Mirchawala’s Hub of Accountancy:
F4:MOCK Exam 1:
Question#1:
Which of the following statements relating to the Crown Court is NOT true?
A. It has no civil jurisdiction
B. Appeals from the Crown Court go directly to the Supreme Court
C. It deals with indictable offences with a jury
Question#2:
Which of the following statements about a pre-incorporation contract is true?
A. Following incorporation, the company could enter into a new contract on identical terms via
novation
B. The company’s promoter is always immune from liability
C. The company may ratify the contract once its incorporation is complete
Question#3:
Which TWO of the following statements about criminal law are true?
A. It is a form of private law
B. The state normally initiates the action
C. The standard of proof is on the balance of probabilities
D. The burden of proof rests with the prosecution
Question#4:
Which of the following statements about revocation of an offer is true?
A. The postal rule applies to revocation of an offer
B. It can be revoked at any time before acceptance
C. Revocation must be communicated personally by the offeror
Question#5:
Pigeon Ltd is a UK registered company and has a wholly owned subsidiary, Duck Ltd, in the USA, which
specialises in disposal of nuclear waste. Duck Ltd is being sued by residents in the USA, for personal
injuries following exposure to nuclear waste from its disposal plants. As Pigeon Ltd is the holding
company and is highly profitable, the residents feel that it is Pigeon Ltd that is liable for the personal
injuries suffered.
Is Pigeon Ltd liable to pay damages for personal injuries on behalf of Duck Ltd, and for what reason?
A. Yes, because it is head of the group and English law treats groups of companies as single economic
units
B. No, because Duck Ltd is a separate legal entity with all the rights and liabilities which would normally
be attached to separate legal entity
C. Yes, because Duck Ltd is acting as an agent of Pigeon Ltd
D. No, because Pigeon Ltd has no direct presence in the USA
Question#6:
On which of the following dates does a partnership begin?
A. The date on which the partnership starts trading with the public
B. The date on which the partners agree to go into business together
C. The start date of the first accounting period
From the desk of Sir Owais Mirchawala:
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Mirchawala’s Hub of Accountancy:
Question#7:
Which TWO of the following statements about a company administration order are true
A. Once an administration order is granted, all of the company’s employees are automatically
dismissed
B. The administrator may state that the company cannot be rescued
C. Fixed charge holders are still able to repossess charged assets during administration
D. The administration will end after 12 months or when it has been successful
Question#8:
For a straightforward case involving a claim for £18,000, which of the following tracks would be
allocated under the Civil Procedure Rules?
A. Fast track
B. Multi-track
C. Small claims track
Question#9:
Which TWO of the following statements apply to contracts governed by the Unfair Contract Terms Act
1977?
A. The reasonableness test takes into consideration the relative bargaining strength of the parties to
the contract
B. In a non-consumer contract, any clause excluding liability for breach relating to the quality of the
goods is subject to the reasonableness test
C. Any clause excluding liability for personal injury due to one party’s negligence will only be upheld if
it is reasonable
D. The Act applies to exclusion clauses contained in contracts relating to the transfer of an interest in
land
Question#10:
Which of the following statements regarding contractual terms is correct?
A. A term can be implied into a contract by custom
B. An express term always overrides an implied term
C. An express term in a contract must always be in writing
Question#11:
In relation to the registration of a company, which of the following names will NEVER be permitted?
A. One which implies a connection with a professional body
B. One which implies a connection with the government
C. One which is the same as the name of a company already on the register
Question#12:
Which of the following statements about limited liability partnerships is true?
A. A written partnership agreement must be registered with the Registrar of Companies
B. A limited liability partnership is a corporate body which has a separate legal personality from its
members
C. At least one general partner must be appointed with unlimited liability for the debts of the firm
Question#13:
Which of the following is an offer?
From the desk of Sir Owais Mirchawala:
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A. An invitation to tender
B. A tender
C. A display of goods in a shop window
Question#14:
Which of the following can be achieved by a private limited company passing a written resolution?
A. The removal of a director
B. The removal of an auditor
C. The appointment of a director
Question#15:
According to the Unfair Contract Terms Act 1977, which of the following clauses would be
automatically void?
A. One excluding liability for negligence which has resulted in personal injury to another party
B. One excluding liability for negligence which has caused damage to another’s property
C. One excluding liability for negligence which has caused financial loss to another party
Question#16:
Which of the following would give rise to a dismissal that would be regarded as redundancy?
A. A reduction in the need for the work done by the employee
B. An alteration of work so that the same work is required but by different means
C. The relocation of an employee whose contract has a mobility clause
Question#17:
Which of the following statements regarding wrongful dismissal is correct?
