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INSIGHT

EXAMINERS GENERAL COMMENTS


BREACH OF EXAMINATION INSTRUCTIONS
IN SPITE OF THE EXAMINERS GENERAL COMMENT IN PREVIOUS
EDITIONS OF THE INSIGHT, IT WAS OBSERVED THAT A
NUMBER OF CANDIDATES HAVE CONTINUED TO BREACH
EXAMINATION INSTRUCTIONS AS STATED BELOW:
A)

BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH


PAPER; AND

B)

BY ATTEMPTING MORE QUESTIONS THAN ALLOWED IN EACH


SECTION.

INADEQUATE COVERAGE OF THE SYLLABUS


IT HAS BECOME MANIFEST THAT MANY CANDIDATES DO NOT COVER THE
SYLLABUS IN DEPTH BEFORE PRESENTING THEMSELVES FOR THE
EXAMINATION.

CANDIDATES

ARE

THEREFORE

ADVISED

TO

ADEQUATELY CONVERSANT WITH ALL ASPECTS OF THE SYLLABUS.

ATSWA PART 1 MARCH 2010

BE

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

Candidates preparing to write future examinations of the Institute


of Chartered Accountants of Nigeria (ICAN) at an equivalent
level;

(ii)

Unsuccessful candidates in the identification of those areas in


which they lost marks and need to improve their knowledge and
presentation;

(iii)

Lecturers and students interested in acquisition of knowledge in


the relevant subjects contained therein; and

(iv)

The profession in improving pre-examination and screening


processes, and so the professional performance.

The answers provided in this book do not exhaust all possible alternative
approaches to solving the questions. Efforts have been made to use methods,
which will save much of the scarce examination time.
It is hoped that the suggested answers will prove to be of tremendous
assistance to students and those who assist them in their preparations for the
Institutes Examinations.

NOTE
Although these suggested solutions have been published under the
Institutes name, they do not represent the views of the Council of the
Institute. They are entirely the responsibility of their authors and the
Institute will not enter into any correspondence about them.

ATSWA PART 1 MARCH 2010

INSIGHT
CONTENTS

PAGE

BASIC ACCOUNTING PROCESSES AND SYSTEMS

ECONOMICS

BUSINESS LAW

COMMUNICATION SKILLS

ATSWA PART 1 MARCH 2010

INSIGHT
AT/101/PI.1

EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST


AFRICA
ACCOUNTING TECHNICIANS SCHEME
PART I EXAMINATION MARCH 2010
BASIC ACCOUNTING PROCESSES AND SYSTEMS
Time allowed: 3 hours
Insert your Examination number in the space provided above
SECTION A Attempt all questions

PART I MULTIPLE-CHOICE QUESTIONS (10 MARKS)


1.

Which of the following should be charged to profit and loss account?


A.
B.
C.
D.
E.

2.

Which of the following is a liability?


A.
B.
C.
D.
E.

3.

Depreciation on factory plant


Work in progress
Direct materials
Office rent
Carriage on raw materials.

Motor Vehicles
Cash at bank
Creditors
Machinery
Stock.

Given the following data what is the amount of capital?


Cash
Stock
Premises
Creditors
Loan from Abel

N
200
17,000
40,000
6,000
8,000
A.
B.

C.
D.

N71,200
N57,000

ATSWA PART 1 MARCH 2010

N57,200
N43,200

INSIGHT
4.

E.
N71,000.
In club Accounts, surplus is determined in the ...................
A.
B.
C.
D.
E.

5.

In lodging money into a current account the document used is ...................


A.
B.
C.
D.
E.

6.

Balance sheet
Nominal Account
Suspense Account
Profit and loss Account
Capital Account.

If the cash float is N2,000 and N1,460 is disbursed during the period, how much
will be re-imbursed at the end of the period based on the Imprest system?
A.
B.
C.
D.
E.

9.

Le59,000
Le56,500
Le14,500
Le11,500
Le26,000.

When the Trial Balance totals do not agree the difference is recorded in
the .......................
A.
B.
C.
D.
E.

8.

Pay-in-slip
Cheque book
Cash book
Invoice
Pass book.

Given opening debtors of Le11,500 credit sales Le48,000 and Receipts from
debtors Le45,000. What is the closing debtors balance?
A.
B.
C.
D.
E.

7.

Production Account
Balance Sheet
Income and Loss Account
Profit and Loss Account
Income and Expenditure Account.

N3,460
N1,460
N2,000
N540
N2,540.

Depreciation is the .................................

ATSWA PART 1 MARCH 2010

INSIGHT
A.
B.
C.
D.
E.
10.

part of the cost of the fixed assets consumed during its period of use
amount spent to buy fixed asset
salvage value of a fixed asset
amount of the money spent in replacing assets
residual value of a fixed asset.

Day books are also known as books of ......................


A.
B.
C.
D.
E.

Remittance
Ledger
Systems
Original Entry
Transaction.

PART II

SHORT-ANSWER QUESTIONS (30 MARKS)

1.

The foundation of postings into the accounts and the ledger is

2.

The double entry principle stipulates that every ................. entry requires a
corresponding ..................... entry.

3.

The process of classifying, summarising data and communicating the results


obtained is called ........................

4.

Carriage outwards is shown as an expense in the .................... Account.

5.

The assumption that a business will continue to operate for the foreseeable future
is ......................

6.

The records of original entry through which transactions are recorded in special
books of account is ......................

7.

An amount spent in purchasing a motor vehicle is debited to ............... account.

8.

The account to debit for the sale of machinery is .......................

9.

Discount received appears on the ................. side of the cash book.

10.

Wages unpaid are shown in the Balance Sheet as .......................

11.

Interest on loan taken to acquire plant is a ................. expense.

12.

Basic pay plus allowances less all deductions (statutory and otherwise)
is ..........................

ATSWA PART 1 MARCH 2010

...............

INSIGHT
13.

The sum of prime cost and production overhead is known as .....................

14.

The transfer of goods or services from a seller to a buyer without immediate


payment by the buyer is ....................

15.

If after issuance of an invoice a seller discovers the buyer had been under-billed,
the seller may raise a .................... for the difference.

16.

A provision for doubtful debts is shown as a ................... from the debtors in the
Balance Sheet.

17.

Determine the working capital from the following data.

18.

Stock
4,000
Debtors
5,000
Creditors
3,000
Unpaid wages
500
Prepayments
1,000
A computer printout is also known as ...........................

19.

The most liquid asset in a companys Balance Sheet is ....................

20.

Items of stock taken by the proprietor for personal use is deducted


as ........................... in the Balance Sheet.

21.

The opening Accumulated Fund of a not-for-profit organisation is determined by


the preparation of the .....................

22.

The three parties to a cheque are the payee, the .........................


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

23.

An unpresented cheque for a period of six months and above is regarded


as ......................

24.

What is the double entry for inventory purchased with cash?

25.

Small cash payments for expenses are settled from the .........................

26.

Purchase Returns book records goods returned to .....................

27.

Accounts payable is classified as ..................... in the Balance Sheet.

28.

If opening capital is N16,500, closing capital is N11,350 and drawings is N3,300,


then profit/(loss) for the year is ....................

ATSWA PART 1 MARCH 2010

and

INSIGHT
29.

Expenditure incurred in the acquisition of fixed assets is ....................

30.

The common name given to Trading and Profit and Loss Account and Balance
Sheet is ....................

SECTION B Attempt any Four Questions (60 Marks)


QUESTION 1
Explain briefly, the following concepts adopted by Accountants in preparation of
financial statements of a business organisation. Give ONE example and ONE
significance of each concept.
(i)

Money measurement
Marks)
(ii)
Matching
(iii)Periodicity

(5
(5 Marks)
(5 Marks)
(Total 15 Marks)

QUESTION 2
(a)

List EIGHT contents of a payroll statement.

(4 Marks)

(b)

Itemise FOUR advantages of a Payroll statement.

(4 Marks)

(c)

The following data were extracted from the Payroll of Koto Beach Supermarket
for the month of March 2008.

Gross Pay
Deductions:
Loans repayment
Staff Pension (AICOL)
PAYE (Relevant Tax Authority
Staff Cooperatives
Trade Unions
NET PAY

12,580,750.50

178,000.00
120,000.00
78,650.50
68,250.00
32,500.00
477,400.50
12,103,350.00

You are required to prepare necessary journal entries to record the above data in detail.
(7
Marks)
(Total 15 Marks)

QUESTION 3
Mr. Traore commenced business on 1 January 2007 the following are his transactions for
the six months ended on 30 June 2007.

ATSWA PART 1 MARCH 2010

INSIGHT
i.
ii.

1/1/07
1/2/07

Mr. Traore put in N600,000 cash to start the business


He purchased a delivery van from Camara Motors Limited for
N100,000 paying N30,000 cash deposit immediately.
iii. 1/3/07
He bought land for N50,000 cash for the business.
iv. 15/3/07 He procured office equipment from GLC Limited at N40,000 and paid
cash immediately.
v. 30/4/07 He purchased goods of N100,000 form Kofi Afriye on four weeks
credit term.
vi. 12/5/07 He sold goods of N50,000 in cash and sold to Dodo Idodo, goods of
N10,000 on one month credit.
vii 30/5/07 Dodo Idodo died and his total debt was written off as bad.
viii 28/6//07 He sold the remaining stock for N70,000 cash.
Required:
Open Ledger Accounts for these transactions and balance each at 30 June 2007.
(15 Marks)

QUESTION 4
Maleaf Daniels Cash book showed a debit balance of L$17,900 on the 31 March 2007.
A careful examination of the cash book with the bank statement showed the following
differences.
(i)
(ii)
(iii)

The bank had debited his account with bank charges of L$5,100.
Internet charge was L$16,400.
Cheques credited in the cash book not yet present for payment
L$172,450.
(iv)
ATM charges to his bank account was L$100.00
(v)
The sum of L$23,900 has been credited to his account as interest on
his
deposit account.
(vi)
Mr Kosu, his customer has been issued with a cheque for the sum of
L$15,120. The cheque has not been paid by his bank.
You are required to:
(a)
Show the adjusted cash book balance.
(8 Marks)
(b)
Reconcile the adjusted cash book balance showing the correct amount
which
should appear on the Bank Statement.
(7 Marks)
(Total 15 Marks)

QUESTION 5
The Accountant provided the following details for James Patrick retail shop for the year
ended 31 December 2007 as he did not keep proper records:

ATSWA PART 1 MARCH 2010

INSIGHT
(i)

Goods were mainly sold on credit. There was no record of sales. However
N500,000 had been received from persons to whom goods have been sold. The
N500,000 comprises cheque N475,000 and cash N25,000.

