Sie sind auf Seite 1von 27

Accredited Accounting Technician

Foundation Examination
Pilot Paper

Paper 1
Accounting and
Business Essentials

Questions & Answers


Booklet

The Suggested Answers are given to provide information for reference purpose.
Hong Kong Institute of Accredited Accounting Technicians Limited 2011
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, and/or
otherwise, without the prior written permission of the copyright owner.
Published by Hong Kong Institute of Accredited Accounting Technicians Limited
27/F, Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong
April 2011

Accredited Accounting Technician


Foundation Examination
Pilot Paper

Paper 1
Accounting and
Business Essentials

This paper must be answered in English and completed within 1 hour 30 minutes.
This examination consists of the following two sections:
Section A: Multiple-choice Questions (60 marks)
Printed in this Question Book (A)
Section B: Compulsory Short Questions (40 marks)
Printed separately in Question-Answer Book (B)
Answer to Section A should be marked on the Multiple-choice Answer Sheet; while
answers to Section B should be written in the space provided in the Question-Answer
Book (B).
The Multiple-choice Answer Sheet for Section A must be fastened to the
Question-Answer Book (B) with a tag provided and handed in together at the end of
the examination.
DO NOT OPEN THIS QUESTION PAPER UNTIL INSTRUCTED TO DO SO BY THE
SUPERVISOR.

Accredited Accounting Technician Foundation Examination


Paper 1 Accounting and Business Essentials
Section A Multiple-choice Question Book (A)

INSTRUCTIONS TO CANDIDATES
1.
2.
3.
4.
5.
6.
7.
8.

Section A carries 60 marks, candidates should attempt all questions.


Complete all candidate details on the Multiple-choice Answer Sheet.
DO NOT write your name on the Multiple-choice Answer Sheet.
Answers to Section A should be marked in the Multiple-choice Answer Sheet and should be
fastened to the Question-Answer Book (B) with the tag provided.
ONE answer should be marked for each question. If more than one answer were marked on
the same question, NO MARKS would be awarded for that question.
No part of this Multiple-choice Question Book is to be torn out.
Multiple-choice Question Book (A) and unused papers, if any, must be returned at the end of
the examination.
DO NOT OPEN THIS MULTIPLE-CHOICE QUESTION BOOK UNTIL INSTRUCTED TO DO
SO BY THE SUPERVISOR.

Accredited Accounting Technician Foundation Examination


Pilot Paper

Paper 1 Accounting and


Business Essentials (Section A)

SECTION A (MULTIPLE-CHOICE QUESTIONS) (60 marks)


Answer ALL questions in this section. Choose the best answer for each question.
Marks will not be deducted for incorrect answers.
(Questions A1 to A30 carry 2 marks each.
A1.

Which of the following is NOT an advantage of a joint venture?


A
B
C
D

A2.

All joint venturers can take part in the management of the joint venture.
Each joint venturer only contributes part of the capital to the joint venture.
Each joint venturer contributes its own assets, technology and knowledge.
Decision making is efficient.

Which of the following are the functions of marketing management?


(1)
(2)
(3)
(4)
A
B
C
D

A3.

Understanding the market environment and what customers need and want
Ensuring the goods produced and services provided are in good quality
Organising promotion campaigns for new products
Recruiting marketing and sales representatives

(1) and (3)


(1), (2) and (3)
(1), (3) and (4)
All of the above

Which of the following is NOT an example of two way communication?


A
B
C
D

A4.

Total: 60 marks)

Manager posted a notice on the notice board.


The Board of Directors held a general meeting with the Chief Executive Officer.
Human resources manager interviewed an applicant.
Sales representative replied an email from a customer.

Which of the following is/are set up by the government to support small and medium
enterprises (SMEs)?
(1)
(2)
(3)
(4)
A
B
C
D

Trade and Industry Department


Hong Kong Monetary Authority (HKMA)
Commercial Credit Reference Agency (CCRA)
Hong Kong Export Credit Insurance Corporation (ECIC)

(1) and (2)


(1) and (3)
(1), (3) and (4)
All of the above

Page 3

Accredited Accounting Technician Foundation Examination


Pilot Paper

A5.

Which of the following is a capital expenditure?


A
B
C
D

A6.

Office of the Commissioner of Insurance (OCI)


Hong Kong Exchanges and Clearing Limited (HKEx)
Securities and Futures Commission (SFC)
Hong Kong Monetary Authority (HKMA)

A company maintains a 3% allowance for discounts allowed at the end of each year. If the
balance of trade receivable amounts to $20,000, and total bad debts amounting to $5,000
need to be written off at the end of the current year, how much is the balance in the
allowance for discounts allowed account at the end of the current year?
A
B
C
D

A9.

the market fluctuation affects the value of the investment, which may lead to a loss.
the debt issuer cannot repay the principal, causing a loss to investors.
there is a change in interest rate, which may cause a loss to investors.
there is a change in government policies, which may lead to a loss.

Which of the following regulatory bodies is responsible for promoting the stability of the
Hong Kong banking system?
A
B
C
D

A8.

Repair expense for a motor vehicle


Rent
Purchases of a delivery truck
Purchases of merchandise

Credit risk of a financial product arises when


A
B
C
D

A7.

