Question Tag: Contracts

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CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)

Itemize and discuss the five-step model for revenue recognition under IFRS 15.

Question

Megida hopes to obtain contracts from both the private and public sectors following the new government economic initiatives. The company’s revenue had always been accounted for in line with IAS 18, as the company had adopted IFRS. Some directors of Megida understand that with the introduction of IFRS 15: Revenue from Contracts, the way revenue from contracts is recognized may change. In particular, one of them who attended an IFRS training organized by the Institute of Chartered Accountants of Nigeria (ICAN) heard about IFRS 15 and its five-step model for revenue recognition but did not understand.

Required:
Itemize and briefly discuss the FIVE-step model approach to revenue recognition under IFRS 15. (9 Marks)

Answer

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Tags: Contracts, Five-Step Model, IFRS 15, Revenue, Revenue Recognition
Level: Level 3

Topic: Revenue Recognition (IFRS 15)

TAX – Nov 2023 – L2 – Q5 – Tax Administration and Enforcement

Explain stamp duty exemptions, electronic document receipt, duties on contracts, and electronic money transfer levies.

Question

Stamp duties are duties basically on instruments (defined to include written document). Stamp duties are governed by Stamp Duties Act Cap. S8 LFN 2004 (as amended), which provides for the levying of duties on certain matters specified in the Act, effective April 1, 1993.

a. Explain THREE instruments exempted from stamp duties. (3 Marks)
b. Describe when electronic documents are considered received in Nigeria. (3 Marks)
c. Discuss duty on contracts. (3 Marks)
d. Explain the electronic money transfer levy. (6 Marks)

Answer

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Tags: Contracts, Electronic Documents, Exemptions, Money Transfer Levy, Stamp Duties
Level: Level 2

BL – May 2012 – L1 – SA – Q14 – Sale of Goods

Determine when the risk in goods transfers from seller to buyer in a sale of goods contract.

Question

In an agreement for the sale of goods, the risk remains with the seller until:

A. Sale is completed
B. Goods are inspected to the satisfaction of the buyer
C. Final payment is made by the buyer
D. Cost, insurance, and freight are paid for
E. Bill of lading is signed by the seller

Answer

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Tags: Business Law, Contracts, Risk, Sale of Goods
Level: Level 1

Topic: Sale of Goods
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q2c – Law of Contract

Identifying and explaining the elements of a valid contract.

Question

State briefly the elements of a valid contract.

Answer

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Tags: Consideration, Contracts, Intention to Create Legal Relations, Offer and Acceptance
Level: Level 1

Topic: Law of Contract
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q20 – Law of Contract

Understanding the term in a contract that gives the party not at fault the right to repudiate.

Question

A term in a contract that gives the party who is not at fault the right to repudiate is a ……………………………….

Answer

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Tags: Breach of Contract, Conditions, Contracts, Repudiation
Level: Level 1

Topic: Law of Contract

BL – Nov 2011 – L1 – SA – Q4 – Law of Contract

Understanding the timeframe for sending a copy of a note or memorandum to the hirer.

Question

Within how many days must the copy of note or memorandum be delivered or sent to the hirer?

Answer

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Tags: Contracts, Hirer’s Agreement, Memorandum
Level: Level 1

Topic: Law of Contract
Series: NOV 2011

BL – Nov 2012 – L1 – SB – Q2B – Law of Contract

Advise on a contract involving an apprentice who is a minor.

Question

Johnson is 16 years old. He served as an apprentice barber at Okay Salon for two years. He paid the apprenticeship premium for only one year. Okay Salon wants to sue for the balance. Advise the parties.

Answer

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Tags: Contracts, Infants
Level: Level 1

Topic: Law of Contract
Series: NOV 2012

BL – Nov 2012 – L1 – SB – Q2A – Law of Contract

Advise on the legal protection available to illiterates in contract agreements.

Question

Dickson is an illiterate. He entered into an agreement with Continental Bakery Limited to supply bags of flour at N15.00 per bag. Unknown to him, the written agreement, which he thumb-printed, read N10.00 per bag. He had supplied 1,000 bags for which the company wants to pay the price in the written contract. Advise Dickson in the circumstances.

Answer

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Tags: Contracts, Illiterates Protection
Level: Level 1

Topic: Law of Contract
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q18 – Law of Contract

Identify the type of acceptance subject to a condition.

