Financial Accounting Exam Questions

P. Ndeli retired on 30 June 2013. He was given a pension of sh. 216,500. With this money he started a business on 1 august 2013. His transactions were as follows August 1 Started business with sh 216,500 cash August 2 Opened a bank account with sh 168,000 August 4 Paid rent sh 72000 by cheque August 8 Bought furniture sh 24000 by cheque August 15 Purchased goods sh 19500 by cheque August 18 Withdrew sh 3500 from the bank for business use August 21 sold goods for cash sh 28800 August 23 Deposited sh 42300 into the bank August 25 Purchased goods from mbulu on credit sh 21000 August 26 sold goods by cheque sh36000 August 27 sold goods on credit to Kongo sh 14300 August 28 Paid wages in cash sh 7400 August 29 Paid transport in cash sh 2400 August 30 Paid electricity in cash sh 4800 August 30 Received in cash sh 13800 from Kongo after deducting discount August 31 Paid insurance sh 15000 by cheque August 31 Paid Mbulu sh 20000 by cash after deducting discount for goods purchased from him Required a) Record the relevant transactions in a three column cashbook (12marks) b) Write up all the ledger accounts and bring down the balances (8marks)

Explain why it is necessary to prepare bank reconciliation (4marks)

The following information was extracted from the books of spl traders on 31 December 2013 1. Cash book showed a credit balance of sh 10480 2. Bank statement showed a credit balance of sh 3800 3. Cheques totaling sh 3060 returned by his bank as “refer to drawer” had not been entered in his cash book 4. Ledger fees sh 1800 and cheque book charges sh 240 debited by the bank had not been entered in cash book 5. Cheques totaling sh26100 received from debtors and lodged on 31 December were credited by the bank on 4 th January 2013 6. Payments by Cheque amounting to sh49380 to creditors during the month of December were not reflected in the bank statement 7. Dividends amounting to sh2100 were received and ccredted by the bank but no entry was made in the cash book 8. A standing order of sh 6000 made to the bank to pay his landlord had not been recorded in the cash book Required i. Update the cash book (10marks) ii. Prepare a bank reconciliation statement (6marks)

The following information was extracted from the books of PATZO traders on 30 th june 2013 Sh Cash in hand 1,200 Cash at bank 1 1,000 Stock (1.7.2012) 21,000 Debtors 8,000 Creditors 1 0,000 Returns inwards 500 Sales 56,000 Purchases 20,500 Capital

Required a) A trial balance as at 30.6.2013 (4marks) b) A trading profit &loss account for the year (10marks) c) Balance sheet as at that date(6marks)

a) A trading profit & loss account for the year (10marks)

Give a brief definition of the following items and for each indicate its treatment in the books of account. a) Capital expenditure b) Revenue expenditure c) Prepaid expenses d) Accrued expenses e) Accrued income

The following was trial balance was extracted from the accounting records of S. Okatchas at 31st December 2012 Dr Cr Sh sh Capital 250,000 Stock 25,000 Plant & machinery 250,000 Cash in hand 6,000 Cash at 30,000 Debtors 55,000 Creditors 46,600 Returns inwards 40,000 Sales 600,000 Purchases 360,000 Salaries 60,000 Water&electricity 8,600 Postage 7,500 Motor van 80,000 Provision for depreciation (plant) 20,000 Provision for depreciation (motor van) 16,000 Returns outwards

b) Balance sheet as at that date(10marks)

c) The following transactions were extracted from the accounting records of Paddy for the month of August 2012: August 1 credit purchase from Ben sh 15,000; August 2 credit purchase from: kings sh 3,000, martin 3500, cindy sh 1500; August 8 credit purchase from: Ben sh 5,000, martin 3200; August 12 goods returned to: kings sh 500, Cindy sh 350; August 15 credit purchase from: kings sh 3,800, martin 2500; August 20 goods returned to: Ben sh 300, martin sh 250; August 25 credit purchase from: kings sh 2,900. Required: i. Purchases journal (8marks) ii. Returns outwards journal (2marks)