Paper 1 Accounting and


Business Essentials (Section A)

$300
$400
$450
$600

The following information relates to the inventories for Happy Limited at 31 December 2010:
Cost:
Estimated selling price:
Further disposal cost:

$55,000
$50,000
$4,000

What should be the valuation of the inventories shown on the Statement of Financial
Position as at 31 December 2010?
A
B
C
D

$55,000
$51,000
$50,000
$46,000

Page 4

Accredited Accounting Technician Foundation Examination


Pilot Paper

A10.

Which of the following should be charged as expenses in the Statement of Comprehensive


Income?
(1)
(2)
(3)
A
B
C
D

A11.

Which of the following statement(s) is/are correct if a firm is not socially responsible to its
stakeholders?

A
B
C
D

Productivity of its employees would be low.


Profit margin in long term would be high.
Company image would be worsened.
Supplier relationship would be improved.

(1)
(2) and (4)
(1) and (3)
All of the above

Which of the following concerning the characteristics of a sole proprietorship are correct?
(1)
(2)
(3)
(4)
A
B
C
D

A13.

Bad debts written off


Increase in allowance for impairment loss on trade receivables
Increase in allowance for discounts allowed

(1) and (2)


(1) and (3)
(1), (2) and (3)
None of the above

(1)
(2)
(3)
(4)

A12.

Paper 1 Accounting and


Business Essentials (Section A)

One person owns the business.


The liability of a sole proprietor is unlimited.
The scale of business is usually small.
It is often managed by the owner.

(1), (2) and (3)


(2), (3) and (4)
(1), (3) and (4)
All of the above

Which of the following concerning small and medium enterprises (SMEs) in Hong Kong
is/are true?
(1)
(2)
(3)
(4)
A
B
C
D

Most SMEs are usually slower in decision-making when compared with large
corporations.
SMEs are usually financed by the public stock issue.
Most SMEs usually focus on the particular products and industries that they
are specialised in.
SMEs can usually survive during economic downturn.

(1)
(2) and (4)
(3)
All of the above
Page 5

Accredited Accounting Technician Foundation Examination


Pilot Paper

A14.

The drivers leading to globalisation include:


(1)
(2)
(3)
(4)
A
B
C
D

A15.

Which of the following are the favorable factors leading to growing economic relationship
between Hong Kong and Mainland China?

(2)
(3)
(4)
A
B
C
D

Signing of Mainland and Hong Kong Closer Economic Partnership


Arrangement (CEPA) in 2003
Effective restriction of the currency exchange
High inflation rate in Mainland China
Improved China trade regulation

(1) and (4)


(1), (3) and (4)
(1) and (2)
(1) and (3)

Which of the following are the functions of a human resources department?


(1)
(2)
(3)
(4)
A
B
C
D

A17.

Development of information communication technology


Reduced cost and time in global transportation
Recent economic tsunami
Expansionary monetary policies in western countries

(1) and (2)


(3) and (4)
(1), (2) and (4)
All of the above

(1)

A16.

Paper 1 Accounting and


Business Essentials (Section A)

Product performance appraisal


Human resources planning
Recruitment and selection
Compensation and benefit management

(2), (3) and (4)


(1) and (4)
(1), (2) and (4)
All of the above

The following are the potential barriers obstructing effective communication EXCEPT:
(1)
(2)
(3)
(4)
A
B
C
D

Interpersonal barriers
Cultural barriers
Emotion barriers
Language barriers

(1) and (2)


(2) and (3)
(1) and (4)
None of the above

Page 6

Accredited Accounting Technician Foundation Examination


Pilot Paper

A18.

Effective communication is important to business because it


(1)
(2)
(3)
(4)
A
B
C
D

A19.

Which of the following are issues affecting the methods of communication?

A
B
C
D

Time required
Type of information
Complexity of content
Type of recipients

(2), (3) and (4)


(1) and (4)
(1), (2) and (4)
All of the above

David targets to save $1 million in five years in order to start up his own restaurant. He has
$670,000 worth of investment portfolio now. If he can earn a 7% return annually on his
investment, and the return will be re-invested in his portfolio, approximately how much
money he will still need to borrow to start up his business five years later?
A
B
C
D

A21.

facilitates accurate decision.


reduces unnecessary delays.
helps to build up team work.
helps to remove all the costs.

(1), (2) and (3)


(2), (3) and (4)
(1), (2) and (4)
All of the above

(1)
(2)
(3)
(4)

A20.

Paper 1 Accounting and


Business Essentials (Section A)

$24,460.34
$40,302.34
$60,290.34
$80,806.34

Assume that Mr. Wong deposits $3,000 in an investment account at the end of each of the
next four years. If the return on the investment is 8% per annum, how much will he have at
the end of Year 4?
A
B
C
D

$12,499.70
$13,518.30
$17,899.50
$18,545.20

Page 7

Accredited Accounting Technician Foundation Examination


Pilot Paper

A22.

Who are the users of financial statements?


(1)
(2)
(3)
(4)
A
B
C
D

A23.

What are the major functions of accounting?

A
B
C
D

To control the business operation


To plan the business operation
To penalise the poor performance of management
To report the financial results of a business

(1) and (2)


(3) and (4)
(1), (2) and (3)
(1), (2) and (4)

B Company bought 50 units of goods with a list price of $100 each from C Company, with a
trade discount of 8%. Due to quality problem, B Company will return 12 units to C
Company. B Company will issue a debit note amounting to
A
B
C
D

A25.

Company owners and management


Lenders
Potential investors
Government bodies

(1) and (2)


(1) and (3)
(1), (2) and (3)
All of the above

(1)
(2)
(3)
(4)

A24.

