when q = 4, d2 = -8-4 = -12  O hence
dq2
q =4 gives maximum profit.
4a (i)
:- maximum profit = 32(4) – (4)3 – 2(4)2
3
=74.67
Aliter
R = q 36 – q2
= 36q – q3
3
3
For maximum profit
MR =MC
i.e. 36 -q2 = 4q + 4
i.e. q2 + 4q – 32 = 0
(q – 4) (q + 8) = 0
q = 4 or -8
i.e. q = 4 since q cannot be negative
Now profit is R – C
i.e 36q – q3 – 2q2 – 4q
3
32q – q3 – 2q2
3
: . maximum profit = 32 (4) – (4)3 – 2(4)2
= 74.67
(ii)
The company breaks even when R = C
36q – q3 = 2q2 + 4q
3
i.e 36 – q2 = 2q + 4  q2 + 6q-96 = 0
3
:- q = -6 ± (36 + 384) = + 7.25 or 13.25
2
;- the company will break even when q = 7.2
ATSWA PART II - MARCH 2010
INSIGHT
b)
Elasticity of demand E = -dq
p
dp
q
p = 36 – q2
3
dp = -2q
dq
3
:- E =
108 – q2
3q
-3
2q
3
2q
108 – q2
3q
= 3
2x 4
108 – 16
3x4
=
= 23/8 =2.88
So, the demand is elastic since E  1
EXAMINER’S COMMENT
This is a Business Mathematics question which tests the candidates’ knowledge of
(i) basic differentiation
being applied to determine maximum profit (ii) the condition under which a company can break even and
(iii) determination of the elasticity of demand when the profit is maximum. About 50% of the candidates
attempted the question.
The pitfalls identified include candidates’ inability to simplify well, to know the condition for maximum profit,
to know when a company breaks even and to know the correct expression for the elasticity of demand.
The overall performance of candidates was fair.
SOLUTION 5
Jerry Curl (y)
Perming (z)
Availability
Dryer
Afro
(x)
1
4
2
220
Washer
Stylist
2
2
2
3
1
3
200
330
System of linear equations
x +4y + 2z
= 220
2x + 2y + z = 200
2x + 3y = 3 z = 330
ATSWA PART II - MARCH 2010
INSIGHT
and in matrix form
1 4 2 x
2 2 1
2 3 3
=
220
y = 300
z
330
1
2
2
4
2
2
1
3
=1
3
=
1 2
-4
3 3
3 – 16 + 4
2 1
+2
2 3
2 2
2 3
= -9
x = 220 4 2
200 2 1
330
3
= 220
-4
3 3
= 660 – 1080 -120
3
2 1
200 1 +2 200
330 3
2
330
3
= -540
x = x
= -540 = 60
-9

y =
1
2
220
200
= 1 200
2
330
=
1 -220 2
330 3
270 – 880 + 520
1 +2 2 200
2 3
2 330
= -90
:- y = -90

-9
z=
= 10
1
2
4
2
220
200
2
3
330
=1 2
200 - 4 2 200 +200 2
3 330
2 330
= 60 – 1,040 + 440
= -540
2
2
3
:- Z = z = -540 = 60

-9
i.e Madam Love should do 60 Afro, 10 Jerry curl and 60 Perming.
EXAMINER’S COMMENT
ATSWA PART II - MARCH 2010
INSIGHT
This question tests the candidates’ knowledge of the use of Cramer’s Rule to solve a systems linear equations.
This involves determining determinants of appropriate matrices. A number of candidates had problem with
that aspect of the question.
Almost 90% of the candidates attempted the question with about 50% of them doing fairly well.
SOLUTION 6
a)
Formulation as a Linear Program
Minimize Z = 1200x1+ 800x2 …………object function
s.t.
5xi + 5x2 1,000 ………. Breakfast constraint
3xi + 2x2  600 ……… Lunch constraint
2xi + 3x2  800 ……….
