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 I – SEPTEMBER 2010
1
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 to be 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.
ATSWA PART I – SEPTEMBER 2010
2
INSIGHT
ATSWA PART I – SEPTEMBER 2010
3
INSIGHT
CONTENTS
PAGE
BASIC ACCOUNTING PROCESSES AND SYSTEMS
24
ECONOMICS
1 -
25 - 40
BUSINESS LAW
- 54
41
COMMUNICATION SKILLS
- 67
55
ATSWA PART I – SEPTEMBER 2010
4
INSIGHT
AT/102/PI.1
NO:……………………………
EXAMINATION
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION – SEPTEMBER 2010
BASIC ACCOUNTING PROCESSES AND SYSTEMS
Time allowed: 3 hours
Insert your Examination number in the space provided above
SECTION A – Attempt All Questions
PART I MULTIPLE-CHOICE QUESTIONS (10 MARKS)
1.
ONE of the following is an example of business entities
A.
B.
C.
D.
E.
2.
The Petty Cash book is regarded as part of
A.
B.
C.
D.
E.
3.
Double entry principle
The Balance Sheet
The Cash book
Profit and Loss Account
Current Account.
The following document is NOT regarded as a source document
A.
B.
C.
D.
E.
4.
Household
Building
Club or Association
Local Government
Tourism.
Bin Card
Pay-in-Slip
Debit note
Statement of account
Receipts.
ONE of the following is regarded as a book of original entry
A.
B.
C.
D.
E.
Journal
Purchase order
Goods received note
Debit note
Nominal ledger.
ATSWA PART I – SEPTEMBER 2010
5
INSIGHT
5.
From the following information determine how much money was
paid by debtors during the year
N
Debtors at the beginning of the year
Debtors at the end of the year
Credit Sales for the year
Trade discount is 51/4%
A.
B.
C.
D.
E.
6.
116,500
165,000
170,000
N161,075
N112,575
N121,500
N113,500
N286,500.
Which ONE of the following best describes the provision made for
the loss in value of Copyright?
A.
B.
C.
D.
E.
Depletion
Depreciation
Amortization
Capitalisation
Appreciation.
Use the following information to answer questions 7 and 8
7.
Petty Cash (Extracts)
Date
Particulars
2009
Jan. 1
Balance b/d
Jan. 1
Cash
Jan. 30
Sundry
payment
Jan. 31
Balance c/d
What is the Cash float every month?
Debit
N
200
8,800
A.
B.
C.
D.
E.
Le
Le
Le
Le
Le
Credit
N
8,300
700
8,600
8,300
9,000
8,800
8,200
ATSWA PART I – SEPTEMBER 2010
6
INSIGHT
8.
On 1 February 2009 the Petty Cashier will be reimbursed with how
much?
A.
B.
C.
D.
E.
9.
8,800
8,300
9,000
700
7,600.
Which of the following is a current asset?
A.
B.
C.
D.
E.
10.
Le
Le
Le
Le
Le
Commission payable
Bills receivable
Bills payable
Depreciation
Copyright.
Which of the items listed below is NOT a factory overhead expense?
A.
B.
C.
D.
E.
PART II
Rent of factory building
Depreciation of plant and machinery
Factory Supervisor’s salary
Cost of raw materials
Insurance Cost on plants and machinery.
SHORT-ANSWER QUESTIONS (30 MARKS)
1.
Credit sales are first entered in…………………………
2.
Expenses outstanding at the end of the year are classified as
.............................. in the balance sheet.
3.
In stock valuation, the method which assumes that the goods which
had
been
held
the
longest
are
first
issued
is
called..................................
4.
The part of the cost of the fixed asset consumed during its period of
use by the company is known as............................
5.
A cheque paid by you but not passed through banking system within
six months of issue becomes................................
6.
In Sales Ledger Control account the discount allowed should be
recorded on the.........................
ATSWA PART I – SEPTEMBER 2010
7
INSIGHT
7.
An instruction given to a banker to regularly pay some expenses is
known as.............................
8.
An alternative name for sales day book is.......................
9.
When withdrawing from a current account, you should always use
a...................
10.
Money spent on acquiring fixed assets or adding value to them is
called.............................expenditure
11.
Telephone bill owing at the beginning of the year was N2,000.
During the year 2009, N10,000 was paid. At the end of the year, the
telephone bill outstanding was N3,000. What is the amount of the
telephone expense to be charged to the Profit and Loss Account for
2009?
Use the following information to answer questions 12 and 13
Le
42,000
265,000
13,000
10,000
52,000
72,000
11,000
18,000
15,000
Opening Stock – Raw Material
Purchases –Raw Materials
Returns Outward
Depreciation- Plant and Machinery
Wages
Closing stock –Raw materials
Direct expenses
Production Manager’s salary
Factory rent
12.
Determine the Prime Cost.
13.
What is the amount of Factory Overhead?
14.
In a Social
is..................
Club,
the
excess
of
expenditure
over
income
15.
The liability of partners in a partnership, if there is no restriction,
is................
16.
The Institution responsible for the registration of companies
is.........................
ATSWA PART I – SEPTEMBER 2010
8
INSIGHT
17.
Conversion costs are a combination of
…………………..
........................... and
18.
When shares are sold at less than the par value. They are issued
at....................
19.
Working capital + Current liabilities equal...........................
20.
The ledger that contains accounts of debtors of the business
is.............................
21.
The type of ledger where capital and drawings are recorded is
called...............
22.
The major function of financial accounting is................
23.
An amount set aside out of profit which is not designed for any
specific purpose is called....................
24.
A document that governs the external relationship of a company
with the outside world is known as......................
25.
An accounting error where sales were overcast and motor vehicle
expenses were also overcast is..........................
26.
Except for certain professional firms, the maximum number of
members who can form a partnership is........................
Use the following information to answer questions 27 and 28.
The following balances were extracted from the books of Kekere
Enterprises.
Capital
Land & Building
Furniture
Goodwill
Cash at bank
Stock at close
Net profit for the year
Machinery
Debtors
27.
N
425,685
300,000
250,000
165,010
145,000
50,000
190,000
460,000
120,500
What is the value of current Assets?
ATSWA PART I – SEPTEMBER 2010
9
INSIGHT
28.
Determine the value of Fixed Assets.
29.
The estimated recoverable value when a fixed asset is disposed off
is referred to as ……………………
30.
Robbin Johnson’s debt of ¢155,216 written off as bad debt two years
ago had just been paid.
Show journal entry to record the recovery.
SECTION B – ATTEMPT ANY FOUR QUESTIONS (60 MARKS)
QUESTION 1
(a)
Accounting can be defined as a system for providing
“quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making
economic decisions”.
Explain the key components of this definition.
(5
Marks)
(b)
Accounting concepts are basic assumptions that regulate the
preparation of accounts. Explain any FIVE of the following
concepts of Accounting:
i.
ii.
iii.
iv.
v.
vi.
vii.
Marks)
Cost concept
Duality concept
Periodicity concept
Matching concept
Prudence concept
Money measurement
Realisation concept
(10
(Total
15
Marks)
QUESTION 2
In accordance with the law of your Country, tabulate SEVEN differences
between a private company and a public company.
(15 Marks)
QUESTION 3
ATSWA PART I – SEPTEMBER 2010
10
INSIGHT
(a.)
On 31 January 2009, the bank balance in the Computer System of
FISHMONGER ENTERPRISES showed a debit balance of N461,000.
On examination of the bank Statement, you find that:
(i) Cheques amounting to N63,000 which were issued to creditors
on 31
January 2009 were yet to be presented for payment.
(ii) Cheques totaling N25,000 were lodged and posted into the
computer on 29 January 2009, but reflected in the bank
statement on February 2009.
(iii) A cheque of N73,000 lodged had been dishonoured prior to 31
January 2009, but posted as returned cheque on 3 February
2009 in the Computer system.
(iv) A dividend of N38,000 paid directly into the Bank account on
24 January 2009 had not been posted into computer system as
at 31 January 2009.
(v) Bank charges totaling N42,000 had been debited in the bank
statement, but yet to be posted into the computer.
(vi) A standing order given to the bank to pay N10,000
subscription fee for trade membership had been paid by the
bank on 29 January 2009, but yet to be posted into the
computer.
You are required to:
(a) i. Make appropriate adjustments to generate the adjusted Cash book
balance
(41/2
Marks)
ii. Prepare a Bank Reconciliation statement as at 31 January 2009.
(3 Marks)
(b) Explain FIVE reasons for the differences between Cash Book and
Bank
Statement balances at a given period.
(71/ 2 Marks)
(Total 15 Marks)
QUESTION 4
John Kofi is a manufacturer. The following balances were extracted from
his books as at 31 December 2009
Stock of raw materials –Jan 1 2007
Raw materials purchases
¢
36,920
410,600
ATSWA PART I – SEPTEMBER 2010
11
INSIGHT
Stock of raw materials –Dec 31 2007
Manufacturing wages
Sales
Factory expenses
Depreciation of plant and machinery
Depreciation of delivery vans
Factory power
Office and administrative expenses
Advertising
Salesmen salaries and expenses
Delivery van expenses
Bad debts
Provision for doubtful debts 1 Jan 2007
Debtors
Royalties
Creditors
Drawings
41,950
444,500
1,520,000
123,450
38,500
21,500
28,400
42,000
11,500
56,000
10,750
6,000
12,900
179,900
29,500
133,500
15,000
Work-in-progress is normally valued at factory cost. Work -in-progress as
at December 2007 was higher than work-in-progress as at January 1 2007
by ¢16,280. Stock of finished goods also valued at factory cost, as at 31
December 2007 was lower than stock of finished goods as at 1 January
2007 by ¢26,315.
You are required to:
Prepare Manufacturing, Trading and Profit and loss account (VERTICAL
FORMAT) as at 31 December 2007 showing:
(a)
(b)
(c)
(d)
(e)
Prime cost of goods produced
(3 Marks)
Factory cost of goods produced
Administrative expenses
Selling and distribution expenses
Finance charges
(3 Marks)
(3 Marks)
(3 Marks)
(3 Marks)
(Total 15 Marks)
QUESTION 5
(a)
What is a source document? Identify the associated benefits of
using it in
Accounting.
(7 Marks)
(b)
Explain any FOUR of the following source documents in terms of
their origin, usage and disposal:
ATSWA PART I – SEPTEMBER 2010
12
INSIGHT
(i)
(ii)
(iii)
(iv)
(v)
Sales invoice
Credit note
Debit note
Payment vouchers
Cheques counterfoils
Marks)
(8
(Total
Marks)
15
QUESTION 6
Dagbolo keeps a cash book as his only account record. The following is a
summary of his transactions for the year ended 31 December 2009.
