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Intermediate Acconting1 Question Paper
Intermediate Acconting1
Course:Diploma In Business Management
Institution: Kca University question papers
Exam Year:2009
UNIVERSITY EXAMINATIONS: 2009/2010
STAGE IV EXAMINATION FOR DIPLOMA IN BUSINESS MANAGEMENT
DAA 102: INTERMEDIATE ACCONTING1
DATE: DECEMBER 2009 TIME: 1½ HOURS
INSTRUCTIONS: Answer any THREE questions
QUESTION ONE
Discuss the meaning and application of the following terms as used in accounting
A) Going concern concept.
B) Materiality
C) Consistency
D) Matching concept
E)Prudence (15 Marks)
QUESTION TWO
A)Explain the differences between bad debts and provision for bad debts (4 Marks)
On 31 December 2007 J. Kiarie balanced his accounts and found that this total debtors were sh.
1,680,00. Included in this figure were irrecoverble debts of sh. 8,400 owed by Michael Otieno and Sh.
11,200 owed by K. Kiige which J. Kiarie decided to write off. In addtion J. Kiarie decided to create a
provision for doubtful debts of 15% of the remaining debtors.
In the following year, ended 31 December 2008 debtors totaled to sh 1,400,000 and no debts were
written off but J. Kiarie maintained the provision for bad debts at 15% of the current debts.
Required
Show for each year ended 31 December 2007 and 2008.
(i). Bas debts written off account.
2
(ii). Provision for doubtful debts account.
(iii). Appropriate entries in the profit and loss account.
(iv). The balance sheet entries on 31 December 2007 31 December 2008.
(15 Marks)
QUESTION THREE
a) Explain the term intangible assets (3 Marks)
b) What is goodwill? Explain the three methods of valuing goodwill (8 Marks)
c) Explain the meaning of the following terms as used in accounting for intangible assets
patents
tradeMarks
copyrights
franchises
(4 Marks)
QUESTION FOUR
a) Explain why some business enterprises do not provide depreciation on freehold land and
buildings.
b) J. Otieno established his Jua Kali business and started trading on 1 January 1998. His purchases
and disposal of fixed assets over a period of three years subsequent to establishing his business
were as follows
Asset Date of purchase Cost (sh) date of Disposal Proceeds of Dsiposal (sh)
MSIE 1 1 January 1998 2,800,000 - -
MSIE 2 1 January 1998 1,400,000 1 January 2000 504,000
MSIE 3 1 January 2000 3,920,000
Required:
i. Prepare the following accounts as they would appear in the books of J. Otieno for the years
ended 31 December 1998, 1999 and 2000 assuming that the firm charges depreciation at
20% per annum calcualted on the straight –line basis.
a. Fixed assets account
b. Provision for depreciation account
c. Disposal of fixed assets account. (15 Marks)
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