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Financial And Management Accounting Question Paper

Financial And Management Accounting

Course:Bachelor Of Science In Information Technology

Institution: Kca University question papers

Exam Year:2009

UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
SCIENCE IN INFORMATION TECHNOLOGY
BIT 1208: FINANCIAL AND MANAGEMENT ACCOUNTING
DATE: AUGUST 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
The following trial balance was extracted from the books of Kiroboto, a sole trader as at 31/12/2002
DR CR
SHS SHS
Furniture 12,000
Motor vehicle 20,000
Bank loan 20,000
Debtors 39,000
Stock 1/1/2002 14,000
Sales 96,000
Discount allowed 3,500
Advertising expenses 1,800
Insurance expenses 4,000
Returns inwards 6,000
Salaries expenses 2,800
Electricity expenses 2,000
2
Purchases 38,000
Rent income 12,000
Carriage inwards 5,000
Returns outwards 3,000
Discount received 4,500
Dividend income 7,000
Creditors 16,000
Drawings 4,000
Cash 15,000
Capital ______ __ 8,600
167,100
167,100
Additional Information:
1. Value of closing stock shs.5,000
2. Bad debts to the written off shs.1,500
3. Prepaid insurance expense was shs2,500
4. Unpaid electricity bill as at 31/12/98 was shs.1,000
5. Rent income received in advance was shs.4,000
6. Dividend income receivable was shs.3,000
Required:
a) Trading and profit and loss account for the year-ended 31/12/2002. (18 Marks)
b) Balance sheet as at 31/12/2002 (12 Marks)
QUESTION TWO
The following transactions took place in Bilongo’s business during the month of March 2005. The
opening balances on 1/3/2005 in the cashbook were:
Cash – 40,000 (DR)
Bank – 2,000 (CR)
2/3/05 Bought business premises worth shs8, 000 and paid by cash
3/3/05 Deposited shs15, 000 cash into the business bank a/c
5/3/05 Bought goods worth shs5, 000 on credit from Beatrice
3
9/3/05 Returned goods worth shs800 to Beatrice as they were faulty
14/3/05 Received shs10, 000 cash as a loan from Isaac
15/3/05 Made credit sales to Daniel worth shs9, 000
16/3/05 Paid the amount due to Beatrice less 15% cash discount using a cheque
17/3/05 Made cash sales amounting to shs7, 000
18/3/05 Purchased goods worth shs7, 000 from Joseph on credit
19/3/05 Paid electricity bill shs2, 000 using a cheque
20/3/05 Made credit sales to Robert worth ssh6, 000
21/3/05 Returned goods worth shs500 to Robert complaining that they had expired
26/3/05 Received cash from Daniel, a debtor in respect to the amount due from him less 8%
cash discount
27/3/05 Paid the amount due to Joseph less 3% cash discount using cash
28/3/05 Received the amount due from Robert less 5% cash discount in form of cheque.
31/3/05 Received a cheque of shs10, 000 in respect to rent income earnings.
Required:
Write a three-column cashbook for the month and clearly show the posting of discounts to the
respective ledger accounts. (20 Marks)
QUESTION THREE
In a new business during the year ended 31st Dec 2007, the following debts are found to be bad, and
are written off on the dates shown
a) 30th April Peter Ksh 11, 000
b) 31st Aug. Samwel Ksh 6, 400
c) 31st Oct. James Ksh.1, 200
On 31st Dec 2007 the schedule of remaining debtors amounting to sh 685,000 is examined and it is
decided to make provision for doubtful debts of sh 22,000.
Required
a) Bad debts account (2 Marks)
b) Provision for bad debts accounting (2 Marks)
c) Profit and loss account extract (2 Marks)
d) Balance sheet extract (2 Marks)
4
(2) Distinguish between capital expenditure and revenue expenditure (8 Marks)
(3)Explain the meaning of the following accounting concepts;
a) Accrual concept (2 Marks)
b) Materiality concept (2Marks)
(Total 20 Marks)
QUESTION FOUR
On 1/1/99 the business bought office equipment worth shs180, 000 cash. On 30/4/00 another
equipment was bought for Ksh.250,00. The office equipment was depreciated at a rate of 8% p.a. using
the reducing balance method on prorata basis. On 1/2/01 the equipment bought on 1/1/99 was sold at
shs148, 000 cash. No depreciation was charged during the year of disposal.
Required:
Open the following ledger accounts to reflect the above accounts for the years 1999, 2000 and 2001.
a) Office equipment a/c (5 Marks)
b) Provision for depreciation a/c (10 Marks)
c) Disposal a/c (5 Marks)
QUESTION FIVE
i) Kamba merchants’ had the following balances on 9 January 1995:
Sh.
Sales 26,000
Purchases 12,000
Bank 200,000
Cash 14,000
Trade creditors: Bula Ltd 25,000
Thama Enterprises 42,000
Trade debtors: Muna retailers 55,000
Kanga 14,000
The following information relates to the sales and purchases of the firm:
1995
January
5
9 Received an invoice for sh.56, 000 from Bula Ltd
Sent an invoice for sh.78, 000 to Muna Retailers
10 Received a credit note for sh.4, 500 from Luka Ltd
Issued a debit note for sh.6, 000 to Kanga to correct an error on an invoice
11 Issued a cash receipt of sh.19, 400 to Kanga in full settlement of his account
12 Received a cash receipt of sh.27, 000 from Thama Enterprises
Issued a cheque for sh.54, 880 to Bula Ltd in full settlement of the amount due
Issued a credit note for sh.2, 000 to Muna retailers
13 Received a copy of bank pay-in-slip for sh.20, 000 from Muna retailers
Prepare the necessary ledger accounts to record the information above in the books of the firm and
balance them off (10 Marks)
ii) Explain the following terms as used in accounting:
a) Depreciation
b) Salvage value
c) Assets
d) Purchases
e) Capital (10 Marks)

Financial And Management Accounting Question Paper

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