Financial Accounting (FA) Tutorial Letter: May 2013 examination ... - imm
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Financial Accounting (FA) Tutorial Letter: May 2013 examination session Dear Student Please make note of the following changes and key areas pertaining to the Financial Accounting May Examination. You are reminded that the detail provided herein is merely a guideline for clarity and direction and you are encouraged to complete the entirety of the module content as outlined in the Learner Guide. Exam Structure The paper consists of six questions resulting in an exam total of 100 marks. All questions must be attempted. Question 1 consists of a multiple choice question worth 5 marks. Question 2 consists of ‘match the columns’ type questions worth 10 marks Question 3 consists of ‘true or false’ type questions. Question 4 consists of short questions, calculations and analysis of transactions worth 25 marks. Question 5 and 6 are long questions worth 20 and 30 marks respectively. Exam Content Question 1, 2 and 3 have a strong theoretical reliance based on the theory components of all study units. In the past many students have neglected the basic theory, principles and concepts identified in study unit 1. There are also basic calculations presented within these questions and you are reminded to take note of the use of a calculator in arriving at percentages, adding up elements etc.
IMM (GSM) ©
1
FA May 2013
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Question 4 again tests various theoretical concepts and knowledge regarding the financial accounting environment. There are also short calculations and one should always identify those sections in the study units which contain ‘stand-alone’ calculations such as bad debts adjustments,
inventory
write
downs
and
valuations,
depreciation,
extracts/components of the financials, financial ratio’s etc. One also needs to understand how to analyse the effect of transactions on the various elements of the accounting equation and process the correct ‘debits’ and ‘credits’ in journal entries for transactions. Calculation focus: Analysis of financial statements, interpretation of financial ratios, accrual adjustments, analysis of transactions, calculation of amounts used in the formulation of financial statements etc. Always remember to round your answer to the number of decimal places specified in the question. Ensure when answering ratio analysis questions that you give your answer in the correct format be it a percentage, days or times. Please refer to the tutorial support pack available on the portal and website for further areas to focus on. Attached to this tutorial letter is a copy of the formula sheet that you will be provided with in your exam. You are reminded that a formula sheet is just a tool to aid in the calculation process and is certainly not an exhaustive list of all that will be tested. It also does not give guidance on the interpretation and understanding of results which are skills you must master in your studying process. General Time management per question must be monitored carefully. Aim to mark maximise by attempting those areas which will result in you achieving the most marks initially. You are reminded to show your workings and calculations where necessary and ensure that they can be easily referenced. Examiners will not ‘hunt’ for substantiating workings. Number all questions CLEARLY and indicate ‘End’ when you have completed all questions in the exam IMM (GSM) ©
2
FA May 2013
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There are some questions which provide suggested formats. These are to be used as a guide and time must not be wasted on formats unnecessarily. Use mark allocation as a guide as to how much information is required when formulating your responses. Manage your time carefully. May we remind you that we are always available to assist with academic queries. Academic queries should be submitted in writing to: [email protected] We wish you a successful May 2013 examination session. Kind regards The IMM GSM Team
IMM (GSM) ©
3
FA May 2013
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APPENDIX A – FORMULA SHEET__T Gross margin = Gross profit/sales Net profit margin = Profit after tax/sales Creditor’s payment period = Creditors/credit purchases x 365 Creditors turnover = Credit purchase/Creditors Debtors’ collection period = Debtors/credits sales x 365 Days stock on hand = Average stock/cost of sales x 365 Current ratio = Current assets/current liabilities Quick ratio = (Current assets – inventory)/current liabilities Debtors turnover = Credit sales/Debtors Inventory turnover = Cost of sales/Inventory Return on assets = Net profit before interest and tax/total assets Price earnings = market price / EPS Earnings per share = PAT/number of shares Interest cover ratio = PBIT / finance costs Debt to Equity = Total debt : Equity Dividend cover = PAT/dividends Total asset turnover = Revenue / total Asset value Return on equity = PAT/Shareholders funds Earnings Yield = EPS/price per share
IMM (GSM) ©
4
FA May 2013
Financial Accounting (FA) Tutorial Letter: May 2013 examination session Dear Student Please make note of the following changes and key areas pertaining to the Financial Accounting May Examination. You are reminded that the detail provided herein is merely a guideline for clarity and direction and you are encouraged to complete the entirety of the module content as outlined in the Learner Guide. Exam Structure The paper consists of six questions resulting in an exam total of 100 marks. All questions must be attempted. Question 1 consists of a multiple choice question worth 5 marks. Question 2 consists of ‘match the columns’ type questions worth 10 marks Question 3 consists of ‘true or false’ type questions. Question 4 consists of short questions, calculations and analysis of transactions worth 25 marks. Question 5 and 6 are long questions worth 20 and 30 marks respectively. Exam Content Question 1, 2 and 3 have a strong theoretical reliance based on the theory components of all study units. In the past many students have neglected the basic theory, principles and concepts identified in study unit 1. There are also basic calculations presented within these questions and you are reminded to take note of the use of a calculator in arriving at percentages, adding up elements etc.