Paper 1 Accounting and


Business Essentials (Section A)

$5,000.
$4,600.
$1,200.
$1,104.

What are the source documents for cash and bank transactions?
(1)
(2)
(3)
A
B
C
D

Receipts
Cheque counterfoils
Pay-in slips

(1) and (2)


(2) and (3)
(1) and (3)
All of the above

Page 8

Accredited Accounting Technician Foundation Examination


Pilot Paper

A26.

When the business owner withdraws cash from the business for private use, the
___________ account in the general ledger should be __________ with the amount.
A
B
C
D

A27.

Paper 1 Accounting and


Business Essentials (Section A)

Capital; credited
Capital; debited
Drawings; credited
Drawings; debited

A company has the following balances:


Sales revenue
Return inwards
Cost of goods sold
Other revenue
Expenses

$
320,000
20,000
150,000
12,000
30,000

What is the amount of the companys net profit?


A
B
C
D
A28.

Which of the following is an expression for cost of goods sold?


A
B
C
D

A29.

$162,000
$150,000
$132,000
$120,000

Opening inventory
inventory
Opening inventory
inventory
Opening inventory
inventory
Opening inventory
inventory

+ (Purchases + Carriage inwards Return outwards) Closing


(Purchases + Carriage inwards Return outwards) + Closing
+ (Purchases Carriage inwards + Return outwards) Closing
+ (Purchases + Carriage inwards Return outwards) + Closing

A company provides the following balances:


Machinery
Inventory
Trade receivables
Trade payables
Long term bank loan

$
325,000
26,000
50,000
37,300
20,000

What is the amount of the companys net current asset?


A
B
C
D

$363,700
$343,700
$38,700
$12,700
Page 9

Accredited Accounting Technician Foundation Examination


Pilot Paper

A30.

Paper 1 Accounting and


Business Essentials (Section A)

An electricity bill for December 2010 was received in January 2011. The bill was included
in the company expenses for the year ended 31 December 2010. Which of the following
principles/concepts is applied?
A
B
C
D

Historical cost
Going concern
Accrual
Consistency
(Total: 60 marks)

[ END OF SECTION A ]
Go on to Question-Answer Book (B) for questions on Section B

Page 10

Accredited Accounting Technician Foundation Examination


Paper 1 Accounting and Business Essentials
Section B Question-Answer Book (B)
MARKS
CANDIDATE NO.:

SECTION QUESTION
NO.

CENTRE NO.:
A
SEAT NO.:

DATE:

NO. OF SUPPLEMENTARY

FOR USE BY
MARKER

(1)

(2)

(3)

MC
Section

SHEETS USED:

TOTAL

INSTRUCTIONS TO CANDIDATES
1.
2.

Section B carries 40 marks. Marks for each question are indicated at the end of the question.
Complete your examination details above.

3.
4.
5.

Write your Candidate Number on each page of this Question-Answer Book.


DO NOT write your name on this Question-Answer Book.
ANSWER ALL QUESTIONS.

6.
7.

Answers to Section A should be marked on the Multiple-choice Answer Sheet and should be fastened to this
Question-Answer Book with the tag provided.
Answers to Section B should be written in the spaces provided on BOTH sides of this Question-Answer Book.

8.

All workings must be shown; rough work should be ruled through.

9.

Supplementary sheets used should bear your Candidate Number as well as the section and question number,
and should be fastened to this Question-Answer Book with the tag provided. The number of supplementary
sheets used should be written in the space provided above.

10.
11.

No part of this Question-Answer Book is to be torn out.


The Multiple-choice Question Book (A) and unused papers, if any, must be returned at the end of the
examination.
DO NOT OPEN THIS QUESTION-ANSWER BOOK UNTIL INSTRUCTED TO DO SO BY THE
SUPERVISOR.

12.

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

SECTION B (COMPULSORY SHORT QUESTIONS)

(40 marks)

Answer ALL questions in this section. Marks are indicated at the end of each question.
B1.

Joseph is the operations manager of a toy manufacturing company in Shenzhen, China.


The Chief Executive Officer of the company has decided to implement Management By
Objectives (MBO).
REQUIRED:
(a)

State three ways on how MBO can be implemented by Joseph and provide
explanations.
(6 marks)

Page 12

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

(b)

Explain how the implementation of MBO improves the performance of


Josephs subordinates.
(4 marks)

(Total: 10 marks)

Page 13

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

B2.

(a)

Explain two objectives of corporate governance.


(2 marks)

(b)

Explain how to improve corporate governance in a listed company? Give


three examples to support your answer.
(6 marks)

(Total: 8 marks)

Page 14

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

B3.

(a)

Define "Going Concern" and illustrate this principle/concept with an example.


(3 marks)

(b)

SAS Company Limited did not record its property at market value even the current
market value of the property was 5% lower than the purchase cost as stated in the
books.
REQUIRED:
State the accounting principle/concept adopted by SAS Company Limited and
provide an explanation.
(3 marks)

(Total: 6 marks)

Page 15

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

B4.

On 1 January 2010, ABC Company Limited bought a motor car for $100,000. The
company depreciates motor vehicles using reducing balance method at a rate of 20% per
annum.
REQUIRED:
(a)

Prepare the journal entry to record the depreciation expense for the year 2010.
(2 marks)

(b)

The motor car was sold for $75,000 on 30 June 2011. Prepare the journal
entries to record the transactions in year 2011 and show your workings.
(6 marks)

(Total: 8 marks)
Page 16

Candidate Number
Accredited Accounting Technician Foundation Examination
Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

B5.

