KCSE Business Studies Topical Questions and Answers

On 1st January 2011 , Jumo Traders had shs 22,500 in cash and shs 250,000 at bank.During the month, the following transactions took place:

21/12/2020

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On 1st January 2011 , Jumo Traders had shs 22,500 in cash and shs 250,000 at bank.During the month, the following transactions took place:

Prepare a duly balanced three column cash book. (10 marks)

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Below are some entries in the cash book of Romano Traders for the month of July 2010.

21/12/2020

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Below are some entries in the cash book of Romano Traders for the month of July 2010.

State the meaning of the following entries:
(a) July 1, 2010 Balance b/d, bank column, shs 100,000
(b) July 6, 2010 cash shs 20,000 and bank shs 20,000
(c) July 28, 2010 debtors shs 20,000
(d) July 31, 2010 Balance c/d shs 10,000

Meaning of the entries:

Bank overdraft.
Contra entry.
Cash received from debtor.
Closing cash in hand.

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On 1st January 2007, Muthoni Traders Cash Book showed a credit balance of Ksh 150,000 at the bank and a debit balance of Ksh 25,250 in hand. During the month, the following transactions took place:

17/12/2020

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On 1st January 2007, Muthoni Traders Cash Book showed a credit balance of Ksh 150,000 at the bank and a debit balance of Ksh 25,250 in hand. During the month, the following transactions took place:

January 5: Made cash sales for Ksh 21,500
January 16: Received a cheque for Ksh 360,000 from a debtor.
January 28: Paid a creditor Ksh.100.000; partly by a cheque of Ksh 80,000 and the
balance in cash.

Prepare a Two-column Cash Book for the month. (5 marks)

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On first January 2012, Ndovu Traders had shs 30,000 in cash and shs 75000 at the bank. During the month, the following transactions took place:

17/12/2020

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a) On first January 2012, Ndovu Traders had shs 30,000 in cash and shs 75000 at the bank. During the month, the following transactions took place:

January 2nd:
Bought goods in cash worth shs 15,500
5th:
Received cash from Chui shs 23,750 after allowing 5% cash discount.
8th:
Withdrew shs 8,900 from the bank for personal use.
11th:
Maro, a debtor settled her account of shs 16,800 by a cheque of shs 16,000.
15th:
Sales amounted to shs 24,250 in cash.
17th:
Paid Furaha traders shs 29,100 in cash in full settlement of their account less 3% cash discount.
20th:
Withdrew shs 15,000 from the bank for business use.
22nd:
Koko a debtor, settled her account of shs 40,000 by cheque less 2.5% cash discount.
25th:
Paid wages shs 21 ,000 in cash.

Required:
Prepare a duly balanced three column cash book. (12 marks)

Expected Response

On first January 2012, Ndovu Traders had shs 30,000 in cash and shs 75000 at the bank. During the month, the following transactions took place:

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The following balances were extracted from the books of Kl00 Traders for the year ended 30th June 2008.

16/12/2020

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The following balances were extracted from the books of Kl00 Traders for the year ended 30th June 2008.

Additional information:
(i) Stock on 30th June 2008 was valued at shs 120,000.
Prepare:
(i) Trading, Profit and Loss accounts for the year ended 30th June 2008. (9 marks)
(ii) Balance sheet as at 30th June 2008. (5 marks)

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Give two reasons why a three column cashbook is used both as a journal and a ledger.

15/12/2020

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Give two reasons why a three column cashbook is used both as a journal and a ledger.

Reasons why a three column cash book is used both as a journal and a ledger:
Cash and bank columns in the cash book act as a ledger and total balances are used to prepare trial balance like other ledger accounts.
Both discount allowed and discount received columns act as a journal and their total balances are transferred to the ledger.
Cash transactions are entered in the three column cash book directly as they occur.

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Kazim maintains a petty cashbook on a weekly interest of Kshs 13,000 on 1st April 2007 the cash balance was Kshs 2,570, During the week of April, the following transactions took place

14/12/2020

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Kazim maintains a petty cashbook on a weekly interest of Kshs 13,000 on 1st April 2007 the cash balance was Kshs 2,570, During the week of April, the following transactions took place

2007

April 2 Received reimbursement from the main cashier
April 3 Paid Kshs 3,070 for cleaning materials
April 4 Paid Kshs 2,000 bus fare
April 6 Bought stationery worth Kshs 2,200
Prepare a petty cashbook to record the above transactions using cleaning stationery and bus fare columns

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The following is a format of the debit side of a three-column cash-book:

14/12/2020

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The following is a format of the debit side of a three-column cash-book:

Name the columns labelled V, W, X and Y. (4 marks)

Expected Response

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On 1 September 2006, Igonji had Sh55 000 in hand and Sh 250 000 at bank.During the month, the following transactions took place:

13/12/2020

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On 1 September 2006, Igonji had Sh55 000 in hand and Sh 250 000 at bank.During the month, the following transactions took place:

