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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- SEPTEMBER 2010

INSIGHT

This issue of INSIGHT is published principally, in response to a growing demand, as an aid to:

FOREWORD

(i)

Candidates preparing to write future examinations of the Institute of Chartered Accountants of Nigeria (ICAN) at an equivalent level; Unsuccessful candidates in the identification of those areas in which they lost marks and need to improve their knowledge and presentation; Lecturers and students interested in acquisition of knowledge in the relevant subjects contained therein; and The profession in improving pre-examination screening processes, and also the professional performance.

(ii)

(iii) (iv)

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 Institutes Examinations.

NOTE
Although these suggested solutions have been published under the Institutes 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 II- SEPTEMBER 2010

INSIGHT

CONTENTS

PAGE

PRINCIPLES AND PRACTICE OF FINANCIAL ACCOUNTING 1-22

GOVERNMENT ACCOUNTING 22-42

QUANTITATIVE ANALYSIS 69

43-

INFORMATION TECHNOLOGY

70-85

ATSWA PART II- SEPTEMBER 2010

INSIGHT
AT/102/PII.5 EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA ACCOUNTING TECHNICIANS SCHEME PART II EXAMINATION SEPTEMBER 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 MULTIPLE-CHOICE QUESTIONS (10 Marks)

1.

A. B. C. D. E. 2.

Which of the following will NOT affect the physical changes in the composition of a partnership?
Death of a Partner Admission of a new Partner Review of Partners capital contribution Retirement of a Partner When a partner becomes of unsound mind.

Which of the following statements is INCORRECT? A. B. C. D. E. Assets Capital = Liabilities Liabilities + Capital = Assets Liabilities + Assets = Capital Assets Liabilities = Capital Assets + Capital = Liabilities

3.

Which of the following best describes the meaning of Purchases? A. B. C. D. E. Items bought Goods bought on credit Goods bought for resale Goods paid for Goods returned by customer

4.

Which of the following accounting entries are correct?

ATSWA PART II- SEPTEMBER 2010

INSIGHT
S/ N i. ii. iii. iv. A. B. C. D. E. 5. A. B. C. D. E. 6. A. B. C. D. E. 7. Transaction Received Commission by cheque Paid rates by Cash Paid Motor expenses by cheque Received refund of Insurance by cheque Account to be Debited Bank Rates Motor expenses Insurance Account to be Credited Commission received Cash Bank Bank

(i) and (ii) (i), (ii) and (iii) (ii), (iii) and (iv) (i), (ii) and (iv) (i), (ii), (iii) and (iv) Sales Invoice Sales day book Daily sales Sales Ledger Return day book The amount spent to buy a non-current asset The salvage value of a non-current asset The part of the cost of non-current asset consumed during its period of use by the Company The amount of money spent replacing non-current assets. The part of the cost of asset reserved to be consumed in future period Sales 15,000 to A. Henry entered in P. Henrys account Cheque payment of 35,000 for motor expenses entered only in cash book Purchases of 4,400 from G. Thomas entered in both accounts as Wages account added up incorrectly, being totalled (i) and (iv) (i) and (iii) (ii) and (iii) (iii) and (iv) (ii) and (iv)

An alternative name for a Sales Journal is

Depreciation is known to be

Which of the following do not affect trial balance agreement? i. ii

iii 4,040 iv A. B. C. D. E. 8.

100 too much.

Given opening accounts receivable of 23,000, sales 96,000 and receipts from debtors 90,000, the closing accounts receivable total should be

ATSWA PART II- SEPTEMBER 2010

INSIGHT
A. B. C. D. E. 9.

17,000 29,000 163,000 37,000 127,000

A Company wishes to pay out all available profits as dividends. Net profit is N79,800.00. There are 60,000.00 8% preference shares of N1 each and 150,000 ordinary shares of N1 each. N15,000.00 is to be transferred to General Reserve. What is the percentage of ordinary dividends that is to be paid? A. B. C. D. E. 20% 40% 10% 60% 50%

10.

In a sales ledger control account, the bad debts written off should be shown in the accounts A. B. C. D. E. As a debt As a credit Both as a debit and as a credit As a balance carried down Should not be posted at all

PART II
1. 2. 3. 4. 5.

SHORT-ANSWER QUESTIONS (30 Marks)

In royalty account, what is subletting? State TWO methods of accounting for hire purchase transaction? List TWO methods of valuing livestocks. The basis of valuing stock of goods is................ The recognized accounting principles required for the preparation of final accounts of limited liability companies are governed by .. and In Garner V Murray (1904) the court ruled that subject to any agreement to the contrary, a deficiency was to be shared by the other solvent partners not in their profit and loss sharing ratios but in the ratio of their Shares issued to existing shareholders from reserves is called .. ..

6.

7.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. The amount for which an asset would be exchanged between knowledgeable willing parties in an arms length transaction is called.................................... Define Property, Plant and Equipment in relation to accounting standard IAS 16. An extra commission received by the consignee that guarantees that all the trade debts will be collected and should any prove to be bad, that he will bear the loss is called . What is the accounting entries for goods sent to branch? The consideration paid to a leasor for allowing another party to utilize a legal right owned by him is called.......................... The guaranteed amount payable where the royalty calculated on the basis of actual production fall short of the estimated level is .. A temporary arrangement undertaken by two or more persons with a view to making profit is called .. A share acquired with current dividend inclusive is referred to as share purchased .. List TWO methods of providing for depreciation. What are the accounting entries to record the purchase of a Fixed Asset? Compensating error is one of the errors still existing inspite of the agreement of the two sides of a trial balance. Briefly describe compensating errors. Okechuku Enterprises paid electricity bill up to 31 August 2007. No other bill was sent and no payment made up till 31 March 2008. (Assume accounting year run from Jan Dec) Monthly bill is L$2,500.00 Determine the electricity expenses up to 31 December 2007 The relationship between dividend received to the current market price is called . In partnership dissolution, the accounting entries for the proceeds on disposal of assets are............. What effect will increase in stock have on the Cash Flow of an organisation when preparing the Statement of Cash Flows? What is the net profit made by an enterprise with opening capital N105,320; Drawings N34,220; additional Capital during the year N75,000 and closing Capital N226,100?

20. 21. 22. 23.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
24. 25. 26. 27. 28. When preparing the Statement of Cash Flow, how do you treat decrease in Provision for Doubtful Debts? What is the selling price of goods that cost N120,000 and are sold at a margin of 331/3%? The necessary accounting entries for the amount expected on Application and Allotment of Shares are .. The excess of mandatory rent demanded by the Landlord over the amount payable on royalty worked is called In accounting for Containers, using Container Trading Account Method, the necessary accounting entries to record scrapped containers are . What is the effect on the net profit, if goods on sale or return are treated as sales? State TWO methods of apportioning interest on hire purchase in the books of the hirer.

29. 30.

SECTION B - Attempt any FOUR questions (60 Marks) QUESTION 1


Mr. Komolafe commenced a Nursery and Primary School business on 1 January 2009. He lacks good knowledge of accounting and was unable to keep proper accounting records except the following information he was able to record in the note book on the day to day running of the school. He paid for the following from the gratuity he received from his teaching job on 1 January 2009 to start the business. N Motor Vehicle (School bus) Stock of Stationery Rent (Jan-Dec 2009) Cash paid in opening Bank Account 555,000 225,000 200,000 20,000

He was able to give you the following information about his business for the year ended 31 December 2009.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(i) (ii) He collected N3,560,000.00 for school fees and was still owed N240,000 for unpaid school fees He drew cheques for the following:

Supplies of Magazines and Stationery Rent: school premises Rates Salaries and Wages Furniture and equipment Food
(iii) (iv) (v) (vi)

N 145,00 0 360,00 0 72,00 0 1,645,00 0 235,00 0 739,75 0

The rent paid for school premises of N360,000 in November 2009 is for the year 2010. Provision for depreciation on motor vehicles, furniture and equipment is to be made at 10% per annum on cost. Stocks on 31 December 2009 were valued at N40,000 He was owing the following amount on 31 December 2009: food N15,000, Magazines and Stationery N7,500

Required: (a) State THREE limitations of receipts and payments accounts in providing useful financial information for an organisation (3 Marks) (b) Prepare the Schools receipts and payments accounts. (6Marks) (c) Prepare the income and expenditure accounts for the year ended 31 December 2009. (6 Marks)

QUESTION 2
(i)

(Total 15 Marks)

What are the specific disclosure requirements of IAS 1? (5 Marks)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(ii) Why is the disclosure of accounting policies by quoted companies considered desirable? (5 Marks) (iii) Identify the circumstances not considered as a change of accounting policies, as provided under IAS (5 Marks) (Total 15 Marks)

QUESTION 3
Jacob and Tetteh are business partners, sharing profit in the ratio 2:1. The following balances were extracted from their records on 31 December 2009. DR CR

Partners Capital Jacob -Tetteh Partners Current Account-Jacob -Tetteh Purchases and Sales Returns Carriage Inwards Carriage Outwards Stock 1 January 2009 Wages and Salaries Insurance Advertising Rent and Rates Repairs Land at cost Plant and Machinery at cost Building at cost Motor Vehicle at cost Office Equipment at cost Furniture and Fitting at cost Investment Bad Debt Provision for Doubtful Debt Provision for Depreciation Building Provision for Depreciation - Plants and Machinery Provision for Depreciation - Motor Vehicle Provision for Depreciation -Furniture and Fittings Trade Receivable and Trade Creditors Drawings: -Jacob -Tetteh Discount Allowed & Received Loan: - Bank - Jacob Bank Balance Cash in Hand

30,000 20,000 800 400 63,000 1,500

32,000 1,000 300 200 3,000 5,000 600 800 500 400 16,000 10,000 14,000 8,000 12,000 7,000 22,000 400

18,000 450 400 500 2,000 1,050 155,60 0

1,000 2,000 1,500 1,000 800 20,000 600 8,000 5,000

ATSWA PART II- SEPTEMBER 2010

155,60 0

INSIGHT

The following notes are important: (i) Inventory at 31 December 2009 was valued at (ii)

4,000

Depreciation at 10% on cost to be provided for Building, Plant and Machinery while 15% on Net Book Value to be provided for Motor Vehicle and Furniture & Fittings. Interest on all loans is to be 10% per annum Accrued Expenses: Rent & Rates Insurance

(iii) (iv)

100 200

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(v) (vi) Prepaid Expenses: Advertising 400 Salaries 150 Provision for Doubtful Debt is to be reduced to 600.

