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Fundamentals Of Accounting I(Bbm-114 Question Paper
Fundamentals Of Accounting I(Bbm-114
Course:Bachelor Of Business Management
Institution: Mount Kenya University question papers
Exam Year:2013
MT. KENYA UNIVERSITY
VIRTUAL LEARNING CAMPUS
MAIN EXAM
FUNDAMENTALS OF ACCOUNTING I(BBM-114)
JANUARY-APRIL SEMESTER.
UNIT LECTURER: MR TITUS MUSYIMI
QUESTION ONE
a) what do you understand by errors? What are the main types of errors (10marks)
b) distinguish between income& expenditure and profit &loss a/c (5 marks)
c) distinguish between trade discount and cash discount (5 marks)
d) from the following information, prepare a bank reconciliation statement (10 marks)
i) balance as per bank statement 9,500
ii) balance as per cash book 12,300
iii) cheques issued and not collected 2,500
iv) direct deposits 1,500
v) bank charges not included in cash book 500
vi) standing orders 2,000
QUESTION TWO
From the following information extracted from the books of XYZ ltd, prepare a two column cash book.
May1: balances b/d from April: Kshs(000)
Cash balance 29
Bank balance 654
Debtors accounts:
B king 120
N. Campell 280
D Shand 40
Creditors accounts:
U barrow 60
A Allen 440
R long 100
May 2:B king pays us by cheque, having deducted 2.5% cash discount of Kshs 3 117
May 8: we pay R long his account by cheque, deducting 5% cash discount Kshs5 95
May 11: we withdrew Kshs100 cash from bank for business use 100
May 16: N campell pays us his account by cheque deducting 2.5% discount Kshs7 273
May 25:we paid office expenses in cash 92
May 28: D shand pays us in cash after having deducted 5% cash discount 38
May 29:we pay U barrow by cheque less 5% cash discount Kshs 3 57
May 30: we pay A Allen by cheque less 2.5% cash discount Kshs 11 429
(20 marks)
QUESTION THREE
Discuss the generally accepted accounting concepts. (20 marks)
QUESTION FOUR
The following is the trial balance of Modern Manufacturing Co. ltd as at 31st march 2000. You are required to prepare it Profit and loss account and balance sheet.
PARTICULARS DR CR
Stock 7500
Purchases and sales 24,500 35000
Productive wages 5,000
Discounts 700 500
Salaries 750
Rent 495
General expenses 1705
P&L a/c (1st April 1999) 1503
Dividend paid (August 1999) 500
Interim dividend paid in Feb.2000 400
Share capital 10,000
Debtors and creditors 3750 1750
Plant and machinery 2900
Cash in hand and bank 1620
General reserve 325
Loan to managing director 325
Bad debts 158
Total 50,303 50,303
Additional information
Depreciate machinery @10% p.a, provide for 5% discount on debtors. One month’s rent of kshs. 45 was due. Six months’ insurance (included in general expenses) was unexpired at shs 75 p.a. closing stock valued at shs 8200. Managing director’s commission 5% on net profit before providing for his commission(calculations to the nearest shilling) (20marks)
QUESTION FIVE
From the following information , you are required to prepare the relevant ledger accounts for the business of MR. KAMAU.
May 1: He introduced 150,000 into his business, and on the same day he banked 35,000.
“ 2: Bought goods worth 20,000 as his first stock, and paid in cash.
“ 3:He bought furniture worth 15,000 and paid in cash.
“ 4: Sold goods worth 5,000 and received cash.
“ 5: Bought more stock worth 13,000 and paid in cash.
“ 10:Sold goods and received a cheque for 7,300.
“ 11:sold goods on credit to mike worth 21,000
“ 12: Bought goods from XYZ on credit for 16,900
“ 15: sold goods on cash and received a cheque of 17,100
“ 21:Bought a motor car for transporting goods and paid partly for it at 40% paying 30,000.
balance to be paid for later.
“ 23:Sold goods for 12,900 on credit
“ 27:Bought goods and paid using a cheque 45,000
“ 28: Paid his rent which had accrued for two months and also Three months in advance
(The monthly rent is 3,300) using a cheque.. (20 marks)
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