Series: NOV 2013

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 6 Marks

CR – Nov 2014 – L3 – SB – Q2c – Revenue Recognition (IFRS 15)

Assess revenue recognition change for NIXAQ sales under IFRS 15 and calculate total revenue for the year.

Maidogo Limited sells NIXAQ, a product manufactured by it, from several retail outlets. In previous years, the company has undertaken responsibility for fitting the product in customers’ premises. Customers pay for the product at the time they are ordered. The average length of time it takes from ordering to its fitting is 14 days. In previous years, Maidogo Limited had not recognised a sale in its books until the product had been successfully fitted because the rectification costs of any fitting error would be expensive.
With effect from 1 April, 2013, Maidogo Limited changed its method of trading by sub-contracting the fitting to approved contractors. Under this policy, the sub-contractors are paid by Maidogo Limited, and they (the sub-contractors) are liable for any errors made in the fitting. Consequently, Maidogo Limited is proposing to recognise sales when customers order and pay for the goods rather than when they have been fitted. Details of the relevant sales figures are:

Sales Figures Amount (N’000)
Sales made in retail outlets for the year to 31 March 2014 69,000
Sales value of NIXAQ fitted in the 14 days to 14 April 2013 3,600
Sales value of NIXAQ fitted in the 14 days to 14 April 2014 4,800

Note: The sales value of NIXAQ in the 14 days to 14 April 2013 are not included in the annual sales figure of N69million, but those for 14 April 2014 are included.

Required:
Discuss whether or not the above represents a change of accounting policy, and calculate the amount that you would include in the revenue for NIXAQ in the year to 31 March 2014. (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2014 – L3 – SB – Q2c – Revenue Recognition (IFRS 15)"

  • 7 Marks

CR – Nov 2014 – L3 – SB – Q2b – Income Taxes (IAS 12)

Discuss reasons for variances in effective tax rates and differences between tax charges and tax payments.

Mr. Ojoowuro, the director of a grocery store, has noticed that the tax charge for his company is N15million on profits before tax of N105million. This is an effective rate of 14.3%. Another company, Irin Plc, has an income tax charge of N30million on profit before tax of N90million. This is an effective rate of tax of 33.3%, yet both companies state that the rate of income tax applicable to them is 25%. Mr. Ojoowuro has also noticed that in the statements of cash flows, each company has paid the same amount of tax of N24million.

Required:
Advise Mr. Ojoowuro on the possible reasons why the income tax charge in the financial statements as a percentage of the profit before tax may not be the same as the applicable income tax rate and why the tax paid in the statement of cash flows may not be the same as the tax charge in the statement of profit or loss and other comprehensive income. (7 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Nov 2014 – L3 – SB – Q2b – Income Taxes (IAS 12)"

  • 15 Marks

AAA – Nov 2013 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Outline audit procedures to identify material subsequent events and explain the purpose and importance of subsequent events review.

You have just concluded the audit of Roico Limited for the year ended 31 December, 2012. During the review of the working paper file, the partner in charge discovered that no information is available on activities after year-end. The partner instructed the team leader to carry out a review of the company’s activities after year-end. The team leader was not comfortable with the instruction and wants to know why it is necessary to examine accounting information relating to the next accounting period.

You are required to:

(a) Enumerate the audit procedures which would be carried out in order to identify any material subsequent events. (10 Marks)

(b) Discuss the purpose and importance of subsequent events review. (5 Marks)

(Total: 15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions"

  • 15 Marks

AAA – Nov 2013 – L3 – SB – Q4 – Audit of IT Systems and Data Analytics

Discuss factors influencing the choice of audit testing methods in a computer environment and propose solutions to address the loss of audit trail.

The availability of computer-assisted audit techniques should be considered by the auditor when planning the nature, extent, and timing of tests in an audit. The auditor must determine his testing strategies which will depend on his choice of either using a manual testing method or computer-assisted method.

You are required to:

(a) Explain FIVE factors that will determine the auditor’s choice of method of testing in the planning of an audit in a computer environment. (10 Marks)

(b) Identify FIVE solutions to loss of audit trail. (5 Marks)

(Total: 15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – SB – Q4 – Audit of IT Systems and Data Analytics"

  • 15 Marks

AAA – Nov 2013 – L3 – SB – Q3 – Audit of Specialized Industries

Identify seven key audit concerns in the extractive industry, focusing on labor issues, community impact, and compliance with regulations.

