Part I Insight March 2014
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hatharper09Part I Insight March 2014
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hatharper09INSIGHT
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 REQUIRED IN EACH PAPER; AND
B) BY ATTEMPTING MORE QUESTIONS THAN REQUIRED IN EACH SECTION.
INADEQUATE COVERAGE OF THE SYLLABUS
IT HAS BECOME MANIFEST THAT MANY CANDIDATES DO NOT COVER THE SYLLABUS
IN DEPTH BEFORE PRESENTING THEMSELVES FOR THE EXAMINATION.
CANDIDATES ARE THEREFORE ADVISED TO BE ADEQUATELY CONVERSANT WITH ALL
ASPECTS OF THE SYLLABUS.
ATSWA PART I MARCH 2014 I
INSIGHT
FOREWORD
This issue of INSIGHT is published principally, in response to a growing
demand, as an aid to:
(i) Candidates preparing to write future examinations of the
Institute of Chartered Accountants of Nigeria (ICAN) at an
equivalent level;
(ii) Unsuccessful candidates in the identification of those areas in
which they lost marks and need to improve their knowledge
and presentation;
(iii) Lecturers and students interested in acquisition of knowledge
in the relevant subject contained therein; and
(iv) The profession in improving pre-examination and screening
processes, and so the professional performance.
The answers provided in this book do not exhaust all possible alternative
approaches to solving the questions. Efforts have been made to use
methods, which will save much of the scarce examination time.
It is hoped that the suggested answers will prove to be of tremendous
assistance to students and those who assist them in their preparations
for the Institute‟s Examinations.
NOTE
Although these suggested solutions have been published
under the Institute‟s name, they do not represent the views
of the Council of the Institute. They are entirely the
responsibility of their authors and the Institute will not enter
into any correspondence about them.
ATSWA PART I MARCH 2014 II
INSIGHT
CONTENTS PAGE
BASIC ACCOUNTING PROCESSES AND SYSTEMS 1 - 29
ECONOMICS 30 - 53
BUSINESS LAW 54 - 75
COMMUNICATION SKILLS 76 - 93
ATSWA PART I MARCH 2014 III
INSIGHT
AT/141/PI.I
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRTICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION - MARCH 2014
BASIC ACCOUNTING PROCESSES & SYSTEMS
Time Allowed: 3 hours
SECTION A: PART I ATTEMPT ALL QUESTIONS (30 Marks)
MULTIPLE-CHOICE QUESTIONS
Write ONLY the alphabet (A, B, C, D or E) that corresponds to the correct option in
each of the following questions/statements.
1. Accounting is concerned with the following purposes EXCEPT:
A. Collecting, analysing and communicating financial information
B. Allowing the business to determine debts owed to third parties
C. Enabling owners to determine the amount of profit or loss for the period
under review
D. Having the record of accounting firms operating in the country
E. Ascertaining the resources owned by the business at the period end
2. Which of the following is NOT true?
A. The International Accounting Standards Board (IASB) is an independent
government owned body
B. IASB develops International Financial Reporting Standards
C. The IASB is a privately funded body that develops and approves IFRS
D. Prior to 2003, standards were issued as International Accounting
Standards
E. All new standards are now designated as IFRS
3. A document sent by a supplier to a customer in respect of goods returned or
over payments made by the customer is called:
A. Debit Note
B. Remittance Advice
C. Goods Returned Note
D. Goods Overpayment Note
E. Credit Note
ATSWA PART I MARCH 2014 1
INSIGHT
4. State the book of prime entry in which you would record the following
transaction:
An invoice for N650,000 was sent to Alhaji WAZOBIA (a customer)
A. Purchases Day Book
B. Cash Book
C. Sales Return Day Book
D. Sales Day Book
E. Purchases Return Day Book
5. Koffi Plc has the following opening balances on its ledger accounts
GH ₵‟000
Furniture & Fittings 15,000
Accounts Receivable 17,000
Bank Account 11,000
Loan payable 13,000
What is the capital at start?
A. GH ₵52,000,000
B. GH ₵30,000,000
C. GH ₵27,000,000
D. GH ₵25,000,000
E. GH ₵24,000,000
Use the information below to answer questions 6 and 7:
Mensah purchased 30,000 umbrellas at N2 each and sold 20,000 units of the
umbrellas for N100,000.
6. Calculate the gross profit
A. N100,000
B. N60,000
C. N40,000
D. N30,000
E. N10,000
7. Calculate the cost of sales
A. N160,000
B. N100,000
C. N60,000
D. N40,000
E. N10,000
ATSWA PART I MARCH 2014 2
INSIGHT
8. Writing off an asset with fixed period of legal life is often referred to as
A. Obsolescence
B. Amortisation
C. Diminishing balance method
D. Depletion
E. Deterioration
9. Nana Plc has a net profit of GH ₵320,000 recorded in the financial statements
for the year ended 31 December, 2013. Inventory costing GH ₵90,000, which
was received into the warehouse on 2 January 2014, was included in the
financial statements at 31 December, 2013 in error.
What would be the net profit after adjusting for the error?
A. GH ₵420,000
B. GH ₵410,000
C. GH ₵320,000
D. GH ₵310,000
E. GH ₵230,000
10. Net assets at the beginning of 2013 were GH ₵203,400. The proprietor
injected new capital of GH ₵16,000 during the year and took drawings of GH
₵4,400. Net assets at the end of 2013 were GH ₵360,000. What was the
profit earned by the business in 2013?
A. GH ₵176,600 profit
B. GH ₵168,600 profit
C. GH ₵168,200 loss
D. GH ₵145,000 profit
E. GH ₵145, 000 loss
11. Which of the following is NOT a type of business enterprise?
A. Ports Authority
B. Sole Proprietorship
C. Partnership
D. Limited Liability Company
E. Unlimited Liability Company
ATSWA PART I MARCH 2014 3
INSIGHT
12. Branches of accounting include all these EXCEPT:
A. Cost Accounting
B. Management Accounting
C. Government Accounting
D. Financial Management
E. Financial Accounting
13. ALL of the following are regular users of general purpose Financial Statement
EXCEPT
A. Business proprietor
B. Tax authority
C. Financial analysts
D. Employees of the entity
E. Judiciary
14. A report on the “true and fair view” of financial statements is expressed by the
A. Board of Directors of the company
B. Owner‟s of the business
C. The Company‟s Accountant
D. Controller of Finance
E. External Auditor
15. Which ONE of the following is NOT contained in a partnership agreement?
A. Partners‟ drawings
B. Capital contribution
C. Arbitration clause
D. Dividend policy
E. Compensation to the state of deceased partners
16. The accounting concept that states that income should be recognised when
they are earned and not when they are received is the
A. Matching Concept
B. Accrual Concept
C. Material Concept
D. Realisation Concept
E. Fairness Concept
ATSWA PART I MARCH 2014 4
INSIGHT
17. The document that serves as evidence of payment to creditors, through the
bank and withdrawals made for office use is
A. Cheque Counterfoils
B. Credit Advice
C. Receipts
D. Withdrawal Slips
E. Cheque Leaf
Use the following information to answer questions 18 and 19:
P. Nyang‟s business affairs on 1 January 2013 are stated below
L$
Cash in hand 132,000
Cash at bank 732,000
Inventories 750,000
Furniture 200,000
Motor Vehicle 160,000
Payables 300,000
18. The business working capital is
A. L$1,314,000
B. L$1,014,000
C. L$ 984,000
D. L$ 864,000
E. L$ 564,000
19. The business net liquid assets is
A. L$1,014,000
B. L$ 864,000
C. L$ 564,000
D. L$ 364,000
E. L$ 264,000
20. Which of the following is NOT an example of a real account?
A. Motor cars
B. Salaries and wages
C. Inventories
D. Cash
E. Furniture
ATSWA PART I MARCH 2014 5
INSIGHT
21. Which of the following is NOT an intangible asset?
A. Patent
B. Goodwill
C. Brand
D. Plant and Machinery
E. Trademark
22. Why should financial statements be prepared on a consistent basis?
A. To make it easier to compare results from one year to the next
B. To ensure that the capital of the business is maintained
C. To make the financial statements easier to understand
D. To ensure that no material error occurs in the financial statements
E. To assist users to calculate the profit easily
23. Which of the following is NOT a reason for depreciating non-current assets?
A. Wear and tear
B. Obsolescence
C. Appreciation
D. Passage of Time
E. Depletion
24. The term “accrued rent expense” means
A. Rent received in advance
B. Rent overpaid
C. Rent due but unpaid
D. Rent overpaid
E. Rent received in arrears
25. Which of these errors arise when ONE or more errors are cancelled out by ONE
or more errors elsewhere?
A. Error of omission
B. Error of commission
C. Error of principle
D. Compensating error
E. Error of original entry
ATSWA PART I MARCH 2014 6
INSIGHT
26. In preparing a company‟s bank reconciliation statement at month end, which
of the following items is adjusted in the cash book?
A. Errors by bank
B. Direct debits
C. Unpresented cheques
D. Opening bank balance
E. Uncredited cheques
27. A business income statement for the year ended 31 December 2013, showed a
net profit of L$83,600. It was later found that L$18,000 paid for purchase of a
motor van had been debited to motor expenses account. It is the company‟s
policy to depreciate motor vans at 25% per year with a full charge in the year
of acquisition.
What would be the net profit after adjusting for this error?
A. L$106,100
B. L$97,100
C. L$70,100
D. L$101,600
E. L$79,100
28. Which of the following payroll deductions is authorised by legislation?
A. Union dues
B. Income tax
C. Co-operative deductions
D. Salary advance
E. Loan refund
29. A major disadvantage of a State owned enterprise is that it
A. Declares dividend
B. Provides basic amenities
C. Is funded by the Private Sector
D. Is influenced by political manoeuvres
E. Funds political parties
30. A bank reconciliation showed the following differences between the bank
statement and the cash book
Unpresented cheques Le750
Outstanding deposits Le500
Bank charges Le100
ATSWA PART I MARCH 2014 7
INSIGHT
If the balance on the bank statement is Le1,000 overdrawn, what is the
balance in the cash book before any adjustment?
A. Debit Le25
B. Credit Le1,150
C. Credit Le1,250
D. Credit Le1,500
E. Debit Le1,200
SECTION A: PART II ATTEMPT ALL QUESTIONS (20 Marks)
SHORT-ANSWER QUESTIONS
Write the answer that best completes each of the following questions/statements:
1. Professional pronouncement on the best practices in handling accounting
transactions is called...................
2. An amount of expenditure incurred from which the benefits derivable
accrued over a period of more than one year is........................
3. Electronic device that has facilities for accepting, storing, retrieving and
processing data to produce information under the control of stored program
is............................
4. Under International Financial Reporting Standards, profit and loss account is
called..............................
5. The systematic allocation of the cost of a non current asset over its estimated
useful life is known as......................................
6. Under International Financial Reporting Standards, the term stocks of raw
materials, work in progress or finished goods is called....................................
7. Interface between the computer/users and hardware/application software is
known as................................
8. Shares of a company that attracts fixed rates of dividend are referred to
as…………………..
ATSWA PART I MARCH 2014 8
INSIGHT
Use the following information to answer questions 9 and 10:
The payslip of Mensa Mushas‟ for the month of July 2013 showed
Basic salary 200,000.
Income Tax 20% of basic salary
Social security contribution:
Employer 15% of basic salary
Employee 7½ of basic salary
Professional allowance GMD 30,000 per month
9. Total amount of total deductions from Mensa Mushas‟ basic pay was.............
10. The net salary paid to Mesa Musha for July 2013 was.................................
11. The loss in value of a non-current asset due to advancement in technology
is.............................
12. The balance on depreciation expense accounts at year end is transferred
to.........................
13. The physical counting of inventories on the last day of an accounting period
is............................
14. An item of expenses that has been paid during the current accounting period
but relates to the next accounting period is known as.............................
15. Which accounting concept justifies the depreciation of non-current assets?
.....................
16. The duplicate copy of credit note will serve as the source document to record
in the........................
17. The cost of acquiring a non-current asset for use by an organisation is known
as...........................
18. Entities whose Board Members are appointed by the state are known
as............................
ATSWA PART I MARCH 2014 9
INSIGHT
Use the following information below to answer questions 19 and 20:
N
Returns Inwards 20,000
Sales 410,000
Opening inventory 100,000
Purchases 370,000
Gross profit 100,000
19. The closing inventory figure is.............................
20. The cost of goods sold is......................................
SECTION B: ATTEMPT ANY FOUR QUESTIONS (50 Marks)
QUESTION 1
a. State four advantages derived from the use of payroll application packages
(2 Marks)
b. The following information is extracted from the payroll work sheet of TANDA
LIMITED
TANDA LIMITED
Payroll work sheet for the month of July, 2013
Bashirat Micheal Total
N,000 N,000 N,000
Basic Salary 11,250 7,600 18,850
Overtime 5,625 4,275 9,900
Leave allowance 5,063 3,420 8,483
Risk allowance 1,688 1,140 2,828
Consolidated 23,626 16,435 40,061
Salary
Less Statutory 563 380 943
Social Security
Income Tax(PAYE) 2,769 1,718 4,487
20,294 14,337 34,631
Less: Other
deductions:
Union dues 500 500 1,000
NET PAY 19,794 13,837 33,631
ATSWA PART I MARCH 2014 10
INSIGHT
Employer‟s Social security contribution for employees is 7½% of consolidated
salary.
You are required to prepare journal entries to record the above information.