Opening Balance
Cash from debtors
Balance c/d
L$
49,260 Cash to creditor
955,840 Salaries
43,180 Rent & Rates
Lighting & Heating
General expenses
Drawings
1,048,280
L$
817,440
34,940
29,460
10,080
26,860
129,500
1,048,280
Its assets and liabilities at 31 December 2008 and 31 December 2009
were:
December
Fixed Assets at cost
Stocks (Inventories )
Debtors (Trade Receivables)
Rent & rate prepaid
Creditors (Trade payables)
Lighting & Heating accrued
2008
L$
132,000
127,260
193,140
6,000
110,520
1,900
2009
L$
132,000
158,800
203,280
7,200
113,460
2,520
Fixed Assets are to be depreciated at 10% of cost.
You are required to prepare:
ATSWA PART I – SEPTEMBER 2010
13
INSIGHT
(a) Statement of Affairs as at 1 January 2009
Marks)
(b)
(5
Trading Profit and Loss Account (Income statement) of Dagbolo for
the year ended 31 December 2009. (Show all workings).
(10 Marks)
(Total
15
Marks)
SECTION A
PART I - MULTIPLE CHOICE QUESTIONS
1.
C
2.
C
3.
D
4.
A
5.
C*
6.
C
7.
C
8.
B
9.
B
10.
D
*NOTE: QUESTION 5 Trade discount is usually deducted before credit
sales figure is arrived at. Trade discount of 5¼% is, therefore, for
information only.
WORKING
Debtors at beginning of year
Credit sales for year
Deduct: Debtors at year end
N
116,500
170,000
286,500
165,000
ATSWA PART I – SEPTEMBER 2010
14
INSIGHT
121,500
EXAMINER’S COMMENT
The Multiple Choice Questions were basically simple and straightforward. Most of the candidates did well as expected.
SOLUTION TO SHORT ANSWER QUESTIONS
1.
Sales Day Book or Sales Journal
2.
Current Liability
3.
First-In-First-Out (FIFO)
4.
Depreciation
5.
Stale
6.
Credit Side
7.
Standing Order or Bankers’ order
8.
Sales Journal
9.
A cheque
10.
Capital
11.
N11,000
12.
Le 285,000
13.
Le 43,000
14.
Deficit
15.
Unlimited
16.
Corporate Affairs Commission
17.
Direct Labour and Factory Overhead
18.
A Discount
ATSWA PART I – SEPTEMBER 2010
15
INSIGHT
19.
Current Assets
20.
Personal/Sales Ledger
21.
Private Ledger
22.
Performance Reporting (Stewardship)
23.
Reserves
24.
Memorandum of Association
25.
Compensating Error
26.
Twenty (20)
27.
N315,500
28.
N1,175,010
29.
Salvage Value/Estimated Residual Value/Scrap Value
30.
DR Debtor, Cr Bad Debts Recovered A/c
DR Bank or Cash, Cr, Debtor
DR Bad Debt Recovered A/c Cr. P & L A/c
WORKINGS
N
Q 11 Telephone bill paid
Add: Outstanding bill at end
Deduct: Telephone bill at start
Charge to P & L A/c
10,000
3,000
13,000
2,000
11,000
Q12 Prime Cost = Direct Material Cost + Direct Labour Cost + Direct
Expenses
= Le {42,000 + 265,000 – 13000 – 72000) + 52,000 + 11,000} = Le
285,000
Q13
Factory Overhead = Depreciation (Plant and Machinery) +
Production Manager’s Salary + Factory Rent = Le(10,000 + 18,000
+ 15,000) = Le 43,000
ATSWA PART I – SEPTEMBER 2010
16
INSIGHT
Q27
Value of Current Assets:
Cash at bank + Debtors + Stock at close
i.e. N(145,000 + 120,500+ 50,000) = N315,500
Q28 Value of Fixed Assets:
Land & Building + Machinery + Furniture + Goodwill, i.e.
N(300,000 +
460,000 + 250,000 + 165,010) = N1,175,010
Q30 DR
CR
Robbin Johnson
Bad Debts Recovered A/c
reinstating
the liability
DR
CR
Bank or Cash
Robbin Johnson
Cancelling
the debt
DR
CR
Bad Debts Recovered A/c
P & L A/c
Transfer of
revenue recovered
EXAMINER’S COMMENT
The questions are of the desired standard and were devoid of ambiguities.
Candidates performance was not very spectacular as most scored 1020/30. Candidates need to pay particular attention to details of simple
definitions and terminologies while preparing for their examination.
SECTION B
Q1
SOLUTION
a.
The key components of the definition are:
i.
System
Accounting entails a process of gathering, summarizing and
reporting financial transactions culminating in the business
financial statements to owners and other users.
ii.
Quantitative Information
Accounting usually employs quantitative figures in recording
financial transactions. Figures expressed in monetary values of
resources can easily be added or subtracted as the case may be.
iii.
Financial in Nature
ATSWA PART I – SEPTEMBER 2010
17
INSIGHT
Accounting involves the recording of values given or received in
money or money’s worth.
iv.
Economic Entities
Accounting employs the entity concept by recording information as
it relates to the organization that is trading or engaged in one form
of business or another in money or money’s worth.
v.
Economic Decisions
Management uses accounting information for making informed
decisions about economic implication of actions taken or to be taken
i.e. value for money expended or to be paid.
1 (b) (i)
Cost Concept
This holds that all resources acquired by the business must be
recorded at the price paid for them at the time and that
subsequent to acquisition cost values are to be retained
throughout the accounting process. This is otherwise referred
to as the “historical cost”. It follows that any future increase
or fall in prices would not affect the position of the assets in
the company’s books unless there is business liquidation when
the assets could then be recognized at their net realizable
value.
(ii)
Duality Concept
This concept states that there are two aspects in the recording
of financial transactions, one represented by the assets
acquired and by claims against them on the other. The
concept recognizes the fact that these two aspects are always
equal and opposite to each other when recorded by the double
entry principle i.e. Assets = Capital + Liabilities.
(iii) Periodicity Concept
Although the result of the performance of a business unit
cannot be determined with precision until its final
liquidation, the concept recognizes that the business
community and users of financial statements require that the
business be divided into accounting periods, usually one year
each, and that changes in position should be measured over
ATSWA PART I – SEPTEMBER 2010
18
INSIGHT
these periods. Financial position may, however, be prepared
and reported more frequently, possibly monthly.
(iv)
Matching Concept
The matching concept holds that for any accounting period,
the revenue earned and all the incurred costs that generated
that revenue must be matched and prepared for the period. If
revenue is carried over from a prior period or deferred to a
future period, all elements of cost and expense relating to
that revenue are usually carried over or deferred as the case
may be.
(v)
Prudence Concept
This concept advocates that revenue and profits are not
anticipated but are recognized by inclusion in the profit and
loss account only when realized in the form either of cash or
of other assets the ultimate realization of which can be
assessed with reasonable certainty. To this end, provision is
to be made for all known liabilities whether with certainty or
is just a best estimate in the light of available information.
(vi)
Money Measurement Concept
This concept holds that accounting is only concerned with
those facts that can be measured in monetary terms with a
fair degree of objectivity (where most people will agree to the
monetary value placed on the transaction).
It follows, therefore, that accounting cannot show every
information that pertain to a business, such as:
• Whether the enterprise has a good management.
• Whether there are serious problems within the
workforce
• That a rival product is likely to result in a loss of
market share.
• That the government is about to pass a law that may
have adverse consequences on the firm’s financial
performance in future.
(vii) Realisation Concept
The concept established the rule for the periodic recognition
of revenue as soon as it is capable of objective measurement
ATSWA PART I – SEPTEMBER 2010
19
INSIGHT
and the value of the asset receivable in exchange is
reasonably certain. For example, it is possible to recognize
revenue at various points (when goods are produced, when
goods are delivered or when the transaction is completed),
the choice being dependent on industrial norm and on which
of the points is the critical event.
EXAMINER’S COMMENT
This question tests candidates’ understanding of fundamentals of
accounting theory and concepts. While most candidates succeeded in
identifying some of the key components of the definition in the 1(a) part,
they could not offer reasonable explanation. Most candidates appear not
to have understood the various accounting concepts and conventions,
going by their submissions. Lack of good communication skills appears to
have contributed to their poor performance in this question.
It is recommended that they familiarize themselves with the SAS1
SOLUTION 2
S/NO. BASIS
1.
Membership
2.
Issues of shares
PUBLIC
No
maximum
number
of
shareholders
Minimum is 7
PRIVATE
Maximum number
is fifty (50)
Excluding
employees
Minimum of two
(2) shareholders is
required
Can sell its shares to CANNOT sell its
members
of
the shares to members
ATSWA PART I – SEPTEMBER 2010
20
INSIGHT
3.
Name
public
Must end with Plc
4.
Transfer of Shares
No restriction
5.
Accounts
6.
Statutory
Meeting
7.
Prospectus
8.
Authorised Share
Capital
Full accounts must
be
filed
and
financial statements
must comply with
the
appropriate
sections
of
the
CAMA
Must be held within
6
months
of
incorporation
Needs
to
file
prospectus
or
statement in lieu
Minimum
N500,000
9.
Audit Committee
Must be appointed
10.
Notice of AGM
of the public
Must
end
with
‘Limited’ or Ltd
Transfer of shares
restricted
In
exceptional
cases
of
small
company
status,
modified financial
statements
is
allowed
Not applicable
Not applicable
Minimum
N10,000
Appointment
applicable
To be advertised in Not Applicable
addition to copies to
members
not
EXAMINER’S COMMENT
Most candidates, not less than 80%, attempted the question.
Unfortunately many misinterpreted the requirements of the question.
They mistook public companies to mean public corporations. Candidates
should be well familiar with the characteristics of the various forms of
business entities and their legal status.
QUESTION 3a: SOLUTION
FISHMONGER ENTERPRISES
ADJUSTED CASH BOOK
AS AT 31st JANUARY 2009
2009
N
2009
N
ATSWA PART I – SEPTEMBER 2010
21
INSIGHT
Jan 31 Balance b/fwd
Dividends
2009
Feb 1
461,000 Jan 31 Dish cheqs
38,000 Bank Charges
Trade Subscription
Balance c/d
499,000
73,000
42,000
10,000
374,000
499,000
Balance b/d
374,000
FISHMONGER ENTERPRISES
BANK RECONCILIATION STATEMENT
AS AT 31st JANUARY 2009
N
Balance as per adjusted cash book
Add: Unpresented Cheques
Less: Uncredited Lodgements
Balance as per Bank Statement
b.
