TRUST ACADEMY

HIGH SCHOOL

Principles of Accounting
Paper 1
FORM 1
Answer All questions

END OF TERM 1 TIME 2 hours

Instructions to candidates

Answer all question in this paper.

Write neatly and legibly.

1 a List any two examples of the following
i.) Current assets (2)
ii.) Current liabilities (2)
b.)Explain any four advantages and four disadvantages of a partnership (8)
2a.).With the aid of a well labelled diagram explain the accounting cycle. (8)
b.) Define the following terms
i.) Drawings (2)
ii.) Purchases (2)
iii.) Purchases returns (2)

c.) Using the information below prepare and balance off a single column cash book for the
month of February. (7)
2016
Feb 1: Started business with $9 000 cash and $ 10 000 in the bank.
2: Bought goods for resale worth $1 300 by cash.
3: Sold goods receiving cheque of $4 000
15: Bought packaging materials for $600 cash
20: Bought a vehicle for $1 400 paying by cheque
21: Sold goods for $2 000 cash
25: Paid salaries for $500 cash
26:Paid for insurance by cheque $900
28: Sold goods on credit to A. Amos for $3 600

3a.) State and explain 5 advantages of electronic data processing over manual. (10)

4. Using the information below name the account debited and the account credited.(7)

 March 17: Withdrew from bank for personal expenses, $40.

 March 19: Issued a cheque for goods purchased, $630.
 March 20: Drew from bank for office use, $150.
 March 22: Received a cheque from Peter & Co. and deposited the same
into bank immediately, $880.
 March 25: Paid a cheque to Daniel Inc. for $270.
 March 30: Withdrew from bank for office use, $145.
 March 31: Paid salary to employees by cheque, $300.