Mirchawala’s Hub of Accountancy:
F4:MOCK Exam 2:
Question#1:
Which two of the following statements about fraudulent trading are correct?
A. It is defined as trading when the person is aware or should have been aware that the company was
insolvent and failed to minimise losses
B. It can result in both a civil and a criminal action
C. Only directors and shadow directors may be liable for fraudulent trading
D. It constitutes trading with the intention to defraud creditors
Question#2:
If a worker is deemed to be an employee, which of the following would NOT be correct?
A. They would benefit from vicarious liability.
B. They would receive their pay gross of all taxable contributions
C. They would receive statutory sick pay
Question#3:
In the context of the law of contract, indicate whether or not each of the following is valid
consideration.
Sort elements
Valid
Not valid
A. Improvements made to a property which the owner later agrees to pay for
B. A promise to undertake decorating work in return for one months accommodation
Question#4:
Which of the following statements about acceptance of an offer in contract law is true?
A. Following a valid acceptance, the offeror can still withdraw from the contract prior to performance
B. There must be some form of positive action by the offeree either spoken, written or by conduct in
order to accept the offer
C. The offeree may choose which terms of an offer to accept
Question#5:
Which TWO of the following statements regarding exclusion clauses are correct?
A. An exclusion clause need not be put forward before the contract is concluded
B. In respect of signed contracts an onerous term must always be highlighted to the other party
C. An exclusion clause can be incorporated into a contract by way of sufficient notice
D. At common law, a person who signs a document which contains an exclusion clause is bound by its
terms even if they have not read the document
Question#6:
Which of the following would NOT terminate an offer?
A. A counter-offer
B. Revocation by the offeror
C. Acceptance
D. Death of the offeree
Question#7:
What does ‘corporate personality’ mean?
A. That the company as an entity is regarded by the law as a separate person
B. That the board of directors as a whole is regarded by the law as a separate person
From the desk of Sir Owais Mirchawala: Page 1
, Mirchawala’s Hub of Accountancy:
C. That the shareholders in the company are regarded by the law as a separate person
Question#8:
Finmere Eagles FC Ltd is a semi-professional football club. John is the majority shareholder and
chairman. He has been personally approving purchases of high-profile footballers for extravagant
transfer fees, while deliberately ignoring creditors for many months. The other directors are concerned
about this, and also about the ability of the club to meet its financial obligations, but have left all major
decisions to John, convinced that he knows best.
To what extent are John and the other directors liable if the company becomes insolvent?
A. John may face charges of fraudulent trading and the other directors may be liable for wrongful
trading
B. Only John may be prosecuted for fraudulent trading and the other directors have no liability
C. All directors and officers may be liable for wrongful trading
D. All directors may face criminal charges for fraudulent trading
Question#9:
Which of the following is NOT an exception to the rule of privity in contract law?
A. Where a person injured in a road accident may sue the driver's insurance company
B. Where there is a restrictive covenant in relation to land
C. Where an implied trust has been created
D. Where an assignment has been made either orally or in writing to a new beneficiary with the
consent of the other party
Question#10:
Are each of the following a feature of a sole trader or a limited company?
Fill the blank with either “Sole Trader” or “Limited Company”.
Profits accrue directly to the owner______ Can continue to exist even after death of the owner______
Limited liability_____ Regulated internally by legislation in terms of procedures and
administration______
Question#11:
Which rule of statutory interpretation suggests that words draw meaning from the other words
around them?
A. Expressio unius est exclusion alterius
B. In pari materia
C. Noscitur a sociis
D. Eiusdem generis
Question#12:
Which of the following in relation to a government bill is NOT correct?
A. It may be introduced in the House of Lords
B. It needs to be passed by the Privy Council
C. It must be passed in the House of Commons and in the House of Lords
Question#13:
Sarah and Hannah have decided to set up business selling curtain fabric. Discussions have taken place
with their solicitor, who is just about to submit documentation to Companies House to form a new
company, Weave Ltd, on their behalf. Yesterday Sarah entered into a long-term supply agreement with
a fabric manufacturer and signed the contract ‘for and on behalf of Weave Ltd.
For each of the following statements, identify whether it is true or false.
