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Cbm 05: Principles Of Accounting Question Paper
Cbm 05: Principles Of Accounting
Course:Certificate In Business Management
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
EXAMINATION FOR THE AWARD OF
CERTIFICATE IN BUSINESS MANAGEMENT
CBM 05: PRINCIPLES OF ACCOUNTING
STREAMS: CBM TIME: 2 HOURS
DAY/DATE: TUESDAY 6/8/2013 8.30 PM – 10.30 AM
INSTRUCTIONS:
ANSWER ANY THREE QUESTIONS
1. (a) Explain the following principles of accounting
(i) Accrual
(ii) Going concept
(iii) Prudence
(iv) Consistency [8 Marks]
(b) The following information relate to the business of Mr. Omari for the month of
July 2012.
2012 July 5: Purchased office furniture on credit for sh 25,000 form Miugiza
furniture Ltd.
10: Sold an old duplication machine for sh 15,000 to samba academy
on credit.
15: Bought a new motor vehicle for sh 800,000 form Explo motor Ltd,
paying sh 300,000 in cash and the balance was to be settled at a later date.
18: Sold an old vehicle on credit to Mara Secondary school for sh
500,000
25: The owner converted a personal electronic calculator valued at sh
9,000 into a business asset.
30: Sold old dining chairs to Maendeleo for sh 10,000 on credit.
Required:
Prepare Mr. Omari’s general journal.
2. (a) Vumilia traders started a business on 1st January 2004 with sh 1,500,000 in bank
and cash in hand sh 40,000. His transactions for the month of January were:
2004 January 1: Bought stock worth sh 50,000 by cheque
2: Purchased office equipment by cheque sh 30,000
4: Withdrew sh 25,000 from the bank for office use
7: Purchased stationery sh 600 in cash
12: Sold goods worth sh 8,000 to Muguna on credit
18: Bought stock worth sh 32,000 on credit from Muthamia
25: Received a cheque of 4,500 from Muguna
27: Purchased stationery 200 in cash
29: Paid Muthamia sh 24,000 by cheque
30: Received cash sh 2000 from Muguna
Required:
Enter the following information into the relevant ledger accounts. [12 Marks]
(b) Balance the ledger accounts and extract a trial balance. [8 Marks]
3. (a) Highlight 5 parties who may need to use accounting information and how each
party may use it. [10 Marks]
(b) The following trial balance relates to Miti Mingi traders as at 31st July 2007.
Items Dr Cr
Capital 336,000
Sales 187,000
Purchases 140,000
Stock (1-8-2006) 21,000
Returns 7,000 10,000
Discounts 4,800 4,100
Motor vehicle 30,000
Debtors 14,000
Creditors 24,000
Rent 6,900
Advertising 11,000
Carriage inwards 4,500
Carriage outwards 8,400
Cash at bank 7,400
Cash in hand _5,600_ ______
561,100
====== 561,000
======
NB: Stock on 31st July 2007 was valued at sh 20,000
Required:
Prepare Miti Mingi’s trading, profit and loss account. [10 Marks]
4. (a) Explain 4 errors that may not be disclosed by a trial balance. [8 Marks]
(b) The following information was extracted from the books of Muthaiga traders for the month of September 2004.
Sep 1: Cash in hand sh 5,500 and at bank sh 9400
4: Sold goods for sh 2,500 cash
6: Received a cheque form Kamau, a debtor sh 2,900
7: Deposited sh 4,000 into the bank from cash till
10: Achieng, a creditor was paid sh 6,000 by cheque
12: Goods were sold for sh 12,000 and sh 8,000 was received by cheque while the balance was to be received later
15: Furniture was bought for sh 4,800 by cheque
18: Sh 6,000 was withdrawn from the bank for business use.
19: Cash sales sh 10,000 paid directly to the bank
Required:
Prepare Muthaiga traders two – column cashbook. [12 Marks]
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