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Daa 100: Introduction To Accounting I Question Paper
Daa 100: Introduction To Accounting I
Course:
Institution: Kca University question papers
Exam Year:2009
1
UNIVERSITY EXAMINATIONS: 2008/2009
STAGE I EXAMINATION FOR DIPLOMA IN BUSINESS MANAGEMENT
DAA 100: INTRODUCTION TO ACCOUNTING I
DATE: APRIL 2009 TIME: 1½HOURS
INSTRUCTIONS: Answer any THREE questions
QUESTION ONE.
John Macknien opened a shop in town on 1 July 2008. The following transactions took place during
the month of July 2008.
July 1 : Introduced shs.200,000 into the business from his private bank account
2 : Opened a business bank account by transfering shs.180,000 of the business
cash into the account.
5 : Paid shs.5,000 in cash being rent for the month.
6 : Bought second-hand shop equipment at shs.3,000, paying by cheque.
9 : Purchased goods for resale on credit worth shs.20,000 from S.W. Stores.
11 : Purchased goods in cash for resale at shs.10,000, paying for the goods in cash.
13 : Returned goods worth shs.2,000 to S.W Stores.
16 : Made cash sales of shs.15,000.
20 : Paid S W. Stores shs.16,200 by cheque.
21 : Sold goods on credit worth shs.10,000 to A. Hassan.
23 : A Hassan returned goods worth Shs5,000.
25 : Received a cheque for shs.4,500 from A.Hussein in settlement of her account, the
balance being treated as a cash discount.
Required:
a) Prepare ledger accounts to record the above transactions, including a three column cashbook
(12 Marks).
b) Extract a Trial Balance as at 31st July 2008 (8 Marks).
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QUESTION TWO
The trial balance of Finis, a sole trader, as at 31st December 2008, was as follows:
Dr. Cr.
Shs. Shs.
Sales 130,000
Return Inwards 250
Stock – 1, Jan 2008 15,000 -
Return Outwards - 150
Purchases 80,000 -
Capital, 1 Jan. 2008 27,600
Cash at Bank 3,100
Debtors 15,400
Creditors 5,000
Premises 8,000
Wages 17,300
Discount received 300
Rent & Rates 3,000
Delivery costs 2,750
Cash withdrawn by Finis 12,000
Heat and Light 3,500
Sundry expenses 2,750
163,050 163,050
Note 1:
The value of stock at 31st December 2008 was shs.17,750.
Required:
a) State the location in the final accounts of each item in the trial balance ie. whether it is entered
in the Trading Account, Profit and Loss Account or the Balance Sheet.
(8 Marks)
b) Prepare the Trading, Profit & Loss Account of Finis for the year ended 31 Dec, 2008 and a
Balance Sheet as at that date. (12 Marks).
QUESTION THREE
a) State and briefly explain the five types of Journals used in a business, and the information
recorded in each (10 Marks).
b) B.Jones is in business as a builders’ merchants. The following credit transactions took place
during January 2009:
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Jan. 1 : Bought goods on credit from Brick Ltd, shs.7,250.
2 : Sold goods on credit to Oak Ltd for shs.4,100.
3 : Bought goods costing shs.3,150 from Stone Ltd on credit.
7 : Sold goods on credit to Pine ltd for shs. 6,300 on credit.
11. : Bought goods costing shs.2,500 from Slate Ltd on credit.
15 : Sold goods to Lime Ltd for shs.6,300 on credit.
17 : Bought on credit from Brick Ltd for shs.2,900.
19 : Received a credit note for shs.1,200 from Brick Ltd.
22 : Sent Oak Ltd a credit note for shs.2,200.
24 :: Stone Ltd sent us a credit note for shs.750 in respect of goods returned.
27: Sent Pine Ltd a credit note for shs.3,600.
Required:
Make the necessary entries in the books of Prime Entry and the General Ledger (10 Marks).
QUESTION FOUR
a) Briefly explain four (4) users of accounting information and their information needs (8 Marks).
b) Explain each of the following accounts concepts:
i. Going concern
ii. Accruals
iii. Matching concept
iv. Duality (8 Marks)
c) List and explain four errors which are not disclosed by a Trial Balance (4 Marks).
QUESTION FIVE
The following information relates to machinery owned by Clip Ltd.
Shs.
At cost, 1 Jan 20X1 65,000
Accumulated depreciation at 1 Jan, 20X1 25,000
Acquired during 20X1 10,000
Depreciation charge for 20X1 8,000
Required:
a) Prepare the following Ledger Accounts to record the above information:
i. Provision for Depreciation Account.
ii. Machinery Account.
iii. Profit and Loss Account (Extract).
iv. Balance Sheet (Extract).
(20 Marks)
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