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Financial Accounting And Management Question Paper

Financial Accounting And Management

Course:Diploma In Information Technology

Institution: Kca University question papers

Exam Year:2009

UNIVERSITY EXAMINATIONS: 2009/2010
STAGE III EXAMINATION FOR DIPLOMA IN INFORMATION
TECHNOLOGY
DIT 302: FINANCIAL ACCOUNTING AND MANAGEMENT
DATE: DECEMBER 2009 TIME: 1½HOURS
INSTRUCTIONS: Answer any THREE questions
QUESTION ONE (20 Marks)
a) You are the career advisor at KCA University. Some students in the Faculty of Science and IT
have put you to task about the need of finance and accounting knowledge in their professional
endevours. Prepare a brief report in that respect.
(10 Marks)
b) All disciplines operate with a certain set of principles. Discuss this statement with a bias to
financial accounting and management (10 Marks)
QUESTION TWO (20 Marks)
a) Name and briefly explain five fundamental accounting concepts (10 Marks)
b) Define the term ‘accounting standards’ and state their purpose. (10 Marks)
QUESTION THREE (20 Marks)
H. James
Trial Balance as at 31st December 20x7
Dr Cr
Ksh Ksh
Stock of raw materials 1.1.20X7 21,000
2
Stock of finished Goods 1.1.20X7 38,900
Work in progress 1.1.20X7 13,500
Wages(direct Ksh 180,000;factory indirect
Ksh 145,000)
325,000
Royalties 7,000
Carriage inwards(on raw materials) 3,500
Purchases of raw materials 370,000
Productive machinery (cost Ksh 280,000) 230,000
Administration computers ( Cost Ksh
20,000)
12,000
General factory expenses 31,000
Lighting 7,500
Factory Power 13,700
Administration salaries 44,000
Sales rep’ salaries 30,000
Commission on sales 11,500
Rent 12,000
Insurance 4,200
General Administration expenses 13,400
Bank charges 2,300
Discounts allowed 4,800
Carriage outwards 5,900
Sales 1,000,000
Debtors and creditors 142,300 64,000
Bank 16,800
Cash 1,500
Drawings 60,000
Capital as at 1.1.20X7 357,800
1,421,800 1,421,800
Notes
3
1. Stock of raw material Ksh 24,000; stock of finished goods Ksh 40,000; work in progress Ksh
15,000.
2. Lighting, rent and insurance are to be apportioned: factory 5/6, administration 1/6
3. Depreciation on productive and administration computers at 10% p.a on cost.
Required.
Prepare the Manufacturing trading and profit and loss account for the year ending 31 December 20X7
and the balance sheet as at 31 December 20X8 (20 Marks)
QUESTION FOUR (20 Marks)
a) List and discuss the various methods of depreciation while explaining causes of depreciation
(10 Marks).
b) Jacuzzi Ltd. has a authorized share capital of Sh.500, 000 in shares of Sh.10 each. Sh.400, 000
of this capital is issued and fully paid up. For the year ended 31 December 2007, the company
made a net profit of Sh.100,000 and it was decided to issue bonus shares instead of paying
dividends at the rate of one fully paid bonus share of Sh.10 for every eight held.
Prepare the ledger accounts to show this issue. (10 Marks)
QUESTION FIVE (20 Marks)
a) State and explain the reasons for having incomplete records (5 Marks)
b) State and explain the different degrees of incompleteness of records. (5 Marks)
c) A business has Ksh 20,000 as capital at 31.12.2008. During 2009, there were no drawings, and
no extra capital has been brought in by the owner. At the end of 2009 the capital was Ksh
30,000.
i). Calculate the profit for the period 2009. (5 Marks)
ii). Assuming drawing were Ksh 8,000 calculate the profit. (5Marks)
.

Financial Accounting And Management Question Paper

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