You are required to prepare Trading, Profit and Loss Account (Income Statement) for the year ended 31 December 2009. (15 Marks)

QUESTION 4
(a) Value Added Statement and Income Statement are two important Statements in the Annual Reports and Accounts of a Public Limited Liability Company. State THREE advantages of Value Added Statement over the Income Statement. (6 Marks) The following is the Profit and Loss Accounts (Income Statement) of Bitec Limited for the year ended 31 December 2009 L$000 Turnover 8,000 Cost of Sales 5,619 2,381 Other income 128 2,509 Distribution & Administrative Expenses (1,325 ) Interest on Debentures (106) Profit before tax 1,078 Taxation 45 Profit After Tax 1,033 Dividend 126 907

(b)

Included in the Distribution and Administrative Expenses are: Salaries and WagesL$83,000 and Depreciation L$60,000 You are required to prepare the Value Added Statement of Bitec Limited for the year ended 31 December 2009. (9 Marks) (Total15Marks)

QUESTION 5
Asejere Multilinks Limited acquired the rights to remove soft sand deposits from the land owned by Morning Stars Limited of Gidimo Village. The rights were granted on the following terms:

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(a) (b) (c) The payment of a royalty of N625 per tonne of sharp sand extracted. A minimum payment of N6,250,000 per annum on 31 December every year Short-workings are to be recouped from the royalties payable in excess of the minimum rent in the two years following

During the first four years of the contract, the following quantities of sharp sand were extracted: Year 1 8,000 tonnes Year 2 9,500 tonnes Year 3 12,000 tonnes Year 4 16,000 tonnes You are required to show the ledger accounts needed to record the above transactions in the books of Asejere Multilinks Limited for each of the four years. (15 Marks)

QUESTION 6
Sabaka Prints Limited purchased a machine from Africanus Limited on hire purchase over a period of three years, paying Le 13,080 on 1 January 2006 and a further annual payment of Le 40,000 due on 31 December 2006, 2007 and 2008. The cash price of the machine was Le 120,000. The supplier charges interest at 6% per annum on outstanding balances. Depreciation at 20% per annum straight line is to be charged. Required: (a) Write up the following ledger accounts for the three years in the books of Sabaka Prints Limited: (i) Machinery Marks) (ii) Africanus Limited Marks) (iii) Provision for Depreciation Machinery Marks) (b) (2 (6 (3

Show the relevant extracts from the Statement of Financial Position (Balance Sheet) as at 31 December 2006 (4Marks) (Total 15 Marks)

SECTION A

ATSWA PART II- SEPTEMBER 2010

INSIGHT
MULTIPLE CHOICE QUESTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. C C and E C B B C B B B B

EXAMINERS COMMENT The Multiple choice questions carried 10 marks and is a compulsory question and was attempted by all candidates. 80% of the candidates performed well and scored above 50% of the marks.
PART II SHORT ANSWER QUESTION 1. 2. The lessee in turn leases part of the lease to another person. a) b) 3. a) b) 4. 5. 6. 7. Hire purchase interest account method Hire purchase interest suspense method Cost approach Appraised value

Lower of lost and net realizable value Generally accepted accounting principles (GAAP) statements of accounting standards (SAS). International Financial Reporting Standards (IFRS) Last agreed capital Scrip capitalisation issue or bonus share

ATSWA PART II- SEPTEMBER 2010

INSIGHT
8. 9. 10. 11. 12. 13. 14. 15. 16. Fair value Property, plant and equipment are tangible assets that have been acquired, held or constructed for use in the production or supply of goods and services. Del credere.

Debit, branch stock account, Credit: Goods sent to branch account


Royalty Minimum Rent Joint venture Cum Div

Straight line method, Reducing balance method, Sum of the year digit method, Depletion method, Amortisation method, Dr. Fixed Assets account, Cr. Bank or cash
Compensating error is an error whereby an amount is wrongly debited and a corresponding figure is wrongly credited in the ledger. L$30,000 Dividend yield Dr. Cash Book, Cr. Realisation Account Decreases the cash Net profit N80,000 Deduct from Net Profit

17. 18. 19. 20. 21. 22. 23. 24. 25.

Profit =Margin Cost % of Total Income x 120,000 = 331/3 x 120,000 = 60,000 662/2 Selling price = N120,000 +N60,000 =N180,000

26.

Dr. Application and Allotment Account

ATSWA PART II- SEPTEMBER 2010

INSIGHT
27. 28. 29. 30. Short workings

Dr. Container Trading Account Cr. Container Stock Account.


Net profit will be overstated.

Straight line method Actuarial method Sum-of the years digit method

EXAMINERS COMMENT Short answer questions with (30) thirty question was attempted by all candidates and 70% of the candidates scored less than 15 marks out of the 30marks allocated to the questions.
SOLUTION 1 Limitation of usefulness of Receipts and Payments: i) ii) iii) iv) The account does not indicate whether a profit or loss is made Capital income and expenditure is not treated separately from revenue income and expenditure No account is taken of accruals and prepayments It does not include notional charges as depreciation

KOMOLAFE RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009 Receipts N Payments Cash deposit 1 Jan 20,000 Salaries and wages 2009 Fees collected 3,560,000 Food Rent School premises Rates Supplies of magazines & stationery Furniture and equipment Balance at 31 December 2009 c/d 3,580,000

N 1,645,00 0 739,750 360,000 72,000 145,000 235,000 383,250 3,580,00 0

383,250

ATSWA PART II- SEPTEMBER 2010

INSIGHT
ii)INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER
2009 Salaries and wages Food (N739,750 +N15,000) Rent School Premises Rates Supplies magazine & stationery (N145,000 +7,500) Stock (N225,000 N40,000) Depreciation: Motor vehicle Furniture and equipment Surplus for the year N 1,645,00 0 754,750 200,000 72,000 152,500 185,000 55,500 23,500 711,750 3,800,00 0 3,800,000 Fees (N3,560,000+N240,000) N 3,800,000

EXAMINERS COMMENT The question which tests candidates knowledge of preparation of accounts from incomplete records was attempted by 70% of the candidates. They put up fair performance. Many of them displayed poor knowledge of ledger postings. SOLUTION 2 ai) Specific disclosure requirements of IAS I a An enterprise shall disclose the summary of significant accounting policies or other notes and judgments made in the preparation of the financial statements The amount of dividend proposed before the financial statements were authorized for issue but not recognized as distribution to shareholders during the period and the related amount per share. of any cumulative preference dividend not

C The amount recognized d

The domicile and legal form of the company, its country of incorporation and the address of its registered office and principal place of business A description of the nature of the companys operations and its principal activities

ATSWA PART II- SEPTEMBER 2010

INSIGHT
f The name of the parent and ultimate parent of the group

ii)

Disclosure of accounting policies by quoted companies is considered to be desirable because: In preparing financial statements there is a high degree of subjectivity involved. By disclosing accounting policies the reader of the financial statements is being provided with useful and relevant information. Therefore, investors have more information upon which to base their decisions of whether to buy, sell or hold a companys shares. In comparing different companies the potential investors may be able to adjust the profit figures to ensure comparability between the companies if the accounting policies are stated.

It may attempt to stop the use of creative accounting if the company is having to disclose its accounting policies for example if a company alters its method of valuing stock in order to increase its profit for the year. By informing the readers of the financial statements of a change in any of its accounting policies the company might be very reluctant to carry out this change.

iii) Example of circumstances not considered as change in accounting policies: A change in the rate at which depreciation is calculated arising from a re-appraisal of the useful or economic life of an asset.

The adoption of an accounting policy for a transaction either not previously dealt in or which was preciously not a significant part of the business of an enterprise:

ATSWA PART II- SEPTEMBER 2010

INSIGHT
The adoption of an accounting policy in recognition of events or transaction occurring for the first time.

EXAMINERS COMMENT
The question on IAS 1 was attempted by 30% of the candidates who displayed poor knowledge of the standard and scored very low marks. Many of the candidates misinterpreted the question by discussing Accounting Principles and Assumptions.

SOLUTION 3
JACOB AND TETTEH TRADING PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 2009

Sales Less Returns Opening stock Add purchases Carriage inward Less returns Net purchases Less closing stock Cost of goods sold Gross profit Decrease in provision for doubtful debt Discount received Bad debt Provision for depreciation Building Plant & machinery Furniture & Fittings Motor Vehicle Carriage outwards Wages & Salaries Insurance Advertising Rent and rates

63,000 1,000 62,000

3,000 32,000 300 32,300 1,500 30,800 33,800 4,000 29,800 32,200 400 600 33,200 400 1,400 1,000 930 1,050

4,380 200 4,850 800 400 600

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Repairs Discount allowed Balance c/d Balance c/d Bal b/d Bal b/d Interest on loan : Bank Tetteh Net Profit 400 500 33,200 12,530 33,200 12,530 800 500 1,300 13,830 19,370

EXAMINERS COMMENT The question which tests the candidates understanding of Trading Profit and Loss Account was attempted by 98% of the candidates, and goods marks were scored. About 20% of them could not understand the difference between returns outwards and returns inwards. In effect they were wrongly treated in the accounts prepared. SOLUTION 4 a) The advantages of Value Added Statement over the profit and Loss Account are: i) ii) It can be used as a better negotiation tool by employees, than the Profit and Loss Account It reveals the effort contributed by employees in the operation of an enterprise and how they were rewarded. Value Added Statement shows the percentage enjoyed by employees out of the wealth created. It demonstrates the efficiency of capital and labour employed in creating the additional wealth of the organization. Whereas the Profit and Loss Account assumes that the beneficial interests of an enterprise belong to the owner. It shows that a business enterprise exist for the benefit of the Society at large, whereas, the Profit and Loss Account assumes that the beneficial interests of an enterprise belong to the owner. It can easily be understood than the Profit and Loss Account.

iii)

iv)

v)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
BITEC LIMITED VALUE ADDED STATEMENT FOR THE YEAR ENDED 31 DECEMBER, 2009 L$000 % Turnover 8,000 Bought in 6,801 Goods & services Value Added 1,199 from operation Other Income 128 1,327 Applied as 100 follows: To Employees Salaries & 83 6.25 Wages To Government: Taxation 45 3.39 To Provider of Capital: Interest on 106 7.99 Debentures Dividend 126 9.50 To Provider for Maintenance & Growth:: Depreciation 60 4.52 Returned 907 68.35 Profit 1,327 100 Bought-in Goods and Services L$00 0 Cost of Sales Add: Distribution & Administrative L$000 5,619 1,325

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Exp 6,944 Less: Salaries & Wages Depreciation 83 60 143 6,801 EXAMINERS COMMENT The question which tests the candidates knowledge of Value Added Statement was attempted by 70% of the candidates and many of them scored average and above average marks. Some of the candidates failed to indicate that the figures are in millions.