374,000
(DR)
63,000
437,000
25,000
412,000
(CR)
CAUSES OF DIFFERENCES BETWEEN CASH BOOK AND BANK
STATEMENTS BALANCES
i.
Uncredited Cheques
These are represented by cheques received from customers by
the company for goods and services sold or rendered and
lodged in the bank but are yet to be credited to the company
by the bank. These would have been debited into the office
cashbook (bank column).
ii.
Unpresented Cheaques
These are cheques issued to suppliers by the company for
payment of goods and services received or rendered but
which the suppliers are yet to present to the bank for
payment.
These would have been credited into office
cashbook (bank column).
iii.
Dishonoured or Returned Cheques
ATSWA PART I – SEPTEMBER 2010
22
INSIGHT
These are cheques deposited by the company into its account
with the bank but which were returned unpaid to the payees
for whatever reason(s).
These cheques would have been
debited as receipts in the office cash book (bank column)
when the cheques were received.
iv.
Bank Charges
These are amounts charged by the bank directly against the
company’s account for services rendered to it. The company
only becomes aware of the charges on receipt of its bank
statements.
v.
Standing or Bankers’ Order
This is an instruction issued to the bank by a current account
holder ordering the bank to make regular payment to
someone or an entity as at when due. The fact that the
payment might have been omitted in the office cashbook, even
when the bank had honoured the order and the value charged
to the account of the customer.
vi.
Direct Credits
These are lodgments made to account holders’ current
account by a third party without the prior knowledge of the
customer, e.g. cash, cheques or dividends credited.
vii.
Error by the Customer
The account holder might make errors in his cashbook, e.g.
over-casting and under-casting errors which result in the
disagreement with the bank balance.
viii.
Errors by the Bank
These are errors committed by the bank in postings to the
personal ledger of the customers. These errors are reflected
in the bank statement rendered to the customer.
EXAMINER’S COMMENT
This question on bank reconciliation is familiar to most candidates.
Almost all the candidates attempted the question and a reasonable
percentage of them scored pass marks. However, many could not explain
ATSWA PART I – SEPTEMBER 2010
23
INSIGHT
clearly the causes of disagreement between the cashbook balance and the
bank statement even when they had applied some of the principles in
answering the question. A more practical question is recommended for
candidates to tackle in future examinations.
SOLUTION 4
JOHN KOFFI
MANUFACTURING, TRADING, PROFIT AND LOSS ACCOUNT FOR THE
YEAR ENDED 31 DECEMBER 2007
¢
Sales
Cost of Sales:
Raw Materials: Opening Stock
Purchases
Less:
36,920
410,600
447,520
41,950
405,570
444,500
29,500
879,570
123,450
38,500
28,400
Factory Power
Manufacturing/Production Cost
Adjust for W.I.P.
190,350
1,069,920
(16,280)
1,053,640
FACTORY COST OF GOODS PRODUCED
ADD: Decrease in stocks of finished
goods
26,315
1,079,955
440,045
GROSS PROFIT ON SALES
Administrative Expenses
Office and Admin expenses
Selling & Distribution Expenses
Depreciation of Delivery Vans
Advertising
Salesmen Salaries & Expenses
Delivery Van Expenses
¢
1,520,000
Closing Stock
Manufacturing Wages
Royalties
PRIME COST
Factory Overheads
Factory Expenses
Depreciation – Plant & Machinery
¢
42,000
21,500
11,500
56,000
10,750
99,750
ATSWA PART I – SEPTEMBER 2010
24
INSIGHT
Finance Charges
Bad debts
NET PROFIT FOR YEAR
6,000
(147,750)
292,295
EXAMINER’S COMMENT
Preparation of financial statements of manufacturing concerns is also a
familiar topic to most candidates and so they attempted the question.
Many did well. The following pitfalls were noticed, however:


Wrong classification of expenses
Non compliance with the requirement of the question to present in
VERTICAL FORMAT.
SOLUTION 5
(a)
Source Document
These are the documents in which financial transactions are first
recorded before being transferred to the subsidiary books. These
documents form the evidence for entries in the original book of
entries.
BENEFITS OF USING SOURCE DOCUMENTS
(i)
Used to make necessary accounting entries in the accounting
department.
(ii) They can be used to support adjustment of entries in the books, e.g.
Journal
(iii) They provide evidence of financial transaction thereby guarding
against fraud.
(iv) They provide audit evidence.
(v)
Can be used to complement other source documents for attestation.
(vi)
As source documents are usually signed, they provide proof of
accountability for any act of omission or commission.
(vii) As source documents are dated, they can be used in the application
of the matching concept.
ATSWA PART I – SEPTEMBER 2010
25
INSIGHT
SOLUTION 5(b)
S/NO DOCUMENT
i.
SALES
INVOICE
ORIGIN
SELLER
USAGE
To request for
payment
for
goods bought on
credit
ii.
CREDIT NOTE
SELLER
To effect refunds
or allowance for
goods returned
iii.
DEBIT NOTE
SELLER
or
Supplementary
Invoice
To correct for an
undercharge on
original invoice
iv.
PAYMENT
VOUCHER
v.
CHEQUE
COUNTER
FOILS
ACCOUNTS To
authorize
DEPT
payment for an
expense
or
service received
ACCOUNTS To
evidence
DEPT.
payment
to
creditors
for
goods
and
services through
the bank
DISPOSAL
Original copy is sent
to buyer and copies
to
the
Seller’s
Account Dept. and a
copy retained in the
sales department
Original copy is sent
to the buyer while
copies
are
dispatched to the
accounts and sales
departments
For
all
practical
purposes treated in
exactly the same way
as sales invoice
Filed
with
supporting
documents
as
evidence of payment
Kept in the accounts
or
Finance
Department for audit
evidence and other
queries
EXAMINER’S COMMENT
This is a very good question on candidates understanding of the origin,
usage and disposal of various source documents. Most of the candidates
attempted the question but lost valuable marks as a result of their failure
to cover all the requirements of the question. Many of the candidates
wrote on the origin and usage of the documents but omitted to say
anything on their disposal.
ATSWA PART I – SEPTEMBER 2010
26
INSIGHT
ATSWA PART I – SEPTEMBER 2010
27
INSIGHT
SOLUTION 6
DAGBOLO
STATEMENT OF AFFAIRS AS AT 1ST JANUARY 2009
LS
LS
132,000
Fixed Assets
Current Assets
Stocks (Inventories)
Debtors (Trade Receivables)
Rent and Rate prepaid
Cash book balance
127,260
193,140
6,000
49,260
375,660
507,660
Liabilities
Creditors (Trade Payables)
Lighting & Heating accrued
110,520
1,900
(112,420)
Capital at start
395,240
DAGBOLO
TRADING. PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31
DECEMBER 2009
Sales
Cost of Sales:
Opening Stock
Purchases
Notes
(1)
(2)
Closing Stock
LS
LS
965,980
127,260
820,380
947,640
( 158,800)
Gross Profit
Expenses
Salaries
Rent and Rates
Lighting and Heating
General Expenses
Depreciation
(10% x 132,000)
Net profit for the year
788,840
177,140
(3)
(4)
34,940
28,260
10,700
26,860
13,200
(113,960)
63,180
ATSWA PART I – SEPTEMBER 2010
28
INSIGHT
NOTES
(1)
Debtors Control Account
Balance b/fwd
Sales (balancing
figure)
Balance b/d
(2)
LS
193,140
965,980
Cash book
Balance c/d
1,159,120
203,280
1,159,120
Creditors Control Account
Cash book
Balance c/d
LS
817,440
113,460
Balance b/fwd
Purchases (balancing
figure)
930,900
113,460
Rent and Rates Account
Balance b/fwd
Cash Book
Balance b/d
(4)
LS
110,520
820,380
930,900
Balance b/d
(3)
LS
955,840
203,280
LS
6,000 Profit and Loss (Bal.
figure)
29, 460 Balance c/d
35,460
LS
28,260
7,200
35,460
7,200
Lighting and Heating Account
Cash Book
Balance c/d
LS
10,080 Balance b/fwd
2,520
12,600
Balance b/d
LS
1,900
10,700
12,600
2,520
ATSWA PART I – SEPTEMBER 2010
29
INSIGHT
EXAMINER’S COMMENT
Candidates’ ability to translate single entry records into a set of final
accounts is tested. The question is not too complex or difficult for good
candidates to tackle. Many candidates attempted to answer the question
but appeared confused in their presentation. In particular, they:


Could not determine the sales and purchases figures through the
preparation of control accounts.
Were unable to determine the appropriate amount of expenses to
charge to the P & L A/c.
Many prepared the statements twice. Many candidates also wasted their
time preparing a balance sheet which was not required by the question.
ATSWA PART I – SEPTEMBER 2010
30
INSIGHT
AT/102/PI.2
NO:…………………………………
EXAMINATION
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION – SEPTEMBER 2010
ECONOMICS
Time allowed: 3 hours
Insert your Examination number in the space provided
above
SECTION A
PART I
1.
An increase in the number of banks and thrifts
Increased integration of world financial markets
Increased use of coins and currency as a medium of exchange
A decrease in the financial services
A surge in the patronage of banks for financial services
When the price of a product rises from N1.50 to N2, the quantity
demanded of the product decreases from 1,000 to 900, then the
price elasticity of demand coefficient is
A.
B.
C.
D.
E.
3.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
Which of the following would you consider to be a recent
development in the banking industry?
A.
B.
C.
D.
E.
2.
Attempt All Questions
3.00
2.71
0.37
0.30
0.33
The demand curve facing a perfectly competitive firm is horizontal
because
A.
B.
C.
D.
E.
The law of demand is ineffective
Marginal revenue equals marginal cost
The market demand is perfectly elastic
The firm is a price setter
The firm is a price taker
ATSWA PART I – SEPTEMBER 2010
31
INSIGHT
4.
Non-exclusion principle relates to the concept of
A.
B.
C.
D.
E.
5.
The annual charge which estimates the amount
equipment used up in each year’s production is called
A.
B.
C.
D.
E.
6.
Indirect business taxes
Inventory reduction
depreciation
investment
amortisation
colleges and universities
businesses and households
resource and product markets
foreign nations and corporations
Non-Governmental Organization (NGO)
As disposable income decreases, ceteris paribus
A.
B.
C.
D.
E.
