SECTION A: (20 marks)
1. The double entry state that
a) Debit the debtor's account, credit the creditor's account.
b) Debit the receiver's account, credit the giver's account.
c) Debit the seller's account, credit the buyer's account.
d) Debit the stock account, credit the merchant's account.
2. When preparing the balance sheet, the capital, net loss and drawings are shown as
a) Capital - Net loss - Drawings
b) Capital + Net loss - Drawings
c) Capital + Net loss - Drawings
d) Capital - Net loss + Drawings
3. Which of the following is true about a club's subscription amount prepaid at the of financial period? the amount
a) Is left out of the club's balance sheet.
b) Is always treated as a loss in the club's final account.
c) Will be shown as part of the club's assets in the balance sheet.
d) Will be shown as a part of the club's liabilities in the balance sheet.
4. The purchase of a motor van on credit would
a) Have no effect on owner's equity.
b) Increase owner's equity.
c) Decrease owner's equity.
d) Up-set the balance sheet equation.
5. What does a debit balance of shs.550 in the cash column of a cash book imply?
a) A total of shs.500 cash was paid out to creditors.
b) The business overspent by shs.550.
c) Receipts exceeded payments by shs.550.
d) A total of shs.550 cash was received from debtors.
6. The following are liabilities except
a) Accrued rent
b) Prepaid insurance
c) Prepaid rent
d) Accrued insurance
7. When a discount receivable account is under-cast by shs.1500, the entries necessary to correct the under cast are
a) Dr. Discount receivable account.
Cr. Discount allowed account.
b) Dr. Discount allowed account.
Cr. Discount received account.
c) Dr. Discount receivable account.
Cr. Cash book.
d) Dr. suspense account; Cr. Discount receivable account.
8. A sale of an old asset building is entered in
a) Sales account
b) Building account
c) Depreciation account
d) Purchases account.
9. Which of the following is reason for preparing control accounts?
a) Recording the amount of goods sold on credit.
b) Recording the transactions not recorded in any other book.
c) Checking the accuracy of the entries.
d) Recording purchases and sales transactions.
10. A machine costs shs.320, 000. Its estimated working life is 7 years and the scrap value is shs12, 000. What will be the amount charged for depreciation in the 5th year?
a) Shs.44,000
b) Shs.45,714
c) Shs.236,000
d) Shs.320,000
11. When of the following affects capital directly?
a) Purchases
b) Sales
c) Stock
d) Drawings.
12. The process of recording a transaction from the source document to the journal is called
a) Posting
b) Journalizing
c) Classifying
d) Vouching.
13. Calculate the owner's equity when fixed assets amount is shs100, 000. Circulating capital is shs60, 000 and current liabilities is shs10, 000.
a) Shs.50,000
b) Shs.120,000
c) Shs.190,000
d) Shs.80,000
14. If a partner's salary is paid in cash , the following sets of double entry would be correct except
a) Dr. Partner's salary a/c, Cr. Cash book.
b) Dr. Appropriation a/c, Cr. Partner's salary a/c.
c) Dr. Appropriation a/c, Cr. Partner's current a/c.
d) Dr. Appropriation a/c, Cr. Partner's drawings a/c.
15. Identify from the following items the one which is included in the purchases ledger control account.
a) Payments
b) Receipts
c) Discount allowed
d) Interest receivable.
16. Mukasa sells goods at 20% above cost price. His stock on 1st January, 1998 and 31st December, 1998 were shs.3, 000,000 and shs.2, 400,000 respectively. The costs of sales are 21,600,000. Calculate his sales.
a) Shs21,000,000
b) Shs24,000,000
c) Shs21,600,000
d) Shs25,920,000
17. If purchases returns is credited to the trading account, this would result into
a) An increase in gross profit
b) No change in gross profit
c) A decrease in gross profit
d) Doubling the gross profit.
18. In which of the following journals will the taking of goods by te owner for personal use be recorded?
a) Purchase journal
b) Cash book
c) Journal proper
d) Private journal
19. The main source of income to a non-profit making organization is
a) Sales
b) Donations
c) Membership fee
d) Annual subscription.
