Principles of Accounting (ACCT201)
Faculty of Economics and Management Science (FEMS)
Semester: Resit
Level: 200
Year: 2019
SECTION A (25 MARKS)
Instruction: write only the letter of the correct answer.
1. Companies not disclosing an immanent bankruptcy will violet the: a. business entity
concept b. going concern concept c. monetary unit assumption d. periodicity
assumption
2. The assumption that states that business can divide their activities in to artificial time
is: a. business entity concept b. going concern concept c. monetary unit assumption d.
periodicity assumption.
3. Assets are recorded at their original purchase price according to: a. materiality
principle b. historical cost principle c. cost benefit principle d. consistency principle
4. Management concealing important financial information violates the: a. materiality
principle b. historical cost principle c. full-disclosure principle d. consistency
principle.
5. When estimating unearned revenue, what principle applies? a. conservatism b.
historic cost c. full disclosure d. consistency.
6. What is not a value of accounting relevance? a. predictive value b. feedback value c.
timeliness d. reliability
7. What is not a value of accounting reliability? a. verifiability value b. representational
faithfulness c. timeliness d. neutrality
8. Which of the following transactions will have no impact on stockholders equity? a.
purchase of land with proceeds of a bank loan b. dividends to stockholders c. net loss
d. investment of cash by stockholders\
9. Which of the following appear in the income statement and balance sheet? a. account
receivables b. account payable c. sales d. accruals
10. The process of providing financial information to external decision makers is referred
to as? a. public accounting b. government accounting c. financial accounting d.
managerial accounting
11. Financial statements usually include all except: a. income statement b. income tax
return c. balance sheet d. cash flows
12. The investment of cash in a business result in/an: a. increase in cash and decrease in
capital b. increase in cash and increase in capital c. increase in supplies and a decrease
in cash c. decrease in cash and increase in capital d. increase in fees earned and
increase in capital
13. The purchase of supplies for cash will result in a/an: a. increase in cash and decrease
in capital b. increase cash and an increase in supplies c. increase in supplies and a
decrease in cash d. increase in equipment and an increase in capital
14. Services rendered for cash will result in/an: a. increase in cash and decrease in capital
b. increase in cash and increase in fees earned c. decrease in cash and increase in fees
earned d. increase in fees earned and a decrease in capital
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
Resit Course: Principles of Accounting: ACCT201
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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15. Cash is received from a client for office rental space: a. cash increases and rental fees
earned decreases. b. cash increases and rental fees earned increases c. cash decreases
and capital increases d. cash decreases and withdrawal fees increases
16. Which of the following account is not a liability? a. account payable b. account
receivable c. salaries accrued d. notes payable
17. Assets total 50,000,000F, liabilities total 10,000,000F, the equity of the business must
total? a. 4,000,000F b. 40,000,000F c. 50,000,000F d. 60,000,000F
18. If during the accounting period the assets increase by 7,000,000F and the owners’
equity increase by 1,000,000F, then the liability must have: a. increase by 6,000,000F
b. increase by 4,000,000F c. decrease by 4,000,000F d. decrease by 10,000,000F
19. If during the accounting period the assets increase by 7,000,000F and the owners’
equity decrease by 3,000,000F, then the liabilities must have: a. increase by
10,000,000F b. increase by 4,000,000F c. decrease by 4,000,000F d. decrease by
10,000,000F
20. Which of the following characteristics does not describe a liability? a. result of a past
transaction b. probable c. present obligation d. must be legally enforceable
21. What will be debited if Sanda started business with 2,000,000F? a. capital account b.
cash account c. Sanda’s account d. business account
22. When income is reduced or decreased, that amount is recorded on: a. right or debit
side of the account b. left or debit side of the account c. left or credit side of the
account d. right or credit side of the account
23. What will be debited if the business sold goods for 10,000,000F on credit? a. cash
account b. sales account c. account receivable account d. purchase account
24. Which of the following is not correct? a. decrease in assets will be credit b. decrease
in liability will be debit c. decrease in expense will be credit d. decrease in revenue
will be credit
25. Which should be credited if salary is paid to Sandi? a. Sandi’s account b. salaries
account d. cash account d. drawings account
SECTION B: (45 marks)
Question 1 (10 marks)
Kingsway Ltd carried out the following transactions during the month of December 2016.
Date Transaction 000FCFA
1 Bought goods on credit 159,000
2 Cash sales banked immediately 100,000
8 Bought a motor van paid immediately as follows: one quarter in
cash and the balance by cheque.
3,000,000
10 Goods sold on credit to customers 400,000
18 Transferred cash from bank 10,000,000
20 Owner puts in cash to the business 1,000,000
22 Goods that cost 500,000frs were sold to a customer in cash 650,000
25 Bought goods on credit 100,000
28 Customer paid his account by cheque 40,000
29 Sold goods on credit 150,000
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30 Received a cheque from customer in full settlement of the
transaction dated December 10th
Required: record the above transactions in a classical journal.
Question 2 (20 marks)
The trial balance below was extracted from the books of MARIAH Enterprise as on 31
st
December 2016
DR
000FCFA
CR
000FCFA
Capital 7,000
Premises 1,444
Machinery 5,880
Provision for depreciation on machinery 358
Stock in trade 31
st
December 2009 825
Purchases 14,500
Sales 23,000
Carriage inwards 305
Carriage outwards 215
Lighting expenses 411
Salaries 2,105
Wages 1,305
Rents and rates 800
Bad debts 560
Discount allowed and received 306 1,502
Drawings 800
Debtors 1,899
Sales returns 155
Purchases returns 906
Cash at bank 3,050
Cash in hand 2,000
Provision for bad debts 35
Creditors 1,250
Bank overdraft 509
36,560 36 ,560
Additional information:
a) Salaries paid in advance amounted to 56,000 FRS.
b) Payment for lighting expenses by cheque for 682,000 FRS. Had been omitted in the
books.
c) Provision for bad debts is to be increased to 55,000 FRS.
d) Rents and rates paid was only for 10 months of the year.
e) Stock at 31
st
December 2016 was 677,000 Frs.
f) Depreciation is to be charged on promises and machinery at 5% and 20% respectively
Required:
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Prepare the statement of income for the year ended 31
st
December 2016 and the statement
of financial position as at that date (vertical format only)
Question 3 (15 marks)
In October 2016, Chum completed the following petty cash transactions:
October:
1 drew a cheque to establish a 25,000F petty cash fund
2 paid 5,000F for postage stamps
4 paid 4,000F to have the office cleaned
5 paid 4,500F for transport expenses
8 drew cheque to reimburse the petty cash fund which had been increased to 50,000F
11 paid 6,500F for minor repairs
12 paid for printing and advertising circulars 3,500F
14 paid a student 5,000F to print advertising circulars
22 purchased postage stamps 5,000F
25 paid a taxi driver 8,500F to deliver goods to customers
27 paid for repairs on duplicating machine 4,500F
30 Drew cheque to reimburse the petty cash fund.
Note: columns of the petty cash book to be limited to the following
I. Cleaning.
II. Telephone and postage expenses
III. Repairs
IV. Printing and advertising
V. Transport
Required:
a) Record the above transactions in an analytical petty cash book
b) Make necessary journal entries to show the posting of the petty cash book to the
ledger and the replenishment of the petty cash on 01/11/2016.
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