Mr. Wong is going to invest $25,100 in an investment plan. Two investment plans
generating the same total cash flows are shown below. The discount rate is 5%.
Cash flows at the year end
Year 1
Year 2

Plan A
$15,000
$12,000

Plan B
$12,000
$15,000

REQUIRED:
(a)

Which plan should Mr. Wong invest? Show all calculations.


(5 marks)

(b)

State three advantages for using net present value method in evaluating an
investment and provide explanations.
(3 marks)

(Total: 8 marks)
[ END OF PILOT PAPER ]

Page 17

Accredited Accounting Technician Foundation Examination


Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

Appendix
Present Value of $1
Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

0.5%
0.9950
0.9901
0.9851
0.9802
0.9754
0.9705
0.9657
0.9609
0.9561
0.9513
0.9466
0.9419
0.9372
0.9326
0.9279
0.9233
0.9187
0.9141
0.9096
0.9051

1%
0.9901
0.9803
0.9706
0.9610
0.9515
0.9420
0.9327
0.9235
0.9143
0.9053
0.8963
0.8874
0.8787
0.8700
0.8613
0.8528
0.8444
0.8360
0.8277
0.8195

2%
0.9804
0.9612
0.9423
0.9238
0.9057
0.8880
0.8706
0.8535
0.8368
0.8203
0.8043
0.7885
0.7730
0.7579
0.7430
0.7284
0.7142
0.7002
0.6864
0.6730

3%
0.9709
0.9426
0.9151
0.8885
0.8626
0.8375
0.8131
0.7894
0.7664
0.7441
0.7224
0.7014
0.6810
0.6611
0.6419
0.6232
0.6050
0.5874
0.5703
0.5537

4%
0.9615
0.9246
0.8890
0.8548
0.8219
0.7903
0.7599
0.7307
0.7026
0.6756
0.6496
0.6246
0.6006
0.5775
0.5553
0.5339
0.5134
0.4936
0.4746
0.4564

5%
0.9524
0.9070
0.8638
0.8227
0.7835
0.7462
0.7107
0.6768
0.6446
0.6139
0.5847
0.5568
0.5303
0.5051
0.4810
0.4581
0.4363
0.4155
0.3957
0.3769

6%
0.9434
0.8900
0.8396
0.7921
0.7473
0.7050
0.6651
0.6274
0.5919
0.5584
0.5268
0.4970
0.4688
0.4423
0.4173
0.3936
0.3714
0.3503
0.3305
0.3118

7%
0.9346
0.8734
0.8163
0.7629
0.7130
0.6663
0.6227
0.5820
0.5439
0.5083
0.4751
0.4440
0.4150
0.3878
0.3624
0.3387
0.3166
0.2959
0.2765
0.2584

8%
0.9259
0.8573
0.7938
0.7350
0.6806
0.6302
0.5835
0.5403
0.5002
0.4632
0.4289
0.3971
0.3677
0.3405
0.3152
0.2919
0.2703
0.2502
0.2317
0.2145

9%
0.9174
0.8417
0.7722
0.7084
0.6499
0.5963
0.5470
0.5019
0.4604
0.4224
0.3875
0.3555
0.3262
0.2992
0.2745
0.2519
0.2311
0.2120
0.1945
0.1784

10%
0.9091
0.8264
0.7513
0.6830
0.6209
0.5645
0.5132
0.4665
0.4241
0.3855
0.3505
0.3186
0.2897
0.2633
0.2394
0.2176
0.1978
0.1799
0.1635
0.1486

11%
0.9009
0.8116
0.7312
0.6587
0.5935
0.5346
0.4817
0.4339
0.3909
0.3522
0.3173
0.2858
0.2575
0.2320
0.2090
0.1883
0.1696
0.1528
0.1377
0.1240

12%
0.8929
0.7972
0.7118
0.6355
0.5674
0.5066
0.4523
0.4039
0.3606
0.3220
0.2875
0.2567
0.2292
0.2046
0.1827
0.1631
0.1456
0.1300
0.1161
0.1037

13%
0.8850
0.7831
0.6931
0.6133
0.5428
0.4803
0.4251
0.3762
0.3329
0.2946
0.2607
0.2307
0.2042
0.1807
0.1599
0.1415
0.1252
0.1108
0.0981
0.0868

14%
0.8772
0.7695
0.6750
0.5921
0.5194
0.4556
0.3996
0.3506
0.3075
0.2697
0.2366
0.2076
0.1821
0.1597
0.1401
0.1229
0.1078
0.0946
0.0829
0.0728

15%
0.8696
0.7561
0.6575
0.5718
0.4972
0.4323
0.3759
0.3269
0.2843
0.2472
0.2149
0.1869
0.1625
0.1413
0.1229
0.1069
0.0929
0.0808
0.0703
0.0611

Present Value of Annuity of $1


Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
60
80
120
240

0.5%
0.9950
1.9851
2.9702
3.9505
4.9259
5.8964
6.8621
7.8230
8.7791
9.7304
10.6770
11.6189
12.5562
13.4887
14.4166
15.3399
16.2586
17.1728
18.0824
18.9874
23.4456
27.7941
36.1722
51.7256
65.8023
90.0735
139.5808

