UNIVERSITY EXAMINATIONS: 2017/2018
ORDINARY EXAMINATION FOR THE DIPLOMA IN
INFORMATION TECHNOLOGY/ DIPLOMA IN
BUSINESS INFORMATION TECHNOLOGY
DIT302& DBIT 106 – FINANCIAL MANAGEMENT& FUNDAMENTALS
ACCOUNTING
FULLTIME/PARTTIME
DATE: AUGUST, 2018 TIME: 2 HOURS
INSTRUCTIONS: Answer Question One and Any Two Questions.
QUESTION ONE
i) The following transactions are extracted from the books of Wali enterprises for the month
ended 31 January 2018.
January 1: Started business with Kshs.600,000 in the bank and 500,000 in cash
January 2: Bought goods on credit from Ndung’u Kshs.270,000
January 3: Bought goods on credit form S. Muigai Kshs.75,000
January 5: Bought goods for cash Kshs.54,000
January 8: Bought goods on credit from S. Muigai Kshs.57,000
January 10: Sold goods on credit to K. Mwaniki Kshs.117,000 January 12:
Sold goods for cash Kshs.63,000
January 18: Took Kshs.9,000 of the cash and paid it to the bank January 21:
Bought machinery by cheque Kshs.165,000
January 22: Sold goods on credit to M. Otieno Kshs.66,000
January 29: We paid Ndung’u by cheque Kshs.258,000
January 31: Bought machinery on credit from Kinuthia Kshs.81,000
Required
A) Enter the transactions in the relevant ledger accounts (12 Marks)
B) Balance of the ledger accounts and extract a trial balance (8 Marks)
ii) Explain FIVE users of accounting information and how the information influences their
decision making in the organization. (10 Marks)
QUESTION TWO
IT is integral in modern day organizations, elaborate 10 ways in which information technology
can aid in ensuring transparency and accountability in the entity.”. Discuss using relevant
examples. (20 Marks)
QUESTION THREE
a) Kendi has a business that has been trading for some time. You are given the
following information as at 31.12.2017
You are required to prepare a Balance Sheet as at 31 December 2017 (10 Marks)
b) Explain FIVE limitations of financial accounting (10 Marks)
QUESTION FOUR
a)
Discuss the FIVE accounting elements that forms the foundation
of financial accounting.(Give examples)
(10 Marks)
b)
Explain using a diagram FOUR qualitative characteristics of
financial information. (10 Marks)
QUESTION FIVE
The following balances were extracted from the books of Kaizen Traders, a sole trader, as at
30th
Additional Information:
i. Stock at 30 September 2017 was Sh.50,000
ii. Depreciation is charged as follows:
Motor vehicles 10% p.a on cost
Premises 5% p.a on cost
Fixtures 3% p.a on reducing balance basis
iii. Lighting and heating amounting to Sh. 300 was not paid during the year and Salaries and
wages paid in advance amount to Sh. 400
iv. The bad debts written off in the year amount to Sh. 1,200. A provision for doubtful debts of
3% of remaining debtors should be made
v. General expenses outstanding amount to Sh. 700.
Sales on cash amounting to Sh. 2,600 were not recorded in the account
Required:
a)
A statement of comprehensive income for the year ended 30th September
2017. (12 Marks)
b) Balance sheet as at at 30th September, 2017. (8 Marks)