(10½ Marks)
(Total 12½ Marks)
QUESTION 2
On examining the books of Devine Export company, you ascertained that on
October 1, 2011, the receivables ledger balances were GH ₵16,048 debit and GH
₵114 credit and the payable ledger balances on the same date were GH ₵12,470
credit and GH ₵210 debit.
For the year ended September 30, 2012, the following particulars are available:
GH ₵
Sales 127,456
Purchases 79,948
Cash from trade accounts receivable 110,424
Cash to trade accounts payable 74,614
Discount received 2,950
Discount allowed 4,656
Returns inwards 2,004
Returns outwards 1,070
Irrecoverable debts written off 652
Cash received in respect of debit balance in payable ledger 210
Contra settlement 868
Allowances to customers on goods damaged in transit 424
On September 30, 2010, there was no credit balance in the receivable ledger except
those outstanding on October 1, 2009 and no debit balances in the payable ledger.
You are required to:
Write up the following accounts recording the above transactions and the balances
as at September 30, 2012.
a. Receivables control account
b. Payables control account (12½ Marks)
ATSWA PART I MARCH 2014 11
INSIGHT
QUESTION 3
a. What is an application software package? (2½ Marks)
b. List FOUR disadvantages of software application packages. (4 Marks)
c. State THREE factors to be considered when deciding on which software
package to use or buy. (6 Marks)
(Total 12½ Marks)
QUESTION 4
Garki Limited makes up its accounts annually to December 31 and provides for
depreciation of its vehicles at the rate of 25% per annum on the straight line basis.
It ignores scrap value when calculating depreciation per annum. Depreciation will
also be charged based on the period the assets are to be put into use.
Records of acquisitions and disposal showed:
i. On January 1, 2009, vehicle No 1 cost GH₵400,000
ii. On January 1, 2010, vehicle No 2 cost GH₵600,000
iii. On January 1, 2012, vehicle No 3 cost GH₵800,000. On the same date, vehicle
No 1 was sold for GH₵100,000
iv. On January 1, 2013, vehicle No 4 cost GH₵1,000,000
You are required to prepare:
a. Motor vehicle Account
b. Provision for depreciation Account
c. Motor vehicle Disposal Account
d. Income Statement and Statement of Financial Position for year 2009, 2010 and
2011 (Extract only) (Total 12½ Marks)
ATSWA PART I MARCH 2014 12
INSIGHT
QUESTION 5
The following Trial Balance was extracted from the books of Konte, a sole
proprietor, whose business is known as Konte Enterprises as at December 31, 2013.
DR CR
Le‟000 Le‟000
Capital 224,000
Motor van 80,000
Inventory 65,600
Balance at bank 49,600
Purchases 640,000
Sales 892,000
Trade receivables 116,000
Trade payables 66,240
Rent and rates 22,432
Salaries 140,160
General expenses 17,888
Motor expenses 10,240
Discount allowed 16,160
Discount received 15,840
Insurance 7,840
Bad debts 12,160
Drawings 20,000
1,198,080 1,198,080
The following matters are to be taken into account
i. Trade Inventories as at December 31, 2013 was Le80,640,000
ii. Salaries outstanding as at December 31, 2013 amounted to Le 48,000,000
iii. Insurance paid in advance was Le2,800,000
You are required to prepare:
a. Income Statement for the year ended December 31, 2013 (7½ Marks)
b. Statement of Financial Position as at December 31, 2013 (5 Marks)
(Total 12½ Marks)
ATSWA PART I MARCH 2014 13
INSIGHT
QUESTION 6
The following is the summary of the Cash Book of Agbelusi Farm for the month of
December 2013
Cash Book
N N
Balance b/d 3,165 Sundry payments 34,920
Sundry receipts 33,915 Balance c/d 2,160
37,080 37,080
Balance b/d 2,160
On investigation the following errors were discovered
i. Bank charges of N80 shown on the bank statement had not been entered in
the cash book.
ii. A cheque drawn for N40 had been returned by the bank marked “R/D” but
this had not been recorded in the cash book.
iii. The opening balance in the cash book was wrongly brought down as N3,165
instead of N3,308
iv. The last page of the pay-in-slip book showed a deposit of N3,267 which had
not yet been credited to the account by the bank.
v. The bank had debited a cheque for N162 in error to the entity‟s account
vi. The bank statement showed an overdrawn balance of N74
vii. A payment of N105 cheque was treated as a receipt in the cash book
viii. Three cheques issued to suppliers for N482, N832 and N68 had not been
presented for payment
Required:
a. Write up the Adjusted Cash Book of the Farm
b. Prepare a Bank Reconciliation Statement as at December 31, 2013
(Total 12½ Marks)
ATSWA PART I MARCH 2014 14
INSIGHT
SUGGESTED SOLUTIONS
SECTION A
PART I MULTIPLE-CHOICE QUESTIONS
1. D
2. A
3. E
4. D
5. B
6. B
7. D
8. B
9. E
10. D
11. A
12. D
13. E
14. E
15. D
16. B
17. A
18. A
19. C
20. B
ATSWA PART I MARCH 2014 15
INSIGHT
21. D
22. A
23. C
24. C
25. D
26. B
27. B
28. B
29. D
30. B
Working 5 GH¢
Furniture & fittings 15,000
Accounts receivable 17,000
Bank account 11,000
43,000
Loan payable (13,000)
Capital at start 30,000
Working 6 N N
Sales (20,000) 100,000
Purchases N(2 x 30,000) 60,000
Less:
Closing inventory
N(2 x 10,000) 20,000 40,000
Gross profit 60,000
Working 7 Cost of sales 40,000
Working 9 G11¢ (320,000 – 90,000)
= GH¢ 230,000
ATSWA PART I MARCH 2014 16
INSIGHT
Working 10 GH¢ GH¢
Net Assets at end 360,000
Deduct:
Net assets at start 203,400
New capital introduced 16,000
219,400
Drawings (4,400)
215,000
Profit Earned 145,000
Solution 18 – Nyang L$ L$
Current Assets – Cash in hand 132,000
Cash at bank 732,000
Inventories 750,000
1,614,000
Current Liabilities: Payables (300,000)
Working capital 1,314,000
Working 19 LS
Cash in hand 132,000
Cash at bank 732,000
Payables (300,000)
Net liquid assets 564,000
Working 27 L$
Net profit as reported 83,600
Add: cost of motor van 18,000
101,600
Less:
Depreciation (L$18,000 x 25%) 4,500
Profit as re-stated 97,100
Working 30
Le
Balance as per bank (1000)
Unpresented cheque (750)
Outstanding deposits 500
Bank charges 100
Balance as per cash book (CR) 1,150
ATSWA PART I MARCH 2014 17
INSIGHT
EXAMINER‟S COMMENT
The standard and structure of the questions are just adequate. No ambiguities
were noticed. Candidates‟ performance was above average and this has lent
credence to the above assertion. The syllabus was also adequately covered.
PART II SHORT ANSWER QUESTION
1. Accounting Standard
2. Capital Expenditure
3. Computer
4. Statement of profit or loss and other comprehensive income
5. Depreciation
6. Inventories
7. Operating software/operating system
8. Preference shares
9. GMD 55,000
10. GMD 175,000
11. Obsolescence
12. Statement of Financial Position
13. Inventory taking/inventory count
14. Prepaid expenses/prepayment
15. Matching concept
16. Returns inward day book/returns – inward journal
17. Capital expenditure
18. Public corporations/statutory corporations/public enterprises
19. N180,000
20. N290,000
ATSWA PART I MARCH 2014 18
INSIGHT
Working 9 GMD
Income Tax (200,000 x 20%) 40,000
Social security:
Employee contribution (200,000 x 7½%) 15,000
Total Deductions 55,000
Working 10 GMD
Basic salary/month 200,000
Professional allowance/month 30,000
Income tax (200,000 x 20%) (40,000)
Social Security – employee‟s contribution
(200,000 x 7½%) (15,000)
Net salary for July 2013 175,000
Working 19
N N
Opening inventory 100,00
Purchases 370,000
470,000
Gross Profit 100,000
570,000
Sales 410,000
Returns Inwards (20,000) (390,000)
Closing inventory 180,000
Working 20
N
Sales 410,000
Returns inwards ( 20,000)
Gross Profit ( 100,000)
Cost of Goods Sold 290,000
EXAMINER‟S COMMENT
The questions are simple enough and straight-forward. Candidates performed
below average in this part of the paper and this point to the fact that candidates
did not pay enough attention to the theoretical framework of the syllabus.
ATSWA PART I MARCH 2014 19
INSIGHT
SECTION B
SOLUTION 1
Advantages derived from the use of payroll application packages
1. They make the implementation of a payroll system to be quicker and
cheaper.
2. Preparation of payroll becomes efficient in terms of speed, accuracy and
storage requirement
3. They provide a standard approach towards payroll preparation.
4. It substantially reduces systems efforts.
5. They save time.
TANDA LIMITED
JOURNAL PROPER
DR CR
N‟000 N‟000
Consolidated Salary 40,061
7½ Social Security Contribution 3,005
Income Tax (PAYE) 4,487
5% Social Security Contribution 943
Union dues 1,000
Bushirat 19,794
Babyface 13,837
7½% Social Security Contribution 3,005
Being the recording of salaries and other
deductions due for July, 2012 43,066 43,066
Income Tax PAYE 4,487
5% Social Security Contribution 943
Union dues 1,000
Bushirat 19,794
Babyface 13,837
7½% Social Security Contribution 3,005
Bank 43,066
Being the payment of salary and deductions for 43,066 43,066
July, 2012
ATSWA PART I MARCH 2014 20
INSIGHT
EXAMINER‟S COMMENT
This question tested candidates‟ ability to journalise the payroll for eventual ledger
postings. The question was not popular with candidates as fewer than 50% of the
candidates attempted it. Unexpectedly, the performance was below average. The
payroll preparation and accounting is a very important area of candidates‟
engagement at this level, they should as a matter of necessity make effort to learn
this aspect in their day-to-day office assignment. Candidates are also to be aware
of the advantages from payroll application packages.
SOLUTION 2
(a)
RECEIVABLE CONTROL ACCOUNT
1st Oct. 2011 Balance b/f 16,048 1st Oct. 2009 – Balance b/f 114
30th Sept. 2012 Sales 127,456 30th Sept. 2012
- Cash received from credit 110,424
customer
Balance c/f 114 - Discount allowed 4,656
- Returns 2,004
- Bad debt written off 652
- Contra settlement 868
- Allowances on goods 424
damaged
- Balance c/f 24,476
143,618 143,618
Bal b/d 24,476 Bal b/d 114
PAYABLE CONTROL ACCOUNT
1ST Oct. 2011 Balance b/f 210 1st Oct. 2011 Balance b/f 12,470
30th Sept. 2012 30th Sept. 2012
- cash pd to credit 74,614 - Purchases 79,948
Suppliers
- Discount received 2,950 - Cash 210
- Returns outwards 1,070
- Contra settlement 868
Balance c/f 12,916
92,628 92,628
Balance b/d 12,916
ATSWA PART I MARCH 2014 21
INSIGHT
EXAMINER‟S COMMENT
The preparation of Control or Total Accounts tested in this question is a familiar
topic to most candidates. As expected, not less than 90% of candidates attempted
the question and performed above average. Candidates are however warned not to
rely on rote learning of the usual entries in these accounts, the use and purpose of
preparing the Total Accounts should be properly appreciated as well.
SOLUTION 3
(a) An application software is a program or a group of programs that is
designed for an end user to solve a specific problem or task.
The term is used to contrast such software with system software which
manages and integrates a computer‟s capabilities but does not directly
perform tasks that benefit the user.
Examples include accounting software, spread sheets, desktop publishing,
database management, system utilities, banking application etc.
(b) Disadvantages of application software packages
(i) Some packages are not brought up-to-date
(ii) The packages may not be 100% suitable for a particular use as they
may not be fully tailored towards the use.
(iii) One may not get experts who will come to one‟s immediate help in
case of problems.
(iv) Inefficiency may be experienced due to inclusion of features that are
not particularly relevant in the packages.
(v) The vendor company that wrote the package may cease to exist.
Users will then face the challenge of getting support for and maintaining the
software.
(c) Factors to consider when deciding on which package to buy or use
(i) Cost This includes the cost of software, setting-up and operating the
system
(ii) Flexibility – How easy is it to make future amendments.
(iii) Types of processing – the input and output medium associated with
the package.
(iv) Timing of processing
(v) Hardware required
(vi) Degree of reliability
ATSWA PART I MARCH 2014 22
INSIGHT
(vii) Integration with other systems
(viii) Users processing requirements
EXAMINER‟S COMMENT
Candidates‟ appreciation of application packages, their advantages and
disadvantages and those factors to consider when deciding on the type of software
package to use or buy is tested. Not less than 70% of candidates attempted the
question and it is comforting to note that at least 55% of candidates who attempted
the question scored very good marks. The topic and other areas of computer
application in candidates‟ job roles should continue to be tested in future
examinations at this level.