A. The usual remedy is damages based on loss of notice period
B. Immorality will always be accepted as a justifiable reason for dismissal
C. Dismissal with less than less than the contractually-stated notice is always wrongful
Question#18:
Bruce and Sheila both perform work for Boomerang Ltd. Bruce supplies his own tools, but is given a
uniform and must stop whatever he is doing and report for duty if Boomerang Ltd calls him. Sheila
generally works alone; however she is unable to complete most tasks without the help of other
workers.
Indicate whether Bruce and Sheilla are self-employed or an employee.
Bruce ________Sheila_______
Question#19:
What is the statutory minimum notice period which must be given to an employee who has been
continuously employed for 18 months?
A. Two weeks
B. One week
C. One month
Question#20:
In relation to a company paying a dividend, which of the following statements is correct?
A. Any unlawful dividend may be reclaimed from the shareholders or the directors
B. The dividend may be increased by the members if they object to the directors’ recommendation
C. A dividend may be partially funded from the share premium account
D. All dividends to preference shareholders must be paid irrespective of company profits
From the desk of Sir Owais Mirchawala:
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Mirchawala’s Hub of Accountancy:
Question#21:
In the context of a company in financial difficulty, which TWO of the following are powers of the
administrator?
A. To report to the secretary of state if they consider that any director is unfit to be involved in the
management of a company
B. To call a meeting of members
C. To remove or appoint directors
D. To make payments to unsecured creditors without court permission
Question#22:
Which TWO of the following statements about the remedy of re-engagement in unfair dismissals are
true?
A. It should not be made where there has been a breakdown in confidence between the parties
B. The employee returns to their old job under the same conditions
C. The employee will have return to the company even if it is not their wish to do so
D. The employee takes on a new role for the same employer on comparable terms to the old job
Question#23:
Which of the following divisions of the High Court hears cases relating to bankruptcy?
A. Queen’s Bench Division
B. Family Division
C. Chancery Division
Question#24:
Which of the following is NOT a duty imposed by law on an employer?
A. To allow employees who are trade union officials time off to attend to official union duties
B. To allow a pregnant employee time off work for antenatal care
C. To allow an employee time off work to perform certain public duties
D. To allow employees time off to look for alternative work
Question#25:
When can separate personality be ignored?
A. When a company is a sham to evade liabilities
B. When a company is set up with a risky investment strategy
C. When a company is an agent of another company
Question#26:
Which of the following is NOT part of the role of non-executive directors in a company?
A. Helping to hold executive directors accountable at board level
B. Bringing independent, external expertise to the decision-making of the board
C. Promoting the success of the company through effective day-to-day engagement with company
decisionmaking
Question#27:
A defendant being sued under the tort of negligence has offered a defence that the claimant knew
about and fully and freely consented to the risk.
Which of the following describes this defence?
A. Novus actus interveniens
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B. Volenti non fit injuria
C. The ‘but for’ test
D. Contributory negligence
Question#28:
Which of the following statements about tort is correct?
A. it is concerned with the infringement of the rights of another
B. The object of proceedings is to punish the offender
C. It involves the breach of a contractual arrangement
Question#29:
Sue owns a delicatessen and has contracted with Tim to supply her with fresh bread every day for the
next ten weeks, after six weeks, Tim tells Sue that he is unable to continue to supply the bread.
Which TWO of the following statements are true?
A. Sue can affirm the contract
B. Sue can wait a further four weeks and then sue for damages
C. Sue can obtain an injunction preventing Tim from breaching his contract
D. Sue can accept this as a breach of contract and sue for damages now
Question#30:
Which TWO of the following are circumstances when a court may decline to follow a precedent that
would otherwise be binding?
A. Where it is possible to distinguish the facts
B. Where the previous statement was made obiter dicta
C. Where the decision was taken by a higher court
D. Where the previous case had been made per incuriam
Question#31:
In the event that a partnership is terminated, which of the following liabilities would be repaid first?
A. A debt owed to a trade creditor
B. Outstanding salary owed to a partner
C. A loan made by a partner to the partnership
Question#32:
Lewis is a shareholder in Mayton plc. After reading the company’s most recent annual accounts, Lewis
is so impressed with how the business is doing that he decides to buy additional shares on the stock
exchange.
It later becomes clear that the accounts have been prepared negligently and that “far from doing well”
the company is actually doing very badly. Lewis intends to sue X & Co. the firm of accountants that
prepared the accounts.
Is X & Co liable to Lewis for negligent misstatement and for what reason?
