1994
SECTION A: (20 marks)
1. Which of the following is regarded as a nominal account?
a) Capital account
b) Machinery account
c) Depreciation account
d) Kwesiga enterprises ltd account
2. Which of the following will not be shown on a statement of account?
a) Cash discount
b) Trade discount
c) Credit notes issued
d) Total invoices issued
3. When subscriptions in arrears are settled by members of the club during the present financial period, they will appear
a) In the club's receipts and payments account only
b) Both in the club's receipts and payments account as well as in the final accounts
c) In the club's final accounts only
d) Neither in the club's receipts and payments account nor in the club's final accounts.
4. An error in which a purchase of office machinery is debited to the purchase account is regarded as an error of
a) Commission
b) Compensation
c) Omission
d) Principle
5. Which of the following is correct accounting entry?
a) Asset reductions are debited
b) Asset increases are credited
c) Liability reductions are debited
d) Capital increase is debited
6. How would you detect that a business account on the bank is overdrawn from a cash book?
a) When the credit side of the cash book runs longer than the debit side
b) When the cash book shows a debit balance
c) When the cash book shows a credit balance
d) When the cash book shows a zero balance.
7. Given a weekly cash float of shs120, 000 and shs104, 000 is spent during the week, how much money will be re-imbursed at the end of the week?
a) Shs224,000
b) Shs104,000
c) Shs16,000
d) Shs120,000
8. Peter sold in bulk to paul on credit, paul is a
a) Debtor
b) Creditor
c) Wholesaler
d) Commission agent
9. Wabwa took goods from his business stock for personal use valued at shs100,000. The accounts affected were:
a) Purchased account and stock account
b) Drawings account and capital account
c) Stock account and capital account
d) Purchases account and drawings account
10. A current liability is the indebtedness of................................to..................
a) Business; outsiders
b) Owners; business
c) Outsiders; business
d) Owners; insiders
11. When a customer deposits money on a bank account, this means
a) The bank owes money to the customer
b) The customer owes money to the bank
c) The bank has given a loan to the customer
d) The customer has paid a debit
12. A surplus is calculated in the ..................................
a) Profit and loss account
b) Trading account
c) Income and expenditure account
d) Receipts and payments account
13. What does "a debit balance brought down in the rent income account" mean?
a) Prepaid income
b) Rent income accrued due
c) Rent income paid in advance
d) We owe the tenants some money.
14. Determine the amount of capital from the following set of accounting set accounting items:
Debtors shs100, 000, creditors shs50,000, commission income due shs21,800, cash shs45,800, bank overdraft shs120,000, prepaid rent due shs31,600 stock due shs84,000.
a) Shs251,600
b) Shs50,000
c) Shs201,600
d) Shs453,200
15. Goods sold to manaasi were debited to akole's account. The entries to correct this error would be
a) Credit Akole's account and debit Manaasi's account
b) Credit Akole's account and debit sales account
c) Credit sales account and debit Manaasi's account
d) Credit manaasi's account and debit Akole's account
16. Given the cost of a machine as shs200,000 and the machine is to be depreciated by 5% per annum, using a reducing balance method, determine the amount of money that will be debited to the profit and loss account as depreciation at the end of the third year.
a) Shs10,000
b) Shs8,570
c) Shs9,025
d) Shs9,500
17. Given the following accounts (i) sales control account, (ii) trading account, (Iii) purchases ledger control account, (iv) customers' statement of accounts, which of these require information from credit notes:
a) (i), (ii) and (iv)
b) Only (i)
c) (i) ,(ii) and (iii)
d) (i) , (iii) and (iv)
18. The sales journal is best described as:
a) Part of double entry system
b) A book of customers accounts
c) A list of credit transactions
d) A list of credit sales
19. Which of the following statements is true when a given expenditure is capitalized? It will be shown
a) In the profit and loss account
b) As a balance sheet item
c) Both in the profit and loss account and balance sheet
d) In the trading account and in the trial balance sheet
20. Debit balances in partners current account are
a) Always shown on liabilities side of the balance sheet
b) Always shown on the asset side of the balance sheet
c) Shown on either side of the balance sheet
d) Never shown in the balance sheet,
SECTION B: (80 MARKS)
21. a) List any four books of original entry.
b) From the following information enter the relevant transactions in the cash book and open up the appropriate ledger accounts.
1991
Jan 1 received a loan of shs10, 000,000 from U.C.B and banked the cheque
2 bought goods on credit from S. Kako worth shs5, 000,000
3 sold goods on credit to B.Were worth shs2, 000,000
4 paid S.Kaka shs3, 000,000 by cheque
5 returned goods to S.kaka faulty in design of shs300, 000
10 B.Were returned goods worth shs200, 000
15 withdrew shs3, 000,000 for office use
19 cash takings shs2, 500,000
20 banked shs2, 000,000
30 paid interest of 12% p.a on the loan from U. C. B by cheque.
22. Given below is Kota's Balance as at 31st Dec. 1992
|
ITEMS |
DR.(SHS) |
CR.(SHS) |
|
Debtors and creditors Land and buildings (1/1/1992) Plant and machinery (1/4/92) Fixtures and fittings Equipment Motor vehicles (1/7/92) Purchases Returns Discounts Stock Cash at hand Cash at bank Rent income Sales General expenses capital |
2,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1.500,000 2,500,000 500,000 1,000,000 1,500,000 600,000 3,400,000
1,000,000 |
2,000,000
600,000 2,000,000
400,000 7,000,000
16,000,000 |
|
28,000,000 |
28,000,000 |
Adjustments:
i. Unsold stock is sh3,000,000
ii. Depreciate each of the following items by 10% p. a
Land and buildings, land and machinery and the motor vehicle
iii. Shs200, 000 was received in advance for rent income.