SOLUTION 5
IN THE BOOKS OF ASEJERE MULTILINKS LTD MORNING STARS LTD A/C YEAR 1 N YEAR 1 Dec 31 Bank 6,250,000 Dec 31 Royalties payable Shortworkings 6,250,000 YEAR 2 YEAR 2 Dec 31 Bank 6,250,000 Dec 31 Royalties payable Shortworkings 6,250,000 YEAR 3 YEAR 3 Dec 31 Shortworkings 1,250,000 Dec 31 Royalties payable Bank 6,250,000 7,500,000 YEAR 4 YEAR 4 Dec 31 shortworkings 312,500 Dec 31 Royalties payable Bank 9,687,500 10,000,00 0 N 5,000,000 1,250,000 6,250,000 5,937,500 312,500 6,250,000 7,500,000 7,500,000 10,000,00 0 10,000,00 0

ROYALTIES PAYABLE A/C N YEAR 1 YEAR 1 31 Dec morning stars ltd 5,000,000 31 Dec Operating A/C

N 5,000,000

ATSWA PART II- SEPTEMBER 2010

INSIGHT
YEAR 2 31 Dec Morning stars YEAR 2 5,937,500 31 Dec operating A/c YEAR 3 7,500,000 Dec Operating A/c YEAR 4 10,000,00 31 Dec operating 0 A/c

5,937,500

YEAR 3 31 Dec Morning stars ltd YEAR 4 31 Dec Morning Stars Ltd

7,500,00

10,000,000

SHORT WORKINGS RECOVERABLE A/C YEAR 1 N YEAR 1 31 Dec Morning Stars Ltd 1,250,00 31 Dec Morning Stars Ltd 0 YEAR 2 31 Dec Morning Stars Ltd YEAR 2 1,250,00 31 Dec Balance c/d 0 312,500 1,562,50 0

N 1,250,00 0

1,562,50 0 1,562,50 0

YEAR 3 1 Jan Bal b/d

YEAR 3 1,562,50 31 Dec Morning Stars Ltd 0 Bal c/d 1,562,50 0 YEAR 4 312,500 31 Dec Morning Stars Ltd

1,250,00 312,500 1,562,50 0

YEAR 4 1 Jan Bal b/d

312,500

EXAMINERS COMMENT The question that tests candidates knowledge of Royalty accounts was attempted by 80% of the candidates and many of them scored high marks. Some of the candidates could not name the ledgers opened correctly and in effect lost good marks. SOLUTION 6 MACHINERY ACCOUNT Le Le

ATSWA PART II- SEPTEMBER 2010

INSIGHT
1/1/06 Africanus Ltd 120,000 31/12/06 Balance c/d 120,00 0

1/7/07 Balance b/d 1/1/08 Balance b/d

120,000 31/12/07 Balance c/d 120,000 31/12/08 balance c/d

120,00 0 120,00 0

1/1/09 Balance b/d

120,000

AFRICANUS (HP CREDITOR) ACCOUNT Le 1/1/06 Bank a/c- deposit 31/12/06 Bank a/c installment 31/12/06 Balance c/d 13,080 1/1/06 Machinery a/c 40,000 31/12/06 H/P interest a/c 73,335 126,41 5 31/12/07 Bank a/c installment 31/12/06 Balance c/d 40,000 1/1/07 Balance b/d 37,735 31/12/07 H/P interest a/c 77,735 Le 120,00 0 6,415

126,41 5 73,335 4,400 77,735

31/12/08 Bank a/cinstallment

40,000 1/1/08 Balance b/d 31/12/08 H/P interest a/c 40,000

37,735 2,265 40,000

Provision for Depreciation Account


Le 31/12/06 Balance c/d 24,000 31/12/06 P & L a/c

Le 24,000

ATSWA PART II- SEPTEMBER 2010

INSIGHT

31/12/07 Balance c/d

48,000 31/12/07 Balance b/d 31/12/07 P & L 48,000

24,000 24,000 48,000

31/12/08 Balance c/d

31/12/08 Balance b/d 31/12/08 P &L

48,000 24,000 72,000

72,000 1/1/09 Balance b/d

72,000

Sabaka Prints Limited Balance Sheet (extracts) as at 31 December 2006 Le Fixed assets Machinery Less accumulated depreciation 120,000 (24,000) 96,000 Le

Current liabilities H/P creditors (Africanus Ltd) 73,33 5


Le Le

Calculations of Interest
01/01/06 01/01/06 Cash price Deposit

120,000 (13,080) 106,920

31/12/06 31/12/06

Interest (6/100 N106,920) 1st installment

6,415 (40,000)

6,415

ATSWA PART II- SEPTEMBER 2010

INSIGHT
01/01/07 31/12/07 31/12/07 01/01/08 31/12/08 31/12/08 Outstanding balance Interest (6/100 73,335) 2nd installment Outstanding balance Interest (6/100 37,735) 3rd installment Total 73,335 4,400 (40,000) 37,735 2,265 (40,000) NIL 2,265 4,400

AT102/PII.6

EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA


ACCOUNTING TECHNICIANS SCHEME PART II EXAMINATION SEPTEMBER 2010 GOVERNMENT ACCOUNTING Time allowed: 3 hours Insert your Examination number in the space provided above

SECTION A PART I 1.

(Attempt all questions) (10 Marks)

MULTIPLE-CHOICE QUESTIONS

A budget may be defined as a financial and quantitative statement prepared for a definite period of time of the policy to be pursued. Among the underlisted which ONE is NOT a function of the annual budget? A. B. C. D. E. To To To To To assist policy making assist control authorise expenditure start impeachment process guide implementation of policy

2.

Government expenditure is mainly in TWO major titles, namely: A. B. Recurrent expenditure and overhead Capital and overview expenditure

ATSWA PART II- SEPTEMBER 2010

INSIGHT
C. D. E. 3. Recurrent and capital expenditure Personnel and overview expenditure Recurrent overhead and capital overhead

There are various sources of public debt available to the government. These sources can be brought under TWO groups. That is: A. B. C. D. E. Internal and Inland sources of debt Internal and External sources of debt External and personal sources from workers Churches and Mosques Voluntary donations from individuals and others

4.

At the Federal (Central) Government level, the administration of financial transaction is the responsibility of: A. B. C. D. E. The Senate President Minister of Finance The Federal Pay Officer The Auditor General The Accountant General

5.

In the process of releasing stores by the store keeper, TWO documents must be prepared before the stores can be released: A. B. C. D. E. Local Purchase Order and Stores Delivery Note (SDN) Store Request Form (SRF) and Stores Issues Voucher (SIV) Store Transfer requisition and Stores Delivery Note (SDN) Bin Card and Store Transfer Requisition Unallocated stores and Stores Bin Card

6.

Stores are classified as: A. B. C. D. E. Used and useable stores Prepared and unprepared stores Allocated and unallocated stores Incoming and outgoing stores Available and unavailable

7.

Contract payment voucher must show minimum set of information. These must include: i. ii. iii. A. B. Vote of Charge Contract Number Contract Account i only ii only ATSWA PART II- SEPTEMBER 2010

INSIGHT
C. D. E. 8. i, ii and iii ii and iii i and iii

Development Fund can be regarded as funds meant to carry out: A. Recurrent Expenditure B. Overhead Expenditure C. Personnel Expenditure D. Capital Projects E. Capital Consumption The total debt owed by a country is referred to as: A. B. C. D. E. Current Debt Total Debt Public Debt Funded Loans Other Debt

9.

10.

Which of the following best shows steps to be taken when a payment voucher is misplaced or cannot be found? i. ii. iii. A. B. C. D. E. Carry out prompt investigation Ascertain whether payment has been made Ascertain whether cash drawn is still on hand and whether fraud has occurred i only i, ii and iii ii only iii only ii and iii only SHORT-ANSWER QUESTIONS (30 MARKS)

PART II 1. 2. 3. 4.

State any TWO investment appraisal methods which do NOT apply the time- value of money in their computation. What is creditor payment period? Why are Government corporations and Boards NOT governed by the provisions of the companies Act of your country? TWO items of current liability in the balance sheet of state owned enterprises (SOEs) are: ............................. and.........................

ATSWA PART II- SEPTEMBER 2010

INSIGHT
5. 6. The body that is in charge of revenue allocation in your country is called............................... The discretional financial assistance to supplement statutory allocation being given to the state and/or local government by the Federal/Central Government is known as........................... Briefly define the term Next of Kin. The items of revenue called.......................... received to finance projects are

7. 8. 9. 10.

The cardinal objectives of .............................. is to ensure that funds are NOT mismanaged or misappropriated. State the name of expenditure of the government on goods and services that are consumed within a short period and recur frequently or on a yearly basis. A document used for transferring receipt books and other security documents from one station (office) to another is called................................ A pension plan where employees and employers make contributions to a pension fund for the benefit of employees is called............................ Give the name of the fund whose assets are held by the Government as trustee for application to purposes stated in the trust deed. To ensure effective operation of a bank account, there is the need to carry out periodic............................ State TWO ways in which a spoilt cheque is treated. What is the name of the document prepared by the cash officer to detail the closing cash balance in different denominations? Give the name of the imprest that is established for a special purpose and terminates immediately the purpose for which it was created ceases to exist. Specify the name of the function performed day in day out, with the procedures required being always the same.

11.

12. 13. 14. 15. 16. 17.

18.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
19. 20. 21. 22. Salary advance of TWO months granted to an officer will be repaid in how many monthly instalments? What is the name of the documentation of procedures and policy to be followed in Government account department? A register maintained to record the names of all employees within a government department is known as.......................... A memo issued by the variation section to the administration department for the purpose of informing employees of any change in remuneration is called........................ State the name of the committee or commission that examines all cases of audit alarms raised and brought before it. A fund that is restricted called....................... to a specific anticipated use is

23. 24. 25. 26.

The amount of money on contract that is set aside to correct defects that may be discovered after job is delivered is called..................... A fund established to provide service to other funds or financing goods and services provided by one governmental agency to another is called................................. The share of a State or Local Government from the Federation Account (Central Government Revenue) is called.......................................................... The law made by a called............................................... Local Government is

27.

28. 29. 30.

What is the official name of the external auditor to the Local/District Government? When it is impracticable to obtain receipt for petty cash disbursement, a certificate to that effect must be given on the face of the voucher signed by the payee; such a certificate is called............................

SECTION B Attempt any Four Questions (60 Marks) QUESTION 1

ATSWA PART II- SEPTEMBER 2010

INSIGHT
On 20 June 2009, the cash book of Owanbe Limited showed a debit balance of N350,000 for its current account at the Bank. On checking the cash book with the Bank Statement, you find the following:

(i) (ii) (iii)

Cheque drawn, amounting to N50,000 had been entered in the cash book but had not been presented to the Bank. Cheques received amounting to N45,000 had been entered in the cash book but had not been credited by the bank. On instruction from account holder the Bank had transferred interest of N600 from its deposit account to its current account recording the transfer on 5 July 2009. This amount had, however, been credited in the cash book on 30 June 2009. Bank charges of N350 shown in bank statement had not been entered in thecash book. The payment side of the cash book had been undercast by N1,000.00 Dividend received amounting to N2,000 had been paid direct to the bank and not entered in the cash book. A cheque of N500 drawn on deposit account had been incorrectly shown in the cash book as drawn on current account. A cheque issued to Bola for N250 was replaced when out of date. It was entered again in the cash book, no other entry being made. Both cheque were included in the total unpresented cheques shown above.

(iv) (v) (vi) (vii) (vii)

Required: (a) Prepare a bank reconciliation statement for the month ended 30 June 2009. (10 Marks) (b) State FOUR reasons of maintaining a vote book in the ministry. (2 Marks) (c) List SIX contents of Bank Reconciliation Statement. Marks) (Total 15 Marks) QUESTION 2 ATSWA PART II- SEPTEMBER 2010 (3

INSIGHT
Mr Koffi, a revenue collector in the Magistrate Court of Takoradi Area Council made a submission of his accounts for the month ended 30 September 2009.
Date Payee Details Amount 000 1/9/2007 3/9/2007 6/9/2007 10/9/200 7 15/9/200 7 22/9/200 7 25/9/200 7 30/9/200 7 Hajia Yusuf Ale John Ebeley Mr. Ebedi Pele Mr. Osagbeifo Nana Mr. Joy Akufo Emmanuel Consult Mrs Mana Ekpo Anan Kwekwu Age Declaration Court Fine Court Fine Court Document Court Document Court Fine Age Declaration Court Document Proceeding Proceeding Proceeding 170 120,000 95,000 125,000 250,000 300,000 250 250,000

The head of all revenue realised in this court is charged to 2000 series with the following sub-heads:

Age Declaration 101 Court Fine 305 Court Proceeding Document 015 The revenue collector paid his total takings to the sub-accounting officer in the Treasury Cash Office on 30 September 2009 and was issued treasury receipt number A200401. Whereas, receipt book 6A in use has serial number K400201 to K4OO25O, the Treasury Cash Officer assumed he issued receipt number K4OO201 to Hajia Yusuf Ale. Required:
Write (15 Marks) up the revenue collectors cashbook.