Dinner constraint
xi, x2  0 ………... non-negativity
b)
Solution by the Graphical method
Initialising the problem
5xi + 5x2 1,000 ………. 1
3xi + 2x2  600 ……… 2
2xi + 3x2  800 ……….
3
xi, x2  0 ………... non-negativity
obtaining boundary Points
from equation 1 when x1=0
0x1 + 5x2 = 1000
5x2 = 1000
;. X2 = 1000 = 200
5
From equation 1 when x2 = 0
5x1 = 1000
;. X1 = 1000
= 200
5
From equation 2 when x1 = 0
0x1 + 2x2 = 600
2x2 = 600
;- x2= 600 = 300
2
From equation 2 when x2 =0
3x1 + 2(0) = 600
3x1 = 600
;- x1 = 600
= 200
3
From equation 3 when x1 = 0
0x1 + 3x2 = 800
3x2 = 800
:- x1 = 800
= 266.67
3
point A = (0,200)
point B = (200,0)
point C = (0,300)
point D = (200,0)
point E = (0,266.67)
ATSWA PART II - MARCH 2010
INSIGHT
From equation 3 when x2 = 0
2x1 + 0x2 = 800
2x1 = 800
;- x1 = 800
= 400
2
point F = (400,0)
Please see graph sheet. Feasible Region = FIC
c)
The dual of the problem is obtained as
maximize Z = 1,000y1+600y2 + 800y3
s.t
5y1 + 3y2 + 2y3  1,200
5y1 + 2y2 + 3y3  800
y1, y2, y3  0
Graph
EXAMINER’S COMMENT
This is an OR application question based on linear programming techniques. Very few candidates attempted
the question and the performance was generally poor.
The major pitfall was the candidates’ inability to formulate the relevant linear programming problem such as
objection function and the constraints.
SOLUTION 7
a)
Q = 2cd
h
where d = 160,000 x 4 = 640 per annum
:- Q =  2x 120 x 640,000
3.75
= 6,400
b)
No of orders per year = d/Q
= 640,000
6,400
=100
Associated ordering cost = L$(120 x 100)
= L$12,000
c)
Total cost per annum = c.d + Q/h
ATSWA PART II - MARCH 2010
INSIGHT
Q
2
=120x 640,000 + 6400 x 3.75
6,400
2
=L$24,000
EXAMINER’S COMMENT
This is an inventory control problem. Candidates are expected to calculate Economic Order Quantity (EOQ)
from the given data. The major pitfall identified was the inability of majority of the candidates to obtain the
correct annual demand from the information given.
Virtually, all the candidates attempted this question with about 30% doing fairly well.
ATSWA PART II - MARCH 2010
INSIGHT
AT/101/PII.8
EXAMINATION NO………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART II EXAMINATION – MARCH 2010
INFORMATION TECHNOLOGY
Time allowed: 3 hours
Insert your examination number in the space provided above
SECTION A - Attempt All Questions
PART I
1.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
Which of the following is collection of records of the same type or related data?
A.
B.
C.
D.
E.
Bit
Byte
Field
File
Data
2.
The sum of 11101two and 1111two is………………….
3.
A. 11111 two
B. 111001two
C. 101100two
D. 111000two
E. 1011101two
Serial transmission can occur either
A.
B.
C.
D.
E.
4.
Which of these is NOT of the seven Open Systems Interconnection (OSI) Layer
A.
B.
C.
D.
E.
5.
Asynchronously or synchronously
Serially or Bi-serially
Asynchronously or Bi-synchronously
Synchronously or Bi-Asynchronously
Bi-serially or co-synchronously
Application
Data evolution
Transport
Network
Physical
A keyboard with only 88 keys is called ........................
ATSWA PART II - MARCH 2010
INSIGHT
A.
B.
C.
D.
E.
6.
enhanced keyboard
standard keyboard
cloned keyboard
classified keyboard
specified keyboard
A printer which prints whole lines at a time is called .....................
A.
B.
C.
D.
E.
Image printer
Character printer
Line printer
Laser printer
Page printer
7.
Which of the following is NOT a running or operating cost during systems development.
