Foundamentals Of Accounting I Question Paper

Foundamentals Of Accounting I

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2009

KENY A TT A UNIVERSITY
UNIVERSITY EXAMINATIONS 2008/2009
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
HAC 100: FOUNDAMENTALS OF ACCOUNTING I
DATE: WEDNESDAY, 19TH AUGUST 2009
TIME:
11.00 A.M. -1.00 P.M.
INSTRUCTIONS:
Answer ALL questions.
I.
The accounting records of Nairobi Entertainers, who deal in video games included
general journal and special journals.
The company also maintains a general ledger
and subsidiary ledgers for accounts receivable and accounts payable.
Among the general
ledger accounts used by Nairobi Entertainers are:
,
Bank
10
Sales
50
Notes receivable
12
Sales Returns & allowances
52
Accounts Receivable
16
Sales discounts
54
Notes payable
30
Purchase Returns & Allowances
60
Account payable
31
Transactions
in the month of August 2009 involving the sale of merchandise
and
the receipt of cash are shown below:
August I Sold merchandise to Ruiru stores for cash Shs23600
4 Sold merchandise to Winners Company Shs 425,000.
Invoice number
218; terms 2/10 n/30.
5 Received cash refund Shs54,400 for merchandise
returned to a supplier.
Page 1 of 5

8
Sold merchandise to Mini stores for Shs216,000.
Invoice number 219
terms e.o.m.
11
Received Shs 115,500 cash as partial collection of a shs315,500 account
receivable from Olympus traders. Also received a note receivable for the
Shs200,000
remaining balance due.
13
Received cheque from Winners company in settlement of Invoice dated August 4
less discount.
16
Sold merchandise to KU stationers for Shs202,000.
Invoice number 220; terms
2110 n/30.
16
Returned merchandise
to supplier, Shah Electronics worth Shs48,000, for
reduction of accounts payable.
20
Sold merchandise to Stejos Inc. for Shs350,000.
Invoice number 221 ; terms 2110
;
n/30.
.
21
KU Stationers returned for credit Shs32,OOO worth of merchandise
purchased on
!
August 16.
23
Borrowed Shs 1,200,000 from Equity Bank signing a six month note payable
25
Received Shs 166,600 KU Stationers in full settlement oflnvoice
dated August 16,
less return on August 21 and 2% discount.
30
Collected from Stejos Inc. amount of Invoice dated August 20, less 2% discount.
30
Received a 60 day note receivable for Shs 216,000 from Mini stores in
settlement of Invoice dated August 8.
REQUIRED
(a)
Sales Journal
(6 marks)
(b)
Cash receipts journal
(8 marks)
(c)
Sales returns journal
(3 marks)
(d)
Purchases returns journal
(3 marks)
Page 2 of 5

2.
Morgan Enterprises operates a private investigating business.
Some clients are required
to pay in advance for the company's
services while others are billed after the services are
rendered.
Advance payments are credited to an account entitled Fees Received in
advance, which represents unearned revenue.
The business adjusts and closes its account
each month. At July 2009, the trial balance appeared as follows:
Morgan Enterprises
Trial Balance
July 31 2009
Dr (Shs)
Cr (Shs)
Cash
875,500
Fees Receivable
1,890,000
Unexpired Insurance
100,000
Prepaid rent
270,000
,
j
Office Supplies
52,500
Office Equipment
855,000
Accumulated
Depreciation:
Office Equipment
285,000
Accounts payable
195,000
Fees Received in Advance
1,200,000
Wambugu Capital
2,430,000
Wambugu Drawings
120,000
Fees earned
1,240,000
Telephone expense
60,000
Travel expense
170,000
Salaries expense
975,000
5,350,000
5,350,000
Page 3 of5

Additional Information:
(a)
The estimated useful life of office equipment is five years.
(b)
Fees Shs320,000 were earned during the month by performing services for clients
who had paid in advance.
(c)
Salaries earned by employees during the month but not yet recorded or paid
amounted to Shs85,000
(d)
On July I, the business moved into a new office and paid the first three months
rent in advance.
(e)
Investigative
services rendered during the month but not yet collected or billed to
clients amounted to Shs 145,000.
(f)
Office supplies on hand May 31 amounted Shs30,000.
(g)
On April I, Shs 240,000 was paid as the premium for six months liability
insurance.
REQUIRED:
(i)
Adjusting journal entries at May 31.
(14 marks)
(i i)
The amount of revenue that should appear in the Company's
income statement
for the month ended July 31.
(6 marks)
Dr. Chirchir has been practising as a gaenocologist
for the last five years.
During July 2009, he completed the following transactions:
July 1 paid office rent for July Shs42,000
2
Purchased equipment on account Shs147,000
5
Received cash on account from patient Shs290,500
8
Purchased X-ray film and other supplies on account Shs I0, 150.
9
One of the item of equipment purchased on July 2 was defective and
was returned to the supplier for an allowance of Shs8750
12 Paid cash to creditors on account Shs87,750.
16 Sold X-ray film to another gaenocologist
at cost for Shs44 10
17 Paid cash for renewal of insurance policy Shs25,900
20 Discovered that the balance of cash account and of the accounts payable account
as if July 1 were overstated by Shs3500.
A payment of that amount to a creditor
in June had not been recorded.
Page 4 of5

📘 Access 10,000+ CBC Exams With Marking Schemes

Foundamentals Of Accounting I Question Paper

More Question Papers

Exams With Marking Schemes

End Term 3 Exams

Mid Term Exams

End Term 1 Exams

Opener Exams

Full Set Exams