March 2010 Part 2 Insight

8/22/2019 March 2010 Part 2 Insight

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EXAMINERS GENERAL COMMENTS

BREACH OF EXAMINATION INSTRUCTIONS

IN SPITE OF THE EXAMINERS GENERAL COMMENT IN PREVIOUS EDITIONS OF

THE INSIGHT, IT WAS OBSERVED THAT A NUMBER OF CANDIDATES HAVE

CONTINUED TO BREACH EXAMINATION INSTRUCTIONS AS STATED BELOW:

A) BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH PAPER;

AND

B) BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH SECTION.

INADEQUATE COVERAGE OF THE SYLLABUS

IT HAS BECOME MANIFEST THAT MANY CANDIDATES DO NOT COVER THE

SYLLABUS IN DEPTH BEFORE PRESENTING THEMSELVES FOR THE EXAMINATION.

CANDIDATES ARE THEREFORE ADVISED TO BE ADEQUATELY CONVERSANT WITH

ALL ASPECTS OF THE SYLLABUS.

ATSWA PART II - MARCH 2010


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FOREWORDFOREWORD

This issue ofINSIGHT is published principally, in response to a growing

demand, as an aid to:

(i) Candidates preparing to write future examinations of theInstitute of Chartered Accountants of Nigeria (ICAN) at anequivalent level;

(ii) Unsuccessful candidates in the identification of those areas inwhich they lost marks and need to improve their knowledgeand presentation;

(iii) Lecturers and students interested in acquisition of knowledge

in the relevant subjects contained therein; and(iv) The profession in improving pre-examination and screening

processes, and so the professional performance.

The answers provided in this book do not exhaust all possiblealternative approaches to solving the questions. Efforts have beenmade to use methods, which will save much of the scarce examinationtime.

It is hoped that the suggested answers will prove of tremendousassistance to students and those who assist them in their preparations

for the Institutes Examinations.


NOTENOTE

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.


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CONTENTS PAGE

PRINCIPLES AND PRACTICE OF FINANCIAL ACCOUNTING

GOVERNMENT ACCOUNTING

QUANTITATIVE ANALYSIS

INFORMATION TECHNOLOGY



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AT/101/PII.5 EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA

ACCOUNTING TECHNICIANS SCHEMEPART II EXAMINATION MARCH 2010PRINCIPLES 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. The proportion which the current assets of a firm bears with the currentliabilities is called?

A. Gearing ratioB. Acid test ratioC. Liquidity ratioD. Assets and liability ratioE. Working capital ratio.

2. The excess of the nominal value of a debenture issued over the cash

received is calledA. Real valueB. Debenture discountC. Debenture premiumD. Issued debentureE. Debenture price.

3. The following are recorded in the profit and loss account EXCEPT

A. Debenture interestB. Wages and salariesC. Discount allowed

D. Commission receiverE. Rent and rates.

4. Which of the following can result in the revaluation of the asset of apartnership firm?

A. When a partner is paid salaryB. When a partner earns bonusC. When there is a change in the profit sharing ratio of the firm



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D. When a partner contributed additional capital to the firmE. When a son of a partner dies.



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5. Prime cost is

A. Direct materials + Direct labour

B. Total production cost Direct labourC. Total variable overheads onlyD. Total of all direct materials, direct labour and direct expensesE. Direct materials + Cost of sales.

Use the information below to answer questions 6 and 7:

Gigabite Limited paid 850,000 to acquire the assets of a partnershipfirm valued as follows:

Land and Building 450,00

0

Equipment 280,000

Stock 400,000

Creditors 195,000

6. What is the technical term given to the amount of 850,000 paid byGigabite Limited?

A. Market valueB. Bought valueC. CapitalD. Purchase considerationE. Average valuation.

7. Gigabite Limited will record 85,000 in its accounting record as ...........

A. capital reserveB. total assetsC. goodwillD. total fixed assetE. liquid assets.

8. The system of stock valuation which ensures that issues of stock are madefrom the latest receipts is known as ..............

A. Last-in-first-outB. First-in-first-out

Average cost pricingC. First-in-first-pricedD. Last-in-last-out.



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9. When a debt previously written-off is subsequently recovered, theaccountant re-instates the debt by raising the following entry:

A. Dr. Cash a/c Cr. Debtors

B. Dr. Cash a/c Cr. Bad debt recoveredC. Dr. Debtors a/c Cr. Bad debt recoveredD. Dr. Debtors a/c Cr. Profit & loss a/cE. Dr. Provision for bad debt Cr. Cash a/c.

10. The constitution that governs the relationship of partners in a partnershipfirm is called

A. Articles of associationB. The regulationC. Memorandum of AssociationD. Partnership resolution agreementE. Partnership deed.

PART II SHORT-ANSWER QUESTIONS (30 Marks)

1. Inventories must be valued at ...............

2. A company with a gearing ratio of 6:4 is said to be ................. company.

3. Give TWO bases on which the head office may transfer goods to a branch.

4. Working capital is calculated as ..............

5. Where there exists no partnership agreement the partners must paythemselves equal salary (True or false).

6. What effect does losses have on the capital of a business?

7. State the double entry required if a company under-provides for tax in theprevious year.

8. The formulae for Earnings Per Share (EPS) is ...........

9. Preference shareholders receive ................ of dividend.

10. The difference between total assets and liabilities is referred to as ...........

11. The excess of the cash received over the nominal value of preferenceshares issued is called .............



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12. The amount by which the net asset of a business exceeds its purchaseconsideration is called ..............

13. An agent is paid commission of 50% of net profit after charging suchcommission. If the profit of a business is N150,000 before commission,calculate the commission payable to the agent.

14. The depreciation method that applies a percentage to the cost of an asseteach year until it is reduced to zero is called ..............

15. Balance sheet is defined as ................

16. Define purchase Goodwill of a business.

17. State TWO circumstances that will give rise to the determination ofgoodwill in a partnership business.

18. The closing balance on the purchases ledger control accountrepresents .....

19. Which accounting ratio is calculated to show the ability of a business topay its debt when called upon?

20. According to the International Financial Reporting Standards, cash flowstatements should be prepared under three main headings. State them.

21. State the TWO main methods used in the preparation of Cash Flow

statement.

22. What is Authorised Share Capital?

23. What is a provision in accounting?

24. Give any ONE situation that will necessitate the revaluation of apartnership.

25. If company A sells goods to company B on sale or return basis, what is theeffect of the closing stock of company B on the sales of company A?

26. What is the effect on profit if a company over-states its opening stockfigures?

27. Write an expression to calculate the net realisable value of a stock.

28. Error of principles is where ..........



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29. Explain the term dormant Partner.

30. Another term for loan stock or loan capital is ...................



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SECTION B - Attempt any FOUR questions (60 Marks)

QUESTION 1

The Trial Balance as at 30 April 2008, given by your clerk is as statedbelow:

DEBITN

CREDITN

Share Capital 1,000,000Profit & Loss A/c 5,648,800Stock opening 1,251,900Purchases 15,444,50

0Returns Outwards 257,250

Discount Allowed 114,300Received 412,600

Sales 33,425,800

Electricity 750,300Rent 1,249,200Commission Sales 334,258Selling & Distribution Exp. 4,426,666Admin. Expenses 3,876,222Finance charges: Bank charges 1,671,290

Interest on loan 2,100,000

Loan XYB Bank 10,000,000

Debtors & prepayments 4,228,214Creditors & Accruals 875,0006% Debentures 2,000,000Fixed Assets: Land 525,000

Building 4,252,000Motor

Vehicle3,000,000

Equipment 1,774,800Provision of depreciation - Building 1,000,000

Motorvehicle

1,442,300

Equipment 234,50050,647,4

5050,647,4

50

Other relevant information:



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(i) Closing stock N6,339,472.(ii) Rent in the Trial Balance runs from 1/5/07 30/4/2010.(iii) Provision for doubtful debt at 1%.(iv) Provision for depreciation - Motor & Equipment 20%

Building 5%(v) Debenture interest yet to be charged.(vi) Electricity owing N40,500.

You are required to prepare:

(a) Extended Trial balance. (11 Marks)(b) Journals for necessary entries. (4 Marks)

(Total 15 Marks)

QUESTION 2

(a) Explain the following terms as defined in International Accounting

Standards (IAS 16) Accounting for Property, Plant and Equipment:(i) Property, plant and equipment. (4Marks)(ii) Fair value (2 Marks)(iii) Recoverable amount (2 Marks)(iv) Improvements (4 Marks)

(b) List further disclosures that are sometimes made in the financialstatements.

(3 Marks)

(Total 15 Marks)QUESTION 3

The following balances were extracted from the ledger of Sosoko Limited for theyear ended 30 June 2008.