(ii)

N360,000 was paid to the suppliers by cheque .

(iii)

Expenses paid during the year by cheque: Rent N10,000 General expenses
N9,000. Rent by cash N2,500.

(iv)

James Patrick took N500 cash every week for 52 weeks as drawings. He also
took goods worth N13,000 during the year for private purposes.

(v)

Other information available were as follows:

Debtors
Trade creditors
Outstanding rent
Cash in Bank
Cash on hand
Stock
(vi)

At 31/12/2006
At 31/12/2007
N
N
55,000
66,000
20,000
32,500
2,500
56,500
152,500
4,000
500
79,500
85,000

The only fixed asset consists of furniture which was valued at N40,000 as at 31
December 2006. This should be depreciated at 10% per annum.
You are required to determine the following:

Proprietors capital as at 31 December 2006.

(4 Marks)

Total sales for the year ended 31/12/2007.

(5 Marks)

Total purchases for year ended 31/12/2007.


(d)

(5 Marks)

Proprietors drawings.

(1 Mark)

NB. You are not required to prepare Final Accounts.


(Total 15 Marks)

ATSWA PART 1 MARCH 2010

INSIGHT
QUESTION 6
Obosi Industries are into the manufacturing of Lantern bulbs. The following balances
were extracted from the accounts for the year ended 31 December 2007.
Raw Materials
Chemical mixtures used in packaging
Wages paid to production staff
Carriage on chemicals and other raw materials
Discount Allowed
Salaries
Opening Stock:
Raw materials
Work in progress
Finished Goods
Plants & Machinery
Factory warehouse expenses
Electricity expenses
Provision for bad debts
Sales
Printing and Stationery
Insurance expenses

(i)

Additional information
Closing Stock:
Raw materials
Work in Progress
Finished Goods

Le
850,000
120,000
122,000
50,000
10,500
82,000
190,000
210,000
180,000
900,000
75,000
62,500
45,000
2,150,000
60,000
160,000

250,000
150,000
285,000

(ii) Depreciation is 20% on plant and machinery


(iii)

iv)

Electricity expenses are shared


-Factory
80%
-General Admin 20%
Insurance expenses: 20% of Insurance was paid in
advance and total insurance expenses is shared between
factory (60%) and General Admin (40%)

You are required:


To prepare Manufacturing, Trading and Profit And Loss Account for the year ended 31
December, 2007.
(15 Marks)

ATSWA PART 1 MARCH 2010

INSIGHT

MULTIPLE CHOICE QUESTIONS


1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

SHORT ANSWER QUESTIONS


1.

Books of original entry/Prime books

2.

Debit; Credit

3.

Accounting

4.

Profit and Loss Account/Income Statement

5.

Going Concern

6.

Journal or Day Books

7.

Motor Vehicle Account/Fixed Assets account

8.

Asset Machinery Disposal Account

9.

Credit

ATSWA PART 1 MARCH 2010

INSIGHT
10.

Current liability

11.

Revenue expense

12.

Net pay

13.

Production/Manufacturing cost

14.

Credit sale

15.

Debit note

16.

Deduction

17.

6,500

18.

Hard copy or output

19.

Cash

20.

Drawings

21.

Statement of affairs

22.

Drawer, Drawee

23.

Stale

24.

Dr

25.

Petty cash

26.

Suppliers/Trade creditors/Payables

27.

Current liabilities/Amount falling due within one year

28.

N 1,850 (Loss) i.e N (11,350 + 3,300 16,500)

29.

Capital expenditure

30.

Final accounts or Financial Statements

Purchases Account

Cr

Cash Account

ATSWA PART 1 MARCH 2010

INSIGHT
Workings Multiple Choice questions
Q3

Determination of capital
Assets
Stock
Cash
Premises
Deduct liabilities
Creditors
Loan (Abel)

N
6,000
8,000

N
17,000
200
40,000
57,200
14,000
43,200

Q6

Determination of closing debtors balance


D
Balance b/d
11,500
Sales
48,000
59,500
Less receipt from debtors
45,000
14,500

Q8

Reimbursement of float
Float amount
Deduct amount spent
Cash balance
Amount reimbursed
New float

N
2,000
1,460
540
1,460
2,000

Workings Short Answer questions


Q 17

Working capital = Current assets current liabilities


Current assets = stock 4,000 + debtors 5,000 + prepayments 1,000

=
Current liabilities = creditors 3,000 unpaid wages 500 =

3,500
6,500

Working capital
Q28

Profit/Loss determination
Opening capital
Profit/ (Loss)
Drawings
Closing capital

10,000

$
16,500
(1,850)
14,650
3,300
11,350

ATSWA PART 1 MARCH 2010

INSIGHT
SECTION B
SOLUTION 1
(i)

Money measurement concept


Money is used as a common denominator for expressing various economic
transactions of a business such that they can be added or subtracted. For example
ownership of plant worth N1 million can be added to ownership of raw materials
worth N500,000. One significance of this concept is that it makes possible the
measurement of the worth of a business using a common unit of measurement.
5
marks

(ii)

Matching concept
This concept states that for any accounting period the earned revenue and all the
costs incurred in generating the revenue must be matched and reported in the
same period. For example revenue from sales must be matched by the cost of the
goods sold as expense in the same period.
One significance of this concept is that it makes possible a correct assessment of
the result (profit or loss) of the organisation and of its balance sheet values.

(iii)

Periodicity concept
Here, the activities of a business organisation are assumed to be divided into
accounting periods (usually one year) and accounts are prepared in accordance
with these periodic activities. For example a period of account may be from July
1, 2008 to June 30 2009. One significance of this concept is that the performance
and financial condition of the undertaking can be related to a specified period of
time and can be quickly evaluated as and when required by users of accounting
information.

EXAMINERS COMMENT
The question tested three of the age long fundamental concepts that form the basis for
preparation of accounts by accountants worldwide. Candidates are expected to be very
familiar with these concepts particularly at this foundation level. There is clear evidence
that candidates are yet to grasp these concepts as majority of them did not attempt the
question and those that did were writing on things that are totally out of point. Not more
than 30% of the candidates attempted the question. The performance is generally poor.

SOLUTION 2
(a)
Contents of a payroll statement
- Names of the staff
- Department of each staff

ATSWA PART 1 MARCH 2010

INSIGHT
-

Grade of each staff


Basic salary
Allowance Housing, etc
Meal subsidies
Other allowances
Deductions PAYE
Deductions unions levy
Deduction staff pension
Net pay
Total salaries
Name of the organisation
Period covered by the payroll

Pay roll serves as a source document to raise accounting entries


It serves as basis of ascertaining cost of labour for a given period
It is part of accounting books that must be kept statutorily
It is used as basis to pay staff salaries and wages
It is useful for the statutory audit
It can be used to plan for the personnel cost or other personnel matters.

(b)

(c)
Gross pay
Loan repayment
Staff pension
PAYE
Staff coop
Trade unions
Salary payable control account
Being details of staff salaries with various deductions
for March 2008
Loan repayment
Staff pension AICOL
PAYE (Relevant Tax Authority)
Staff Coop
Trade Unions
Salaries payable control account
Bank
Being payment of staff salaries and deductions for
the month of March 2008

DR
N
12,580,750.50

CR
N
178,000.00
120,000.00
78,650.50
68,250.00
32,500.00
12,103,350.00

178,000.00
120,000.00
78,650.50
68,250.00
32,500.00
12,103,350.00
12,580,750.50

EXAMINERS COMMENT
This question examined candidates understanding of the concept of payroll preparation
and accounting. This is an important area where candidates at this level should operate in
their various establishments. Candidates should endeavour to know not only the how of

ATSWA PART 1 MARCH 2010

INSIGHT
any accounting preparation, but the why of it as well. Many candidates failed to
explain the advantages of preparing the payroll i.e. its usefulness to the organisation and
other users of the accounting information. The submission of some of the candidates
showed that they do not have the slightest idea of the journal preparation in payroll
procedure. Not less than 70% of candidates attempted the question many of whom
scored below average.

SECTION B
SOLUTION 3
Mr. Traores books
Capital account
12/5/07

N
600,000
_______
600,000

Bal c/f

1/1/07

cash account

1/7/07

Bal b/f

N
600,000
______
600,000
600,000

Delivery van account


1/2/07

1/7/07

Camara motors

Bal b/f

N
100,00
0
______
100,00
0
100,00
0

30/6/07

Bal c/f

N
100,000
_______
100,000

Camara motors Ltd account


1/2/07
30/6/07

Cash account
Bal c/f

N
30,000
70,000
100,000

1/2/07

Delivery van account

N
100,000
______
100,000

Land account
1/3/07

Cash account

N
50,000
______
50,000

30/6/07

Bal b/f

ATSWA PART 1 MARCH 2010

N
50,000
______
50,000

INSIGHT
1/7/07

Bal b/f

50,000

ATSWA PART 1 MARCH 2010

INSIGHT
15/3/07

Cash

1/7/07

Bal b/f

Office equipment account


N
40,000
30/6/07
______
40,000
40,000

Bal c/f

N
40,000
______
40,000

Purchases account
30/4/07

Kofi Afriye a/c

1/7/07

Bal b/f

N
100,000
_______
100,000
100,000

30/6/07 Bal c/f

N
100,000
_______
100,000

Kofi Afriye account


30/6/07

N
100,000
_______
100,000

Cash

30/4/07 Purchase account


1/7/07

Bal b/f

N
100,000
______
100,000
100,000

Dodo Idodo account


12/5/07

Sales account

N
10,000
_____
10,000

30/5/07 Bad debts account

N
10,000
______
10,000

Bad debts account


30/5/07

1/7/07

30/6/07

Dodo Idodo a/c

N
10,000

Bal b/f

______
10,000
10,000

Bal c/f

30/6/07 Bal c/f

Sales account
N
130,000 12/5/07
12/5/07
________ 28/6/07
130,000
1/7/07

N
10,000
______
10,000

Cash account
Dodo Idodo a/c
Cash account
Bal b/f

ATSWA PART 1 MARCH 2010

N
50,000
10,000
70,000
130,000
130,000

INSIGHT
Cash account
1/7/07
12/5/07
28/6/07

1/7/07

N
600,000
50,000
70,000
720,000
_______
720,000
600,000

Dodo Idodo account

Sales account
Sales account

Bal b/f

1/2/07
1/3/07
15/3/07

Camara Motors Ltd


Land account
Office equipment

30/6/07

Bal c/f

N
30,000
50,000
40,000
120,000
600,000
720,000

EXAMINERS COMMENT
This question tests candidates understanding of basic double entry ledger postings. As
expected, close to 85% of the candidates attempted the question. Though many appeared
to understand the requirements of the question but their presentation showed lack of
organisation and coherence. Many opened several ledger accounts for the same account
(e.g. cash account for every postings to the cash book, instead of a single cash account,
several purchases accounts, etc). Many made a complete reversal of the double entry
postings, debiting items that should be credited and vice versa. A few very experienced
candidates scored very high marks. Candidates are advised to familiarize themselves
with the solutions in the INSIGHT.

