Description

BOOK KEEPING AND ACCOUNTING

Question One:

• Among the documents commonly used in business are as follows:

Purchase invoice

• Purchase credit note
• Statement of account
• Bank pay in slip

You are required to list under each of the above headings, the detailed information to describe the documents.           (6 Marks)

• Record the following transaction in the appropriate subsidiary books of Wagava Kimani for the month of January 2015.

January 1 Purchased 200 trays at Shs. 200 each from Kangundo Wholesalers

2 Sold 1 dining table, on credit from Naomi Wanjuki; 300 door mats at Shs.200 each; 500 rugs at Shs. 300 each, 200 stairs clips at Shs.45 each all less 10% trade discount.

7 Sold on credit to S Mwaniki 1 oak board at Shs. 7,200

14 Sold, on credit to P. Mundia 1 bedroom suit for Shs. 6,750.

20 Purchased from Mugwe Co. Ltd on credit 100 carpets at Shs. 850 each, 500 trays at Shs.200 each. All less 10% discount.

22 Returned 10 trays received from Mugwe Co. Ltd on 20^th January which were damaged on transit

(7 Marks)

• Explain the merits of an imprest system. (4 Marks)
• Omolo maintains a petty cash book on imprest system. The imprest being Shs. 30,000. The following transactions took place in 2016 April.

April 1  Received imprest from the cashier of Shs. 30,000

3 Bought postage stamps of Shs.2,000

6 Paid Shs. 4,000 for Peter’s accounts in purchases ledger 7 Bought stationery Shs. 5,000

8 Paid travelling allowance to S. Otieno an employee Shs. 4,000.

10 Paid window cleaning expenses Shs.6,000

12 Paid Lenana’s account in purchases ledger Shs.5,000

14 Paid subscription for trade association Shs.2,000

• Paid office cleaning expenses Shs.2,000
• Received Shs.30,000 from the cashier
• Paid S. Otieno for travelling expenses Sh. 10,000.
• Bought electric light bulbs Shs.2,000
• Paid Lenana’s account in the purchases ledger Shs. 2,500.
• Paid travelling expenses Shs.1,000
• Paid for sugar, tea and milk Shs.3,000

Required:

Enter the transactions into a petty cashbook under analysis column; postage and stationery travelling expenses, cleaning expenses, sundries in a ledger column. Balance off the petty cashbook and show the balance on 1 ^st May, 2016.