Revision 2
Thursday 9 January 2025 10:08
MN12002 Introduction to Accounting Jan 2025 exam format
Duration: 2 hours
Format: Answer three (3) questions
• Section A: One compulsory question (40%) and
• Section B: Answer one optional question out of a choice of two financial
accounting questions (30% each)
• Section C: Answer one optional question out of a choice of two management accounting
questions (30% each)
Section A: Question 1 (compulsory)
You will be required to construct a company income statement and balance sheet
from a trial balance and year-end adjustments. Examples of adjustments that you are
expected to be familiar with include:
• Accruals
• Prepayments
• Disposal of non-current assets
• Cost of Goods Sold
• Depreciation
• Writing off bad debts
• Creating or adjusting provision for doubtful debts
• Tax
• Interest on long-term loans/debentures
• Dealing with dividends (either paid or proposed)
• Dealing with the issue of new shares
Section B: Choose one out of two Financial Accounting optional questions.
Examinable topics
Financial Ratios
To answer this question, you will need to be able to calculate a range of ratios including:
○ Gross profit % (gross profit margin)
○ Operating profit % (operating profit margin)
○ ROCE
○ ROE
• Collection days (trade receivables days)
• Payables days (trade payables days)
• Current ratio
• P/E ratio (price earnings ratio)
• Debt to Equity ratio
• Interest cover
No ratio formulas will be provided during the exam.
You will also be required to provide brief commentary on the calculated ratios – what do
the relevant ratios tell you about the company’s profitability, efficiency, liquidity
and solvency (long-term financing)? What do the investor ratios say about investor
expectations, and how are they linked to the company’s profitability?
Accounting for Depreciation
To answer this question, you should know how to calculate depreciation on non- current
assets using the straight line and reducing balance methods.
You should know how to report depreciation on the income statement, and account for
its impact on the relevant non-current assets on the balance sheet.
You should also be able to deal with purchases and/or sale of a non-current asset during
an accounting period and report the results in the income statement and
balance sheet.
General financial accounting knowledge
Within the main questions above, there may be 1-2 sub-questions requiring a brief
discussion of financial accounting topics, e.g., the differences between financial and
management accounting, users of financial accounting information, the purpose of
calculating depreciation, or provision for doubtful debt etc etc, the accrual prinpicle and
the siginificance in financial reporting. These sub-questions may range from 5 to 10 marks.
Section C: Choose one out of two Management Accounting optional
questions.
Examinable topics
Break-even point analysis/Cost volume profit analysis
3
This question involves determining the break even point. You will need to differentiate
between fixed and variable costs and calculate the contribution and/or break-even point of a
product or division.
You should also be able to briefly discuss your calculations.
Relevant costs and decision making
This question involves determining the relevant costs. You will need to differentiate between
revevant and irrelavant cost, and calculate the minimum price for special orders.
You should also be able to briefly discuss your calculations.
General management accounting knowledge
Within the main questions above, there may be 1-2 sub-questions requiring a brief
discussion of a general management accounting topic, e.g., cost classification in management
accounting, relevance of opportunity costs and sun costs etc etc. These sub-questions may
range from 5 to 10 marks.
Thursday 9 January 2025 10:08
MN12002 Introduction to Accounting Jan 2025 exam format
Duration: 2 hours
Format: Answer three (3) questions
• Section A: One compulsory question (40%) and
• Section B: Answer one optional question out of a choice of two financial
accounting questions (30% each)
• Section C: Answer one optional question out of a choice of two management accounting
questions (30% each)
Section A: Question 1 (compulsory)
You will be required to construct a company income statement and balance sheet
from a trial balance and year-end adjustments. Examples of adjustments that you are
expected to be familiar with include:
• Accruals
• Prepayments
• Disposal of non-current assets
• Cost of Goods Sold
• Depreciation
• Writing off bad debts
• Creating or adjusting provision for doubtful debts
• Tax
• Interest on long-term loans/debentures
• Dealing with dividends (either paid or proposed)
• Dealing with the issue of new shares
Section B: Choose one out of two Financial Accounting optional questions.
Examinable topics
Financial Ratios
To answer this question, you will need to be able to calculate a range of ratios including:
○ Gross profit % (gross profit margin)
○ Operating profit % (operating profit margin)
○ ROCE
○ ROE
• Collection days (trade receivables days)
• Payables days (trade payables days)
• Current ratio
• P/E ratio (price earnings ratio)
• Debt to Equity ratio
• Interest cover
No ratio formulas will be provided during the exam.
You will also be required to provide brief commentary on the calculated ratios – what do
the relevant ratios tell you about the company’s profitability, efficiency, liquidity
and solvency (long-term financing)? What do the investor ratios say about investor
expectations, and how are they linked to the company’s profitability?
Accounting for Depreciation
To answer this question, you should know how to calculate depreciation on non- current
assets using the straight line and reducing balance methods.
You should know how to report depreciation on the income statement, and account for
its impact on the relevant non-current assets on the balance sheet.
You should also be able to deal with purchases and/or sale of a non-current asset during
an accounting period and report the results in the income statement and
balance sheet.
General financial accounting knowledge
Within the main questions above, there may be 1-2 sub-questions requiring a brief
discussion of financial accounting topics, e.g., the differences between financial and
management accounting, users of financial accounting information, the purpose of
calculating depreciation, or provision for doubtful debt etc etc, the accrual prinpicle and
the siginificance in financial reporting. These sub-questions may range from 5 to 10 marks.
Section C: Choose one out of two Management Accounting optional
questions.
Examinable topics
Break-even point analysis/Cost volume profit analysis
3
This question involves determining the break even point. You will need to differentiate
between fixed and variable costs and calculate the contribution and/or break-even point of a
product or division.
You should also be able to briefly discuss your calculations.
Relevant costs and decision making
This question involves determining the relevant costs. You will need to differentiate between
revevant and irrelavant cost, and calculate the minimum price for special orders.
You should also be able to briefly discuss your calculations.
General management accounting knowledge
Within the main questions above, there may be 1-2 sub-questions requiring a brief
discussion of a general management accounting topic, e.g., cost classification in management
accounting, relevance of opportunity costs and sun costs etc etc. These sub-questions may
range from 5 to 10 marks.