September 2 Cash sales banked Sh 35260
3 Bought ribbons in cash Sh 4 500
8 Paid Wangila, a creditor Sh 94 000 by cheque in full settlement of’ his account after deducting 6% cash discount
12 Received a cheque for Sh 58 800 from Wetu after allowing her a cash discount of Sh 1 200
15 Paid salaries Sh 34 000 in cash
25 Withdrew Sh 50 000 from bank for office use
28 Anyango, a debtor paid her account of Sh 75 000 by cheque less 10% cash discount.
30 Deposited all the cash into bank except Sh 13 700

Prepare a three column cash book arid balance it off. (10 marks)

September 2 Cash sales banked Sh 35260 3 Bought ribbons in cash Sh 4 500 8 Paid Wangila, a creditor Sh 94 000 by cheque in full settlement of’ his account after deducting 6% cash discount 12 Received a cheque for Sh 58 800 from Wetu after allowing her a cash discount of Sh 1 200 15 Paid salaries Sh 34 000 in cash 25 Withdrew Sh 50 000 from bank for office use 28 Anyango, a debtor paid her account of Sh 75 000 by cheque less 10% cash discount. 30 Deposited all the cash into bank except Sh 13 700 Prepare a three column cash book arid balance it off. (10 marks)

On 1 September 2006, Igonji had Sh55 000 in hand and Sh 250 000 at bank.During the month, the following transactions took place:

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Outline the meaning of the following terms as used in accounting:(a) Contra entry ,(b) Cash discount

13/12/2020

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Outline the meaning of the following terms as used in accounting: (a) Contra entry , (b) Cash discount

(a) Contra entry:- This is a transaction affecting both sides of a two/three column cash book simultaneously. It is indicated by letter ‘C'.
(b) Cash discount:- This is a reduction/allowance given to a buyer by the setter for making prompt payment.

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On 1 January 2006, Mzalendo Traders sh.180000 in cash and sh.170000 at bank.During the month, the following transactions took place:

11/12/2020

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On 1 January 2006, Mzalendo Traders sh.180000 in cash and sh.170000 at bank.During the month, the following transactions took place:

2006
January 10 paid ABM Traders sh.25, 000 by cheque less sh.1000 Cash discount.
16 Sold goods for sh. 14,000 cash, less 5% discount
31 Banked all the cash except sh.5200
Enter the above transactions in cash book extract given below and balance it off.(5mks)

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The following information was extracted from the books of Mamboleo Traders in the month of September, 2014.

11/12/2020

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The following information was extracted from the books of Mamboleo Traders in the month of September, 2014.

September 1 Had cash in hand, Shs 15,500 and a bank overdraft of Shs 9,700.
September 3 Bought goods for sale Shs 12,300 on credit.
September 5 Sold good in cash Shs 8,500.
September 9 Sold goods on credit Shs 10,000.
September 12 Received a cheque of Shs 9,000 from a debtor.
September 15 Paid a creditor Shs 10,000 in cash.
September 17 Paid wages Shs 2,600 in cash.
September 19 Received a cheque Shs 23,400 from Samson for goods sold in January.
September 20 Received Shs 6,700 from a debtor in cash.
September 23 Withdrew Shs 7,700 from the bank for office use.
September 24 Paid electricity bills by cheque Shs 1,200.
September 25 Received a cheque of Shs 11,500 from a debtor.
September 26 Made cash sales of Shs 12,800.
September 27 Purchased goods worth Shs 8,950 in cash.
September 28 Deposited personal cash Shs 3,500 into the business account.
September 30 Paid water bills by cheque Shs 2,800.

Required:
Prepare a two column cash book. (10 marks)

Expected Response

The following information was extracted from the books of Mamboleo Traders in the month of September, 2014.

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On 1st January 2015, Ndovu Traders had Ksh 30,000 in cash and Ksh 75,000 at the bank.

5/12/2020

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On 1st January 2015, Ndovu Traders had Ksh 30,000 in cash and Ksh 75,000 at the bank.
During the month, the following transactions took place:

January 2: Bought goods in cash worth Ksh 15,500.
5: Received cash from Chui Ksh 23,750 after allowing 5% cash discount.
8: Withdrew Ksh 8,900 from the bank for personal use.
11: Maro, a debtor settled her account of Ksh 16,800 by a cheque of Ksh 16,000.
15: Sales amounted to Ksh 24,250 in cash.
17: Paid Furaha traders Ksh 29,100 in cash in full settlement of their account less 3% cash discount.
20: Withdrew Ksh 15,000 from the bank for business use.
22: Koko a debtor settled her account of Ksh 40,000 by cheque less 2.5% cash discount.
25: Paid wages Ksh 21,000 cash

Required: Prepare a duly balanced three column cash book. (12 marks)

Expected Response

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On 1st September 2015, Gondi had Ksh 55,000 in hand and Ksh 250,000 at bank. During the month, the following transactions took place:

5/12/2020

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On 1st September 2015, Gondi had Ksh 55,000 in hand and Ksh 250,000 at bank. During the month, the following transactions took place:

September 2 Cash sales banked Ksh 35,260
3 Bought ribbons in cash Ksh 4,500
8 Paid Wangila, a creditor Ksh 94,000 by cheque in full settlement
of his account after deducting 6% cash discount
12 Received a cheque for Ksh 58,800 from Wetu after allowing her a
cash discount of Ksh 1,200
15 Paid salaries Ksh 34,000 in cash
25 Withdrew Ksh 50,000 from bankfor office use
28 Anyango, a debtor paid her account of Ksh 75,000 by cheque less
10%- cash discount
30 Deposited all the cash into bank except Ksh 13,700

Required: Prepare a three column cash book and balance it off. (10 marks)

Expected Response

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The following transactions relate to Dagoreti Enterprises for the month of March 2016.

29/11/2020

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The following transactions relate to Dagoreti Enterprises for the month of March 2016

March 1:
Started business with Ksh 15,300 in cash and a bank overdraft of Ksh 8,200
March 3:
Made cash purchases of Ksh 10,200 in cash
March 4:
Harrison, a debtor settled his account of Ksh 18,000 by issuing a cheque of Ksh 13,400 and the rest by cash
March 5:
Paid wages by cheque, Ksh 5,000
March 6:
Received a cheque of Ksh 9,310 from Chebet
March 7:
Received cash, Ksh 7,720 from Otieno
March 8:
Paid Hassan Ksh5.450 in cash
March 9:
Deposited Ksh6.000 from the office into the business bank account
March 10:
Paid insurance Ksh 3,700 by cheque
March 11:
Paid Ksh 3,900 for repairs in cash
March 12:
Received Ksh 8,570 in cash from Mwende
March 13:
Received a cheque of Ksh 11,200 from Makokha
March 14:
Paid water bill Ksh 2,590 by cheque
March 15:
Paid rent Ksh 6,500 by cheque
March 29:
Took all the cash that was in the office and deposited it into the business bank account

Required: Prepare a two column cash book for the month of March 2016. (10 marks)

Extract

The following transactions relate to Dagoreti Enterprises for the month of March 2016

Expected Response

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KCSE BASED BUSINESS STUDIES Q & A

On 1st January 2011 , Jumo Traders had shs 22,500 in cash and shs 250,000 at bank.During the month, the following transactions took place:

On 1st January 2011 , Jumo Traders had shs 22,500 in cash and shs 250,000 at bank.During the month, the following transactions took place:

Below are some entries in the cash book of Romano Traders for the month of July 2010.

Below are some entries in the cash book of Romano Traders for the month of July 2010.

On 1st January 2007, Muthoni Traders Cash Book showed a credit balance of Ksh 150,000 at the bank and a debit balance of Ksh 25,250 in hand. During the month, the following transactions took place:

On 1st January 2007, Muthoni Traders Cash Book showed a credit balance of Ksh 150,000 at the bank and a debit balance of Ksh 25,250 in hand. During the month, the following transactions took place:

On first January 2012, Ndovu Traders had shs 30,000 in cash and shs 75000 at the bank. During the month, the following transactions took place:

Expected Response

The following balances were extracted from the books of Kl00 Traders for the year ended 30th June 2008.

The following balances were extracted from the books of Kl00 Traders for the year ended 30th June 2008.

Give two reasons why a three column cashbook is used both as a journal and a ledger.

Give two reasons why a three column cashbook is used both as a journal and a ledger.

Kazim maintains a petty cashbook on a weekly interest of Kshs 13,000 on 1st April 2007 the cash balance was Kshs 2,570, During the week of April, the following transactions took place

Kazim maintains a petty cashbook on a weekly interest of Kshs 13,000 on 1st April 2007 the cash balance was Kshs 2,570, During the week of April, the following transactions took place

The following is a format of the debit side of a three-column cash-book:

Expected Response

On 1 September 2006, Igonji had Sh55 000 in hand and Sh 250 000 at bank.During the month, the following transactions took place:

On 1 September 2006, Igonji had Sh55 000 in hand and Sh 250 000 at bank.During the month, the following transactions took place:

Outline the meaning of the following terms as used in accounting:(a) Contra entry ,(b) Cash discount

Outline the meaning of the following terms as used in accounting: (a) Contra entry , (b) Cash discount

On 1 January 2006, Mzalendo Traders sh.180000 in cash and sh.170000 at bank.During the month, the following transactions took place:

On 1 January 2006, Mzalendo Traders sh.180000 in cash and sh.170000 at bank.During the month, the following transactions took place:

The following information was extracted from the books of Mamboleo Traders in the month of September, 2014.

Expected Response

On 1st January 2015, Ndovu Traders had Ksh 30,000 in cash and Ksh 75,000 at the bank.

Expected Response

On 1st September 2015, Gondi had Ksh 55,000 in hand and Ksh 250,000 at bank. During the month, the following transactions took place:

Expected Response

The following transactions relate to Dagoreti Enterprises for the month of March 2016.

Expected Response

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