A. Staff salaries
B. Overheads
C. Cost of hardware
D. Utilities and consumable
E. Insurance and financing
8.
The contents of a feasibility study report exclude ONE of the following items.
A.
B.
C.
D.
E.
9.
The following are computer crimes common in an IT environment EXCEPT:
A.
B.
C.
D.
E.
10.
Impersonation
Data diddling
Intentional spreading of viruses
Hacking
Access to a large database
A security measure built into a system with the powers of judgment to determine the accuracy of
output or result describes.
A.
B.
C.
D.
E.
PART II
1.
Current system issues
Executive summary
Description of options
Conclusion
Fact findings
Verification
Validation
Through put
Bench mark test
Test run
SHORT-ANSWER QUESTIONS (30 Marks)
The major advantages of primary memory over the secondary storage is …………………
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2.
The processor consists of arithmetic and ……………… unit.
3.
The components of the hardware are input, output, storage and …………….. units.
4.
A standard computer keyboard has ……………. function keys.
5.
The three basic types of monitors are RGB monitors, ……………. and colour monitors.
6.
A collection of related records or a logical grouping of characters is known as ………………….
7.
A configuration of eight bits used to represent a character is ……………….
8.
ASCII is an acronym for ………………..
9.
An integrated collection of data is ……………………
10.
A computer with the combined features of representing process data in discrete values and also akin
to measuring instruments such as thermometers is known as ……………………
11.
A user who illegally penetrates a computer network to manipulate data is called…………………
12.
Protective measures taken to prevent physical, logical and procedural damage of the computer system
is called ……………..
13.
A computer crime that involves falsifying data at the point of entry is called ………………
14.
A computer crime whereby criminals snoop around computer room to gain access to the physical
facilities and the computer file is called…………………
15.
An E-mail virus that has infected over 100,000 computers is called………………..
16.
A network in which all communications devices are connected to a common channel is called a
……………… network.
17.
A client computer system can remotely login to computer server across the internet. The protocol
that governs the login is known as …………………
An interface that enables dissimilar networks to communicate is known as …………….
18.
19.
The name given to the communications network that covers a geographical area, the size of a city or
suburb is known as ……………
20.
The use of television, video and sound technology together with computers to enable people in
different geographical locations to see, hear and talk with each other is called………………..
21.
Computer package designed for numerical, statistical and accounting information is called …………………
22.
Word star is an example of ………………… packages.
23.
Symphony is an example of ……………… packages.
24.
Pictorial representation of the set of procedures used in writing a program is called …………………….
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25.
Program flowchart and ………………….. flowchart are major type of flowcharts.
26.
The computer-to-computer system of exchange of structured business information in a standard
electronic format is called……………….
27.
MS Internet Explorer and Netscape Navigator are both examples of ………………….
28.
An electronic business activity that includes delivery of information, products, services and payments
using the internet is called ……………..
29.
The combination of text, audio, video and graphics are ………………. information that may be required in
E-commerce applications.
30.
The type of E-commerce that binds the relationship between consumers and the company is referred
to as ………………
SECTION B - Attempt any FOUR questions (60 Marks)
QUESTION 1
Identify FIVE major features of each of the following computer hardware generations:
(a)
(b)
(c)
First Generation
Third Generation
Fourth Generation
(5 Marks)
(5 Marks)
(5 Marks)
(Total 15 Marks
QUESTION 2
(a)
What do you understand by Direct Input devices of a computer system?
(b)
(2 Marks)
Input devices are made using different technologies. Two of such are magnetic and optical.
(i)
(ii)
(c)
Give THREE examples of magnet input devices
Give TWO examples of optical Input devices
(3 Marks)
(2 Marks)
Give TWO advantages and TWO disadvantages of TWO input devices
(8 Marks)
(Total 15 Marks)
QUESTION 3
a)
What is software?
(b)
Explain the TWO main types of software with FOUR examples each
(c)
(2 Marks)
(8 Marks)
Give any TWO classifications of Operation System and state FOUR examples of each.
