MAY 2014 – Page 10

BL – May 2014 – L1 – SB – Q6 – Negotiable Instruments

Discussing characteristics of negotiable instruments and banker duties.

Question

a. “A Negotiable Instrument must express clarity in the instruction on the instrument without any ambiguity”. Explain TWO characteristics of a Negotiable Instrument. (4 Marks)

b. The relationship between the banker and his customer is said to be the relationship between a debtor and a creditor. You are required to state FIVE duties of a banker to its customer. (5 Marks)

c. A testator that has made a Will can only revoke it under certain circumstances. Explain THREE ways by which a Will may be revoked. (6 Marks)

Answer

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Tags: Banking Law, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2014

BL – May 2014 – L1 – SB – Q5 – Corporate Governance

Discussing requirements for incorporation and the implications of proposed company names.

Question

a. Jossy is a cabinet maker based on Victoria Island, Lagos, where he has a lucrative business. Jossy is proposing to expand his business and wants to invite James to form a Limited Liability Company, using the name Jossy James Limited.

You are required to:
i. State FIVE documents that must be filed for the incorporation of the company; and (5 Marks)
ii. Advise the parties on whether the proposed name, Jossy James Limited is appropriate and, state FOUR prohibited or restricted company names. (5 Marks)

b. State FIVE advantages of a Limited Liability Company over a Partnership. (5 Marks)

Answer

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Tags: Company Law, Company Secretary, Incorporation
Level: Level 1

Topic: Corporate Governance
Series: MAY 2014

BL – May 2014 – L1 – SB – Q4 – Partnership Law

Discussing the duties of a Company Secretary and circumstances benefiting non-partners in a partnership.

Question

a. “Every company must, by law, have a Secretary. A company may also serve as a Secretary to another company. However, a sole director may not be the Secretary of a company. The Company Secretary is the Chief Administrative Officer of the company”.

Required: State FIVE duties of a Company Secretary. (5 Marks)

b. At common law, a Secretary was regarded as a mere servant who should do what he was told to do and could NOT bind the company in any way. This notion has since been corrected by the Companies and Allied Matters Act CAP C20 LFN 2004.

Required: State FIVE persons qualified to be appointed as Company Secretary of a public company under the Companies and Allied Matters Act. (5 Marks)

c. Partnership contract is based on confidence, good faith, and trust between the partners.

Required: Explain TWO circumstances in which a non-partner could benefit from the profits of a partnership. (5 Marks)

Answer

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Tags: Company Secretary, Partnership Law
Level: Level 1

Topic: Partnership Law
Series: MAY 2014

BL – May 2014 – L1 – SB – Q3 – Sale of Goods,

Discussing classes of goods under the Sale of Goods Act and characteristics of hire purchase transactions.

Question

a. In commercial transactions, goods and services are offered and sold. Explain briefly TWO classes of goods under the Sale of Goods Act. (5 Marks)

b. In hire purchase agreements, goods are delivered to the hirer who pays some money to the owner of goods as deposit. Explain briefly TWO characteristics of a hire purchase transaction. (5 Marks)

c. Steven insured his five-storey building with ABC Insurance Company Limited and paid the premium for the building. Steven had been told by his engineers that the building is weak and may collapse in no distant future, but Steven did not disclose this to his insurers, thinking it was immaterial. A year after the policy was issued, the building collapsed and the insurance company has refused to indemnify Steven on the ground of non-disclosure of a material fact. State the relevant law and advise the parties. (5 Marks)

Answer

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Tags: Contract Law, Hire Purchase, Sale of Goods
Level: Level 1

Topic: Sale of Goods
Series: MAY 2014

BL – May 2014 – L1 – SB – Q2B – Contract Law

Identifying five ways a contract can be discharged.

Question

Contractual obligations and rights arising from a contract can be discharged in various ways.
You are required to state FIVE ways by which a contract may be discharged.

Answer

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Tags: Contract Law, Discharge of Contracts
Level: Level 1

Topic: Contract Law
Series: MAY 2014

BL – May 2014 – L1 – SB – Q2A – Classification of Law

Advising Mrs. Devoted Hubby regarding property rights in the context of divorce.

Question

Mr. Loverboy Hubby and Mrs. Devoted Hubby were happily married until Mr. Hubby met Miss Girlie. The desire of Mr. Hubby to follow Miss Girlie led to separation between him and his wife, and Mr. Hubby moved out of the family house to Miss Girlie’s residence.
Mr. Hubby intends to divorce Mrs. Hubby. As part of arrangement for the divorce, they met and Mr. Hubby gave her a written statement that, in consideration of Mrs. Hubby paying the mortgage on the family house which was in the name of her husband, he would transfer the house into her sole ownership. Mrs. Hubby paid the mortgage and asked for the transfer of the house, but Mr. Hubby refused, claiming that the agreement is not binding on him.
Advise Mrs. Devoted Hubby.