XYL Limited has been granted a license to operate in the extractive industry in the middle belt of the country, where there is an abundant mineral resource called Topaz. This mineral is in great demand in the manufacturing industries of Western Europe.

Due to the need for heavy equipment requiring intensive capital outlay, indigenous companies could not invest in the sector. Moreover, the technical expertise required in mining this product is not locally available.

The company was not only granted the license but also granted a pioneer status. The local community where operations take place supply the necessary labor, both skilled and unskilled. After a year, the workers’ union found out that they were paid far less than what the company is paying in similar operations in nearby countries. As a result of labor union activities, many workers were retrenched, and the company started making use of locals who had just completed secondary school education. Union activities were proscribed.

Being an extractive industry, the local people were affected as they could no longer carry out their economic activities as before.

Your firm has just been appointed as auditors of XYL Limited after three years of operation.

You are required to:

Explain SEVEN areas of concern that would be of interest to you as auditor and provide reasons for their importance. (15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – SB – Q3 – Audit of Specialized Industries"

  • 15 Marks

AAA – Nov 2013 – L3 – SB – Q2 – Audit Planning and Strategy

Outline reasons for audit planning and describe procedures for planning the audit of an existing client.

Planning an audit involves establishing the overall audit strategy for the engagement and development of an audit plan.

You are required to:

(a) Enumerate SEVEN reasons for audit planning. (7 Marks)

(b) Explain EIGHT audit procedures you would consider in planning the audit of an existing client. (8 Marks)

(Total: 15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – SB – Q2 – Audit Planning and Strategy"

  • 15 Marks

AAA – Nov 2013 – L3 – SB – Q1 – Ethical Issues in Auditing

Evaluate whether to comply with a former executive’s request for audit services while addressing confidentiality in auditor-client relationships.

Your firm acts as the auditors and advisers to Naija Seven Limited, and to its four directors. The company is owned 50% by Praise Caro, 25% by his wife Madame, and 10% by James Patrick. Braima is the Chief Executive, and Julius is the Finance Director. Julius’ sister, Mabel Mama, recently resigned from the executive board following a disagreement with Praise. Mabel Mama formed her own company, Nigeri Heaven, in competition with Naija Seven.

Currently, Mabel is negotiating with her former co-executives on the profit-related remuneration due to her and the sale of her 15% holding of shares in Naija Seven to one or all of them.

Mabel Mama has contacted you to find out Praise Caro’s current remuneration package since he refused to disclose it to her. She has also requested that your firm should continue to act as her personal adviser, financial adviser, and auditor to Nigeri Heaven.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – SB – Q1 – Ethical Issues in Auditing"

  • 1 Marks

AAA – Nov 2013 – L3 – AII – Q19 – Ethical Issues in Auditing

Identify the term for codified moral rules and regulations guiding professional behavior.

The codified rules and regulations which are mainly based on moral duties and obligations on how professionals should carry out their duties and how to behave in the society are known as……………….

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q19 – Ethical Issues in Auditing"

  • 1 Marks

AAA – Nov 2013 – L3 – AII – Q18 – Public Sector Audits

Identify the body responsible for reviewing the Auditor General's report for the Federation.

The report of the Auditor General for the Federation is reviewed by…………which has the power to invite any person indicted for public hearing.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q18 – Public Sector Audits"

  • 1 Marks

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

An audit which is carried out on a company in respect of its relationship with shareholders, employees, customers, the community in which it operates, and the public at large is known as……………………..

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q12 – Partnership Accounts

Understanding the implications of a purchase consideration paid by a company.

Kowope Nigeria Limited paid purchase consideration of N900,000 for an existing partnership which has assets and liabilities valued as follows: Leasehold building – N500,000; Motor vehicles – N150,000; Furniture – N240,000; Inventory of stationery – N50,000 and Trade payables – N200,000. It means:

A. The company gained N160,000 as capital reserve
B. The company anticipates profit of N160,000
C. The partnership assets and liabilities are inflated by N160,000
D. The partnership is undervalued by N160,000
E. The company is paying N160,000 as goodwill

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q12 – Partnership Accounts"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts

Reason for revaluing assets when partnership composition changes.

