KASNEB CPA Foundation Level (Kenya) · Financial Accounting

Adjustments, inventory and reconciliations

14 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 14 questions

  1. A business paid rent of KSh 120,000 for the year ended 31 December. Of this amount, 3 months relate to the next year. What rent expense is charged to this year's income statement?
  2. A business paid rent of KSh 96,000 for the year ended 31 December. Of this amount, 2 months relate to the next year. What rent expense is charged to this year's income statement?
  3. A business paid rent of KSh 180,000 for the year ended 31 December. Of this amount, 4 months relate to the next year. What rent expense is charged to this year's income statement?
  4. A business paid rent of KSh 240,000 for the year ended 31 December. Of this amount, 5 months relate to the next year. What rent expense is charged to this year's income statement?
  5. Trade receivables total KSh 500,000. Bad debts of KSh 20,000 are written off and a provision for doubtful debts of 5% is made on the remaining balance. What is the amount of the provision?
  6. Trade receivables total KSh 800,000. Bad debts of KSh 40,000 are written off and a provision for doubtful debts of 10% is made on the remaining balance. What is the amount of the provision?
  7. Trade receivables total KSh 320,000. Bad debts of KSh 12,000 are written off and a provision for doubtful debts of 5% is made on the remaining balance. What is the amount of the provision?
  8. Trade receivables total KSh 650,000. Bad debts of KSh 50,000 are written off and a provision for doubtful debts of 2% is made on the remaining balance. What is the amount of the provision?
  9. A trader's inventory records show: 10 units bought at KSh 100, then 10 units bought at KSh 120. 12 units are sold. Using FIFO, what is the cost of the 8 units left in inventory?
  10. A trader buys 20 units at KSh 50 and 30 units at KSh 60. Using the weighted average cost method, what is the average cost per unit?
  11. At the year end inventory cost KSh 80,000 but could be sold for only KSh 65,000 after repairs costing KSh 10,000. At what value should it be shown?
  12. The sales ledger control account has an opening balance of KSh 140,000. Credit sales were KSh 600,000, cash received KSh 520,000 and sales returns KSh 20,000. What is the closing balance?
  13. The cash book shows a bank balance of KSh 85,000. The bank statement shows an unpresented cheque of KSh 12,000 and a deposit not yet credited of KSh 7,000. What balance should the bank statement show?
  14. The cash book shows a credit (overdrawn) balance of KSh 8,000. Bank charges of KSh 500 shown on the statement have not been entered in the cash book. What is the corrected cash book balance?

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