Answer

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Tags: Divorce, Family Law, Property Rights
Level: Level 1

Topic: Classification of Law
Series: MAY 2014

BL – May 2014 – L1 – SB – Q1C – Law of Tort

Advising Olu on his legal rights following an incident involving Ojoge.

Question

Ojoge is a driver with Ozaro Bottling Company. At the close of work on Tuesday, while still putting on the branded overall jacket of Ozaro Bottling Company and walking down the street to his house, a motorcyclist, Olu, splashed rainwater on Ojoge.
Ojoge beat up Olu thoroughly and fractured his arm. While attempting to flee from the scene to avoid being lynched by an angry mob, his overall jacket dropped, and the mob used the jacket to locate Ojoge’s place of work.
Based on the fact that Ojoge works with Ozaro Bottling Company, Olu is, considering seeking legal redress against Ozaro Bottling Company for the act of Ojoge.

Required:
Advise Olu on his rights under the law

Answer

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Tags: Legal Rights, Personal Injury, Tort Law
Level: Level 1

Topic: Law of Tort
Series: MAY 2014

BL – May 2014 – L1 – SB – Q1B – Employment Law

Advising Mrs. Kabuki on her fundamental rights under Nigerian law.

Question

Jones Plastic Packaging Company Limited has its head office in Lagos. The company suspected that one of its accounting staff, Mrs. Kabuki, was responsible for the economic losses suffered by the company in recent months.
On Monday, when Mrs. Kabuki resumed at the factory, she was detained at the security gate for eight hours without questioning. Thereafter, she was summarily dismissed. She had protested that she had no information about what led to her dismissal. The only official communication from the company to her in the last six months was the letter of dismissal from employment.
Mrs. Kabuki is aggrieved and wants to seek legal redress.
Required:
Advise Mrs. Kabuki on her Fundamental rights under the 1999 Constitution of the Federal Republic of Nigeria

Answer

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Tags: Employment Law, Fundamental Rights, Legal Advice
Level: Level 1

Topic: Employment law
Series: MAY 2014

BL – May 2014 – L1 – SB – Q1A – Nigerian Legal System

Identify and explain four fundamental rights in the Nigerian Constitution.

Question

“Fundamental rights” are provided for in the 1999 Constitution of the Federal Republic of Nigeria. You are required to state any FOUR Fundamental rights contained in the Constitution.

Answer

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Tags: Fundamental Rights, Nigerian Constitution
Level: Level 1

Topic: Nigerian Legal System
Series: MAY 2014

BL – May 2014 – L1 – SA – Q20 – Law of Trusts

Identifying the term for a person holding legal title to property for another.

Question

A person who holds the legal title to a property for the benefit of another is a ____________.

Answer

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Tags: Beneficiary, Legal Title, Trusts
Level: Level 1

Topic: Law of Trusts
Series: MAY 2014

FA – May 2014 – L1 – SA – Q7 – Control Accounts

Identifies a feature that is not characteristic of control accounts.

Question

Which of the following is NOT a feature of a control account?
A. It is maintained by the financial controller
B. It is used to check arithmetical accuracy of the ledger to which it relates
C. The ledger to which it relates is known as self-financing
D. It contains the total of entries in individual accounts
E. The entries therein appear on the same side as they do in the individual accounts

Answer

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Tags: Control Accounts, Financial Records, Ledger Accuracy
Level: Level 1

Topic: Control Accounts
Series: MAY 2014

FA – May 2014 – L1 – SA – Q6 – Financial Statements Preparation

Discusses the impact of an overvalued closing inventory on profit.

Question

The closing inventories of a firm were overvalued by ₦300,000 due to an error in the inventory valuation sheets. How would the correction of this affect the reported profit?
A. Increase reported profit by ₦300,000
B. Reduce reported profit by ₦300,000
C. No effect on the reported profit
D. Increase reported profit by ₦600,000
E. Reduce reported profit by ₦600,000

Answer

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Tags: Closing Inventory Error, Inventory Valuation, Profit Adjustment
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2014

FA – May 2014 – L1 – SA – Q5 – Bank Reconciliation

Defines unpresented cheques in accounting.