(5 Marks)
(Total 15 Marks)
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QUESTION 4
(a)
Explain the term “Network Topology”?
(b)
Described briefly with the aid of diagram the following:
(i)
Ring Topology
(ii)
Bus Topology
(iii)
Star Topology
(c)
(2 Marks)
(9 Marks)
List FOUR devices used in networks.
(4 Marks)
(Total 15 Marks)
QUESTION 5
a)
What is a Computer Crime?
(3 Marks)
(b)
Give any SEVEN examples of computer crimes that can be committed in a workplace.
(7 Marks)
(c)
(i)
(ii)
Explain the term “Time and Resources Theft”
Give any three examples of such “Theft”
(5 Marks)
(Total 15 Marks)
QUESTION 6
(a)
Name and describe FOUR internet capabilities and their functions
(b)
State FOUR benefits of the Internet to an organisation
(c)
What is a firewall?
(8 Marks)
(4 Marks)
(3 Marks)
(Total 15 Marks)
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MULTIPLE CHOICE ANSWERS
1.
D
2.
C
3.
A
4.
B
5.
B
6.
C
7.
C
8.
E
9.
E
10.
D
EXAMINER’S COMMENT
This section consists of ten multiple choice questions which cover major parts of the syllabus.
performance was good as 70% of the candidates scored over 50% of the
SHORT ANSWER QUESTIONS
1.
Speed of Access
2.
Logical and Control
3.
Central processing
4.
Ten
5.
Monochrome
6.
Field
7.
Byte
8.
American standard code for information interchange
9.
Database
10.
Hybrid
11.
A Hacher
12.
Computer Security
13.
Data Swindling
14.
Piggy backing
15.
Mellisa Virus / Sobig Virus
16.
Bus/Ring
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INSIGHT
17.
Telnet/ Wireless Application protocol ( WAP)
18.
Gateway
19.
Metropolitan area network (MAN)
20.
Video conferencing (Teleconferencing)
21.
Spreadsheet
22.
Word Processing
23.
Spreadsheet
24.
Program Flowchart
25.
System
26.
27.
28.
29.
30.
Electronic Data interchange (EDI)
Web browsers
E-commerce
Multimedia
Business-to-consumer (B2C)/(C2B)
EXAMINER’S COMMENT
This section consists of thirty questions which cover every section of the syllabus.
The performance was not encouraging as 60% of the candidates scored below 40% of the mark. The major
pitfalls were the inability of the candidates to reproduce essential concepts and acronyms in IT. The
candidates are advised to give special recognition to the concepts and pay more attention to the meaning of
most acronyms in IT.
SOLUTION 1
a)
The features of First Generation Computers
Hardware include: It occupied large amount of space
 Use of vacuum tubes/ diode
 Large circuits which consist of wires and thermionic valves were involved
 T he internal storage consists of a magnetic drum and delay lines
 Slow in operation
 Low capacity of internal storage
 A lot of heat generated
 Lot of manual intervention
b) The features of third generation computers include:
 Integrated circuit (IC) is used
 Computers of this generation were cheaper, smaller and faster compared to first generation
computers
 Designing of sophisticated operating systems
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



Time –sharing devices introduced
Data channel communication came into existence
There were a wide range of optional peripherals available
Supports multiprogramming and multiprocessing
c) The features of Fourth generation computers include:
 Very large scale integration (VLSI) circuit was introduced
 The VLSI led to the introduction of micro processor which facilitated the production of
micro computers
 The generation witnessed wide Varity of software tools like database management systems,
word processing packages, spreadsheet etc
 User friendly i.e. Easy to use
 Enhancement of networking capabilities
 Introduction of electronic mail, office information systems
 Extremely large internal and external storage media etc.
 Simple and Common Operating system
In general, the above generations could be treated under the following headings:
 Size of system
 Memory capacity
 Memory Technology
 Operation system
 Network
 Human Computer Interface [HCI]
 Computer Languages
 Heat Generated
EXAMINER’S COMMENT
This question tests candidates’ knowledge on the computer hardware generations. The question demands for
features and computer facilities available during each generation. 92% of the candidates attempted this
question and the performance was very encouraging as over 80% of the candidates scored over 50% of the
marks.