SOLUTION 4
MALEAF DANIEL
(a)
31/3/07
31/3/07

1/4/07

Balance b/f
Interest on
deposit

Bal b/d

ADJUSTED CASH BOOK


L$
17,900
31/3/07 Interest charged
23,900
31/3/07 Bank charges
______
41,800
20,200

31/3/07 ATM charges


Bal c/d

L$
16,400
5,100
100
20,200
41,800

Bank reconciliation statement as at 31st March 2007


L$
Balance as per adjusted cash book
Add Unpresented cheque
Cheque issued to Mr. Kosu
Balance as per bank statement (CR)

ATSWA PART 1 MARCH 2010

L$
20,200

172,450
15,120
187,570
207,770

INSIGHT
EXAMINERS COMMENT
This is a familiar topic to most candidates. As expected, almost all the candidates
attempted the question and did well. However, a few failed to head the statement
correctly (Bank reconciliation Statement AS AT ). Many also wrongly treated the
cheque issued to Mr. Kosu (L$15,120) as uncredited cheque.

SOLUTION 5
JACK PATRICK RETAIL SHOP
(I)

Proprietors capital 31/12/06


N
40,000
79,500
55,000
56,500
4,000
235,000
20,000
215,000

Furniture
Stock
Debtors
Bank
Cash
Less creditors
Capital
(ii)
Sales
Debtors 31/12/07
Receipts during the year
Less debtors 31/12/06

N
66,000
500,000
566,000
55,000
511,000
5 marks

(iii)
Purchases
Creditors 31/12/07
Payments during the year
Less creditors 31/12/06
Less goods taken

N
32,500
360,000
392,500
20,000
372,500
13,000
359,500

(iv)
Proprietors drawings
Cash N(500 x 52)
Goods

N
26,000
13,000
39,000

ATSWA PART 1 MARCH 2010

INSIGHT
EXAMINERS COMMENT
The question seeks to test candidates ability to prepare basic statements from incomplete
records in order to derive some key figures for the preparation of periodic financial
statements. Though the question is simple and straight forward, yet most candidates
avoided it. Candidates also wasted their precious time preparing final accounts that were
not required by the question. Candidates appeared not to have fully grasped the
preparation of debtors and creditors control accounts and some of the entries were
completely reversed. Candidates should endeavour to study the suggested solutions in
the INSIGHT.

SOLUTION 6
OBOSI INDUSTRIES
MANUFACTURING, TRADING AND PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER 2007
Le
Sales
Opening stock Raw Materials
Purchases
Chemical mixture
Carriage
Less closing stock
Wages
Prime cost
Depreciation Plant & Machinery
Factory warehouse expenses
Electricity (80% x 62,500)
Insurance (160,000 32,000 x 60%)
Opening work in progress
Less closing work in progress
Cost of manufacture
Opening stock of finished goods

Le

Le

Le
2,150,000

190,000
850,000
120,000
50,000

170,000
1,210,000
250,000
180,000
75,000
50,000
76,800
210,000
150,000

Less closing stock of finished goods


Gross profit
Discount allowed
Salaries
Provision for bad debts
Printing of stationery
Insurance (160,000 32,000 x 40%)
Electricity expenses (20% x 62,500)
NET PROFIT

ATSWA PART 1 MARCH 2010

960,000
122,000
1,082,000

381,800
1,463,800
60,000
1,523,800
180,000
1,703,800
285,000
10,500
82,000
45,000
60,000
51,200
12,500

1,418,800
731,200

261,200
470,000

INSIGHT
EXAMINERS COMMENT
This is a familiar area to most candidates and so it is not surprising that over 90% of the
candidates attempted the question and did well. However, many candidates did not
follow a proper order of presentation of the Manufacturing, Trading and Profit and Loss
account and in the process lost very valuable marks. The general performance in the
question is above average.

ATSWA PART 1 MARCH 2010

INSIGHT
AT/101/PI.2

EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA

ACCOUNTING TECHNICIANS SCHEME


PART I EXAMINATION MARCH 2010
ECONOMICS
Time allowed: 3 hours

Insert your Examination number in the space provided above


SECTION A
PART I
1.

Central planning
Roundabout production
Markets and prices
Barter
Double coincidence of wants.

Cost-push inflation occurs when ........................


A.
B.
C.
D.
E.

4.

Microeconomics
Macroeconomics
Positive economics
Normative economics
Political economy.

To decide how to use its scarce resources to satisfy human wants, pure capitalism
relies on ............................
A.
B.
C.
D.
E.

3.

MULTIPLE-CHOICE QUESTIONS (10 Marks)

When we look at the whole economy or its major aggregates, our analysis would
be at the level of ...........................
A.
B.
C.
D.
E.

2.

Attempt All Questions

Consumers use their market power to push up prices


Aggregate supply increases at a faster rate than aggregate demand
Resources owners use their market power to push up prices
Aggregate demand increases at a faster rate than aggregate supply
All of the above.

Which of the following countries is NOT a member of Paris Club of


creditors.
A. Japan
B. Canada
C. United States of America

ATSWA PART 1 MARCH 2010

INSIGHT
D. United Kingdom
E. Germany.
5.

Which of the following characteristics is necessary for an asset to function


effectively as money?
A.
B.
C.
D.
E.

6.

Backed by a precious metal


Prohibited as legal tender by the monetary authority
Generally acceptable as a medium of exchange
Having value in future transactions
Printed in high quality paper.

Demand is said to be price elastic if .................................


A. Percentage change in price results in more than proportionate change in
quantity demanded
B. Percentage change in quantity demanded is less than percentage change in
price
C. Percentage change in price is greater than the percentage change in quantity
demanded
D. Demand is more than supply
E. Change in demand is greater than change in supply.

7.
The International financial Institution that gives loans to member countries for
the purpose of poverty eradication and development is
the .......................................
A.
B.
C.
D.
E.
8.

A firm shuts down whenever .................................


A.
B.
C.
D.
E.

9.

International Monetary Fund


World Bank
Paris Club
London Club
GATT.

Average fixed cost is declining


Marginal cost exceeds marginal revenue
It is making a loss
Minimum average total cost exceeds price
Minimum average variable cost exceeds price.

With a proportional tax system, as the level of income increases in an economy,


the average tax rate will .........................
A. increase
B. decrease
C. remain the same

ATSWA PART 1 MARCH 2010

INSIGHT
D. either increase or decrease
E. be progressive
10.

The unemployment that occurs as a result of a fall in the level of aggregate


demand and business activity is called .........................
A.
B.
C.
D.
E.

PART II

frictional unemployment
structural unemployment
cyclical unemployment
disguised unemployment
seasonal unemployment

SHORT-ANSWER QUESTIONS (30 MARKS)

1.

In pure capitalism, property and resources are ...................... owned.

2.

The study of the activities of individual firms, industries and consumers is the
subject matter of which aspect of economics?

3.

When value judgements are made about the economy or economic policy, this is
called ........................... economics.

4.

Suppose the consumption function of a simple hypothetical economy is c= 40 +


0.8Y, it means that the marginal propensity to save is equal to ...........................

Both consumption and savings are ...................... related to the level of disposal income.
5.

The total value of all incomes earned by factors of production during a year is
known as the .......................

6.

The man-made aid to production is called ..........................

7.

The number of units of a domestic currency needed in exchange for a unit of


foreign currency is the ............................

8.

The International financial institution that was responsible for the easy exchange
of currencies of one country to another is the ...........................

9.

A payment to a factor in excess of what is necessary to keep it in its present


employment is ........................

10.

A government owned business organisation that enjoys the advantage of limited


liability is the ..............................

ATSWA PART 1 MARCH 2010

INSIGHT
11.

If a country has a deficit in its balance of trade, then the total value of its exports of
goods is ................................ than that of its imports of goods.

12.

The type of unemployment which refers to those who are out of work due to
reasons of physical and mental disabilities is referred to as .............................

13.

A document containing quantitative and qualitative descriptions of the current


economic potentialities of the economy, specific objectives policies and
macroeconomics projection of the economy is called .........................

14.

A table showing the relationship between the quantity of a particular product


purchased and its price is known as ...........................

15.

A good with a negative income elasticity is called ............................

16.

In an indifference curve analysis, utility is measured in ..........................

17.

The spread and certainty with which an asset can be converted into cash/money is
referred to as ............................

18.
The interest rate charged by the Central Bank when the commercial
want to borrow is ...........................

banks

19.

The horizontal part of the total demand for money curve is called ...........................

20.

A study shows that the coefficient of the cross elasticity of demand for commodity
x with respect to the price of commodity y is negative. This indicates that x and y
are ..........................