CFA000

Stock of raw materials 01/07/2007 320Work-in-progress 01/07/2007 146Stock of finished goods 01/07/2007 1,400Sales 10,00

0Purchases of raw materials 3,500Printing and stationery 72General expenses 60Other administrative expenses 132Factory rent 80Depreciation of delivery van 500Depreciation of plant 668



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Carriage inwards of raw materials 150Advertising expenses 100Bad debts 85Indirect wages 1,000

Direct wages 1,600Direct expenses 400

Additional information:

(i) Stock as at 30/06/2008 were:CFA

Raw materials 450Finished goods 1,80

0Work-in-progress 168

(ii) The following expenses are to be apportioned as follows:

Factory

Administrative & selling

Printing and stationery General expenses 1/3 2/3

(iii) Direct wages outstanding as at 30 June 2008 were CFA 50.

Required:Prepare the manufacturing, trading and profit and loss account for the yearended 30 June 2008. Show clearly the prime cost, the cost of production andgross profit and net profit. (15 Marks)

QUESTION 4

(a) Briefly state the contents of a value added statement.(3 Marks)(b) Given below is the summarised information of Glotech Technologies

Limited in respect of the year ended 30 June 2008.L$

Salaries and wages 3,918,000

Purchased materials used inproduction 9,180,000

Turnover 16,804,500

Company tax for the year 510,000Dividends to shareholders 280,500Services purchased 1,810,500Depreciation of fixed assets 306,000



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Loan interest paid and payable 229,500

Using the above information, you are required to prepare the following:

(i) A value added statement showing the relevant percentage. (7

Marks)

(ii) A conventional profit statement of the Company.(5 Marks)

(Total 15 Marks)



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QUESTION 5

The following balances were extracted from the books of Bongai Limited after the preparation of the

trading accounts at 31 December 2007.N

Share capital authorised and issued

1,000,000 N1 Ordinary shares 1,000,000200,000 10% N1 preference shares 200,000Stocks at 31 December 2006 5,240,750Debtors and prepayment 1,700,000Creditors and accruals 857,625Bank balance 487,25010% Debenture 1,000,000General reserve 8,250,000Bad debts 21,250Gross profit for the period 7,394,250Wages and salaries 1,762,500Rates and insurances 88,125Postages and telephone 38,750Electricity 76,000Debenture interest ( year to 30 June 2007) 50,000Directors fees 156,250Sundry expenses 194,250Vehicles (at cost N1,212,500) 425,000

Office fittings and equipment (at costN2,790,000) 1,715,000

Land and buildings at cost 8,262,500Profit and loss account at 1 January 2007 1,515,750

The following information is also available:

(i) Office fittings and equipment are to be depreciated at 15% of cost andvehicles at 20% of cost.

(ii) A bill for N34,250 in respect of electricity consumed up to 31 December2007 has not been entered in the ledger.

(iii) The amount for insurance includes a premium of N18,750 paid inDecember 2006 to cover the company against fire loss for the year 31December 2006 to 31 December 2007.

(iv) Provisions are to be made for:Directors fees N312,500Audit fees N75,000 (10 Marks)



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The outstanding debenture interest



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(v) The directors have recommended that:

- N750,000 be transferred to general reserve- the preference dividend be paid- a 10% ordinary dividend be paid

You are required to:

(a) Prepare the income statement (profit and loss and appropriation accounts)for the period ended 31 December 2007. (8 Marks)

(b) A Balance Sheet (Statement of Financial position) as at that date. (7Marks)

(Total 15Marks)

QUESTION 6

Jemmy Enterprises has a branch in Zaso Town which trades on its own account.The following is a summary of the transaction of the branch for the year ended31 December 2008.

Goods from Head office 240,000Purchases from suppliers credit 202,500

Cash 67,500Sales - Credit 495,000Cash 405,000

Cash received from Debtors 420,000Cash paid to creditors 142,500Expenses paid by Branch 150,000Expenses paid Head office forbranch

45,000

Cash received from Head office 30,000Cash remitted to Head office 420,000

The branch prepares its own final accounts.


Record the above transaction in the ledger accounts with the branch. (15Marks)



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SECTION A

PART I - MULTIPLE CHOICE QUESTIONS

1. E

2. B

3. D

4. C

5. D

6. D

7. A

8. A

9. C

10. E

EXAMINERS COMMENTMany of the candidates scored above 50% marks in this part.

PART II - SHORT ANSWER QUESTIONS

1. the lower of cost and net realizable value

2. highly geared company

3. i) At costii) At selling price by the branchiii) At cost plus a predetermined percentage



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4. Current assets less current liabilities

5. False

6. It decreases capital

7. Debit profit and loss appropriation account Credit IRS account

8. Earnings per share (EPS) = Net profit after tax and preference dividendNumber of ordinary shares issued

9. A fixed rate of dividend

10. Capital employed or shareholders fund

11. Premium on preference shares

12. Capital reserve

13. 50% x N150,000100% + 50% = N50,000

14. Straight line method

15. Balance sheet is the statement that shows the financial position of a

business as at a particular time.

16. Purchase Goodwill is the excess of price or purchase consideration overthe value of net identifiable assets acquired.

17. Where there is a change in profit or loss sharing ratio on death or retirement of a partner

admission of a new partner dissolution of the partnership

18. Trade Creditors

19. Acid test ratio or liquid ratio

20. Operating activities, investing activities and financing activities

21. Direct method and indirect method



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22. Authorised share capital is the maximum number of shares thatcompanys regulations or memorandum of association allows it to issue tothe public.

23. Provision is an expenditure that has occurred but cannot be calculatedwith substantial accuracy.

24. a partner is admitteda partner leaves the firmthere is a change in the profit and loss sharing ratio

25. No effect

26. The profit figure will decrease

27. Saleable value anticipated cost before sale

28. Error of principles occurs where the wrong class of account is used

29. A dormant partner is a general partner who takes no part in themanagement of the firm.

30. Debenture

EXAMINERS COMMENTThe candidates put up average performance generally in this part.

QUESTION 1 (LANDSCAPE TABLE)



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JOURNAL ENTRIES

DR CRN N

i Dr. Debtors and prepayments 832,800Cr. Rent 832,80

0ii Dr. Bad and doubtful debt 42,282

Cr. Provision for doubtful debt 42,282iii Depreciation (P & L a/c) 1,167,560

Provision for depreciation Motor vehicle 600,000

Provision for depreciation Equipment 354,96

0Provision for depreciation Building 212,600

iv Interest on debenture 120,000Electricity 40,500Creditors and accruals 160,50

0

EXAMINERS COMMENTThe question on extended trial balance was attempted by 90% of the candidatesand many of them put up poor performance. 80% of the candidates whoattempted the question could not raise the required journal entries.

SECTION B

SOLUTION 2

a) (i) Property, plant and equipment are tangible assets that:



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are held by an enterprise for use in the production or supply ofgoods and service, for rental to others or for administrativepurposes and may include items held for the maintenance or

repair of such assets have been acquired or constructed with the intention of being

used on a continuing basis, and are not intended for sale in the ordinary course of business

(ii) Fair value is the amount for which an asset could be exchangedbetween a knowledgeable, willing buyer and a knowledgeable,willing seller in an arms length transaction.

(iii) Recoverable amount is that part of the net carrying amount of anasset that the enterprise can recover from the future use of the

asset, including its net realisable value on disposal.

(iv) Improvements are expenditures that increase the future benefitsfrom the existing asset beyond its previously assessed standard ofperformance is included in the gross carrying amount. Examples ofthese future benefits include:

an extension in the assets estimated useful life an increase in capacity a substantial improvement in the quality of output or a reduction in

previously assessed operating costsExpenses on improvements should be added to the gross carrying

amount.

b) The following are further disclosures in financial statements

a reconciliation of the amounts of property, plant and equipment at thebeginning and end of an accounting period showing additions, disposals,acquisitions through business combinations and other movements.

the amount of payments on account of property, plant and equipment inthe course of construction or acquisition.

the carrying amount of temporarily idle property plant and equipment.

EXAMINERS COMMENTThe question tests the candidates knowledge of IAS 16 property, plant andequipment. 70% of the candidates attempted the question and many of themscored less than 50 marks.

SOLUTION 3S O S O K O LTD



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MANUFACTURING, TRADING AND PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED 30 JUNE 2008

CFA CFA000 000

Opening stock of rawmaterials 320

Purchases of raw materials 3,500

Carriage inwards 150 3,6503,970

Less closing stock ofmaterials

450

Cost of materials used 3,520

Add direct cost:

Wages 1,600Add owing 50

1,650

Direct expenses 400 2,050Prime cost 5,570Factory overheads:Factory rent 80Depreciation plant 668General expenses (60 x

1/3)

20

Printing & stationery ( x72)

18

Indirect wages 1,000

1,786

7,356



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EXAMINERS COMMENT

The question in manufacturing, trading profit and loss account was attempted by95% of the candidates and they put up good performance. The only pitfall istheir inability to determine prime cost and cost of production.