QUESTION 3

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Orile Igben Local Government Council requests that you prepare its year 2010 budget. The following figures were made available in respect of the personnel cost of the works department for the year 2009. Office No in Post 1 2 5 8 8 2 13 18 8 15 22 30 12 18 Gra de Lev el 16 15 12 10 9 8 13 10 09 08 07 05 04 03 03 Salary

City Engineer Deputy Engineer Principal Engineer Senior Engineer Engineer 1 Engineer II Chief Technical Officer Principal Technical Officer Senior Technical Officer Higher Technical Officer Technical Officer Artisan Grade I Artisan Grade II Drivers Cleaners Additional Information: (i) (ii)

N 24,00 0 20,00 0 15,00 0 12,00 0 10,00 0 9,000 17,00 0 12,00 0 10,00 0 9,000 7,200 4,800 3,600 2,400 2,400

X X X X X X X X X X X X X X X

N 2,40 0 1,80 0 1,20 0 950 860 720 1,50 0 950 860 720 600 360 210 210 210

The Deputy City Engineer is due for promotion. 1 Senior Engineer and 12 Artisans Grade I are to be appointed.

The officers in the salary ranges (steps) are stated below:


Salary Scale

1 1

2 1

3 1 -

4 -

5 -

No of Staff: Deputy Engineer Principal Engineer

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Senior Engineer Engineer 1 Engineer II Chief Technical Officer Principal Technical Officer Senior Technical Officer Higher Technical Officer Technical Officer Artisan Grade I Artisan Grade II Drivers Cleaners 2 4 1 5 4 6 5 10 5 6 3 2 1 3 10 2 6 2 10 6 6 2 3 2 5 3 2 5 6 3 3 1 2 10 10 3 -

(iii) Except those on promotion, each member of staff would move to the next incremental step. (iv) Staff allowance is 20% of salary.

Required: Prepare the summary of the personnel cost budget for the works department for the year 2010. Ignore comparative figures for 2009. (15 Marks)

QUESTION 4
(a) (b) What is store in Government Accounting? Marks) (3

The following information relates to receipts and use of stencils in the central store of Yooman State University in the month of September 2009.
Date

Particular s Balance b/f Issues Issues Issues Purchases

Supplier/Dept Health Science Economics Geography CSS Bookshop

SIV/S RV No

Qty 580

Pric e L$

01/09/0 9 03/09/0 9 03/09/0 9 05/09/0 9 06/09/0

0471 0473 0485 2778

58 160 46 400 28

ATSWA PART II- SEPTEMBER 2010

INSIGHT
9 10/09/0 9 13/09/0 9 16/09/0 9 18/09/0 9 21/09/0 9 29/09/0 9 30/09/0 9
Required:

Issues Issues Purchases Issues Issues Issues Purchases

Accounting Bio-Chemistry Yooman Bookshop Economics Pharmacy History CSS Bookshop

0493 0497 2849 0516 0518 0519 05202

80 120 400 120 160 80 600 35 30

Enter the above information in the Bin Card with appropriate headings and rulings. (12 Marks) (Total 15 Marks)

QUESTION 5

BATA LOCAL GOVERNMENT has the following information for the year ended 31 December 2009: (i) (ii) General Reserve Balance on 31 December 2009 Asset and Liabilities as at 31 December 2009: Fixed Deposit Investments in shares Advances Deposits Cash N 2,081,000 14,000,00 0 800,000 1,023,000 1,477,400 1,431,800

ATSWA PART II- SEPTEMBER 2010

INSIGHT

(iii) Balance from Revenue and Expenditure Abstract for the year: HEA PARTICULARS D 1001 Taxes and Rates 1002 1003 2004 2006 2002 2007 1005 1007 2009 2011 1008 Local Licences, Fees and Fines Commercial Undertakings Finance and Supply Department Education Secretary to the Local Government Health and Social Welfare Interest and Dividends Miscellaneous Works and Housing Traditional Offices Statutory Allocation AMOUNT N 25,021,00 0 8,675,000 5,029,400 9,484,600 419,000 3,142,200 7,557,000 403,200 1,349,800 5,601,200 211,600 33,112,00 0 565,000 32,324,00 0 589,400

2012 Miscellaneous 4000 Capital Expenditure 2010 Commerce and Industry (iv) The codification in use is as follows: Revenue begins with 1 Expenditure begins with 2 Capital Expenditure begins with 4

You are required to prepare:

(a)

The statement of revenue and expenditure for the year ended 31 December 2009. (10 Marks)

(b) The statement of assets and liabilities as at 31 December 2009. (5Marks) (Total 15 Marks)

QUESTION 6
MAIDUBI District Government has huge arrears of tenement rates for period 2006 to 2007 and decided to set up a Rates Arrears Section for quick collection. Daiti Ruwankudi was deployed to the Section as Senior Cashier in charge. Following incessant rumours and the flamboyant lifestyle of Daiti

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Ruwankudi, the District Treasurer is of the opinion that the Senior Cashier has defrauded the District of a substantial amount of daily takings. The following information relates to the year ended 31 December 2007: (i) any Rates debtors are surcharged 20% interest on any amount payable in year. (ii) Payment of tenement rate is due on the 1 January every year. Any amount owing after this date will suffer the surcharge once. (iii) Actual figures relating to 2007 are: Arrears of 2006 brought into 2007 Rates owing for 2007 Arrears of 2007 carried forward to 2008 (iv) 256,000,000 1,670,000,0 00 186,000,000

A total of 1,864,000 was banked by Daiti Ruwankudi after making the following payments authorised by the Council resolutions. HEAD PARTICULARS Treasury Imprest Account 2004/03 2004/05 2001/02 2005/07 2002/02 2005/11 2001/01 Printing of Treasury booklets Councillors allowances Culverts and drains Rural Women Programmes Library Magazine Mayors and Chiefs AMOUNT 50,000,000 20,000,000 30,000,000 16,000,000 10,000,000 8,000,000 10,000,000

Required: Prepare a statement showing the extent of defalcation by Daiti Ruwankudi. (Total 15 Marks) SECTION A PART I MULTIPLE CHOICE QUESTIONS 1. 2. D C

ATSWA PART II- SEPTEMBER 2010

INSIGHT
3. 4. 5. 6. 7. 8. 9. 10. B E B C C D C B

EXAMINERS COMMENT The Multiple choice questions were well structured and performance of the candidates was generally impressive. SECTION B SHORT ANSWER QUESTIONS 1. 2. Payback period, Accounting rate of return (ARR) Cost benefit analysis (CBA) Credit payment period is the number of days that it takes creditor to be paid. It is computed as follows: Trade creditors balance at year end Credit purchases Government corporations have their enabling Act that create and govern them. Suppliers /creditors, overdraft, taxation, short term loan (any two) Revenue mobilization/ allocation and Fiscal commission (RMAFC) Specific grant/project grants Next of kin means the person whose name was furnished by the deceased officer in his record of service kept in the record office of the establishment in writing any time before his death. Capital receipts

3. 4. 5. 6. 7.

8.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
9. 10. 11. 12. 13. 14. 15. Vote book (-FR 502) Recurrent Expenditure Receipt Book Issue Notes (RBN) Contributory Pension/Super Annuity Fund/Provident fund Trust Funds Bank reconciliation i) ii) iii) iv) 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 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

Cash specification or cash analysis Special imprest Routine function 6 monthly installment Financial Regulation Group Register or Nominal roll Variation Advice Audit alarm committee /Ombudsman/General Auditing Encumbered fund /committed fund/ restricted fund Retention fee Intra service Fund Statutory Allocation. Bye, Law/ordinance Auditor General for Local Government

ATSWA PART II- SEPTEMBER 2010

INSIGHT
30. Honour Certificate.

EXAMINERS COMMENT Question 1-20 under the Short Answers Question were well understood. Performance was equally impressive with the exception of question II where by all the candidates displayed 100% ignorance. Short Answers Question 2130 was not understood by the candidates as more than 70% scored 3/10 of marks obtainable. SOLUTION 1 OWAMBE LIMITED BANK RECONCILIATION STATIONERY AS AT 30TH JUNE 2009
N Balance as per adjusted cash book ADD: Unpresented cheques

N 351,750 50,250 402,000

Less: Uncredited Cash Balance per Bank Statement ADJUSTED CASH BOOK FOR PERIOD END JUNE 30 2009 N Balance as per cash book Dividend Cheque on Deposit Cheque Reissued Bola Bank Interest Transfer 350,000 Bank charges 2,000 Cheque Re issue to Bola 500 Under Cast 250 600 Balance c/d 353,350 Balance b/d 351,750

(45,000) 357,000

N 350 250 1,000

351,750 353,350

b) i)

A departmental vote and expenditure allocation book is maintained by Ministry because of the following reasons: To Curb excess expenditure in the vote

ATSWA PART II- SEPTEMBER 2010

INSIGHT
ii) iii)
iv)

Ascertain the balance available at the time at a glance Ensure proper accountability Provide accurate records for future reference and auditing purpose 6 contents of Bank reconciliation (i) (ii) (iii) (iv) (v) (vi) Balance as per cash book Statement of accounts Uncredited cheque Undebited cheque Returned cheque Bank order

(c)

EXAMINERS COMMENT Question 1(a) deals with Bank Reconciliation Statement. About 98% of them attempted the question while less than 40% score above 50%. Students lack understanding of Preparation of Bank Reconciliation Statement. Candidates performed well in question 1b & c- Reasons for maintaining vote Book and contents of Bank Reconciliation Statement.
SOLUTION 2
TAKORADI AREA COUNCIL REVENUE COLLECTORS CASHBOOK Date Revenue receipt No K400201 K400202 K400203 K400-204 Classification head-SubHead 2001-101 2000-305 2000-305 2000-015 From whom Receivable Hajia Yusuf A (age declaration) John Holt Court fine Ebedi Pele Court fine Osagbeifo Nana Court proceeding document Joy Akufo - Court Proceeding document Emmanuel Consult - Court fine Amount

000
170 120,000 95,000 125,000

Dat e

Treasury Receipt

Amount

000

1/9/2007 3/9/2007 6/9/2007 10/9/2007

15/9/2007

K400-205

2000-015

250,000

22/9/2007

K400-206

2000-305

300,000

ATSWA PART II- SEPTEMBER 2010

INSIGHT
25/9/2007 30/9/200 7 K400-207 K400-208 2000-101 2000015 Mana Ekpo - Age Declaration Anan Kwekwu-Court Proceeding document 250 250,000 30/9/200 A200401 1,140,420 7 1,140,420 1,140,420