1%
0.9901
1.9704
2.9410
3.9020
4.8534
5.7955
6.7282
7.6517
8.5660
9.4713
10.3676
11.2551
12.1337
13.0037
13.8651
14.7179
15.5623
16.3983
17.2260
18.0456
22.0232
25.8077
32.8347
44.9550
54.8882
69.7005
90.8194

2%
0.9804
1.9416
2.8839
3.8077
4.7135
5.6014
6.4720
7.3255
8.1622
8.9826
9.7868
10.5753
11.3484
12.1062
12.8493
13.5777
14.2919
14.9920
15.6785
16.3514
19.5235
22.3965
27.3555
34.7609
39.7445
45.3554
49.5686

3%
0.9709
1.9135
2.8286
3.7171
4.5797
5.4172
6.2303
7.0197
7.7861
8.5302
9.2526
9.9540
10.6350
11.2961
11.9379
12.5611
13.1661
13.7535
14.3238
14.8775
17.4131
19.6004
23.1148
27.6756
30.2008
32.3730
33.3057

4%
0.9615
1.8861
2.7751
3.6299
4.4518
5.2421
6.0021
6.7327
7.4353
8.1109
8.7605
9.3851
9.9856
10.5631
11.1184
11.6523
12.1657
12.6593
13.1339
13.5903
15.6221
17.2920
19.7928
22.6235
23.9154
24.7741
24.9980

5%
0.9524
1.8594
2.7232
3.5460
4.3295
5.0757
5.7864
6.4632
7.1078
7.7217
8.3064
8.8633
9.3936
9.8986
10.3797
10.8378
11.2741
11.6896
12.0853
12.4622
14.0939
15.3725
17.1591
18.9293
19.5965
19.9427
19.9998

6%
0.9434
1.8334
2.6730
3.4651
4.2124
4.9173
5.5824
6.2098
6.8017
7.3601
7.8869
8.3838
8.8527
9.2950
9.7122
10.1059
10.4773
10.8276
11.1581
11.4699
12.7834
13.7648
15.0463
16.1614
16.5091
16.6514
16.6667

7%
0.9346
1.8080
2.6243
3.3872
4.1002
4.7665
5.3893
5.9713
6.5152
7.0236
7.4987
7.9427
8.3577
8.7455
9.1079
9.4466
9.7632
10.0591
10.3356
10.5940
11.6536
12.4090
13.3317
14.0392
14.2220
14.2815
14.2857

8%
0.9259
1.7833
2.5771
3.3121
3.9927
4.6229
5.2064
5.7466
6.2469
6.7101
7.1390
7.5361
7.9038
8.2442
8.5595
8.8514
9.1216
9.3719
9.6036
9.8181
10.6748
11.2578
11.9246
12.3766
12.4735
12.4988
12.5000

9%
0.9174
1.7591
2.5313
3.2397
3.8897
4.4859
5.0330
5.5348
5.9952
6.4177
6.8052
7.1607
7.4869
7.7862
8.0607
8.3126
8.5436
8.7556
8.9501
9.1285
9.8226
10.2737
10.7574
11.0480
11.0998
11.1108
11.1111

10%
0.9091
1.7355
2.4869
3.1699
3.7908
4.3553
4.8684
5.3349
5.7590
6.1446
6.4951
6.8137
7.1034
7.3667
7.6061
7.8237
8.0216
8.2014
8.3649
8.5136
9.0770
9.4269
9.7791
9.9672
9.9951
9.9999
10.0000

11%
0.9009
1.7125
2.4437
3.1024
3.6959
4.2305
4.7122
5.1461
5.5370
5.8892
6.2065
6.4924
6.7499
6.9819
7.1909
7.3792
7.5488
7.7016
7.8393
7.9633
8.4217
8.6938
8.9511
9.0736
9.0888
9.0909
9.0909

12%
0.8929
1.6901
2.4018
3.0373
3.6048
4.1114
4.5638
4.9676
5.3282
5.6502
5.9377
6.1944
6.4235
6.6282
6.8109
6.9740
7.1196
7.2497
7.3658
7.4694
7.8431
8.0552
8.2438
8.3240
8.3324
8.3333
8.3333

13%
0.8850
1.6681
2.3612
2.9745
3.5172
3.9975
4.4226
4.7988
5.1317
5.4262
5.6869
5.9176
6.1218
6.3025
6.4624
6.6039
6.7291
6.8399
6.9380
7.0248
7.3300
7.4957
7.6344
7.6873
7.6919
7.6923
7.6923

14%
0.8772
1.6467
2.3216
2.9137
3.4331
3.8887
4.2883
4.6389
4.9464
5.2161
5.4527
5.6603
5.8424
6.0021
6.1422
6.2651
6.3729
6.4674
6.5504
6.6231
6.8729
7.0027
7.1050
7.1401
7.1427
7.1429
7.1429

15%
0.8696
1.6257
2.2832
2.8550
3.3522
3.7845
4.1604
4.4873
4.7716
5.0188
5.2337
5.4206
5.5831
5.7245
5.8474
5.9542
6.0472
6.1280
6.1982
6.2593
6.4641
6.5660
6.6418
6.6651
6.6666
6.6667
6.6667

Page 18

Accredited Accounting Technician Foundation Examination


Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

Future Value of $1
Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
60
80
120
240

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
60
80
120
240

0.5%
1.0050
1.0100
1.0151
1.0202
1.0253
1.0304
1.0355
1.0407
1.0459
1.0511
1.0564
1.0617
1.0670
1.0723
1.0777
1.0831
1.0885
1.0939
1.0994
1.1049
1.1328
1.1614
1.2208
1.3489
1.4903
1.8194
3.3102