SOLUTION 4

a) Turnover


CFA CFA000 000

Add work-in- progress at 01/07/07 146

Less work-in-progress at 30/06/2008 168 (22)Cost of production 7,334

Sales 10,000

Less cost of sales:Opening stock of finished goods 1,40

0Add cost of production 7,33

48,73

4Less closing stock of finished goods 1,80

06,934

Gross profit 3,066

Less: General, selling and administrativeexpensesPrinting and stationery (72 x ) 54General Expenses (60 x 2/3) 40Other administrative expenses 132Depreciation delivery van 500

Advertising expenses 100Bad debts 85 911Net profit 2,155


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Bought out materials and services used in production Value added Employees pay and contributions Government company tax

Interest on borrowing Dividend to shareholders Depreciation Profit

bi) GLOTECH TECHNOLOGIES LTD

VALUE ADDED STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008

N %Turnover 16,804,5

00Bought out materials and services used inproduction

10,990,500

Value added 5,814,000

100

Applied toEmployees pay and contribution 3,918,000

67.39

Government company tax 520,000 8.77Providers of capitalInterest on borrowing 229,500 3.95Dividend to shareholders 280,500 4.83Retained in businessDepreciation of fixed assets 306,000 5.26Profit to reserve 570,000 9.8

5,814,00

0

100

(bi) GLOTECH TECHNOLOGIES LTD

CONVENTIONAL PROFIT STATEMENT FOR THE PERIOD ENDED 30 JUNE2008

N N



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Turnover 16,804,500

Bought out materials used inproduction

9,180,000

Salaries and wages 3,918,000Bought out services 1,810,50

0Depreciation of fixed assets 306,000Loan interest 229,500 15,444,0

00Profit before tax 1,360,50

0Taxation 510,000Profit after tax 850,500

Dividends 280,500Retained profit of the year 570,000

EXAMINERS COMMENTThe question which tests the candidates knowledge in preparation of valueadded statement was attempted by 60% of the candidates. Many of themscored above 50 marks, while few candidates lack the understanding of thedifference between value added statement and cash flow statement in part (a)of the question.

SOLUTION 5BONGAI LIMITED

PROFIT AND LOSS AND APPROPRIATION ACCOUNT FOR THE PERIODENDED

31 DECEMBER 2007

N NGross profit for the period 7,394,25

0Less:Bad Debts 21,250Wages and Salaries 1,762,50

0Rates and insurance 88,125Postages and telephone 38,750Electricity 110,250



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Debentures interest 100,000Directors fees 468,750Audit fee 75,000Sundry expenses 194,250

Depreciation:Office fittings 418,500Vehicles 242,000 3,519,87

5Net profit for the period 3,874,37

5Profit and loss account at 31 Jan 2007 1,515,75

0Profit available for distribution 5,390,12

5

Dividend proposed:10% ordinary 100,00010% preference 20,000 120,000

Transfer to general reserve 750,000Undistributed profit at 31 Dec 2007 4,520,12

55,390,12

5

BONGAI LIMITEDBALANCE SHEET AT 31 DECEMBER 2007



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N N NAuthorized and issued share capital1,000,00 N1 ordinary shares 1,000,00

02,000,000 10% N1 preference

shares

200,000 1,200,00

0Reserves:General reserve 9,000,00

0Undistributed profit 4,520,12

513,520,1

25Shareholders funds 14,720,1

25Loan capital:10% debentures 1,000,00

0

Net capital employed 15,720,125

Represented by:Fixed assetsLand and building (cost) 8,262,50

0Office fittings and equipment (cost) 2,790,00

0Less: Depreciation 1,493,50

01,296,50

0

Vehicles (cost) 1,212,5000

Less: Depreciation 1,030,000

182,500

9,741,500

Current assets:Stock 5,240,75

0Debtors 1,700,00

0Bank 487,250

7,428,000

LessCurrent liabilities:Creditors and accrual 1,279,37

5Debenture interest 50,000Dividend proposed 120,000 1,449,37

55,978,62

515,720,1

25


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EXAMINERS COMMENTThe question on income statement and balance sheet was attempted by 70% ofthe candidates. Candidates performance in part (a) was okay, while many ofthem performed poorly in part (b).

SOLUTION 6



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Head office current Account Cash 420,000 Cash 30,000

Goods 240,000Expenses 45,000Balances c/d 105,000

420,000 420,000Balance b/d 105,000

Purchases Account Head office 240,000 Trading

Account510,000

Creditors 202,500Cash 67,500

510,000 510,000

Sales Account

Trading Account 900,000 Sundry debtors 495,000

Cash 405,000900,000 900,000

Sundry Creditors Account Cash 142,500 Purchases 202,500Balance c/d 60,000

202,500 202,500

Sundry Debtors Account Sales 495,000 Cash 420,000

Balance c/d 75,000495,000 495,000

Expenses Account Cash 150,000 Profit and loss 195,000Head office 45,000

195,000 195,000

Cash Book Head office 30,000 Sundry

creditors142,500

Sundry Debtors 420,000 Head office 420,000Sales 405,500 Purchases 67,500

Expenses 150,000Bal c/d 75,000

855,000 855,000Bal b/d75,000


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EXAMINERS COMMENTThe question test candidates knowledge of branch account 60% of thecandidates attempted the question and many of them scored above 50 marks.

The common pitfall is that most of them could not post entries correctly into theledger accounts.



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AT101/PII.6 EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA

ACCOUNTING TECHNICIANS SCHEMEPART II EXAMINATION MARCH 2010

GOVERNMENT ACCOUNTING


Insert your Examination number in the space provided above

SECTION A (Attempt all questions)


1. The coordinated actions which have to be taken to ensure that fundsavailable are adequately controlled and effectively utilised are known as............................

A. revenue controlB. cash controlC. expenditure control

D. payment controlE. budgetary control.

2. Which of the following is an example of recurrent expenditure?

A. Advances granted to staffB. Refund of unspent touring advanceC. Payment for utilitiesD. Purchases of motor vehicleE. Construction of access road.

3. An example of below the line account is ........................

A. housing loanB. electricity billC. purchases of plant and machineryD. salariesE. cash received from the ministry of finance



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4. A Non Expendable store is a ...........................

A. stationery itemB. food stuff itemC. shovelD. motor vehicleE. brush

5. Store purchased for general stock rather than for a particular service forwhich the final vote of charge cannot be stated at the time of purchase iscalled ...................................

A. allocated of store

B. non-expendable storeC. expendable storeD. unallocated storeE. general store

6. Which of these best describes the composition of the Board of Survey?

A. The president and not less than two membersB. The president and not less than four membersC. The president and not less than six membersD. The president and not less than three members

E. The president and not less than one member

7. All of the following are debt instruments of foreign borrowing EXCEPT:

A. Government Development StocksB. Treasury BillsC. Government Revenue BondsD. Paris Club reschedulingE. Treasury certificates

8. All the items listed below are the functions of the Local Government,

EXCEPT:

A. Licensing of bicycles, trucks, motors vehicles etcB. Naming of roads and numbering of housesC. Registration of deaths and marriagesD. Provision of security for the entire local government council areaE. Construction and maintenance of roads



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9. ONE of the following budgets shows the total basic salaries and allowancesof various categories of staff in each ministry or department

A. Salaries and wages commission budget

B. Personnel Cost BudgetC. Total Cost budgetD. Manpower Planning BudgetE. Human Resources Cost Budget

10. Where income is distributed in the economy evenly, this is referred to as:

A. Equitable income distributionB. Inequitable distributionC. Income distributionD. Equity and Income distribution

E. Proportionate income distributionF.

PART II SHORT-ANSWER QUESTIONS (30 MARKS)

1. A radical approach of a countrys refusal to pay back its debt istermed........................

2. The Government Agency responsible for the administration and collectionof Value Added Tax (VAT) in your country is ..........................

3. A form of taxation which is fixed lump sum per head istermed ...........................

4. State TWO types of imprest you know.

5. The type of loan that can be sought by a country having persistent balanceof payment deficit is called...............................

6. A grant that is tied to a specific project is called ...........................

7. Items of revenue received to finance projects are called...........................

8. Funds that accrue to the Local Government Councils from theFederation/Consolidated Accounts and other constitutional releases arefrom ..................... sources.

9. The cardinal objectives of Internal Audit is to ensure that funds arenot .........................



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10. The name of fund whose assets are held by the government as trustee forapplication to purposes stated in the trust deed is called.........................

11. That voucher used in transferring money from one department to the

other without physical cash changing hands is called..............................

12. Incomes and expenditure not budgeted for but listed arecalled ...........................

13. All financial warrants must be issued and signed by the ............................

14. The control book that highlights the uncommitted balance at a glance iscalled ...........................

15. The government expenditure on roads, bridges, buildings etc is

called ...............................

16. On what date does the authority of the warrant issued expire?

17. What legal authority enables the government to incur expenditure beforethe passenger of the Appropriation Bill.

18. State the TWO ways in which a spoilt cheque is treated.

19. Who is responsible for the control of treasury and revenue collector receiptbooks in public sector accounting.

20. What is the name of the document used by the revenue collector to recordall the cash received and paid or transferred by him.

21. All receipt books, licences etc issued from the main stocks for use underthe relevant Financial Regulation must be recorded in a ..................... bythe receiving officer.

22. The Committee that examines all cases of audit alarm raised and broughtbefore it is called ............................