Question

State the type of acceptance of a bill of exchange in which the bill is accepted “subject to the shipping vessel arriving from South Africa.”

Answer

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Tags: Conditional Acceptance, Contracts
Level: Level 1

Topic: Law of Contract
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q10 – Sale of Goods

Identify the type of goods subject to a contract of sale.

Question

Goods which may be subject matter of a contract of sale of goods may be either existing goods or

Answer

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Tags: Contracts, Future Goods, Goods
Level: Level 1

Topic: Sale of Goods
Series: NOV 2012

BL – May 2024 – L1 – SB – Q3b – Law of Contract

State and explain four rules that govern consideration in contracts.

Question

Consideration is an element of a contract.
Required:
State FOUR rules that govern consideration. (6 Marks)

Answer

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Tags: Business Law, Consideration, Contracts, Legal Rules
Level: Level 1

Topic: Law of Contract
Series: MAY 2024

BL – May 2024 – L1 – SA – Q8 – Sale of Goods

Identify the type of goods not identified at the time of contract.

Question

In a sale of goods contract, goods that are not identified and agreed upon at the time of contract are:

A. Generic goods
B. Prospective goods
C. Specific goods
D. Unascertained goods
E. Perishable goods

Answer

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Tags: Contracts, Sale of Goods, Unascertained Goods
Level: Level 1

Topic: Sale of Goods
Series: MAY 2024

PT – Nov 2019 – L2 – Q2c – Withholding Tax Administration

Calculates withholding tax due from various contracts awarded to KPP Books & Stationery Ltd. by Ghana Water Company.

Question

c) Below are the various contracts awarded to KPP Books and Stationery Limited by the Ghana Water Company for the 2018 year of assessment:

1st contract: supply of stationery costing GH¢1,000 in January 2018.
2nd contract: supply of Station Diaries costing GH¢900 in March 2018.
3rd contract: supply of additional stationery costing GH¢900 on August 16, 2018.
Required:
What amount of withholding tax is due to the Ghana Revenue Authority in the year 2018 from Ghana Water Company? (5 marks)

Answer

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Tags: Contracts, Tax deductions, Threshold, Withholding Tax
Level: Level 2

Topic: Withholding Tax Administration
Series: NOV 2019

CR – Mar 2024 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers

This question requires determining whether Odjani Plc should recognize revenue as a principal or agent in the sale of airline tickets, based on IFRS 15.

Question

Odjani Plc (Odjani) negotiates with major local and international airlines to purchase tickets at reduced rates compared with the price of tickets sold directly by the airlines to the public. Odjani agrees to buy a specific number of tickets and must pay for those tickets regardless of whether it is able to resell them. The reduced rate paid by Odjani for each ticket purchased is negotiated and agreed in advance. Odjani determines the prices at which the airline tickets will be sold to its customers. Odjani sells the tickets and collects the consideration from customers when the tickets are purchased. The entity also assists the customers in resolving complaints with the service provided by the airlines. However, each airline is responsible for fulfilling obligations associated with the ticket, including remedies to a customer for dissatisfaction with the service.

Required:
In line with IFRS 15: Revenue from Contracts with Customers, explain whether Odjani is a principal or agent and indicate how it would determine the amount of revenue to recognize from the ticket sales.

Answer

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Tags: Agent, Contracts, IFRS 15, Principal, Revenue Recognition
Level: Level 3

Topic: IFRS 15: Revenue from contracts with customers
Series: MAR 2024

CR – Nov 2023 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers

Revenue recognition for a data provider offering real-time and historical data access based on IFRS 15 for the year ended 31 May 2023.

Question

Accra Investors Help (AIH), a large stock market data provider in Ghana, provides stock market data to investors across major markets in Africa.

On 1 June 2022, the data provider sold a client access to its real-time database for three (3) years at an invoiced price of GH¢3.6 million. The client has the right of access to AIH’s database any time, 24 hours each day, to obtain the real-time data about stock prices around the African markets. On the same date, AIH sold to another client for GH¢800,000 access to 30 years of historical data for the next two (2) years. The client has the right to access the data, containing historical information from 1992-2021 (24 hours each day) and is also free to download the data and retain it after the two-year access to AIH’s system has elapsed.