1%
1.0100
1.0201
1.0303
1.0406
1.0510
1.0615
1.0721
1.0829
1.0937
1.1046
1.1157
1.1268
1.1381
1.1495
1.1610
1.1726
1.1843
1.1961
1.2081
1.2202
1.2824
1.3478
1.4889
1.8167
2.2167
3.3004
10.8926

11%
1.1100
1.2321
1.3676
1.5181
1.6851
1.8704
2.0762
2.3045
2.5580
2.8394
3.1518
3.4985
3.8833
4.3104
4.7846
5.3109
5.8951
6.5436
7.2633
8.0623
13.5855
22.8923
65.00
524.06
4225.11
274635.99
75424928785.77

2%
1.0200
1.0404
1.0612
1.0824
1.1041
1.1262
1.1487
1.1717
1.1951
1.2190
1.2434
1.2682
1.2936
1.3195
1.3459
1.3728
1.4002
1.4282
1.4568
1.4859
1.6406
1.8114
2.21
3.28
4.88
10.77
115.89

12%
1.1200
1.2544
1.4049
1.5735
1.7623
1.9738
2.2107
2.4760
2.7731
3.1058
3.4785
3.8960
4.3635
4.8871
5.4736
6.1304
6.8660
7.6900
8.6128
9.6463
17.0001
29.9599
93.05
897.60
8658.48
805680.26
649120673317.10

3%
1.0300
1.0609
1.0927
1.1255
1.1593
1.1941
1.2299
1.2668
1.3048
1.3439
1.3842
1.4258
1.4685
1.5126
1.5580
1.6047
1.6528
1.7024
1.7535
1.8061
2.0938
2.4273
3.26
5.89
10.64
34.71
1204.85

4%
1.0400
1.0816
1.1249
1.1699
1.2167
1.2653
1.3159
1.3686
1.4233
1.4802
1.5395
1.6010
1.6651
1.7317
1.8009
1.8730
1.9479
2.0258
2.1068
2.1911
2.6658
3.2434
4.80
10.52
23.05
110.66
12246.20

13%
1.1300
1.2769
1.4429
1.6305
1.8424
2.0820
2.3526
2.6584
3.0040
3.3946
3.8359
4.3345
4.8980
5.5348
6.2543
7.0673
7.9861
9.0243
10.1974
11.5231
21.2305
39.1159
132.78
1530.05
17630.94
2341063.63
5480578920960.75

5%
1.0500
1.1025
1.1576
1.2155
1.2763
1.3401
1.4071
1.4775
1.5513
1.6289
1.7103
1.7959
1.8856
1.9799
2.0789
2.1829
2.2920
2.4066
2.5270
2.6533
3.3864
4.3219
7.04
18.68
49.56
348.91
121739.57

6%
1.0600
1.1236
1.1910
1.2625
1.3382
1.4185
1.5036
1.5938
1.6895
1.7908
1.8983
2.0122
2.1329
2.2609
2.3966
2.5404
2.6928
2.8543
3.0256
3.2071
4.2919
5.7435
10.29
32.99
105.80
1088.19
1184152.57

14%
1.1400
1.2996
1.4815
1.6890
1.9254
2.1950
2.5023
2.8526
3.2519
3.7072
4.2262
4.8179
5.4924
6.2613
7.1379
8.1372
9.2765
10.5752
12.0557
13.7435
26.4619
50.9502
188.88
2595.92
35676.98
6738793.69
45411340363982.90

7%
1.0700
1.1449
1.2250
1.3108
1.4026
1.5007
1.6058
1.7182
1.8385
1.9672
2.1049
2.2522
2.4098
2.5785
2.7590
2.9522
3.1588
3.3799
3.6165
3.8697
5.4274
7.6123
14.97
57.95
224.23
3357.79
11274742.82

8%
1.0800
1.1664
1.2597
1.3605
1.4693
1.5869
1.7138
1.8509
1.9990
2.1589
2.3316
2.5182
2.7196
2.9372
3.1722
3.4259
3.7000
3.9960
4.3157
4.6610
6.8485
10.0627
21.72
101.26
471.95
10252.99
105123864.28

9%
1.0900
1.1881
1.2950
1.4116
1.5386
1.6771
1.8280
1.9926
2.1719
2.3674
2.5804
2.8127
3.0658
3.3417
3.6425
3.9703
4.3276
4.7171
5.1417
5.6044
8.6231
13.2677
31.41
176.03
986.55
30987.02
960195145.04

10%
1.1000
1.2100
1.3310
1.4641
1.6105
1.7716
1.9487
2.1436
2.3579
2.5937
2.8531
3.1384
3.4523
3.7975
4.1772
4.5950
5.0545
5.5599
6.1159
6.7275
10.8347
17.4494
45.26
304.48
2048.40
92709.07
8594971441.07

15%
1.1500
1.3225
1.5209
1.7490
2.0114
2.3131
2.6600
3.0590
3.5179
4.0456
4.6524
5.3503
6.1528
7.0757
8.1371
9.3576
10.7613
12.3755
14.2318
16.3665
32.9190
66.2118
267.86
4384.00
71750.88
19219445.00
369387066182044.00