23. In government accounting Revolving Fund is also known as .....................

24. The transfer of funds to lower levels of government either directly orindirectly is referred to as ..........................

25. What is the official name of the external auditor to the Local Government?



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26. How is the outstanding balance of motor vehicle advance taken by aretiring officer treated?

27. What is the name of the document issued by the Accountant General for

the submission of Budget Estimate?

28. Which budget is prepared in the Public Sector for construction of bridges,schools and roads?

29. The budget technique that present public expenditure by referring tofunction and projects is called..........................

30. The type of budget that can be used to reflate an ailing economy isa(n) ....................



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SECTION B Attempt any Four Questions (60 Marks)

QUESTION 1You are required to enter the following transactions in cash book which wascarried out by John Kente for the month of December 2009.

December 1 John commenced business with N480,000cash

December 3 Paid into bank N280,000December 4 Purchased office equipment by cheques

N100,000December 5 Cash sales N16,000 paid cash for wages

N6,000December 12 Sent Peter sale cheque in settlement of hisaccount of N40,000 Discount received 2%

December 15 Cash sales N60,000December 17 Received cheque from Adebayo N76,000

being full settlement of his account N80,000December 19 Paid Tola N2,000 cashDecember 21 Sent Abubakar a cheque for N40,000December 23 Received cheque from Paul N40,000December 25 Paid staff wage in cash N8,000December 27 Sent cheque to Kanu in settlement of his

account of N48,000 less 5% discountDecember 28 Paid electric bill N8,400 cashDecember 29 Paid N20,000 into cashDecember 31 Paid into bank N8,000

(15 Marks)

QUESTION 2

The following balances are in the records of the Ministry of Water Resources forthe month of October, 2009.

Head & Description AmountSubhead

000

Receipt:2/1 VAT 40,7002/3 Companies Income Tax 7,500



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2/4 Capital Gain Tax 1,2505/3 Petroleum Profit Tax 4,73510/6 Stamp duties 1,20010/7 Sales of government properties 21,000

12/5 Sundries 7,000Below the- line2001 Deposits 5,0005001 Advances 3,700

Payments:8/1 Personnel Cost 27,5008/2 Local Transport 3,5008/3 Stationery 2,7508/4 Printing 2,1008/5 Utility Service 9,500

8/6 Maintenance of Properties 3,1508/7 Entertainment 1,7508/8 Motor Vehicle expenses 2,5008/9 Miscellaneous expenses 850

Below -the- line:2001 Deposits 8,5005001 Advances 3,500

Opening balance as at 1 October year2009

1,200

Required:

Prepare the Transcript of the Ministry for the month of October 2009. (15 Marks)QUESTION 3

The following information was extracted from the accounting records of Ministryof Transportation during the month ended August 2007. The Treasury Cashbookshowed a debit balance of L$11,200,000 as against the balance as per bankstatement that showed a credit balance of L$8,050,000. On investigation, it wasrevealed that:

(a) Cheques issued to suppliers but not presented to bank are:

L$

(i) 2604001 1,450,000

(ii) 2604040 800,000

(iii) 2604102 750,000

(b)An investment income of L$2,450,000 was received directly by the bankbut no entry in the



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cash book.

(c) Standing order of L$2,600,000 to Virgin Liberia made by bank but no entryin the Cashbook.

(d)A cheque of L$2,750,000 received from a Tender was duly entered into thecash book but no

entry was made in bank.

(e)Bank charges of L$1,350,000 had been deducted by the bank but no entrywas made in the #

cashbook.

Required:

(i) Prepare the bank reconciliation statement for August 2007. (12Marks)

(ii) State THREE financial items that require entries in the cashbook but notfeatured

in the bank reconciliation. (3 marks) (Total 15 Marks)

QUESTION 4

From the Ministry of Industry the following information were extracted from the ledger:

NValues of stores as per stock Account 1,307,00

0

Value of store issued during the year as abstract 1,407,500PAYMENTSPayment as per abstract 3,007,50

0Payment in respect of change previous year 2,075,00

0Expenditure credit from claim met 790,000Store taken on change at the fixed price as per stockaccount

4,500,000

Total Price Deficiencies 890,000

Value of claims raised 2006 750,000Transfer to unallocated stock net 950,000

You are required to:-

Prepare Unallocated Store Reconciliation Account Issue and Payment.

(15 Marks)

QUESTION 5



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(a) What is Incremental Budgeting System? (3 marks)

(b) The Ministry of Agriculture of Tema State provided the followinginformation about budgeted and actual overhead and personnel in respectof year 2007.

Head

Subhead

Title/Particular Previous

Actual

000 000

35 01 Contribution, Subvention &Grants

600 600

35 02 Maintenance of capital assets 1,575 1,183

35 03 Maintenance Motor vehicle 605 63535 04 Office furniture & Maintenance 400 36435 05 Stationery 1,160 98635 06 Telephone Services 210 26335 07 Utility 355 31835 08 Travel & Tours 875 1,03

035 09 Personnel Costs 2,600 2,49

035 10 Staff Training & Development 203 17335 11 Contributions to Foreign Bodies 430 430

35 12 Miscellaneous Expenses 650 553

The following information are also relevant:

(i) Increase in activities in 2008 will attract 30% of overhead cost.

(ii) 20% of total salaries for 2007 is required to meet the additional personnelcost 2008. The

personnel costs for the year 2007 include 945,000 spent on staffallowance.(iii) The staff allowance will be 50% of the year 2008 staff salaries.(iv) An inflation factor of 20% on overhead cost is recognised in the

computation

of 2008 budget.


Prepare an incremental budget for the year. Show all workings. (15Marks)



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QUESTION 6

(i) The Auditor General for FREETOWN STATE observed the following anomalies on

Treasury Clearance Fund (Statement 5.1) as at 31 December 2005.

(a)

Account No Description Amount inTrial balance

Le

Amount inStatement

Le

Difference

Le

1100 -1199

Excess CashAccount

CR

160,559,146

79,703,159 CR

80,855,987

CR

1300

1399

Clearance

AccountSAD

D

R

553,475 553,275 D

R

200 DR

(b)The total debit figures in the statement should be Le26,202,854 instead ofLe26,202,654 while the total credit figure should be Le227,700,535

instead ofLe146,884,548.

(c) The net balance as at 31 December 2005 should be Le201,497,681 insteadof

Le120,641,894.

You are required to effect the correction through the use of the Journal.

(10 Marks)

(ii) State FIVE particulars that a good Advances Voucher should disclose.

(5Marks)

(Total 15 Marks)MULTIPLE CHOICE QUESTIONS

1. C

2. C

3. A

4. D



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5. D

6. A

7. D

8. D

9. B

10. A

SHORT ANSWER QUESTIONS

1. Debt repudiation

2. Federal Inland Revenue Service (FIRS)

3. Poll Tax

4. Standing and Special Imprest

5. Balance of payment support loan

6. Specific grant

7. Capital receipts

8. Statutory

9. Mismanaged or misappropriated

10. Trust funds

11. Adjustment voucher

12. Below-the-line account

13. Minister of Finance

14. Vote book

15. Capital expenditure



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16. 31st December (the end of the year)

17. Provisional general warrant

18. (i) Spoilt cheque must be cancelled(ii) Spoilt cheque to be affixed to the counterfoil(iii) The designated bank is promptly informed(iv) Corresponding cheque number cancelled in cheque delivery register

19. The Accountant-General

20. Revenue collector cash book

21. Receipt Book Register

22. Audit Alarm Committee

23. Working capital fund

24. Intergovernment transfer

25. Auditor-General for local government

26. The outstanding balance of advance is deducted from the retiring officersgratuity embloc. However, if the gratuity is not adequate to recoup the

outstanding amounts, the vehicle is seized by court action, sold andnecessary set-off exercised.

27. Call circular28. Capital budget

29. Performance budgeting

30. Deficit budget

SOLUTION 1

SECTION BJOHN KENTE CASH BOOK FOR DECEMBER 2009

Date Particular

Discount

Cash Bank Date Particular

Discount

Cash Bank



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Allowed

received

Dec 3 Cash 480,000

Dec. 3 Bank 280,000

Dec 5 Cash 280,00

0

Dec. 4 100,0

Dec15

Sales 16,000 Dec. 5 Wages 6,000

Dec17

Adebayo 60,000 Dec. 12 Prefer 800 39,20

Dec23

Paul 4,000 76,000 Dec. 19 Tola 2,000

Dec 9 Bank 40,000 Dec. 21 Abubakar 40,00Dec31

Cash 20,000 Dec. 25 Wages 8,000

8,000 Dec. 27 Kanu 2,400 45,60

Dec. 28 ElectricBill 8,400Dec. 29 Cash 20,00Dec. 31 Bank 8,000Dec. 31 Bal c/d 263,60

0159,2

_____ _______ _______ _____ _______ ______4,000 576,00

0404,00

03,200 576,00

0404,0

Bal b/d 263,600

159,700

EXAMINERS COMMENTQuestion 1 is on cash book of transactions for a month in a three column cashbook. More than 99% of the candidates attempted this question. 70% of thecandidates that attempted the question scored above 50%. Confusion ofbetween cash and bank columns were faced by candidates.