8.
of capital
In the circular flow model, government provides goods and services
and receives net taxes from
A.
B.
C.
D.
E.
7.
consumption
production
monopoly
public good
government
both consumption and saving increase
consumption increases and saving decreases
consumption decreases and saving increases
both consumption and saving decrease
both consumption and saving remain unchanged
The use of exchange control to eliminate a nation’s balance of
payments deficit results in
A.
B.
C.
D.
E.
decrease in the nation’s imports
increase in the nation’s imports
decrease in the nation’s exports
decrease in the nation’s price level
decrease in the nation’s income level
ATSWA PART I – SEPTEMBER 2010
32
INSIGHT
9.
If the required reserve ratio were 12½%, the value of the monetary
multiplier would be
A.
B.
C.
D.
E.
5
6
7
8
9
10. Which of the following policies would do the most to reduce
inflation?
A.
B.
C.
D.
E.
PART II
Increase taxes by N5 billion
Reduce government purchases of goods and services by N5
billion
Increase taxes and government expenditures by N5 billion
Reduce both taxes and government purchases by N5 billion
Reduce taxes by N5 billion
SHORT-ANSWER QUESTIONS (30 MARKS)
1.
The position of the budget line is determined by ..................... and
…………….
2.
A consumer has ..................... from a good if each extra unit
consumed adds successively less to total utility.
3.
A change in any of the factors influencing demand except own price
causes.........................
4.
In which type of market structure do consumers pay the lowest
possible price?
5.
The case where
as...…………….......
6.
A regulatory framework submitted to the Corporate Affair
Commission (Registrar of Companies), which defines the internal
relationship
of
the
company
and
its
employees
is
called.............................
7.
The addition of average fixed cost and average variable cost gives
…………….
there
are
a
few
buyers
is
described
ATSWA PART I – SEPTEMBER 2010
33
INSIGHT
8.
The type of supply
is.............................
for
two
goods
9.
The shut-down point exists for the firm when...............................
10.
The
demand
curve
facing
the
monopolist
will
be
................................, implying that more can be sold at lower price
11.
The
simplest
form
is.......................................
12.
An element of market conduct that denotes the ways in which
suppliers attempt to distinguish their own products from those of
competitors is.........................
13.
The functional relationship between quantities of inputs and
outputs is expressed by........................
14.
A revenue concept that is the equivalent of the unit price of a
product is........................
15.
The view that economics is the science which studies human
behaviour as a relationship between ends and scarce means which
have alternative uses was given by...................................
16.
The apex financial institution in the capital market of your country
of
that
are
business
by-products
organisation
is..................
17.
In the version of the quantity theory of money MV=PQ, what does V
and Q represent?
18.
The value of the multiplier in the national income determination is
inversely related to............................
19.
The total money value of all the goods and services produced within
the geographical boundaries of a country is called........................
20.
The type of inflation caused by an excess of total spending over the
economy’s capacity to produce goods and services is
called......................
21.
The proportion of any
called...........................
22.
A change in a component of aggregate demand which leads to an
amplified change in the equilibrium GDP is called.........................
change
in
income
consumed
ATSWA PART I – SEPTEMBER 2010
is
34
INSIGHT
23.
A phenomenon of cyclical fluctuations of economic activity which is
composed of bonus and depression is known as.....................
24.
The deliberate manipulation of taxes and spending by the
government to achieve certain macroeconomic objectives is known
as...................
25.
The most important determinant of the speculative demand for
money is..................
26.
The amount of goods and services one’s nominal income can buy
is....................
27.
The difference between the exports and imports of physical goods
of a country is called.........................
28.
The exchange rate mechanism in which the exchange rate is
determined by the interaction of the demand and supply of foreign
exchange is...........................
29.
A process by which industries and corporations that were
previously in public hands and controlled mainly by the state are
sold back to the private sector is known as..............................
30.
The excess of government outlays over government receipts is
referred to as....................................
Attempt any FOUR Questions (60 Marks)
TWO Questions each from Sections B and C
SECTION B–MICRO-ECONOMICS
QUESTION 1
(a)
What FOUR assumptions are made in drawing a production
possibilities
curve (PPC)?
(8 Marks)
(b)
Draw production possibilities curves to illustrate
(i) Unemployment
(31/2 Marks)
ATSWA PART I – SEPTEMBER 2010
35
INSIGHT
(ii) Advances in technology
(31/2 Marks)
(Total
15 Marks)
QUESTION 2
(a)
Explain the difference between 'change in quantity supplied’ and
‘change in supply’.
(9 Marks)
(b)
Outline any THREE factors influencing the supply of a commodity.
(6 Marks)
(Total
15 Marks)
QUESTION 3
State and explain any FIVE factors influencing location of industries in
West African Countries.
(15 Marks)
SECTION C – MACRO-ECONOMICS
QUESTION 4
Consider a closed economy with no government sector in which
consumption (C) is related to income (Y) by the equation:
C = 400 + 0.75 Y
Required:
(a) What is a closed economy?
Marks)
(2
(b) Explain what is meant by autonomous consumption and then
determine its value from the equation given.
(5 Marks)
(c) Determine from the equation the marginal propensity to consume.
(3 Marks)
(d) At the investment level of 500, what would be the equilibrium level of
income given the equation above?
(5 Marks)
ATSWA PART I – SEPTEMBER 2010
36
INSIGHT
(Total
15 Marks)
QUESTION 5
(a)
What is Inflation?
(3 Marks)
(b) Analyse the effects of inflation and suggest how it can be controlled.
(12
Marks)
(Total
15 Marks)
QUESTION 6
(a)
What is “Monetary Policy”?
(3 Marks)
(b)
State and explain any FOUR instruments of monetary policy.
(12
Marks)
(Total
15 Marks)
PART I
1.
B
2.
D
3.
E
4.
D
5.
C
6.
B
7.
D
8.
A
9.
D
MULTIPLE-CHOICE QUESTIONS
ATSWA PART I – SEPTEMBER 2010
37
INSIGHT
10.
B
PART II
SHORT-ANSWER QUESTIONS
1.
Prices of goods and consumer’s income
2.
Diminishing marginal utility
3.
A shift in the demand curve/change in demand
4.
Perfect competition
5.
Oligopoly
6.
Articles of Association
7.
Average Total Cost (ATC)
8.
Joint supply
9.
Price falls below average variable cost (AVC) or AVC exceeds price.
10.
Downward sloping
11.
Sole proprietorship
12.
Product differentiation
13.
Production function
14.
Average revenue (AR)
15.
Lord Lioness Robbins
16.
Securities and Exchange Commission (SEC)
17.
(V) velocity of money circulation and (Q) total real output or real
GNP
18.
Marginal propensity to save (MPS)
19.
Gross Domestic Product (GDP)
20.
Demand Pull inflation
ATSWA PART I – SEPTEMBER 2010
38
INSIGHT
21.
Marginal propensity to consume (MPC)
22.
Multiplier
23.
Business cycle
24.
Fiscal Policy (or discretionary fiscal policy)
25.
Rate of interest
26.
Real income
27.
Balance of Trade (BOT)
28.
Flexible or floating exchange rate
29.
Privatisation
30.
Budget deficit
SECTION B
SOLUTION 1
a)
Assumptions made in drawing a production possibilities curve
(PPC);
(i)
Full Employment and Productive Efficiency:- It is assumed that the
economy is employing all its resources with the best available
technology – producing goods and services at least cost.
(ii)
Fixed or Scarce Resources:- The supply of factors of Production is
fixed in both quantity and quality.
(iii) Fixed Technology:- The methods used to produce output does not
change during the period of analysis, which usually is a very short
period of time.
(iv)
Only Two Goods:- The Economy is producing only two goods.
(v)
Increasing Opportunity Cost:- Every additional unit of one good
produced requires forgoing increasing units of the other good. This
assumption is represented in the shape of the PPC which is concave
to the origin.
(b)
ATSWA PART I – SEPTEMBER 2010
39
INSIGHT
(i)
Production Possibilities Curve (PPC) and unemployment.
Good
Y
PPC
.U
0
Good x
There is unemployment when some resources are lying idle i.e. not
being utilized in the economy. Any point inside the PPC, such as U
therefore indicates or illustrates unemployment i.e. output
combination that is less than what the economy is capable of
producing.
ii)
Production Possibilities Curve (PPC) and Advances in Technology
(Economic Growth)
Good
Y
PPC1
PPC2
0
Good x
A rightward Shift, such as from PPC1 to PPC2 illustrates advances in
technology which allows the economy to achieve a larger output of goods
X and Y (economic growth).
EXAMINER’S COMMENT
ATSWA PART I – SEPTEMBER 2010
40
INSIGHT
The question tested candidates’ knowledge of the assumptions of the
production possibilities curve (PPC) and its applications to the concept of
unemployment and the consequence of advances in technology. The
question was attempted by about 14% of the candidates, while less than
50% of them scored pass marks. Most of the candidates demonstrated
poor knowledge of the assumptions of PPC and they were also not able to
identify economic growth as a consequence of advances in technology.
SOLUTION 2
a)
i)
Change in quantity supplied:- refers to movement along a
given
supply curve that is primarily caused by increase or decrease
in the commodity’s own price (see figure 1)
Fig. 1:
Change in quantity supplied
Price
S
P2
P0
P1
S
0
ii)
Q1
Q0
Q2
Quantity
Change in Supply:- Refers to the shift (leftward or rightward in
supply curve resulting from factors influencing supply other than
commodity’s own price (see fig. 2)
ATSWA PART I – SEPTEMBER 2010
41
INSIGHT
Fig. 2: Change in supply
S2
S0 S1
Price
P0
S2
S0
S1
0
Q1
Q0
Q2
b)
Factors influencing the supply of a commodity include:
i)
Price of the Commodity:- At higher prices producers will be willing
to supply more quantity of the commodity into the market, vice
versa.
ii)
Prices of Other Goods:- A Producer will tend to concentrate on the
production of goods with rising prices than those with constant
prices.
iii)
Prices of factors of Production:- With rising prices of factors of
production supply will reduce and vice versa.
iv)
Technology:- A new and more efficient technology will encourage
production at lower unit cost which will lead to increase in supply.
v)
The Goal of the Firm:- If the main goal of the producer differs from
profit maximization, producer can increase supply even when
commodity price is low.
vi)
Weather:- For agricultural products, most especially, a favourable
weather condition will lead to increase in supply.