Prepare:
Trading and profit and loss account and the balance sheet for the period ended 31st December 1992.
23. a) Mention two reasons why it is necessary to prepare a bank reconciliation statement periodically.
b)Study the following information obtained from the accounts section of Kibuye traders.
KIBUYE TRADERS
CASH BOOK (bank column only)
|
DATE |
DETAILS |
DEBBIT (SHS) |
CREDIT (SHS) |
BALANCE (SHS) |
|
1.1.19992 3.1.1992 4.1.1992
6.1.1992
8.1.1992
10.1.1992 15.1.1992 20.1.1992
25.1.1992 |
Balance b/f Cash Katwe general Merchants No. 00254 Kibuye petrol station (cheque) Nateete traders (cheque No.00524) Cash Foods and beverages Okello and Family Shop Uganda general Merchandise wages |
300,000
250,000
100,000
220,000 |
150,000
200,000 150,000
120,000 200,000
|
200,000 DR 500,000
750,000
600,000
700,000 500,000 500,000
570,000
450,000 250,000 |
UGANDA COMMERCIAL BANK
BANK STATEMENT ACCOUNT NO.001
|
DATE |
DETAILS |
DEBIT (SHS) |
CREDIT(SHS) |
BALANCE(SHS) |
|
1.1.1992 3.1.1992 5.1.1992
6.1.1992
8.1.1992
10.1.1992 12.1.1992
18.1.1992
25.1.1992 |
Balance b/f Cash Katwe general Merchants (cheque No. 00254) Kibuye petrol Station (cheque) Natete traders Cheque No.0524) Cash Nateete traders (cheque No.00524) Foods and beverages ltd Ledgers fees Uganda electricity Board (standing order) |
150,000
200,000
100,000
150,000 20,000
15,000 |
3,000,000
250,000
100,000 |
200,000 500,000
750,000
600,000
700,000 500,000
400,000
250,000 230,000
215,000 |
Required to:
i) bring kibuye traders cash up to date
ii) reconcile the updated cash book balance with the bank statement balance as on 25.1.92
24. okello and family stores had the following balance sheet as at 1st January 1993.
Okello and family stores
Balance sheet
As at 1.1.93
|
LIABILITY & CAPITAL SHS Capital 1,700,000 Creditors 40,000
1,740,000 |
ASSETS SHS Fixed assets Building 1,000,000 Furniture 250,000 Current assets: Stock 170,000 Cash at bank 270,000 Cash in hand 50,000 1,740,000
|
During the month of January 1993 the following transactions took place.
January 2 sold stock worth shs20, 000 for shs150,000 on credit
11 issued a cheque of shs20, 000 to one of his creditors
18 withdrew shs70, 000 from the bank for business use
22 paid for electricity bill in cash for shs50, 000
27 received more goods on credit worth shs100, 000
30 withdrew cash worth sh20, 000 for personal use
Required to:
i) Post the above transactions into the ledger accounts.
ii) Draw out the balance sheet as at 31st January, 1993.
25. The accountant of Nakavu traders prepared the following balance sheet as at 31st December, 1992 despite the disagreement of the end of the year trial balance.
NAKAVU TRADERS
Balance sheet
As at 31st December, 1992
|
Capital and liabilities shs Capital 1.1.92 500,000 Add: net profit 250,000 Less: drawings (50,000) 700,000 Current liabilities Bank overdraft 200,000 Creditors 50,000
950,000 |
Assets shs Fixed assets Land 150,000 Building 250,000 Current assets Stock 200,000 Debtors 200,000 Cash 120,000 Suspense account 30,000 950,000 |
Later on the following errors were discovered.
i) An invoice amounting to shs10,000 issued to one of the customers has not been posted
ii) Goods worth shs10, 000 had been taken by proprietor for his personal use but no entries had been made to effect this.
iii) A cheque worth shs20, 000 sent to one of the trade credit suppliers to the business had been posted as a credit entry in the suppliers account.
iv) Shs15,000 in respect of December electricity bill had been included as shs25,000 in the end of year trial balance
v) Shs25,000 in respect of rent receivable had been posted to the rent receivable account as shs15,000
You are required to:
i) Correct the above errors using Nakavu traders' journal
ii) Draw the suspense account duely balanced.
iii) Compute the adjusted net profit.
iv) Redraft the balance sheet.
26. Akol , Baale and chabo are in partnership sharing future profits and losses in the ratio 3:2:1 respectively. Interest is charged on capital and drawings at the rate of 10% per annum in each case.
|
|
AKOL |
BAALE |
CHABO |
|
Capital Accounts Drawings Current Accounts Sales Managers' Salary for the year(chabo) |
Shs 3,000,000 500,000 Dr. 100,000
|
Shs 2,000,000 400,000 Cr. 200,000 |
Shs 1,000,000 600,000 Cr. 400,000
2,000,000
|
Additional information
i) The net profits for the year 1991 was shs 4,000,000
ii) Unsold stock by 31st December 1991 was shs1,500, 000
iii) Drawings: Akol 1/1/1991
Baale 1/4/1991
Chabo 1/7/1991
Required to prepare a:
i) Profit and loss appropriation account
ii) Partners current accounts.