SOLUTION 3

(a) MINISTRY OF TRANSPORTATIONBANK RECOCILIATION STATEMENT FOR THE MONTH OF AUGUST 2007

N NTreasury cash book balance31/8/07

11,200,000

Add Unpresented cheques2604001 1,450,0002604040 800,0002604102 750,000 3,000,000

Investment income 2,450,000



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16,650,000

Less: Uncredited chequeStanding orders 2,600,000

Tender 2,750,000Bank charges 1,350,000 (6,700,000)

Bank error 1,900,000

Balance per bank statement 8,050,000

(b)i) Bank chargesii) Dishoured chequesiii) Standing order

iv) Clerical errors in the cash bookv) Errors, omission and irregularities such as casting errors

EXAMINERS COMMENTQuestion 3 is a question on bank reconciliation statement for a month. About95% of the candidates attempted this question. Majority of the candidatesunderstand the topic hence 80% of those that attempted it scored over 50%.

SOLUTION 4UNALLOCATED STORES

RECONCILIATION ACCOUNTISSUE

N NValue of store issue asper

Value of store as

store account 1,307,000 per abstract 1,407,500

Adjustment 100,5001,407,500 1,407,50

0

PAYMENTSN N

Payment as per abstract 2006 3,007,500 Stock taken onLess payment in respect 2005 2,075,000 Change fixed 4,500.000Less expenditure credit 790,000 Total price 890,000



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deficienciesValue of claim 750,000

Less transfer unallocateddeficiencies

Sub head price excess 950,000Sub-Total 807,500Adjustment 5,332,500

6,140,000 6,140,000

EXAMINERS COMMENTQuestion 4 is on unallocated store accounts. Only about 40% of the candidatesattempted this question and about 10% of them scored pass marks. Generallythey performed woefully. This indicated that candidates did not prepare for thistopic. This is a potential future topic for reexamination.

SOLUTION 5

(a) Incremental budgeting system is a technique by which a particularpercentage of last years budget is added to obtain this years budget.

(b)MINISTRY OF AGRICULTURE, TEMA STATEINCREMENT BUDGET FOR THE YEAR 2008

Head 35

Sub-heads

Particulars/titles Notes 000

01 Contribution, subvention & grants 1 936.0002 Maintenance of capital assets 2 1,845.4803 Maintenance of motor vehicle 3 990.6004 Office furniture & maintenance 4 567.8405 Stationery 5 1,538.1606 Telephone services 6 410.2807 Utilities 7 496.0808 Travel & tours 8 1,606.8009 Personnel costs 9 2,781.00

10 Staff training & developments 10 269.8811 Contribution to foreign bodies 11 670.8012 Miscellaneous expenses 12 862.68

To budget cost 12,975.60

Working:



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Notes

SubHeads

Particulars Workings

1 01 Contribution etc 600 x 1.20 x 1.3 936.002 02 Maintenance of capital assets 1,193 x 1.20 x 1.30 1,845.4

83 03 Maintenance of motor vehicle 635 x 1.20 x1.30

990.60

4 04 Office furniture & maintenance 364 x 1.20 x1.30

567.84

5 05 Stationery 986 x 1.20 x1.30

1,538.16

6 06 Telephone services 263 x 1.20 x1.30

410.28

7 07 Utilities 318 x 1.20 x1.30

496.08

8 08 Travel & tours 1,030 x 1.20 x1.30 1,606.809 09 Personnel cost:

Salaries = (2,490 945) x1.20

Staff allowance (1,854 x50%)

1,854927 2,7810

0

10 10 Staff training & development 173 x 1.20 x1.30

269.88

11 11 Contribution of foreign bodies 430 x 1.20 x1.30

670.80

12 12 Miscellaneous expenses 553 x 1.20 x1.30 862.68

EXAMINERS COMMENTQuestion 5 deals with budgeting in governmental establishment. Around 65% ofthe candidates attempted this question where about 10% of them scored passmarks. Candidates should realize the importance of budgeting in organizationsand should understand it properly, theory and practice.

SOLUTION 6

(a)i DR Difference account 80,855,987



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ii CR Clearance state net 80,855,987iii DR Clearance statement 200Iv CR Difference account 200

(b)

(c)

Voucher relating to advance must indicate:a) Name of the officer collecting the advanceb) Designation of officer collecting the advancec) Below the line code

d) Nature of advancee) Term of recoveryf) The authority for the advanceg) Approving officeh) Ledger referencei) Officer entry into the ledger

EXAMINERS COMMENTQuestion 6 deals with anomalies in Auditor-General is Treasury Clearance Fund,which requires journal entry. The question is meant to test the candidatesknowledge of application of journal in correcting accounts. About 20% of

candidates attempted this question where only 30% of them scored pass marks.The correction of accounts is important, candidates should prepare for it.

AT/101/PII.7 EXAMINATION NO:


DR Clearance statement 200

CR Difference account 200DR Difference account 80,815, 989

CR Clearance statement 80, 815, 987

DR Difference account 280,855.787

CR Statement clearance 80,855,787


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ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICAACCOUNTING TECHNICIANS SCHEMEPART II EXAMINATION MARCH 2010

QUANTITATIVE ANALYSIS





1. When a fair coin is tossed once, a boy wins 100 if head shows up and

loses 50 if tail shows up. Find his expected income

A. 25.00B. 50.00C. 55.00D. 75.00E. 150.00.

2. If the regression coefficient is positive, this indicates

A. High correlationB. Negative correlationC. Non-sense correlationD. Positive correlationE. Low correlation.

3. How many samples of size 2 can be chosen from 5 numbers withoutreplacement?

A. 32B. 25

C. 20D. 10E. 7

4. If the marginal cost of a product is given by MC = 9 + 3q2, then the totalcost is

A. 6q + CB. 9q + 6q2 + C



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C. q3 + CD. 9q + q3 + CE. 9q + 6 + C.

5. If Matrix P of dimension 2 x 2 is multiplied by I = 1 0 the result

is0 1 ,

A. P -1

B. PC. PT

D. PPT

E. I.

6. If a sum of N12,000 is invested for two years at 8% compounded semi-annually, the amount is

A. N12,979.20B. N14,038.30C. N13,920.00D. N13,996.80E. N14,480.00

7. Which of these statements is correct?

A. Arithmetic mean < Geometric mean < Harmonic meanB. Arithmetic mean = Geometric mean = Harmonic meanC. Arithmetic mean > Geometric mean > Harmonic mean

D. Harmonic mean > Geometric mean > Arithmetic meanE. Geometric mean > Harmonic mean > Arithmetic mean

8. Data obtained from these methods can be regarded as primary source ofdata EXCEPT:

A. Observation methodB. Personal interview methodC. Panel methodD. Telephone methodE. Registration method.

9. The head and the tail of an arrow in a network respectively indicate the

A. beginning and the end of a taskB. end and beginning of a taskC. head event and tail eventD. tail event and head event



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E. end task and tail event.

10. The minimum duration of a project equals the sum of the

A. durations of all possible paths in the networkB. durations of the longest and the shortest activitiesC. durations of activities on the longest non-critical pathD. durations of activities connecting events where the earliest start

time equals latest start timeE. optimistic and the pessimistic time estimates of activities along the

critical path.

PART II SHORT- ANSWER QUESTIONS (30 Marks)

1. The TWO main aspects of statistics are ............... and ..................

2. The difference between the upper and lower class boundaries of a groupeddata is called .................

3. A table containing variable values in one column and the number of timesthese values repeat themselves in adjoining column is knownas .................

4. The value in the data set which lies in such a position that half of theobservations are below it and the remaining half above it is known as

the ................

5. The arithmetic mean of the absolute values of the deviations of theindividual values from the mean in a data set is ..................

6. The probability of an event which cannot occur is ..............

7. Given that the mean and variance of a set of data are 25 and 16respectively, then the coefficient of variation is ..................

8. The type of interest that accrues only on the principal is known as ...........

9. A null set is a subset of every defined set. True or False?

10. The profit is zero when revenue ...............

11. If x represents the number of oranges, and y stands for the number ofapples and if the two items are related as follows:

2x + y < 40



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x + y = 22then x is .......................

12. A set with four elements or members has .......... subsets.

13. The set that contains all the elements in the universal set but are notfound in sets A nor set B is written in notation form as ..................

Use information in the diagram below to answer questions 14 and 15.

A(28) B U

5 y 9

x 2x 15

8 C(32)

14. From the Euler-Venn diagram shown above, the total number of elementsin set B (i.e. n (B)) is .....................

15. The size of the universal set n(U) in the Euler-Venn diagram is ............

16. The list of every member of a population is called the ..................

17. The normal distribution reasonably approximates the binomial distributionwhen the number of trials is ............ and the probability of success is notclose to ..............

18. Regression establishes a ............ between two variables while correlationmeasures the strength of the ...............