EXAMINER’S COMMENT
This question on the concept of supply was very popular among the
candidates. About 98% of the candidates answered the question while
about 70% of them scored pass marks. The few candidates who scored
poorly were those ones who could not draw relevant diagrams to
ATSWA PART I – SEPTEMBER 2010
42
INSIGHT
illustrate and differentiate between ‘change in quantity supplied’ and
‘change in supply’.
SOLUTION 3
a)
Factors influencing location of Industries in West Africa include:
i)
Natural factors:- Some Industries are located in certain places due
to the natural factors which make productive activities
nontransferable. This is the case for extractive industries such as
crude oil, coal, iron ore, and so on.
ii)
Nearness to the source of raw materials:- This is to reduce
transport expenses, especially where raw materials are heavy or
bulky. e.g. iron and steel mills where iron ore is available, cement
industry located in area where limestone is available, and so on.
iii)
Nearness to market:- Siting Industries where demand for the
product is high is an important factor in cases where the product
are heavy, perishable and fragile. This is to reduce transport risks
and cost. e.g. brewery in commercial towns, eateries in cities, e.t.c.
iv)
Infrastructural facilities:- Availability of good communication,
efficient transport network, pipe-borne water, regular electricity
supply are essential to avoid high production cost associated with
private provisioning of these facilities.
v)
Nearness to source of finance:- Most Industries are located in
towns and cities where there are banks and financial Institution
from which Firms can obtain loan for expansion.
vi)
Nearness to other firms:To derive cost-saving advantages
associated with localization of industries i.e. external economics.
vii)
Even development considerations:Government sometimes
encourages location of industries in rural area to promote even
development.
viii) Social and political factors:- Government may encourage location
of Industries outside cities to discourage overcrowding and avoid
its associated problems, or to score political points in areas where
voters are supportive of the party in government.
EXAMINER’S COMMENT
ATSWA PART I – SEPTEMBER 2010
43
INSIGHT
This question on the location of industries is straightforward and was
attempted by not less than 96% of the candidates. About 62% of the
candidates who attempted the question scored pass marks.
SOLUTION 4
a)
Closed economy:- This is an economy that is not influenced by any
form of International Trade. i.e., there are no exports (x = 0) or
imports (M = O) of any kind.
b)(i)
Autonomous Consumption:- It is that part of total consumption
expenditure
that does not vary with changes in national income or disposable
income.
-
It represents some minimum level of consumption expenditure
that is necessary to sustain a basic standard of living and
which consumers would therefore need to undertake even at
zero income. (Y = 0).
ii)
c)
Given:
C = 400+ 0.75Y
When Y = 0,
C = 400 + 0.75 (0) = 400
 Autonomous consumption = 400
Marginal Propensity to Consume.
This is defined as dc
dY
Given C =400 + 0.75Y
 dc
= d 400 + 0.75Y
dY
dY
= 0.75
d)
Equilibrium Income:
C = 400 + 0.75Y
Equilibrium occurs when Y = C + I
I = 500
 Y = C + 500
Substituting C = 400 + 0.75Y, we have
Y = 400 + 0.75Y + 500
0.25Y = 900
Y = 3,600
EXAMINER’S COMMENT
ATSWA PART I – SEPTEMBER 2010
44
INSIGHT
This question tested candidates’ understanding of the two-sector national
income model for a closed economy. The question was attempted by
about 28% of the candidate and less than 30% of them scored average
pass mark.
In equilibrium national income determination, candidates should be able
to answer questions on two-sector and three-sector models of closed
economy, as well as simple model of the open-economy with the
assumptions of automous imports, investment, export and a lump-sum
tax.
SOLUTION 5
a)
Inflation can be defined as a persistent increase in the general price
level of goods and services over a period of time.
b)
Effects of inflation on the economy:
i)
Inflation reduces the real value of money, this hurts fixed income
earners, people living on pensions or social security tend to suffer
during this time as their real income shrinks.
ii)
Inflation can also redistribute wealth among different asset owners.
An Asset whose price remains the same in the face of price increase
loses its value over time.
iii)
During inflation, debtors benefit from an overhang of outstanding
amounts because they pay off their debts in cheaper value. On the
other hand, creditors loose, as they feel cheated about the reduction
in the purchasing strength of maturing debt repayments.
iv)
When domestic prices of a country rise faster than those of other
trading nations, exports will tend to fall and imports rise.
v)
Inflation may move people to higher income brackets.
An
individual’s new income level also push the earner into higher
income-tax bracket. With this, more savings are generated as a
larger part of income (If the tax is progressive) flows to the
Government Sector away from private spending.
c)
Control of inflation:
i)
Price Control:- Prices of some goods and services may be set by
administrative decisions rather than determined in a free market.
Price control requires extensive policing for it to be effective.
ATSWA PART I – SEPTEMBER 2010
45
INSIGHT
ii)
Fiscal policy:- Reduction of government expenditure or increase in
taxation to reduce aggregate demand in the economy.
iii)
Monetary policy:Reduction of money
availability through
- selling government securities
- raising reserve requirements
- raising bank rate ( or discount rate), e.t.c
supply and
credit
iv)
Incomes policy:- Wage freeze to reduce money supply/aggregate
demand.
EXAMINER’S COMMENT
The question explored candidates’ knowledge of the phenomenon of
inflation. About 87% of the candidates attempted the question and the
success rate was about 50%. A good number of the candidates wrongly
interpreted ‘ effects of inflation’ to mean ‘causes of inflation’ as a result
of which they scored poorly.
SOLUTION 6
a)
Monetary Policy:- refers to the combination of measures designed
to reduce money supply and credit availability in the economy with
a view to achieving specific macroeconomic objectives.
b)
Monetary Policy Instruments include:
i)
Open Market Operations (OMO):- This refers to buying and selling
of Government Securities such as Treasury Bill, Treasury
Certificate, e.t.c.
ii)
Bank or Discount Rate:- This is a minimum lending rate of the
Central Bank at which it rediscounts first class bills of exchange and
government securities held by the commercial banks.
iii)
Reserve Requirements:- Every commercial bank is required by law
to keep a certain percentage of its total deposit liabilities in the
form of liquidity ratio (Vault Cash) and demand deposit with the
Central Bank.
iv)
Selective Credit Controls:- These are used by the Central Bank to
influence specific types of credit for particular purposes or sectors
of the economy.
ATSWA PART I – SEPTEMBER 2010
46
INSIGHT
v)
Credit Ceiling:- Imposition of a limit to which commercial bank
can grant credit.
vi)
Moral suasion:- Persuading commercial banks to take specific
steps that is consistent with Government macroeconomic targets.
vii)
Special Deposit:- Instructing commercial banks to make specified
amount of deposit to reduce their lending capacity.
EXAMINER’S COMMENT
The question required candidates to define monetary policy and to
mention and explain briefly only four (4) of its instruments. About 72%
of the candidates attempted the question with about 38% of them scoring
at least 50% of the marks allocated. The poor performance of the most of
the candidates on this question was due to their inability to provide brief
explanation of the instruments of monetary policy identified. Candidates
should note that in any question that requires mentioning (state) and
explanation, mere mentioning or identifying the point attracts not more
than 25% of the mark allocated while explanation attracts about 75%.
Candidates are therefore advised to adhere strictly to the instruction
always.
ATSWA PART I – SEPTEMBER 2010
47
INSIGHT
AT/102/PI.3
EXAMINATION NO:………………………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART 1 EXAMINATION – SEPTEMBER 2010
BUSINESS LAW
Time allowed: 3 hours
Insert your examination number in the space provided above
SECTION A - Attempt All Questions
PART I
1.
“Nemo dat quod non habet” means ………………..
A.
B.
C.
D.
E.
2.
Writ of summons
Judicial Pronouncement
Contractual Relationship
Contractor’s Bill
Referendum
Laws promulgated by Military governments are called…………………
A.
B.
C.
D.
E.
4.
Equity and Justice
The buyer is supreme
He who possesses bears the risk
You cannot give that which you do not possess
There is no right without obligation
Offer and acceptance are essential ingredients of a valid ……………..
A.
B.
C.
D.
E.
3.
MULTIPLE-CHOICE QUESTIONS (10 Marks)
Martial law
Martial Regulations
Cantonment
Decrees and Edicts
Military fiat
Slander is a type of …………………
A.
B.
C.
D.
E.
Assault
Manslaughter
Defamation
Libel
Misrepresentation
ATSWA PART I – SEPTEMBER 2010
48
INSIGHT
5.
Which of the following is true of a Hire Purchase (lease Purchase)
Agreement?
A.
B.
C.
D.
E.
6.
In a claim under an insurance policy, NONE of the following can be
subrogated EXCEPT
A.
B.
C.
D.
E.
7.
Agency
Tag team
Team
Partnership
Business Association
The concept
………………..
A.
B.
C.
D.
E.
9.
Loss adjuster
NICON
The Insured
The Insurer
The next of Kin of the insured
The relationship which subsists between persons carrying on a
business in common with a view to profit is called ……………..
A.
B.
C.
D.
E.
8.
The goods must be imported
The agreement must relate to consumer goods only
The hirer and the owner must be registered under CAMA
The agreement must have the consent of the Governor
The agreement does not involve the hirer in a legal obligation
to buy the goods
of
uberrimae
fidei
in
Insurance
implies
that
The insurer should be registered with NICON.
The insurer should inform the insured about the truthful
position of its account.
The insurer should disclose the identity of its owners to the
insured.
The insured should disclose all relevant and material facts
about the subject matter of insurance to the insurer.
The insured should observe utmost good faith when making a
claim.
Formal decisions of a company at its Board meetings are contained
in ………….
A.
B.
Memorandum and Articles of Association
Internal Memorandum
ATSWA PART I – SEPTEMBER 2010
49
INSIGHT
C.
D.
E.
10.
Queries
Resolutions
Bulletin
A bill of exchange can be discharged in all of the following ways,
EXCEPT
A.
B.
C.
D.
E.
PART II
Material alteration
Cancellation
Payment in due course
Acceptor becoming holder
Relocation of drawee
SHORT-ANSWER QUESTIONS (30 Marks)
1.
What is the effect of a Counter Offer?
2.
State the rule of interpretation of statutes which states that words
used in a statute must be given their ordinary grammatical meaning
irrespective of any absurdity that may arise.
3.
A precedent which a judge is not bound to follow but which
influences the judge’s decision is referred to as ………………..
4.
State the body in your country which recommends the appointment
of the Chief Judge of a state.
5.
A representation made recklessly without any care as to its
truthfulness is called……………….
6.
State the major aim of Civil Law.
7.
What is defamation in Permanent Form?
8.
State the type of contract in which one or both or all the parties
have performed their obligations under the contract.