SOLUTION 4
(a) MOTOR VEHICLES ACCOUNT
GHC DATE GHC
2009 2009
Jan 1 Bank (Veh.1) 400,000 Dec 31 Balance c/d 400,000
400,000 400,000
2010 2010
Jan 1 Balance b/d 400,000 Balance c/d 1,000,000
Jan 1 Bank (veh.2) 600,000 Dec 31
1,000,000 1,000,000
2011 2011
Jan 1 Balance b/d 1,000,000
Dec 31 Balance c/d 1,000,000
1,000,000 1,000,000
2012 2012
Jan 1 Balance b/d 1,000,000 Jan 1 Vehicle Disposal A/c 400,000
Jan 1 Bank (Veh. 3) 800,000 Dec 31 Balance c/d 1,400,000
1,800,000 1,800,000
2013 2013
Jan 1 Balance b/d 1,400,000 Dec 31 Balance c/d 2,400,000
Jan 1 Bank (Veh. 4) 1,000,000
2,400,000 2,400,000
2014
Jan 1 Balance b/d 2,400,000
ATSWA PART I MARCH 2014 23
INSIGHT
(b) PROVISION FOR DEPRECATION A/C
GHC DATE GHC
2009 2009
Dec 31 Balance c/d 100,000 Dec 1 Compreh. Income 100,000
100,000 100,000
2010 2010
Dec 31 Balance c/d 350,000 Jan 1 Balance b/d 100,000
Dec 31 Compr. Income 250,000
350,000 350,000
2011 2011
Dec 31 Balance c/d 600,000 Jan 1 Balance b/d 350,000
Dec 31 Compr. Income 250,000
600,000 600,000
2012 2012
Jan 1 Veh. Disposal 300,000 Jan 1 Balance b/d 600,000
Dec 31 Bal c/d 650,000 Dec 31 Compr. Income 350,000
950,000 950,000
2013 2013
Dec 31 Balance c/d 1,250,000 Jan 1 Balance b/d 650,000
Dec 31 Compr. Income 600,000
1,250,000
2014
Jan 1 Balance b/d 1,250,000
(c) MOTOR VEHICLE DISPOSAL A/C
DATE GHC DATE GHC
2012 2012
Jan 1 Motor vehicle 400,000 Jan 1 Bank 100,000
A/c
Jan 1 Provision for depr. 300,000
400,000 400,000
ATSWA PART I MARCH 2014 24
INSIGHT
GARKI LIMITED
INCOME STATEMENT (EXTRACT)
Expenses GHC
2009 Dec. 31 Depreciation 100,000
2010 Dec. 31 Depreciation 250,000
2011 Dec. 31 Depreciation 250,000
d. (ii) GARKI LIMITED
STATEMENT OF FINANCIAL POSITION (Extract)
AS AT 31 DECEMBER
2009
COST ACCUM DEP. CARRYING VALUE
GHC GHC GHC
Non-Current Assets:
Motor vehicles 400,000 100,000 300,000
NON-CURRENT ASSETS:
2010
Motor Vehicles 1,000,000 350,000 650,000
NON-CURRENT ASSETS:
2011
Motor Vehicles 1,000,000 600,000 400,000
EXAMINER‟S COMMENT
Accounting for deprecation of non-current assets is the subject matter of this
question. As common and fundamental as the topic is to students of accounting,
the real book-keeping entries on depreciation are yet to be fully grasped by most
candidates. The whole process of acquisition, addition and disposal of non-current
assets and the method of showing the substance of the transaction in the final
accounts must be learnt by candidates. Only about 50% of candidates attempted
the question but close to half of the candidates could not properly show the extracts
of the Income Statement and Statement of Financial Position.
ATSWA PART I MARCH 2014 25
INSIGHT
SOLUTION 5
KONTE
Statement of comprehensive income for the year ended 31 December, 2013
Le‟000 Le‟000 Le‟000
Sales 892,000
Less: Cost of sales
Opening inventory 65,600
Add: Purchases 640,000
705,600
Less: Closing inventory 80,640 624,960
Gross profit 627,040
Add: Discount received 15,840
282,880
Less Expenses:
Salaries 140,160
Add: Accrual 48,000 188,160
Rent and rates 22,432
General expenses 17,888
Motor expenses 10,240
Discounts allowed 16,160
Insurance 7,840
Less: Prepaid 2,800 5,040
Bad debts 12,160 272,080
Net profit 10,800
KONTE
Statement of financial position as at December 31, 2013
Le‟000 Le‟000
NON-CURRENT ASSETS:
Motor Vehicles 80,000
CURRENT ASSETS
Inventory 80,640
Trade Receivables 116,000
Prepaid Insurance 2,800
Bank Balance 49,600 249,040
TOTAL ASSETS 329,040
ATSWA PART I MARCH 2014 26
INSIGHT
EQUITY AND LIABILITIES
Owner‟s Equity 224,000
Net profit 10,800
234,800
Drawings (20,000)
214,800
CURRENT LIABILITIES
Trade payables 66,240
Accrued salaries 48,000 114,240
329,040
EXAMINER‟S COMMENT
This question has tested the usual topic on preparation of a set of final accounts of
a sole trader from a given Trial Balance. Candidates are no doubt familiar with the
topic. However, candidates have continued to use the „T‟ format instead of the
vertical formal (statement format). Though candidates were not penalized at this
level, they are advised to get used to the vertical format at this early stage. They
may be penalized in future.
SOLUTION 6
AGBELUSI FARM
ADJUSTED CASH BOOK
N N
Balance b/d 2160 Bank charges 80
Difference in bal. Errors in cheque drawn 210
(3308 – 3165) 143
Dishonoured cheque 40
Balance c/d 1973
2303 2303
Balance c/d 1973
ATSWA PART I MARCH 2014 27
INSIGHT
Bank Reconciliation Statement
As on 31st December 2013
N N
Balance per adjusted cash book 1973
Add Unpresented cheques:
Cheque 1 482
Cheque 2 832
Cheque 3 68 1382
3355
Less: Uncredited cheque 3267
Debit in error by the bank 162 (3426)
Balance per Bank Statement (overdrawn) (74)
AGBELUSI FARM
ADJUSTED CASH BOOK (alternative)
N N
Balance b/f 2160 Bank charges 80
Dishonored cheque 40 Payment recorded
as receipt (105 x 2) 210
Diff. in opening Balance c/d 2053
balance (3308 – 3165) 143
2343 2343
Balance b/d 2053
AGBELUSI FARM
BANK RECONCILIATION STATEMENT AS ON 31ST DECEMBER 2013
Balance as per bank statement (74)
Add: Uncredited lodgement 3267
Cheque debited in error
on bank statement 162 3429
3355
Deduct: Unpresented cheques
(482 + 832 + 68) 1382
Adjusted Cash Book Balance 1973
Note:
The cash book balance did not reconcile with the bank statement balance
(N74) because of some technical defect (Re-N40 drawn cheque returned
unpaid).
ATSWA PART I MARCH 2014 28
INSIGHT
EXAMINER‟S COMMENT
Candidates are required to write up an adjusted cash book and draw up a bank
reconciliation statement. This also is a familiar exercise to candidatures. As
expected over 95% of the candidates attempted the question. Not less than 50% of
the candidates who attempted the question scored above average marks.
ATSWA PART I MARCH 2014 29
INSIGHT
AT/141/PI.2
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION - MARCH 2014
ECONOMICS
Time Allowed: 3 hours
SECTION A: PART I ATTEMPT ALL QUESTIONS (30 Marks)
MULTIPLE-CHOICE QUESTIONS
Write ONLY the alphabet (A, B, C, D, or E) that corresponds to the correct option in
each of the following questions/statements:-
1. As a methodology in economics, deductive approach means
A. Reasoning from the general to the particular
B. Reasoning from the particular to the general
C. Generalization from the particular to the general
D. Using figures from observed phenomenon to substantiate points
E. Establishing verifiable laws
2. The income elasticity of demand coefficient for a normal good is
A. Positive
B. Negative
C. Zero
D. Infinite
E. Less than zero
3. Two goods X and Y are said to be complementary when
A. The two goods are independent
B. A rise in the price of X does not affect the demand for Y
C. A fall in the price of X does not affect the demand for Y
D. A fall in the price of X causes a fall in the demand for Y
E. A fall in the price of X raises the demand for Y
4. Demand for any factor of production is a
A. Competitive demand
B. Derived demand
C. Joint demand
D. Composite demand
E. Normal demand
ATSWA PART I MARCH 2014 30
INSIGHT
5. ONE of the assumptions of the ordinalist theory of consumer behaviour is that
A. Choice is inconsistent
B. Total utility is a function of price
C. Consumer is irrational
D. Satisfaction is measurable
E. Utility can be ranked
6. The marginal product of labour is zero when
A. Average product is rising
B. Total product is rising
C. Total product is falling
D. Total product is at maximum
E. Average product is at maximum
7. The oldest and simplest form of business organisation is
A. Public Corporation
B. Cooperative Society
C. Joint Stock Company
D. Partnership
E. Sole Proprietorship
8. The necessary condition for a firm to be at equilibrium at a given level of
output is where
A. Marginal cost is falling
B. Marginal cost is greater than the marginal revenue
C. Marginal cost is equal to marginal revenue
D. Marginal cost is less than the marginal revenue
E. Price is equal to marginal revenue
9. The following are the characteristics of land as a factor of production EXCEPT
where
A. It is geographically fixed in supply
B. It is subject to the law of diminishing returns
C. It is highly mobile
D. The stock of land cannot be replaced once exhausted
E. It is a free gift of nature
ATSWA PART I MARCH 2014 31
INSIGHT
10. Which one of the following is NOT an advantage of division of labour?
A. It makes possible greater use of machinery
B. Greater skills of workers
C. Employment of specialists
D. Extreme interdependence
E. Savings of time
,
11. For monopoly firm, the demand curve is
A. Inelastic
B. Perfectly inelastic
C. Perfectly elastic
D. Elastic
E. Unitary elastic
12. The market condition for a typical firm is given as P=100-4q and the total cost
function is C=50+20q. The price and output level that maximize profit are
A. 60 and 10 respectively
B. 20 and 10 respectively
C. 10 and 10 respectively
D. 10 and 20 respectively
E. 30 and 20 respectively
1
13. In the multiplier equation expressed as K= , where mpc is marginal
1 mpc
propensity to consume. If the marginal propensity to save (mps) is 0.25, then
the value of investment multiplier (K) is
A. 25
B. 4.0
C. 2.5
D. 2.0
E. 1.0
14. The following factors exert influence on the size of a country‟s national income
EXCEPT
A. Quantity and quality of labour
B. Availability of national resources
C. Mobility of labour
D. Technical know-how
E. Social and economic overhead
ATSWA PART I MARCH 2014 32
INSIGHT
15. The difference between the Gross National Product (GNP) and the Gross
Domestic Product (GDP) is
A. Consumption of fixed capital
B. Net factor income from abroad
C. Disposable income
D. Per capita income
E. Depreciation
16. Which of the following statements correctly describes precautionary demand
for money?
A. To meet unforeseen expenses
B. For day to day expenses
C. For expected better investment opportunity
D. To meet irregular expenses
E. As a unit of account
17. Which of the following is NOT among the characteristics of money?
A. Durability
B. Portability
C. Flexibility
D. Homogeneity
E. General acceptability
18. Open Market Operations (OMO) is concerned with the purchase and sale of
A. Operational assets
B. Equity
C. Debentures
D. Shares
E. Government securities
19. Which of the following is a measure of contractionary fiscal policy?
A. Increase in government expenditure
B. Increase in taxes
C. Granting subsidies to firms
D. Granting tax holiday to local industries
E. Collection of loans from the multilateral creditors
ATSWA PART I MARCH 2014 33
INSIGHT
20. A tax system in which the tax rate falls as income rises illustrates
A. Progressive tax system
B. Regressive tax system
C. Proportional tax system
D. Conventional tax system
E. Exceptional tax system
21. The incidence of taxes levied on a good whose demand is perfectly price
inelastic falls heavily on the
A. Government
B. Producer
C. Consumer
D. Wholesaler
E. Retailer
22. Inflation reduces the standard of living of the following category of people
EXCEPT
A. Pensioners
B. Creditors
C. Rent receivers
D. Salary earners
E. Businessmen
23. Which of the following is NOT an advantage of international trade?
A. Increase in total world output
B. Brings about interdependence among nations
C. Efficient use of world resources
D. Encourages diseconomies of scale
E. Increases world standard of living
24. The policy instruments used in many countries to restrict imports include
A. Price indexation
B. Excise duties
C. Bank rate
D. High tariffs
E. Subsidies
ATSWA PART I MARCH 2014 34
INSIGHT
25. Which one of the following is NOT an assumption of the theory of comparative
cost advantage?
A. Perfect mobility of factors of production
B. Trade restrictions
C. Two countries in the world
D. No transportation cost
E. Existence of full employment
26. The following are some of the objectives of the International Monetary Fund
(IMF) EXCEPT
A. Establishment of a system which facilitates utilization of foreign
exchange among member countries
B. Maintenance of stable exchange rate among the member countries
C. Facilitating convertibility of nation‟s currencies and elimination of
exchange restrictions
D. Assisting member countries to solve their balance of payment problem
E. Providing long term loans for development projects
27. Which of the following countries is NOT a member of the Economic Community
of West African States (ECOWAS)?
A. Nigeria
B. Guinea Bissau
C. Cameroun
D. Gambia
E. Ghana
28. Which of the following international organisations‟ currently monitors and
enforces rules on international trade?
A. General Agreement on Trade and Tariff (GATT)
B. World Trade Organisation (WTO)
C. United Nations Conference on Trade and Development (UNCTAD)
D. International Finance Corporation (IFC)
E. International Trade Union (ITU)
ATSWA PART I MARCH 2014 35
INSIGHT
29. Which of the following is NOT a feature of developing economies?
A. Low level of income
B. Low life expectation
C. Low population growth rate
D. Export of primary products
E. Predominance of primitive technology
30. Economic growth is achieved if there is
A. A sustained increase in a country‟s real output
B. A significant decline in inflation rate
C. An increase in the level of consumption in the economy
D. An increase in population growth rate
E. A reduction in infant mortality rate
SECTION A: PART II ATTEMPT ALL QUESTIONS (20 Marks)
SHORT-ANSWER QUESTIONS
Write the answer that best completes each of the following questions/statements:
1. To make a rational choice, the consumers are guided by their ……………
2. A table showing how much of a product firms will sell at alternative prices is
known as ……………….................
