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Dpba 010: Financial Accounting Question Paper
Dpba 010: Financial Accounting
Course:Financial Accounting
Institution: Kenya Methodist University question papers
Exam Year:2008
KENYA METHODIST UNIVERSITY
END OF FIRST TRIMESTER 2008 EXAMINATION
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
COURSE CODE : DPBA 010
COURSE TITLE : FINANCIAL ACCOUNTING
TIME : 3 HOURS
INSTRUCTIONS
• Answer Question ONE and any other Two Questions
Question 1.
The following trial balance has been extracted from the ledger of Mr. Yousef a sole trader.
Trial balance as at 31 may 19x6
Dr Cr
£ £
Sales 138,078
Purchase 82,350
Carriage 5,144
Drawings 7,800
Rent rates and insurance 6,622
Postage and stationery 3001
Advertising 1,330
Salaries and wages 26,420
Bad debts 877
Provision for bad debts 130
Debtors 12,120
Creditors 6,471
Cash on hand 177
Cash at bank 1,002
Stock as at 1 June 19x5 11,927
Equipment
At cost 58,000
Accumulated 19,000
Capital 53,091
216,770 216,770
The following additional information as at 31 may 19x6 is available:
(a) Rent is accrued by £210.
(b) Rates have been prepaid by £880.
(c) £2,211 of carriage represents carriage inwards on purchases
(d) Equipment is to be depreciated at 15% per annum using the straight line method
(e) The provision for bad debts to be increased by £40.
(f) Stock at the close of business has been valued at £13,551
Required:
Prepare a trading and profit and loss account for the year ended 31 May 19x6 and a balance sheet as at that date. (30 marks)
Question 2
Included in the creditors ledger of J Cross, a shopkeeper, is the following account which disclosed that the amount owing to one of his suppliers at 31 may 19x4 was £472.13.
Creditors ledger
Nala merchandising company
19x4 £ 19x4 £
may 18 purchases returns 36.67 may 1 Balance b/d 862.07
27 Purchases returns 18.15 16 Purchases 439.85
‘’ Adjustment 25 Purchases 464.45
(overcharge) 5.80 “ Adjustment
31 Discount received 24.94 (undercharge) 13.48
“ Bank 1,222.16
“ Balance c/d 472.13
1,779.85 1,779.85
In the first week of june 19x4, J Cross received a statement (shown below) from the supplier, which showed an amount owing of £2,424.53.
J Cross in account with
Nala merchandising company, statement of account
Debit Credit
19x4 £ £ £
May 1 Balance 1,538.70 DR
3 Discount 13.40 1,525.30 DR
Cheque 634.11 891.19 DR
5 Allowance 29.12 862.07 DR
7 Goods 256.72 1,118.79 DR
10 Goods 108.33 1,227.12 DR
11 Goods 74.80 1,301.92 DR
14 Adjustment 13.48 1,315.40 DR
18 Goods 162.55 1,477.95 DR
23 Goods 301.90 1,779.85 DR
25 Allowance 36.67 1,743.18 DR
28 Goods 134.07 1,877.25 DR
29 Goods 251.12 2,128.37 DR
30 Goods 204.80 2,333.17 DR
31 Goods 91.36 2,424.53 DR
31 Balance 2,424.53 DR
Required:
Prepare astatement reconciling the closing balance on the suppliers account in the creditors ledger with the closing balance shown in the statement of account submitted by the supplier. (20 marks)
Question 3
Write up a two-column cashbook from the following: (20 marks)
19x6
Nov 1 Balance brought forward from last month: cash £105: Bank £2,164
“ 2 Cash Sales £605.
“ 3 Took £500 out of the cash till and paid it into the bank.
“ 4 J Mathews paid us by cheque £217.
“ 5 we paid for postage stamps in cash £60.
“ 6 Bought office equipment by cheque £189
“ 7 We paid J Lucas by cheque £50.
“ 9 Received rate refunds by cheque £72.
“ 11 withdrew £250 from the bank for business use.
“ 12 paid wages in cash £239
“ 14 Paid motor expenses by cheque £57
“ 16 L Levy lent us £200 in cash.
“ 20 R Norman paid us by cheque £112.
“ 28 We paid general expenses in cash £22.
“ 30 Paid insurance by cheque £74.
Question 4
Record the following for the month of January, balance off all the accounts, and then extract a trial balance as at 31 Jan 19x4 (20 marks)
19x4
Jan 1 Started business with £3,500 cash.
2 Put £2800 of the cash into a bank account.
3 Bought goods for cash £150
4 Bought goods on credit from L Coke £360; M Burton £490; T Hill £110; C Small £340.
5 Bought stationery on credit from Swift Ltd £170.
6 Sold goods on credit to: S Walters £90; T Binns £150; C Howard £190; P Peart £160.
8 Paid rent by cheque £55.
10 bought fixtures on credit from Matalon Ltd £480.
11 Paid salaries in cash £120
14 returned goods to M Burton £40; T Hill £60.
15 Bought motor van by cheque £700.
16 Received loan from J Henry by cheque £600.
18 goods returned to us by : S Walters £20; C Howard £40.
21 cash sales £90.
24 sold goods on credit to:T Binns £100; P Peart £340; J Smart £115
26 we paid the following by cheque: M Burton £450; T Hill £50
29 Received cheques from J Smart £115; T Binns £250
30 Received a further loan from J Henry by cash £200.
30 Received £500 cash from P Peart.
Question 5
Explain the following concepts of the Accounting process (20 marks)
a. Business entity concept
b. Realization concept
c. Accrual concept
d. Prudence concept
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