9.
State the legal term for the display of goods in a store or
supermarket.
10.
State the effect of the death of an offeror before the acceptance.
11.
What is the effect of a contract made by a partner that is not for the
purpose of the Partnership Business?
ATSWA PART I – SEPTEMBER 2010
50
INSIGHT
12.
The relationship existing between a Banker and its customers is
called …………..
13.
A court order mandating a third party to appear before the court to
show cause why he should not pay to the judgment creditor the debt
due from the judgment debtor in satisfaction of the judgment debt
and costs is called ……………..
14.
By what name is a body usually set up to draft a constitution for a
country known?
15.
Contracts where terms are contained in printed form and are used
for all contracts of the same type are called ………………..
16.
The THREE torts that constitute trespass to person are………………,
…………….., and …………………..
17.
The doctrine on which a plaintiff usually relies when he or she is
unable to show how a negligent act occasioning harm to him
occurred but wants the court to rely on the surrounding facts is
known as …………………..
18.
How does a Partnership entered into for a fixed term become
determined?
19.
What is the remedy of an employer who suffers serious losses due
to the negligence or incompetence of an employee?
20.
A temporary contract of insurance used in indemnity contracts
particularly in motor vehicle insurance in favour of the proposer in
the interim period between submission of the proposal and the final
determination
of
his
application
by
the
insurer
is
called………………………
21.
A court order compelling a party not to do certain things is called
……………..
22.
What type of agency is created where a person is precluded from
denying a representation he made if in reliance upon the
representation, another person’s position is materially altered?
The right of a person to retain possession of the goods of another
without consent as security for payment of a debt owed him is
known as…………
23.
ATSWA PART I – SEPTEMBER 2010
51
INSIGHT
24.
Goods identified and agreed upon at the time a contract of sale is
made is known as ………………
25.
What is the consequence of a breach of condition in a sale of Goods
Contracts?
26.
What is the meaning of Res Ipsa loquitur?
27.
The right of an unpaid seller to stop goods which are still on the
way if the seller becomes aware that the buyer is insolvent is
known as ……………...
28.
A person who takes a bill that is inter alia complete and regular on
its face is called.........................
29.
What other name is given to apparent authority of an agent?
30.
When will a representation be fraudulent in Law?
SECTION B - Attempt any FOUR questions (60 Marks)
QUESTION 1
Olu intends to take an insurance policy on his car with ABC Insurance
Limited. When supplying information he deliberately omitted to tell the
insurer that he had been involved in an accident and was convicted for
dangerous driving.
Required:
(a)
(b)
What effect, if any, is the non-disclosure of Olu’s recent accident
and conviction on the contract?
5 Marks)
Assuming that Olu was given a Cover Note prior to the issuance of a
policy of insurance, what significance would that be?
(5 Marks)
(iii) Discuss the propriety of an employee of the insurer completing the
proposal form for Olu.
(5 Marks)
(Total 15
Marks)
ATSWA PART I – SEPTEMBER 2010
52
INSIGHT
QUESTION 2
(a)
Ajayi has secured a patent over a scientific innovation. He has
employed Alaba as his Assistant to work the patent. Ajayi is
concerned about the loyalty of Alaba not to float a rival company or
join a rival company if he should leave Ajayi’s employment. Ajayi
persuaded Alaba to sign an Agreement to restrict the latter from
working the patented scientific innovation in any other company or
workshop operating within Nigeria for a period of fifty years.
What is the legality of such agreement?
(9 Marks)
(b)
Distinguish between contract of services and contract for services.
(6 Marks)
(Total 15 Marks)
QUESTION 3
(a)
Enumerate FIVE effects of Corporate Personality.
(10 Marks)
(b)
The creditors of Bodexy Limited have appointed KURUMI Consulting
Services (a subsidiary of HABNA Bank) as liquidators for the
purpose of winding up Bodexy Limited. Mr. Cambert Kumalo is a
major shareholder of Bodexy Limited with fully paid up shares, and
he also has substantial accounts with Habna Bank.
Assets realized by Kurumi Consulting Services was inadequate to
satisfy the company’s liabilities, hence the liquidator influenced
Habna Bank to freeze Mr. Kumalo’s accounts with the Bank so as to
get Mr. Kumalo to pay a substantial amount as his contribution to
the winding-up process.
Advise Mr. Kumalo on his rights and liabilities
Marks)
(5
(Total15
Marks)
QUESTION 4
Simon entered into a contract for sale of 100 tyres which were to be
produced three months after the date of the agreement. The factory
produced a total of 1000 tyres at the end of the day. Simon’s 100 tyres
were separated from the 1000 tyres produced and this was sent to him in
Sapele. Before the arrival of the lorry in Sapele, the cheque that Simon
used for the 100 tyres was dishonoured by Simon’s bank. The seller
immediately called the driver and instructed him not to deliver the tyres
to Simon.
ATSWA PART I – SEPTEMBER 2010
53
INSIGHT
Required:
(a)
What classification of goods is
(a) the 100 tyres Simon contracted for before production?
(b) the total of 1000 tyres produced by the factory?
(c) the 100 tyres separated from 1000 tyres produced?
Marks)
(6
(b)
When can title pass to Simon on the 100 tyres he ordered for?
(5 Marks)
(c)
What type of right of the seller was exercised by the instruction to
the driver that the tyres should not be delivered to Simon?
(4
Marks)
(Total
15
Marks)
QUESTION 5
(a)
State the instances when a bank can disclose information about a
customer’s account without liability for breach of duty.
(9 Marks)
(b)
State THREE of the duties owed a bank by the customer.
(6 Marks)
(Total
Marks)
15
QUESTION 6
(a)
What is Publication as it relates to the tort of defamation?
(3 Marks)
(b)
Kodjo had a misunderstanding with his friend, Jerry. Kodjo wrote a
note to his own wife where he falsely described Jerry as a thief.
Two days after receiving the note, Kodjo’s wife showed the note to
Mrs. Jerry.
Required:
(a)
What wrong, if any, has Jerry and his wife committed?
(4 Marks)
(b)
Would your answer be different if Kodjo falsely called Jerry a thief
during a court proceeding?
(4 Marks)
ATSWA PART I – SEPTEMBER 2010
54
INSIGHT
(c)
If Jerry is indeed a thief, what defense would be available to Kodjo
for describing him as one and why?
(4 Marks)
(Total
15
Marks)
SOLUTION
SECTION A
PART I - MULTIPLE CHOICE SOLUTIONS
1.
D
2.
C
3.
D
4.
C
5.
E
6.
D
7.
D
8.
D
9.
D
10.
E
GENERAL COMMENTS:
As observed by the Tuition Houses, the examiners did a very good job
with regard to the Questions this diet. The marking scheme was also in
order. The performance, as usual, varied from very good to good, average
and poor. However, more than half of the candidates performed above
average.
EXAMINER’S COMMENT
ATSWA PART I – SEPTEMBER 2010
55
INSIGHT
These are compulsory questions which covered the whole syllabus and
majority of
the candidates passed very well with some even scoring the whole ten
marks.
However, a few completely missed many of the options.
PART II
SHORT ANSWER SOLUTIONS
1.
It destroys the original offer
2.
Literal Rule
3.
A persuasive precedent
4.
National Judicial Council
5.
Fraudulent misrepresentation
6.
To compensate the victim
7.
Libel
8.
Executed contracts
9.
Invitation to treat
10.
The offer lapses or is terminated
11.
It is not binding on the firm or the partners
12.
Debtor and creditor relationship
13.
A Ganishee order
14.
The Consistent Assembly
15.
Standard form contracts
16.
(1) Assault (2) Battery and (3) False imprisonment
17.
Doctrine of Res 1psa loquitor
18.
By effluxion or expiration of time
ATSWA PART I – SEPTEMBER 2010
56
INSIGHT
19.
Dismissal
20.
Cover Note
21.
Injunction
22.
Agency by Estoppel
23.
Lien
24.
Specific goods
25.
Repudiation
26.
The fact speaks for itself
27.
The right of stoppage in transit
28.
Holder in due course
29.
Ostensible authority
30.
When the maker knows that it is not true or that it is false
EXAMINER’S COMMENT
This is also a compulsory question which covered the whole syllabus. The
performance generally is above average.
SECTION B
SOLUTION 1
(a)
A contract of insurance is a contract of utmost good faith which
requires the insured to disclose all the facts at his disposal to the
insurer at the point of forming the contract.
ATSWA PART I – SEPTEMBER 2010
57
INSIGHT
It is on the basis of the facts disclosed by the insured that the
insurer will make up his mind whether or not to accept the risk and
the terms for doing so.
Olu’s failure to disclose that he had an accident recently and was
convicted for dangerous driving was a concealment of material facts
which should have assisted ABC Insurance Limited to decide
whether to accept the risk or not.
If the loss insured against occurs, the company can deny liability as
the contract would have been based on non-disclosure of material
facts.
(b)
The cover note given to Olu is to provide him temporary cover while
his proposal is being considered.
The cover note is a separate contract which is distinct from the
policy itself.
The significance of the cover note, if Olu had been given, is that he
would have been able to claim indemnity from ABC Insurance
Limited for any loss suffered by him.
(c)
The completion of the proposal form by the employee of ABC
Insurance Limited cannot in any way affect the invalidity of the
contract.
The employee of ABC Insurance Limited is regarded as Olu’s agent
and the employers are entitled to terminate the contract.
EXAMINER’S COMMENT
This question tested law of Insurance. About 55% of the candidates
attempted the question but the performance was just fair.
SOLUTION 2
ATSWA PART I – SEPTEMBER 2010
58
INSIGHT
(a)
A contract or agreement in restraint of trade restricts a person
wholly or partially from carrying on his trade, business or
profession.
Such contracts are generally void and unenforceable.
However, where such contracts seek to protect a legitimate interest
and the restriction is reasonable and not against public policy or
interest, they may be held valid.
On the other hand, where the restriction is too wide in scope in
terms of the territory which it covers and the duration of time the
contract is to last, the likelihood of its being set aside is very high.
Thus a term restricting a trade throughout Nigeria for a period of
fifty years may be held void or invalidated notwithstanding that it
seeks to protect a legitimate interest.
(b)
The distinction between a contract of services and a contract for
services depends basically on whether the relationship between the
parties is that of master and servant or master and independent
contract.
A contract of service subsists between a master and his servant
whereas a contract for services subsists between a master and an
independent contractor.
For the contract of service, the master determines what is to be
done and how it shall be done. Hence he has control over the other
party.