3. The practice by which a government fixes a maximum price for a commodity
to be sold is called ………….................
4. The point at which the budget line is just tangent to an indifference curve is
called the ……………...............
5. The downward portion of a firm‟s long run average cost curve shows the
range of output over which the firm is experiencing ……………...............
6. If a firm‟s total cost function is given as TC = L$1200 + 32q – 2q2, what is
the value of the average total cost when q=20?
7. If output increases by 30%, following a 50% increase in the factor inputs, the
firm is experiencing ………....................
ATSWA PART I MARCH 2014 36
INSIGHT
8. A firm which fixes low price for its products with the intention to drive out
rivals or prevent new firms from entering the market is said to be engaged
in............................
9. The flow of payments and receipts and the interdependence between the
major economic units in an economy is usually demonstrated by a diagram
known as……….................
10. In a two-sector economy, the marginal propensity to consume (MPC) is 0.75.
By how much should the investment expenditure be increased to enable the
equilibrium national income increase by N800 million?
11. The main macroeconomic problem which may arise as a result of rapid
growth in money supply is…………………..
12. By engaging in the purchase and sale of stocks and shares for its customers,
the commercial banks perform the function of ………..................
13. Taxes levied on consumption of goods and services are classified as...............
14. The type of budget that should be adopted to stimulate economic growth
during economic depression is the................................
15. Unemployment caused by insufficient aggregate demand in an economy is
known as............................
16. Given the exchange rate between the United States Dollars (US$) and the
Nigerian Naira (N) as US$1=N158. How much will a Nigerian buyer pay for
a good worth US$102?
17. Quantitative restrictions on imports and exports are called............................
18. The highest level of economic integration is............................
19. The European Economic Community (EEC) is now known as............................
20. A conscious and deliberate effort on the part of government to maximize the
social economic welfare through efficient allocation of resources is...............
ATSWA PART I MARCH 2014 37
INSIGHT
SECTION B ATTEMPT FOUR QUESTIONS IN ALL (50 Marks)
PART I MICROECONOMICS (Attempt Any TWO Questions)
QUESTION 1
a. Explain:
i. Price elastic demand (2 Marks)
ii. Price inelastic demand (2 Marks)
b. Discuss with the aid of appropriate diagram, the incidence of excise tax
imposed on the commodity whose demand is:-
i. Price elastic (41/4 Marks)
ii. Price inelastic (41/4 Marks)
(Total 12½ Marks)
QUESTION 2
a. Describe an “indifference curve”. (2½ Marks)
b. Mention any FOUR properties of Indifference Curve. (6 Marks)
c. Under the indifference curve approach, state and illustrate the consumer
equilibrium condition. (4 Marks)
(Total 12½ Marks)
QUESTION 3
a. Explain the term “production function”? (2½ Marks)
b. Explain with the aid of appropriate diagram, the relationship between total,
marginal and average products. (10 Marks)
(Total 12½ Marks)
ATSWA PART I MARCH 2014 38
INSIGHT
PART II: MACROECONOMICS (Attempt Any TWO Questions)
QUESTION 4
The Central Banks in both developed and developing economies formulate and
execute monetary policy to promote the general performance of their economies.
Required:
a. Explain the term “monetary policy”. (4½ Marks)
b. Identify any FOUR tools available to the Central Bank of your country in the
conduct of its monetary policy. (8 Marks)
(Total 12½ Marks)
QUESTION 5
The following table shows the determination of equilibrium national income using
the aggregate demand – aggregate supply approach (all information in million
naira):
Consumption Investment Government Export Import Aggregate Aggregate
spending Demand Supply
(C) (I) (G) (X) (M) (AD) (Y)
42 20 12 12 6 A 50
82 20 12 12 6 B 100
122 20 12 12 6 C 150
162 20 12 12 6 D 200
202 20 12 12 6 E 250
242 20 12 12 6 F 300
282 20 12 12 6 G 350
Required:
a.
i. Compute the values of A, B, C, D, E, F and G to obtain aggregate
demand trend. (3½ Marks)
ii. Determine the value of the equilibrium national income. (2 Marks)
iii. What is the value of net export for the economy? (1 Mark)
ATSWA PART I MARCH 2014 39
INSIGHT
b. Explain the terms:
i. Inflationary gap (3 Marks)
ii. Deflationary gap (3 Marks)
(Total 12½ Marks)
QUESTION 6
Despite the benefits of international trade, countries still impose some barriers on
the volume of imports.
Required:
Give any FIVE reasons in support of trade protection. (Total 12½ Marks)
SUGGESTED SOLUTIONS
SECTION A
PART I MULTIPLE-CHOICE QUESTIONS
1. A
2. A
3. E
4. B
5. E
6. D
7. E
8. C
9. C
10. D
11. D
12. A
ATSWA PART I MARCH 2014 40
INSIGHT
13. B
14. C
15. B
16. A
17. C
18. E
19. B
20. B
21. C
22. E
23. D
24. D
25. B
26. E
27. C
28. B
29. C
30. A
EXAMINER‟S COMMENT
The questions were selected from all topics in the syllabus. About 58% of the
candidates scored pass marks in this part.
PART II SHORT-ANSWER QUESTIONS
1. Scale of preference
2. Supply schedule
3. Price ceiling
4. Consumer equilibrium point
5. Increasing returns to scale/economies of scale
6. ATC =$52.00
ATSWA PART I MARCH 2014 41
INSIGHT
7. Decreasing returns to scale / diseconomies of scale
8. Price War
9. Circular flow of income
10. N200 million
11. Inflation
12. A broker
13. Indirect taxes
14. Deficit budget
15. Cyclical unemployment
16. N16,116
17. Quota
18. Economic Union (EU)
19. European Union (EU)
20. Development planning
EXAMINER‟S COMMENT
The questions in this part provided a good coverage of the syllabus. About 42% of
the candidates scored pass marks.
SOLUTION 1
a.(i) Price Elastic Demand:-Demand for a commodity is price elastic if a given
percentage change in price gives rise to a greater percentage change in
quantity demanded. The demand curve for such a commodity will exhibit a
gentle slope as shown in the figure below:
Price
P1
P
P2
Q
D
Q1 Q2 Quantity
ATSWA PART I MARCH 2014 42
INSIGHT
ii. Price Inelastic Demand
Demand for a commodity is price inelastic if a given percentage change in
price gives rise to a lesser percentage change in quantity demanded. This is
illustrated in the figure below:
D
Price
P1
P2
D
0 Q1 Q2 Quantity
(b) Excise taxes are taxes levied on goods produced within the country. The
incidence of tax depends on the price elasticity of demand and supply. Since
the tax is collected from the producer, this indirectly implies a rise in the
production cost which can be illustrated with an upward (leftward) shift in
the supply curve.
i. The incidence of Tax on a product whose demand is Price Elastic:- The
burden of tax will fall on both the producer and the consumer but the
greater burden falls on the producer. This is illustrated in the figure (i)
below.
ATSWA PART I MARCH 2014 43
INSIGHT
St
Price
D1
S1
P3
St
P1
P2
D1
S1
0 Q2 Q1 Quantity
The supply curve shifts from S1 S1 to St St due to the imposition of tax. This
leads to increase in market price from P1 to P3. The price actually received
by the producer fall from P1 to P2 and the amount paid in tax to the
Government is the difference between P3 and P2, Since P3 – P1 is greater than
P1 – P2, the greater burden falls on the producer and lesser quantity is traded
on the market.
(ii) The incidence of Tax on a Product whose demand is price Inelastic:- In this
case, both the consumer and the producer bear the burden of tax but the
greater burden falls on the consumers. This is illustrated in the figure (2)
below:
Figure 2 St
Price D1
S1
P3
P1
P2
D1
0
Q2 Q1 Quantity
ATSWA PART I MARCH 2014 44
INSIGHT
Figure (2) shows that the burden of tax on the producer (P1 – P2) is less than
the burden on the consumer (P1 – P2). The quantity traded on the market
also falls from Q1 to Q2, which is relatively smaller.
EXAMINER‟S COMMENT
The question tested candidates‟ knowledge of selected degrees of price elasticity of
demand as well as the application of the concept of price elasticity of demand in
the analysis of the incidence of an indirect tax. The question was attempted by
about 85% of the candidates and the success rate was about 24%. About 70% of
those who attempted the question demonstrated complete ignorance of the concept
of incidence of tax, while about 20% of them who drew the diagrams failed to
make reference to the diagrams to support their explanations concerning how the
burden of tax would be shared between the producer and the consumer under the
given demand conditions. Candidates should note that to score well in any
question that requires „explanation with the aid of diagram‟ there must be a
linkage between the diagram drawn and the explanation provided.
SOLUTION 2
An indifference curve is a locus of points that shows the different combinations of
two goods which give the consumer the same level of satisfaction. A graph of
indifference is shown below.
C
Good A
D
E
Indifference Curve
0
Good B
Any point on the curve, such as C, D and E gives the consumer the same level of
satisfaction.
ATSWA PART I MARCH 2014 45
INSIGHT
(b) The main Properties of an Indifference Curve are discussed below:
i. An indifference curve has a negative slope:- This means that the
indifference curve is downward sloping. It also shows that as less quantity
of good A is consumed, a greater quantity of good B must be consumed to
enjoy the same level of satisfaction
ii. The higher the indifference curve, the higher the level of satisfaction:- A
higher indifference curve to the right of another represents a higher level of
utility and preferable combination of the two goods.
Good A
III
II
I
0 Good B
iii. Indifference curves cannot intersect:- If two indifference curves intersect,
the point of intersection will represent two different levels of utility, and this
will be unreasonable and illogical.
iv. An indifference curve is convex to the origin:- This implies that as the
consumer substitutes one commodity for the other, the marginal rate of
substitution diminishes.
v. An indifference curve cannot touch either axis:- If an indifference curve
touches either of the axis, it violates the assumption that the consumer
consumes two goods. For instance, in the diagram below, if the indifference
curve I touches the Y-axis at M, it implies that the consumer consume OM of
good A and Zero of good B. Similarly, if the indifference curve touches the X-
axis at point L, it implies that the consumer consumes OL of good B and zero
of good A.
ATSWA PART I MARCH 2014 46
INSIGHT
II
M
Good A
0 L
Good B
(c) Under the indifference curve approach, the consumer is at equilibrium where
the budget line is tangential to the indifference curve. At this point, the
slope of the budget line (the negative prices ratio) equals the slope of the
indifference curve (the ratio of the marginal utilities or MRS)
Good A
F
III
E
II
G II
I
X - axis
0 Good B Q
In the above diagram, Line PQ is the budget line while curves I, II, III represent
indifference curves. The consumer is at equilibrium at point E where the
indifference curve II is tangential to the budget line PQ.
EXAMINER‟S COMMENT
The question on the Indifference curve – Budget line approach to the theory of
customer behaviour is straight forward. The question was attempted by about 34%
of the candidates but only about 20% of them scored pass marks. Candidates
should realize that all aspects of the syllabus are examinable; hence they should
read wide and effectively.
ATSWA PART I MARCH 2014 47
INSIGHT
SOLUTION 3
(a) Production function for any commodity is purely a technical relationship
between quantities of various inputs used and the maximum output of the
commodity that can be produced during a given period of time. Specifically,
the production function gives a summary of the technically efficient methods
of combining inputs to produce output.
Mathematically,
Q = f (L, K, T) - Long run
Q = f (L, K) - Short run
bi. Total product (TP):- This is the total amount of the commodity that can be
produced using a fixed amount of the fixed input and different amount of all
other inputs during a given period of time. In the short run, total product
will vary with the quantity of the variable factor used.
ii. Marginal Product (MP):- This can be defined as the addition to total product
resulting from using one more or less unit of the variable factor. It is equal
to the change in the total product of labour divided by the change in the
quantity of labour.
TPL
MPL
L
iii. Average Product (AP):- The average product of an input is the output per
unit of the input. It is found by dividing the total product of the input by the
quantity of the input used.
Mathematically,
TPL
APL
L
Where:
APL = average product of labour
TPL = total product of labour
L = units of labour employed
The relationship between total product, marginal product and average
product can be observed from diagram below.
ATSWA PART I MARCH 2014 48
INSIGHT
X
TP
MP
TPL
A
P
APL
Units of Labour
0 L1
MPL
It is clear from the diagram that at first TPL rises, reaches maximum and then falls,
as units of variable factor employed increases beyond point X.
When TPL is rising, marginal product and AP are equally rising with MPL above TPL.
At the maximum point of APL, MPL cuts APL from above.
At the maximum point of TPL, MPL, is at point zero.
When MPL is falling, APL is equally falling but APL is above the MPL.
EXAMINER‟S COMMENT
This question on the theory of production tested candidates understanding of the
concepts of production function, total product (TP), average product (AP) and
Marginal Product (MP). The question was attempted by about 75% of the
candidates with about 52% of them scoring pass mark. About 44% of the
candidates lost vital marks for their inability to draw the required diagram
correctly.
Candidates should prepare well for future examinations to ensure that they perform
well.