20. When the monthly bank statement is out to a customer the following would appear except
a) Payments from petty cash
b) Direct debit
c) Interest charged by the bank
d) Dishonored cheque
SECTION B: (80 marks)
21. Write notes on each of the following:
a) Capital expenditure,
b) Revenue expenditure,
c) Statement of affairs
d) Inter ledger transfers
e) Provisions
f) Double entry
g) Worksheet
h) Year end adjustments
22. Corner Kilak Pub maintains a petty cash book on an imprest system. The imprest amount is shs.1, 000,000 and the balance at the beginning of the month was shs200, 000. The following cash transactions took place during the month of June, 1999.
June 1 paid for stamps shs25, 000 envelopes shs10, 000 and aerogramme shs5,000.
June 5 paid for bar license for June shs30, 000
June 7 paid for business directory from Monitor publications shs12, 500
June 10 bought pens, ink, pins, staples, cellotape shs20, 000
June 13 paid telephone cards and telephone bills totaling shs 75,000
June 15 paid carriage for the return of soda empties to Kampala shs.50, 000
June 16 paid for email and fax bills for May shs117, 500
June 21 paid newspaper vendor for one month's supply of the Monitor and new vision newspapers shs36, 000
June 22 refunded the manager's transport expenses to Kampala shs60, 000
June 24 bought wrapping paper for gifts to outstanding customers' shs18, 500
June 25 paid for advertising space in pece stadium, shs18, 500
June 27 paid supplier Mr. Orone shs115, 000
June 27 paid sugar and tea leaves shs10, 000 and bread shs16, 000
June 28 paid shell (u) ltd shs85, 000 for fuel supplied.
June 30 paid office messenger's wage for the month shs.30, 000 and bar attendants shs.90, 000
June 30 paid transport of merchandise to the depots shs.175, 000
Required to:
Draw up a petty cash book duly balanced with the following columns:
i. Communications
ii. Selling and distribution
iii. Office expenses
iv. Fuel and travel
v. Bar expenses.
Note: put expenses under their specific headings.
23. a) State any six features of non-profit making organizations that make them distinct from profit making organizations.
b) The following is the receipts and payments account of ARINGA SPORTS CLUB compiled during the year ended 31-12-98.
ARINGA SPORTS CLUB
RECIEPTS AND PAYMENTS ACCOUNTS FOR THE YEAR ENDED 31-12-98
|
shs Balance b/f 1,390,000 Subscriptions 7,170,000 Entrance fees 250,000 Annual diner fees 1,000,000 Sports gala 1,750,000
11,560,000 Balance b/f 1,600,000 |
shs salaries 4,700,000 general expenses 560,000 audit fees 200,000 printing & stationery 450,000 secretaries honorarium 1,000,000 annual dinner expenses 1,500,000 insurance 100,000 bank charges 50,000 sports equipment 400,000 gala expenses 1,000,000 balance c/f 1,600,000 11,560,000
|
Additional information:
Shs
Subscription outstanding at the end of 1997 600,000
Subscription received in advance 31/12/1997 450,000
Subscription received in advance 31/12/1998 270,000
Subscription outstanding 31/12/1998 750,000
Salaries outstanding at start of 1998 400,000
Salaries outstanding at end of 1998 480,000
General expenses include prepaid insurance 60,000
Audit fees for 1998 are not yet paid 100,000
Audit fees paid are for 1997
Free hold lease of grounds 10,000,000
Sports equipment on 1.1.1998 2,600,000
Sports equipment on 31.12.1998 2,700,000
10% bank loan obtained 1.1.1997 2,000,000
Interest on bank loan for 1998 still outstanding ?
Required to prepare:
Income and expenditure A/C for the year ending December 31, 1998.
24. a) State six causes of discrepancy between the customers cash book balance and bank statement balance.
b) The following cash book and bank statement for the month of august, 1999 were provided by Ambition international.
CASH BOOK (BANK COLUMN)
|
DATE |
PARTICULARS |
CHEQ. NO. |
AMOUNT SHS |
DATE |
PARTICULARS |
CHEQ. NO |
AMOUNT SHS |
|
1/8/99 4/8/99 8/8/99 13/8/99 18/8/99 21/8/99 25/8/99 30/8/99
1/9/99 |
Balance b/f Sales Oluka ben Muhima & sons Kanta Auditors Van disposal Sales Farmers' Assn'.