19. The mean of a sample of size 100 is 20 while the population mean andstandard deviation are 18 and 6.8 respectively. Calculate the test

statistic.

20. If Kofi expects 400 cedis from his brother with probability 0.6 and 300cedis from his sister with probability 0.5, how much money is he likely tohave?

21. If the null and alternative hypotheses are stated as Ho: = 0; Hi: > 0,then the test is said to be a ............. test.



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22. The feasible region in any Linear programming problem is always in thefirst quadrant because the variables cannot be ...............

23. In transportation problems, the cost of transporting one unit of acommodity must be ..............

24. An activity in a process is represented on the network by ..............

25. The shortest time period in which a whole project can be completed equalsthe duration of the ...............

26. The correct presentation of the network shown below is .......

B

1 A 2 3 D 4C

27. The revenue (in Naira) from the sales of x units of a product is representedby R(x) = 7x3 + 4x2 + 7x. Then the marginal revenue is ...............

28. The rate of increase of the revenue in question 27 when 50 units of theproduct are sold is ............

29. TWO types of models that are used for inventory control are deterministicand ...............

30. The level of stock at which a further replenishment order should be placedis ...............

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

QUESTION 1

The daily profits (in N000) made by an accounting consulting company in aseason are given below:

20 32 45 50 18 18 24 2815 23 12 36 38 16 44 4840 31 24 36 37 43 30 2128 33 35 25 49 22 26 33


STATISTICS


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38 27 26 24 27 29 34 3730 20 40 43 27 41 28 31

a) By the aid of Tally method, use the classes 10-14, 15-19, etc., to construct

the frequency distribution table for the data. (8 Marks)

b) Determine the,(i) Number of days the company operated.(ii) Number of days the company made a daily profit of less than

N30,000.(iii) Proportion of the days under consideration in which the company

made a daily profit of at least N40,000.(iv) Percentage of the days under consideration in which the company

made profit of at least N20,000 but less than N30,000. (7 Marks)(Total 15 Marks)



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QUESTION 2

TWO out of every FIVE students from JAYEBs local government council intertiary institutions are awarded scholarships.

If 400 students from the local government are randomly selected, calculate theprobability that(a) at least 150 (8 Marks)(b) between 140 and 175 (4 Marks)(c) at most 135 (3 Marks)

of the students are awarded scholarships (Total 15 Marks)

QUESTION 3

The auditors report of a company provides the following data for themanagement to take valuable decisions on weekly expenses.

Week 1 2 3 4 5 6 7 8Expenses(m)

5 4 10 12 8 6 6 5

(a) Calculate the

(i) Mean weekly expenses (4 Marks)(ii) Variance of the weekly expenses (5

Marks)(iii) Co-efficient of variation of the weekly expenses.

(4 Marks)

(b) Based on your result in (a)(iii) above only, comment, in not more than onesentence, on the stability of the weekly expenses.

(2 Marks)

(Total 15 Marks)

BUSINESS MATHEMATICS

QUESTION 4

In a manufacturing company, the demand and total cost functions arerespectively p = 36 q2 and C = 2q2 + 4q, where q is the number of quantitiesproduced and sold.

3

a) Determine the number of quantity that will



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(i) maximise the profit of the company and hence determine themaximum profit.

(ii) make the company to break even. (11 Marks)

(b) Determine the elasticity of demand when the profit is maximum andcomment on your result. (4 Marks) (Total 15 Marks)

QUESTION 5

Madam Love operates a Beauty Salon in Akoka. She specialises in Afro (x), JerryCurl (y) and Perming (z) hair styles. To service each customer, she makes use ofdryer, washer and stylists. To do an afro hair style requires 1 hour in the dryer,2 hours in the washer and 2 hours with the stylist. The jerry curl hair style

requires 4 hours in the dryer, 2 hours in the washer and 3 hours with the stylist.And the perming hair style requires 2 hours in the dryer, 1 hour in the washerand 3 hours with the stylist. She has available 220 dryer hours, 200 washerhours and 330 stylists hours.

Required:

a) Obtain the system of linear equations for Madam Loves problem. (3Marks)

b) Use the Cramers rule to determine how many Afro (x), Jerry curl (y) andPerming (z) hair styles she can do given her available resources.

(12 Marks) (Total 15 Marks)OPERATIONS RESEARCH

QUESTION 6

An organisation has just established a canteen outfit for its staff members wherethey are to take free meals. The staff members are entitled to breakfast, lunchand dinner. The organisation has two main cadres of staff, management staff(M) and operating employees (O). In order to minimise costs, the organisationhas decided to encourage its staff to skip either lunch or dinner.

The table below gives the information pertaining to the decision problem.

ActivitiesActivity Levels

Mx1

Ox2

Lower Limitsof Availability

Resour B 5 5 1000

L 3 2 600



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ces D 2 3 800

Contribution to cost N1,200

N800

where: x1 denotes the number of management staff members to be givenmeals.x1 denotes the number of operating employees to be given meals.

Required:

(a) Formulate the problem as a Linear Program. (3 Marks)(b) Plot the Primal Model on a graph and identify the feasible region (10Marks)(c) Obtain the Dual of the problem. (2 Marks)

(Total 15 Marks)

QUESTION 7

The demand for an item is 160,000 per quarter at a constant rate. The orderingcost is L$120 while holding cost per item is L$3.75 per annum.

You are required to find the:

(a) Economic Order Quantity. (6 Marks)

(b) number of orders per year and the associated ordering cost. (5Marks)

(c) total cost per annum. (4 Marks) (Total 15 Marks)



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SECTION A

PART I MULTIPLE-CHOICE QUESTIONS

1. A

2. D

3. D

4. D

5. B

6. B

7. C

8. E

9. B

10 D

Workings

1. Expected income = x 100 + x (-50) = N25

3. 5C2 = 5 x 4 = 102

4. C = (9 + 3q2) dq = 9q + q3 + c

6. A = P (1 + r)n in 2x2 = 4; n = 2x 2 = 4 r = 0.4 (i.e. 8% 2 for semiannually)

= 12,000 (1 + 0.04)4

= N14,038.30

7. Out of the three, Arithmetic mean is the highest while the Harmonic meanis the smallest.

8. Here Registration method is the most appropriate and correct option .



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SHORT - ANSWER QUESTIONS

1. Descriptive and inferential

2. Class width or class size

3. Frequency table

4. Median

5. Mean Absolute Deviation or MAD

6. 0.0 or zero

7. x 100/1 = 4/25 x 100/1 = 16%x

8. simple interest

9. True

10. equals cost or is equal to cost

11. y = 22 x2x + 22 x < 40

x < 40 22 = 18;. x < 18

12. 24 or 16

13. (AB)1 or A1B1

14. 8 + 15+x + 2x = 32 x = 35 + y + x + 2x = 28 5 + 3 (3) + y + 28 y = 14

: . n (B) = 9 + 15 + (2(3) + 14 = 44

15. n(U) = 44 + 3 + 5 + 8 = 60

16. Sampling frame

17. large, zero (in that order)



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18. relationship, relationship (association)

19. z = x = 20 18 = 2.94

/n = 6.8/ 10020. 0.6 x 400 + 0.5 x 300 = 390 cedis

21. one tailed or one sided

22. negative or less than zero

23. constant

24. an arrowed line or

25. critical path

B26. A

C D

OR

A B D

C

27. R (x) = 7x3 + 4x2 + 7x:. MR = dR (x) = 21x2 + 8x + 7

dx 2(x)

28. MR = 21x2 + 8x + 72x

at x =50MR = Rate of increase = 21(50)2 + 8(50) + 7

250ATSWA PART II - MARCH 2010

23

41

1 2 3 4


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=N52,900.4929. Stochastic in probabilistic model

30. Re-order level

EXAMINERS COMMENTThe entire syllabus is fairly covered in which the three sections of the syllabus(i.e. Statistics, Business Mathematics and Operations Research) are adequatelyrepresented. The performance of candidates was fair.

SOLUTION 1

a)Profit (N000) Number

of days10-14 I 115-19 III 420-24 IIII III 825-29 IIII IIII 1030 - 34 IIII III 835 - 39 IIII III 740-49 IIII I 645 -49 III 350 - 54 1 1

48

b) (i) Number of days of operation = f = 48 days(ii) Number of days with daily profit less than N30,000

= 1 + 4 + 8 + 10 = 23 days

(iii) Number of days with daily profit of N40,000 or more= 6 + 3 + 1 = 10 days

:- proportion of the total days = 10/48 = 5/24 or 0.208

(iv) Number of days with daily profit more or equal to N20,000 but lessthan N30,000

= 8 + 10 = 18 days:- percentage of the total days= 18/48 x 100/1 = 37.50%

EXAMINERS COMMENTThis question tested the candidates knowledge of constructing frequencydistribution table from the given set of data using the Tally Method.



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Majority of the candidates attempted the question and not less than 70% of thecandidates did fairly well.

