PRINCIPLES OF ACCOUNTING DECEMBER 2023 PAST PAPER

WEDNESDAY: 6 December 2023. Morning Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Show ALL your workings. Do NOT write anything on this paper.

QUESTION ONE

The following trial balance was extracted from the financial records of Sports limited on 30 September 2022:

Additional information:
1. Closing inventory as at 30 September 2022 was valued at Sh.73,000,000.
2. As at 30 September 2022, prepaid rent amounted to Sh.3,000,000 while outstanding electricity was Sh.2,300,000.
3. A half year interest on bank loan is outstanding.
4. Depreciation is to be provided as follows:

5. Allowance for doubtful debts is to be maintained at a rate of 5% on accounts receivable.
6. The estimated corporation tax for the year ended 30 September 2022 was Sh.7,400,000.
7. The directors have agreed to transfer Sh.5,000,000 to general reserves.

Required:

Statement of profit or loss for the year ended 30 September 2022. (10 marks)

Statement of financial position as at 30 September 2022. (10 marks)

(Total: 20 marks)

 

QUESTION TWO

1. Describe FOUR characteristics of a good computerised accounting system. (4 marks)

2. Summarise TWO accounting techniques used in incomplete records and single-entry book-keeping. (4 marks)

3. Hasora Munene, a sole trader in a small retail business prepares receivables and payables ledger control accounts on a monthly basis.

As at 1 August 2022, the following balances were extracted from the financial records of the business:

As at 31 August 2022, the balances in the receivables and payables ledger accounts were as follows:

Required:
Prepare the following ledger control accounts in the books of Hasora Munene for the month of August 2022:

Receivables ledger control account. (6 marks)

Payables ledger control account. (6 marks)

(Total: 20 marks)

 

QUESTION THREE

1. Highlight FOUR contents of a partnership agreement. (4 marks)

2. Explain FIVE qualitative characteristics that make accounting information provided in financial statements useful to stakeholders. (10 marks)

3.  The following set of balances were obtained from the accounting records of Jaba Limited as at 30 November 2023:

Required:
Calculate the cash conversion cycle for Jaba Limited for the period ended 30 November 2023 (6 marks)

(Total: 20 marks)

 

QUESTION FOUR

1. Highlight FOUR benefits of adopting international Public Sector Accounting Standards (IPSAS) in the
presentation and preparation of financial statements. (4 marks)

2. Distinguish between the following terms as applied in accounting:

“Capital expenditure” and “revenue expenditure”. (2 marks)

“Revenue income” and “capital receipts”. (2 marks)

“Statutory reserves” and “non-statutory reserves”. (2 marks)

“Delivery notes” and “invoices”. (4 marks)

3. Explain THREE characteristics of not – for – profit entities. (6 marks)

(Total: 20 marks)

 

QUESTION FIVE
The following information related to Mega One Sports Club for the year ended 30 September 2023:

Additional information:
1. Subscriptions received during the year included Sh.500,000 being arrears of the last financial year.
2. It is the policy of the club to write off any subscriptions in arrears for more than twelve months.
3. During the year, an equipment with a net book value of Sh.1,200,000 was sold for Sh.1,600,000.

 

Required:

1. Restaurant income statement for the year ended 30 September 2023. (4 marks)

2. Subscriptions account. (4 marks)

3. Income and expenditure account for year ended 30 September 2023. (6 marks)

4. Statement of financial position as at 30 September 2023. (6 marks)

(Total: 20 marks)

(Visited 23 times, 1 visits today)
Share this:

Written by