21.

A market in which there are many sellers, all producing goods which are similar
but capable of being differentiated by customers is called .........................

22.

The producer of a commodity can shift the entire burden of an indirect tax to the
final consumers if demand for the commodity is ..........................

23.

Changes in government spending and tax collections designed to achieve certain


macroeconomic objectives are known as .........................

24.

All government spending on assets that yield a flow of services over a period of
time is called ...............................

25.

In the long run, easy entry and exit of firms will result in monopolistic competitors
earning ............................. profit.

26.

To stimulate economic growth during economic depression it will be necessary for


the government to adopt ....................... budget.

ATSWA PART 1 MARCH 2010

INSIGHT
27.

The national currency of another country that is required to carry out international
transactions is called ............................

28.

A sustained increase in a countrys real GDP and per capital real GDP is
called .........................

29.

In every modern economy, currency issue and distribution is a function


of ..............................

Attempt any FOUR Questions (60 Marks)


TWO Questions each from Sections B & C
SECTION BMICROECONOMICS
QUESTION 1
(a)

Outline the essential features of perfect completion

(12 Marks)

(b)

Describe the general rule for profit maximisation for the perfectly completive
firms.
(3 Marks)
(Total 15 Marks)

QUESTION 2
(a)
(b)
(c)

What do Economists mean by the concept of own price elasticity of demand?


(3
Marks)
How is own price elasticity of demand measured?
(2 Marks)
The demand equation for a product is given as:
QD = 10,000 5P
Where QD and P are the quantity demanded and price of the product respectively.
Required:
(i)
Determine the quantities that would be consumed at prices 500 to 700
respectively.
(4 Marks)
(ii)

Calculate the own price elasticity of demand when the price of the product
increases from 500 to 700 .
(4 Mark)

(iii)

Interpret the own price elasticity of demand coefficient you have


calculated in (ii) above.
(2 Marks)
(Total 15 Marks)

ATSWA PART 1 MARCH 2010

INSIGHT
QUESTION 3
(a)

State the law of diminishing returns

(3 Marks)

You are given the following hypothetical cost schedule in Naira(N) of a firm in
the short run.

Output
Q
0
1
2
3
4
5
6
7
8
9
10

Total
Fixed
cost
TFC
100
100
100
100
100
100
100
100
100
100
100

Total
Variable
Cost
TVC
0
90
170
240
300
370
450
540
650
780
930

Total
Cost
TC
(i)
190
270
(ii)
400
470
(iii)
640
750
(iv)
1030

Average
Fixed
Cost
AFC
(v)
50
33.33
(vi)
20
16.67
(vii)
12.5
11.11
(viii)

Average
variable
Cost
AVC
(ix)
85
(x)
75
75
(xi)
77.14
81.25
(xii)
93

Average
Total Marginal
Cost
Cost
ATC
MC
190
(xvii)
(xiii)
80
113.33
70
100.0
(xviii)
(xiv)
70
91.76
80
91.43
(xix)
(xv)
110
97.78
(xx)
(xvi)
150

(b)

Calculate the missing values in (i) to (xx)

(10 Marks)

(c)

At what output level does diminishing marginal returns set in?


(2 Marks)
(Total 15 Marks)

SECTION C MACROECONOMICS
QUESTION 4
(a)

List measures that are used to control inflation in any country.


(5 Marks)

(b)

Explain any FIVE measures that can be used to control inflation in your
country.
(10 Marks)
(Total 15 Marks)

QUESTION 5
(a)
(b)

What is meant by Balance of payments


(3 Marks)
Identify and explain the various component accounts of the balance of payments
(9 Marks)

(c)

Explain balance of payment deficit.

ATSWA PART 1 MARCH 2010

(3 Marks)
(Total 15 Marks)

INSIGHT
QUESTION 6
Explain any FIVE reasons for the imposition of taxes on individuals and economic
activities in your country.
(15 Marks)

MULTIPLE CHOICE QUESTIONS


1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

SHORT ANSWER QUESTIONS


1.

Privately

2.

Microeconomics

3.

Normative economics

4.

0.2

5.

Directly/positively

6.

National income

7.

Capital

ATSWA PART 1 MARCH 2010

INSIGHT
8.

Exchange rate

9.

International Monetary Fund (IMF)

10.

Economic rent

11.

Public corporation

12.

Less/lower

13.

Residual unemployment

14.

A development plan

15.

Demand schedule

16.

Inferior goods

17.

Utils

18.

Liquidity

19.

Discount rate or bank rate

20.

Liquidity trap

21.

Complementary goods

22.

Monopolistic competition

23.

Perfectly inelastic

24.

Fiscal policy

25.

Capital expenditure

26.

Normal profit/Zero economic profit

27.

Budget deficit

28.

Foreign exchange

29.

Economic growth

30.

The Central Bank

ATSWA PART 1 MARCH 2010

INSIGHT
SOLUTION 1
(a)

(b)

The essential features or characteristics of perfect competition are:


i)

Large number of buyers and sellers: The market consists of a large


number of firms each producing a very small fraction of the total output
that it cannot in any way influence the product price. Similarly, there are
many buyers to the extent that no one of them can influence the market
price of the product. In order words, both buyers and sellers are price
takers.

ii)

Homogeneous product: The products of all firms are identical in the eyes
of the consumers. This assumption makes the establishment of a uniform
price possible.

iii)

Perfect mobility of resources (free entry and exit): There is free


movement of resources in and out of the industry. That is, no legal or
artificial barriers to entry and exit.

iv)

Perfect knowledge of all relevant information: All buyers and sellers


must have adequate knowledge of existing market conditions. The buyers
must know all possible alternative arrangements of places where exactly
the same type of product can be obtained as well as the ruling price.
Similarly, all firms have equal access to productive resources and the same
technology as a result of which price differential cannot be justified.

The general rule for profit maximization for the perfectly competitive firm is that
the firms will achieve the maximum profit at the output level where Marginal
Revenue (MR) is equal to Marginal Cost (MC). Since price and Marginal
revenue (MR) are equal for the perfectly competitive firm, the profit
maximizing rule becomes: Output level where maximizing rule becomes
MC = MR = P

EXAMINERS COMMENT
The question requires the discussion of the features of perfect competition and
identification of the rule for profit maximization for the perfectly competitive firm. The
question was attempted by about 75% of the candidates. Most of the candidates who
attempted the question were able to mention the features of perfect competition, but could
not explain them correctly, thus losing vital marks. Less than 50% of the candidates
scored pass marks in this question.

ATSWA PART 1 MARCH 2010

INSIGHT
SOLUTION 2
(a)

The concept of own price elasticity of demand refers to the degree of


responsiveness of quantity demanded of a commodity to change in price of that
commodity.

(b)

Own price elasticity of demand (Ep) is measured as percentage change in quantity


demanded divided by the percentage change in price i.e
Ep

% change in Quantity demanded


% change in price

Q x P
P Q

Where
Q = change in quantity demanded
P = change in price
P = the original price of the good
Q = the original quantity demanded
(c)

Given the demand equation as:


Q = 10,000 5P
(i)

If P = 500
Q = 10,000 - 5(500)
= 10,000 2,500
= 7,500

If P = 700
Q = 10,000 5 (700)
= 10,000 3,500
= 6,500
(ii)

Ep = (-)Q x P
p q

Where
Q = 6,500 7,500 = -1,000
P = 700 500 = 200
P = 500, Q = 7,500
Ep = (-) - 1000 x 500
200 7,500
=

0.33

ATSWA PART 1 MARCH 2010

INSIGHT
(iii)

Since price elasticity of demand coefficient (Ep) is less than 1, it follows that
demand for the commodity is price inelastic.

EXAMINERS COMMENT
The question tested candidates knowledge of the concept of own price elasticity of
demand; definition, measurement and interpretation of the coefficient. Over 80% of the
candidates attempted this question with about 60% of them scoring pass marks. The
major pitfall is wrong application of the formula to obtain price elasticity of demand
coefficient, which in turn leads to wrong interpretation in part c (iii) of the question.

SOLUTION 3
(a)

The law states that as increasing quantities of a variable factor are added to fixed
quantities of some other factors, the average and the marginal product of the
variable factor will initially increase but will eventually decrease.

(b)
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
xiii)
xiv)
xv)
xvi)
xvii)

TCO
TC3
TC6
TC9
AFC1
AFC4
AFC7
AVC10
AVC1
AVC3
AVC6
AVC9
ATC2
ATC5
ATC8
ATC10
MC1

Is =
is
is
is
is
is
is
is
is
is
is
is
is
is
is
is
is

Xviii)

MC4

is

xix)

MC7

is

xx)

MC9

is

TFC0 + TVC0
TFC3 +TVC3
TFC6 + TVC6
TFC9+ TVC9
TFC1 Q1
TFC4 Q4
TFC7 Q7
TFC8 Q8
TVC1 Q1
TVC3 Q3
TVC6 Q6
TVC9 Q9
AFC2 + AVC2
AFC5 + AVC5
AFC8 + AVC8
AFC0 + AVC10
TC Q
Q
TC
Q
TC
Q
TC
Q

= N (100 + 0)
= N (100 + 240)
= N (100 +450)
= N 100 + 780)
= N (100 1)
= N (100 4)
= N (100 7)
= N (100 10)
= N (90 1)
= N (240 3)
= N (450 6)
= N (780 9)
= N (50 + 85)
= N (20 + 74)
= N (12.50 + 81.25)
= N (10 + 93)
= N90 1

N100
N 340
N 550
N 880
N 100
N 25
N 14.29
N 10.00
N 90.00
N 80.00
N 75.00
N86.67
N135.00
N94
N93.75
N103.0
N90

= N60 1

N60

= N90 1

N90

= N130 1

N130

Note: TC0 = Total cost when output (Q) is 1


ATC2 = Average total cost when output (Q) is 2, etc
c)

Diminishing marginal returns set in at output level 4.

ATSWA PART 1 MARCH 2010

INSIGHT
EXAMINERS COMMENT
The question explored candidates understanding of the law of diminishing returns as well
as how to calculate the various short-run costs. This is a straightforward question, and it
was attempted by over 90% of the candidates. The performance on this question was
impressive, not less than 80% of the candidates scored pass mark.

