THE PRESIDENT’S OFFICE MINISTRY OF EDUCATION, REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

COMPETENCY BASED SECONDARY EXAMINATION SERIES

BOOK KEEPING FORM THREE

Time: 2:30 Hours November, 2022

Instructions

1. This paper consists of sections A, B and C with a total ofnine (9) questions.
2. Answer all questions in sections A and B and two (2) questions from section C.
3. Section A carries twenty (20) marks, section B forty (40) marks and section C carries forty (40) 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, programmable calculators and any unauthorized materials are not allowed in the examination room.

SECTION A (20 Marks)

Answer all questions in this section

1. For each of the items (i) – (xv), choose the correct answer from among the given alternatives and write its letter besides the item number in the answer booklet provided:

1. How could a purchases of a non- current assets by cheques affect the statement of financial postion?

1. By decreasing non-current assets account and decreasing bank account
2. By increasing bank account and decreasing asset account
3. By increasing non-current asset account and decreasing cash account
4. By increasing cash account and decreasing asset account
5. By increasing non-current asset account and decreasing bank account

2. 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 R.James entered in R.James 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 sales Account.
5. A purchase of goods worth TZS 2,500/= omitted from the books

3. Which of the following depreciation methods uses the reduced value to compute the depreciation of non-current assets?

1. Straight line method
2. Sum of the years’ digit methods
3. Diminishing balance method
4. Unit of output method
5. Revaluation method

4. At the beginning of Accounting year, a club had TZS 14,000/= as non-current Assets, TZS 5,000/= as current Assets and TZS 5,000/= as liabilities. What would be its opening Accumulated fund?

1. TZS 4,000/=
2. TZS 14,000/=
3. TZS 12,000/=
4. TZS 24,000/=
5. TZS 10,000/=

5. Form three students were arguing on which primary and basic objective of preparing a trial balance is. Which of the following uses is the basic purpose of preparing a trial balance?

1. A trial balance is used for internal control as back up document
2. A trial balance is used as a tool for preparing financial statements
3. A trial balance is used to check arithmetical accuracy of double entry
4. A trial balance is used to present a list of balances at one place
5. A trial balance is used to determine profit or loss of a business

6. 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. Wages paid to the worker who operates a machinery

7. Money contributed by individuals under non-profit marking organization is known as:

1. Capital introduced
2. Capital owed
3. Capital employed
4. Working capital
5. Accumulated fund

8. A firm bought a machine for TZS 16,000/=. It is expected to be used for 5 years then sold for TZS 1,000/=. What is the annual amount of depreciation if the straight-line method is used?

1. TZS 3,200/=
2. TZS 3,100/=
3. TZS 3,750/=
4. TZS 3,000/=
5. TZS 6,000/=

9. When business entity paid rent of TZS 800,000/=. The payment was recorded in the books as follows. Debit: “Bank” TZS 800,000/= and Credit: Rent TZS 800,000/=. What entries will be posted to rectify this error?

1. Debit “Bank” TZS 800,000/= and credit “Rent” TZS 800,000/=
2. Credit “Rent” TZS 800,000/= and credit “Bank” TZS 800,00/=
3. Debit “Bank” TZS 800,000/= and Credit “Rent” TZS 1,600,000/=
4. Debit “Rent” TZS 1,600,000/= and credit “Bank” TZS 1,600,000/=
5. Debit “Bank” TZS 1,600,000/= and credit “Rent” TZS 1,600,000/=

9. Baraka wants to start up a business dealing with Clothing Wholesale Store, but he does not have enough capital to commence his business. The following can be used as the sources of capital for his business EXCEPT:

1. Money borrowed from bank
2. Money saved for business start up
3. Money saved for building a private house
4. Cash received from the sales of shares
5. Cash received from the sale of his private car

10. Government expenditures on items from which the government attains no value are called.

1. Development expenditure.
2. Recurrent expenditure.
3. Capital expenditure.
4. Revenue expenditure
5. Nugatory expenditure.

11. A business owned by Esther had an opening and closing capital balances of TZS 57,000/= and TZS 64,300/= respectively. The drawings during the same year amounted to TZS 11,800/=. What was the amount of profit made by her business during that year?

