Principles of Accounting (ACCC2101)

Higher Institute of Commerce and Management (HICM)

Semester: Resit

Level: 200

Year: 2018

Answers (200 )
THE UNIVERSITY BAMENDA
HIGHER INSTITUTE OF COMMERCE AND MANAGEMENT(HICM)
SESSION :FIRST SEMESTER RESIT EXAMINATION 2017/2018.
LEVEL 200
COURSE TITLE: PRINCIPLES OF ACCOUNTING TIME ALLOWED: 3 HOUR
S
LECTURER: Dr. Mukah Samuel & Mr. ARMSTRONG-PEACE
Instructions. Answer all question!
Question 1(23 marks)
a) Explain the difference between accounting and bookkeeping 4 marks
b) What is the meaning of depreciation? 2 marks
c) Depreciation is a method of providing for or saving up for, replacement of fixed assets. Do you
agree? Support your position. 4 marks
d) State 4 causes of depreciation. 4 marks
e) A grinding machine originally cost 120,000 frs and estimated to have a scrap value of 20,000 frs
after the 4 years of it estimated useful life.
What is the depression charge in year 2 of the asset’s life under:
i) The straight line method? 3 marks
ii) The reducing balance method? 3 marks
iii) The sum of digits method? 3 marks
Question 2 (30 marks)
GREENROCK started a small business at bamenda main market on the first of may 2016 with a capital
of FCFA 160,000. During the month of march 2016 the following transactions took place.
2
nd
Bought goods on credit from Muna worth FCFA 100,000
5
th
Paid rent FCFA 20.000
5
th
Sold goods for FCFA 250,000 cash
6
th
Deposited FCFA 250,000 on credit from Kemeni
6
th
Sold goods on credit to Adamu FCFA 400,000
7
th
Drew FCFA 10,000 from the cash account for personal use
8
th
'Received from Adamu FCFA 309,000 being part payment of goods sold on credit
10
th
Cash sales FCFA 320,000
11
th
Paid advance wages in cash FCFA 150,000
12
th
Bought goods worth FCFA 500,000 on credit from Kika Ltd
13
th
paid Muna a supplier for his account FCFA 80,000
15
th
Bought goods for sale by cash FCFA 160,000
20
th
Cash sales FCFA 550,000
21
st
paid Kika Ltd FCFA 250,000
22
nd
paid for office expenses FCFA 220,000
23
rd
Sold goods on credit to Siben Ltd FCFA 270,000 and Ojong Ndip FCFA 220. 500
24
th
paid kemeni FCFA 200,000 - ’
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25
th
Cash sales FCFA 450,000
26
th
Received from Ojong Ndip FCFA 220,500
28
th
Siben Ltd paid his account for FCFA 200,000
30'
h
Cash sales FCFA 150,000
30
th
paid balances of wages FCFA 150,000 cash
31
st
Cash purchases FCFA 120,000
Work Required:
Present the cash book (10 Marks) •,
Present the sales and purchases
26
th
Received from Ojong Ndip FCFA 22,500
28
th
Siben Ltd paid his account for FCFA 20,000
30'
h
Cash sales FCFA 15,000
30
th
paid balances of wages FCFA 15,000 cash
31
st
Cash purchases FCFA 12,000
Work Required:
1. Present the sales and purchases daybooks and the cashbook (10 Marks)
2. Draw the relevant ledger accounts(10 Marks)
3. Extract the trial balance (6marks).
Question 3 (17marks)
QUESTIONING INC. Present the total balance for the year ended 31/12/2016 from the sale of basic
commodities.
ELEMENTS DEPIT FCFA (000) CREDIT FCFA (000)
Motor vehicles 3,000
Fixture 2,000
Stock(1
st
January 2016) 1,000
Sale 15,000
Purchases 7,000
Rent 1,000
Salaries and wages 1,000
Electricity 500
Telephone 400
Motor vehicle expenses 500
Discounts 600 500
Returns 1,000 500
Debtors 4,000
Creditors 3,000
Cash 2,000
Bad debts 500
Provision for bad& doubtful
debts
500
Drawings 1,000
Capital 6,000
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TOTALS 25,500 25,500
Additional Information
1. Rent outstanding at the end of the year amounted to 200,000.
2. Salaries and wages paid in advance amount to FCFA 100,000
3. Accrued electricity is FCFA 50,000
4. A prepaid telephone bill is FCFA 100,000.
5. Stock as at 31/12/2016 stood at FCFA 3,000,000.
6. The provision for bad and doubtful debts is to be set at10% of debts.
Work Required
1. Prepare thee trading, profit and loss account for OUTSTANDING INC. for the year ended
31/12/2016(9marks)
2. Prepare the balance sheet as at 31/12/2016(8 marks)
It is your altitude and not your aptitude that determines your altitude.
BE WISE, GOOD LUCK!!!
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