🌊PAPER 36-Qns

 

KIGURUNYEMBE SECONDARY SCHOOL

FORM THREE MIDTERM EXAMINATION

062-BOOK-KEEPING

Time: 2:30 Hours March, 2023

Instructions:

1. This paper consists of sections A, B and C with a total of nine (9) questions.

2. Answer all questions in all sections.

3. Section A carries fifteen (15) marks, Section B forty (40) marks and Section C carries forty-five (45) marks.

4. All writings should be in blue or black ink pen and all drawings should be in pencil.

5. Non programmable calculators may be used.

6. Cellular phones and any unauthorized materials are not allowed in the examination room.

SECTION A (15 Marks)

Answer all questions in this section.

1. For each of the items (i) - (x), choose the correct answer from the given alternatives and write its letter beside the item number in the answer sheet provided:

(i)Mtumzima Company is a newly registered firm dealing with buying and selling second hand motor cars from Japan. On 1st January 2023, a company bought a motor van costing TZS 6,000,000/= .It was estimated to be used for four (4) years, then be sold at a scrap value of TZS 2,000,000/=. What is the annual amount of depreciation if the straight line method is used?

1. TZS 1,500,000/=

2. TZS 2,500,000/=

3. TZS 8,000,000/=

4. TZS 6,000,000/=

5. TZS 1,000,000/=

(ii)Sameer and Salome were arguing on the primary and basic reason for preparing a trial balance. What is the basic reason for writing up a trial balance among the following reasons?

1. A trial balance issued for internal control as a back up document.

2. A trial balance is used as a tool for preparing financial statements.

3. A trial balance is used to determine a reliable financial position

4. A trial balance is used to present a list of balances at one place.

5. A trial balance is used to check arithmetical accuracy of double entry

(iii)Which of the following are the examples of revenue expenditure?

1. Purchases of goods and payment for electricity bill in cash

2. Repair of van and petrol costs for van

3. Buying machinery and paying for installation costs

4. Electricity costs of using machinery and buying van

5. Purchases of office equipment

(iv)When the financial statement is prepared, the bad debts Account is closed by being transferred to: -

1. Statement of financial position

2. Provision for doubtful debts Account

3. Income statement

4. Debtors account

5. Suspense account

(v)Which of the following errors would be disclosed by the Trial Balance?

1. Credit sales of TZS 20,000/= entered in the books as TZS 2,000/=

2. Cheque for TZS 65,000/= from Junior entered in his account as TZS 59,000/=

3. Cash sales TZS 100,000 were completely omitted in the books

4. Selling expenses TZS 5,000 had been debited to the sales Account.

5. A purchase of goods worth TZS 2,500/= omitted from the books

(vi)Valentina, a sole proprietor, took out cash amounting to TZS 30,000/= from her business for private use. What would be a double entry transaction?

1. Debit Cash account, Credit Drawings account

2. Debit Drawings account, Credit Capital account

3. Debit Cash account, Credit Capital account

4. Debit Drawings, Credit Bank account

5. Debit Drawings account, Credit Cash account

(vii)Which of the following is treated as current assets in a statement of financial position?

1. Prepaid income

2. Accrued expenses

3. Accrued revenue

4. Depreciation

5. Bad debts

(viii) The following information was available in the books of Yahaya Stores for the year ended 31st December, 2022: Premises TZS 120,000/=, Inventory TZS 85,000/=, Loan from NBC TZS 46,000/=, Cash in hand TZS 40,000/=, Accounts payable TZS 30,000/=. What was the amount of capital for a business?

1. TZS. 245,000/=

2. TZS. 169,000/=

3. TZS. 76,000/=

4. TZS 85,000/=

5. TZS. 120,000/=

(ix) On 20th January, 2023, Herieth, a sole proprietor, purchased machinery paying TZS 3,500,000/= by cheque. What would be a double entry for this transaction?

1. Debit: Cash account, Credit: Machinery account

2. Debit: Purchases account, Credit: Machinery

3. Debit: machinery account, Credit: Bank account

4. Debit: Purchases account, Credit: Bank account

5. Debit: Machinery account, Credit: Cash account

(x) A company does not include the value of skills gained by its employees from training programs in its financial records. Which accounting concept is applied?

