ACCA Paper F4

321 Pages·2010·6.29 MB·English

P
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PAPER F4
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CORPORATE AND BUSINESS LAW
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(ENGLISH)
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In this January 2010 edition I
(cid:120) We discuss the best strategies for revising and taking your ACCA exams S
(cid:120) We show you how to be wwell prepared for your exam
I
(cid:120) We give you lots of great guidance on tackling questions
(cid:120) We show you how you can build your own exams O
(cid:120) We provide you with three mock exams including the DDecember 2009 exam
N
(cid:120) We provide the AACCA examiner's answers as well as our own to the June and December
2009 exams as an additional revision aid
Ouri-Passproduct also supports this paper.
K
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FOR EXAMS IN 2010
First edition 2007
Fourth edition January 2010
ISBN 9780 7517 8050 5
(previous ISBN 9780 7517 4724 9)
British Library Cataloguing-in-Publication Data
A catalogue record for this book All our rights reserved. No part of this publication may be
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photocopying, recording or otherwise, without the prior
Published by written permission of BPP Learning Media Ltd.
BPP Learning Media Ltd
BPP House, Aldine Place We are grateful to the Association of Chartered Certified
London W12 8AA Accountants for permission to reproduce past
examination questions. The suggested solutions in the
www.bpp.com/learningmedia exam answer bank have been prepared by BPP Learning
Media Ltd, except where otherwise stated.
Printed in the United Kingdom
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2010
sustainable, managed forests.
ii
Contents
Page
Finding questions
Question index.................................................................................................................................................................iv
Topic index......................................................................................................................................................................ix
Using your BPP Learning Media Practice and Revision Kit
.........................................................xii
Revising F4
General exam support from BPP Learning Media...........................................................................................................xiii
Topics to revise..............................................................................................................................................................xiii
Question practice...........................................................................................................................................................xiii
Passing the F4 exam......................................................................................................................................................xiv
Exam information..........................................................................................................................................................xvii
Analysis of past papers........................................................................................................ ...........................................xx
Useful websites .............................................................................................................................................................xxi
Planning your question practice
BPP Learning Media’s question plan.............................................................................................................................xxii
Build your own exams..................................................................................................................................................xxvii
Questions and answers
Questions..........................................................................................................................................................................3
Answers..........................................................................................................................................................................29
Exam practice
Mock exam 1
(cid:120) Questions............................................................................................................................................................189
(cid:120) Plan of attack.......................................................................................................................................................193
(cid:120) Answers...............................................................................................................................................................195
Mock exam 2
(cid:120) Questions............................................................................................................................................................211
(cid:120) Plan of attack.......................................................................................................................................................217
(cid:120) Answers...............................................................................................................................................................219
Mock exam 3 (December 2009)
(cid:120) Questions............................................................................................................................................................237
(cid:120) Plan of attack.......................................................................................................................................................243
(cid:120) Answers...............................................................................................................................................................245
ACCA examiner's answers
(cid:120) June 2009............................................................................................................................................................263
(cid:120) December 2009...................................................................................................................................................275
Review form & free prize draw
iii
Question index
The headings in this checklist/index indicate the main topics of questions, but questions may cover several different
topics.
Questions set under the old syllabus 2.2paper are included because their style and content reflect the F4 exam.
Some questions have been amended to reflect the current exam format.