Assets must be revalued where there is a change in the partnership composition because:

A. Inflation affects the values of partnership assets
B. The economic value of the partnership must be enhanced
C. Deflation affects the value of partnership assets
D. It helps to prevent injustice to the concerned partners
E. The law insists that there should be a revaluation

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q11 – Partnership Accounts"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts

Necessary entries for writing off net decreases in the Revaluation Account.

The necessary accounting entries to write-off net decrease in the Revaluation Account of a partnership are:

A. Dr. Revaluation Account; Cr. Partners’ Capital Account
B. Dr. Partners’ Capital Accounts; Cr. Revaluation Account
C. Dr. Partners’ Current Accounts; Cr. Revaluation Account
D. Dr. Revaluation Account; Cr. Partners’ Current Account
E. Dr. Revaluation Account; Cr. Realisation Account

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q10 – Partnership Accounts"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q9 – Virtual Accounting

Identifying programs that facilitate computer hardware usage.

The suite of programs that facilitate the optimal use of the computer hardware and provide a suitable environment for the running of user programs is called:

A. Application packages
B. Word processing programs
C. Systems programs
D. Accounting packages
E. Executive programs

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q9 – Virtual Accounting"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q8 – Scope and Purpose of Accounting

Identifying the first phase of financial accounting.

Accounting has been defined in several ways, each emphasising a particular feature of the subject. In general, the first phase of financial accounting is the:

A. Preparation of financial statements
B. Analysis of financial statements
C. Writing of source documents
D. Drawing up of trading account
E. Wooing customers to buy goods

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q8 – Scope and Purpose of Accounting"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2

Understanding IAS 2's guidelines on inventory valuation.

In accordance with IAS2, which of the following statements about the valuation of inventory is correct?

A. Selling price less estimated profit margin may be used to arrive at cost if this gives a reasonable approximation of actual cost
B. LIFO is an accepted valuation method for inventory
C. FIFO is not an accepted valuation method for inventory
D. The cost of goods manufactured by an enterprise will include materials and labour only
E. Inventory items are normally valued at the higher of cost and net realisable value

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q6 – Regulatory Environment of Accounting

Understanding what GAAP refers to.

The “generally accepted accounting practice” (GAAP) refers to:

A. Complete set of regulations from all sources together with any general accounting principles and conventions
B. Only the principles and conventions that are enshrined in companies’ legislations
C. The accounting regulations which apply to large companies
D. Financial accounting which is concerned with reporting financial results in aggregates to a variety of users
E. Legislation which generally sets out the broad rules with which companies must comply when preparing financial statements

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q6 – Regulatory Environment of Accounting"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q5 – Scope and Purpose of Accounting

Identifying the best definition of the concept of accounting.

Which of the following best defines “the concept of accounting”?

A. An activity performed by accountants
B. A system comprising several interrelated and interdependent parts
C. A technique of management
D. A discipline of study
E. A process of handling information of economic nature, which is useful and adaptive to varying situations

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q5 – Scope and Purpose of Accounting"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q4 – Financial Statements Preparation

Identifying a key difference between sole traders and limited liability companies.

Which of the following is the difference between sole traders and limited liability companies?

A. A sole trader’s financial statements are private and never made available to third parties; a company’s financial statements are given to shareholders and may be publicly filed.
B. Both businesses have share capital.
C. Only drawings appear in a sole trader’s financial statements.
D. A sole trader is fully and personally liable for any losses that the business might make, while a company’s losses are borne by the government.
E. Both the sole trader and companies issue loan notes in order to raise funds.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q4 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q3 – Accounting from Incomplete Records

Determining information that is not needed when preparing accounts from incomplete records.

In preparing a set of final accounts from incomplete records, which of the following information need NOT be considered?

A. Business structure
B. Accounting and business equations
C. Credit sales and trade receivables
D. Purchases, inventory, and the cost of sales
E. Stolen goods, goods destroyed, or goods taken by the owner of the business

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q3 – Accounting from Incomplete Records"

knowsia

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan