SECTION A: (20 marks)
1. Which of the following is a liability?
a) Rent income due
b) Rent expense prepaid
c) Prepaid rent income
d) Rent expense paid in cash
2. When an overdraft is acquired, what happens to the financial position of the business?
a) Assets are increased; liabilities decreased
b) Assets are decreased; liabilities increased
c) Assets are increased; liabilities increased
d) Assets are not affected; liabilities increased.
3. Customers accounts are found in:
a) Sales ledger
b) General ledger
c) Purchase ledger
d) Nominal ledger
4. When each withdraw from bank for office use, the entries are
a) Debit cash column; credit bank column
b) Debit bank column; credit cash column
c) Debit cash column; credit cash column
d) Debit bank column; credit bank column.
5. The word used to describe the transfer of nominal entries to the ledger is..............................
a) Balancing
b) Posting
c) Normalizing
d) Narrating
6. Which one of the following documents would be sent to a customer when the supplier discovers that some of the goods taken had been omitted during the calculation of amounts due
a) Credit note
b) An invoice
c) Debit note
d) Standing order
7. A cheque issued by a firm and entered in a cash book but not yet passed through the banking system would be called...........................
a) An uncredited cheque
b) A dishonored cheque
c) A refer to drawer cheque
d) An undebited cheque
8. Gross loss is
a) When cost sales exceeds net sales
b) When cost of sales is less than sales
c) When sales exceed purchases.
d) When net is equal to cost of sales.
9. Which of the following errors will the trial balance not disclosed?
a) Errors of transaction
b) Miscat in entries
c) Reversal of entries
d) Miscalculation of balances
10. Given that creditors were shs25,000 and shs42,000 on 1st January 1991 and 31st December 1991 respectively and if payments made to creditors amounted shs32,000during the year. What was the total amount of invoices received from the creditors?
a) 74,000
b) 42,000
c) 49,000
d) 67,000
11. Which of the following information is not required when preparing a sales ledger control account?
a) Total credit notes issued to customers
b) Cash sales
c) Total invoices issued to customers
d) Payments from customers
12. A debit balance in electricity account at the end of trading period represents
a) Amount of electricity paid in advances
b) Outstanding amount of electricity
c) Amount of electricity in arrears
d) Overused amount of electricity.
13. A machine whose cost value is shs100, 000 with an expected life time of four years is to be depreciated using straight-line method. If after two years it will have registered an accumulated depreciation of shs48, 720. What will be its scrap value at the end of four years?
a) Shs94,000
b) Shs2,560
c) Shs24,000
d) Shs51,280
14. In an income and expenditure account of a club, one of the items which will appear on the credit side of the account is......................
a) Member's subscriptions
b) Purchases of club equipment
c) Donations
d) Entrance fees from discos
15. Which of the following information is true in the absence of a partnership deed?
a) Interest is charged on partners' drawings
b) Profits and losses are shared in proportion to the partners' capital contributions.
c) Interest is allowed on partners' capital
d) No interest is charged on partners' drawings
16. Which one of the following may not be a good reason for returning goods by a customer?
a) Faulty design
b) Obsolence
c) Damage in transit
d) Demand is low
17. Which one of the following will be included in the trading Accounts of a shopkeeper?
a) Carriage inward
b) Electricity bill
c) Accountants fee
d) Carriage outward
18. When a debtor to a firm is declared bankrupt, this requires the firm to
a) Debit debtors' account and credit bad debts account
b) Credit debtors' account and debit the bad debts account
c) Debit bad debts recovered accounts and credit debtors' account
d) Credit bad debts recovered account and debit debtors' account.
19. Musa had the following information on the dates shown below:
1st January 1992 31st December 1992
Assets: shs50, 000 shs75, 000
Creditors: shs25, 000 shs15, 000
Determine the profit musa made during the year
a) Shs25,000
b) Shs35,000
c) Shs60,000
d) Shs50,000
20. Money spent on items for items for business use is referred to as:
a) Revenue expenditure
b) Retained expenditure
c) Differed expenditure
d) Capital expenditure
SECTION B: (80 marks)
21. a) Give two reasons to explain why it is necessary for a poultry farmer to keep proper books of accounts.
b) The following information was obtained from Bwireko poultry farm as at 31st December 1992:
shs
Sales (eggs) 1,600,000
Purchases (poultry feeds) 860,000
Advertising 46,000
Farm equipment 200,000
Electricity charges 24,000
Value of laying birds 135,000
Land 300,000
Buildings 300,000
Capital 700,000
Stationery 2,800
Drawings 124,000
Cash at bank 187,500
Carriage on sales 84,000
Wages and salaries 172,000
Farm debtors 128,000
Farm creditors 83,300
Loan from Uganda development bank 200,000
Interest on loan 20,000
Stock (unused feeds) as at 31/1/92 125,000
Additional information
1) Depreciation per annum is to be allowed on all the farm's fixed assets.
2) Laying birds are kept for more than one year.
3) Income tax of shs200, 000 is due but not yet paid.
You are required to prepare:
i. Bwireko poultry farm's trading profit and loss account for the period ended 31/12/1992.
ii. A balance sheet as at 31/12/1992.
22. a) List any five causes of differences between customer's cash book balance and bank statement balance.
b) The following is the cash book (Bank column) of Mr. Mpopa for June 1991.
DR BANK ACCOUNT CR
|
SHS June 2 Ezutu 500,000 5 Ocholi 1,500,000 8 Mikisa 2,000,000 20 Baluka 3,000,000 30 Balance c/d 1,500,000 8,500,000 |
SHS June 1 Balance b/d 2,000,000 3 Muhashi 800,000 7 Onyango 2,200,000 25 Adutia 3,500,000
8,500,000 July 1 Balance b/d 1,500,000 |
BANK STATEMENT
30/06/91
|
DATE |
ITEMS |
DEBIT |
CREDIT |
BALANCE |
|
June 1 June 4 June 6 June 8 June 10 June 18 June 30 |
Balance b/f Muhashi Ocholi Onyango Mikisa Ledger fee Standing order |
SHS
1,800,000
2,200,000
200,000 300,000 |
SHS
1,500,000
2,000,000 |
SHS 2,000,000 3,800,000 2,300,000 4,500,000 2,500,000 2,700,000 3,000,000 |
Note:
The cheque issued to Muhashi was shs.1, 800 ,000 and not shs800,000.
Prepare:
i. the amended cash book
ii. Bank reconciliation statement.
23. a) Mention any five uses of a journal other than correcting errors.
b) Prepare journal entries necessary to correct the following errors in the books of Maina a trader in jinja.
i. A carpet bought on credit at shs490, 000 for office uses had been entered in the purchases day book and posted to the purchases account.
ii. Maina had withdrawn cash amounting to shs50, 000 for personal use but no entry had been made in the books.
iii. Goods worth shs52, 000 had been sold to Misanvu on credit but entered in the sales day book as shs25, 000 and posted to the accounts.
iv. A cheque worth shs90, 000 received from Muboga, one of the credit customers had been posted in Muboga's account as shs9, 000.
v. A cash payment of shs6, 500 for petrol had been debited to the delivery van account.
24. a)Give any three advantages of control accounts.
b)The following details are from books of Alube Motor Dealers:
balances on 1st January 1991.
Shs
Debtors 1,200,000
Creditors 800,000
Stock 1,000,000
Transactions during the year:
Cash receipts from debtors 4,800,000
Cash payments to creditors 2,500,000
Credit sales 5,000,000
Credit purchases 3,000,000
Returns outwards 100,000
Returns inwards 200,000
Debts written off 400,000
Cheques dishonored (Debtors) 1,800,000
Discount allowed 100,000
Discount received 50,000
Package charges (Debtors) 50,000
Required to:
Select the appropriate items from the above list and use them to prepare a
i. sales ledger control account
ii. Purchases ledger control account.
25. Bagagga Progressive Farmers bought a vehicle at shs28, 000, 000 on 1st January 1991. It was estimated that the vehicle would last five years leaving a scrap value of shs3, 000, 000.
You are required to show the following accounts for a period of three years:
i. Motor vehicle account
ii. Provision for depreciation on vehicle account
iii. Depreciation account
26. a) List any three differences between a receipt and payments account and an income and expenditure account.
b) Given below is the receipts and payments account for the West Nile Club for the year ended 3st December, 1992:
DR Receipts and Payments Account CR
|
SHS Jan 1 Balance b/d 800,000 Subscriptions: 1992 1,000,000 1993 200,000 Donations 1,200.000 Club Disco Collections 900,000 Sales of refreshments 1,100,000 5,200,000 |
SHS Club Disco expenses 100,000 Rent (premises) 300,000 Ground hire 200,000 Equipment 500,000 Purchase of Refreshments 700,000 Balance c/d 3,400,000
5,200,000 |
Additional information:
i. stock of refreshments as at 1/1/1992 shs200,000
ii. stock of refreshments as at 31/12/1992 shs300,000
iii. prepaid rent is shs100,000
iv. ground hire dues shs50,000
Required to prepare the:
i. Bar trading account.
ii. Income and expenditure account for the year ended 31st December, 1992.