SOLUTION 2
(a)
Direct Input devices are input devices that read source documents into the central processing unit
[CPU] without any intermediary medium/ media i.e there is no intermediary conversion of source
data before transfer into the CPU.
2 mark
(b)(i) Magnetic Input devices


Magnetic Ink Character Reader [MICR]
Magnetic strip reader
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



Keyboard
Joystick
Tag
Barcode
(ii) Optical Input devices





Optical Character Reader [OCR]
Optical Mark Reader [OMR]
Touch screen
Scanner
Mouse
(c) (i) Keyboard
Advantages:
 Cheap
 Flexible
 Easy to use
Disadvantages:
 Personnel need training
 Slow
 High error risk
(ii)
MICR
Advantages
 Cheap in operation of high volume activities
 Low error rate
 It is fast
Disadvantages:
 It is expensive to purchase
 The fonts are not easily readable
 It has limited use
(iii) OCR
Advantages:
 Cheap in operation for high-volume activities
 Has low error rate
 It is fast
 Fonts are easily readable
 Read data directly to computer
Disadvantages:
 Expensive
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

It is easy to corrupt the characters
It attracts dirt and damages easily.
EXAMINER’S COMMENT
This question tests candidates’ understanding on input devices. It specifically demands for
the definition of direct input devices and examples of input devices based on magnetic and
optical technologies.
Over 80% of the candidates attempted this question, but the performance was just average
as over 55% of the candidates scored below 50% of the mark.
The major pitfalls were:
I
Inability to define direct input devices;
Ii
Inability to recognize and distinguish between magnetic and optical input devices.
The students are advised to study the input and output devices more
seriously.
SOLUTION 3
a)
Software is a generic term used for all computer programs that run on the hardware system and
their accompanying documentations.
2 marks
b)
The two main types of software are:
i.
System Software which are programs that control the computer hardware.
Examples include:
 Operating Systems
 Utility programs
 Language processor
 Loader
 Editors
ii.
Application Software are software designed and developed for specific application areas.
They are mostly ready-made packages.
1 mark
Examples include:
 Word processor
 Electronic Spreadsheet
 Database Management Systems
 Graphics generators
 Desktop publishing
 Statistical packages e.g. SPSS
 Accounting packages e.g. Peachtree
 General purpose packages e.g. Ms –Excel
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
c).
Mathematical package e.g. Matematica
The two main classification of operating systems are single-user, multi-user or Network operating
system.
i.
Single –user Operating System is designed for a single user access operation. Its examples
include –PC-Dos, IBM-Dos, OSVS, OS/2, Ms-Dos, Windows 95.
ii.
Multi- user Operating System is designed for networking or multi access operation, its
examples includes:
 PC-MOS
 UNIX
 NOVEL
 LINUX
 WINDOWS NT
Network Operating Systems:
 Apple talk
 Windows NT
 LAN Manager
 Novell Netware
EXAMINER’S COMMENT
This question tests candidates’ knowledge on computer software systems. The question demands for the
definition of software and examples of the different software subsystems. It also demands for the different
types of operating systems.
Over 90% of the candidates attempted this question and the performance was good as over 60% of the
candidates scored above 50% of the mark.
The major pitfall was the inability of the students to classify the operating systems as single user and
multiuser (or Network) operating systems. Some students classified the operating systems according to the
platforms i.e. operating systems stored on disk and operating systems in windows.
Candidates are advised to pay more attentions to software and particularly operating systems.
SOLUTION 4
a)
Network topology: refers to the connection of different computer systems and deals with problems of
how best various computers can be interconnected i.e. physical patterns.
b) (i)
Ring topology: all the PCs and other communication devices are connected in a continuous loop. It is
a typical peer-to-pear LAN, no server. However if a connection is broken the entire network may
stop working
D
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D
C
A
B
A
Ring topology
ii)
Key: Here A, B, C, D are Computer systems.
