784.JULY - DEC 2024 Financial Accounting

INFORMATION AND COMMUNICATIONS
UNIVERSITY
SCHOOL OF HUMANITIES AND BUSINESS
Department of Accounting, Business and Finance

FINANCIAL ACCOUNTING
ASSIGNMENT – OCT 2024
ANSWER ALL THE QUESTIONS
QUESTION ONE (6 MARKS)
a) Bookkeeping and Accounts involves the recording of business transactions
from the source documents into books of accounts while Accounting is the
analyzing, summarizing, interpreting and communicating of accounting
information to relevant stakeholders.
i) State any 3 users of accounting information
ii) Identify and explain any 3 uses of accounting information

b) i) What do the following stand for: IFRS, IASB, GAAP, IASC, FASB and
IFAC
iii) Explain the following accounting conventions and principles:
Business Entity, Prudence, Accruals concept and Going on concept
QUESTION TWO (12 MARKS)

a) The following information was obtained from the books of Danny Musenge for
the month of October, 2018:
1/10/18 Balances brought forward were: Cash K5,000, Bank K25,000

2/10/18 Sold goods on credit to: Jacob K2,500, James K3,250, John
K1,000
5/10/18 Cash sales were K7,500
6/10/18 Cash of K6,000 was deposited into the business bank account
8/10/18 Bought goods on credit from: Tembo K1,500, Tendai K 2,000
10/10/18 Cash purchases were K2,500
11/10/18 Paid for Rent by cheque K1,000
12/10/18 James returned goods to us K250 and we returned goods to
Tendai K300
18/10/18 Withdrew cash from the bank for official use K1,250
19/10/18 Paid wages by cheque K4,000
21/10/18 Bought a motor Vehicle by cheque K8,000.
Required:
i) Prepare the 2 – Column cashbook, the Sales day book, Sales Returns
Daybook, Purchases daybook and Purchases returns day book
ii) Post to the Ledger Accounts and extract a trial balance
a) The following ledger account was obtained from the books of Chibomba Ltd:
Kabubi’s Account
Date Details Fol Debit Credit

1/09/20 Balance b/d 5,250
5/09/20 Copy Invoice No. 01 SDB 15,750
6/09/20 Credit note No. CN 03 SRDB 1,000
15/09/2 Cheque No 001233 CB 5,250
0
18/09/2 Copy Invoice No. 02 SDB 4,000
0
22/09/2 R/D – Cheque 001233 CB 5,250
0
23/09/2 Cash receipt CB 5,000
0
23/09/2 Discount CB 250
0
30/09/2 Balance c/d ???
0
30,250 30,250
01/10/2 Balance b/d ???
0
Answer the questions below with reference to Kabubi’s account above:

i) In which type of ledger book would this Account be found?
ii) In which class of accounts does this account belong?
iii) Who is Kabubi to Chibomba?
iv) Explain the transaction that took place on 5/09/20?
v) Explain the transaction that took place on 15/09/20
vi) R/D stands for what and what does it mean?
vii) Why was the transaction on 15/09/20 repeated on 22/09/20
viii) What is the other name for copy invoice
ix) SRDB are initials for ……
x) How much was Kabubi owing Chibomba on 30 th September, 2020
QUESTION THREE (6 MARKS)
a) Final Accounts are prepared to determine the profitability, net worth and
liquidity of the business in a given period of time.
i) Identify 3 main statements that are prepared periodically to achieve
the above 3 purposes.
ii) Identify the main elements that are dealt with in the Balance Sheet
b) The table below is a Trading and profit and Loss Account. Calculate the
missing figures from i) to xx)
NET PROFIT COST OF EXPENSES TURNOVER GROSS

(K) SALES (K) (K) (K) PROFIT (K)
i 1,500,000 1,500,000 5,500,000 Ii
1,000,000 2,550,000 iii iv 4,000,000
v vi 3,000,000 10,123,000 7,123,000
vii 6,000,000 2,200,000 viii 5,000,000
200,000 500,000 ix 1,200,000 X
QUESTION 4 (15 MARKS)

Kaleji and Nsama have been in partnership, selling computers and related
accessories. Their agreement provides that each of them is entitled to interest on
capital of 5% per annum and is charged interest on drawings of 2% per annum.
Their profit sharing ratio is 3:2 respectively.
The firm’s trial balance as at 31 December, 2018, was as follows:

Dr. Cr.
K K
Carriage Inwards 16,700
Returns Inwards 15,200
Salaries and wages 45,000
Office expenses 3,200
Rent and rates 3,800
Postage and stationery 2,650
Bad debts written off 4,500
Provision for bad debts (01.01.18) 780
Discounts received 250
Sales 350,000
Trade Creditors 38,400
Trade Debtors 48,500
Stock at (01.01.18) 65,400
Purchases 165,000
Motor Vehicles at cost 20,000
Office equipment at cost 18,000
Provision for depreciation at (01/01/18)
- Motor Vehicles 4,000
- Office equipment 3,600
Cash at bank 16,900
Drawings: - Kaleji 35,000
-Nsama 15,500
Current accounts: -Kaleji 6,240
-Nsama 2,920
Capital accounts: -Kaleji 45,000
-Nsama 30,000
478,270 478,270
Additional information
(i) Rent and rates paid in advance K990
(ii) Arrears for postage and stationery are K360
(iii) The provision for bad debts is to be adjusted to K 500
(iv) With effect from 1 July 2011 partners were entitle to a salary per annum as
follows:
Kaleji, K36,000, Nsama K24,000
(v) Motor vehicles are to be depreciated at 20% per annum on a reducing balance
basis,
and Office equipment at 10% on a straight line basis.
(vi) Stock at 31 December, 2018 was valued at K82,800.
Required:
(a) Prepare the Partnership Statement of Comprehensive Income. [8]
(b) Prepare the Appropriation Account and Current Accounts for the Partnership for
the
year ended 31 March 2012 [4]
DUE DATE: FRIDAY, 1 NOVEMBER 2024, LATEST 22:00 HRS

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INFORMATION AND COMMUNICATIONS

Department of Accounting, Business and Finance

ii) Identify and explain any 3 uses of accounting information

QUESTION TWO (12 MARKS)

1/10/18 Balances brought forward were: Cash K5,000, Bank K25,000

Date Details Fol Debit Credit

Answer the questions below with reference to Kabubi’s account above:

NET PROFIT COST OF EXPENSES TURNOVER GROSS

QUESTION 4 (15 MARKS)

The firm’s trial balance as at 31 December, 2018, was as follows:

DUE DATE: FRIDAY, 1 NOVEMBER 2024, LATEST 22:00 HRS

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