Cover Page
Student Assessment Submission and Declaration
When submitting evidence for assessment, you must sign a declaration
confirming that the work is your own.
ESL ID
Student name:
CCCU ID
Submission date
Module name and code Contemporary Issues in Accounting (U10473)
Assessment No. 2
Title Contemporary Issues in Accounting (Open Book Exam)
Lecturer's Name
Student declaration
I certify that the assignment submission is entirely my own work. I fully understand the
consequences of plagiarism. I understand that making a false declaration is a form of
malpractice.
Student signature: Date:
Page 1 of 6
Instructions:
1. Part A is a COMPULSORY section:
Attempt Question 1(a) “Answer any SIX”
Attempt Question 1(b) COMPULSORY
Attempt Question 1(c) COMPULSORY
2. Part B: Attempt any TWO questions. All questions carry equal
marks.
3. Total word limit is 2000 words (+ / - 10%)
4. Submission deadline: 3rd October 2023 (2:00 PM)
5. Guidelines: You are required to demonstrate your basic knowledge
of accounting. This means you can use notes, texts, or articles as
study materials for the exam.
You will take the exam at home and submit it within 24 hours of
receiving the exam paper on the prescribed online platform (CCCU
Blackboard).
You must demonstrate a strong understanding of the topics
covered, such as accounting records and their importance in
commercial operations; source materials and their use in preparing
accounts; the calculation of some key ratios, and their
implementation to interpret a basic profit and loss account and
balance sheet to support effective management decision making.
Page 2 of 6
PART A
COMPULSORY section (50 marks)
Attempt Question 1(a) “Answer any SIX”
Attempt Question 1(b) COMPULSORY
Attempt Question 1(c) COMPULSORY
Question 1(a) [30 marks]
The following information has been collected from two London-based
companies. The accounts are drawn as of 31st December 2021.
Profit and Loss Account for the year ended 31st December 2021
(Figures are in £000)
Particulars JACK JOHN
Sales 5529 5604
Less: Cost of Goods Sold (Including purchases) (2676) (2329)
Gross Profit 2853 3275
Less: Depreciation (1425) (1605)
Earnings before Interest & Tax or Operating Profit 1428 1670
Less: Interest (371) (331)
Earnings before Tax 1057 1339
Less: Taxes (204) (317)
Earnings after Tax or Net Profit 853 1022
Balance Sheet as at 31st December 2021
(Figures are in £000)
Assets JACK JOHN
Fixed Assets 16330 15956
Current Assets
Account Receivables 1026 1159
Inventory 2308 2470
Cash 573 652
Total Current Assets 3907 4281
Total Assets 20237 20237
Liabilities & Equity
Capital / Equity 13905 14335
Long Term Debt 3081 2666
Current Liabilities
Account Payables 1854 2032
Other Current Liabilities 1397 1204
Total Current Liabilities 3251 3236
Total Liabilities and Equity 20237 20237
Page 3 of 6
REQUIREMENT:
Conduct ratio analyses, compare, and comment on their results and analyse
the performance of the companies.
ASSUMPTIONS:
1. All sales and all purchases are on credit.
2. Please assume ‘inventory’, ‘accounts receivables’, and ‘accounts payables’
as average as there is no beginning balance available.
…………………………………………………………………………………………………
(Answer any SIX of the following requirements)
[05 marks] x 6 requirements = [30 marks]
1. Calculate and analyse any SIX of the following: [30 marks]
i. Current Ratio
ii. Quick Ratio
iii. Operating Profitability Ratio
iv. Net Profit Ratio
v. Return on Equity (ROE)
vi. Inventory Turnover Ratio
vii. Receivable Turnover Ratio
viii. Payable Turnover Ratio
ix.Debt-equity Ratio
x.Financial Leverage
Page 4 of 6
Question 1(b) [10 marks]
The following trial balance was extracted from the books of Lulu Enterprise as
at 31st December 2022.
(Figures are in £000)
Sales 5000
Opening stock 330
Closing stock 289
Sales return 521
Purchases 2346
Rent expense 108
Depreciation 26
Utilities 13
Fuel expenses 50
Sales discount 284
Transportation in 133
Transportation out 260
Requirement: Prepare an income statement for the year ended 31st
December 2022.
Question 1(c) [10 marks]
Critically discuss the importance of information and communication technologies (ICT) tools in
enhancing efficiency and effectiveness of accounting process.
Page 5 of 6
PART B
Attempt all questions.
25 marks x 2 Questions = 50 Marks
Question 1 [25 marks]
Discuss five differences between a private limited company and a public limited
company and support your arguments with examples for both.
Question2 [25 marks]
Identify and discuss five ethical issues and challenges faced by accountants in today’s business
world.
References
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