SOLUTION 4
The FIVE measures that can be used to control inflation are:
Fiscal policy
Monetary policy
Commercial policy
Prices and incomes policy
Indexation policy
i)

Fiscal policy: To curb inflationary pressures, government may adopt restrictive


fiscal policy. This entails a cut in government spending /or and increase in
taxation or a combination of the two, to reduce aggregate demand directly.

ii)

Monetary policy: Government through the central bank may adopt restrictive
monetary policy with a view to curbing the growth of money stock. The
implementation of this policy may take the form of the sale of government
securities (i.e. the use of open market operation), increase in cash reserve and
liquidity ratios, increase in discount rate, imposition of credit ceiling, calling for
special deposits such as issuance of stabilization securities or a combination of
some of these measures.

iii)

Commercial policy: It is a rule adopted by a country for the conduct or


regulation of its foreign trade and payments? It involves the use of tariffs, quotas
and exchange control etc to restrict trade or to promote free trade. Specifically,
the use of commercial policy to curb inflation will require the adoption of a fixed
exchange rate system. This system is characterized by government intervention to
keep the rates of exchange between currencies stable.

iv)

Prices and incomes policy: This refers to a set of rules, guidelines, or laws
devised by government to influence wage and price movements. The proponents
of this policy are those who hold the view that inflation is caused by trade union
activities such as work stoppages and strikes to force employers to pay higher
wages. Prices and incomes policy can take the form of the imposition of
legislation to regulate or even to freeze wages and prices. Alternatively,
government may set up Prices and Incomes Board to assess proposed price
increases and to promote collective bargaining between employers and labour
unions.

ATSWA PART 1 MARCH 2010

INSIGHT
v)

Indexation policy: This is a mechanism for periodic adjustments in the nominal


value of contracts or economic variables such as wages, salaries and interest
payments in line with movements in a specific price index. For instance, wages
indexation ties nominal wages to the general price level so that nominal wages
rise in line with the overall price level. The complete indexation of all contracts is
frequently advocated as a policy to prevent the arbitrary redistribution of income
caused by inflation

EXAMINERS COMMENT
The questions required candidates to identify and explain relevant economic policies to
curb inflationary pressures in the economy. The question was relatively less popular
among the candidates because it was attempted by not more than 60% of them. The
candidates performed poorly on this question, since less than 50% of them scored pass
marks.

SOLUTION 5
(a)

The balance of payments is a record of all transactions that occur during a year
between the residents of a country and the rest of the world. All inflows from
abroad are recorded as credit in the balance of payments, while all outflows are
recorded as debit.

(b)

The balance of payments consists of three major components that are explained
below:

(c)

i)

The Current Account: This is the account that measures the flow of goods
and services in a country. It comprises the visible trade, invisible trade
and unrequited transfer. Surplus and deficit on the account depends on
whether or not the receipt is greater or less than payment.

ii)

The Capital Account: This account measures the flow of capital goods
and services in a country. It comprises short-term capital like treasury bill,
certificate etc and long-term capital like foreign direct investment,
portfolio investment, plant and machinery, and so on.

iii)

Official Reserves Account: This is a balancing account that contains the


external reserves of the country which is used to determine the credit
worthiness of any nation.

Balance of payments deficit refers to a situation where the total receipt is less
than total payment in the balance of payments account of the country. In
international trade and monetary relations, a balance of payments deficit position
indicates that the country is not sufficiently self-reliant.

EXAMINERS COMMENT
The question tested candidates understanding of the concept of balance of payment
(BOP) and the associated issue of BOP deficit. About 45% of the candidates attempted

ATSWA PART 1 MARCH 2010

INSIGHT
the question. Just a few of them, about 25% obtained pass marks. The main reason for
poor performance is that most of them mistook fiscal balance for balance of payments and
fiscal/budget deficit for BOP deficit. Candidates are advised to read up this aspect of the
syllabus from recommended or standard textbooks on economics.

SOLUTION 6
Taxes are imposed for the following reasons:
i)

Revenue generation: It is the primary motive for imposition of taxes by various


governments. The revenue so generated are used to finance various government
expenditure and to provide various socio-economic infrastructure

ii)

Redistribution of income and wealth: The use of progressive tax helps in


reducing income inequality as the rich people pay higher tax rate than the poor.

iii)

Protection of infant industries: Imposition of restrictive tariffs on some selected


imported goods allows infact domestic firms to thrive up to the stage of
withstanding competition from the foreign sector.

vi)

To check inflation and deflation: Taxes can be used to regulate the economy.
During inflation period, tax rates are increased in order to reduce excessive
demand. On the other hand, tax rates are reduced along with some other reliefs in
order to stimulate aggregate demand and revamp the economy from recession.

v)

Correction of balance of payments deficit: Higher tariffs on imports will


reduce the quantity of goods and services imported and thus lead to improvement
in the BOP position.

vi)

Discouraging of the consumption of certain goods: Some local and or foreign


products may be considered harmful or non-essential and therefore are taxed
heavily in order to discourage their consumption.

EXAMINERS COMMENT
The question is about the various uses of taxation, especially to generate revenue for
government, as well as an instrument of fiscal policy. The question was popular among
the candidates, but only about 40% of them scored pass marks. Most of the candidates
understood the question, but could not write enough points to score pass marks.
GENERAL COMMENT
Some of the candidates failed to adhere strictly to the instruction that requires selection of
questions only from each section A (Micro economic) and section B (Macro economics)
This non-adherence to instruction contributed significantly to the failure of candidates in
this paper.
Candidates are therefore advised to adhere strictly to the instruction always.

ATSWA PART 1 MARCH 2010

INSIGHT
AT/101/PI.3

EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA

ACCOUNTING TECHNICIANS SCHEME


PART I EXAMINATION MARCH 2010
BUSINESS LAW
Time allowed: 3 hours
Insert your examination number in the space provided above
SECTION A - Attempt All Questions
PART I
1.

The act of accepting a new agreement in place of another one is


termed ..................
A.
B.
C.
D.
E.

2.

B.
C.
D.
E.

It is authorised by a resolution passed at a general meeting and sanctioned


by the court
The promoters approve it
The company is being wound up
The company wants to raise capital
The company wants to build a new factory.

Who is the central character in the winding-up of a company?


A.
B.
C.
D.
E.

4.

contract of indemnity
contract of subrogation
contract of novation
contract of give and take
contract of insurance

ONE of the instances when it is lawful for a company to issue shares at a discount
under the company law of your country is where:
A.

3.

MULTIPLE-CHOICE QUESTIONS (10 Marks)

Creditor
The promoter
The liquidator
The Corporate Affairs Commission
Committee of inspection.

The type of meeting which a company is obliged under the law to hold on annual
basis is
A.
B.
C.
D.
E.

Annual General Meeting


Extra Ordinary General Meeting
Bi-annual General Meeting
Special General Meeting
Ordinary General Meeting.

ATSWA PART 1 MARCH 2010

INSIGHT
5.

Before a defendant can rely on an exemption clause in his favour, he is expected


to show that ..........
A.
B.
C.
D.
E.

6.

Which of the following is NOT ONE of the cases in which specific performance
of a contract may be ordered by a court of law?
A.
B.
C.
D.
E.

7.

The literal rule


The golden rule
The Ejusdem generis rule
The purposive rule
The mischief rule

The essential elements for creating a legally binding contract do NOT


include ..............
A.
B.
C.
D.
E.

9.

Where damages are an adequate remedy


Where consideration has passed
Lack of mutuality
Where the contract is for services of a personal nature
Where the contract is not one for annuity.

The rule of statutory interpretation in which words are understood in their context
is ............
A.
B.
C.
D.
E.

8.

The clause is a term of the contract


The clause covers the liability in question
The clause is not grossly unfair
(a) and (b) above
(a) and (c) above.

offer and acceptance


consideration
invitation to treat
capacity of parties to contract
intention to create legal relations.

Identify the persons to whom a company auditor does NOT owe a duty
A.
B.
C.
D.
E.

Directors
Future investors
Promoters
Company employees
Board of Directors.

ATSWA PART 1 MARCH 2010

INSIGHT
10.

A special type of agent who agrees to answer for and reimburse his principal for
defaults of third parties in making payments to the principal in consideration for
extra commission is
A.
B.
C.
D.
E.

PART II

An auctioneer
A factor
A del credere agent
An estate agent
A broker.

SHORT-ANSWER QUESTIONS (30 Marks)

1.

What is the principle of law by which the decisions of a higher court are binding
on lower courts?

2.

What is the type of contract in which communication of an acceptance is


unnecessary?

3.

When does a bill cease to be an order bill?

4.

Causing injury or loss to another as a result of ones failure to exercise reasonable


care in his conduct is ..................

5.

When will a person who is not a partner in a firm become liable for the liabilities
of the partnership?

6.

What is the employers primary duty to an employee?

7.

When is a bill deemed to be regular and complete on the face of it?

8.

State the action which must be taken if a foreign bill is dishonoured either by nonacceptance or non-payment.

9.

When may an infant be sued on a bill?

10.

Unlawful entry onto a parcel of land or misuse of such land or unlawful


interference with the right of the lawful owner to use such land is called ................

11.

Who may declare dividend?

12.

When is a bank duty bound to honour cheques drawn by a customer?

13.

What becomes of a company once the formalities for registering a company in


your country have been complied with?

ATSWA PART 1 MARCH 2010

INSIGHT
14.

The legal justification for the proposition that members of a corporation are not
liable for its debt is ..............

15.

The document issued by a public company inviting members of the public for
subscription for its shares is .............

16.

An agreement or set of promises which is regarded as binding and enforceable is


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

17.

What is the legal form of debt associated with corporations?

18.

State the TWO types of business which may be transacted at an annual general
meeting of a company.

19.

What is the meaning of the phrase He who comes to equity must come with
clean hands?

20.

State the specialised form of mistake in which a person who signs a document
believes it to contain something when it actually contains another.

21.

A situation in which one party is mistaken while the other is not in a contractual
dealing is referred to as ............... mistake.