ATSWA PART I MARCH 2014 49
INSIGHT
SOLUTION 4
a. Monetary policy refers to the combination of measures designed to control
money supply and credit availability in the economy. Monetary policy can
either be expansionary or contractionary (restrictive). An expansionary
monetary policy is that which is designed to increase money supply and
credit availability in the economy. On the other hand, it is called
contractionary or restrictive monetary policy if it is meant to reduce money
supply and credit volume.
In Nigeria, the main instruments of monetary policy are open market
operations (OMO), selective credit control, reserve requirements, monetary
policy rate (MPR), special deposit, and moral suasion.
The objectives of monetary policy include; promoting price stability,
economic growth, external balance, and full-employment.
b. The tools available to the central bank in the conduct of its monetary policy
are:-
i. Reserve requirements: - This refers to the proportion of total deposit
liabilities which the commercial and merchant banks are expected to keep as
reserves. To curtail commercial banks lending operations during the period
of inflation, the Central bank can raise the reserve requirements; this implies
a reduction of the money supply. On the other hand, to expand credit
availability, the Central bank can lower reserve requirements.
ii. Open Market Operations: - OMO is the sale or purchase of government
securities in the financial market by the Central Bank. When the Central
bank sells treasury bills in the open market, the excess reserves of the
banking system and the money supply will decline thereby reducing the
capacity of the banks to extend credit. Conversely, the Central bank buys
Treasury bill or any other eligible financial instrument in the open market if
it wishes to increase the money supply.
iii. Discount rate: - This is the interest rate charged by the Central bank on its
loans. In other words, it is the rate at which the Central bank is prepared to
lend to the commercial and merchant banks in the performance of its
function of a lender of last resort. To check credit expansion, the Central
bank will increase discount rate. On the other hand, if the aim is to
encourage lending and thus investment, the Central bank will lower the
discount rate.
ATSWA PART I MARCH 2014 50
INSIGHT
iv. Credit Ceiling:- Setting of credit ceilings involves the fixation by the central
bank, of the maximum credit that the commercial and merchant banks can
grant to the domestic economy. If the Central bank raises the ceiling,
increased lending operations will be undertaken and the money supply will
increase. A lowering of the credit ceiling will have opposite effects.
v. Selective Credit Control:- This involves issuance of directives to the
commercial and merchant banks on the proportions of the total credit to be
allocated to various sectors of the national economy.
vi. Moral Suasion:- This is simply a process by which the intentions of the
Central bank are clarified to the commercial and merchant banks as agents
for monetary policy execution.
vii. Special deposits:- In order to influence bank liquidity, the Central bank may
also call for special deposits. In order to raise such deposits, the commercial
and merchant banks have to call in some of their loans, especially call
money which is invested on a day-to-day basis.
EXAMINER‟S COMMENT
This question on monetary policy was attempted by about 96% of the candidates.
About 73% of the candidates who attempted the question scored pass marks, while
about 27% who scored poorly was as a result of misinterpreting the part (b) to
mean functions of the central bank instead of the tools (instruments) of monetary
policy required. Adequate preparation will ensure better performance in future
examinations.
SOLUTION 5
a. i. AD C I G X M
A 42 20 12 12 6 N 80million
B 82 20 12 12 6 N120million
C 122 20 12 12 6 N160million
D 162 20 12 12 6 N 200million
E 202 20 12 12 6 N 240million
F 242 20 12 12 6 N 280million
G 282 20 12 12 6 N 320million
ATSWA PART I MARCH 2014 51
INSIGHT
ii. At equilibrium, AD = AS
The equilibrium national income is N200million
iii. Net export = (X – M)
= (12 – 6) million
= N6 million
b.
i. An inflationary gap exists when the equilibrium level of income is greater
than the full employment level of income. Mathematically, inflationary gap,
Ye Y f
Ginf where
K
Ginf = inflationary gap
Ye = equilibrium national income
Yf = Full – employment national income
K = multiplier
ii. Deflationary gap exists when the equilibrium level of income is less than the
full employment level of income.
Ye Y f
Gdef where
K
Yf = full-employment national income
Ye = equilibrium national income
G ef = Deflationary gap
K = Multiplier
EXAMINER‟S COMMENT
This is a question on the determination of equilibrium national income and the
concepts of inflationary and deflationary gaps. Only about 8% of the candidates
attempted the question and the pass rate was about 12%. The pass rate could have
been higher but for their carelessness in not putting „millions‟ and „Naira‟ (unit of
measurement) behind the computed figures. For instance it was wrong in (aii) to
put the value of equilibrium national income as N200 instead of N200 million. Ditto
for the computed figures in (ai) and (aiii).
ATSWA PART I MARCH 2014 52
INSIGHT
SOLUTION 6
The main reasons in support of trade protection include the following:
a. To protect infant industries:- An infant industry is an industry that is newly
established and in its early stage of development; and whose domestic share
of the market is currently small due to competition from foreign competitors.
When such industries are protected, it facilitates their growth and achieves
cost competitiveness through the acquisition of economies of scale.
b. To expand domestic employment:- The tariffs and other trade restrictive
measures make imports more expensive in relation to locally produced
substitutes. This makes the consumers to shift their consumption
expenditures in favour of locally produced goods. This helps the producers
to expand their production capacity and domestic employment opportunities.
c. To correct balance of payments deficit:- The correction of balance of
payments requires the reduction of the imports value, drawing down on the
nation‟s foreign reserves among others. Thus, the imposition of high tariffs
and other measures reduce the volume and values of imported goods and in
eventually correcting the existing balance of payments deficit.
d. To prevent dumping: - This is the practice of selling goods and services in
the foreign markets at a cheaper price than in the home market. This
practice is aimed at unloading unwanted and substandard goods and to
monopolise the domestic markets or driving away the domestic producers.
Tariffs are therefore imposed to discourage the practice of dumping.
e. To enhance national security:- protective tariffs and other measures are
required to promote the survival as well as strengthen industries producing
strategic goods necessary for national security. The National security of a
nation will be threatened if the supply of arms and ammunitions are left in
the hands of the foreigners.
f. To promote Self-Sufficiency:- High tariffs and other measures would be
imposed on imported goods to reduce dependence entirely on foreign
countries and encourage the production of such commodities locally. This
would encourage self-sufficiency in time of crisis.
EXAMINER‟S COMMENT
The question is on the rationale behind the imposition of trade barriers. Not less
than 92% of the candidates attempted the question and the success rate was about
83%.
ATSWA PART I MARCH 2014 53
INSIGHT
AT/141/PI.3
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION - MARCH 2014
BUSINESS LAW
Time Allowed: 3 hours
SECTION A: PART I ATTEMPT ALL QUESTIONS (30 Marks)
MULTIPLE-CHOICE QUESTIONS
Write ONLY the alphabet (A, B, C, D or E) that corresponds to the correct option in
each of the following questions/statements:
,
1. The major disadvantage of Arbitration is
A. Privacy
B. Confidentiality
C. Publication in the newspaper
D. High cost
E. Swearing an affidavit
2. Appeals will lie from the Court of Appeal/Circuit Court Liberia to the
A. National Industrial Court
B. House of Lords
C. West African Court of Appeal
D. ECOWAS Court of Appeal
E. Supreme Court
3. Criminal Law is associated with the following EXCEPT
A. Death sentence
B. Imprisonment
C. Award of damages to the claimants
D. Arraignment
E. Punishment to the litigant
4. Which of the following is NOT a requirement for the existence of a duty of care
with regard to negligent misstatement?
A. There must be an enquirer who consults another with special knowledge
B. Reliance by the inquirer
ATSWA PART I MARCH 2014 54
INSIGHT
C. Such reliance is reasonable and the person to whom the inquiry was
made knows reliance is likely
D. The person relying on the misrepresentation suffers loss
E. There is a contract between the inquirer and the person making the
statement
5. Your Country‟s legislation consists of the following EXCEPT
A. Acts
B. Laws
C. Bills
D. Bye-laws
E. Decrees
6. Which of the following is NOT an element of a contract?
A. Minor
B. Agreement
C. Consideration
D. Intention to create legal relations
E. Offer
7. John Kokoti entered into a contract for the supply of clothing and Mr. Jaguda
promised to pay on delivery. The consideration in this contract is
A. The promise to supply the goods
B. The clothing that will be supplied
C. Mr. Jaguda‟s promise to pay
D. The supply of the goods and the promise to pay
E. There is no consideration in the contract
8. A breach of a condition in a contract leads to
A. Adopting the contract
B. Repudiating the contract and claiming damages for any loss
C. Requesting for validation of the contract
D. Requesting for apology from the party in breach
E. Asking the party that breached the condition to sue for damages and
repudiate the contract
ATSWA PART I MARCH 2014 55
INSIGHT
9. The Courts will enforce restrictive covenants only if the following conditions
are met, EXCEPT
A. The clause protects a legitimate interest of the employer
B. The clause protects public morality
C. The clause protects the profitable interest and secret of the employer
D. The clause goes no further than is reasonably necessary to protect that
legitimate interest
E. It is in the public interest to enforce the clause
10. In Robinson V Davison (1871), a piano player was unable to perform due to
illness. The contract was discharged by frustration. The effect of the
discharge is
A. Discharge only
B. Of no effect
C. That the Court can order the other party to make a payment
corresponding to the benefit already received
D. To automatically correct the contract
E. To renegotiate the contract
11. Agency may be created in the following ways EXCEPT by
A. Agreement
B. Necessity
C. Estoppel
D. Ratification
E. Inducement
12. The duties imposed on an agent in favour of the principal are the following
EXCEPT to
A. Perform fully
B. Make secret profit
C. Exercise due care and diligence
D. Account to the principal
E. Act personally
ATSWA PART I MARCH 2014 56
INSIGHT
13. Which of the following goods may NOT be classified under Sale of Goods Act?
A. Specific goods
B. Unascertained goods
C. Real property
D. Existing goods
E. Future goods
14. The following are remedies available to the buyer of goods when the seller
breaches the contract, EXCEPT
A. Rejection of the goods and repudiation of the contract
B. Damages for non-delivery
C. Specific performance
D. Retaining the goods for an unreasonably long time
E. Recovery of the price paid
15. The following are the obligations of the owner in hire purchase to the hirer
EXCEPT to
A. Deliver the goods to the hirer
B. Have good title to the goods
C. Pay the agreed instalments
D. Ensure that the goods correspond with the description
E. Ensure that the hirer enjoys a quiet possession of the goods
16. A contract of hire purchase can be terminated in any of the following ways
EXCEPT by
A. Mutual agreement
B. Repudiation
C. Restitution
D. Performance
E. Frustration
17. Which of the following is NOT the duty of the employee?
A. Duty of care
B. Duty to render service personally
C. Duty to engage in illegal contract
D. Duty to obey lawful orders
E. Duty to be faithful
ATSWA PART I MARCH 2014 57
INSIGHT
18. Which of the following is NOT a test required to determine the existence of a
master and servant relationship?
A. Control test
B. Dismissal test
C. Organisation test
D. Ability test
E. Termination test
19. The following people are parties to an insurance contract EXCEPT
A. The insured
B. The insurer
C. The carrier
D. The broker
E. The agent
20. Which of the following is NOT a Negotiable Instrument
A. Cheque
B. Bills of Exchange
C. Credit cards
D. Debentures
E. Banker‟s draft
21. The statutory maximum number of partners in a firm of accountants is
A. 20
B. 10
C. Inifinity
D. 30
E. 36
22. A partner that contributes capital but is not involved in the day-to-day
administration of the firm is a/an
A. Limited partner
B. Active partner
C. Dormant partner
D. General partner
E. Illegal partner
ATSWA PART I MARCH 2014 58
INSIGHT
,,
23. The meeting of a company‟s shareholders which is called to address specific
issues is called an/a
A. Extra-ordinary General Meeting
B. Annual General Meeting
C. Shareholders Meeting
D. Directors Meeting
E. Stakeholders Meeting
,
24. The document that regulates the internal management of a company is called
A. Memorandum of Association
B. Articles of Association/Incorporation
C. Register of members
D. Minutes of meetings
E. Regulation
25. The shares of the company that bear the financial risk of the business is
A. Cumulative preference shares
B. Preference shares
C. Ordinary shares
D. Qualification shares
E. Chairman shares
26. A Unit Trust is a
A. Sole proprietorship
B. Guarantee scheme
C. Collective investment scheme
D. Cooperative society
E. Merger company
27. A Bill of Exchange is an unconditional order written by the drawer to
A. A drawee
B. An Acceptor
C. A holder
D. A Sheriff
E. A Registrar
ATSWA PART I MARCH 2014 59
INSIGHT
28. The duty of secrecy between a bank and its customer is
A. An open secret
B. Confidentiality
C. On customer‟s instruction
D. Unethical
E. Not known to law
29. The holder of a Bill of Exchange is the person
A. In possession of the bill
B. Who gave the bill
C. Who pays the bill
D. Who issued the bill
E. Who has information on the bill
30. It is the duty of a banker to honour the obligation of
A. The presenter
B. The drawer
C. The payee
D. The holder
E. The negotiator
SECTION A: PART II ATTEMPT ALL QUESTIONS (20 Marks)
SHORT-ANSWER QUESTIONS
Write the answer that best completes each of the following questions/statements:
1. List any TWO duties of an employee under a contract of employment.
2. The owners of a limited liability company are called ………………………….
3. The complainant in a civil case is called ………………………..
4. A professional who carelessly misled a client that relied on his professional
advice and suffered loss is liable of……………………………..
5. The term of a contract that goes to the root of an agreement and allows the
aggrieved party to rescind the contract is a…………………………..