From the desk of Sir Owais Mirchawala: Page 2
F4:MOCK Exam 2:
Question#1:
Which two of the following statements about fraudulent trading are correct?
A. It is defined as trading when the person is aware or should have been aware that the company was
insolvent and failed to minimise losses
B. It can result in both a civil and a criminal action
C. Only directors and shadow directors may be liable for fraudulent trading
D. It constitutes trading with the intention to defraud creditors
Question#2:
If a worker is deemed to be an employee, which of the following would NOT be correct?
A. They would benefit from vicarious liability.
B. They would receive their pay gross of all taxable contributions
C. They would receive statutory sick pay
Question#3:
In the context of the law of contract, indicate whether or not each of the following is valid
consideration.
Sort elements
Valid
Not valid
A. Improvements made to a property which the owner later agrees to pay for
B. A promise to undertake decorating work in return for one months accommodation
Question#4:
Which of the following statements about acceptance of an offer in contract law is true?
A. Following a valid acceptance, the offeror can still withdraw from the contract prior to performance
B. There must be some form of positive action by the offeree either spoken, written or by conduct in
order to accept the offer
C. The offeree may choose which terms of an offer to accept
Question#5:
Which TWO of the following statements regarding exclusion clauses are correct?
A. An exclusion clause need not be put forward before the contract is concluded
B. In respect of signed contracts an onerous term must always be highlighted to the other party
C. An exclusion clause can be incorporated into a contract by way of sufficient notice
D. At common law, a person who signs a document which contains an exclusion clause is bound by its
terms even if they have not read the document
Question#6:
Which of the following would NOT terminate an offer?
A. A counter-offer
B. Revocation by the offeror
C. Acceptance
D. Death of the offeree
Question#7:
What does ‘corporate personality’ mean?
A. That the company as an entity is regarded by the law as a separate person
B. That the board of directors as a whole is regarded by the law as a separate person
From the desk of Sir Owais Mirchawala: Page 1
, Mirchawala’s Hub of Accountancy:
C. That the shareholders in the company are regarded by the law as a separate person
Question#8:
Finmere Eagles FC Ltd is a semi-professional football club. John is the majority shareholder and
chairman. He has been personally approving purchases of high-profile footballers for extravagant
transfer fees, while deliberately ignoring creditors for many months. The other directors are concerned
about this, and also about the ability of the club to meet its financial obligations, but have left all major
decisions to John, convinced that he knows best.
To what extent are John and the other directors liable if the company becomes insolvent?
A. John may face charges of fraudulent trading and the other directors may be liable for wrongful
trading
B. Only John may be prosecuted for fraudulent trading and the other directors have no liability
C. All directors and officers may be liable for wrongful trading
D. All directors may face criminal charges for fraudulent trading
Question#9:
Which of the following is NOT an exception to the rule of privity in contract law?
A. Where a person injured in a road accident may sue the driver's insurance company
B. Where there is a restrictive covenant in relation to land
C. Where an implied trust has been created
D. Where an assignment has been made either orally or in writing to a new beneficiary with the
consent of the other party
Question#10:
Are each of the following a feature of a sole trader or a limited company?
Fill the blank with either “Sole Trader” or “Limited Company”.
Profits accrue directly to the owner______ Can continue to exist even after death of the owner______
Limited liability_____ Regulated internally by legislation in terms of procedures and
administration______
Question#11:
Which rule of statutory interpretation suggests that words draw meaning from the other words
around them?
A. Expressio unius est exclusion alterius
B. In pari materia
C. Noscitur a sociis
D. Eiusdem generis
Question#12:
Which of the following in relation to a government bill is NOT correct?
A. It may be introduced in the House of Lords
B. It needs to be passed by the Privy Council
C. It must be passed in the House of Commons and in the House of Lords
Question#13:
Sarah and Hannah have decided to set up business selling curtain fabric. Discussions have taken place
with their solicitor, who is just about to submit documentation to Companies House to form a new
company, Weave Ltd, on their behalf. Yesterday Sarah entered into a long-term supply agreement with
a fabric manufacturer and signed the contract ‘for and on behalf of Weave Ltd.
For each of the following statements, identify whether it is true or false.
From the desk of Sir Owais Mirchawala: Page 2