Page 19

Accredited Accounting Technician Foundation Examination


Paper 1 Accounting and Business Essentials (Section B)
Pilot Paper

Future Value of Annuity of $1


Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
60
80
120
240

0.5%
1.0000
2.0050
3.0150
4.0301
5.0503
6.0755
7.1059
8.1414
9.1821
10.2280
11.2792
12.3356
13.3972
14.4642
15.5365
16.6142
17.6973
18.7858
19.8797
20.9791
26.5591
32.2800
44.1588
69.7700
98.0677
163.8793
462.0409

1%
1.0000
2.0100
3.0301
4.0604
5.1010
6.1520
7.2135
8.2857
9.3685
10.4622
11.5668
12.6825
13.8093
14.9474
16.0969
17.2579
18.4304
19.6147
20.8109
22.0190
28.2432
34.7849
48.8864
81.6697
121.6715
230.0387
989.2554

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
60
80
120
240

11%
1.0000
2.1100
3.3421
4.7097
6.2278
7.9129
9.7833
11.8594
14.1640
16.7220
19.5614
22.7132
26.2116
30.0949
34.4054
39.1899
44.5008
50.396
56.939
64.203
114.413
199.021
581.826
4755.066
38401.025
2496681.8
685681170770.6

2%
1.0000
2.0200
3.0604
4.1216
5.2040
6.3081
7.4343
8.5830
9.7546
10.9497
12.1687
13.4121
14.6803
15.9739
17.2934
18.6393
20.0121
21.4123
22.8406
24.2974
32.0303
40.5681
60.4020
114.0515
193.7720
488.3
5744.4

12%
1.0000
2.1200
3.3744
4.7793
6.3528
8.1152
10.0890
12.2997
14.7757
17.5487
20.6546
24.1331
28.0291
32.3926
37.2797
42.7533
48.8837
55.750
63.440
72.052
133.334
241.333
767.091
7471.641
72145.693
6713993.8
5409338944300.8

3%
1.0000
2.0300
3.0909
4.1836
5.3091
6.4684
7.6625
8.8923
10.1591
11.4639
12.8078
14.1920
15.6178
17.0863
18.5989
20.1569
21.7616
23.414
25.117
26.870
36.459
47.575
75.401
163.053
321.363
1123.7
40128.4

4%
1.0000
2.0400
3.1216
4.2465
5.4163
6.6330
7.8983
9.2142
10.5828
12.0061
13.4864
15.0258
16.6268
18.2919
20.0236
21.8245
23.6975
25.645
27.671
29.778
41.646
56.085
95.026
237.991
551.245
2741.6
306130.1

13%
1.0000
2.1300
3.4069
4.8498
6.4803
8.3227
10.4047
12.7573
15.4157
18.4197
21.8143
25.6502
29.9847
34.8827
40.4175
46.6717
53.7391
61.725
70.749
80.947
155.620
293.199
1013.704
11761.950
135614.927
18008174.1
42158299391998.1

5%
1.0000
2.0500
3.1525
4.3101
5.5256
6.8019
8.1420
9.5491
11.0266
12.5779
14.2068
15.9171
17.7130
19.5986
21.5786
23.6575
25.8404
28.132
30.539
33.066
47.727
66.439
120.800
353.584
971.229
6958.2
2434771.5

6%
1.0000
2.0600
3.1836
4.3746
5.6371
6.9753
8.3938
9.8975
11.4913
13.1808
14.9716
16.8699
18.8821
21.0151
23.2760
25.6725
28.2129
30.906
33.760
36.786
54.865
79.058
154.762
533.128
1746.600
18119.8
19735859.6

14%
1.0000
2.1400
3.4396
4.9211
6.6101
8.5355
10.7305
13.2328
16.0853
19.3373
23.0445
27.2707
32.0887
37.5811
43.8424
50.9804
59.1176
68.394
78.969
91.025
181.871
356.787
1342.025
18535.133
254828.441
48134233.5
324366716885585.0

7%
1.0000
2.0700
3.2149
4.4399
5.7507
7.1533
8.6540
10.2598
11.9780
13.8164
15.7836
17.8885
20.1406
22.5505
25.1290
27.8881
30.8402
33.999
37.379
40.995
63.249
94.461
199.635
813.520
3189.063
47954.1
161067740.3

8%
1.0000
2.0800
3.2464
4.5061
5.8666
7.3359
8.9228
10.6366
12.4876
14.4866
16.6455
18.9771
21.4953
24.2149
27.1521
30.3243
33.7502
37.450
41.446
45.762
73.106
113.283
259.057
1253.213
5886.935
128149.9
1314048291.0

9%
1.0000
2.0900
3.2781
4.5731
5.9847
7.5233
9.2004
11.0285
13.0210
15.1929
17.5603
20.1407
22.9534
26.0192
29.3609
33.0034
36.9737
41.301
46.018
51.160
84.701
136.308
337.882
1944.792
10950.574
344289.1
10668834933.8

10%
1.0000
2.1000
3.3100
4.6410
6.1051
7.7156
9.4872
11.4359
13.5795
15.9374
18.5312
21.3843
24.5227
27.9750
31.7725
35.9497
40.5447
45.599
51.159
57.275
98.347
164.494
442.593
3034.816
20474.002
927080.7
85949714400.7

15%
1.0000
2.1500
3.4725
4.9934
6.7424
8.7537
11.0668
13.7268
16.7858
20.3037
24.3493
29.0017
34.3519
40.5047
47.5804
55.7175
65.0751
75.836
88.212
102.444
212.793
434.745
1779.090
29219.992
478332.529
128129626.7
2462580441213620.0

Page 20

Suggested Answers
Pilot Paper

Paper 1
Accounting and
Business Essentials

Accredited Accounting Technician Foundation Examination


Pilot Paper
Suggested Answers and Marking Scheme

Paper 1 Accounting and


Business Essentials

SECTION A (MULTIPLE-CHOICE QUESTIONS) (60 marks)


(Questions A1 to A30 carry 2 marks each)
A1.
A2.
A3.
A4.
A5.
A6.
A7.
A8.
A9.
A10.