ATSWA PART I MARCH 2014 60
INSIGHT
6. The destruction of the subject-matter of a contract at the time it was made
and concluded, is known as………………………………..
7. The measure of payment in a contract in which one person has performed
part of his obligation in the contract is……………………………
8. A situation in which one of the parties to a contract makes a mistake as to
the identity of the subject matter of the contract is known as………………
9. In agency, a person in whose possession goods are entrusted with implied
authority to sell them in his name is………………………..
10. In Sale of goods Law, goods which are to be manufactured, identified and
agreed upon with the seller after making the contract are…………………..
11. The relationship between the parties in a hire purchase transaction is that
of………………………… and ………………………..
12. Contract of employment connotes the relationship of ………and……….
13. The principle of Insurance Law in which the insured is to be placed in his
original position before the loss is known as………………..
14. In partnership, a partner who stays at the background but shares in its
profits and losses is called a……………………………….
15. An Extra-Ordinary General Meeting of a company is usually called
by……………
16. The relationship between a banker and customer is regarded in Law as that
of a……………………and a…………………………………
17. A bill that is signed for the purpose of lending by a person who has not
received value for the bill is called…………………………..
18. The effect of a general crossing on a cheque is that the proceeds of the
cheque may only be collected through …………………………….
19. Where some conditions are imposed by the acceptor of a bill are subject to
the arrival of a stated date, the acceptance is called…….…………………
20. A written instrument containing an unconditional promise by a party to pay
in future is called………………………………………..
ATSWA PART I MARCH 2014 61
INSIGHT
SECTION B: ATTEMPT ANY FOUR QUESTIONS (50 Marks)
QUESTION 1
a. Alternative Dispute Resolution (ADR) provides a quicker and at times more
equitable ways of dispute resolution. List THREE advantages and TWO
disadvantages of ADR.
b. Mr. Ojo sought and obtained a business plan from his Chartered Accountant,
Mr. Aina, who advised him to invest in a particular line of business. The
advice was wrong and Mr. Ojo suffered a loss.
You are required to advise Mr. Ojo on the nature of liability of Mr. Aina.
(5 Marks)
c. A contract has been defined “as an agreement which the law recognises as
binding on the parties and which is enforceable in Law”. Explain briefly
ONE element of a contract (2½ Marks)
(Total 12½ Marks)
QUESTION 2
a. Bartholomew invented a Computer database. He asked Joseph to assist him
to patent the invention and arrange licensing agreements with interested
users.
Bartholomew wrote subsequently, commending Joseph‟s laudable efforts
and offered to pay him 15% of the net receipts from the invention for the job.
Bartholomew has refused to pay Joseph, who intends to seek legal redress.
Required:
Advise Joseph accordingly. (5 Marks)
b. Explain and give ONE example of a contract in restraint of trade. (2½ Marks)
c. Alexander was employed as a canvasser by a press company. His letter of
appointment stipulated that he should not canvass for any other press
company even during his free periods and he should not, on termination of
his appointment, solicit any of the customers of the company for himself or
on behalf of any other company.
Required:
Examine the prohibitions and their enforceability against Alexander.
(5 Marks)
(Total 12½ Marks)
ATSWA PART I MARCH 2014 62
INSIGHT
QUESTION 3
a. Write short notes on the following:
(i) Negotiorum Gestor
(ii) Agency of Necessity
(iii) Nemo dat quod non habet (9 Marks)
b. Explain briefly the hirer‟s right and method to terminate a hire purchase
contract (3½ Marks)
(Total 12½ Marks)
QUESTION 4
a. The relationship of a Principal and an Agent may arise in various ways.
Among such ways is agency by ratification.
i. What is agency by ratification? (2 Marks)
ii. Explain THREE conditions necessary for ratification to be valid
(3 Marks)
b. Ade discovers that a trader, Segun, is selling bags of rice which his friend,
Olu, would want to buy if he were present. Ade, therefore purports to buy
the bags of rice on Olu‟s behalf.
At that stage, Ade was acting without Olu‟s agreement or authority.
However, when Ade informed Olu of the purchase, Olu was pleased to adopt
the transaction.
Required
Explain the legal position of the parties in the situation and comment on the
legality of the transaction. (4½ Marks)
c. Describe TWO items which an insured needs not disclose to the insurer in the
proposal form on aspects of material facts. (3 Marks)
(Total 12½ Marks)
QUESTION 5
a. People may pool resources together to run businesses and share whatever
benefits they realise from the association or partnership.
Required:
Explain briefly TWO types of partnership. (5 Marks)
ATSWA PART I MARCH 2014 63
INSIGHT
b. Elo and Abu are friends. Elo, who has an oil palm farm, borrowed N100,000
from his friend, Abu, in 2010 which he used to develop the farm and set up
an oil mill there. Abu, in his free times, assisted his friend in the farm. In
2013, Abu demanded for the repayment of his N100,000. Elo told Abu that
he is not entitled to repayment because they were running a partnership. He
told Abu to wait for harvest time when the produce would be sold for Abu to
recover his money. Abu is not happy with the idea of partnership.
Required:
State the law and advise the parties (4½ Marks)
c. The Corporate Affairs Commission/Registrar General/Business Registry
Department was established in your Country under the enabling law to
perform certain functions.
Required
State any THREE of those functions. (3 Marks)
(Total 12½ Marks)
QUESTION 6
a. Write brief notes on each of the following:
i. Crossed cheque
ii. Inchoate bill
iii. Promissory Notes
iv. Dishonour of a bill (10 Marks)
b. A bank is bound to serve its customers. From this statement, state and
explain briefly ONE duty of a banker to its customers. (2½ Marks)
(Total 12½ Marks)
ATSWA PART I MARCH 2014 64
INSIGHT
SUGGESTED SOLUTIONS
SECTION A
PART I MULTIPLE-CHOICE QUESTIONS
1. D
2. E
3. C
4. None
5. C
6. A
7. D
8. B
9. C
10. C
11. E
12. B
13. C
14. D
15. C
16. C
17. C
18. A
19. C, D, & E
20. C
ATSWA PART I MARCH 2014 65
INSIGHT
21. C
22. C
23. A
24. B
25. C
26. C
27. A
28. B
29. A
30. B
EXAMINER‟S COMMENT
The MCQs substantially covered the syllabus and performance was impressive with
about 65 – 70% scoring above average marks.
PART II: SHORT-ANSWER /QUESTIONS
1. Obey instruction/duty of care/duty to be faithful/duty of personal service
2. Shareholders
3. Plaintiff/claimant
4. Negligent misstatement/misrepresentation
5. Condition
6. Res-extincta/frustration
7. Quantum meruit
8. Unilateral mistake
ATSWA PART I MARCH 2014 66
INSIGHT
9. Factor/Mercantile Agent
10. Future Goods
11. Bailee/Bailor Owner/hirer
12. Master/Servant
13. Indemnity
14. Dormant/Sleeping
15. Directors
16. Debtor and Creditor
17. Accommodation Bill
18. A collecting bank
19. Conditional Acceptance
20. Promissory Note
EXAMINER‟S COMMENT
SAQs also covered the syllabus though pass rate was slightly lower than MCQ. Pass
rate is reasonably put at 60% (i.e. those who scored 10 and above)
SOLUTION 1
1a. Alternative Dispute Resolution (ADR) has numerous advantages, which
include the following
i. It is cheaper than litigation
ii. It guarantees privacy
iii. It is faster than litigation
iv. It achieves amicable resolution of disputes
v. No victor, no vanquished position is achieved by parties
ATSWA PART I MARCH 2014 67
INSIGHT
Disadvantages of ADR include the following:
i. Parties‟ consent must be obtained
ii. Parties‟ must participate
iii. Dissent by a party terminates the process
b. The nature of liability of Mrs. Aina is civil liability and liability deals with the
private rights and obligations which arise between individuals.
The facts of the case reveal the tort of negligent misstatement. The principle is
that someone possessed of special skill undertakes to apply that skill for the
assistance of another person who relies upon such skill, a duty of care will
arise, and where a breach occurs, the inquirer can bring an action for
damages.
However, the parties must be contractually bound and one party must have
sustained a loss arising from his reliance on the statement.
In this case, Mr. Ojo and Mr. Aina are contractually involved. Therefore, Mr.
Ojo can successfully institute a civil action under the tort of negligent
misstatement and seek damages from Mr. Aina.
The following are some elements of a binding contract:
i. Agreement between parties: The agreement must be made up of offer
and acceptance. The parties must be at consensus ad idem, that is, there
must be a meeting of the minds.
ii. There must be an intention to create legally relations. The parties must
not only agree but must intend to create legal enforceable rights and
obligations.
iii. There must be “offer” and “acceptance”: An offer must be made from the
offeror and must be accepted by the offeree within the stipulated terms of
the offeror.
EXAMINER‟S COMMENT
Part A of this question tests candidates‟ knowledge of ADR and is coming out for
the first time. Part B tests knowledge of Tort (negligent misstatement) while Part C
deals with elements of a contract. Probably due to the novel nature of Part A of the
question, pass rate fell below average. Overall, about 60% attempted the question.
ATSWA PART I MARCH 2014 68
INSIGHT
SOLUTION 2
a. This is a case of past consideration. Any act, service or promise which is
freely and gratuitously performed prior to and independently of a contract is
called past consideration and is unenforceable in Law.
Using the principle of law, Batholomew cannot be sued because it is a past
consideration and Joseph may not succeed in an action against Batholomew
for same reason.
However, one exception to the rule of past consideration is that, where
services are rendered at the express or implied request of a person who
subsequently promises to pay for them, it will be assumed that the parties
have agreed the services are to be paid for, which contract now becomes
enforceable.
Re: CASEY PATENT
In this case, using the exception rule, Joseph may successfully institute legal
action for the 15% promised him.
a. Contracts in restraint of trade are agreements or clauses in contracts which
seek to restrict the freedom of a party to practice his trade, business or
profession. At common law, it is void.
There are several categories of contracts in restraint of trade. The following
are presently recognized:
i. Employer and Employee situation
ii. Seller and Purchaser of business concern
iii. Solid Agreements
iv. Restrictions on partners
v. Pricing and Production Target Agreements.
a. Employers often insert clauses in employment contracts restricting
employees‟ freedom to practice his trade, business or profession within a
specified period; such restrictive clauses are void and unenforceable in law.
However, the court may enforce a contract in restraint of trade where the
terms of the restraint is necessary to protect an interest of the employer and
it is reasonable in terms of period and area covered.
ATSWA PART I MARCH 2014 69
INSIGHT
In the case at hand, the restriction that Alexandra should not canvass for any
other press company during his free period appears reasonable to protect
the business interest of the employer.
However, that Alexandra should not, on termination of his appointment,
solicit any of the customers of the company, for himself or on behalf of any
other company appears to be too wide and no limitation as to date or
location. The restriction is void and will be unenforceable against
Alexandar.
EXAMINER‟S COMMENT
Part A tests knowledge of candidates on Past Consideration. While Parts B and C
pertain to contracts in restraint of trade. About 40% of the students attempted the
question while pass rate was below average.
SOLUTION 3
a) i. Negotiorum Gestor refers to where anyone who without authority
(expressed or implied) comes into possession of another persons‟ property
and has to take steps to preserve such property.
The question that arises here is whether such a person is entitled to
reimbursement or commission from the actual owner who did not
authorize the person to act for him. As a general rule, the law regards
such a person as a volunteer who cannot claim any reward or
commission.
The general rule is that no liability may be imposed upon any person
without his consent.
ii. Agency of Necessity; This is actually necessitated by circumstances which
enables the agent to bring his principal into a contractual relationship
with the third party. A good example of agency of necessity is the ship
master as well as the accepter of a Bill of Exchange who does it on behalf
o f the ship-owner and may even sell part of the cargo to defray any
expenses; as was held in NOLARA V HENDERSON (1872).
Generally, agency of necessity will arise under the following conditions:
i. It must be impossible for the ship master to communicate with the
owner of the ship or cargo for instruction.
ii. The action taken by the agent must be for the benefit of the principal
iii. The ship master must have acted in good faith
ATSWA PART I MARCH 2014 70
INSIGHT
iii. S.21 of the Sale of Goods Act provide that where goods are sold by a
person who is not the owner, the buyer acquired no better title than the
seller had unless;
a) The seller had authority or consent of the owner or
b) The owner is estopped from denying the sellers authority to sell.
The basic common law rule is that „ No man gives away that which is not his
own. Nemo dat quod non habet‟. That principle is as stated in S.21 of the
Sale of Goods Act.
b) Under hire-purchase contract, a hirer has the right to re-deliver the goods to
the owner and terminate the contract at any time.
The following are methods to terminate a hire-purchase contract:
i. He may give notice of termination in writing to any person that is entitled
to collect or receive the hire rent.
ii. Upon giving the notice, he must pay any installments which are in
arrears,
EXAMINER‟S COMMENT
Part A of the question tests understanding of two fundamental concepts of law,
“Nemo Dat” Rule and Negotiorum Gestor, as well as Agency by Necessity. Part B
deals with hire purchase agreements. About 70% attempted the question with most
exhibiting poor understanding. Pass rate was not up to 20%.
SOLUTION 4
a) i. Agency by ratification can arise in a situation where an agent acts in the
name of or professedly on behalf of a principal in existence and
ascertainable, or exceeds his mandate without the principal‟s authority,
the latter way ratify the act and make it as valid as if it had been done
with his authority.
ii. The conditions that must exist for a valid ratification to take place are:
i. Existence of the principal: The principal must be in existence
when the transaction he seeks to ratify was entered into by the
agent.
ii. Capacity of the principal: A principal can only ratify acts and
transactions if he had capacity to do those things as at the time
they were done.
