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Level 1
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Category: Level 1

ICAG Knowledge Level
1.3 Business & Corporate LawEmployment lawLevel 1

Nov 2018 Q1 c.

AlRabico Chemists is the only pharmaceuticals in the northern region and Mr. Oppong is one of the key Pharmacists who had worked with the company for 18 years and has special skills which can only be used at AlRabico. His net monthly salary was GH¢15,000 and he always goes to Kumasi to spend the weekends with his family. On 14th July 2016, during a staff meeting, the new head Pharmacist Alhaji Mahmoud announced Mr. Oppong’s dismissal with immediate effect for insubordination. Mr. Oppong is deeply hurt and embarrassed by the action of Alhaji Mahmoud.
Required:
i) Explain with reasons the type of service contract Mr. Oppong’s work fall.                                                                    (5 marks)

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An employee-employer contract is a contract of service

  • Permanent employees have a contract of service with their employer. By definition, if a worker has a contract of service with an organisation, they are an employee.
  • The worker is controlled by their employer – they must perform the tasks they are instructed to by a line manager according to their job description.
  • The worker is expected to work at a specific place during specific hours on specific days (even flexi-time has core hours)The worker must present themselves for work and cannot send someone else as a substitute.
  • Employees have statutory rights to holiday pay, sick pay, maternity and paternity rights and redundancy payments
  • Employees have statutory rights regarding how they can be asked to leave their employment
                                                                                                                                                                                    (Any 5 points)

ii) What remedies are available for Mr. Oppong?                                                                                                               (2 marks)

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  • to make an order for reinstatement.
  • to make an order for re-engagement.
  • to make an order for compensation.
                                                                                                                                                                                   (Any 2 points)

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1.3 Business & Corporate LawHuman rightsLevel 1

Nov 2018 Q1 b.

Abena Muka had been a client of Good Shepherd Savings and Loans Ltd (GSSL). On the month of June 2018 Abena Muka was at the office of GSSL to transact business. She entered the office at the time that business transactions for the day had ended. She had been to the office consecutively for the third time and was not served. She insisted that she will not leave the banking hall until she is served. Her insistence attracted officials of the GSSL who then instructed the policeman on security duty to walk her out of the premises. The policeman in obeying the official’s instruction, severely beat up Abena Muka. The conduct of the official of GSSL and the policeman attracted the attention of the public.
Required:
Explain TWO (2) fundamental human rights of Abena Muka which the company and the policeman violated as per the constitution of the Republic of Ghana.                                                                                                                                (6 marks)

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  • The personal liberty of Abena Muka was violated in the sense that her movement was momentarily restricted-article 14 of the Constitution of the Republic of Ghana, 1992.
  • The dignity of Abena Muka was breached when the policeman subjected her to beatings and, the Company refused to serve her by disrespecting her dignity. Article 15 of the Constitution of the Republic of Ghana, 1992. (3 marks)

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1.3 Business & Corporate LawCourt structureLevel 1

Nov 2018 Q1 a.

List the court structure in Ghana in the superior order of hierarchy.                                                                                   (3 marks)

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  • Supreme court
  • Court of Appeal
  • High court/Regional tribunals
  • Circuit courts
  • District courts

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1.3 Business & Corporate LawFraudulent and criminal behaviourLevel 1

May 2018 Q7 c.

Kum is the Executive Director of Okitimiw Company Limited. Kum ordered that three-fourths of monies received weekly by the Company should be paid into the Company’s account and the remaining into his personal account for his travels, boarding and lodging within and outside the country. Auditing of the accounts of the Company revealed that the lodging of the monies in the personal account of the executive director was not only unlawful but was done to perpetuate fraud.
On the official winding up of the Company, it was revealed that the business was carried out for fraudulent purpose and the directors and other officers of the Company were aware of what went on.
Required:
i) Identify TWO conditions that can be used to restrain fraudulent persons from managing companies.                          (6 marks)

View Solution

Section – 186 of the Companies Act Restraining Fraudulent Persons from Managing Companies
Where,

  • a person is convicted on indictment, whether in Ghana or elsewhere, of any offence involving fraud or dishonesty or any offence in connection with the promotion, formation or management of a body corporate, or
  • a person is adjudicated bankrupt whether in Ghana or elsewhere, or
  • it appears that a person has been guilty of any criminal offence, whether convicted or not, in relation to anybody corporate or of any fraud or breach of duty in relation to a body corporate,

ii) State TWO actions the Registrar-General will take where the process of inspection reveals criminal liability of the Executive Director.                                                                                                                                                                               (6 marks)

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In the keeping of the books and accounts of a company, where it appears to the Registrar of Companies that there are circumstances suggesting that the business of the company is being conducted for a fraudulent or unlawful purpose among other things (section 219 of ACT 179), the Registrar of Companies after completion of the process of inspection of the books of accounts, and it appears to him that a person may have committed an offence for which that person is criminally liable, the Registrar shall refer the matter to the Attorney-General and if the Attorney –General considers that the case is one in which a prosecution ought to be instituted, shall institute proceedings section 225 of ACT 179).