A. No, because Lewis bought his new shares from an existing shareholder and not from Mayton plc
itself
B. Yes, because Lewis bought the additional shares as a direct result of reading the accounts
C. No, because X & Co does not owe a duty of care to existing shareholders who rely on the accounts
when deciding whether to vary their shareholding in Mayton plc
D. Yes, because it is reasonably foreseeable that existing shareholders would rely on the accounts for
the purpose of reviewing their investments
Question#33:
From the desk of Sir Owais Mirchawala:
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Which of the following remedies is always available for breach of contract?
A. Specific performance
B. Damages
C. Repudiation
Question#34:
Which of the following is the correct order of payment on liquidation?
A. Preferential debts, unsecured creditors, floating charges, deferred debts
B. Floating charges, preferential debts, deferred debts, unsecured creditors
C. Preferential debts, floating charges, unsecured creditors, deferred debts
D. Floating charges, unsecured creditors, deferred debts, preferential debts
Question#35:
Which of the following statements about an ordinary partnership governed by the Partnership Act
1890 is true?
A. Each partner is personally liable for all the debts of the partnership
B. The maximum number of partners is restricted to 20
C. The partnership agreement must be in writing
MTQ’S:
Question#36:
Mega plc wishes to expand overseas, and has embarked upon a number of schemes in order to raise the
finance necessary for investment.
Mishra subscribed for additional shares in Mega plc, which were offered as part of a rights issue. The £1
nominal shares were made available at a price of £3.
Joel purchased a £100,000 debenture secured against the main factory building of Mega plc via a fixed
charge.
Task 1:
What is the minimum payment Mishra will have to make for each share?
A. One quarter of the nominal value plus share premium (£2.25)
B. Share premium (£2)
C. Nominal value (£1)
D. Nominal value plus one quarter of the share premium (£ 1.50)
Task 2:
Which TWO of the following statements relating to the fixed charge held by Joel are true?
A. It is over a class of assets present and future
B. Until the charge crystallizes Mega plc may carry on in business in the usual way
C. It attaches to specific assets upon creation
D. The charge will be effective from the date of creation if registered within 21 days
Task 3:
What is the correct formula governing the distribution of dividends in a PRIVATE company?
A. Accumulated unrealised profits less accumulated realised losses and unrealised accumulated losses
B. Accumulated realised profits less accumulated realised losses
C. Accumulated realised profits less accumulated realised losses and unrealised accumulated Losses
D. Accumulated unrealised profits less accumulated realised losses
From the desk of Sir Owais Mirchawala:
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Mirchawala’s Hub of Accountancy:
Question#37:
The actions of the directors of XYX plc have caused concern to some of the company’s shareholders on
two occasions:
(1) A takeover bid was made for XYX plc which the directors believed was not in the company’s best
interests, To ensure that the bid was rejected, the directors allotted new shares to a third party. A group
of minority shareholders who were in favour of the takeover bid reel that their interests have been
prejudiced.
(2) Two directors of XYX plc resigned recently. It has come to light that these two directors had
previously set up their own company, DTS Ltd in order to secure a contract with PRK Ltd. an existing
client of XYX plc.
Task 1:
Which TWO of the following statements apply to XYX plc’s directors regarding the allotment of shares
to the third party?
A. The directors’ actions cannot subsequently be ratified by the members if the directors have used
their powers improperly
B. The allotment of shares for the purpose of preventing a takeover bid is an improper use of the
directors’ powers
C. The directors have a duty to exercise their powers for the purposes for which they were conferred
D. As the allotment of shares by the directors prejudiced the Interests of the minority, the allotment is
invalid
Task 2:
For which of the following statements regarding the contract secured by DTS Ltd from PRK Ltd is
correct?
A. As PRK Ltd is entitled to award a contract to whichever company it chooses, XYX plc cannot recover
any profit made by DTS Ltd on that contract
B. As DTS Ltd is a separate legal person, no action can be taken against it or its directors in respect of
the contract secured from PRK Ltd
C. As the directors resigned from XYX plc before setting up DTS Ltd, no action can be taken against
them
D. The directors of DTS Ltd may be accountable to XYX plc for the profit made on the contract secured
from PRK Ltd
Task 3:
Which TWO of the following statements regarding the duties owed by directors to their company are
correct?
