ICB Level 3 Mock Online Examination

It is useful, as preparation for the Level 3 examination, to tackle the online mock examination. If you have tackled one or more manual past examinations as part of your revision, you will be aware that they are concerned primarily with the presentation of final accounts and balance sheets of various types of organisation. I worked my way through the mock examination to see if this was similar in approach or differed. It proved, with some differences to be much the same in approach as the previous manual examination.

Having worked through the mock examination, which presumably will be typical of the actual examination, I thought I would share my experiences and thoughts. Hopefully there will be something you find useful. If, as you work through the mock or your actual examination, you feel there is something you have learned which will be helpful to other students please add your comments below.

I have covered some of the following in my blog on the earlier levels and am repeating it here in case you have not read them or you read them some time ago.

The mock examinations for all levels are available at the ICB shop on the ICB website http://www.bookkeepers.org.uk/

Purchasing the examinations is straightforward and you should, within a couple of minutes, be provided with the information of how to take the mock examinations. When I took the mock I was told it was valid for use for 28 days from the date of purchase. The time allocated from start to finish in which to complete the mock examination was 2 hours. For reasons I will explain below, I found that much of the time was needed to complete the mock. Time management is important.

I am not sure if you could buy the mock, book the actual examination and then attempt both on the same day. But as this occurred to me I tackled the Level 3 mock within an hour of completing the Level 2 mock. Having done so, I would not recommend this approach. It would be sensible to have more of a break between the mock and the examination.

As you will be taking the actual examination in a Pearson Vue Centre it is easier to put the time aside but for best use of the mock examination at home I would suggest replicating examination conditions. My advice is the same as for Levels 1 and 2. Make sure you have:

- a clear 2 hours on the computer without interruption, including phone calls
- a pad of blank paper
- pens and pencils
- a calculator

You will need to make calculations and draw up financial statements on your pad. It is advisable to take your time in preparing the statements clearly so you can refer back to them easily. During the mock examination, and probably actual examination, you will need either to refer back a screen or two. Or, if you have your answer on your pad, it will be easier to refer to it. Please write clearly and double check all the figures you take from pad to screen because some options are very similar in the answers given.

Turning now to the practicalities of the mock examination (and, I assume the actual examination). As with Levels 1 and 2 you are provided with details the pass mark, how long you have to complete the examination and very important information about the FINISH button. Once you press that you cannot return to the mock so it is important to be completely happy with your work before pressing it. You are reminded at the end to check your work. Please do so!

There is also a START button on this page. Once you have pressed it you are then into your mock examination time and to the next page which lists a number of questions down the left hand side (5 questions, some having one, two or three parts in my case) with the word finish at the end. There was probably less of a feeling of time pressure than in the Level 1 and 2 examination and mock that I completed. In hindsight, there was a need not to waste time. Completing the mock online will help you better manage your time in the examination.

As I mentioned for Levels 1 and 2, you can flick through the pages to see what is involved in each of the tasks if you wish before starting and you will see some tasks are shorter than others. You are advised to complete the tasks in order but most appeared to be discrete so if you have a ‘favourite topic’ it is probably possible to tackle that first. I would certainly recommend reading through all the tasks quickly and then each task in turn fully before starting because there are more interrelationships between parts of tasks at earlier Levels.

The question style differs from Levels 1 and 2. There are a few radio buttons but, primarily fill-in boxes are used in the format of statements such as trading accounts, profit and loss accounts, income and expenditure accounts, balance sheets and so on.

There were a variety of tasks in the mock examination. Some followed a full or partially full set of final accounts and others were more selective. For instance, one question started with an appropriation account (so the trial balance provided was after the profit and loss account had been completed). The first task was then to calculate figures and insert them in a pro-forma appropriation account. A similar approach was taken with the balance sheet. This means that some items can be cut and paste from the information and placed into fill-in boxes. Other fill-in boxes may need some work (e.g. working out depreciation and just putting the net book value of fixed assets into the fill-in boxes). In a question like this is would probably not be a good use of time writing out your answer first. There are opportunities to calculate figures for total fixed assets, total current assets and so on, on the pro-forma. And if your balance sheet balances, there is a good likelihood that your answer is correct or you have only made one or two compensating errors.

In another question I was provided with, effectively, the receipts and payments account of a club and was asked to calculate various figures and then complete the balance sheet.

There was sufficient information to produce an income and expenditure account too but it was not required within the examination. I was tempted into writing an income and expenditure account out on paper so that I could see the full set of accounts and, thereby, check my work on the information I had to produce. I feel that this was a mistake. Although I was able to do this, the time taken put me under time pressure. Hence, I would suggest completing just what you are required to do in the examination and check your work carefully first, before trying anything more extensive as a double-check.

Some questions were relatively straightforward but of Level 3 standard. Others required a little more thought. For instance, one question called for the restatement of a balance sheet extract after changes in share capital. This is one of those questions in which it can be easy to miss something under pressure and I used a strategy I used in the past on manual papers to deal with the situation. I drew up three columns on my pad.

In the first column I wrote the initial figure given, in the second column the changes with plus and minus and the final figure in the third column.

e.g. Net assets 50,000 Bank + 22,000 = 72,000

Share capital 40,000 + 20,000 = Sh cap 60,000
Share premium 2,000 + 2,000 = Sh pr 2,000

In the above an issue of shares means that assets increase (because the shares bring cash into the business) and share capital and premium increase. I found the use of columns provided clarity and I was able to see I had dealt with all aspects of the calculation. As this was working which no one would see except me I used recognisable abbreviations.

You may find it useful in the less recognisable type of questions to think about your strategy for answering the question before tackling it. Time thinking may save time overall.

I noticed that the terms capital employed and shareholders’ equity were used in the mock examination. There are different ways of interpreting these terms in reality. The following approach was used in the mock examination and I presume that is a signal for how they will be calculated in the actual examinations in future. You might like to commit these to memory.

Capital employed = share capital + reserves + long-term liabilities

Shareholders’ equity = share capital + reserves

Gearing, which is also measured in various ways, was also tested and this was calculated as: long-term liabilities divided by share capital + reserves + long-term liabilities measured as a percentage.

I tried different measures/interpretations of capital employed, shareholders’ equity and gearing. Some were regarded as right, some not. Hence, it is important that you use the above formulae.

Please aim for accuracy in all your calculations. In manual examinations you are often given credit for the correct approach for later calculations even if earlier ones are incorrect. It was not clear that this was the same approach taken in the online paper.

Finally, after completing the examination, almost instantly after pressing finish you are taken to a page which provides the mark earned and a question by question breakdown of the answers given and the correct answers. So you can clearly see what was correct and any mistakes made.

My key lessons from taking this mock examination though were to manage time carefully and not to introduce additional work even if it would confirm the figures in statements completed. A Level 3 examination requires full attention to the topics tested and appropriate time devoted to concentrate on them.