Required:
Advise on how much revenue AIH would recognize for the year ended 31 May 2023 on each of the two contracts. (4 marks)

Answer

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Tags: Contracts, Financial Reporting, Historical Data, Real-Time Data, Revenue Recognition
Level: Level 3

Topic: IFRS 15: Revenue from contracts with customers
Series: NOV 2023

CR – Nov 2019 – L3 – Q3a – IFRS 15 – Revenue from Contracts with Customers

IFRS 15 to recognize revenue for contracts with customers involving deferred payments and prepayments.

Question

a) IFRS 15: Revenue from Contracts with Customers specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles-based five-step model to be applied to all contracts with customers.

Mankranso Ltd, a hotel, had the following transactions during the year:

i) On 31 March 2019, Mankranso Ltd signed a contract to supply 50,000 units of food packs at an agreed price of GH¢10 per unit. On the same day, 30,000 units were delivered at that date, with the remainder delivered on 1 June 2019. It was agreed that the customer would have extended credit terms of 12 months from the date of delivery. Mankranso Ltd’s cost of capital is 10%.
(3 marks)

ii) During the year ended 31 March 2019, Mankranso Ltd received payment in advance for the supply of 2,000 hotel room-nights to customers at GH¢100 per room per night. Only 400 of these had been occupied by 31 March 2019. The amounts paid by the customers are non-refundable unless the company fails to provide the agreed accommodation.
(3 marks)

Required:
In each scenario above, calculate the amount of revenue to be recognised in the financial statements of Mankranso Ltd for the year ended 31 March 2019. Justify the correct accounting treatment for each transaction.

Answer

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Tags: Contracts, Deferred Revenue, IFRS 15, Revenue Recognition
Level: Level 3

Topic: IFRS 15: Revenue from contracts with customers
Series: NOV 2019

BCL – Nov 2016 – L1 – Q3a – Contract Law

List the modifications made to the doctrine of consideration by the Contracts Act, 1960 (Act 25).

Question

The Contracts Act, 1960, Act 25, has modified the common law doctrine of consideration. List FOUR of the modifications.

Answer

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Tags: Consideration, Contracts, Ghana, Modifications
Level: Level 1

Topic: Contract Law
Series: NOV 2016

BCL – Nov 2016 – L1 – Q2b – Sale of Goods/Hire Purchase

Identify differences between Free On Board (FOB) and Cost, Insurance, and Freight (CIF) contracts.

Question

Identify FOUR differences each between Free On Board (FOB) contracts and Cost, Insurance, Freight (CIF) contracts.

Answer

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Tags: CIF, Contracts, FOB, Sale of Goods, Shipping
Level: Level 1

Topic: Sale of goods/hire purchase
Series: NOV 2016

BCL – Nov 2016 – L1 – Q2a – Sale of Goods/Hire Purchase

Explain the relationship between the parties under the Sale of Goods Act.

Question

Mr. Bossman bought a Nissan diesel vehicle from Trans Africa Engineering and Motor Co. Ltd. However, when the vehicle broke down, Mr. Bossman did not go to the dealers for spare parts, but rather went to Messrs Jones Williams & Co., and through one of its directors, placed an order for the spare parts from Japan. The order was placed for the spare parts with TSS Co. Ltd, and by Telex, headed “we quote for Japan,” TSS Co Ltd, supplied Jones Williams & Co. with the requisite quotation, and that the spare parts would be delivered in three (3) months’ time. Mr. Bossman then got his foreign bankers to transfer the amount, being the cost of the spare parts to the bankers of Messrs Jones Williams & Co. Ltd, who in turn, paid the amount to the suppliers. When the spare parts were not forthcoming, Mr. Bossman sued Messrs Jones Williams & Co. for the return of his money, interest, and damages. Before the court case started, Mr. Bossman received the spare parts, and therefore had to abandon his claims.

Required:
a) Explain the following in terms of the provisions of the Sale of Goods Act, 1962 (Act 137):
i) The relationship between Mr. Bossman and Messrs Jones Williams & Co. Ltd.
ii) The relationship between TSS Co. Ltd and Messrs Jones Williams & Co. Ltd.

Answer

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Tags: Agency, Contracts, Ghana, Sale of Goods
Level: Level 1

Topic: Sale of goods/hire purchase
Series: NOV 2016

BCL – Nov 2023 – L1 – Q1d – Contract Law

Advise on the enforceability of a contract involving a civil servant.