A. Directors are never permitted to put personal interests before the interests of the company
B. Directors owe their duties to the members of the company
C. One director not liable for a fellow director’s breach of duty
D. The duties are owed by anyone classed as being a director
From the desk of Sir Owais Mirchawala:
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Question#38:
Arya is a solicitor. Frank is a businessman who owns a small motor repair shop. Frank first instructed
Arya two years ago, when he was buying a hou5e. Frank has recently deposited funds with Arya and
instructed her to undertake the following transactions on his behalf:
(1) Purchase a local chain of salons, which Frank intends to fund with a large cash deposit and a
mortgage for the balance
(2) Transfer a small cash sum to a bank account in Farland. Which Frank recently opened up while on
holiday there
Arya has heard rumours that Frank is involved in criminal activity and thinks these rumours might be
true. However, she has no proof and so she agrees to act on Frank’s behalf
Task 1:
If the funds which Frank has deposited with Arya are the proceeds of crime, indicate which offences
each party has committed.
A. Money laundering only
B. Failure to report only
C. Money laundering and failure to report
Task 2:
For each of the following statements regarding the transfer to the bank account in Farland (and
assuming that the sum is the proceeds of crime), indicate whether it is true or false.
A. Transferring funds from the UK to a bank in Farland is an example of integration by Fran
B. Because the cash sum to be transferred is immaterial, Arya is not obliged to report her suspicions in
relation to it.
Task 3:
Which TWO of the following are valid defences against a charge of money laundering?
A. Disclosure is made by a person to the authorities before laundering takes place
B. A person involved in money laundering has a reasonable excuse for non-disclosure
C. The organisation has failed to appoint a money laundering reporting officer so no there is no one to
make a disclosure to
D. A person involved in money laundering did not know that the funds originated from proceeds of
crime
Question#39:
Garry saw an advertisement which stated:
‘Invitation to tender: 500 wooden containers required of 100cm x 100cm x 100cm to be supplied over
the next three months. Contact Hugh at Haulage Ltd.’
Garry emailed Hugh saying that he would meet the requirements at a price of £5000. Hugh then phoned
Garry to say that he no longer required containers on the advertised terms. However he enquired
whether Garry’s firm would consider an arrangement to produce such quantities of the containers as
Haulage Ltd may order from time to time, Garry agreed to such an arrangement.
Task 1:
For each of the following statements, identify whether it is true or false.
A. Garry’s email amounts to an acceptance
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B. The initial advertisement placed by Haulage Ltd is an invitation to treat
C. Garry’s agreement to produce such quantities of the containers as Haulage Ltd may order from time
to time is an offer
D. Hugh’s phone call amounts to a counter-offer
Task 2:
Garry said he would produce containers as required as long as he was paid £10 per container supplied.
As time progressed, Garry produced what was ordered. This continued for six months until Garry
decided that on balance, the work was not making him as much money as he had expected. Gerry then
called Hugh to advise him that he would not be able to supply any further containers.
Which TWO of the following statements are true?
A. It is not possible to enter into binding contractual agreements such as Hugh is requesting, owing to a
lack of certainly of terms
B. Each order placed by Hugh over the first six months amounts to a separate acceptance and
therefore a separate contract
C. Garry can withdraw from the arrangement at any time but must fulfill orders already placed
D. Garry is contractually obliged to continue supplying containers until Haulage Ltd terminates the
agreement
Question#40:
KTP & Co is a partnership which operates toy stores throughout the UK. On 1 October 20X4. KTP & Co
appointed Harry as a partner. On the same day, Jack. Who had been a partner for many years, decided
to retire from the partnership with immediate effect. Jack told his fellow partners of his decision but did
not notify anyone else that he was leaving that day.
For sortie months, KTP & Co had been negotiating a contract for a large consignment of soft toys with an
existing supplier. On 2 October 20X4. The firm signed the contract. Harry only found out about this
contract at the end of November. December sales were very disappointing and very few of the toys
were sold. The soft toy supplier is now demanding payment in full.
Task 1:
What is Harry’s legal position regarding liability for payment to the supplier for the soft toys, and for
what reason?
A. He is not liable for the soft toy contract as all the negotiations took place before he joined as a
partner.
B. He is jointly and severally liable with the other partners for the soft toy contract because it was
signed after he joined the firm.
C. He is only liable for the soft toy contract up to the amount of the capital, if any, he has invested in
the partnership.
D. He is not liable for the soft toy contract as he only found out about it after it had been signed.
Task 2:
For each of the following statements regarding Jack’s liability for the soft toys, indicate whether it is
true or false.
A. He is not liable for any monies due to the soft toy supplier because he retired from the partnership
before the contract was signed
B. If his former partners fail to pay the monies owed he will be liable to the soft toy supplier
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Task 3:
For each of the following statements regarding the liability of a retiring partner, indicate whether it is
true or false.
A. A retiring partner is liable for partnership debts incurred prior to their retirement, unless released
from liability by the creditors.
B. A retiring partner is liable for partnership debts incurred by the Firm for six months after they retire.
From the desk of Sir Owais Mirchawala:
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