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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
FIRST YEAR EXAMINATION FOR THE AWARD OF
CERTIFICATE IN BUSINESS MANAGEMENT
CBM 05: PRINCIPLES OF ACCOUNTING
STREAMS: CERT (BM) Y1 TIME: 2 HOURS
DAY/DATE: MONDAY 12/8/2013 8.30 PM – 10.30 AM
INSTRUCTIONS:
ANSWER ALL QUESTIONS
1. (a) Describe 5 users of accounting information. [10 Marks]
(b) The following Trial Balance has been drawn up form the accounts of Leah’s
Bookshop.
Trial Balance
As at 31 December 2010
Dr Cr
Sh. Sh.
Sales 151500
Purchases 103500
Salaries and wages 18700
Office expenses 2500
Insurance 1100
Electricity 600
Stationary 2400
Advertising 3500
Telephone 800
Rates 3000
Discount allowed 100
Discount received 200
Rent received 2000
Return inwards 1500
Return outwards 3500
Stock as at 1 Jan 2010 46000
Premises 80000
Fixture and fittings 5000
Debtors & creditors 4800 7500
Cash in hand 200
Cash at bank 12000
Capital 111000
Drawings 14000 ______
287700
====== 287700
======
Stock as at 31. December 2010 was sh. 41,000
Prepared: Trading profit and loss account and balance sheet. [17 Marks]
2. Mr. M Onyango commenced trading as a wholesaler on 1 may 2011 with a capital of sh. 5000 with which he opened a bank account for his business.
During May the following transactions took place.
May 1: Bought shop fittings and fixtures from store fitment sh 2000
May 2: Purchased goods on credit from Abel sh650
May 4: Sold goods on credit to Bruce sh 700
May 9: Purchased goods on credit from Green sh 300
May 11: Sold goods on credit to Hill sh 580
May 13: Cash sales paid into bank sh 200
May 16: Received cheque form Bruce in settlement of his account
May 20: Paid rent by cheque sh 200
May 21: Purchased goods on credit form Kay sh 800
May 22: Sold goods on credit to Wailor Sh 360
May 22: Sent cheque to Abel on settlement of his account
May 23: Paid delivery expenses by cheque sh 50
May 24: Received from Hill sh 200 on account
May 30: Drew cheque for personal expenses sh 200 and assistant wages sh 320
May 31: Settled the account of Green.
Required:
(a) Record the transactions in the book of original entry. [5 Marks]
(b) Post the entries in the ledger accounts. [10 Marks]
(c) Extract a trial balance. [5 Marks]
3. (a) Name and explain 4 types of errors which do not affect the trial balance.
[4 Marks]
(b) You are drawing the accounts of Wanjiru, a sole proprietor. Your trial balance fails by a debit figure of sh 2400 which you pass to suspense account and proceed to draw the trading profit and loss account for the year ended 31/12/03. In your attempt to find the errors you observe the following:
Rent undercast 800
Rates overcast 2000
Sales overcast 2800
Cash payment to creditor entered in the cash book only 1200
Complete omission of drawing by cheque 600
A purchase of sh 7500 entered in the books as 5700
Investment income undercast 400
Required:
(i) Journal entries to correct the errors [7 Marks]
(i) Suspense account [5 Marks]
4. During the 1st week of June 2005 Wangari and Kendi Enterprises had the following petty cash transactions.
2nd June Wangari drew a cheque of sh 10,000, cashed it and turned the proceeds to Wagumo the petty cashier.
2nd June Wamugumo paid sh 500 postal charges
3rd June Purchased office supplies, sh 1200 and 200 for photocopying
4th June Paid sh 800 for repairs to an office printer and paid sh 1000 for delivery charges on goods purchased for resale.
5th June Wangari the business owner, drew from petty cash sh 1500 for personal use and sh 400 for office cleaning
6th June Paid postal charges sh 1200 and sh 800 for mobile scratch card
7th May Wangari signed a petty cash receipt and took sh 200 from petty cash for lunch
Required:
Prepare petty cash book [7 Marks]
______________________________________________________________________________
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