EXAMINERS COMMENT Question 1(a) deals with Bank Reconciliation Statement. About 98% of them attempted the question while less than 40% score above 50%. Students lack understanding of Preparation of Bank Reconciliation Statement. Candidates performed well in question 1b & c- Reasons for maintaining vote Book and contents of Bank Reconciliation Statement. SOLUTION 3
ORILE IGBON LOCAL GOVERNMENT COUNCIL SUMMARY OF THE PERSONNEL COST BUDGET FOR 2007 OFFICE NO OF POST GRADE LEVEL SALARY N City Engineer Principal Engineer Senior Engineer Engineer I Engineer II Chief Technical Officer Principal Technical Officer Senior Technical officer Higher Technical Officer Technical Officer Artison Grade I Artisan Grade II Drivers 1 2 6 8 8 2 13 18 8 15 34 30 12 16 12 10 09 08 13 10 09 08 07 05 04 03 24,000 33,600 89,100 94,620 82,080 38,500 180,700 211,820 79,200 126,600 182,640 124,800 35,100

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Cleaners 18 03 51,390 1,354,150 Staff Allowance N1,354,150 20 100 270,830

1,624,980

EXAMINERS COMMENT Question 3 deals with Personnel Cost Budget. Over 60% of candidates did not attempt this question. While less than 30% of those that attempted it scored above 50%. Many of the candidates shown ignorance of the question, hence they scored zero (o). This is a potential future topic for reexamination. SOLUTION 4 a) In government accounting stores include all movable property purchased from the public funds or otherwise acquired by the Government. YOOMAN STATE UNIVERSITY CENTRAL STORE BIN CARD FOR THE MONTH OF SEPTEMBER 2009
PRIC E SI, SRV & invoices Receipt QTY Issue QTY

b)
DATE

PARTICULARS

01/09/09 03/09/09 03/09/09 05/09/09 06/09/09 10/09/09 13/09/09 16/09/09 18/09/09

Balance b/F Issue to Health Science Issue to Economic Issue to Geography Purchase from 28 CCS Bookshop Issue to Accounting Issue to BioChemistry Purchase from 30 Yooman Bookshop Issue to Economics 0471 0473 0485 2778 0493 0497 2849 0516 400 120 400 80 120 58 160 46

Bala nce QTY 5 80 522 362 316 716 636 516 916 796

ATSWA PART II- SEPTEMBER 2010

INSIGHT
21/09/09 29/09/09 30/09/09 Issue to Pharmacy Issue to History Purchase from CSS Bookshop 35 0518 0519 05202 600 160 80 636 556 1156

EXAMINERS COMMENT Question 4 deals with store and store accounting, above 95% of the candidates attempted the question. Part a that deals with definition of terms was poorly attempted by more than 50% of the Candidates. Part b was well attempted as 85% of the candidates scored above 75% of the marks allocated.

SOLUTION 5 BATA LOCAL GOVERNMENT GENERAL REVENUE AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2009
N HEAD 1001 1002 1003 1005 1007 1008 Less: 2002 INCOME PARTICULARS Taxes and Rates Local Licensees, fees and fines Commercial undertaking Interest and dividends Miscellaneous Statutory allocation 3,142,200 9,484,600 419,000 7,557,000 5,601,200 589,400 211,600 565,000 32,324,000

25,021,000 8,675,000 5,029,400 403,200 1,349,800 33,112,000 73,590,400

Expenditure Particulars Secretary to the local government 2004 Finance and supply dept 2006 Education 2007 Health and social welfare 2009 Works and housing 2010 Commerce and industry 2011 Traditional Offices 2012 Miscellaneous 4000 Capital Expenditure Excess of income over expenditure for the year Add: Unappropriated revenue brought forward

59,894,000 13,696,400 2,081,000

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Unappropriate revenue carried forward 15,77,400

BATA LOCAL GOVERNMENT STATEMENT OF ASSETS & LIABILITIES AS AT 31ST DECEMBER 2009 ASSETS EMPLOYED N Cash on hand and at bank 1,431,800 Fixed deposits 14,000,000 Investment in Shares 800,000 Advances 1,023,000 17,254,800 FINANCED BY: Unappropriated profit 15,777,400 Deposit 1,477,400 17,254,800 SOLUTION 6 MAIDUBI DISTRICT GOVERNMENT COMPUTATION OF AMOUNT DEFALCATED BY DAITI RUWANKUDI
L$000 Balance brought forward Add: Rates owing for 2007 Less: Balance c/f to 2008 Add: 20% interest surcharge on amount collected. 20/100 N1,740,000,000 Total Collected: Less: Authorised Disbursement and bank deposit: Takings banked by Daiti Ruwankudi 2004/03/ Treasury imprest account 2004/05 Printing of Treasury booklets 2001/02 Councilors allowances 2005/07 Culverts and drains 2002/02 Rural women programmes 2005/11 Library Magazine 2001/01 Obas and Chiefs Amount defalcated L$,000 256,000 1,670,000 1,926,000 186,000 1,740,000 348,000 2,088,000 1,864,000 50,000 20,000 30,000 16,000 10,000 8,000 10,000

Total collections- 2007

2,008,000 80,000

EXAMINERS COMMENT

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Question 6 deals with Revenue accounting with emphasis on defalcation. It was poorly attempted as less than 10% of candidates attempted the question. Only about 5% of them did averagely well. This is a potential future topic for re-examination.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
AT/102/PII.7 EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA ACCOUNTING TECHNICIANS SCHEME PART II EXAMINATION SEPTEMBER 2010 QUANTITATIVE ANALYSIS
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)

In testing the equality of a given univariate data, the most appropriate test statistic is: A. B. C. D. E. t - test mean-value test Sample test Z test Normal test is equal to

2.

The integral, A. B. C. D. E. (d2 c2) k (d + c) (d c) d2 c2 k d2 c2 d2 + c2 + k

3.

A component which is ordered in batches of 120 units has annual demand of 200. If the carrying cost is estimated to be N2 per year, the optimal ordering cost in naira is: A. B. C. D. E. N115.20 N72.00 N144.00 N333.33 N288.00

4.

A representation of data in which every observed value is paired with the number of times each observed value occurred is: ATSWA PART II- SEPTEMBER 2010

INSIGHT
A. B. C. D. E. 5. Cumulative frequency distribution Sampling distribution Frequency distribution Data clarification Frequency

The graph of time series values against different time points is known as A. B. C. D. E. Scatter plot Time plot Line plot Graph plot Simple plot

6. What type of error is committed when a false null hypothesis is accepted? A. B. C. D. E. 7. Error of commission Error of omission Type I error Type II error Systematic error

In a transportation problem, when the number of allocations is less than the number of rows + columns 1,........................... results A. B. C. D. E. Degeneracy Balance Unbalance Feasibility Infeasibility

8.

If A and B are two events with P(A) = 0.30, P(B) = 0.78 and P(A B) = 0.16, find P(A B). A. B. C. D. E. The that 0.84 0.92 0.48 0.23 0.38 use of a dummy ......................................

9.

activity

always

ensures

ATSWA PART II- SEPTEMBER 2010

INSIGHT
A. B. C. D. nodes E. 10. Not much resources are used Two different activities do not have the same starting and finishing nodes Too much time is not used for completing the project Two different activities have the same starting and finishing The time used for critical activity is a minimum.

The derivative of u(x)/v(x) is A. dx V(x) V(x) du(x) + U(x) dv(x) dx 2

B.

V(x) du(x) - U(x) dv(x) dx dx V(x)2 C. dx V(x)2 D. V(x) du(x) + U(x) dv(x) dx dx U(x) 2 E. dx u(x) dV(x) + V(x) du(x) dx U(x) du(x) - V(x) dv(x) dx

PART II SHORT- ANSWER QUESTIONS (30 Marks) 1. The number of sample points in a sample space when a coin and a die are tossed together is...................... 2. The probability that an assessor skips a meal is 0.6. If he is paid 1,200 for each meal skipped and he can skip only a meal per day during an assignment that spans five days, what is his expected maximum earnings from skipping meals? If A is a square matrix of order 2 and A -1 is the inverse of A then AA -1 is ................

3.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
4. 5. 6. 7. 8. 9. If bulk discounts are allowed in inventory control, the highest discount may not necessarily be the best........................ If the elements below the leading diagonal of a matrix are all zeros, the matrix is called.............. Matrix. Errors in counting can be referred to as .................................. errors. A project is not desirable if the net present value is......................... The two major assumptions made in linear programming are........ and The present value of receiving L$2,000 in one years time, L$3,000 in two years time and L$4,000 in three years time, when the discount rate is 10%, is............... Close-ended and open-ended questions are the two types of questions normally asked in a ................................. construction. A function which has a constant base and a variable power is said to be a(n) ..................... function. Statistical data or.................... can be classified as either ........................

10. 11. 12. 13.

Cumulative frequency curve is plotted with ......................... along the vertical axis against the ........................... of each class along the horizontal axis. The two ways of mathematically modeling are ......................... and............................ a time series

14. 15. 16.

The geometric mean of n-observations is the ............. of the ............... of the n-observations. In using the Cramers Rule to solve the equations: 2x1 3x2 = 4 x 1 + x2 = 3 is obtained as ............................. Approximation one needs Method to to first solve a compute

17.

When using the Vogels transportation problem, the ..............................

ATSWA PART II- SEPTEMBER 2010

INSIGHT
18. 19. 20. 21. The unknowns (xi) in a Linear Programming problem are known as the .................... variables. The difference between sample statistic and the population parameter being estimated is known as ..................................... error. Given the supply function P = (q + 2) 2 , the producers surplus at p o = 60 and qo = 3 is ............................... The type of inventory model where it is assumed that certainty of the rate of demand is constant or approximately constant is................................. In testing for equality of a single population mean when the sample size is less than 30,.......................... statistic is used. The total producers gain is usually referred to as................................. For sample observations (xi) obtained from a population,
( x i ) 2 n

22. 23. 24.

S2 = n 1 is an unbiased ...................... of the population variance. 25. 26. 27. 28. 29. 30. The rate of change of the dependent variable with respect to independent variance is called....................... If the SECOND derivative of profit function with respect to the quantity is less than zero, then the resulting profit is.................................. The primary objective of Network Analysis is to complete the project within the ........................ time. When profit is maximum, the marginal cost ..................... marginal revenue. A series of activities in a Network which leads back to the same event is called a......................... The TWO main methods of drawing a network diagram are ............... and...............................

