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Bbm 114: Fundamentals Of Accounting I Question Paper
Bbm 114: Fundamentals Of Accounting I
Course:Bachelor Of Business Management
Institution: Mount Kenya University question papers
Exam Year:2010
Mount Kenya University
UNIVERSITY EXAMINATION 2010/2011
SCHOOL OF BUSINESS AND PUBLIC MANAGEMENT
DEPARTMENT OF ACCOUNTING AND FINANCE
UNIT CODE: BBM 114
UNIT TITLE: FUNDAMENTALS OF ACCOUNTING I
DATE: AUGUST 2011 MAIN EXAM TIME: 2HRS
ANSWER QUESTION ONE AND ANY OTHER TWO QUESTIONS
SECTION A: (30MARKS)
1. a. Define accounting. (2mks)
b. State and explain three bodies that given the accounting profession in Kenya giving the role of each body. (6mks)
c. State and explain 5 errors that do not affect the balancing of trial balance.
(10mks)
d. Differentiate between financial accounting management accounts and cost accounting. (3mks)
e. (i) What is depreciation? (2mks)
(ii) List and explain 4 reasons why depreciation may occur. (4mks)
f. State and explain three books of original entry. (3mks)
SECTION B: (40MARKS)
2. The following terms are usually encountered in the preparation of accounts:
a. fundamental accounting concepts
b. accounting bases
c. accounting polices
You required to:
(i) Define two of the above terms.
(ii) Indicate three fundamental accounting concepts which are regarded as having a general acceptability and write short notes on two of the three. (20mks)
3. Jogoo trades a merchandise business had the following trial balance as at 30th June 2010
Dr. Cr.
Sh. Sh.
Sales 156400
Stock- January 2009 41400
Purchases 104000
Motor vehicles at cost 164000
Trade debtors 123000
Trade creditors 156,000
Cash at bank 32150
Motor vehicle expenses 6200
Rent and rates 11600
Electricity 1200
Postage and telephone expenses 2500
Drawings 41000
Sundry expenses 2700
Capital 219200
531600 531600
Provision for depreciation as at 1/7/2009 was ksh 7900
Required
Income statement and balance sheet as at 30/6/2010 (20mks)
QUESTION 4
Jane Wekesho is a sale who keeps record of has cash and bank transaction. Her transaction for month of March were as follows
March:
1. cash in hand sh 100 cash at bank sh 5672
4. Wakesho received a cheque for sh. 1246 from W. mwendoe which way paid directly into
bank. This represented sales
6. Paid wages in cash sh. 39
8. Sold goods for cash sh. 152
10. Received cheque from G. Mwenyumba for sh. 315 in full settlement of a debt of sh. 344.
This was paid directly into the bank
11. Paid sundry expenses in cash sh. 73
14. Purchased goods by cheque for 800
18. Paid J. Mwavula a cheque of sh. 185 in full settlement of a debt of sh. 201
23. Withdrew sh. 100 from the bank for office purposes
24. Paid wages in cash sh. 39
26. paid salaries by cheque sh. 230
28. Sold goods for cash sh. 94
31. Retained cash amounting to sh. 150 and paid the remainder into the bank
Required
a) Enter the above transaction within T. accounts and bring down the balances
b) Prepare a trial balance as at 31st March. (20mks)
QUESTION 5
John Sikabe owns a medium sized factory. The only accounting record he maintains is a cash book. At the end of each financial year he takes his cash book to shah, Mwangi, patel & co a firm of practicing accountants to prepare his son Charles Sikabe, who has just qualified as a
Bcom accounting option holder has suggested that a formal double entry bookkeeping system should be introduced
His father however thinks that additional expenditure was rented by introduction of double entry book keeping is not likely to be justified by any advantages that may accrue. In fact he argues, he does not see that any advantages at all likely to be gained. He is however prepared to study very carefully any argument that Charles Sikabe may like to put forward in writing
Required
Draft Charles Sikabe’s memorandum to his father. (20mks)
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