Examination No.___________________

THE PUBLIC ACCOUNTANTS EXAMINATION

COUNCIL OF MALAWI

2010 EXAMINATIONS

CERTIFICATE IN FINANCIAL ACCOUNTING

PROGRAMME

PAPER FA 3: BUSINESS KNOWLEDGE

FRIDAY 3 DECEMBER 2010 TIME ALLOWED: 3 HOURS

2.00PM - 5.00PM

INSTRUCTIONS: -

1. You are allowed 15 minutes reading time before the examination begins during

which you should read the question paper and, if you wish, make annotations on the question paper. However, you are not allowed, under any circumstances, to open the answer book and start writing or use your calculator during this reading time.

2. Number of questions on paper - 7.

3. This paper is divided into two sections: A and B.

Answer TWO questions ONLY from Section A. Answer THREE questions ONLY from Section B.

4. Each question carries 20 marks.

5. Begin each answer on a fresh page.

6. Support your answers by underlining authorities quoted, citing statutes and/or cases where appropriate.

7. This paper must not be removed from the examination hall.

8. DO NOT OPEN THIS PAPER UNTIL YOU ARE INSTRUCTED BY THE

INVIGILATOR.

This paper contains 3 pages

1

SECTION A

Answer TWO questions ONLY from this section

1. (a) Explain how the four factors of production help production to take place. 16 Marks

(b) What is the difference between direct and indirect production? 4 Marks (TOTAL : 20 MARKS)

2. (a) Provide any four functions of a retailer. 8 Marks

(b) Explain any four functions of a wholesaler. 8 Marks

(c) Mention two reasons why large scale retailing is a threat to the wholesaler. 4 Marks

(TOTAL : 20 MARKS)

3. (a) How do the following protect home industry?

(i) import duties; 2 Marks

(ii) import quotas; 2 Marks

(iii) subsidies. 2 Marks

(b) When is a Bill of Lading said to be:

(i) clean; 2 Marks

(ii) dirty? 2 Marks

(c) Mention four aids to trade. 8 Marks

(d) Which inland port in Malawi will assist in importing and exporting goods?

2 Marks

(TOTAL : 20 MARKS)

Continued/……

2

SECTION B

Answer THREE questions ONLY from this Section

4. (a) Define the following insurance terms:

(i) Proposal Form 2 Marks

(ii) Insurance policy 2 Marks

(iii) Premiums 2 Marks

(iv) Insured 2 Marks

(v) Insurer 2 Marks

(b) Explain the following types of assurance policies:

(i) Whole life policy 2 Marks

(ii) Term policies 2 Marks

(iii) Endowment policies 2 Marks

(c) Mention any two principles of insurance. 4 Marks (TOTAL : 20 MARKS)

5. (a) What is a partnership deed? 2 Marks

(b) Mention any five contents of a partnership deed. 10 Marks

(c) Mention any two types of partners. 8 Marks

(TOTAL : 20 MARKS)

6. (a) Explain a contract of sale of goods. 4 Marks

(b) Mention any three terms that are implied by the Sale of Goods Act. 6 Marks

(c) Mention any three remedies of an unpaid seller in a Sale of Goods contract. 6 Marks

(d) Mention any two remedies of a buyer in a contract of sale of goods.

4 Marks

(TOTAL : 20 MARKS)

Continued/……

3

7. (a) What is an offer, in law of contract? 2 Marks

(b) Explain four circumstances under which an offer can no longer be accepted in law of contract. Provide supporting case to each circumstance.

16 Marks (c) What is misrepresentation in law of contract? 2 Marks

(TOTAL : 20 MARKS)

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