SECTION B Attempt Any Four Questions out of which at Least one Must Come From Each Sub-Section (60 Marks)

ATSWA PART II- SEPTEMBER 2010

INSIGHT

STATISTICS QUESTION 1 The figure below shows the performance of two sets of students in accounting examinations in 2004 and 2005. Number of students with indicated grades 2004 2005 15 10 35 30 45 22 50 15 35 25 20 18

GRADE A B C D E F

Required: Draw (i)A simple bar chart for 2004 figures Marks) (ii) (iii) (iv) bar chart of 2004 and 2005 figures (Total 15 Marks) QUESTION 2 The weights of 30 students who came tops in a professional examination are summarised in the table below: A component bar chart of the grades recorded for the two years (4 Marks) A percentage component bar chart of 2004 and 2005 figures (4 Marks) A multiple (7Marks) (3

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Weights in Kilogram s 62 - 65 66 - 69 70 - 73 74 - 77 78 - 81 82 - 85 86 89 Frequency

1 3 6 9 7 3 1

Required: (a) Draw the histogram and use it to estimate the mode. Marks) (b) Calculate: (i) (ii) The mean and standard deviation. Marks) Coefficient of variation. Mark) (Total 15 Marks) (9 (1 (5

QUESTION 3 The table below shows the summary of the money withdrawn during the week by the customers of Cash Care Bank Plc.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
Amount withdra wn (N000) 21 - 30 31 - 40 41 - 50 51 - 60 61 - 70 71 - 80 81 - 90 Number of Customers 78 62 95 145 101 80 59

Required: (a) Calculate the standard deviation of all withdrawals. Marks)

(10

(b) Given that the mean withdrawal is N55,500.00 and the median withdrawal is N55,700.00, calculate an appropriate coefficient of sleekness and interpreter the result (5 Marks) (Total 15 Marks) BUSINESS MATHEMATICS QUESTION 4 The weekly cost and revenue functions in thousands of cedis are respectively: C(q) = 90 + 28q + 0.75q2 R(q) = 100q + q2 Where q, in hundreds, is the number of units produced and sold. Required: ATSWA PART II- SEPTEMBER 2010

INSIGHT
(a) (b) Determine the break-even quantities. (5 Marks) (i) Derive marginal profit and find the quantity of items that will maximise profit. (7 Marks) (ii) Calculate the maximum profit. (3 Marks) (Total 15 Marks)

QUESTION 5 A designer outfit makes three types of dresses: trousers (T), Shirts (S) and Blouses (B) which have to be processed by three machines P, Q and R. The relevant requirements and availabilities per week are as detailed below: Types of dress T S B Available hours Machines required for each dress P Q R 3 2 1 2 1 1 1 1 3 1080 730 890

Required: (a) Assuming that all machine hours are utilised, appropriate system of linear equations for the outfit. (2 Marks) Write the equation in (a) in matrix form: AX = B (2 Marks) Find the (i) determinant of A (4 Marks) for A (2 Marks) (iii) (iv) transpose of C inverse of A (ii)matrix of cofactors (C) (1 Mark) (1 Mark) formulate the

(b) (c)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(d) Use your results in (b) and (c) to determine the number of each type of dress to be made each week. (3 Marks) (Total 15 Marks) OPERATIONS RESEARCH QUESTION 6 The table below shows the activities involved in the construction of students library. Activity A B C D E F G H I J K L Proceedi ng Activity A A A C C C B, D F, I G, J E, H Activity Durations (weeks) 5 7 6 8 2 6 4 2 6 2 3 4

You are required to: (a) Construct the activity-on-arrow Network diagram for the project. (6 Marks)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(b) (c) Determine all possible paths and their durations from the start event to finish event. (6 Marks) i. Identify the critical path and its duration. (2 Marks) ii. State the shortest time required to complete the project. (1 Mark) (Total 15 Marks) QUESTION 7 Madam Lulu is a small scale business woman who has just started a mini catering outfit in Volta. She has decided to produce two types of birthday cakes, namely chocolate cakes (C) and fruit cakes (F). The two types of cakes go through two main processes i.e. baking and cooling and decorating. In order to produce a chocolate cake, she needs 2 hours for baking and 6 hours for cooling and decorating. To produce a fruit cake, she needs 4 hours of baking but only 2 hours of cooling and decorating. She has available 400 man hours of baking and 600 man hours of cooling and decorating. From market research, she calculates that she will make a profit 2,000 on each chocolate cake and 3,000 on each fruit cake. Required: (a) (b) Formulate the problem as a Linear Program. (5 Marks)

Use the graphical approach to determine how many chocolate and fruit cakes Madam Lulu should produce to maximise profit. (9 Marks) (Total 15 Marks) (Total 15 Marks)
PART I 1. 2. 3. 4. 5. 6. D B B C B D MULTIPLE-CHOICE QUESTIONS

ATSWA PART II- SEPTEMBER 2010

INSIGHT
7. 8. 9. 10. 2. = x2 + k 2
d

A B B A

= d 2+ k 2

c2 + k 2 = d2 - C 2 2 2

= d2 C2 = ( d + c ) (d c)

3.

Ordering cost =

CO = Q 2 Ch 2D

Q Cn D C0

= optimum quantity = holding cost = demand = (120)2 (2) (2) (200) = N72.00

8.

P(AUB)

= =

P(A) + P(B) - P(AnB) 0.30 + 0.78 0.16

ATSWA PART II- SEPTEMBER 2010

INSIGHT
= 0.92

EXAMINERS COMMENT The questions fairly cover the three sections of the syllabus: four on Statistics, three on Business Mathematics and three on Operations Research. Although very few candidates scored a little bit above average, generally the performance was not good enough. PART II 1. 2. 3. 12 3,600 cedis 1 0 or I2 0 1 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Option or choice Upper triangular Non-sampling Negative Linearity; Non negativity. LS7,302.78 Questionnaire Exponential Quantitative or numeric, Qualitative or non-numeric Cumulative frequencies, upper class boundaries (in that order) Additive, Multiplicative nth root, product (in that order) 5 Penalties or column and row differences Decision ATSWA PART II- SEPTEMBER 2010 SHORT-ANSWER QUESTIONS

INSIGHT
19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Sampling 141 Deterministic t distribution or t test Producers` surplus Estimate Differentiation Maximum value Minimum or shortest Equals or is equal to Loop Activity-on-arrow and activity-on-node.

EXAMINERS COMMENT The candidates are expected to provide very short answers to the questions in this part of the paper. This part has 11 questions on Statistics, 11 on Business mathematics and 8 on Operations Research. The candidates performance was also not good enough. This covers the syllabus heavily. Thus, candidates are expected to cover the entire syllabus very well to succeed.
SOLUTION 1 (ii) Construction of component bar char of the grades recorded for two years Grade A B C 2004 15 35 45 2005 10 30 22 Total 25 65 67

ATSWA PART II- SEPTEMBER 2010

INSIGHT
D E F (iii) 50 35 20 15 25 18 65 60 38

Computing a percentage component bar chart of 2004 and 2005 figures: Percentage of total for Grade A B C D E F *60 = 15 x 100 25 **40 = 10 x 100 25 2004 15 35 45 50 35 20 2005 10 30 22 15 25 18 Total 25 65 67 65 60 38 2004 60* 54 67 77 58 53 2005 40* 46 33 23 42 47

EXAMINERS COMMENT The question is on bar charts. All the various forms of bar charts are tested in the question. Some candidates had difficulty in distinguishing between a component bar chart and a percentage component bar chart. Some were also confusing multiple bar chart with either component bar chart or percentage component bar chart. A reasonable number of candidates did fairly well in answering the question. On the average, the performance of the candidates was fair. SOLUTION 2
(a) (b) Weights x f fx x- x (x-x)2 f(x-x)2 Class boundaries for histogram See graph Mode is 75.9 kilograms

ATSWA PART II- SEPTEMBER 2010

INSIGHT
62 65 66 69 70 73 74 77 78 81 82 85 86 89 63.5 67.5 71.5 75.5 79.5 83.5 87.5 1 3 6 9 7 3 1 30 2,269 (i) mean = x =fx = 2269 = 75.63 f = 30 = 63.5 202.5 429 679.5 556.5 250.5 87.5 -12.13 -8.13 -4.13 -0.13 3.87 7.87 11.87 147.14 66.10 17.06 0.02 14.98 61.94 140.9 147.14 61.5 65.5 198.3 65.5 69.5 102.36 69.5 73.5 0.18 73.5 77.5 104.86 77.5 81.5 185.82 81.5 85.5 140.90 85.5 89.5 879.56

f(x -x)2 f

879.56 30

29.32
5.41

= (ii)

Coefficient of variation = x 100 x = 5.41 x 100 75.63 = 7.15% ALITER Standard deviation X 63.5 67.5 71.5 75.5 79.5 83.5 f 1 3 6 9 7 3 Fx 63.5 202.5 429.0 679.5 556.5 250.5 x2 4032.25 4556.25 5112.25 5700.25 6320.25 6972.25 fx2 4032.25 13668.75 30673.50 51302.25 44241.75 20916.75

b (i)

ATSWA PART II- SEPTEMBER 2010

INSIGHT

87.5

1 30

87.5 2,690

7656.25

7656.25 172,491. 50

S =

fx
f

- fx f

5.41

172491.50 - 2269 30 30

ATSWA PART II- SEPTEMBER 2010

INSIGHT

ALITER USING ASSUMED MEAN Class 62-65 66-69 70-73 74-77 78-81 82-85 86-89 f 1 3 6 9 7 3 1 30 x 63.5 67.5 71.5 75.5 79.5 83.5 87.5 d -12 -8 -4 0 4 8 12 d2 144 64 16 0 16 64 144 fd -12 -24 -24 0 28 24 12 4 fd2 144 192 96 0 112 192 144 880

(i)

Mean = x = A + fd f = 75.5 + 4 = 75.63 30 fd2 (fd) 2 f 29.316 = = 880 - 42 30 30 = 5.14

SD

= f

(ii)

C.V

= x 100 = 5.41 x 100 x 1 75.63 1 = 7.15%

ATSWA PART II- SEPTEMBER 2010

INSIGHT

ALITER USING SCALING FACTOR Class 62-65 66-69 70-73 74-77 78-81 82-85 86-89 f 1 3 6 9 7 3 1 30 X 63.5 67.5 71.5 75.5 79.5 83.5 87.5 d -12 -8 -4 0 4 8 12 h -3 -2 -1 0 1 2 3 fh -3 -6 -6 0 7 6 3 1 fh2 9 12 6 0 7 12 9 55

(i)

Mean = x

= A+ f

fh

= 75.5 + 4 30

= 75.63

SD= C

fh2 (fh) 2 f

=4

55 30

1 30

=4

1.835

= 5.414

(ii)

CV

= x 100 = 5.41 x 100

ATSWA PART II- SEPTEMBER 2010

INSIGHT
75.63 1 = 71.5%

EXAMINERS COMMENT Estimating mode from a Histogram and calculating mean, standard deviation and coefficient of variation are the subject matter of question. Virtually, all candidates attempted the question and the performance was generally good. The major pitfall was the inability of some candidates in recalling the correct formula for calculating the standard deviation of grouped data. The use of class boundaries as the axis of the histogram posed a big challenge to some candidates. SOLUTION 3
X 25.5 35.5 45.5 55.5 65.5 75.5 85.5 f 78 62 95 145 101 80 59 620 fx 1989.0 2201 4322.5 8047.5 6615.5 6040.0 5044.5 34260. 0 fx2 50719.5 78135.5 196673.75 446636.25 433315.25 456020.0 431304.75 2092805.0 0

Standard deviation =

fx2 f

fx f

2092805.00 34260 = i.e. (b) 620 = 17.94542 N17,945.42 620

Coefficient of skewness = 3(mean median)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
s.d = 3(55,500 55,700) 17,945.42 = - 0.033