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iii. Transaction is undertaken on principal‟s behalf: only a principal
whose existence was disclosed to the third party can ratify.
iv. Lawful quality of the transaction: An unlawful or illegal
transaction cannot be ratified.
v. Time for ratification: If ratification of an unauthorized act is
delayed unduly, ratification becomes impossible.
b) The legal position of the parties in the question is as follows:
i. Ade at the time he discovered the bags of rice had no mandate to act on
behalf of Olu
ii The transaction was nevertheless legal (i.e. It does not infringe on any
law)
iii. Olu had the capacity to enter into the contract as required by the
conditions for ratification
iv. Olu‟s adoption of Ade‟s action constitutes Ade agent of Olu for the
particular transaction in question, not by prior agreement or authority
but by subsequent approval or ratification.
v. The transaction is therefore a valid agency by ratification
vi. Segun can enforce the contract against olu
c) The basic principle of insurance is that the insured must disclose all material
facts which will enable the insurer to decide whether to accept the offer of the
insured in the contract of insurance.
There are however exceptions to this rule: Those exceptions are:
i. Facts which the Insured does not know
ii. Facts which might diminish the risk
iii. Facts within the knowledge of the insurer
iv. Facts which are waived by the Insurer
EXAMINER‟S COMMENT
Parts A and B tasks students understanding of how Agency by Ratification is
created as well as conditions necessary for ratification, while Part C deals with non-
disclosure of material facts in an insurance contract. About 50% of candidates
attempted the question while rate of those who scored above 5 marks was about
average.
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INSIGHT
SOLUTION 5
a) i. General Partnership: One which every partner is fully liable for the debt
and liabilities of the partnership business, and every partner has a right
to participate in the running of the business.
ii. Limited Partnership: One in which the liability of one or more partners is
limited by agreement to the amount contributed as capital, but such
partner must not participate in the running of the partnership business.
b) A partnership is defined in S.I of the Partnership Act 1890 as a relationship
which subsists between persons carrying on a business in common with a view
of profit.
The essential requirement of a partnership is that the partners must carry on
the business with an intention of making and sharing profit, where the
intention is not to share the profits, the relationship shall not qualify as a
partnership even where the parties are jointly involved in carrying on the
business.
In the instant case, Elo and Abu did not agree to sharing a profit of the
business. There is no partnership between them and as such Abu can recover
his N100,000 from Elo because it is a loan to him and not capital to the
business as a partner. The relationship between them contemplates that of a
debtor/creditor and not a partnership.
c) The function of the Corporate Affairs Commission are as follows:
i. Administration of the Act with regards to regulation and supervision of
the formation and incorporation of companies.
ii. Registration, management and winding-up of companies
iii. Establishment and maintenance of companies‟ registry or branches in all
the states of the federation.
iv. Arrangement and conduct of investigation into the affairs of any
company where the interest of shareholders and the public so demand.
v. Performance of such functions as may be specified by any other law.
vi. Undertaking such activities which may be necessary to give full effect to
the provision of the Act.
ATSWA PART I MARCH 2014 73
INSIGHT
EXAMINER‟S COMMENT
Although Part A of the question was straightforward, a lot of candidates lacked
understanding of the distinction between types of Partners and types of
Partnerships, while Part B further tests students‟ detailed understanding of the Law
of Partnership. The question scenario was well structured. Part C requires students
to state the functions of CAC. About 90% attempted the question while about 60 –
70% did well.
SOLUTION 6
a) i. A crossed cheque is one which has two parallel lines on its face. It
cannot be paid across the counter, but into the payee‟s account.
Where it has the name of a banker between the parallel lines, it is
referred to as a special crossing. Only the banker can collect its proceeds
on behalf to its customer.
ii. A bill which is drawn lacking in some material particulars but which is
signed and delivered is referred to as an incomplete or inchoate bill e.g.
a blank cheque which is signed and delivered.
iii. A promissory note is defined as “An unconditional promise in writing,
made by one person to another, signed by the maker, engaging to pay on
demand or at a fixed or determinable future time a sum certain in money
to or the order of a specified person or to bearer”
iv. Where a time bill is presented to the drawee for acceptance but the
drawee refuses to indicate such or gives a conditional acceptance, It may
be treated as dishonoured. Where on the due date the drawee or
acceptor fails to pay on the bill it is dishonoured. The holder can then
proceed to enforce it against any of the parties liable on it.
b) A banker owes the following duties to its customers:
a. To Honour the Customer‟s Cheques: a banker is bound to honour the
customers cheques presented to it as long as the customers has
sufficient funds in their account.
b. To Exercise due care in his dealings: The banker must be careful in the
dealings on behalf of the customers with a third party.
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INSIGHT
c. Not to pay without authority: The banker must not exceed the mandate
given to it by the customers;
d. To maintain secrecy: The banker must not disclose the state of the
account of the customers to third parties without the consent of the
customer.
e. To Advise the customers correctly on Investments: The banker may
give professional advise to the customer in respect of any investment
portfolio the customers are about to engage in.
EXAMINER‟S COMMENT
The question generally deals with banking law in both parts A and B. Attempt rate
is about 90% and success rate was impressive with about 60% scoring above
average.
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INSIGHT
AT/141/PI.4
ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION - MARCH 2014
COMMUNICATION SKILLS
Time Allowed: 3 hours
SECTION A: PART I ATTEMPT ALL QUESTIONS (20 Marks)
MULTIPLE–CHOICE QUESTIONS
Write ONLY the alphabet (A, B, C, D or E) that corresponds to the correct option in
each of the following questions/statements:
1. Which of the following is a system of signs governed by rules explicitly or
implicitly between members of the using culture?
A. Codex
B. Code
C. Message
D. Dissonance
E. Grammar
2. The means by which the sender affects the receiver is
A. Message
B. Feedback
C. Codification
D. Paradigm
E. Culture
3. A process which enables meaning to be produced is
A. Commutation
B. Semantics
C. Broadcasting
D. Reference
E. Communication
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4. Human communication began with
A. Writing
B. Literacy
C. Sign language
D. The word of mouth
E. Reading
5. The grape-vine is a
A. Channel of communication
B. Message in the communication process
C. Feedback
D. Formal communication
E. Non-verbal communication
6. The punctuation mark used to separate words in a series is
A. Comma
B. Colon
C. Dash
D. Hyphen
E. Semi-colon
7. Which of the following words is correctly spelt?
A. Accomodation
B. Acomodation
C. Accommodation
D. Accomondation
E. Acommodation
8. The following sentences are correct EXCEPT
A. Each child is an adult-to-be
B. She eats three times daily
C. None of the candidates have arrived
D. Neither the boys nor the girl has left
E. The committee has been set up
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9. Which of the following words is correctly spelt?
A. Programe
B. Programme
C. Proggramme
D. Proagram
E. Proagrame
10. Capital letter can be used to begin each of the following EXCEPT
A. Proper Nouns
B. Plural Words
C. Complimentary close of a letter
D. Title
E. Sentence
11. Which of the following salutations is the most appropriate in a formal letter?
A. Dear Daddy
B. Dear Sir
C. Dear Honey
D. Dear Sweetheart
E. Dear Uncle
12. Writer‟s address in a letter could appear
A. At the top left hand corner of the page
B. At the bottom left hand corner of the page
C. At the top right hand corner of the page
D. At the centre of the page
E. At the bottom right hand corner of the page
13. Which of the following is an example of a formal letter?
A. Letter of complaint
B. Letter to an uncle
C. Letter to a father
D. Letter to a friend
E. Letter to a relative
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14. Which of the following is NOT an example of a formal letter?
A. Memorandum
B. Letter of Appeal
C. A credit letter
D. Application for employment
E. Letter to a colleague
15. Which of the following is the usual complimentary close in any formal letter?
A. Yours affectionately
B. Yours faithfully
C. Yours always
D. Yours in business
E. Yours lovely
16. Each of the following letters must contain the signature of the writer EXCEPT
A. Letter of enquiry
B. Letter of query
C. Letter of order
D. Letter to an uncle
E. Letter of appeal
17. Which of the following is NOT a formal feature of a memorandum?
A. Date
B. Subject
C. To:
D. From:
E. E-mail address
18. A letter to all members of a professional club inviting them to a meeting is
A. Letter of commendation
B. Letter of authority
C. Circular letter
D. Letter of appeal
E. Letter of support
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19. Reference number in a formal letter is used
A. To refer to the writer
B. To refer to the number of letters written
C. For record purposes
D. To indicate the referee number of the company
E. For proper future identification
20. Which of the following is used by organizations for internal communication
among workers on a regular basis?
A. House Journal
B. News letter
C. Memorandum
D. Newspaper
E. Magazine
SECTION A: PART II ATTEMPT ALL QUESTIONS (20 Marks)
SHORT-ANSWER QUESTIONS
Write the answer that best completes each of the following questions/statements:
1. A letter written to a person who recently received an award is called a(n)
…………………… letter.
2. The acronym “ECOWAS” stands for ……………………………………………….
3. The abbreviation “Mr.” stands for ……………………………………………..
4. When somebody‟s writing is not clear, it is said to be ……………………...
5. A type of essay that is usually factual and persuasive is ……………….. essay.
6. “Bola”, said Yomi, “will you be going to Paul‟s party this weekend”? This is
an example of a(n) ……………………… speech.
7. He asked where her bag and car keys were. This is a(n) …………………
speech.
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8. “There is no fewer than fifty cows in the field” The grammatical error in this
sentence is ………………….
9. I have two highly-placed and rich uncles, but none of them cares for me.
The correct form of the underlined word in this sentence is …………………
10. “The layout of most of our towns are not planned”. The error contained in
this sentence is that of ………………….
11. Speech making is an example of ………………… communication.
12. For intelligibility, a speaker must pronounce his words with appropriate
………………. patterns while making a speech.
13. The technical name that refers to the situation or environment in which a
speech is made is called …………………...
14. A speech delivered from an outline is said to be…………………………...
15. In speech making, the speaker‟s voice must be …………………………...
16. A speaker delivering a speech to a large audience for the first time, may
likely suffer ……………………..
17. A piece of writing which is meant for delivery as a speech is referred to as a
……………………
18. When delivering a speech……………. aids are used to supplement the
speech.
19. Letter writing is an example of …………………….. Communication.
20. Impromptu requires no………………………
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SECTION B:
QUESTION 1
COMPULSORY
COMPREHENSION (30 Marks)
Read the following passage carefully and answer the questions on it.
It is now fashionable to hear discussions centring on the disproportionate
representation of males and females in the population. It is indeed not uncommon
to hear people say that for every man there are about two or three women; so,
every man can marry more than one woman. This theory is, of course, more
popular among those who favour the seeming glamour of the polygamous way of
life. The big question is: “How correct is this theory”? And, what are the facts?
The stark reality is that in any normal population, out of every one hundred
conceptions, about fifty-three to fifty-five are boys, and about forty-five to forty-
seven are girls. So, there are potentially more boys than girls in any normal
population. However, because of many factors, some of which are not fully clear,
the male foetus is far more fragile than a female one. There are therefore more
miscarriages of male than of female babies. As a result, by the time the babies are
born, the ratio between boys and girls has fallen to about fifty-two boys to forty-
eight girls.
As infants, boys are more delicate than girls. Boys are less resistant to certain killer
diseases and girls thus have a higher chance of survival. The result is that before
adolescence, between the ages of nine and eleven years, the numbers of boys and
girls are virtually at par in the population.
Throughout adolescence, from ages twelve to nineteen years, boys are known to fall
victim to a variety of ailments in much higher numbers than girls. Besides, the
tendency of boys to be adventurous and daring exposes them to more mishaps,
some of these fatal. So, by the beginning of adulthood, there are slightly more girls
than boys. The relative rates of reduction, in the numbers of males and females
continue throughout adulthood. Men are the bread-winners, the soldiers and the
travellers. It is during their middle age that very many men die tragically, as
soldiers in their boots, so to say. The net result of this is that within any normal
population, there are more women in their mid-thirties and forties than there are
men.
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Finally, in their late forties and fifties, far more men than women die of cardiac
diseases like hypertension, heart-attack and anxiety. This is the period when there
are clearly more widows than widowers.
On the whole, therefore, there are more females than males but certainly not in the
proportion claimed by adherents of polygamy. During their marriageable years,
there are about eleven wives to ten husbands – that is, husbands and wives of the
same age. That in some communities one man could marry as many as fifteen
wives is a result of the fact that men normally marry from among the ladies
younger than themselves. This, more than any other factor, allows some men who
are inclined to polygamy to have their way.
*(Culled from O.O. Idowu et al, Round-up English, PP 69- 70)
a. What is the author referring to as „this theory‟? (3 Marks)
b. What is the factor that brings down the potential ratio of boys to girls?
(2 Marks)
c. State briefly what brings to par the numbers of boys and girls at infancy.
(3 Marks)
d. Apart from (b) and (c) state briefly THREE other reasons for reduced male
population. (6 Marks)
e. Why do polygamous men have their way? (2 Marks)
f. „It is indeed not uncommon‟. What does this statement mean? (2 Marks)
g. What sentence types are the following?
i. “It is now fashionable”
ii. “The relative rates of reduction, in the numbers of males and females
continue throughout adulthood”.
iii. “This is the period when there are clearly more widows than
widowers”. (6 Marks)
h. Give ONE word that could replace each of the following as used in the
passage:
i. Glamour
ii. Stark
iii. Fragile
ATSWA PART I MARCH 2014 83
INSIGHT
iv. Fatal
v. Tragically
vi. Adherents
(6 Marks)
(Total 30 Marks)
,
SECTION C: ATTEMPT ANY TWO QUESTIONS (30 Marks)
QUESTION 2
a. What is “listening”? (3 Marks)
b. Explain any FOUR ways in which effective listening can be promoted.
