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Caa 100: Introduction To Accounting One Question Paper
Caa 100: Introduction To Accounting One
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2009
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UNIVERSITY EXAMINATIONS: 2009/2010
FISRT YEAR STAGE I EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 100: INTRODUCTION TO ACCOUNTING ONE
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer All Questions
QUESTION ONE (25 MARKS)
The following trial balance was extracted from the books of Susan, a wholesaler as at 31 December
2005.
Sh Sh
Capital 1,805,850
Drawings 210,000
Trade debtors and creditors 315,000 105,000
Sales 1,492,680
Returns inwards and outwards 25,270 38,290
Purchases 733,040
Wages 224,000
Salaries 105,000
Discounts allowed and received 17,360 29,820
Provisions for depreciations:-
Fixtures 20,300
Vehicle 556,000
Bank 180,810
Cash in hand 8,400
Lighting and heating 33,040
Rates 17,360
Premises(cost) 534,450
Fixtures(cost) 106,400
Vehicle(cost) 1,112,000
Stationery 10,920
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Postage and telephone 14,000
Insurance 4,200
Provision for bad debts 14,000
Motor vehicle expenses 27,020
Bad debts 5,040
Stock in trade on January 2005 443,380
Bank loan @ 15% p.a 70,000
Interest on loan for six months 5,250
4,131,940 4,131,940
The following information is provided:
1. Stock in trade on 31 December 2005 was Sh.434,700
2. Depreciation is to be charged on fixtures at 5% on cost and on motor vehicles at 20% on
reducing balance.No depreciation is to be provided on premises.
3. Only three quarters of rates and lighting and heating applies to the business.
4. Rates prepaid as at 31 December 2005 amounted to Sh 4,480.
5. Half years interest on loan has not been paid.
6. Prepaid insurance is Sh 840. Provision for bad debts is to be raised to Sh 17,500
7. An invoice for goods purchased on 20 December for Sh 7000 had been omitted
8. Susan took Sh2,800 of goods(at cost) for her own use.
Required:
a) Trading profit and loss account for the year ended 31 December 2005. (15 Marks)
b) Balance Sheet as at 31 December 2005 (10 Marks)
QUESTION TWO (25 MARKS)
(a) Explain the meaning of control accounts and indicate the sources of information for writing up
control accounts. (8 Marks)
(b) Diana maintains control accounts for sales and purchases ledgers.
Balances as at 30 April 2000 were as follows:
Sh Sh
Sales ledger 1,834,480(Dr) 13,920(Cr)
Purchases ledger 24,760(Dr) 1,477,640(Cr)
Transactions for the year were as follows:-
Sh
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Sales 16,919,480
Purchases 11,365,680
Cash Sales 9,666,080
Cash Purchases 22,400
Receipts from credit customers 15,771,240
Payments to suppliers for credit purchases 11,044,400
Returns inwards 121,920
Returns outwards 94,440
Bad debts written off 186,720
Debts settled by contra between ledgers 74,480
Increase in provision for bad debts 46,000
On 30 April 2000 debit balances on the purchases ledger were Sh 18,000 and credit balances on the
sales ledger were Sh 15,360.
Required:
(I) Sales ledger control account. (9 Marks)
(II) Purchases ledger control account (8 Marks)
QUESTION THREE (25 MARKS)
(a) State the reasons for preparing a bank reconciliation statement (8 Marks)
(b) Sarah Nunge has received his bank statement for the year ended 31 October 2006.At that date
his balance at the bank was Sh845,100 but his cash book showed a balance of Sh 2,839,800.He
investigated the matter and discovered the following discrepancies:
1. Some of his customers had agreed to settle their debts by making direct payments
through the bank.Unfortunately the bank credited the sum of Sh 999,000 to Diana
Nunges account.
2. Bank charges of Sh 3,600 had not been entered in the cash book
3. A cheque payment of Sh 52,800 had been written back in the cash book but the bank
had already honoured it.
4. Diana Nunge brought down his opening cash book balance of Sh 395,100 as a debt
balance instead of credit balance.
5. Cheques drawn by Diana totaling to Sh 27,000 had not been presented to presented to
the bank.
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6. Diana N had not entered receipts of Sh 31,800 in his cash book
7. Receipts of Sh 118,200 paid into the bank on 31 October 2006 had not been entered by
the bank.
8. Standing order payments amounting to Sh 74,400 had not been entered in the cash
book.
9. Diana N had entered in his cash book a payment of Sh 33,600 as Sh 36,300
10. A cheque of Sh 18,000 from a debtor returned by the bank marked "Refer to drawer"
had not been written back in the cash book.
Required:
1) Statement showing Diana Nunges adjusted cash book balance at 31 October 2006.
(10 Marks)
2) Bank reconciliation statement as at 31 October 2006 . Start with balance as per bank
statement and reconcile it with the adjusted cash book balance. (7 Marks)
QUESTION FOUR (25 MARKS)
a) Explain the accounting concepts (7 Marks)
b) Explain three errors not revealed by the agreement of a trial balance (6Marks)
c) John Safari commenced transportation business on 1 January 2002. On
That date he purchased a motor vehicle for sh.3,000,000 in cash. On
January 2003 he purchased another motor vehicle for sh 4,000,000 in cash.
John Safari provides depreciation at the rate of 25% per annum on straight line method.
Required:
i) The Motor Vehicle Account,
ii) Depreciation Account
iii) Provision for Depreciation Account
For the three years ended 31st December 2004. (12 Marks)
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