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Financial Accounting /Fundamentals Of Accounting Question Paper
Financial Accounting /Fundamentals Of Accounting
Course:Diploma In Information Technology
Institution: Kca University question papers
Exam Year:2012
UNIVERSITY EXAMINATIONS: 2011/2012
EXAMINATION FOR THE DIPLOMA IN INFORMATION TECHNOLOGY
DIT 302/DBIT106 FINANCIAL ACCOUNTING /FUNDAMENTALS OF
ACCOUNTING
DATE: MARCH, 2012 TIME: 1½ HOURS
INSTRUCTIONS: Answer Any Three Questions
Question One
a) Give a definition for depreciation, and explain why equipment and machinery reduces in value over
a period of time. (4 Marks)
b) Accounting concepts are very important in the preparation of the financial statements. Discuss three
of them stating why they are necessary (6 Marks)
c) Describe the following errors giving specific examples:
i. Error of commission (2 Marks)
ii. Error of Ommision (3 Marks)
iii. Error of principle (3 Marks)
iv. Error of original entry (2 Marks)
Question Two
The trial balance below was prepared as at 30th April 2005
Dr Cr
$ $
Sales 18,600
Purchases 11,556
Stock 1st May 2004 3,776
2
Carriage outwards 326
Carriage inwards 234
Return inwards 440
Return outwards 355
Salaries and wages 2,447
Motor expenses 664
Rent 576
Miscellaneous expenses 1,202
Motor vehicles 2,400
Fixtures and fittings 600
Debtors 4,577
Creditors 3,045
Cash at bank 3,876
Cash in hand 120
Drawings 2,050
Capital 12,844
34844 34,844
Required:
Prepare
i. Trading profit and Loss account for the year ended 30th April 2005 (10 Marks)
ii. Balance sheet as at that date (10 Marks)
Question Three
a) Briefly explain why the following parties may be interested in the financial statements of an
organisation:
i. Employees. (4 Marks)
ii. Financial analysts. (4 Marks)
iii. The government. (4 Marks)
iv. The public. (4 Marks)
b) State any two circumstances that may hinder a firm from improving on the usefulness of its financial
statements. (4 Marks)
3
Question Four
a) Define what is an accounting information system (4 Marks)
b) Discuss four effective features of an accounting information system (8 Marks)
c) A computerized accounting system comprises of three components. Explain three of them giving
examples (8 Marks)
Question Five
Mr Josphat Muigai started his business on 1st January 2010. Given from the following information.
January 2010
1st Started his firm with capital in cash of Sh. 250,000
2nd Bought goods on credit from the following persons. D Kamau Sh. 54,000, C Maina
Sh.87,000, G Kuria Sh.25,000 D Bosire Sh.76,000 and L Mwangi Sh.64,000
4th Sold goods on credit to C Malli Sh.43,000, B Munro Sh.62,000, H Thuku Sh. 176,000
6th Paid rent cash Sh. 12,000
9th Malli paid by cheque Sh. 43,000
10th H Thuku paid by cheque Sh.150,000
12th Paid by cheque to G Kuria Sh. 25,000, D Kamau Sh.54,000
15th Paid carriage cash Sh.53,000
18th Bought goods on credit from C.Maina Sh 43,000 and D Bosire Sh. 110,000
21st Sold on credit to B Munro Sh. 67,000
31st Paid rent by cheque Sh.18,000
a) Prepare the necessary accounts balance them off (10 Marks)
b) Extract a trial balance (10 Marks)
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