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Fundamentals Of Accounting I Question Paper
Fundamentals Of Accounting I
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2009
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
FIRST SEMESTER EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
BAC 100: FUNDAMENTALS OF ACCOUNTING I
DATE:
Monday 21st December 2009
TIME: 11.00am – 1.00pm
INSTRUCTIONS
1)
Answer all the questions.
2)
Present your working logically
3)
Marks are indicated at the end of every question
Q1.
From the following trial balance drawn from the books of a trader, prepare trading
profit and loss account for the year to 31st December, 2007.
Trial balances as on 31 December, 2007
Dr
Cr.
sh.
sh.
Capital on Jan 1, 2007
40,000
Freehold property
10,800
Depreciation on freehold property
1,200
Insurance pre-paid (Jan 1 2007)
300
Stock (Jan 1, 2007)
14,360
Furniture and Fittings
1,500
Page 1 of 4
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Insurance Paid
3,000
Sales
80,410
Returns in
1,590
Purchases 67,350
Returns out
2,520
Office expenses
5,100
Bad debts
1,310
Carriage out
1,590
Carriage in
1,450
Discount
150
Accounts receivable
11,070
Account payable
4,700
Cash and bank
2,610
128,180 128,180
Adjustments:
i)
Stock on hand sh.10,700 including stationary stock sh 200.
ii)
Insurance prepaid sh.330.
iii)
Office expenses include stationary purchases sh. 800.
iv)
Carriage inwards include carriage paid on purchase of furniture sh.50.
v)
Included among expenses for office is an amount of sh.1000 paid for
acquisition of freehold property.
vi) Debtors
include:
a)
sh 400 considered definitely bad,
b)
sh 1000 considered definitely good and
c)
sh 600 considered very much doubtful
vii)
Provision for doubtful debts be made at 5%
[20marks]
Q2.
Explain the following terms giving examples in each case.
a)
Adjustments
[4marks]
Page 2 of 4
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b)
Provision
[4marks]
c)
Bad
debts
[4marks]
d)
Double
entry
[3marks]
Total [15marks]
Q3.
GD owned a retail business. She employed an inexperienced bookkeeper who
prepared a trial balance which failed to agree. The accounts were balanced by
including the following debit balance.
Difference on trial balance suspense account. Sh, 2,513.
On investigation, the following errors were discovered:
i)
Discounts received sh.324 in January, 2007 had been posted to the debit of
the
discounts
allowed.
ii)
Wages of sh. 2963 paid in February, 2007 had not been posted from the
cash
book.
iii)
A remittance of sh 940 received from Kikwetu in November, 2006 had
been posted to the credit f Mambo Ltd.
iv)
In December, 2006, the company took advantage of purchasing stationary
at a bargain price of sh 2000. No adjustment have been made in the
accounts for the fact that ¾ in the value, of this stationary was in stock on
April
30,
2007.
v)
A payment of sh,341 to Wimpi in Jan 1, 2007 was posted to the personal
account
as
sh.143.
vi)
A remittance of sh3000 received from North, a credit customer, in April
2007 had been credited to sales.
The draft account for the company for the year ended 30th April, 2007 showed a profit of
sh.24,760.
Required:
a)
Outline the principal uses of a trial balance.
[2marks]
b)
Prepare the difference on trial balance suspense account showing where
appropriate, the entries to correct the errors.
[8marks]
Page 3 of 4
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c)
Prepare a computation of the corrected net profit for the year ended 30th
April,
2007.
[7marks]
Q4.
The books of Mr. Lazy on 31 January, 2008 revealed the following positions:-
Sh.
Sh.
Capital 8,000
Furniture
2,000
Creditors 7,500
Debtors
9,000
Stock 4,000
Cash at bank
500
15,500
15,500
During the year, his books were imperfectly kept but an analysis of the bank transactions
revealed the following:
Receipts from customers
Sh 35,000
Drawings for personal expenses
6,000
Payment of salaries
3,000
Payment of creditors
22,000
Payment for rent
1,500
Miscellaneous expenses
400
The schedules on 31 December, 2008 of debtors totaled sh. 950 and of creditors sh. 6400.
No inventory of the stock on 31 December, 2008 was taken but it was stated that a gross
profit at uniform rate of 40% on turnover was made during the year.
Required:
Prepare a bank account, a trading and profit or loss account and balance sheet as at 31
December,
2008.
[18marks]
Page 4 of 4
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