However, the master has no such controlling influence on an
independent contractor. Therefore in a contract of service the
master is vicariously liable for the consequences of the acts done by
his servant.
This is not generally applicable for contract for services involving
an independent contractor.
EXAMINER’S COMMENT
The question was very popular with above 98% attempts. However many
candidates
misunderstood the A Part by treating it as Agency whereas it was on
conduct in
ATSWA PART I – SEPTEMBER 2010
59
INSIGHT
restraint of trade. There was more understanding and better
performance in the B
part.
SOLUTION 3
(a) The effects of corporate personality include the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(b)
Separate Entity
Limited Liability
Perpetual succession
Ability to sue and be sued
Ability of the company to own property
Transferability of shares
Borrowing powers by the company
Lack of secrecy in respect of the company’s affairs
In the case of a company limited by shares being wound-up, no
contribution shall be required from any member exceeding the
amount, if any, unpaid on shares being held by the member.
Since Mr. Lambert Kumalo is a member with fully paid up shares,
he is not liable to make any further payment to the winding-up
process.
The liquidator and Habna Bank acted against the
provisions of the law by freezing the accounts of Mr. Kumalo and he
can therefore seek redress in a court of law.
EXAMINER’S COMMENT
This was a very straight-forward question on Company Law but
surprisingly it
attracted only about 50% attempts. The candidates who attempted the
question did
extremely well.
SOLUTION 4
A.
(a)
The 100 tyres Simon contracted for are future goods
(b)
The total of 1000 tyres produced by the factory are
unascertained goods
(c)
The 100 tyres separated from the 1000 tyres are ascertained
goods
ATSWA PART I – SEPTEMBER 2010
60
INSIGHT
B.
Title to the 100 tyres will pass to Simon when they are separated
from the total of 1000 tyres produced by the factory and
unconditionally appropriated to the contract
C.
The right of stoppage in transistu, that is, the right of stopping the
goods while they are in transit.
EXAMINER’S COMMENT
This question was on sale of goods with particular reference to types of
goods.
Many candidates mixed-up the types. The performance of the candidates
who
attempted the question was therefore just average.
SOLUTION 5
a.
The instances when a bank may disclose information about a
customer’s account are:
i.
Where
ii.
Where
iii.
When
disclosure
iv.
Where
v.
Where
b.
disclosure is required by statute
there is a public duty to disclose
the interest of the bank itself necessitates
the
the customer consents to the disclosure
a court orders the disclosure
The following are the duties owed to a bank by its customer
i.
Duty to take reasonable care in drawing cheques so as to
guide against alteration
ii.
Duty to inform the banker of any forgery or alteration known
to the customer
iii.
Duty not to capitalize on the banker’s mistake in sending an
incorrect statement
iv.
Duty to pay back any money advanced to him as loan or
overdraft
EXAMINER’S COMMENT
ATSWA PART I – SEPTEMBER 2010
61
INSIGHT
This question on banking law is very popular with about 90% attempts.
The A part was well understood by the candidates and they scored very
high marks. Surprisingly the (B) part which tested a customer’s duty to
his banker was misunderstood by many candidates. The overall
performance was above average.
SOLUTION 6
a.
Publication is the communication of the defamatory matter to
another person i.e. a third party other than the subject of the
defamation
b.
(i)
in
Kodjo did not commit any wrong by describing Jerry as a thief
the note he wrote to his wife. This is because communication
between the maker of a defamatory statement and his spouse
is not regarded as publication.
If there is no publication, there is no defamation.
But communication of the defamatory statement by Kodjo’s
wife to Mrs. Jerry is a libel.
(ii)
The answer would not be different if Kodjo called Jerry a thief
during a court proceeding. This is because calling Jerry a
thief during a court proceeding will not constitute
defamation. The occasion is absolutely privileged. Absolute
privilege occasions are those occasions when someone can
make a defamatory statement without liability.
(iii) The defense of justification or truth will be available to Kodjo,
if Jerry is indeed a thief and the defence is absolute. The
defence states that a person cannot recover damages for
alleged defamation in respect of a reputation which he does
not possess.
EXAMINER’S COMMENT
This is a question on the law of defamation. It is very popular as it is
quite straight-forward. However, the performance is slightly below
average which can only be due to inadequate preparation by the students.
ATSWA PART I – SEPTEMBER 2010
62
INSIGHT
AT/102/PI.4
EXAMINATION NO:………………………………
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION – SEPTEMBER 2010
COMMUNICATION SKILLS
Time allowed: 3 hours
Insert your Examination number in the space provided above.
SECTION A
PART I
Attempt All Questions
MULTIPLE-CHOICE QUESTIONS (10 Marks)
1.
Which of the following reading strategies will a busy manager
adopt?
A.
Critical reading
B.
Slow reading
C.
Skimming and scanning reading
D.
Revision reading
E.
Analysis reading
2.
All of these are speech delivery styles EXCEPT:
A.
Face-to-face
B.
Written-and-read
C.
Memorised
D.
Extemporaneous
E.
Impromptu
ATSWA PART I – SEPTEMBER 2010
63
INSIGHT
3.
All of these are barriers to effective listening EXCEPT:
A.
Physical disposition
B.
Distraction
C.
Mental disposition
D.
Inappropriate timing
E.
Attentiveness
4.
All the following are factors that affect a chosen medium in
communication EXCEPT:
A.
Speed
B.
Cost
C.
Safety
D.
Accuracy
E.
Beauty
5.
Which of the following is NOT an attribute of diagonal
communication?
A.
Co-operation
B.
Goodwill
C.
Friendliness
D.
Bureaucracy
E.
Respect
6.
He was held up in the traffic on his way back from office
The underlined word in the above sentence is a(n) ______________
A.
Preposition
B.
Adjective
C.
Verb
D.
Noun
E.
Adverb
7.
All of the following are collective noun EXCEPT:
A.
Police
B.
Cattle
C.
Seat
D.
Clergy
E.
Folk
8.
Which of the following pairs of consonants are voiceless?
A. /p/ and /t/
B. /b/ and /a/
C. /p/ and /a/
ATSWA PART I – SEPTEMBER 2010
64
INSIGHT
D. /t/ and /b/
E. /d/ and /t/
9.
A writer who lifts a sentence word for word will acknowledge it by:
A.
Putting it in parenthesis
B.
Putting it in quotation marks
C.
Using reported speech
D.
Using a declaration sentence
E.
Using an apostrophe
10.
Which of the following forms of correspondence is used when a
report is being
submitted?
A.
A memorandum
B.
A newsletter
C.
A covering Letter
D.
A news bulletin
E.
A circular
PART II
1.
SHORT-ANSWER QUESTIONS (20 MARKS)
Communication which takes place within a person is
.......................................
2.
The interference which occurs as a result of a speaker’s use of
offensive words
is an example of .......................................
3.
ONE major disadvantage of writing as a medium of communication
is that it is only for the ……………….........................
4.
The informal route through which unconfirmed information is
circulated within an organization is ……………..……………….
5.
Before a reader can decode the content of a written message, he
must be conversant with the ……………… of the language.
6.
When a person is called upon without a previous notice to speak to
an audience, he is presenting a(n) ………………………. speech.
7.
PORPE is an acronym for a method of reading. The “E” stands for
……………….
8.
A proposal put before a meeting is a …………………………….
9.
Words that have similar meanings are ...........................................
ATSWA PART I – SEPTEMBER 2010
65
INSIGHT
10.
“There is a woman in the closet “ The underlined expression is a(n)
….................
11.
The fierce-looking man is the Chairman’s new body guard. The
underlined
sentence element is the ………………..….
12.
A sentence consisting
….………………..
13.
“You must go to the bank before mid-day”. This is an example of
a(n) ……………….. statement.
14.
They were in the garden when the robbers struck. The underline
expression is a(n) …....................
15.
“Please borrow me some money.”
The appropriate word to use instead of ‘borrow’ in the sentence
above is ……………..
16.
“Ameh’s idea is different than yours.
Replace the underlined word with a more appropriate one.
17.
The person to whom a letter is sent is called ………………………
18.
Graphs, tables, maps and pictures which are too bulky to be
included in the body of a formal report are usually labelled and
attached collectively as ……………………..
19.
Persuasive communication that uses the mass media to reach a
broad audience is ……….....…………..
20.
The mass media
………....................
for
of
two
independent
advertising
may
be
clauses
is
electronic
a
or
SECTION B - SUMMARY
QUESTION 1
COMPULSORY
Read the following passage carefully and answer the questions on it:
In a very broad sense art can be described as an occupation in which skill
is employed to gratify taste or produce what is beautiful, but this
definition does not encompass every aspect of how artworks relate to the
people who produce them. The art of a people is an outward, visible
ATSWA PART I – SEPTEMBER 2010
66
INSIGHT
symbol of their culture and degree of civilization, for it is an aspect of
their ability in reasoning and productivity. Artworks reflect the spiritual
development of the society in which they are created, for, unlike the
products of craft, they are not necessarily made for a definite functional
purpose, but as an expression of beauty which relates to intellectual or
spiritual values.
Art reflects the social, economic, intellectual and
spiritual values of the society in which it is rooted.
There are two broad categories of art which can be described as liberal
arts and fine arts. The liberal arts are those branches of learning that are
concerned with reasoning, language and aspects of man’s social, physical
and cultural environment. (It is from this term that Universities award
their students Bachelor of Arts Degrees.) Fine arts refers to whatever is
beautiful or appeals to the taste, they are the arts of design such as
painting, architecture and sculpture.
The fine arts are cultivated
essentially for the pleasure and emotional satisfaction they afford those
who experience them. They most often affect the senses of sight, sound
and touch. Although there are many divisions of fine art, the major
categories are:
Architecture
Ceramics
Dance
Drama
Graphic design
Literature
Music
Painting
Poetry
Sculpture
Artworks are products of societies and must therefore reflect the tastes
and attitudes of those societies. Playwrights, authors, artists, builders,
dancers, etc, only create or perform what is acceptable to their fellows.
Therefore the functions of art are closely connected to the beliefs, values
and cultural development of the society they are created for. The subjects
and techniques of artists cannot be separated from time and place; the
artist’s choice of theme is determined by the prevailing social-economic
and political situation of his age and environment. Works of art, being
dynamic, will therefore develop and alter when prevailing social attitudes
change.
Required:
(a)
In TWO short sentences, broadly define “Art” as explained in the
passage.
(10 Marks)
(b) In ONE short sentence, state the role of art in society.
(5Marks)
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INSIGHT
(c) In ONE short sentence, state the difference between liberal and fine
arts.