The only pitfall identified was the inability of a few candidates to correctly use

the Tally Method to capture the total daily profits.SOLUTION 2

P = 2/5 = 0.4:- q = 0.6

np = 400 x 0.4 = 160npq = 400 x 0.4 x 0.6 = 9.8Calculate the various Z values as follows:

(a) 150 160 = - 1.029.8

A = 0.3461 from the table and B= 0.5:- the required probability (shaded) = 0.5 + 0.3461 = 0.8461

A B

-1.02

b) 175 160 = 1.539.8

140 160 = -2.049.8

A is 0.4793 and B is 0.4370 from the tables:- required probability (shaded) = 0.4793 + 0.4370 = 0.9163

A B

-2.04 1.53



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INSIGHT

c) 135 160 = -2.559.8

A is 0.4946 from the tables:- required probability = 0.5 0 .4946 = 0.0054

A

-2.55

EXAMINERS COMMENTThis question is on probability distribution using Normal approximation toBinomial.

Very few of the candidates attempted the question and their performance wasfair. The main pitfall identified was the inability of most of those who attemptedit to correctly use the Normal Distribution Tables.

SOLUTION 3X X2

5 254 1610 10012 1448 646 366 365 2556 446

(i) mean = x = 56n 8

=7.0 = 7m(ii) variance = 2 = x2 (x)2 /n

n= 446 (56)2/8

8= 54/8 = 6.75



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(iii) C.V. = x 100x 1

=6.75 x 1007 1

= 2.5598 x 1007 1 = 37.12%

b) Since, the coefficient of variation is a little above 30%, one can concludethat the weekly expenses are fairly stable.

Variance = (x x)2 = 54n 8 = 6.75

EXAMINERS COMMENTThe question is set to test candidates ability to identify discrete data. Majorityof the candidates failed to recognise this aspect of the question and hence madeblunders by using wrong set of data as variates i.e. they were using the realfigures i.e. the expenses as frequencies and the time (given in weeks) asvariables. Generally, the performance was very poor. More than 95% of thecandidates attempted the question.


ALITERX (X X) (X X)2

5 -2 44 -3 9

10 3 912 5 258 1 16 1 16 -1 16 -1 15 -2 4

54


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SOLUTION 4

a) (i) Profit ( Revenue Cost

= q (36 q2) - (2q2 + 4q)3

=36q q3 2q2 4q3

= 32q q3/3 2q2

d /dq = 32 q2 4q

At the turning point, d /dq = 0, then

32 q2 4q = 0i. e. q2 + 4q 32 = 0

(q-4) (q+8) =0 gives q= 4 or -8

At this point, q = -8 is rejected since quantities cannot benegative.

d2 = -2q - 4

dq2

when q = 4, d2 = -8-4 = -12 < O hence

dq2

q =4 gives maximum profit.

:- maximum profit = 32(4) (4)3 2(4)2

3=74.67

4a (i) Aliter

R = q 36 q2 = 36q q33 3

For maximum profitMR =MCi.e. 36 -q2 = 4q + 4i.e. q2 + 4q 32 = 0(q 4) (q + 8) = 0

q = 4 or -8i.e. q = 4 since q cannot be negativeNow profit is R Ci.e 36q q3 2q2 4q

332q q3 2q2

3: . maximum profit = 32 (4) (4)3 2(4)2



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INSIGHT

= 74.67

(ii) The company breaks even when R = C36q q3 = 2q2 + 4q

3i.e 36 q2 = 2q + 4 q2 + 6q-96 = 03

:- q = -6 (36 + 384) = + 7.25 or 13.252

;- the company will break even when q = 7.2



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b) Elasticity of demand E = -dq pdp q

p = 36 q23

dp = -2qdq 3

:- E = -3 108 q22q 3q

= 3 108 q22q 3q

= 3 108 162x 4 3 x 4

= 23/8 =2.88So, the demand is elastic since E > 1

EXAMINERS COMMENTThis is a Business Mathematics question which tests the candidates knowledgeof (i) basic differentiation being applied to determine maximum profit (ii) thecondition under which a company can break even and (iii) determination of theelasticity of demand when the profit is maximum. About 50% of the candidates

attempted the question.

The pitfalls identified include candidates inability to simplify well, to know thecondition for maximum profit, to know when a company breaks even and toknow the correct expression for the elasticity of demand.

The overall performance of candidates was fair.

SOLUTION 5

Afro

(x)

Jerry Curl

(y)

Perming

(z)

Availabilit

yDryer 1 4 2 220Washer 2 2 1 200Stylist 2 3 3 330

System of linear equations

x +4y + 2z = 220



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INSIGHT

2x + 2y + z = 2002x + 3y = 3 z = 330



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and in matrix form

1 4 2 x 2202 2 1 y = 3002 3 3 z 330

= 1 4 22 2 1 = 1 1 2 - 4 2 1 +2 2 2

3 3 2 3 2 32 3 3 = 3 16 + 4

= -9

x = 220 4 2200 2 1 = 220 2 1 - 4 200 1 +2 200 2

3 3 330 3 330 3330 3 3 = 660 1080 -120

= -540

x = x = -540 = 60 -9

y = 1 2202 200 = 1 200 1 -220 2 1 +2 2 200

330 3 2 3 2 3302 330 = 270 880 + 520

= -90

:- y = -90 = 10 -9

z = 1 4 2202 2 200 = 1 2 200 - 4 2 200 +200 2 2

3 330 2 330 2 32 3 330 = 60 1,040 + 440

= -540

:- Z = z = -540 = 60 -9



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i.e Madam Love should do 60 Afro, 10 Jerry curl and 60 Perming.

EXAMINERS COMMENT

This question tests the candidates knowledge of the use of Cramers Rule tosolve a systems linear equations. This involves determining determinants ofappropriate matrices. A number of candidates had problem with that aspect ofthe question.

Almost 90% of the candidates attempted the question with about 50% of themdoing fairly well.

SOLUTION 6

a) Formulation as a Linear Program

Minimize Z = 1200x1+ 800x2 object functions.t. 5xi + 5x21,000 . Breakfast constraint3xi + 2x2 600 Lunch constraint2xi + 3x2 800 . Dinner constraint

xi, x2 0 ... non-negativity

b) Solution by the Graphical methodInitialising the problem

5xi + 5x21,000 . 13xi + 2x2 600 22xi + 3x2 800 . 3

xi, x2 0 ... non-negativity

obtaining boundary Pointsfrom equation 1 when x1=00x1 + 5x2 = 10005x2 = 1000;. X2 = 1000 = 200

5 point A = (0,200)From equation 1 when x2 = 05x1 = 1000

;. X1 = 1000 = 2005 point B = (200,0)

From equation 2 when x1 = 00x1 + 2x2 = 6002x2 = 600;- x2= 600 = 300

2 point C = (0,300)



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From equation 2 when x2 =03x1 + 2(0) = 6003x1 = 600;- x1 = 600 = 200

3 point D = (200,0)

From equation 3 when x1 = 00x1 + 3x2 = 8003x2 = 800:- x1 = 800 = 266.67

3 point E = (0,266.67)

From equation 3 when x2 = 02x1 + 0x2 = 8002x1 = 800

;- x1 = 800 = 4002 point F = (400,0)Please see graph sheet. Feasible Region = FIC

c) The dual of the problem is obtained asmaximize Z = 1,000y1+600y2 + 800y3s.t5y1 + 3y2 + 2y3 1,2005y1 + 2y2 + 3y3 800y1, y2, y3 0

Graph

EXAMINERS COMMENTThis is an OR application question based on linear programming techniques.

Very few candidates attempted the question and the performance was generallypoor.

The major pitfall was the candidates inability to formulate the relevant linearprogramming problem such as objection function and the constraints.

SOLUTION 7



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INSIGHT

a) Q = 2cdh

where d = 160,000 x 4 = 640 per annum

:- Q = 2x 120 x 640,0003.75= 6,400

b) No of orders per year = d/Q= 640,000

6,400=100

Associated ordering cost = L$(120 x 100)= L$12,000

c) Total cost per annum = c.d + Q/hQ 2

=120x 640,000 + 6400 x 3.756,400 2

=L$24,000

EXAMINERS COMMENTThis is an inventory control problem. Candidates are expected to calculateEconomic Order Quantity (EOQ) from the given data. The major pitfall identified

was the inability of majority of the candidates to obtain the correct annualdemand from the information given.

Virtually, all the candidates attempted this question with about 30% doing fairlywell.