Which is close to 0. i.e the distribution is symmetric. EXAMINERS COMMENT The main difference between this question and Question 2 is in the area of candidates being required to calculate the coefficient of skewness. Candidates are expected to know that the nearer to zero the coefficient of skewness is, the nearer the distribution will be to being symmetric. The major pitfall of the candidates was the inability to recall the correct expression for the coefficient of skewness. Generally, the overall performance was fair. SOLUTION 4 At breakeven, profit or loss equals zero i.e R = C 90 + 28q + 0.75q2 = 100q - q2 = =
i.e

1.75q2 - (100 28)q + 90 = 0 1.75q2 - 72q + 90 = ax2 + bx + C a= 1.75, b = -72, C = 90 -b b2 4ac /2a

q1 , q2 =

= 72 (722 4(1.75) 90) / 2(1.75) = 72 4554 / 3.5


= 39.8514 or 1.2914

Break even, quantities are 3985.14, 129.14 (b) Profit P = R C =100q q2 90 + 28q + 0.75q2 P = 72q 90 - 1.75q2

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(i) Marginal Profit (MP) = dp = 72 3.5q dq At stationary/turning point, MP = 0 i.e M.P = dp = 0 = 72 1.75 (2)q = 72 3.5q dq

ALITER

q = 72/3.5 = 20.5714

4b(i) C(q) = 90 + 28q + 0.75q2 dc dq R(q) = 100q - q2 dR dq Profit is maximised when marginal revenue = marginal cost i.e 100 2q 3.5q = 28 + 1.5q = 72 = 72 3.5 q = 20.5714 EXAMINERS COMMENT Condition for a company to break even and maximizing profit concept are tested in the question. Candidates are expected to know that a companys profit is maximized when the marginal revenue equals the marginal cost, and that the company breaks even when the profit or loss is zero. The major pitfall of some of the candidates was their getting the concept of break even wrong. Some of them thought that company breaks even when the = 100 2q = M.C = 28 + 1.5q

ATSWA PART II- SEPTEMBER 2010

INSIGHT
marginal revenue equals marginal cost. On the average, the performance was poor. SOLUTION 5
(a) let t units of T, s units of S and b units of B be made each week, then 3t + 2s + b = 1080 2t + s + b = 730 t + s + 3b = 890 (b) 3 2 1 2 1 1 A 3 2 1 2 1 1 1 1 3 1 1 3 t s b X 1080 730 890 B

(c)(i) A =

= 3 1 1 -2 1 + 2 1 1 3 1 3 1 1 = 6 10 + 1 = -3

(ii)

C = 1 1 -2 1
1 3 2 1 -1 3 2 1 1 3 3 1

2 1 1 1 3 2

1 3 -1 1 3 1 3 2 1

1 1 -2 1

(ii)

C =

2 -5 1 2 -5 1

-5 8 -1 -5 8 -1

1 -1 -1 1 -1 -1 - 1 /3 2 -5 1 -5 8 -1 1 -1 -1

C1 =

(iv)

A-1 = Adj = C1 = A A

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(d) X = t s b =- /3
1

2 -5 1

-5 8 -1

1 1 -1

1080 = 1/3 730 890

-600 450 = 540

200 150 180

i.e 200 trousers, 150 shirts and 180 blouses are to be made per wee EXAMINERS COMMENT This is testing candidates knowledge on matrix formulation. Candidates are expected to obtain the inverse of a matrix based on determinant, and adjoint of the matrix. Candidates are expected to know that the transpose of the matrix of cofactors of the matrix is its adjoint and the inverse of the matrix is its adjoint divided by its determinant. Inability of some of the candidates to compute the matrix of cofactors was the major pitfall. The performance was generally fair. A number of candidates could not formulate the given worded problem in a matrix form i.e AX = B SOLUTION 6
(a) 4

E 2 A 5 8 D 1 11 B 7 3 (b) 1 2. 3. A A A - C E C G

2 5

L 4 4 G G K K8 1 4 3

L H - K - L

ATSWA PART II- SEPTEMBER 2010

INSIGHT
4. 5. 6.
Path Durations :

A A B
1

C D I
5

I J - j

F -

+ 2

- K + 4 = 11 weeks

2 3 4 5 6

: : : : :

5 5 5 5 7

+ + + + +

6 6 6 8 6

+ + + + +

2 4 6 6 2

+ + + +

4 3 2 2 + + 3 3

= = = = =

17 18 22 24 18

weeks weeks weeks Weeks weeks

(c)(i) The critical path is path 5: A- D- I- J- K with duration of 24 weeks (ii) The shortest time to complete project = 24 weeks

EXAMINERS COMMENT This question is on Network Analysis based on the activity-on-arrow format. The major pitfall was that some candidates did not show arrows in the network drawn. The performance was generally fair. SOLUTION 7
Linear Programming Graphical Method Activities Activity Levels x1 Baking Cooling and Decorating Contribution to profit 6 N2,000 2 N3,000 600 2 Chocolate cake (c ) Fruit cake (f) Availability

x2 4 400

Formulation as a Linear Program Maximize Z = 2000x1 + 3000x2

ATSWA PART II- SEPTEMBER 2010

INSIGHT
s. t. 2x1 + 4x2 6x1 + 2x2 400 Baking constraint 600 Cooling & Decorating instraint

x1, x2 0. (b) Solution by the graphical method Initializing the program 2x1 + 4x2 6x1 + 2x2 = 400 .. = 600 .. (1) (2)

Computing Boundary points, we have When x1 = 0 in eq. 2(0) + 4x2 = 400 4x2 = 400 x2 = 400 = 100 4 Point A = (0,100) From eq. (1) when x2 = 0 2x1 + 4(0) = 400 2x1 = 400 = 400 = 200 2 Point B (200,0)

x1

From e.q (2)when x1 = 0 6(0) + 2x2 = 600 2x2 = 600 x2 = 600 = 300 2 Point C = (0,300) From e.q (2)when x2 = 0 6(x1) + 2(0) = 600 6x1 = 600 x1 = 600 = 100 6 Point D = (100,0) From the graph, the profit at A, B, C are tabulated as follows: Z = 2,000 x1 + 3,000 x2 Point A x1 0 x2 100 Z 300,000

ATSWA PART II- SEPTEMBER 2010

INSIGHT
B C 80 100 60 0 340,000 200,000

So, B gives the maximum profit i.e Madam Lulu should bake 80 chocolate cakes and 60 fruit cakes. EXAMINERS COMMENT Linear Programming via graphical solution is the subject matter of question. The major pitfall of the candidates is in the formulation of given worded problem as a linear programming problem. Most of candidates did not state the non-negativity condition. Generally, performance was good. the the the the

ATSWA PART II- SEPTEMBER 2010

INSIGHT
AT/102/PII.8 EXAMINATION NO..................

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA ACCOUNTING TECHNICIANS SCHEME PART II EXAMINATION SEPTEMBER 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)


E-commerce protection from security attacks is built around the following key concepts EXCEPT A. B. C. D. E. Repudiation Authentication Integrity Availability Confidentiality.

2.

The acronym edu in the URL http://www.atswa.edu specifies A. B. C. D. E. The The The The The domain name site is on the worldwide web name of the organization hosting the site protocol IP address.

3.

The term used to describe all types of written instructions associated with using, operating or developing a computer system is called: A. B. C. D. E. Program File Database Documentation Report.

4.

The act of managing and operating part or all of an organisations information systems services by an external source at an agreed service level is called: A. External management

ATSWA PART II- SEPTEMBER 2010

INSIGHT
B. C.
D. E.

Maintenance facility Maintenance consultancy


Computer Bureau Facility management.

5.

These are types of application packages EXCEPT: A. B. C. D. E. Utility packages Spreadsheet packages Word processing packages Database management system packages Accounting packages.

6.

The following are features of Word Processing packages EXCEPT: A. B. C. D. E. Copy Edit Bold Query Mail-merge.

7.

External storage is NOT the same as: A. B. C. D. E. Secondary storage Auxiliary storage Backing storage Bulk storage Primary storage.

8.

Hardware does NOT include A. B. C. D. E. Input devices Output devices Operating systems The central processing unit Secondary storage unit.

9.

An office automation system which allows electronic transfer of funds from one account to another describes A. B. C. D. E. Automated teller machine (ATM) Electronic Funds Transfer Bankers Automated Clearing Services (BACS) Information centre facilities Magnetic paying system.

10.

The name given to the facility which enables connection to wide area networks is:

ATSWA PART II- SEPTEMBER 2010

INSIGHT
A. B. C. D. E. PART II 1. 2. 3. 4. Router Gateway Bridge Packet switching technology Microwave technology. SHORT-ANSWER QUESTIONS (30 Marks)

The model that defines the data requirement probably in terms of entities, attributes and relationships is known as RAD stands for.. The change over approach where the old system is suddenly replaced with the new is known as A department or office that is manned by technically skilled staff that assists the information system department staff with regards to user request and complaints is referred to as. A firm that operates to offer computing services to individuals and other firms that require the services is called.. The generic name to all input, output and secondary storage devices that are part of a computer system is. The THREE types of computer systems are, digital and the analog. A computer systems consists of THREE broad components, the hardware, the software and the. The central processing unit consists of the arithmetic and logic unit, the control unit and the The support equipment that is designed primarily to be used in an online mode is called A check that enables data to be transferred from one hardware device to another or from one storage location to another is called.. The process of checking for the accuracy of input data is called. Any manipulation carried out with the intention of gaining advantage or that constitutes criminal deception is called

5. 6. 7. 8. 9. 10. 11. 12. 13.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
14. 15. 16. 17. 18. The technique of disguising information stored or in transmission in order to preserve its confidentiality is called.. A network which connects large number of computers workstations over a long distance is called. and

A special purpose computer package used in the production of office documents, letters and contracts is known as. The name given to all the physical devices found in a computer system is A computer processing system which is capable of processing data instantly and making the results available immediately is called a(n) system The microchip technology was made up of flakes of . The microchip technology was invented in the computer generation. The use of video communications that allow business meetings to be held with participants who are in different locations is called. converts digital signals to analog frequencies. When a worker at home communicates using hardware and software with his office, this process is called A network in which all communication devices are connected in a continuous loop is known as . The communication processor that allows a single communications channel to carry simultaneous data transmissions from many terminals is known as. E-mail messages that are sent to other users and contain extremely critical derogatory and often vulgar information are called What is the name given to unsolicited commercial e-mails? The protocol that allows a user to log on to any computer on the internet and use the software and other programs on the remote computer is called..

19. 20. 21.

22. 23. 24. 25.

26. 27. 28.

ATSWA PART II- SEPTEMBER 2010

INSIGHT
29. A system that uses a variety of technologies to compare and process money and credit transfer between banks and businesses and their customers is called.. Each file on the internet has an address called

30.