Time Page number
allocation
Marks Mins Question Answer
Part A: Essential elements of the legal system
1 Types of law 10 18 3 29
2 Legal system and courts (12/07) 10 18 3 30
3 Civil courts and tracks (2.2 12/02) 10 18 3 31
4 Contemporary sources of law (12/08) 10 18 3 33
5 Precedent 10 18 3 35
6 Precedent; terms (6/09) 10 18 4 37
7 Legal terms (2.2 6/05) 10 18 4 38
8 Common law and legislation (6/08) 10 18 4 40
9 Delegated legislation (Pilot Paper) 10 18 4 42
10 Sources of law and the Human Rights Act 1998 10 18 4 44
Part B: The law of obligations
11 Alvin (12/08) 10 18 5 45
12 Ann's art (2.2 12/01 amended) 10 18 5 47
13 Ali (12/07) 10 18 5 49
14 Offers and invitations to treat l (2.2 6/04) 10 18 6 50
15 Offers and invitations to treat II (6/08) 10 18 6 51
16 Acceptance and revocation of offer (2.2 6/03) 10 18 6 53
17 Ace Ltd (2.2 6/07 amended) 10 18 6 55
18 Car filters (Pilot Paper) 10 18 7 56
19 Presumption and rebuttal (2.2 12/05) 10 18 7 57
20 Alan's intention (2.2 12/04 amended) 10 18 7 59
21 Privity and intention (12/07) 10 18 7 61
22 Consideration (6/09) 10 18 8 62
23 Forms of consideration (2.2 12/02) 10 18 8 64
24 Paying Adam (2.2 6/03 amended) 10 18 8 65
25 Types of term I (Pilot Paper) 10 18 8 67
26 Types of term II (6/09) 10 18 8 68
27 Exclusion clauses (2.2 6/02) 10 18 9 70
28 Seller Ltd and Transport Ltd 10 18 9 72
29 Breach of contract (12/08) 10 18 9 74
30 Arti (6/09) 10 18 9 75
31 Astride's wall (6/08) 10 18 10 77
iv Finding questions
Time Page number
allocation
Marks Mins Question Answer
32 Remedies for breach (2.2 12/02 and 12/04) 10 18 10 79
33 Remoteness and measure of damages (2.2 6/04) 10 18 10 81
34 Roger and Lulu 10 18 10 83
35 Remoteness of damage (12/07) 10 18 10 84
36 Duty of care (Pilot Paper) 10 18 11 85
37 Standard of care (6/08) 10 18 11 86
38 Causality and remoteness 10 18 11 87
39 Defences (12/08) 10 18 11 88
40 Accountants4U 10 18 11 90
Part C: Employment law
41 Employed v self-employed (6/08) 10 18 12 91
42 Employment contracts (2.2 Pilot Paper) 10 18 12 93
43 Common law duties (2.2 6/02) 10 18 12 94
44 Redundancy (Pilot Paper and 6/09) 10 18 12 96
45 Constructive and unfair dismissal (12/07) 10 18 12 98
46 Constructive and fair dismissal (12/08) 10 18 12 100
47 Grace and Fawn Ltd (2.2 12/02 amended) 10 18 13 102
48 Impact College (2.2 12/05 amended) 10 18 13 103
Part D: The formation and constitution of business
organisations
49 Types of authority (2.2 12/01) 10 18 14 104
50 Unlimited and limited partnerships 10 18 14 106
51 Ham, Sam and Tam (12/08) 10 18 14 108
52 Clare, Dan and Eve (6/08) 10 18 14 109
53 Partnership liability 10 18 15 111
54 Partnership v company (2.2 12/01 amended) 10 18 15 112
55 Termination of partnerships (2.2 12/02) 10 18 15 113
56 Types of company (2.2 6/02) 10 18 15 115
57 Separate personality (6/08) 10 18 15 116
58 Mick's company (2.2 12/05 amended) 10 18 15 118
59 Public companies (Pilot Paper) 10 18 15 120
60 Company registers and accounting records (2.2 6/02 amended) 10 18 16 121
61 Eden plc (2.2 6/05 amended) 10 18 16 122
62 Objects clause (2.2 6/05 amended) 10 18 16 123
63 Articles (2.2 6/04 amended) 10 18 16 125
64 Fred (12/08) 10 18 17 126
65 Company names (6/09) 10 18 17 128
66 Various terms (2.2 6/06) 10 18 17 129
Finding questions v
Time Page number
allocation
Marks Mins Question Answer
Part E: Capital and the financing of companies
67 Issue and premium (2.2 12/01) 10 18 18 131
68 Capital terms I (2.2 12/03 amended) 10 18 18 132
69 Shares and debentures (6/08) 10 18 18 133
70 Capital terms II (12/08) 10 18 18 135
71 Capital maintenance and reducing share capital (6/09) 10 18 18 136
72 Class rights (2.2 12/02) 10 18 19 139
73 Flop Ltd (Pilot Paper) 10 18 19 140
74 Lux Ltd (2.2 6/07 amended) 10 18 19 142
75 Dividends (12/07) 10 18 19 143
76 Debentures and charges (2.2 6/04) 10 18 20 144
Part F: Management, administration and regulation
of companies
77 Resolutions (12/08) 10 18 21 146
78 Meetings (Pilot Paper) 10 18 21 148
79 Company secretary (2.2 Pilot Paper and 6/05) 10 18 21 149
80 Implied authority and company secretary (2.2 6/07) 10 18 21 150
81 Appointment and removal (2.2 12/03) 10 18 21 151
82 Statutory grounds for disqualifying directors (6/09) 10 18 22 152
83 Statutory duties 10 18 22 154