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AT/101/PII.8 EXAMINATION NO

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICAACCOUNTING TECHNICIANS SCHEMEPART II EXAMINATION MARCH 2010

INFORMATION TECHNOLOGY





1. Which of the following is collection of records of the same type or relateddata?

A. BitB. ByteC. FieldD. FileE. Data

2. The sum of 11101two and 1111two is.

A. 11111 twoB. 111001twoC. 101100twoD. 111000twoE. 1011101two

3. Serial transmission can occur either

A. Asynchronously or synchronouslyB. Serially or Bi-serially

C. Asynchronously or Bi-synchronouslyD. Synchronously or Bi-AsynchronouslyE. Bi-serially or co-synchronously

4. Which of these is NOT of the seven Open Systems Interconnection (OSI)Layer

A. Application



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B. Data evolutionC. TransportD. NetworkE. Physical

5. A keyboard with only 88 keys is called ........................

A. enhanced keyboardB. standard keyboardC. cloned keyboardD. classified keyboardE. specified keyboard

6. A printer which prints whole lines at a time is called .....................

A. Image printerB. Character printerC. Line printerD. Laser printerE. Page printer

7. Which of the following is NOT a running or operating cost during systemsdevelopment.A. Staff salariesB. OverheadsC. Cost of hardware

D. Utilities and consumableE. Insurance and financing

8. The contents of a feasibility study report exclude ONE of the followingitems.

A. Current system issuesB. Executive summaryC. Description of optionsD. ConclusionE. Fact findings

9. The following are computer crimes common in an IT environment EXCEPT:

A. ImpersonationB. Data diddlingC. Intentional spreading of virusesD. HackingE. Access to a large database



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10. A security measure built into a system with the powers of judgment todetermine the accuracy of output or result describes.

A. VerificationB. ValidationC. Through putD. Bench mark testE. Test run

PART II SHORT-ANSWER QUESTIONS (30 Marks)

1. The major advantages of primary memory over the secondary storage is

2. The processor consists of arithmetic and unit.

3. The components of the hardware are input, output, storage and.. units.

4. A standard computer keyboard has . function keys.

5. The three basic types of monitors are RGB monitors, . and colourmonitors.

6. A collection of related records or a logical grouping of characters is knownas .

7. A configuration of eight bits used to represent a character is .

8. ASCII is an acronym for ..

9. An integrated collection of data is

10. A computer with the combined features of representing process data indiscrete values and also akin to measuring instruments such as

thermometers is known as

11. A user who illegally penetrates a computer network to manipulate data iscalled

12. Protective measures taken to prevent physical, logical and proceduraldamage of the computer system is called ..



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13. A computer crime that involves falsifying data at the point of entry iscalled

14. A computer crime whereby criminals snoop around computer room to gain

access to the physical facilities and the computer file iscalled

15. An E-mail virus that has infected over 100,000 computers iscalled..

16. A network in which all communications devices are connected to acommon channel is called a network.

17. A client computer system can remotely login to computer server acrossthe internet. The protocol that governs the login is known as

18. An interface that enables dissimilar networks to communicate is known as.

19. The name given to the communications network that covers ageographical area, the size of a city or suburb is known as

20. The use of television, video and sound technology together withcomputers to enable people in different geographical locations to see, hearand talk with each other is called..

21. Computer package designed for numerical, statistical and accountinginformation is called

22. Word star is an example of packages.

23. Symphony is an example of packages.

24. Pictorial representation of the set of procedures used in writing a programis called .

25. Program flowchart and .. flowchart are major type of

flowcharts.

26. The computer-to-computer system of exchange of structured businessinformation in a standard electronic format is called.

27. MS Internet Explorer and Netscape Navigator are both examples of.



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28. An electronic business activity that includes delivery of information,products, services and payments using the internet is called ..

29. The combination of text, audio, video and graphics are .

information that may be required in E-commerce applications.

30. The type of E-commerce that binds the relationship between consumersand the company is referred to as

SECTION B - Attempt any FOUR questions (60 Marks)

QUESTION 1

Identify FIVE major features of each of the following computer hardwaregenerations:

(a) First Generation (5 Marks)(b) Third Generation (5 Marks)(c) Fourth Generation (5 Marks)

(Total 15 Marks

QUESTION 2

(a) What do you understand by Direct Input devices of a computer system?(2 Marks)

(b) Input devices are made using different technologies. Two of such are

magnetic and optical.

(i) Give THREE examples of magnet input devices (3 Marks)(ii) Give TWO examples of optical Input devices (2 Marks)

(c) Give TWO advantages and TWO disadvantages ofTWO input devices(8 Marks)

(Total 15Marks)

QUESTION 3

a) What is software? (2 Marks)

(b) Explain the TWO main types of software with FOUR examples each(8 Marks)

(c) Give any TWO classifications of Operation System and state FOURexamples of each.

(5 Marks)



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(Total 15 Marks)

QUESTION 4

(a) Explain the term Network Topology? (2 Marks)

(b) Described briefly with the aid of diagram the following:(i) Ring Topology(ii) Bus Topology(iii) Star Topology (9 Marks)

(c) List FOUR devices used in networks. (4 Marks) (Total 15 Marks)

QUESTION 5

a) What is a Computer Crime? (3 Marks)

(b) Give any SEVEN examples of computer crimes that can be committed in aworkplace. (7Marks)

(c) (i) Explain the term Time and Resources Theft(ii) Give any three examples of such Theft (5 Marks)

(Total 15Marks)

QUESTION 6

(a) Name and describe FOUR internet capabilities and their functions(8 Marks)

(b) State FOUR benefits of the Internet to an organisation (4 Marks)

(c) What is a firewall? (3 Marks) (Total 15 Marks)



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MULTIPLE CHOICE ANSWERS

1. D2. C

3. A

4. B

5. B

6. C

7. C

8. E

9. E

10. D

EXAMINERS COMMENTThis section consists of ten multiple choice questions which cover major parts ofthe syllabus. The performance was good as 70% of the candidates scored over50% of the

SHORT ANSWER QUESTIONS

1. Speed of Access

2. Logical and Control

3. Central processing

4. Ten

5. Monochrome

6. Field

7. Byte

8. American standard code for information interchange



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9. Database

10. Hybrid

11. A Hacher

12. Computer Security

13. Data Swindling

14. Piggy backing

15. Mellisa Virus / Sobig Virus

16. Bus/Ring

17. Telnet/ Wireless Application protocol ( WAP)

18. Gateway

19. Metropolitan area network (MAN)

20. Video conferencing (Teleconferencing)

21. Spreadsheet

22. Word Processing

23. Spreadsheet

24. Program Flowchart

25. System

26. Electronic Data interchange (EDI)

27. Web browsers

28. E-commerce

29. Multimedia



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30. Business-to-consumer (B2C)/(C2B)

EXAMINERS COMMENTThis section consists of thirty questions which cover every section of thesyllabus.

The performance was not encouraging as 60% of the candidates scored below40% of the mark. The major pitfalls were the inability of the candidates toreproduce essential concepts and acronyms in IT. The candidates are advised togive special recognition to the concepts and pay more attention to the meaningof most acronyms in IT.

SOLUTION 1

a) The features of First Generation Computers

Hardware include:-

It occupied large amount of space

Use of vacuum tubes/ diode

Large circuits which consist of wires and thermionic valves were

involved

T he internal storage consists of a magnetic drum and delay lines

Slow in operation

Low capacity of internal storage

A lot of heat generated

Lot of manual intervention

b) The features of third generation computers include:

Integrated circuit (IC) is used

Computers of this generation were cheaper, smaller and faster

compared to first generation computers

Designing of sophisticated operating systems



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Time sharing devices introduced

Data channel communication came into existence

There were a wide range of optional peripherals available

Supports multiprogramming and multiprocessing

c) The features of Fourth generation computers include:

Very large scale integration (VLSI) circuit was introduced

The VLSI led to the introduction of micro processor which facilitated

the production of micro computers

The generation witnessed wide Varity of software tools like database

management systems, word processing packages, spreadsheet etc

User friendly i.e. Easy to use

Enhancement of networking capabilities

Introduction of electronic mail, office information systems

Extremely large internal and external storage media etc.

Simple and Common Operating system

In general, the above generations could be treated under the following headings: Size of system

Memory capacity

Memory Technology

Operation system

Network

Human Computer Interface [HCI]

Computer Languages



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INSIGHT

Heat Generated

EXAMINERS COMMENT

This question tests candidates knowledge on the computer hardwaregenerations. The question demands for features and computer facilitiesavailable during each generation. 92% of the candidates attempted thisquestion and the performance was very encouraging as over 80% of thecandidates scored over 50% of the marks.

SOLUTION 2

(a) Direct Input devices are input devices that read source documents into thecentral processing unit [CPU] without any intermediary medium/ media i.ethere is no intermediary conversion of source data before transfer into theCPU. 2 mark

(b)(i) Magnetic Input devices Magnetic Ink Character Reader [MICR]

Magnetic strip reader

Keyboard

Joystick

Tag

Barcode

(ii) Optical Input devices Optical Character Reader [OCR]

Optical Mark Reader [OMR]

Touch screen

Scanner

Mouse

(c) (i) KeyboardAdvantages:

Cheap

Flexible



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INSIGHT

Easy to use

Disadvantages: Personnel need training

Slow

High error risk

(ii) MICRAdvantages

Cheap in operation of high volume activities

Low error rate

It is fast

Disadvantages:

It is expensive to purchase The fonts are not easily readable

It has limited use

(iii) OCRAdvantages: Cheap in operation for high-volume activities

Has low error rate

It is fast

Fonts are easily readable Read data d

March 2010 Part 2 Insight

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