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Hrd2118:Accounts And Finance Question Paper
Hrd2118:Accounts And Finance
Course:Bachelor Of Supplies Management
Institution: Meru University Of Science And Technology question papers
Exam Year:2013
QUESTION ONE - (25 Marks)
The following balances were extracted from the books of Rono Kiprono, a sole trader at Gakoromone Market, for the year ended 30 September 2012.
Shs.
Capital 8,760,000 Drawing s 900,000 Trade Debtors 1,356,000 Trade Creditors 1,626,600 Sales 6,669,600 Purchases 3,141,600 Return Inwards 108,300 Return Outwards 164,100 Wages and Salaries 1,410,000 Discount allowed 74,400 Discount Received 127,800 Stock 1 October 2011 1,900,200 Bank balance 792,300 Cash in hand 42,600 Lighting and power expenses 141,600 Rates 74,400 Office building 1,950,000 Fixtures and fittings 432,000 Motor Vehicles 4,800,000 Purchase of stationery 46,800
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Sundry Expenses 19,200 Insurance 180,000 Provision for bad and doubtful debts 199,500 Motor vehicle running expenses 115,800 Bad debt written off 21,600 Postage and telephone 40,800
Additional Information:
(i) Stock as at 30 September 2012 amounted to sh.1,320,000 (ii) One- quarter of lighting and power expenses is to be treated as for personal use of Rono Kiprono. (iii) Depreciation is to be provided as follows: a) 10% on fixtures and fittings b) 20% on motor vehicles c) 5 % on office building (iv) Prepaid rates amounted to Sh.19200 (v) Insurance unexpired amounted to Ksh.3000 (vi) Provision for bad and doubtful debts at the end of the year is to be equal to 10% of trade debtors.
Required: a) Trading profit and loss account for the year ended 30 September 2012. ( 15 Marks) b) Statement of financial position as at 30 September 2012 ( 10 Marks)
QUESTION TWO - (15 Marks)
Write up three column cash Book for M. Messa from the information given below, then balance off this cash book at the end of the month and show the discount accounts in the general ledger. (15 Marks) 2008 January 1 Balances b/f cash sh.2,500 Bank shs.7,400 2 Bought goods by cheque shs.2,000 3 Cash sales shs.1,800 5 Banked cash shs 2,000 6 Paid by cheque, in each case discount received 3 %. A John sh 1,500, H. Hotman shs.3,000, Davis Baariu Shs1,400/ 7 Received cheque, in each case discount allowed 5% Ben Kago Shs.4,000, L Mutahi Shs.4,000, B.Briton Shs 3,000, J. Mathew Shs.3,200. 10 Bought office furniture by cheque shs.3,000 15 Cash drawings shs.500 20 Paid to D. Adams Shs.800 Cash less 3 % discount. 22 Received from Karaine Shs1,500 less 4% Discount. 30 Paid wages in cash Shs.1,000.
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QUESTION THREE - (20 Marks )
a) Explain the following accounting concepts by giving relevant examples (i) Substance over form ( 2 Marks) (ii) Accruals ( 2 Marks) (iii) Historical cost ( 2 Marks) (iv) Money measurement ( 2 Marks) (v) Going concern ( 2 Marks)
b) The following are extracts from the cash book and bank statement of B. Wasike.
B. Wasike Cash Book Dr Cr October 2012 Sh October 2012 Sh 1 Balance b/d 3,480 8 A. Dawo 690 7 J. Mwangi 176 15 R. Masiga 66 22 J. Chomba 146 28 G. Saidi 230 31 K. Wambua 498 31 Balance c/d 3,662 31 M Babu 356 4656 4656
Bank statement
October 2012 Dr Cr Balance 1 Balance B/d 3480 3480 7 Cheque 176 3656 “ A. Dawo 698 2958 20 R. Masiga 66 2892 22 Cheque 146 3038 31 Credit transfer J. Owiti 108 3146 31 Bank Charges 44 3102
Required:
(i) Update the cash book ( 5 Marks) (ii) Draw up a bank reconciliation statement as at 31 October 2012 ( 5 Marks)
QUESTION FOUR
(a) Explain clearly 4 errors which do not affect the agreement of the trial balance (4 Marks) (b) What is meant by “suspense account”? ( 1 Mark)
(c) The Audit of the books of L. Nyati books for the year ending 31 December 2008 revealed the following errors: (5 Marks)
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(a) A machine purchased for shs.1,200 had been debited to the purchases account. (b) Goods purchased from A Buret for shs.150 were credited to the account of C. Buret. (c) An invoice from A. Njue for shs270 was omitted. (d) Goods sold to J. Masinde for Shs 175 were entered in the sales day book as shs 157. (e) The salaries and wages account was over-added by shs 35 and rent received account had also been over added by shs.35.
Required:
Show by means of journal entries how the above errors should be corrected in the books of L.
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