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1.4 Introduction to Mgt. AccountingForecasting techniquesLevel 1

Nov 2019 Q5 a.

FB Logistics has been clearing containers from the port of Tema over the past seven years. Management is aware that the business has been facing seasonal fluctuations but there is no scientific basis for the determination of such variations that can be used to predict future revenue.
As a newly engaged Cost Accountant you have been provided with some past quarterly performance over a three-year period. Details of the performance are shown below:
                                    Year 1                 Year 2                    Year 3 

1st Quarter                   120                      180                        150
2nd Quarter                  140                      160                        200
3rd Quarter                   160                      185                        230
4th Quarter                   180                       210                       220
Required:
Using quarterly moving average, calculate the seasonal variation for the company.

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1.3 Business & Corporate LawInsolvencyLevel 1

May 2018 Q7 b.

Define special resolution.                                                                                                                                                   (4 marks)

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A resolution is a special resolution under section 168 of ACT 179 is when it is passed by not less than three-fourths of the votes cast by the members of the company who being entitled so to do vote in person or, where proxies are allowed by proxy at a general meeting of which, notice specifying the intention to propose the resolution as a special resolution, has been duly given

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1.4 Introduction to Mgt. AccountingLevel 1Standard costing

Nov 2019 Q5 b.

Standards as used in performance measurement are norms or benchmarks set for comparison purposes in performance evaluation.
Required:
Explain FIVE (5) uses of standard costing.                                                                                                                        (5 marks)

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  • Profit planning
  • Profit measurement
  • Performance assessment
  • Cost control and management
  • Employee reward schemes
  • Costs and inventory valuation

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1.3 Business & Corporate LawInsolvencyLevel 1

May 2018 Q7 a.

State FOUR persons who are incompetent to be appointed liquidators.                                                                            (4 marks)

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  • An infant;
  • A person found by a court of competent jurisdiction to be a person of an unsound mind;
  • A body corporate;
  • A person convicted on indictment, whether in the Republic or elsewhere of an offence involving fraud or dishonesty or of an offence in connection with the promotion or management of a body corporate;
  • An undischarged bankrupt or any other person subject to insolvency proceedings under the Insolvency Act, 1962 ACT 153
  • A director of a company is not qualified for appointment as a liquidator of that company.
  • An auditor of a company shall not be appointed as liquidator in a private liquidation unless on the appointment, a special resolution is duly passed dispensing with the auditing of the accounts of that auditor.

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1.4 Introduction to Mgt. AccountingAccounting for labourLevel 1

Nov 2019 Q4 b,c&d

b) Apagya Ltd has two product lines AB and CD. Time rate and piece rate labour rewarding systems are used for AB and CD products respectively.
Required:
Explain the terms time rate and piece rate, clearly outlining their differences and giving examples of business setting where each could be applied.                                                                                                                                                         (4 marks)

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PIECE RATE:
This a wage reward system where labour is paid based on the volume of work done. Here, the output recorded is the reference point for measuring the wages payable to the employee but not the time spent. Examples of production settings where this rate system is applicable may include, construction, manufacturing, food processing, etc.

TIME RATE:
This is a reward system that relates wages to the time spent by the employee. Example, hourly, daily, weekly, fortnightly or monthly, depending on the nature of skill of the employee. This is usually used in service firms such accounting firms, hospitality services, law firms etc.

c) AB Ltd operates a 40-hour weekly work regime and rewards labour for all overtime worked at time and one-half.
The wage rate is GH¢80 per hour.
The following details are recorded for the month of October 2019 for an employee (Adamu):

Week           Hours Worked
1                     36
2                     48
3                     45
4                     46

Required:
i) Compute the total direct labour costs for Adamu for the month of October 2019.                                                         (4 marks)

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ii) Calculate the total indirect labour costs for Adamu for the month of October 2019.                                                     (4 marks)

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d) Explain the treatment of overtime premium in accounting for labour costs.                                                                  (2 marks)

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Overtime premium is generally accounted for as indirect labour costs. However, where overtime payments result from customer specific requirements for the production of a product or job, then such overtime premium may be accounted for as direct labour.

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1.3 Business & Corporate LawCompany meetings and resolutionsLevel 1

May 2018 Q6 b iii & iv.

At what time will an annual general meeting of a company limited by shares be dispensed with in any year?                 (2 marks)

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Where the auditors of the company and the members of the company entitled to attend and vote at an annual general meeting agree in writing that an annual general meeting shall be dispensed with in any year (section 149 of ACT 179).

State FOUR persons who qualify to receive notices of general meetings in a company limited by shares.                      (8 marks)

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  • every member,
  • every person on whom the ownership of the a share devolves by reason of that person being a legal personal receiver or a trustee in bankruptcy of a member,
  • every director of the company
  • every auditor for the time being of the company

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