SECTION B- Attempt any FOUR questions (60 Marks) QUESTION 1 (a) Discuss briefly SIX criteria for systems design. (12 Marks) (b) List THREE considerations for file designing. Marks) Total 15 Marks) QUESTION 2 (a) (b) Name THREE factors involved in the selection of input devices. Marks) Explain any TWO purposes of EACH of the following: (i) (ii) (iii) (iv) Input unit Control unit Arithmetic and logic unit (ALU) Main memory. Marks) (3 (3

(8

(c)

Give any FOUR operations performed by the Arithmetic and Logic Unit. (Marks) (Total 15 Marks) QUESTION 3 (a) (b) State FOUR negative effects of computer viruses in an IT environment. (4 Marks) Identify FOUR ways of preventing viruses in an Information Technology environment. (4 Marks) Give FOUR examples of Antivirus tool kits. (4 Marks)

(c)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
(d) What are the effects of Windows NT virus? (3 Marks) (Total 15 Marks) QUESTION 4 (a) Convert the following decimal numbers to binary numbers: (i) 43 (5

(Ii) 467 Marks) (b) Convert the binary number 1011101 to number in base 4. (3 Marks) (c) Convert the decimal number 0.625 to binary. (4 Marks) (d) Convert 11011101 (3 Marks) (Total 15 Marks) QUESTION 5 (a) Define a computer network and state FOUR goals of network architecture. (7Marks)
Give THREE types of Network. (3 Marks) List FIVE advantages of computer networks. Marks) Marks)
two

to base 8.

(b) (c)

(5 (Total 15

QUESTION 6 (a)
(b)

List and explain FOUR levels at which computer crimes are committed. (8 Marks) Explain the following methods of computer crimes: ATSWA PART II- SEPTEMBER 2010

INSIGHT
(i) (ii) (iii) (iv) The Trojan horse Marks) Super zapping Marks) Piggy backing Marks) Data leakage . (1 Mark) (2 (2 (2

(Total 15 Marks) MULTIPLE CHOICE QUESTIONS 1. D 2. 3. 4. 5. 6. 7. 8. 9. 10. A D E A D E C B B

EXAMINERS COMMENT The Multiple choice questions are of good standard and many candidates scored very high marks. SECTION A - PART II (30 Marks) 1. EAR Model /Data Model 2. 3. 4. 5. Rapid Application Development Direct change over Information Centre Computer Service Bureaux

ATSWA PART II- SEPTEMBER 2010

INSIGHT
6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Peripherals Hybrid Human ware Main/Primary Memory/Internal Storage unit Peripheral Equipment Parity Check Verification/Validation Fraud/Cyber Crime/Computer Crime Encryption Wide Area Network (WAN) Word Processor/Word Processing Package Hardware Real-time Silicon 4th Video Conferencing MODEM TELEMMUTING/Telecommuting Ring Multiplexer/Multiplexor Flaim mails Spam Telnet Electronic Fund Transfer (ETF) Uniform resource locator (URL) ATSWA PART II- SEPTEMBER 2010

INSIGHT
EXAMINERS COMMENT The Short Answer Questions are very standard and many candidates scored between 13 and 20 marks. SOLUTION 1 a. i) PURPOSE: The purpose must be to meet the demands of requirements specification and, the objectives that were agreed at the beginning of the project. ii) iii) ECONOMICAL: The costs and benefits of the new system should be compared with those of the existing system. WORKFLOWS: The best work flows must be attained. This includes methods of transmitting data to and from the computer, the number of stages in processing, file organization etc. FLEXIBILITY: The system should be designed with possible integration of procedures in mind. Consideration should be given to the expansion of the hardware when the need arises. The system should be able to cope with peak period processing. EXCEPTION PRINCIPLE: The principle of exception should be incorporated in the design of the new system so that only deviations from plan are reported for managements attention. RELIABILITY: The reliability of all the hardware and software must be considered FORMS: Data should be presented to computer in a machine sensible form. The analyst must consider all the methods of input and try to reduce the steps necessary between origination of data and its input. EXISTING SYSTEM: Consideration must be given to the existing staff, procedures, equipment, forms etc in the design of any new system. TIME: The analyst must design the system to satisfy time requirements, speeds of equipment, modes of access and processing methods must also be considered.

iv)

v)

vi) vii)

viii)

ix)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
b. i) ii) iii) iv) v) vi) vii) Storage media Method of file organization File security Record layout Volume of transaction The Access method Which data items will be the key field?

EXAMINERS COMMENT This question tests the candidates understanding of the criteria for system and file designing. Only few candidates attempted this question and their performance was poor. SOLUTION 2 (a) FACTORS INVOLVED IN THE SELECTION OF INPUT DEVICES i) ii) iii) iv) (b) (i) Type of application, whether online or offline Costs of the devices Speed and volume of input Error tolerance PURPOSE OF INPUT UNIT ii) To accept data in required form To convert this data to machine understandable form. To transmit this data to the central processing unit (CPU)

PURPOSE OF CONTROL UNIT To decode and execute the program instructions To control and coordinate data movement within the CPU To control and coordinate data movement between the CPU and other components of the computer system.

iii)

PURPOSE OF THE ARITHMETIC AND LOGIC UNIT To carry out arithmetic operations To carry out logical operations

ATSWA PART II- SEPTEMBER 2010

INSIGHT
iv) THE PURPOSE OF THE MAIN MEMORY c) To store programs during the execution To store data that is being currently used To store the operating system.

OPERATIONS PERFORMED BY ALU i) Arithmetic operations Addition Subtraction Multiplication Division Exponentiation Logical operation e.g comparison and sequencing of operations.

ii)

EXAMINERS COMMENT This question demands for the factors to be considered in the selection of input devices. The part (b), which demands for the purposes of certain components of the computer system, was well attempted by the candidates and the performance was very good. Over 90% of the candidates attempted this question. SOLUTION 3 a) EFFECTS OF COMPUTER VIRUSES i) ii) iii) iv) v) vi) b) Significant loss of data from the hard disk Erasure of the contents of the CMOS thus affecting data time and other details that the computer needs to boot. Wreckage of the IT equipment Clogging up e-mail computer servers Automating mailing of a copy of the virus to all the e-mail computer servers May display abnormal figures on monitor to harass users.

WAYS OF PREVENTING VIRUSES: i) Separate business PC from the internet PC used for surfing the net ATSWA PART II- SEPTEMBER 2010

INSIGHT
ii) iii) iv) v) vi) c) Build firewall to shield the network Obtain regular updates of various tool kits Obtain e-mail anti-virus software Avoid using strange storage media Avoid copy/pirated files /programs

EXAMPLES OF ANTIVIRUS TOOLKITS i) ii) iii) iv) v) Norton Antivirus Tool Kit Dr. Solomon Antivirus Tool Kit Microsoft Antivirus Tool Kit Mcafee Antivirus Tool Kit Trend PC- Cillin

d)

Windows NT Virus is known as remote explorer. It is very dangerous and has the capacity of infecting the entire network by replicating itself on Windows NT systems. It It It It It prevents proper communication of network users makes use of the network prevents access to network software reduces the quality of work of users on the network prevents access to shared files.

EXAMINERS COMMENT This question tests the candidates understanding of virus and antivirus tool kits. Over 95% of the candidates attempted this question and the performance was encouraging. The (c) part is not a good question, it should have demanded for common examples of Antivirus tool kits. SOLUTION 4
a) (i) 2 2 2 2 2 2 43 21 10 5 2 1 R 1 1 0 1 0

ATSWA PART II- SEPTEMBER 2010

INSIGHT

4310=101011 2 2 2 2 2 2 2 2 2 467 233 116 58 29 14 7 3 1 0

two

R 1 1 0 0 1 0 1 1 1

467ten 111010011two b) 1,01,11,01two 4 = 2n =22 1,01,11,01 1131 i.e 1011101two = 1131four (Accept conversion through base 10) c) 0.625
ten

n=2

1131

four

to a binary number

0.625 2 =1.250 0.250 2 =0.500

ATSWA PART II- SEPTEMBER 2010

INSIGHT
0.500 2 =1.000 Thus 0.625ten =0.101two

d)

11011101 2n =8 =23

two

to base 8 n=3

11,011,101 3 3 5
two

335eight =335eight

i.e 11011101

(Accept conversion through base 10)

EXAMINERS COMMENT This question tests candidates ability in quantitative aspect of Computer Science. The question is on the conversion of numbers from one base to another. Over 95% of the candidates attempted this question and over 90% of them scored above 95% of the mark. SOLUTION 5 (a) i) A computer network may be defined as an interconnection of a number of computers, telephones and other shared devices in various ways so that users can process and share information. OR A Computer network is the connectivity of several computers to enable them share resources and communicate with each other THE GOALS OF NETWORK ARCHITECTURE INCLUDE: To allow for distributed processing To allow sharing of expensive peripherals To share files To share software Reduction in overall processing time Reduction in cost of hardware Reduction in costs of software Use of high quality peripherals

ATSWA PART II- SEPTEMBER 2010

INSIGHT
b) TYPES OF NETWORK INCLUDE: i) ii) iii) iv) v) c) Wide area network Local area network Metropolitan area network Peer to- peer system Client Server system

ADVANTAGES OF NETWORKS INCLUDE: i) ii) iii) iv) v) vi) vii) Cost effectiveness Sharing of peripheral devices Access to a common database Allow for better communication Modular Expandability Reduces risk of failure of the system It is more stable as no breakdown will affect the whole organisation.

EXAMINERS COMMENT This question tests the candidates knowledge on computer networks. Over 95% of the candidates attempted this question and the performance was fair. Most of the candidates confused the goods of network architecture to advantages of network. SOLUTION 6 LEVELS AT WHICH COMPUTER CRIMES ARE COMMITTED: i) Input level: Crimes are committed at this level by the computer operator. It involves feeding the computer with wrong data which obviously will give wrong information. Output: The result from the computer can be sold to other competitors, thus jeopardizing the interest of the firm Software level: fictitious codes can be added by the programmer to move certain amounts of money from one account to another. Information transmission level: with the use of networking and internet, several resources of the firm are exposed to the outsiders. Hackers can gain access to firms information in another country to perpetrate their evil acts.

ii) iii) iv)

ATSWA PART II- SEPTEMBER 2010

INSIGHT
v) vi) (b) Storage level: Damage/alteration of stored data, where data can be altered to meet the criminal need. System level: Unauthorised system use. METHODS OF COMPUTER CRIMES: i) Trojan horse method: It involves the use of programming skill to carry out some illicit activities of transactions like copying confidential documents. i.e Trojan Horse is where a user installs an illegal code inside a legal code to carry out illegal operation. Super Zapping: This is a system diagnostic tool that gives more control to the programmer to carry out unrestricted modification to the business software. i.e Super zapping is the unauthorized use of special systems program to bypass regular control path to commit crime. Piggy backing: This is a method used by criminals to snoop around the computer room to gain access to the physical facilities and the computer files. It is also possible when a user leaves a workstation without logoff. i.e Piggy backing is where an unauthorized user taps into a transmission line and the user logs into the system to use the system with the user. Data leakage: is when an authorized user mistakenly takes away a valid computer resource out of the processing environment but upon discovery uses it for illegal act.

ii)

iii)

iv)

EXAMINERS COMMENT This question tests candidates understanding of computer crimes. Only about 10% of the candidates attempted this question and the performance was poor. Most candidates confused levels at which computer crimes are committed to mean either types of computer crimes or ways of committing computer crimes.

ATSWA PART II- SEPTEMBER 2010