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Bac 100: Fundamentals Of Accounting I Question Paper
Bac 100: Fundamentals Of Accounting I
Course:Fundamentals Of Accounting
Institution: Kenyatta University question papers
Exam Year:2011
INSTRUCTIONS: Answer all the questions.
Q1.
Kamau began operation on January 1 2010 as a private investigator. The trial
balance columns of the worksheet for Kamau investigators as at December 2010
are as follows:
Kamau Investigators
Work Sheet
For the year ended 31 2010
Trial balance
Dr (shs)
Cr (shs)
Bank
63,000
Fees Receivable
27,100
Supplies
5,250
Prepaid insurance
1,200
Equipment
150,000
Notes Payable
50,000
Accounts payable
61,750
Kamau capital
100,000
Kamau Drawings
3,000
Page 1 of 4
Fees earned
68,100
Salaries expense
6,000
Traveling expenses
6,500
Rent expenses
6,000
Miscellaneous expense
1,000
____
279,850
279,850
Additional Information
1. Supplies on hand total shs. 3,750.
2. Depreciation on Equipment is shs. 2,000.
3. Interest accrued on the not payable is shs 1,500.
4. Insurance expense as at 31st December 2010 is sh 10,500.
5. Fees earned but unbilled as at December 31 201 is shs 3,750
Required:
a) A 10-column work sheet
[10marks]
b) Journalize the adjusting entries from the worksheet
[5marks]
c) Closing journal entries.
[5marks]
Q2.
The chart of accounts for Githurai Company includes the following selected
accounts:
112 Accounts Receivable
412 Sales Return and Allowance
126 Supplies
510 Purchases
157 Equipment
512 Purchase return and allowances
201 Account payable
516 Freight in
401 Sales
610 Advertising Expenses
In January the following selected transactions were completed. All purchases and sales
were on account.
January 1
Purchased merchandise from Johnson Company shs. 400,000
2
Received freight bill from Githurai forwarders for the purchase on
January 1 shs. 20,000
3
Made sales to KU company shs 65,000 and KM Company shs. 95,000
Page 2 of 4
5
Purchased merchandise from Maxwell Company shs. 160,000
8
Received credit on merchandise returned to Maxwell company sh 1,500
13
Purchased store supplies form Nairobi Stationers shs 36,000
15
Purchased merchandise from Johnson Company shs 100,000 and
Kimbo supplies shs 140,000
16
Made sales to Shah & company shs 172,500 and Otieno shs 78,500.
18
Received bill for advertising from Nation Newspapers shs. 30,000.
21
Made sales to X company shs 15,500 and Z company shs 110,000.
22
Granted allowance to X company for merchandised damaged in
shipment shs 7,000
24
Purchased merchandise from Maxwell Company shs. 150,00
26
Purchased equipment from Nairobi Traders shs. 30,000.
28
Received freight bill from Githura forwarders on purchase from
Maxwell Company shs 19,000.
30
Sales were made Z company shs
REQUIRED
a) Purchases Journal and the sales journal. The purchases found should have the
following column headings Date, Accounts Credited, (debited), Ref, other account
Dr, Purchases Dr. Freight-in Dr. and Accounts Payable Cr.
[15marks]
b) Post to the general subsidiary ledgers accounts.
[8marks]
c) Prove the agreement of the Control and subsidiary accounts.
[2marks]
Q3.
a)
Why do accountantirise historical cost to record the value of assets?
[6marks]
b)
Explain the following concepts as they are used in accounting.
i)
Prudence
ii)
Consistency
iii)
Substance over form.
[6marks]
Page 3 of 4
Q4.
The trial balance of Kipkurui did not balance. The difference was transferred to a
suspense account and it was decided to proceed with the preparation of the draft
final account. After these accounts were completed, the following errors were
discovered.
a) The sales daybook for the month of September had been undercost by shs
6,000.
b) Discount allowed of shs 46 had been posted to the credit of discount received
account as shs 64.
c) Wages of shs 69 for the construction of shelves in the warehouse had been
debited to wages account as sh 96.
d) Defective furniture and fillings costing shs 124 returned to furniture supplies
Ltd had been recorded in the books as goods purchased.
e) The cost of new motor vehicle shs 5000 had been debited to purchases
account.
f) A payment of shs 120 for repairs to motor vehicle had been debited to Motor
vehicle account.
REQUIRED
i) Journal entries to correct the above errors.
[12marks]
ii) The suspense account.
[1mark]
Page 4 of 4
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