IMM (GSM) ©
1
FA May 2013
Page 2 of 4
Question 4 again tests various theoretical concepts and knowledge regarding the financial accounting environment. There are also short calculations and one should always identify those sections in the study units which contain ‘stand-alone’ calculations such as bad debts adjustments,
inventory
write
downs
and
valuations,
depreciation,
extracts/components of the financials, financial ratio’s etc. One also needs to understand how to analyse the effect of transactions on the various elements of the accounting equation and process the correct ‘debits’ and ‘credits’ in journal entries for transactions. Calculation focus: Analysis of financial statements, interpretation of financial ratios, accrual adjustments, analysis of transactions, calculation of amounts used in the formulation of financial statements etc. Always remember to round your answer to the number of decimal places specified in the question. Ensure when answering ratio analysis questions that you give your answer in the correct format be it a percentage, days or times. Please refer to the tutorial support pack available on the portal and website for further areas to focus on. Attached to this tutorial letter is a copy of the formula sheet that you will be provided with in your exam. You are reminded that a formula sheet is just a tool to aid in the calculation process and is certainly not an exhaustive list of all that will be tested. It also does not give guidance on the interpretation and understanding of results which are skills you must master in your studying process. General Time management per question must be monitored carefully. Aim to mark maximise by attempting those areas which will result in you achieving the most marks initially. You are reminded to show your workings and calculations where necessary and ensure that they can be easily referenced. Examiners will not ‘hunt’ for substantiating workings. Number all questions CLEARLY and indicate ‘End’ when you have completed all questions in the exam IMM (GSM) ©
2
FA May 2013
Page 3 of 4
There are some questions which provide suggested formats. These are to be used as a guide and time must not be wasted on formats unnecessarily. Use mark allocation as a guide as to how much information is required when formulating your responses. Manage your time carefully. May we remind you that we are always available to assist with academic queries. Academic queries should be submitted in writing to: [email protected] We wish you a successful May 2013 examination session. Kind regards The IMM GSM Team
IMM (GSM) ©
3
FA May 2013
Page 4 of 4
APPENDIX A – FORMULA SHEET__T Gross margin = Gross profit/sales Net profit margin = Profit after tax/sales Creditor’s payment period = Creditors/credit purchases x 365 Creditors turnover = Credit purchase/Creditors Debtors’ collection period = Debtors/credits sales x 365 Days stock on hand = Average stock/cost of sales x 365 Current ratio = Current assets/current liabilities Quick ratio = (Current assets – inventory)/current liabilities Debtors turnover = Credit sales/Debtors Inventory turnover = Cost of sales/Inventory Return on assets = Net profit before interest and tax/total assets Price earnings = market price / EPS Earnings per share = PAT/number of shares Interest cover ratio = PBIT / finance costs Debt to Equity = Total debt : Equity Dividend cover = PAT/dividends Total asset turnover = Revenue / total Asset value Return on equity = PAT/Shareholders funds Earnings Yield = EPS/price per share
IMM (GSM) ©
4
FA May 2013