Question

Which of the following statements best defines unpresented cheques?
A. Cheques paid by the bank but not yet recorded in the cash book
B. Cheques that are yet to be credited to the customer’s account
C. Cheques issued by the business but not yet presented for payment
D. Cheques that are stale and no longer acceptable for payment
E. Cheques that have been returned due to insufficient funds

Answer

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Tags: Bank Reconciliation, Cash Book Adjustments, Unpresented Cheques
Level: Level 1

Topic: Bank reconciliations
Series: MAY 2014

FA – May 2014 – L1 – SA – Q4 – Regulatory Environment of Accounting

Identifies the document governing a company's relationship with third parties.

Question

The document which discloses the conditions that govern a company’s relationship with third parties is called
A. Articles of Association
B. Loan notes
C. Register of Members
D. Memorandum of Association
E. Memorandum of Understanding

Answer

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Tags: Articles of Association, Company Law, Corporate Documentation, Memorandum
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2014

FA – May 2014 – L1 – SA – Q3 – Elements of Financial Statements

Identifies a non-component of financial statements under IFRS.

Question

Which of the following is NOT a component of financial statements under IFRS?
A. Statement of financial position
B. Statement of profit or loss and other comprehensive income
C. Statement of changes in equity
D. Statement of affairs
E. Statement of cashflows

Answer

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Tags: Basic Accounting Principles, Financial Statements, IFRS
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2014

FA – May 2014 – L1 – SA – Q2 – Accounting for Inventories in Accordance with IAS 2

Identifies costs included in inventory valuation under IAS 2.

Question

According to IAS 2 on inventories, which of the following costs should be included in valuing the inventories of a manufacturing company?
A. Carriage inwards
B. Carriage outwards
C. General administrative overheads
D. Depreciation of land and building
E. Discount allowed

Answer

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Tags: Cost Accounting, IAS 2, Inventory Valuation, Manufacturing Costs
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q1 – Double-Entry Accounting Principles

Identifies the rule for double-entry bookkeeping.

Question

The double entry rule is expressed as
A. Debit the receiver, credit the giver
B. Debit the giver, credit the receiver
C. Debit the receiver, credit the Bank/Cash account
D. Debit the Bank/Cash account, credit the giver
E. Debit amount paid, credit amount received

Answer

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Tags: Accounting Fundamentals, Basic Accounting Principles, Double Entry
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2014

Series: MAY 2014

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BL – May 2014 – L1 – SB – Q6 – Negotiable Instruments

Discussing characteristics of negotiable instruments and banker duties.

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BL – May 2014 – L1 – SB – Q5 – Corporate Governance

Discussing requirements for incorporation and the implications of proposed company names.

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BL – May 2014 – L1 – SB – Q4 – Partnership Law

Discussing the duties of a Company Secretary and circumstances benefiting non-partners in a partnership.

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BL – May 2014 – L1 – SB – Q3 – Sale of Goods,

Discussing classes of goods under the Sale of Goods Act and characteristics of hire purchase transactions.

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BL – May 2014 – L1 – SB – Q2B – Contract Law

Identifying five ways a contract can be discharged.

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BL – May 2014 – L1 – SB – Q2A – Classification of Law

Advising Mrs. Devoted Hubby regarding property rights in the context of divorce.

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BL – May 2014 – L1 – SB – Q1C – Law of Tort

Advising Olu on his legal rights following an incident involving Ojoge.

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BL – May 2014 – L1 – SB – Q1B – Employment Law

Advising Mrs. Kabuki on her fundamental rights under Nigerian law.

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BL – May 2014 – L1 – SB – Q1A – Nigerian Legal System

Identify and explain four fundamental rights in the Nigerian Constitution.

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BL – May 2014 – L1 – SA – Q20 – Law of Trusts

Identifying the term for a person holding legal title to property for another.

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FA – May 2014 – L1 – SA – Q7 – Control Accounts

Identifies a feature that is not characteristic of control accounts.

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FA – May 2014 – L1 – SA – Q6 – Financial Statements Preparation

Discusses the impact of an overvalued closing inventory on profit.

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FA – May 2014 – L1 – SA – Q5 – Bank Reconciliation

Defines unpresented cheques in accounting.

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FA – May 2014 – L1 – SA – Q4 – Regulatory Environment of Accounting

Identifies the document governing a company's relationship with third parties.

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FA – May 2014 – L1 – SA – Q3 – Elements of Financial Statements

Identifies a non-component of financial statements under IFRS.

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FA – May 2014 – L1 – SA – Q2 – Accounting for Inventories in Accordance with IAS 2

Identifies costs included in inventory valuation under IAS 2.

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FA – May 2014 – L1 – SA – Q1 – Double-Entry Accounting Principles

Identifies the rule for double-entry bookkeeping.

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