Bus Topology: In a bus network all the communication devices are connected to a common channel
.If a connection is broken, the network may stop working.
This type of network structure may be organized as a client/ server or peer-to-peer network.
11/2 for definition
TERMINAL
COMPUTER
11/2 for labeled diagram
SsSS
SERVER
TERMINAL
PRINTER
Bus Topology
iii.
Star topology: on the star network all the PCs and communication devices are
connected to a central server. The advantages are that the server prevents
collision of messages and also if a connection is broken between any
communications device and the server, the rest of the devices on the network
will continue to function.
A
B
D
SERVER
C
STAR TOPOLOGY
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Key A, B, C, D are computers and compute resources.
c)
Devices used on the Internet include:
i. Switches
ii. Routers
iii. Gateways
iv. Hubs
v. Computers
vi. Cables or wireless channels
vii. Modem
viii. Multiplexors
ix. Network cards
x. Network operating systems
EXAMINER’S COMMENT
This question tests candidates’ understanding on components of the network and network topology. The
question demands for the definition of network topology and components of networks.
About 90% of the candidates attempted this question and the performance was very impressive as over 60%
of the candidates scored over 50% of the mark.
SOLUTION 5
a)
Computer crime is an illegal exploitation of computer technologies, usually involving the internet, to
support crimes such as fraud, identity theft, sharing of information and embezzlement.
3 marks
b)
Types of crime that may be committed with computer include
i.
Fraud achieved by manipulation of computer records
ii.
Spamming wherever outlawed completely or where regulations controlling it are violated
iii.
Deliberate circumvention of computer security systems
iv.
Unauthorized access to or modification of programs and data hacking and cracking
v.
Intellectual property theft including software piracy.
vi.
Identity theft where this is accomplished by use of fraudulent computer transactions
vii.
Writing and spreading of viruses and worms
viii.
Denial of services attack
ix.
Pornography
x.
Leakages
c) (i)
Time and Resource theft refers to a situation where a user makes use of organization computer time
for its private use for a gain and stealing of organization resources for personal use.
2 marks
(ii) Examples of such unauthorized uses include
 Private consulting
 Playing video games
 Unauthorized use of internet facilities
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

Processing private data with organization computer system
Copying of organization software
EXAMINER’S COMMENT
This question tests candidates’ understanding on computer crimes.
examples of computer crimes.
It demands for the definition and
About 40% of the candidates attempted the question and the performance was good as 55% of he candidates
scored over 50% of the mark.
The major pitfall was the inability of the students to define and give examples on “Time and Resources
Theft”. This is a rather recent concept and the students are advised to lay more emphasis on it.
SOLUTION 6
a)
i.
ii.
iii.
iv.
v.
vi.
vii.
b)
c)
Internet capabilities and their functions
Online processing: This allows task to be done among several systems across wide areas e.g. ebanking, EFT, e-commerce, EDI
E-mail: This allows person to person messaging and document sharing
Browsing: This allows the process of obtaining information from organization website by indicating
the organization web addresses.
WWW: This facilitates the retrieval, format and display of information including text, audio, graphics
and video using hypertext links
Global communication: This allows interactive activities among people in different locations e.g.
Video conferencing, audio conferencing, charting , teleconferencing, telecommuting
Usenet Newsgroup: This involves discussion among groups on electronic bulletin boards
Telnet: This allows client computer system to remotely log on to computer server across the internet.
Benefits of Internet to organizations include:
i.
Reduces communication costs
ii.
Enhance communication and coordination to wide geographical areas
iii.
It accelerates the distribution of knowledge
iv.
It facilitates Electronic commerce
v.
It provides access to large databases
vi.
Strategic competitive advantage
vii.
Enhance management efficiency
Firewalls are security systems with specialized software to prevent outsiders from invading private
networks
EXAMINER’S COMMENT
This question tests candidates’ understanding on the capability and function of the internet.
About 40% of the candidates attempted this question and the performance was fair as over 60% of the
candidates scored over 50% if the mark.
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