Balance b/f
|
- - 1,267 652 901 - 887 117 |
62,500 40,000 7,500 17,000 23,000 6,000 19,000 15,000
190,000 97,500 |
1/8/99 6/8/99 11/8/99 15/8/99 19/8/99 23/8/99 27/8/99 30/8/99 31/8/99 |
Salaries Purchases Lawn mower UEB Petty cash National water Ondama Picfare Balance c/f |
381 382 383 384 385 386 387 389 |
20,000 16,000 30,000 5,000 4,000 10,000 5,000 2,500 97,500 190,000
|
BANK STATEMENT
|
DATE |
PARTICULARS |
CHEQ.NO |
DEBIT |
CREDIT |
BALANCE |
|
1/8/99 2/8/99 6/8/99 6/8/99 10/8/99 16/8/99 17/8/99 20/8/99 24/8/99 28/8/99 28/8/99 30/8/99 30/8/99 31/8/99 31/8/99 31/8/99 |
Balance b/f Credit transfer Cash Dama traders Muhima & sons Oluka Ben Cash Kanta Audit Firm Car and general Cheque deposit Ondama Oluka Ben Farmer's association Bank charges Cash Invoice No. BS101 |
381
382 652 1,267 385 901 383 087 387
117
388 |
16,500
16,000
4,000
30,000
5,000 7,500
1,000 10,000 12,000 |
40,000
17,000 7,500
23,000
19,000
15,000 |
62,500 46,000 86,000 70,000 87,000 94,000 90,500 113,500 83,500 102,500 97,500 90,000 105,000 104,000 94,000 82,000 |
Notes:
i. One of the employees account could not be traced and his salary of shs. 3,500 was not paid by the bank.
ii. Cheque no.388 was actually stolen. It was meant for petty cash.
Required to:
a) Update the cash book,
b) Draw a bank, reconciliation statement for the period ended August 31,1999.
25. a) State five errors revealed by the trial balance.
b) CARELESS LTD. Prepared their trial balance which failed to agree on 30th June 1999. The following errors were later discovered:
i. The purchases journal had been under cast by shs150,000
ii. Acheque received from Yoma for shs2,000,000 had been returned by the bank as dishonored but not recorded in the customers books
iii. Goods worth shs.105, 000 returned by tito, had been posted to the debit of his account.
iv. Sale of office furniture for shs.3, 000,000 had been entered in his sales day book, the total of which had been posted to sales account.
v. A debtor, Isma with shs600, 000 was omitted from the schedule of debtors.
vi. Discounts column on the debt side of the cash book was not transferred to the ledger at the end of the year shs147, 000.
vii. Insurance premium of shs450, 000 paid on 30th June 1998 for the year ended 30th June 1999 had not been brought forward.
viii. A cheque from Nile Insurance Corporation of shs750, 000 received for loss of stock by fire had been deposited in the personal bank account of the owner. No record was made in the books of the business.
ix. Commission of shs.25, 000 received from CELTEL in cash was credited twice, both in discount received account and commission received account. Each time the double entry being completed in the cash book.
Required to make journal entries to rectify the above errors.
26. a) Name five source books used in the preparation of control accounts, and state the type of information obtained in each.
b)From the following information prepare the balanced:
i. sales ledger control a/c
ii. purchases ledger control a/c
Opening balances: shs
Creditors (Dr.) 78,300
(Cr.) 1,074,600
Debtors (Dr.) 1,315,800
(Cr.) 21,600
Transportation during the year:
Purchases 5,956,200
Purchases returns 230,000
Sales 7,874,100
Sales returns 94,500
Cash from debtors 6,858,900
Discount allowed 253,800
Cash paid to suppliers 5,258,700
Discount received 149,400
Cash refunded to customers 15,600
Bills receivable 370,800
Bills payable 202,500
Bills receivable dishonored 22,500
Bad debts 44,850
Transfer from debtor's ledger to
Creditors ledger 12,000
Closing balances:
Creditors (Dr.) 69,300
(Cr.) ?
Debtors (Dr.) ?
(Cr.) 40,800