1. Dual aspect concept

2. Matching concept

3. Money measurement concept

4. Going concern concept

5. Business entity concept

Qns	i	ii	iii	iv	v	vi	vii	viii	ix	x
Ans

2. Match the items in Column A with the responses in Column B by writing the letter of the correct responses below the corresponding item number in the table provided:

Column A

Column B

(i)A process of making a non-current asset free from one’s ownership by either selling or leaving it. (ii)An amount spent on acquisition of non-current assets or adding value to them. (iii)An income which the firm anticipates getting but which has not been received during the accounting period. (iv)It is used to record business transactions that are not journalized in any of the other books of original entry. (v)An excess of sales over the cost of goods sold.

A. Journal B. Net profit C. Ledger D. Journal proper E. Revenue expenditure F. Gross profit G. Capital expenditure H. Accrued income I. Cash book J. Prepaid income K. Depreciation L. Disposal

Column A	i	ii	iii	iv	v
Column B

SECTION B (40 Marks)

Answer all questions in this section.

3. Briefly explain the meaning of the following terms;

(a) Prepaid expenses

(b) Accrued income

(c) Depreciation

(d) Accrual concept

(e) Accrual basis of Accounting

4. Monica Enterprises had prepaid rent at the beginning of the period amounting to TZS 80,000/= and TZS 40,000/= was accrued last year. During the year payment of TZS 640,000/= was made with respect to rent. It was established that at the end of the period prepaid rent should be TZS 120,000/=. Compute the amount of Rent Expenses to be transferred to the income statement.

5. Some of the following items should be treated as Capital expenditures and some as Revenue expenditures. For each of them state which classification applies:

(i)The purchase of machinery for use in the business TZS 8,000,000

(ii)Carriage paid to bring the above machinery to the premises TZS 200,000

(iii)Complete redecoration of the premises at cost of TZS 150,000

(iv)Payment made for a quarterly electricity bills of TZS 40,000

(v)The purchase of a soft drinks vending machine for the canteen with a stock of soft drinks for TZS 500,000

6. On 1st July, 2016, Christian Company bought a motor van for TZS 18,000,000, and decided to sell it for TZS 12,000,000 after using it for four (04) years.

(a) What is a term used for a process of a non-current asset falling in value?

(b) In three (03) points outline possible factors to why the company decided to sell machinery at a price lower than the original cost price.

SECTION C (45 Marks)

Answer all questions from this section.

7. Ipyana Constructors Company started business on 1st January, 2016. Their purchases and disposals of machines over the subsequent three years were as follows;

Machine	Date of Purchase	Cost (TZS)
Machine A	1 January 2016	5,000,000
Machine B	1 April 2017	2,500,000
Machine C	1 January 2018	700,000

Machine B was sold on 1st July 2018 for TZS. 900,000. A provision for depreciation on all machines at the end of the year is calculated at the rate of 20% per annum using a straight line method based on each month's ownership basis.Using the information provided, write up the following accounts as they would appear in the company’s books for the three years ended 31st December, 2016,2017 and 2018:

1. Machinery Account

2. Provision for depreciation on Machinery account

3. Machinery disposal account

8.The following information relate with Doreen Retail Store for the year ended 31st July,2019;

	1.8.2018	31.07.2019
Commission received in arrears	1,000	3,700
Commission received in advance	6,500	8,300

Commission received by cheque during the year amounted to TZS 23,000.Use the information given to prepare a Commission received account showing the amount to be transferred to the income statement.

9. The following trial balance was extracted from the books Mary Traders as at 30thJune 2022 were as follows;

Details	DR	CR
Capital		776,000
Inventory as at 1.7.2021	164,800
Bank balance	156,800
Purchases and sales	1,656,000	2,205,600
Trade debtors and creditors	290,000	154,400
Motor van expenses	20,400
Drawings	184,000
Sales returns and Purchases returns	4,800	4,000
Salary and wages	324,800
Motor vehicles	250,000
Transport charges	30,000
Provision for doubtful debts		10,000
Bad debts	9,200
General expenses	44,800
Discounts allowed and received	42,000	37,200
Rent and rates		9,600
	3,187,200	3,187,200

Additional information:

1. Transport charges accrued TZS 6,000

2. Salaries outstanding TZS 32,800

3. Rent and rates paid in advance TZS 1,600

4. Depreciation on motor vehicles to be made at the rate of 10% per annum

5. Provision for doubtful debts increased to TZS 12,000

6. Inventory at 30th June 2022 was valued at TZS 201,600.

Required:

Using the information above, you are required to prepare;

1. Income statement for year ended 30th June 2022

2. Statement of financial position as at 30th June 2022

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