(5
Marks)
(d)
In THREE short sentences, state the THREE features of fine arts.
(15 Marks)
(e) State the relationship between art and society.
(5 Marks)
(Total
40
Marks)
SECTION C
Answer Any Two Questions (30 Marks)
QUESTION 1
(a)
With the aid of appropriate diagrams, explain
(i)
(ii)
The fan and wheel network
The single strand or chain network
(7
Marks)
(b) Briefly discuss FOUR advantages of using the fan or wheel network?
(8 Marks)
(Total 15 Marks)
QUESTION 2
Explain in detail the elements of the SQ3R method of read
(15 Marks)
QUESTION 3
You have been delegated to represent your General Manager at a
conference of the Association of Accounting Technicians hosted by your
company. Write a goodwill message to be delivered on his behalf.
(15 Marks)
QUESTION 4
In each of the following sentences, an expression is underlined. Give the
grammatical NAME and FUNCTION of each of these expressions.
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INSIGHT
(a) The lady wearing a red skirt was appointed as a Minister.
(3
Marks)
(b) The man who stabbed the Chairman had been arrested. (3 Marks)
(c) The poor are usually religious.
(3 Marks)
(d) The children are in the room.
(3 Marks)
(e) He has no excuse for what he has done.
(3 Marks)
(Total 15 Marks)
SECTION A
PART I - MULTIPLE CHOICE
1.
C
2.
A
3.
E
4.
E
5.
D
6.
D
7.
C
8.
A
9.
B
10.
C
QUESTIONS
EXAMINER’S REPORT
The questions are adequately representative of the syllabus.
PART II SHORT ANSWER QUESTIONS
1.
Intra-personal
2.
Semantic noise
3.
Literate/educated
4.
The grapevine
5.
Orthography
6.
Impromptu
7.
Evaluate
8.
Motion
9.
Synonyms
ATSWA PART I – SEPTEMBER 2010
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INSIGHT
10.
Prepositional phrase
11.
Complement
12.
Compound
13.
Imperative
14.
Adverbial clause (of time)
15.
Lend
16.
From
17.
Addressee/recipient
18.
Appendices
19.
Advertising/advertisement
20.
Print
EXAMINER’S REPORT
The questions here test lexical and grammatical items. This section was
well attended by the Candidates.
SECTION B; COMPULSORY
a)
i)
Art is a skill employed to gratify taste .
OR
Art is a skill employed to produce things beautiful.
OR
Art is a creation of beauty.
ii)
Art is the symbol of the culture and development of a people.
b)
Art is a reflection of the social, economic, intellectual and spiritual
values of a society.
c)
Liberal Arts deals with reasoning, language and man’s total
environment while fine arts is concerned with beauty.
d)
i)
Fine arts offers pleasure to people.
ii)
It (Fine arts) satisfies people’s emotions.
iii)
It (Fine arts) appeals to the senses of sight, sound and touch.
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INSIGHT
e)
Societal changes influence the form and functions of art.
OR
The works of art are influenced by the prevailing situations in the
society.
OR
Artworks change
development.
with
the
trend
of
societal
growth
and
EXAMINER’S REPORT
Candidates were unable to digest this passage and re-express the
concepts therein in their own words. This accounts for the relatively low
scores here as ability to re-express ideas in independent terms is critical
in summarizing. From past experience this is usually a problem to
candidates while summarizing.
SECTION C
SOLUTION 1
ai)
THE FAN OR WHEEL NETWORK
The Fan or Wheel Network is a network that represents a situation
where information originates from one source but the information
is targeted at many receivers or groups. An example of a situation
in which this network is used is in a classroom or at a preaching
event. Whenever this network is used, feedback is instant and the
network limits the possibility of distortion.
Sender
a
b
c
d
e f
g
h
i
R e c e i v e r s
Diagram of the Fan or Wheel Network
ii)
THE SINGLE STRAND OR CHAIN NETWORK
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INSIGHT
The Single Strand or Chain Network represents a situation where
information passed from one person to another. The information
moves from person to person until it reaches the final point/
destination.
Sender *
*
*
Receive r (Rx) RX
*
RX
*
RX
*
RX
Diagram of the single strand or Chain Network
b.
ADVANTAGES OF USING THE FAN OR WHEEL NETWORK
i)
The Fan or Wheel Network has the advantage of facilitating
direct feedback. Also feedback is obtained with ease because
there is direct contact between sender and receiver.
ii)
The possibility of distortion is reduced when the Fan or Wheel
Network is used. This is because there is direct interface
between sender and receiver.
iii)
Whenever the Fan or Wheel Network is used for information
dissemination, control is centred in the sender without any
mediation from any source.
iv)
When the Fan or Wheel Network is used, information
dissemination is done speedily. This is because information
goes from one person to a number of persons at the same
time.
v)
The Fan or Wheel Network makes for efficiency in
information dissemination because the central point of
control ensures coordination.
vi)
The Fan or Wheel Network, with the facility of coordination
supports the performance and coordination of tasks that are
not complicated.
EXAMINER’S REPORT
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INSIGHT
This question tests Network Information System in an organisation.
Candidates did not understand the concept being tested. More than 60%
of those who attempted this question could not draw the diagram
correctly. Discussion was equally deficient. About 65% of all candidates
attempted the question and of this number only 20% got 50% and above
of the total score.
SOLUTION 2
The SQ3R method represents a series of steps to be taken in reading a
text. These steps are Survey, Question, Read, Recall and Review.
a.
SURVEY: The survey stage in reading is the general overview of
text. This means taking a general look at the text. If it is a book,
the reader browses through the title, table of contents and other
fore materials. Chapter and sectional headings as well as chapter
summaries may be surveyed. If the text is an article, the reader will
have to survey the title, headings and sub-headings, topic sentences
and concluding sentences.
Survey helps the reader to identify the theme of the message, the
major point of the text and to determine the level of readability of
the text. All this will help the reader to determine the level of
attention and energy to be given the text.
b
QUESTION: This is the stage where the reader needs to ask himself
the questions that will help him gather the right information from
the text. Such questions to be asked include: ‘What do I know about
the text?’ ‘what do I want to know about the text?’These questions
will help the reader on what he already knows and what more he
needs to know.
Other questions such as ‘What new facts are in the text?’ ‘What are
my needs?’ ‘Why am I reading? will help the reader assess his
current and potential knowledge as well as determine his goal.
c.
READ:
At this stage, the actual reading begins. The
reader’s performance will now depend on how fast he can read and
how much he can read more than once, gather points paragraph by
paragraph and pay attention to elaboration, explanations, examples
and any supporting visual aids. The reader should skip unimportant
portions of the text to save time and energy.
d.
RECALL: Having read the text, the reader tries to recall key
words, topic sentences, definitions and illustrations without looking
at the text. Recall may be done orally or by notes to determine the
ATSWA PART I – SEPTEMBER 2010
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INSIGHT
reader understanding of the text. This helps to enhance the reader’s
capacity for retention of facts read.
e.
REVIEW: This entails an assessment of the previous steps of
survey, question, read and recall. This must be done without
looking at the text. This helps the reader to assess himself and to
internalize the facts gathered.
The points become a part of the
reader, stored in his long term memory.
EXAMINER’S COMMENT
This question tests reading method. Candidates’ response here is highly
deficient. Even where they know the concepts they could not explain
them. Also, at least 60% of those who attempted this question got the
concept wrong; they could not name the concept in precise order. Even at
that about 60% of candidates attempted the question. Of this number,
only about 20% scored above 50% of total score.
SOLUTION 3
The candidate is expected to write a goodwill message. Since we cannot
predict what the candidate would write, we expect the following from the
candidate’s write up:
i) Heading for the goodwill message;
ii) Salutation/protocol/courtesy;
iii) Giving apology for the General Manager’s absence;
iv) Expression about the company’s happiness to host the conference;
v) Expectations of the conference;
vi) Conclusion.
Below is a model goodwill message expected of the candidate:
GOODWILL MESSAGE DELIVERED BY CHIEF Z.M AYEDERO, THE
GENERAL MANAGER OF MONEY WISE VENTURES, APAPA, LAGOS AT THE
20TH ANNUAL CONFERENCE OF THE ASSOCIATION OF ACCOUNTING
TECHNICIANS HOSTED AT MONEYWISE VENTURES, LAGOS, HELD ON
14TH AUGUST, 2010.
The Chairman of this occasion,
The Chairman of Association of Accounting Technicians,
Members of the Association of Accounting Technicians,
Invited Guests,
Gentlemen and Ladies of the Press,
Distinguished Ladies and Gentlemen.
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INSIGHT
On behalf of the General Manager, Moneywise ventures, I gladly welcome
you to the 20th Annual Conference of the Association of Accounting
Technicians holding today. I also use this medium to apologise for the
unavoidable absence of my General Manager at this occasion.
The theme of this conference “The Accounting Profession and the
Nigerian Economy” is very interesting and relevant to the ailing economy
of Nigeria. This conference will definitely afford the participants the
opportunity of brainstorming on how Nigeria could cope with the ailing
economy and how to improve the economic situation of the country.
Furthermore, I wish to assure you that your conference will be a success.
I also wish to inform, especially the participants, who have come from far
distances, that Lagos is a city of aquantic splendor. In this wise, there are
many interesting places that you can visit for relaxation after each day’s
deliberation. Please feel free to interact with the people.
I wish you a successful conference and accident free journeys back to
your various destinations.
NOTE:
Content:
Style:
EXAMINER’S COMMENT
This question tests Public Speaking. 3 out of every ten candidates
attempted this solution. Of this three, only one usually got 50% and
above. Candidates problems here include poor expression and inability to
properly articulate points.
SOLUTION 4
GRAMMATICAL NAME
FUNCTION
a
Noun phrase
Subject (of the sentence)
b
Adjectival clause
Qualifies the noun ‘man’
c
Noun phrase
Subject (of the sentence)
d
Prepositional phrase
Adverbial modifying ‘are’
E
Noun clause
Object of preposition ‘for’
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INSIGHT
EXAMINER’S COMMENT
Many candidates, about 75% attempted this question but only 25% of that
scored
50% and above.
Traditionally, candidates are attracted to grammar questions without
having the
competence to answer the questions.
GENERAL COMMENT
(Observations on the question paper and organization of marking
exercise).
There appears to be a fixation by some candidates on some topics which
candidates and their tutors expect to be tested, some of these were not
tested in this paper and this may be a contributory factor to students’
performance.
Poor mastery of writing skills, re-expression skills,
summarizing and unclear understanding of communication concepts were
candidates undoing.
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