(12 Marks)
(Total 15 Marks)
QUESTION 3
a. Each of the following sentences contains a figure of speech. Write out the
figure of speech used in each of the sentences.
i. Oh death! Where is thy string?
ii. John Bull was a bull on the field.
iii. The sun sometimes looks intensely upon the earth.
iv. The more you look, the less you see.
v. Two million people attended my sister‟s wedding ceremony.
vi. Give us this day, our daily bread.
vii. Departure is a sweet sorrow.
viii. Rumour spreads like a wild fire.
ix. Mr. Wright has the right to write the speech.
x. To err is human, to forgive is divine. (10 Marks)
b. The following pairs of words are used as nouns as well as verbs. Write out in
capital letters the syllable on which the primary stress is placed in each of
the words to show the difference between the nouns and the verbs.
i. Import/import
ii. Rebel/rebel
iii. Increase/increase
iv. Refuse/refuse
v. Record/record (5 Marks)
(Total 15 Marks)
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QUESTION 4
a. What is speech writing? (3 Marks)
b. Explain briefly, with examples, any FOUR techniques for an effective speech
delivery. (12 Marks)
(Total 15 Marks)
QUESTION 5
a. What is a paragraph? (6 Marks)
b. Explain any THREE structural elements of a paragraph. (9 Marks)
(Total 15 Marks)
SUGGESTED SOLUTIONS
SECTION A
PART I MULTIPLE-CHOICE QUESTIONS
1. B
2. A
3. E
4. D
5. A
6. A
7. C
8. C
9. B
10. B
11. B
12. C
13. A
ATSWA PART I MARCH 2014 85
INSIGHT
14. E
15. B
16. D
17. E
18. C
19. E
20. B
EXAMINER‟S COMMENT
The questions cover all sections of the syllabus. The candidates‟ performance was
good as about 75% of them scored 50% and above of the allocated marks.
Candidates can still perform better in future examinations by ensuring that they
cover all areas of the syllabus.
PART II SHORT-ANSWER QUESTIONS
1. Congratulatory
2. Economic Community of West African States
3. Mister
4. illegible/ not legible
5. argumentative
6. direct
7. indirect/reported
8. number error
9. neither
10. concord / agreement
11. oral/verbal
12. intonation
13. context/setting
14. extemporaneous
15. audible/clear
ATSWA PART I MARCH 2014 86
INSIGHT
16. stage fright
17. manuscript/script
18. visual
19. written
20. preparation/script/notes
EXAMINER‟S COMMENT
The questions cover all the sections of the syllabus.
Candidates‟ performance was below average as about 40% of them scored 50% and
above of the allocated marks. Candidates should familiarize themselves with all
the sections of the syllabus for better performance in future examinations.
SOLUTION 1
a. The theory is that women are twice the population of men
and so every man can marry more than one wife.
b. Miscarriages of male babies.
OR The rate of miscarriages of male babies is higher than that of female
c. Boys are more prone to killer diseases than girls.
OR Boys are less resistant to certain killer diseases than girls.
d. i. Boys engage in risky adventures which result in fatality.
ii. Variety of diseases kill more boys than girls.
iii. More men die of heart-related ailments in their forties
and fifties than women.
e. Men tend to marry younger women than themselves.
f. It is common/It is usual.
g. i. Simple sentence
ii. Simple sentence
iii. Complex sentence
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INSIGHT
h. i. glamour – fascination, attractiveness, excitement, enchantment
ii. stark - sheer, utter, downright, complete
iii. fragile - delicate, brittle, frail, tender, weak, feable
iv. fatal - mortal, deadly
v. tragically - calamitously, disastrously, pathetically,
melancholically, sorrowfully
vi. adherents – supporters, followers, practitioners
EXAMINER‟S COMMENT
The question tests candidates‟ understanding of the content of a given passage.
Candidates‟ performance was fair as about 45% of them scored more than 50% of
the allocated marks. The commonest pitfalls were inability to understand the
content of the passage, how to answer comprehension questions and low
vocabulary level. Candidates are advised to embark on wide reading for pleasure
and specific purposes. They should also practice answering comprehension
questions a lot.
SOLUTION 2
a. Listening is one of the four basic communication skills. It is a process of
receiving, constructing meaning and responding to spoken message.
Listening can take different forms. The major types of listening include
informative, empathic, attentive and critical. Listening is a skill that could
be enhanced or developed through practice. (3 Marks)
b. i. Living up to expectation
A good listener can demonstrate some specific traits that would
enable the speaker think there is the likehood that the information
flow would be enhanced. It is one thing to be a good listener, but it is
better if one is seen to really be one. A speaker wants one to listen
and so he looks for clues to show that one is really listening. (3 Marks)
ii. Use of other bodily receptors
Ears are the primary means by which the human body receives sound
impulses. Nevertheless, a good listener should exploit other bodily
receptors in order to enhance effective listening. For example, the
habit of maintaining a good eye contract with the speaker enables
him to know whether or not the audience members are listening
attentively to him. This will enable the speaker to adjust his speech to
keep the interest of his audience. (3 Marks)
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INSIGHT
iv. Clarifying by asking questions
Attending to a message affords the opportunity to collect or acquire
information. The next step is for the listener to assign meaning to the
message received through evaluation. Clarification of the speaker‟s
motives is done through asking questions by the listener. This brings
about the desired interaction between the speaker and the listener,
thereby enhancing listening. (3 Marks)
v. Eliminating or avoiding distractions
Active listening requires full concentration by the listener. An active
listener will move away from any form of distractions or eliminate
anything that can affect concentration during the course of
communication. For instance, a listener who wants to engage in
effective listening may decide to put off his or her mobile phone or
put it in the silent mode. He or she may also try to put behind him or
her any problems that may impair his full concentration. (3 Marks)
vi. Interest arousal
The speaker must learn to arouse the interest of his audience by
consciously aiding them to listen. An unusual throat-clearing sound
will jolt the audience to attention at the beginning of the speech
exercise. This should be followed by a short but funny anecdote that
the audience will remember throughout the duration of the speech or
even after. Occasional jokes in the course of the speech will promote
the interest of the audience in the speech and thereby eliciting
effective listening. (3 Marks)
vii. Avoidance of prejudice
If a listener dislikes the person of a speaker for any reason, the
listener may equally dislike the speech of the speaker. The listener
may hear the speech without understanding it. Mind wandering sets
in and tiresome irrelevances creep into the mind to blot out the
speaker‟s message. The listener in this position must consciously shift
his attention from the person of the speaker in order to give objective
attention to the message. This is the only way the listener can
promote effective listening in this situation.
(Total 15 Marks)
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INSIGHT
EXAMINER‟S COMMENT
The question tests candidates‟ understanding of one of the language skills –
listening. About 95% of the candidates attempted the question. The performance
was very poor as about 15% of the candidates scored 50% and above of the
allocated marks. The commonest pitfall was their inability to explain what
listening is and ways of promoting effective listening. Candidates are advised to
pay attention to the four language skills for better performances in future
examinations. They should also make use of ICAN Study Packs and past question
papers.
SOLUTION 3
a. i. Rhetorical question/Metaphor
ii. Metaphor/Pun
iii. Personification
iv. Paradox
v. Hyperbole/Exaggeration
vi. Synecdoche
vii. Oxymoron
viii. Simile
ix. Alliteration
x. Antithesis
b. Noun Verb
i. IMport imPORT
ii. REbel reBEL
iii. INcrease InCREASE
iv. REfuse reFUSE
v REcord reCORD
(Total 15 Marks)
EXAMINER‟S COMMENT
The question tests candidates‟ knowledge of figure of speech and stress pattern in
English. About 75% of the candidates attempted the question. Candidates‟
performance was good as about 80% of them scored well above average mark.
Candidates should intensify effort in the area of language use section of the
syllabus for better performance.
ATSWA PART I MARCH 2014 90
INSIGHT
SOLUTION 4
a. Speech writing is the art of putting oral presentation into written form. It
demands specific skills to be successful. It is more demanding than speech
making. The writer of a speech is expected to engage in audience analysis
with a view to making his speech understandable to the audience. The
writer must, therefore, adhere strictly to writing conventions like the use of
relevant punctuation marks, varied sentence structures, grammatical rules,
etc. The writer can write his speech himself or employ a professional speech
writer to do it for him.
bi. The Read Method/Manuscript Presentation
A speaker adopting this method reads aloud his/her speech word for word
from a prepared text to an audience. Certain speeches must be delivered
word for word according to a meticulously prepared manuscript. Examples
include an accountant‟s report to a professional committee, a President‟s
message to the National Assembly or a Governor‟s budget presentation to the
State House of Assembly. It is used frequently in broadcast journalism, in
high-level politics, or in situations where the audience is extremely large.
It is usually a well-planned, organized and error-free form of speech which
can be arranged serially, chronologically, or logically. This, in effect,
presents ideas, facts, figures etc in such a way that has form and format,
regulated by some conventions or principles. This makes it lacking in
spontaneity and freshness.
The written speech has the potential of enhancing vital and accurate
information within a given time and space. It can be preserved for future
reference. It cannot be denied.
ii. The Memorised Method/Technique
This is a method in which a speaker writes his/her speech and commits it to
memory and „regurgitates‟ verbatim at the venue of speech making. A
practiced speaker of this method gives the audience the impression of his
eloquent oratory. A good speaker using this method is able to make the
necessary eye contact with his audience and compels them to give him their
attention. This method encapsulates all the attributes of the read speech in
addition to its own unique attribute: memory may fail and cause untold
embarrassment to the speaker.
ii. Impromptu Method/Technique
An impromptu speech is an unexpected, unprepared, off-the-cuff talk. It is a
speech delivered on the spur of the moment. It is delivered with little or no
preparation. Many of the speeches given in life are impromptu and they are
ATSWA PART I MARCH 2014 91
INSIGHT
reserved for experienced and knowledgeable people with a vast resource of
residual knowledge, not the average speaker. This method can be rambling
and digressing because of its off-the-cuff nature.
iv. Extemporaneous Method/Technique
An extemporaneous method entails a carefully planned, researched,
organized presentation in outline form as a memory aid to the speaker. The
actual speech composition is done spontaneously before the audience. A
good speaker will have rehearsed his/her presentation before the day of
actual presentation.
This limits digression and allows the speaker to make eye contact with the
audience to guage their interest or lack of it in the speech and to allow the
speaker to make amends as the need arises.
iv. Eclectic/Holistic Method/Technique
This method combines all the above techniques. A holistic speaker has the
advantage of preparing well for the speech, reading parts of the
presentation from a manuscripts and reciting parts that have been
memorized. The speaker can interact freely with the audience the
understanding of the speech. The holistic method combines beautifully
formality and informality for effect.
EXAMINER‟S COMMENT
The question tests candidates‟ knowledge of speech writing and different
techniques/methods of speech delivery. About 25% of the candidates attempted the
question. Candidates‟ performance was very poor as about 5% scored above
average mark. The commonest pitfalls were candidates‟ inability to understand
what speech writing and methods of speech delivery are. Majority of them
confused „techniques/methods‟ with how to make speech delivery effective.
Candidates are advised to study speech writing/making for better performance in
future examinations.
SOLUTION 5
a. A paragraph is a section of a piece of writing consisting of several related
sentences dealing with a single idea. It can also be defined as a unit of
discourse consisting of a string of sentences on a point within a larger
discourse. The core of a paragraph is the topic sentence around which
revolve elaborating sentences.
ATSWA PART I MARCH 2014 92
INSIGHT
b. Structural Elements of the Paragraph
i. Topic Sentence:- This is a sentence that shows the central idea or
thesis which the paragraph deals with. It can occur anywhere in the
paragraph. To make readers understand the topic sentence, it should
be placed near the beginning of the paragraph as much as possible.
ii. Elaborating sentence:- This discusses fully and adequately what the
topic sentence deals with. It defines terms, gives examples,
illustrations, facts, evidences and statistics elucidating the issue
raised in the topic sentence.
iii. Concluding sentence:- This is used to summarize the main idea
discussed in the paragraph. It may be a repetition of the idea in the
graph, using a synonymous expression.
iv. Coherence:- This element makes the paragraph understandable. It is
achieved when the idea expressed in a previous sentence flows into
the next through the use of repetition of key words and synonymous
words in several sentences in a logical sequence. Pronouns can be
used to refer to nouns in previous sentences and transition words can
be used to link ideas from different sentences.
v. Unity:- Every sentence in a paragraph must focus on a central idea.
The focus started with must be sustained. To maintain focus, every
intrusive idea outside the focus of the paragraph should be expunged
in order to achieve the principle of unity of the paragraph. If any
intrusive idea is considered important, it should be reserved for a new
paragraph.
EXAMINER‟S COMMENT
The questions tests candidates‟ knowledge „paragraphing‟ under writing skill.
About 15% of the candidates attempted the question. The performance was very
poor as only 5% of those who attempted the question scored above average mark.
The major pitfall of the candidates was their inability to state what a paragraph is
and its structural elements. Candidates are advised to pay attention to this item on
the syllabus if they want to improve their performance in future examinations.
ATSWA PART I MARCH 2014 93
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