84 Promoting success (12/08) 10 18 22 155
85 Powers and duties of directors (2.2 6/03) 10 18 22 156
86 Helen (2.2 12/03 amended) 10 18 22 158
87 Directors (6/08) 10 18 22 159
88 Auditors I (2.2 6/03) 10 18 23 161
89 Auditors II (12/07) 10 18 23 163
90 Katch Ltd (12/07) 10 18 23 165
91 Clean Ltd (6/09) 10 18 23 166
Part G: Legal implications of companies in
difficulty or in crisis
92 Liquidation (2.2 12/04 amended) 10 18 24 168
93 Compulsory winding up 10 18 24 170
94 Lazy Days 10 18 24 171
95 Earl (12/07) 10 18 24 172
vi Finding questions
Time Page number
allocation
Marks Mins Question Answer
Part H: Governance and ethical issues relating to
business
96 Directors and corporate governance (Pilot Paper) 10 18 25 173
97 Huge plc (Pilot Paper) 10 18 25 175
98 Sid and Vic (6/08) 10 18 25 176
99 Wrongful trading (2.2 12/05) 10 18 25 178
100 Push Ltd (2.2 6/07 amended) 10 18 26 179
101 Money laundering (2.2 12/05) 10 18 26 180
102 Greg (6/09) 10 18 26 181
Mock exam 1
Questions 103 to 112
Mock exam 2
Questions 113 to 122
Mock exam 3 (December 2009)
Questions 123 to 132
Planning your question practice
Our guidance from page xxii shows you how to organise your question practice, either by attempting questions
from each syllabus area or by building your own exams – tackling questions as a series of practice exams.
ACCA examiner's answers
The ACCA examiner's answers to questions marked 'Pilot paper', '12/07', ‘6/08’ or ‘12/08’ can be found on the
BPP website at the following link:
www.bpp.com/acca/examiner-solutions
Additional question guidance
Additional guidance to certain questions can be found on the BPP website at the following link:
www.bpp.com/acca/extra-question-guidance
Finding questions vii
Using your BPP Learning Media products
This Kit gives you the question practice and guidance you need in the exam. Our other products can also help you pass:
(cid:120) Learning to Learn Accountancy gives further valuable advice on revision
(cid:120) Passcards provide you with clear topic summaries and exam tips
(cid:120) Success CDs help you revise on the move
(cid:120) i-Pass CDs offer tests of knowledge against the clock
You can purchase these products by visiting www.bpp.com/mybpp.
You can view demonstrations of i-Learn and i-Pass products by visiting www.bpp.com/acca/study-
materials/#ilearn. Scroll down the page until you find the sections for i-Learn and i-Pass and click on the
appropriate 'View demo' button.
viii Finding questions
Topic index
Listed below are the key Paper F4 syllabus topics and the numbers of the questions in this Kit covering those
topics.
If you need to concentrate your practice and revision on certain topics or if you want to attempt all available
questions that refer to a particular subject, you will find this index useful.
Syllabus topic Question numbers
Acceptance 11, 12, 13, 16, 17, 18
Administration 94
Agent's authority 49
Articles of association 62, 63, 64, Mock exam 2: Q9
Auditors 88, 89
Breach of contract 29-33
Capital maintenance 71
Case law 4, 5, 6, 7, 8, 10
Causality 38, Mock exam 1: Q5
Charges 76, Mock exam 2: Q9
Class rights 72, 78
Company formation 58, 59
Company meetings 78, Mock exam 1: Q6
Company names 65, Mock exam 2: Q5
Company records 60
Company resolutions 77
Company secretary 79, 80
Compulsory liquidation 93
Consideration 22-24
Constructive dismissal 43, 45, 46
Contract law 11 – 33, Mock exam 1: Q2, Mock exam 1: Q3, Mock exam 2: Q2,
Mock exam 2: Q3, Mock exam 2: Q8, Mock exam 3: Q2,
Mock exam 3: Q3, Mock exam 3: Q8
Contract of service/for services 41, 42
Corporate governance 96
Corporate personality 57, 58
Court system 2, 3, 5
Criminal activity in companies 97-102, Mock exam 1: Q7, Mock exam 3: Q10
Damages 31-33
Debentures 69, 76
Defences to negligence 39
Delegated legislation 9, Mock exam 2: Q1
Directors' appointment and removal 81, 82
Directors' duties and powers 83-85, Mock exam 1: Q9, Mock exam 3: Q9
Directors' role 85, 87
Dismissal from employment 43-48, Mock exam 1: Q8, Mock exam 2: Q4
Disqualification of directors 82
Dividends 75
Duty of care 36, 37, 40, Mock exam 1: Q5, Mock exam 2: Q6
Employers' duties 43
Employment contract 42, Mock exam 3: Q7
Exclusion clauses 27, 28, Mock exam 2: Q8
Finding questions ix