D
A
A
C
C
B
D
C
D
C

A11.
A12.
A13.
A14.
A15.
A16.
A17.
A18.
A19.
A20.

C
D
C
A
A
A
D
A
D
C

A21.
A22.
A23.
A24.
A25.
A26.
A27.
A28.
A29.
A30.

B
D
D
D
D
D
C
A
C
C
(Total: 60 marks)

Page 22

Accredited Accounting Technician Foundation Examination


Pilot Paper
Suggested Answers and Marking Scheme

SECTION B (COMPULSORY SHORT QUESTIONS)


B1.

(a)

Paper 1 Accounting and


Business Essentials

(40 marks)

Joseph could organise his operations duties because the procedures for MBO
have been clearly laid down, such as setting objectives, development and
implementation of action plan and performance review.

Joseph could give support and feedback to his subordinates regularly and
review their work progress

Joseph could encourage his subordinates to participate in objective setting and


action plan development. He has to discuss with them the kinds of actions
towards the goal.

(Any other reasonable answers)


(2 marks each, total 6 marks)
(b)

With participation in objective setting, MBO can enhance their commitment to


the organisations objectives.

With clearer direction of duties, MBO can help them improve performance and
productivity.

With regular support and feedback, MBO can motivate them to accomplish their
tasks.

With Josephs close supervision, MBO can help them improve their productivity
and work efficiency.

(Any other reasonable answers)


(Any 2 points, 2 marks each, total 4 marks)
(Total: 10 marks)
B2.

(a)

The objectives of corporate governance are:




To ensure that the Board of Directors and management do not abuse their power
to use business resources for their own benefits.

To strike a balance among the interests of different stakeholders by monitoring


how the Board of Directors and management run the business.

To ensure that the business is operated in an ethical and a legal manner.


(Any 2 points, 1 mark each, total 2 marks)

(b)

The ways to improve corporate governance in a listed company include:




Increasing the independence of the Board of Directors. For example, the Chief
Executive Officer should not be a member or the chairperson of the Board of
Directors at the same time.
Page 23

Accredited Accounting Technician Foundation Examination


Pilot Paper
Suggested Answers and Marking Scheme

Paper 1 Accounting and


Business Essentials

Accountability should be clearly defined. For example, the senior management


has to be responsible for any failures that the decision may bring.

Maintaining good ethics and conduct. For example, the company can provide
ethical trainings to the Board and the management.

Developing a good internal control system. For example, the company should
set up an internal audit function.

(Any other reasonable answers)


(Any 3 points, 2 marks each, total 6 marks)
(Total: 8 marks)
B3.

(a)

Going concern principle/concept: A business is assumed to operate continuously in


the foreseeable future. For example, if a business is assumed to be a going concern,
the value of its assets should be shown at net book value, not the liquidated value.
(3 marks)

(b)

SAS Company adopted the historical cost principle/concept. The assets of the
business should be recorded at historical cost instead of the current market value.
(3 marks)
(Total: 6 marks)

B4.

(a)

2010
Dec 31

Depreciation Expense Motor Car


($100,000 x 20%)
Accumulated Depreciation Motor Car
Depreciation provided on motor car for
year 2010

Debit
$20,000

Credit

Marks
[0.75]

$20,000

[0.75]
[0.5]

(2 marks)

Page 24

Accredited Accounting Technician Foundation Examination


Pilot Paper
Suggested Answers and Marking Scheme

(b)

2011
Jun 30

Jun 30

Depreciation Expense Motor Car


(100,000 x 80% x 20% x 6 / 12)
Accumulated Depreciation Motor Car
Depreciation provided on motor car for 6
months
Accumulated Depreciation Motor Car
Bank/Cash
Motor Car
Gain on Disposal of Motor Car
Sale of motor car

Paper 1 Accounting and


Business Essentials

Debit
$8,000

Marks
[1]

Credit
$8,000

$28,000
$75,000
$100,000
$3,000

[1]
[0.5]
[1]
[0.5]
[0.5]
[1]
[0.5]

(6 marks)
(Total: 8 marks)

B5.

(a)

Although the total future cash flows are $27,000 for both investment plans,
the net present value are totally different.

Marks

If the discount rate is 5%, the net present value for Plan A is $70
[$15,000 / (1.05) + $12,000 / (1.05)2 $25,100] or
[($15,000  0.9524) + ($12,000  0.9070) $25,100]

[2]

while Plan B is $66


[$12,000 / (1.05) + $15,000 / (1.05)2 $25,100] or
[($12,000  0.9524) + ($15,000  0.9070) $25,100]

[2]

As the NPV for Plan B is negative, Mr. Wong should invest in Plan A.

[1]
(5 marks)

(b)

Advantages for using net present value method in evaluating an investment:






It considers all the cash flows.


It considers the time value of cash flows.
It tells whether the investment can increase the firms value.

(Any other reasonable answers)


(1 mark each, total 3 marks)
(Total: 8 marks)
[ END ]

Page 25