12/07/2007
Examiner's Report for June 2007 Papers
Level II Certificate in Manual Bookkeeping
Once again may I congratulate the successful candidates on such a high standard of competence demonstrated in the papers.
The major 30 mark question (1) was answered with a high level of competence overall. However, some candidates still continue to post individual items to both the VAT account and the Sales account from the Sales Day Book rather than the batch totals. Also others continue to offset Returns to both Purchases account and the Sales account rather than posting them to the Sales and Purchases Returns accounts.
The first part of (Q2) up-dating the Cash Book was well handled as was the Bank Reconciliation Statement. I emphasised in my previous report that the format of the statement should start with the Balance per the Bank Statement and conclude with the Balance per the Cash Book. This is the conventional layout; however some candidates still show the reverse of this in their answers.
The journal entries and the suspense account in Q3 was an area once again where some students lost marks. Some candidates failed to recognise the item that was classed as private and subject of the drawings account. Also others did not identify the need to create a journal relevant to the suspense account.
The set of final accounts, the subject of (Q4) were well prepared. However common errors included the incorrect posting of opening and closing stocks in the profit and loss account. Some candidates charged Drawings to the Profit and Loss Account, this is fundamentally incorrect. Others showed the Loan a Long Term Liability as a Current Liability.
Many candidates prepared the VAT account in (Q5) without difficulty, but then a number failed to calculate correctly the VAT for the invoice by not allowing for the Cash Discount.
A number of candidates then transferred the totals on the VAT account to the VAT form boxes 1, 3 and 4 rather than extract the relevant net figures for input and output tax from the VAT account.
Again some candidates failed to place the word “none” per the instructions in the relevant boxes on the VAT form and continue to use terms as “nil” “N/A)” and simply “0”
As the examiner I was delighted with the high level of competence demonstrated by many in this examination.
Level III Diploma in Manual Bookkeeping
May I offer my congratulations to the successful candidates many of whom showed a high level of competence.
The Ltd Company (Q1) was overall well answered. However, areas where candidates lost marks included incorrect calculation on the loss on the disposal of the asset and the change in the level of the provision for bad debts and its effect upon the debtors figure on the Balance Sheet. The layout of these final accounts was most acceptable.
The question that focussed on the Sports Club accounts (Q2) caused the most difficulty.
Some candidates struggled with defining the term Accumulated Fund, failing to recognise its relationship with the Accounting Equation. Others did not realise that the Income and Expenditure Account is based on the Accruals Concept, whereas Receipts and Payments is merely cash and bank only.
The subscriptions account was correctly answered by few candidates. Others included both the Grant Income and Building Fund on the Income and Expenditure Account rather than recognising that this was Capital Income.
As previously experienced the Partnership question (3) was extremely well answered both in terms of the Appropriation Account and the Current Accounts as was the written part of the question.
Incomplete Records questions (Q4) continue to be popular with candidates and this question was again very well prepared .In future papers both opening and closing accruals and pre-payments will apply to the same class of expenditure as it is clear that some candidates continue to struggle with these concepts. However some candidates struggled with identifying the elements to comment on the businesses profitability. Examples could have included Net Profit % of Sales, Gross Profit % of Sales and Return on Capital Employed. I would expect all candidates to recognise these elements.
I was most disappointed with some answers to the definitions and underpinning knowledge in (Q5).My recent short paper on the ICB Students’ Newsletter Archive will be useful to all level 3 candidates.
Many candidates could not define the terms Capital Employed and Shareholders’ Funds and few recognised the relevance of the Partnership Agreement to Q 5.6
Others could not explain clearly why Goodwill often arises on the admission of a Partner.
Regards
Dr Philip E Dunn
Head of Education