Question

Frank James is a foreign national and businessman. He approached Rampa, an accountant and civil servant at the Registrar General Department for assistance to establish a factory. Rampa was ready to help if Frank James offered him 20% of the yearly profit from the business. Subsequently, Frank James and Rampa signed a written agreement for Rampa to have 20% of yearly profit from the business. Frank James paid the 20% for the first two years. In the third and fourth years, Frank James failed to pay the agreed 20% on profit. Rampa insists on enforcing the agreement.

Required: Advise Rampa on the chances of success of his claim. (5 marks)

Answer

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Tags: Contracts, Enforcement, Public Policy
Level: Level 1

Topic: Contract Law
Series: NOV 2023

Question Tag: Contracts

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CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)

Itemize and discuss the five-step model for revenue recognition under IFRS 15.

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TAX – Nov 2023 – L2 – Q5 – Tax Administration and Enforcement

Explain stamp duty exemptions, electronic document receipt, duties on contracts, and electronic money transfer levies.

You're reporting an error for "TAX – Nov 2023 – L2 – Q5 – Tax Administration and Enforcement"

BL – May 2012 – L1 – SA – Q14 – Sale of Goods

Determine when the risk in goods transfers from seller to buyer in a sale of goods contract.

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BL – Nov 2011 – L1 – SB – Q2c – Law of Contract

Identifying and explaining the elements of a valid contract.

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BL – Nov 2011 – L1 – SA – Q20 – Law of Contract

Understanding the term in a contract that gives the party not at fault the right to repudiate.

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BL – Nov 2011 – L1 – SA – Q4 – Law of Contract

Understanding the timeframe for sending a copy of a note or memorandum to the hirer.

You're reporting an error for "BL – Nov 2011 – L1 – SA – Q4 – Law of Contract"

BL – Nov 2012 – L1 – SB – Q2B – Law of Contract

Advise on a contract involving an apprentice who is a minor.

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BL – Nov 2012 – L1 – SB – Q2A – Law of Contract

Advise on the legal protection available to illiterates in contract agreements.

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BL – Nov 2012 – L1 – SA – Q18 – Law of Contract

Identify the type of acceptance subject to a condition.

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BL – Nov 2012 – L1 – SA – Q10 – Sale of Goods

Identify the type of goods subject to a contract of sale.

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BL – May 2024 – L1 – SB – Q3b – Law of Contract

State and explain four rules that govern consideration in contracts.

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BL – May 2024 – L1 – SA – Q8 – Sale of Goods

Identify the type of goods not identified at the time of contract.

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PT – Nov 2019 – L2 – Q2c – Withholding Tax Administration

Calculates withholding tax due from various contracts awarded to KPP Books & Stationery Ltd. by Ghana Water Company.

You're reporting an error for "PT – Nov 2019 – L2 – Q2c – Withholding Tax Administration"

CR – Mar 2024 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers

This question requires determining whether Odjani Plc should recognize revenue as a principal or agent in the sale of airline tickets, based on IFRS 15.

You're reporting an error for "CR – Mar 2024 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers"

CR – Nov 2023 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers

Revenue recognition for a data provider offering real-time and historical data access based on IFRS 15 for the year ended 31 May 2023.

You're reporting an error for "CR – Nov 2023 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers"

CR – Nov 2019 – L3 – Q3a – IFRS 15 – Revenue from Contracts with Customers

IFRS 15 to recognize revenue for contracts with customers involving deferred payments and prepayments.

You're reporting an error for "CR – Nov 2019 – L3 – Q3a – IFRS 15 – Revenue from Contracts with Customers"

BCL – Nov 2016 – L1 – Q3a – Contract Law

List the modifications made to the doctrine of consideration by the Contracts Act, 1960 (Act 25).

You're reporting an error for "BCL – Nov 2016 – L1 – Q3a – Contract Law"

BCL – Nov 2016 – L1 – Q2b – Sale of Goods/Hire Purchase

Identify differences between Free On Board (FOB) and Cost, Insurance, and Freight (CIF) contracts.

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BCL – Nov 2016 – L1 – Q2a – Sale of Goods/Hire Purchase

Explain the relationship between the parties under the Sale of Goods Act.

You're reporting an error for "BCL – Nov 2016 – L1 – Q2a – Sale of Goods/Hire Purchase"

BCL – Nov 2023 – L1 – Q1d – Contract Law

Advise on the enforceability of a contract involving a civil servant.

You're reporting an error for "BCL – Nov 2023 – L1 – Q1d – Contract Law"

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