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Caa 100: Introduction To Accounting I Question Paper
Caa 100: Introduction To Accounting I
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2009
1
UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR STAGE I EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 100: INTRODUCTION TO ACCOUNTING I
DATE: APRIL 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer all questions
QUESTION ONE
a) Discuss the functions of accounting to your organization [10 Marks]
b) Enter up the sales and returns inwards journals from the following details, and then post the
items to the relevant accounts in the sales ledger and the general ledger.
2008
Nov 1 Credit sales to B Peter shs. 5800, John sh. 6700, B. Kariuki shs.2500.
Nov 2 Credit sales to Adlemen shs 7500, John sh. 4500, B Peter sh. 1700
Nov 5 Goods returned by B Peter sh.500 B Kariuki shs 230
Nov 10 Credit sales to Adlement sh 2700, B Peter shs 200
Nov 15 Goods returned by Jon sh 750
Nov 25 Credit sales to B Kariuki shs 25000
[15 Marks]
2
QUESTION TWO
The following trial balance was extracted from the books of Nyakio traders on 31st December 2008.
DR CR
Shs Shs
[000] [000]
Capital account 13,000
Drawings 2,700
Debtors and creditors 2,535 2,250
Stock 1.1.2007 3,961
Purchases and sales 14,500 22,400
Returns 539 462
Wages & salaries 3,165
Carriage Inwards 470
Discounts 354 330
Advertising 313
Bad debts 110
General expenses 510
Rates 275
Cash in hand 80
Cash at bank 330
Motor vehicles 1,100
Premises 7,500
38,442
=====
38,442
=====
The following additional information is provided:-
a) Wages due shs. 54,000
b) Rates paid in advance shs. 65,000
c) Motor vehicles to be depreciated by 20%
d) Stock at 31.12.2007 was valued at shs. 4,126,000
You are required to prepare in vertical form
i) Trading and Profit & loss Account for the year ending 31st December 2008
ii) Balance sheet as at 31.12.2008 [25 Marks]
3
QUESTION THREE
The following bank statement was received by Mark Nganatha, a trader on 31 march 2008.
Debits Credits Balance
Shs Shs shs
Balance 8,400.00
Deposits 11,640.00 20,040.00
Deposits 1,745.00 21,785.00
Cheque no 176 7,200.00 14,585.00
Cheque no. 717 1,360.00 13,225.00
Deposits 2,500.00 15,725.00
Cheque no. 719 3,400.00 12,325.00
Bank charges 50.00 12,325.00
Cheque no. 721 2,840.00 9,435.00
Unpaid cheque 4,250.00 5,185.00
Deposits 3,600.00 8,785.00
Cheque No. 718 4,850.00 3,935.00
Standing order - Rent 5,000.00 1,065.00
His cash book [bank column only] had the following entries for March 2008.
Cash book [bank column only]
Shs. Shs.
Balance b/f 8,400.00 Cheque No. 716 7,200
Deposits 11,640.00 Cheque No. 717 1,360
Deposits 1,745.00 Cheque No. 718 4,850
Deposits 3,600.00 Cheque No. 719 3,400
Deposits 4,285.00 Cheque No. 720 2,610
Cheque No. 721 2,840
Cheque No. 722 3,180
You are informed that no error has been made in either the bank statement or the cash book.
You are required to complete and balance the Cash Book as at 31st march 2008 and prepare a Bank
reconciliation statement.. [Total 25 Marks]
QUESTION FOUR
a) State the objectives of accounting for stock. [5 Marks]
4
b) The stock room and part of the business premises of Akiba Mali Ltd were gutted by fire on the
28th November , 2007 and property of unknown value destroyed.
An examination of the account records spread by the fire, circularization of trade debtors and
trade creditors, auditors and personal interviews with members of the accounts departments
revealed the following data:
Balance at 1st January Shs
Stock on hand 164,750.00
Sundry debtors 169,080.00
Sundry creditors 135,905.00
Provision for bad debts 43,375.00
Balances at 27th November, 2007
Cash sales 28,800.00
Cash purchases 20,140.00
Sales returns 14,740.00
Purchase returns 6,250.00
Payments to trade creditors 219,435.00
Cash received form Debtors 358,900.00
Discount allowed 3,200.00
Bad debts written of 1,760.00
Discount received 3,030.00
Trade debtors 161,680.00
Trade creditors 98,310.00
A physical count for the stock on the 28th November, 2007 valued on the lower cost and net realizable
value at shs. 11,700.
Akiba Mali Ltd operates in a fairly stable industry and has maintained an average percentage of gross
profit to turnover of 40 per cent for the last three years.
The loss of stock by fire is fully covered by insurance and the whole cost of the stock destroyed by
fire is recoverable from the insurance company.
Required.
Prepare an account setting out the amount to be recovered from the insurance company. [20 Marks]
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