22.

State the legal term applicable when it becomes impossible for the parties to carry
out their obligations due to subsequent circumstances which make performance
impossible.

23.

What is the most pervasive test for the existence of a master-servant relationship?

24.

What is the meaning of the maxim nemo dat quod non habet under the Sale of
Goods law?

25.

What is the most important condition implied in a transaction for the sale of goods
by description?

26.

The remedy available to the seller of goods in the form of a right to retain
possession of the goods until some claim has been satisfied is called a right
of ..................

27.

What is the meaning of the term C. I. F. in a contract for the sale of goods?

28.

What is the standard of proof required by the prosecutor in a criminal case to


prove the guilt of an accused person?

29.

State the type of contract in which one person promises to answer for the debt,
default or miscarriage of another person .............

ATSWA PART 1 MARCH 2010

INSIGHT
30.

The person who bears the primary liability to pay a debt that has been guaranteed
by another person is the ................

SECTION B - Attempt any FOUR questions (60 Marks)


QUESTION 1
(a)
(b)

State TWO obligations of the owner and TWO obligations of the hirer in a hire
purchase transaction.
(8 Marks)
Define partnership and state THREE things which a partner has no implied
authority to undertake on behalf of the partnership and the other partners.
(7 Marks)
(Total 15 Marks)

QUESTION 2
(a)

State the methods by which payment may be made for the shares of a company.
(6 Marks)

(b)

Distinguish between registered debenture and bearer debenture.


(6 Marks)

(c)

Explain what is meant by voting on a poll at a general meeting of a company.


(3 Marks)
(Total 15 Marks)

QUESTION 3
Gazali Kazala, a financial expert published a Newspaper advertorial which purportedly
contained a detailed report on the state of finance of Gillogan Nigeria Company
Limited. Zali Bank Plc advanced an unsecured loan to Gillogan Nigeria Company
Limited in reliance on the Report on Gazali Kazala which he described as
authoritative, independent, reliable, indepth analysis of the true state of affairs of
Gillogan Nigeria Company Limited.
A petition has been filed against Gillogan Nigeria Company Limited for winding-up on
ground of failure to fulfil its financial obligations to its numerous creditors. Zali
Bank Plc is contemplating a legal action against Gazali Kazala for negligent misstatement.
Required:

ATSWA PART 1 MARCH 2010

INSIGHT
(a)

Advise the parties on the liability or otherwise of Gazali Kazala to Zali Bank Plc.
(10 Marks)

(b)

Discuss briefly the defence of contributory negligence.

(5 Marks)
(Total 15 Marks)

QUESTION 4
(a)

State FIVE remedies of the seller under a sale of goods transaction.

(5 Marks)

(b)

Give FOUR duties of a seller under an F. O. B. Contract.

(4 Marks)

(c)

What are the obligations of the seller under both the Ex-ship and Ex-warehouse
contracts?
(6 Marks)
(Total 15 Marks)

QUESTION 5
(a)

What is a contract of insurance?

(5 Marks)

(b)

Explain the concept which states that no premium no cover in the law of
insurance.
(5 Marks)

(c)

Napoleon insured his Business Centre against the occurrence of fire and the
premium is usually paid in advance annually on the 1st day of March.
Napoleon travelled abroad for medical check-up on 25 February 2008 and
therefore unavailable to pay his premium. However, fire had gutted the Business
Centre on 15 March 2008 and was completely ruined.
Napoleon has threatened to take legal action against the Insurance Company.
Advise him.
(5 Marks)
(Total 15 Marks)

QUESTION 6
On 12 December 2008, a cheque for the sum of 2,000,000 (Two Million Cedis) was
issued by Ayew to Kofi or order. On 20 December 2008, the cheque was
dishonoured upon presentation at Intercontinent Financial Bank Limited.
Required:
(a)
Advise the parties supposing that:
(i)

The Account of Ayew was in credit in excess of the amount stated on the
cheque.
(5 Marks)

(ii)

The cheque was not presented until 2 August 2009.

ATSWA PART 1 MARCH 2010

(5 Marks)

INSIGHT
(b)

State TWO requirements for negotiability of a negotiable instrument.


(5 Marks)
(Total 15 Marks)

SOLUTION
SECTION A
PART 1
MULTIPLE CHOICE SOLUTIONS
1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

PART II
SHORT ANSWER QUESTION
1.

Judicial precedent

2.

Unilateral contracts

3.

When words prohibiting transfer of the bill are inserted

4.

Negligence

ATSWA PART 1 MARCH 2010

INSIGHT
5.

When he or she holds himself out as a partner

6.

Payment of remuneration

7.

When no apparent irregularity either in the drawing or in the endorsement of the


bill can be found

8.

Noting and protesting

9.

Where an action is brought to recover the price of necessaries

10.

Trespass to land

11.

Shareholders in a general meeting

12.

Once there is sufficient funds in the account

13.

It becomes a legal entity

14.

Limited liability nature of the company/a company is a separate legal person from
the persons who form it.

15.

A prospectus

16.

Contract

17.

Debenture

18.

Ordinary business and special business

19.

To act in good faith

20.

Non est factum

21.

Unilateral

22.

Frustration

23.

The control test

24.

Nobody can pass a good title who has none

25.

That the goods will correspond with the description

26.

A lien

ATSWA PART 1 MARCH 2010

INSIGHT
27.

Cost, insurance and freight contracts

28.

Proof beyond reasonable doubt

29.

A contract of guarantee or suretyship

30.

The debtor

SECTION B
SOLUTION 1
(1) (a)
The owner
to deliver the goods
to have a good title to the goods
to ensure correspondence with description
to ensure quiet possession by the hirer
The hirer
to accept delivery
to take reasonable care of the goods
to pay the agreed instalments
to re-deliver the goods upon termination or expiry of the hire
(b)
A relationship which subsist between two or more persons carrying on business
with a view to profit
(i)
(ii)
(iii)
(iv)
(v)

Execution of deed
Reference of dispute to arbitration
Admission of a new partner
Compromising any debt owed to the firm
Making co-partners become partners in another firm

EXAMINERS COMMENT
This question is on hire purchase. The candidates performance is very good as they had
a good grasp of the issues raised in the question.

SOLUTION 2
(a)
(i)

by cash

ATSWA PART 1 MARCH 2010

INSIGHT
(ii)
(iii)

by any other valuable consideration provided there is provision to that


effect in the Articles
partly by cash and partly by such valuable consideration.

(b)
A registered debenture is payable only to those persons whose names appear on
the register of debenture holders of the company. A bearer debenture is a
negotiable instrument which is payable to any person who presents it to the
company with proper endorsement or authority.
(c)

It means voting according to the shareholding of the members and it is only used
when demanded by qualified persons.

EXAMINERS COMMENT
This question on debentures and voting in a general meeting of company is
straightforward but not very popular. The performance of those candidates who
attempted the question was not good too. This may be due to inadequate preparation.

SOLUTION 3
(a)

The law imposes a duty on professionals not to make careless statements capable
of causing financial and economic loss.
It is not necessary that fiduciary relation should exist for the defendant to be liable
for negligent misstatement. Suffice to state that subject to an express disclaimer
of liability, a negligent misstatement without fraud may give rise to an action for
damages for financial loss suffered by the plaintiff who acted on the
misstatement.
Accordingly Gazali Kazala for having published the report as described in the
facts is liable for negligent misstatement. And Zali Bank Plc can institute an
action against him for negligent misstatement.

(b)

At common law, a claim for negligence filed by the plaintiff will fail against the
defendant if the plaintiff has contributed in anyway to the accident. The position
of the common law has been modified by the Civil Liability (Miscellaneous
Provisions) Act 1961. It provides that a claim of a plaintiff who has contributed
to the damage done to him by another person shall not be completely defeated but
the damages recoverable shall be reduced to such an extent as the court shall
consider just and equitable in the circumstances.
The defence of contributory negligence is therefore employed by the defendant to
reduce or all together avoid the payment of damages.

ATSWA PART 1 MARCH 2010

INSIGHT
EXAMINERS COMMENT
Less than half of the candidates attempted this question out of which about half really
appreciated the issues raised. It is a question on case study which may be responsible for
the unpopularity and the relatively poor performance.

SOLUTION 4
(a)
1)
2)
3)
4)
5)

Lien
Right to withhold delivery
Stoppage in transitu
Right of resale
Damages

1.
2.
3.

To place the goods on board of a ship nominated by the buyer


To pay all handling and transport charges
To meet all charges in connection with the goods up to the time of the
goods passing over to the ship
To give the buyer notice to enable him to insure the goods

(b)

4.
(c)

Obligation of the seller under ex-ship contract:


1) Getting delivery of the goods to be made to the buyer from a ship which has
arrived at the port of delivery and has reached a place which is usual for the
delivery of the types of goods in question.
Obligation of the seller under ex-warehouse contract:
1) To deliver the goods at the particular warehouse or store as the case may be.
Property and risk remain with the seller until he has done this.
EXAMINERS COMMENT
The (a) part of the question was well understood, but the (b) and (c) parts were not.
However, candidates ought to have performed averagely since F.O.B contracts are
common knowledge.

SOLUTION 5
(a)
A contract of insurance is essentially an agreement between two parties that is, the
insurer and the insured by which in return for payment of premium, the insurer
indemnifies the insured against a particularly stated loss or upon the occurrence of

ATSWA PART 1 MARCH 2010

INSIGHT
a stated event. The loss or event may never occur such as an accident in the case
of motor vehicle insurance whereas the event may be one which is bound to
occur, but the date and time are unknown such as death in the case of life
insurance.
(b)

The payment of premium is a condition precedent to the assumption of risk by the


insurer. The policy evidencing the contract of insurance must be delivered to the
insured.
Any premium paid to an insurance broker is deemed to be premium paid to the
insurer involved in the transaction. Therefore, the importance of premium is that
it is a condition precedent to the assumption of risks by the insurer without which,
no premium no cover.

(c)

The premium was due on 1st March 2008 while Napoleon was on medical checkup abroad. This does not preclude him from paying the premium so as to get
cover in respect of the risk insured against. There was no payment of the
premium. Therefore, there was no cover. He cannot succeed if he sues the
company that insured the business centre against fire.

