Get premium membership and access revision papers, questions with answers as well as video lessons.
Cms 302 Accounting Information Systems-(Day) Question Paper
Cms 302 Accounting Information Systems-(Day)
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2011
1
UNIVERSITY EXAMINATIONS: 2010/2011
EXAMINATION FOR THE BACHELOR OF COMMERCE
CMS 302 ACCOUNTING INFORMATION SYSTEMS-(DAY)
DATE: DECEMBER 2011 TIME: 2 HOURS
INSTRUCTIONS: Answer ALL Questions
QUESTION ONE
a) Use the given balance sheet and income statement in answering the questions that follow:
SAFEWAY LTD
Balance Sheet
December 31, 2010, and December 31, 2009
(In millions)
Assets 2010 2009
Noncurrent Assets:
Property
Land 1,384.90 1,348.70
Buildings 3,847.20 3,597.10
Leasehold improvements 2,494.80 2,467.70
Fixture and equipment 5,539.80 5,195.30
Property under capital leases 758.10 684.30
14,024.80 13,293.10
Less accumulated depreciation -5,619.00 -4,762.30
Total property, net 8,405.80 8,530.80
Goodwill 2,404.90 3,125.70
Other assets 778.30 932.20
Total noncurrent assets 11,589.00 12,588.70
Current Assets:
Prepaid expenses 307.50 233.10
Inventory 2,642.20 2,717.80
Accounts receivable 383.20 431.60
Cash 174.80 76.00
Total current assets 3,507.70 3,458.50
Total assets 15,096.70 16,047.20
2
SAFEWAY LTD
Balance Sheet
December 31, 2010, and December 31, 2009
(In millions)
Liabilities and stocholders'equity 2010 2009
current liabilities
Short-term loans payable 750.00 823.00
Accounts payable 1,509.60 1,811.50
Accrued salaries and wages 1,204.70 1,158.10
Total current liabilities 3,464.30 3,792.60
Long-term notes and debetures 6,404.00 7,009.90
Obligations under capital leases 668.30 602.70
Other liabilities 915.80 1,014.50
Total liabilities 11,452.40 12,419.70
Stockholders'equity
Paid-in capital 3,340.40 3,312.90
Deferred stock compensation -14.00 0.00
Retained earnings 4,117.80 4,287.60
Accumulated other comprehensive income (loss) 87.50 -68.30
Treasury stock [repurchased shares] -3,887.40 -3,904.70
Total stockholders'equity 3,644.30 3,627.50
Total liabilities and stockholders'equity 15,096.70 16,047.20
SAFEWAY LTD
Income Statement
For the Years Ended December 31, 2010 and December 31, 2009
(In millions)
Revenues 2010 2009
Sales 35,552.70 34,767.50
Other revenue 9.60 15.50
Total Revenue 35,562.30 34,783.00
Expenses
Cost of goods sold 25,018.90 23,955.50
Operating expenses 9,230.80 8,576.40
Goodwill impairment charges 729.10 1,288.00
Interest expense 442.40 430.80
Income tax expense 310.90 660.40
Cumulative effect of accounting change 0.00 700.00
Total expenses 35,732.10 35,611.10
Net income/Loss -169.80 -828.10
3
Required:
Create a chart of accounts for the presentation of data in the above format. The chart of accounts
should include flexibility for future expansion. (8 marks)
b) Describe the necessary setup in an ERP for the procure-to-pay and order-to-cash processes
(6 marks)
c) Explain how the processes in b) above are integrated for the production of financial
statements
(3 marks)
d) Explain how financial statements are produced in QuickBooks and displayed on the screen
(3 marks)
QUESTION TWO
a) The accountant for KCA University made the following closing entries at the end of the
university’s year.
a Interest Revenue 4,700
Accounts Payable 1,900
Capital Stock 10,000
Sales 45,000
Reserves 61,600
b Reserves 48,700
Gain on sale of Land 3,000
Cost of Goods Sold 32,000
Accounts Receivable 12,000
Operating Expense 4,200
Other Assets 3,500
Required:
1. After reviewing these entries, discuss the errors, if any
2. Make the correct closing entries
(8 marks)
b) Using QuickBooks Accounting Information System, explain the following:
a. How to activate inventory module (4 marks)
b. If an inventory item is bought, where does it appear on the financial statement?
(4 marks)
4
c. How the inherent risk, control risk, detection risk and audit risk are related to the
internal controls (4 marks)
QUESTION THREE
a) Discuss the six elements of an accounting information environment, including the related
internal controls (6 marks)
b) Discuss the ERP implementation process, major ERP security issues and address solutions
to mitigate them (6 marks)
c) Discuss the systems development life cycle (SDLC), including the internal system controls
(8 marks)
QUESTION FOUR
MANAGEMENT BEHAVIOUR ASSOCIATES UNADJUSTED TRIAL BALANCE
Accounts Debits Credits
Cash 8,000
Investment in Marketable Securities 10,000
Accounts Receivable 16,500
Interest Receivable 0
Supplies 2,800
Prepaid Rent 1,400
Land 25,000
Buildings 120,000
Accumulated Depreciation-Buildings 8,000
Accounts Payable 9,400
Bank Notes Payable 20,000
Salaries Payable 0
Interest Payable 0
Capital Stock 25,000
Retained Earnings (Reserves) 35,600
Fees Earned 200,000
Salaries Expense 90,000
Rent Expense 20,000
Legal and Accounting Expense 1,800
Utility Expense 1,000
Delivery Expense 1,500
Total 298,000 298,000
The bookkeeper also gave you the following additional information:
a. The company was notified by its brokers that it had earned interest revenue of
ksh1,050 from its various marketable securities
b. Supplies on hand at the end of the year amounted to ksh500
c. Prepaid rent of ksh900 was used during the year
5
d. The building was purchased on January 2, 2008, and has no salvage value
e. The interest rate on the note is 8%. No interest has been paid on the note since July
1, 2010.
f. Salaries payable at year-end amounted to ksh2,500
g. The December 31, 2010, telephone bill of ksh450 arrived in January 2011 and was
not included in the utilities expense of ksh1,000 listed in the unadjusted trial
balance. Use the accounts payable account.
Required:
1. Make the necessary adjusting entries. Set up new accounts where appropriate
(3 marks)
2. Post the adjusting entries to the ledger accounts (2 marks)
3. Prepare an adjusted trial balance (3 marks)
4. Using the adjusted trial balance, prepare an income statement and balance sheet
(6 marks)
5. Make the closing entries (2 marks)
6. Analysis: Compute Management Behavior Associates’ return on equity for 2010.
Do you think that Management Behavior Associates can achieve the same level of
return on equity (or more) in each year for the next five years? Explain.
(4 marks)
More Question Papers
Popular Exams
Return to Question Papers