EXAMINERS COMMENT
This is the most popular question which was attempted by more than 90% of the
candidates and practically all of them performed well.

SOLUTION 6
(a)
i.

There is a duty imposed upon a banker to honour his customers cheques


provided there is sufficient fund or credit balance in the account or
adequate overdraft has been granted to the customer and the cheque is
regular on the face it.
There are some remedies available to the customer whose cheque has been
wrongfully dishonoured. He can recover damages which may be
substantial or nominal depending on whether he is a trader or not.
Ayew can therefore maintain an action against the bank for wrongful
dishonour of the cheque.

ii.

A cheque is a bill of exchange drawn on a banker and payable on demand.


A cheque is always payable on demand and such demand is made when
the cheque is presented for payment.

ATSWA PART 1 MARCH 2010

INSIGHT
A cheque which is not presented for payment until after six months had
lapsed can safely be dishonoured for having become a stale cheque.
(b)
A negotiable instrument must satisfy the following requirements:
It must be in writing
It must be an unconditional order in writing to pay a certain sum in money
on demand or at a stated or determinable future time
-

It must be signed by the maker or drawer depending on the type of


the bill of exchange.

EXAMINERS COMMENT
Negotiable instruments were tested by this question which enjoyed a reasonable
popularity. Only the (b) part gave candidates some problems but the overall performance
was slightly above average.

ATSWA PART 1 MARCH 2010

INSIGHT
AT/101/PI.4

EXAMINATION NO:

ASSOCIATION OF ACCOUNTANCY BODIES IN WEST AFRICA

ACCOUNTING TECHNICIANS SCHEME


PART I EXAMINATION MARCH 2010
COMMUNICATION SKILLS
Time allowed: 3 hours

Insert your Examination number in the space provided above.

SECTION A
PART I
1.

D.
E.

Message content
Channel of communication
Encoding procedure
Message receiver
Response time.

that communication is a two-way process


that there is no permanent sender, no permanent receiver
that noise is not peculiar to channel, but common to all elements of the
process
that channel is the only fixed element of the process
the influence of social environment of the process.

The following are vital to efficient reading, EXCEPT:


A.
B.
C.
D.
E.

4.

(10 Marks)

De Fleurs communication model of 1966 emphasises the following EXCEPT:


A.
B.
C.

3.

MULTIPLE-CHOICE QUESTIONS

The sender of a message determines the following EXCEPT:


A.
B.
C.
D.
E.

2.

Attempt All Questions

interest
understanding
style of writing
kind of typeface/handwriting
distraction.

The following are methods of speech delivery EXCEPT


A.
B.

Reading from script


Memorization

ATSWA PART 1 MARCH 2010

INSIGHT
C.
D.
E.
5.

The simple past tense of SHRINK is


A.
B.
C.
D.
E.

6.

compound
simple
complex
compound-complex
simple-complex.

The underlined expression in If I were you, I would run is a .............. clause.


A.
B.
C.
D.
E.

9.

a declarative
an imperative
an interrogative
an exclamatory
an indefinite.

This is the car that John crashed is a .................. sentence


A.
B.
C.
D.
E.

8.

shrunk
shrinked
shrinking
shrank
shrunken.

The boy is good is ................... statement.


A.
B.
C.
D.
E.

7.

Extemporaneous
Oration
Impromptu.

main
particle
subordinate
tentative
subjunctive.

The chairman of a meeting does the following EXCEPT


A.
B.

10.

presides over a meeting


ensures that a quorum is formed before the commencement of a
meeting
C.
ensures that the meeting is properly convened
D.
keeps accurate records
E.
ensures that the agenda is strictly followed.
Which of the following is NOT a feature of the formal report?

ATSWA PART 1 MARCH 2010

INSIGHT
A.
B.
C.
D.
E.

PART II

title
heading
salutation
terms of reference
recommendations.

SHORT-ANSWER QUESTIONS (20 MARKS)

1.

Basic communication skills are listening, speaking, reading and .............

2.

Agreement reached by the entire house without any formal voting conducted is
known as ...............

3.

A Committee that is set up for a special purpose is called ..................

4.

The right of an individual to appoint another person to attend and vote on his
behalf at a meeting is called .............

5.

A double vowel sound is called .................

6.

Information that flows from subordinates to superior is known as .............

7.

Horizontal system of communication is also known as ...............

8.

Technical words or expressions used in a particular field of specialisation is called


...............

9.

Official record of all that transpires during a meeting is known as ............

10.

The word Devaluation has ......... syllables.

11.

As harmless as a dove. This is an example of ................

12.

Communication that originates and ends within the same organisation is


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

13.

The guideline that employees must follow in a business organisation is known


as .................

14.

The sound that is produced without any obstruction of the air stream at any point
in the mouth is ...............

15.
16.

Unofficial and unconfirmed information sent through an interpersonal channel


is ................
Facial expressions, gestures or sign language are examples of ..............

17.

Changes in the form of a verb to indicate time is known as ...............

ATSWA PART 1 MARCH 2010

INSIGHT
18.

The response a sender of a message gets from the intended recipient of the
message is ..............

19.

Message is transmitted to the receiver through a(n) ...............

20.

Reading that is concerned mainly with speed is ..................

SECTION B - COMPREHENSION
QUESTION 1
COMPULSORY
Read the following passage carefully and answer the questions on it.
Selection interview are usually geared towards eliciting useful information about an
applicants qualifications, experiences and skills with a view to determining his
suitability for a stipulated job or position. The applicants aim is to secure a job which he
feels he is capable of doing; the employers goal, on the other hand is to employ the best
person available for the job. Both long and short term plans should therefore be made.
If you are an applicant for a job you must ensure that your education and training have
equipped you to carry out the tasks involved. Once you have received an invitation for
the interview, set about preparing your personal data sheet with a record of your name,
address, age, marital status, education, professional training, work experience, interests,
honours and distinctions, and hobbies.
This personal data sheet is also referred to as a rsum or a curriculum vitae. You should
also try to get some information about the nature of the job by talking to some employees
and reading any available literature on the organisation. This will enable you to
anticipate some of the questions you are likely to be asked, and to prepare a few of your
own for the interviewers.
It is important that you maintain your composure and comport yourself with dignity
throughout the interview. Answer questions simply and clearly and speak directly to the
persons asking the questions. Do not go out of your way to impress. Be polite, courteous
and frank. Avoid boastfulness and affectation. In other words, refrain from pompous
statements, unnecessary airs, and overdressing. Listen carefully to what is being said to
you so that you can respond intelligently. Be honest and sincere and avoid exaggeration
or fabrication.
When given an opportunity to ask questions, make inquiries about prospects for training
and advancement, fringe benefits such as accommodation, transport facilities and medical
care. Before leaving the interview, thank the panel for having given you the opportunity
to attend the interview.

ATSWA PART 1 MARCH 2010

INSIGHT
Curled from: Sybil James et. al (1990): Introduction to Communication for Business
Organisation. Spectrum, Ibadan.
(1)

Suggest a suitable title for the passage.

(2)

What, according to the passage, is the goal of both the applicant and the
employer?
(4 Marks)

(3)

How can an applicant anticipate the questions to be asked during a job interview?
(4
Marks)

(4)

Why is it necessary to conduct employment interviews?

(5)

State the FIVE common pitfalls that an applicant must avoid during an interview
as contained in the passage.
(10 Marks)

(6)

(a)

According to the writer, when should an applicant prepare his


rsum?
(2 Marks)

(b)

What are the items that should be entered into it?

(7)

(3 Marks)

(6 Marks)

(5 Marks)

Give another word or phrase for each of the following words as used in the
passage.
(i)
goal
(ii)
equipped
(iii)
anticipate
(iv)
composure
(v)
fabrication
(vi)
opportunity
(6 Marks)
(Total 40 Marks)

SECTION C
Answer Any Two Questions (30 Marks)
QUESTION 1
Briefly discuss any FIVE differences between oral communication and non-verbal
communication.
(15 Marks)

QUESTION 2
With examples, discuss any FIVE bad reading habits and suggest how those habits can
be corrected.
(15 Marks)

ATSWA PART 1 MARCH 2010

INSIGHT
QUESTION 3
Each of the following sentences contains a gap. Two words are provided in brackets at
the end of the sentence. Choose the one that best completes the sentence. Write out the
correct word only. DO NOT COPY THE SENTENCE.
(i)

Ten years have .......... since the two companies merged. (past/passed)

(ii)

A good teacher always tries to ........... answer from his students rather than telling
them everything. (illicit/elicit)

(iii)

Perhaps you can ask the chairman to .......... the decision until the next meeting.
(deter/defer)

(iv)

When the company received a lot of adverse publicity the staff ....... become very
low. (moral/morale)

(v)

Always ..........that you proof-read your documents before sending them out.
(insure/ensure)

(vi)

I have asked the Head of Department to ............ write to the lecturer to request for
his annual leave. (formally/formerly)

(vii)

Mark has always ......... to be the manager of his own company. (aspired/inspired)

(viii)

How will the new procedures ........... safety in the company? (affect/effect)

(ix)

Please let me have your expert ......... on this issue. (advise/advice)

(x)

It is always essential to ......... your answers carefully before submitting your


answer book (check/cheque).
(15
Marks)

QUESTION 4
You are a participant at the National Communication Commissions GSM Consumers
Forum. At the forum, you are required to deliver a short opening speech on the
value telecommunication has brought to the delivery of banking services.
Prepare your speech. You may invent names and other details as you deem fit.
(15 Marks)

SECTION B

ATSWA PART 1 MARCH 2010

INSIGHT
MULTIPLE CHOICE QUESTIONS
1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

EXAMINERS COMMENT
The questions cover the entire scope of the syllabus. A few candidates copied the
alphabets as well as the answer for each option while some others copied the answers
without the alphabets.
The candidates that did this do not understand the principle behind the questions.
Candidates are only required to indicate the answers by writing out the alphabets.
About 75% of the candidates scored 50% and above while about 80% scored 40% and
above.

SHORT ANSWER QUESTION


1.

Writing

2.

concensus

3.

Ad hoc

4.

proxy

5.

diphthong

6.

upward communication

7.

lateral communication

8.

jargon/jargons

9.

minutes

10.

five (5)

ATSWA PART 1 MARCH 2010

INSIGHT
11.

simile

12.

internal communication

13.

rules and regulations/code of conduct/staff manual

14.

vowel

15.

rumour

16.

non-verbal communication/ body language/kinesics

17.

tense

18.

feedback/reply

19.

channel

20.

scanning

EXAMINERS COMMENT
The questions here also cover the entire span of the syllabus. In some cases, candidates
insert one or two options that are not really short answers. Also, making concepts that
are perpetually plural, singular is a problem here e.g. minute for minutes. 85% of the
candidates scored 40% and above.

SECTION B; COMPULSORY
1.

Preparing for job interview

2.

The applicants goal is to get a job while the employers goal is to fill the vacant
position with the best person possible.

3.

The applicant can anticipate the questions by


i)
seeking information from employees in the organization
ii)
reading available literature about the organization

4.

Employment interviews are necessary for confirming the following about the
applicant:
i)
qualifications
ii)
experiences
iii)
skills

5.

An applicant must avoid these common pitfalls during an interview:


i)
Boastfulness/pompus statements
ii)
affectation.
iii)
unnecessary airs/going out of the way to impress

ATSWA PART 1 MARCH 2010

INSIGHT
vi)

iv)
overdressing.
v)
exaggeration.
fabrication.

6a.

The candidate should prepare his rsum immediately/as soon as he has received
an invitation for interview.

b)

The items to include are:


i)
name
ii)
address
iii)
age
iv)
marital status
v)
education
vi)
professional training
vii)
work experience
viii) interests
ix)
honours
x)
distractions
xi)
hobbies

7.

i)
ii)
iii)
iv)
v)
vi)

objective/aim/purpose
prepared/empowered
predict/expect/forecast
confidence
lying/lies
a chance

EXAMINERS COMMENT
The candidates understood the passage and were able to easily derive suitable answers to
them. Also, the candidates responded appropriately by recognising and supplying scoring
points. 85% of the candidates scored 50%.

SECTION C
SOLUTION 1
The basic differences between oral communication and non-verbal communication are as
follows:
i)
Oral communication uses the spoken word, whereas non-verbal communication
hardly uses words. Two people communicating orally would use words whose
meanings are clear to both parties. They may communicate through face-to-face
contract, telephone, meetings and speeches. For non-verbal communication, the
sounds used sighs, (usually indicating relief), hisses (usually indicating disgust).

ATSWA PART 1 MARCH 2010

INSIGHT
ii)

iii)
iv)

v)

vi)

vii)

Other features of non-verbal communication associated with speech are paralanguage features like volume, pitch and rate of speech.
Non-verbal communication is usually an aid, whereas oral communication is
usually an independent instrument of communication. Facial expressions and
gestures may be used to complement verbal expressions. They may be used to
clarify, reinforce and illustrate word of mouth.
In non-verbal communication, feedback may be involuntary. When, for example,
a person sees a pictures or witnesses something that is frightening and faints, the
feedback is involuntary but it is nonetheless a feedback.
Non-verbal communication is highly symbolic and may be subject to different
interpretations. In different cultures and contexts, specific non-verbal messages
can be interpreted differently by the sender and decoder. Also, culture situation
and appearance may cause signals, signs, gestures and facial expressions to be
interpreted differently by sender and receiver. On the other hand, most oral
communication is direct and non-symbolic.
Oral communication is transient. It is not permanent and most of the time, it is
not recorded. With this situation what is said can be denied and may not be very
useful as an object of reference. On the other hand, non-verbal communication in
the form of posters, charts, tables are properly documented and can be stored in a
form that has a level of performance and in which they can serve as objects of
reference.
Some non-verbal communication items like posters can be beautified using
colours lines and shapes. Also, the use of colours, lines and shapes in posters
make the material attractive thereby drawing attention not only to the material but
also to the message. Oral communication cannot be made beautiful or attractive
with colours, lines and shapes.
For oral communication, feedback is instant. The feedback to face-to-face
conversation is instant, even telephone conversation facilitates instant feedback.
On the other hand, non-verbal communication does not excite or attract instant
feedback. A table, graph and chart may not be seen by the receiver until a
considerable time after its creation. In this sense, it would not attract instant
feedback.

EXAMINERS COMMENT
This question is on methods of communication. Quite a number of candidates answered
this question. 70% of the candidates, in actual fact, attempted this question. However,
the attempt rate does not reflect students master on the topic as only 40% of the
candidates who attempted it scored 40% and above.

SOLUTION 2
The bad reading habits are as follows:
i)

TRACING LINE OF PRINT: It is a bad reading habit to trace lines of print.


Some readers trace lines of print with finger, ruler, pen, pencil while reading.
This habit slows the reader down and impairs comprehension.

ATSWA PART 1 MARCH 2010

INSIGHT
CORRECTION: Readers who indulge in this habit should be corrected and
enlightened not to trace lines of print when reading. They should be educated that
eye muscles should move over the page and the eye should pace the reading.
ii)

VOCALIZATION: Vocalization is done by pronouncing the words to oneself as


one reads. This may be done in whispers. Any movement of the vocal apparatus
such as tongue, throat and vocal cord while reading is vocalization. Vocalization
is a distraction and unnecessary expenditure of energy.
CORRECTION: Readers should be enlightened on the disadvantages of
vocalization while reading. Vocalization divided attention between sound
articulation and comprehension and as such prevents readers from paying required
attention to comprehension.

iii)

SUB-VOCALIZATION: Readers sometimes read under their breath. They do


not read aloud but still move from item to item, as if pronouncing the words
under-breath. This is unnecessary mental and physical exertion. It also involves
dividing attention between sub-vocalization and comprehension.
CORRECTION: Readers should be counseled to read for meaning rather than
giving attention to single items. Reader should also concentrate on sight reading,
avoiding sub-vocalization and focusing on comprehension.

iv)

REGRESSION: Readers have a way of reversing and reading backward by rereading a portion of the material that they have already read. Regression may be a
product of lack of concentration or over-sentivity to comprehending
the
material on first reading. Regression wastes time and effort and makes reader
lose trend of the material as a continuous flow of idea.
CORRECTION: Readers should be advised to concentrate on the material they
are reading. They should read a material through as many times as they wish
rather than
prolonging a single reading effort through regression. Reading
should be continuous and progressive rather than regressive.
MOVING THE HEAD: Many readers move their heads back and forth,
horizontally; up and down, vertically in order to read and follow the contents of
the material.
However, this is stressful and it also slows down the pace of
reading.
CORRECTION: Readers should be enlightened that they should avoid moving
the head; rather they should move the yes using the muscles of the eyes.

v)

vi)

OMISSION: Readers sometimes leave out large tracts or portions of a material


and go without reading those portions. However, important points may be tucked
in certain parts of the material that may appear to be unimportant. Clarifications,
illustrations which may appear unimportant may aid the reader to fully understand
all aspects of the subject of a material.
CORRECTION: A material should be read from the beginning to the end. No
part of the material should be unread.

ATSWA PART 1 MARCH 2010

INSIGHT
vii)

INSERTION/EMBELLISHMENT: Readers sometimes read facts or meanings


that are not present in any particular material into it. Meanings and facts are
sometimes inserted into a material by the will of the reader when they are not in
the material.
CORRECTION: Whatever is not in the material should not be read into it; it
should not be projected into it.

EXAMINERS COMMENT
This question is on reading, precisely Bad Reading Habits. Only 20% of the candidates
answered this question. Of this number, 50% scored 40 and above. The performance of
candidates here is surprising as this concept is not hidden in the syllabus and the question
is a direct question attracting well enunciated responses.

SOLUTION 3
1.

passed

2.

elicit

3.

defer

4.

morale

5.

ensure

6.

formally

7.

aspired

8.

affect

9.

advice

10.

check

EXAMINERS COMMENT
This question is on Grammar, particularly word usage and common errors. 95% of the
candidates attempted this question and of this number, 85% scored 50% and above.

SOLUTION 4
OPENING SPEECH DELIVERED BY ATOLAGBE TIMOTHY AT THE NATIONAL
COMMUNICATION COMMISSION (NCC) GSM CONSUMERSFORUM HELD AT
THE PENISULA RESORT, LEKKI ON FRIDAY, JANUARY 29, 2010
The Chairman, National Communication Commission,
The President, Institute of Chartered Accountants of Nigeria,
The President, Chartered Institute of Bankers,

ATSWA PART 1 MARCH 2010

INSIGHT
Chief Executives in the Banking Industry,
Chief Executives in Telecommunication Companies,
Stakeholders in the Telecommunication Industry,
Distinguished Guests,
Distinguished Participants,
Gentlemen of the Press,
Ladies and Gentlemen.
It is my pleasure to be a participant at this landmark event tagged GSM
Consumers forum of the National Communication Commission (NCC) It is my firm
belief that whatever we do here today would impact positively on the delivery of GSM
services in the country.
The theme of this forum: The Value Telecommunication Has Brought to the
Delivery of Banking Services. is not only appropriate but also timely.
Telecommunication has brought tremendous improvement to banking operations
and the delivery of banking services.
Telecommunication has made universal banking possible. Now, a customer can
access his account at any branch of his bank. Automated Teller Machine (ATMs) have
been deployed by banks in every nook and cranny of Nigeria, giving customers access to
money round the clock through the use of ATM cards. The Automated Teller Machine
technology has telecommunication as its backbone.
Telecommunication has also revolutionalised banking by facilitating on-line, real
time banking, ensuring that transactions on a customers account reflect the moment the
transactions on the accounts through transaction alerts.
The future of banking is likely to get better as bankers continue to harness the
advantages and advancements in telecommunication to deliver first class and efficient
banking services.
Thank you for your attention.

EXAMINERS COMMENT
The question, which is on speech writing, is highly unpopular among candidates. Only
about 3% of the candidates attempted this question and of this number 25% scored 40%
and above.

ATSWA PART 1 MARCH 2010