1. TZS 19,100/=
2. TZS 16,600/=
3. TZS 5,000/=
4. TZS 19,600/=
5. TZS 18,600/=

12. Mtumzima Art Creators is a registered company dealing with production and supply of the artistic works. During October 2022, it Purchased machinery for cash costing TZS 35,000,000/=. What will 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 Cash account
4. Debit Purchases account , Credit cash account
5. Debit purchases account, Credit machinery account

13. What is the effect of TZS 500,000/= being added to Purchases instead of being added to a non-current asset?

1. Net profit would be understated
2. Net profit would be overstated
3. Both Gross profit and Net profit would be understated
4. Net profit would not be affected
5. Gross profit would be affected

14. Depreciation can be described as the

1. Amount spent to buy a non-current asset.
2. Salvage value of a non-current asset.
3. Cost of the non-current asset consumed during its period.
4. Amount of money spent replacing non-current asset.
5. Cost of old assets plus new purchased.

15. If the Assets of the business amounted to TZS 85,000/= and Owner’s Capital is TZS 60,000/= How much is the Liabilities of the business?

1. TZS. 45,000/=
2. TZS. 145,000/=
3. TZS.25,000/=
4. TZS.85,000/=
5. TZS 60,000/=

2. For each of the items (i) – (v), match the descriptions of correction of errors terms in Column A with their corresponding names in Column B by writing the letter of the correct response beside the item number in the answer sheet:

SECTION B (40 Marks)

Answer all questions in this section

3. Briefly describe the meaning of the following terms as used in book keeping:

1. Accrued expenses
2. Book keeping
3. Credit transaction
4. Carriage outwards
5. Net profit

4. Upendo is a business woman who owns a Jewels shop in Arusha. She is also a customer of CRDB bank. Upendo prefers to settle her debts using cheques. In the last month, she wrote a cheque to Onesmo, her creditor, for which the bank refused to settle it. In five points outline the reasons for this to happen.
5. On 31^st December 2017, the cash book balance of ShedrackTraders was TZS 25,370/= where the bank statement showed a credit balance of TZS 25, 670/=. In comparing these two balances, the following were discovered;

1. Cheques not yet presented for payment TZS 12,340/=
2. Cheques paid into the bank but not yet credited by the bank account TZS 12,160/=
3. Items shown in the bank statement but not yet entered in the cash book were as follows:

1. Bank charges TZS 240/=
2. Standing order TZS 460/=
3. Dividends collected by the bank TZS 820/=

Required:

1. Bring the cash book to date to show the correct cash book balance.
2. Prepare a bank reconciliation statement starting with the adjusted cash book balance.

6. Rule a petty cash book under the following headings: - Postage, stationery, Petrol, entertainment and ledger.

2020 TZS

March 12 Petty cashier received cash from main cashier…………………. 15,000

14. Paid postage………………………………………….. 500

16. Paid entertainment…………………………………… 3,000

18. Paid petrol…………………………………………….. 1,200

20. Paid B. Robert, a creditor……………………………… 4,000

25. Paid for stationery…………………………………… 1,700

29. The cashier reimbursed the petty cashier the amount spent in the period.

SECTION C (40 Marks)

Answer two (2) questions from this section.

7. Mtumzima Transport Company with the financial year ending on 31^st December, bought two motor vans on 1^st January 2011, No 1 for TZS 18,000,000 and No 2 for TZS 15,000,000. It also buys another van, No. 3 on 1^st July 2012, for TZS 19,000,000 and another No 4 on 1^st October, 2013 for TZS 17,200,000 the van No 1 was sold for TZS 6,290,000 on 30^th September 2014. It is a company’s policy to charge depreciation at 15% per annum using a straight line method for each month of ownership basis.

Required: Prepare for the year ended 31^st December, 2011, 2012, 2013 and 2014.

1. Motor van account
2. Accumulated Provision for depreciation account
3. Motor van disposal account

8. The following trial balance has been extracted from the ledger of Julius, a sole trader.

Trial balance as at 31^st May, 2022

The following additional information as at 31^st May, 2022 is available:

1. Rent is accrued by TZS 210/=
2. Rates have been prepaid by TZS 880/=
3. TZS 2,211 of carriage represent carriage on purchases
4. Equipment is to be depreciated at 15% p.aon cost.
5. The allowance for doubtful debts to be increased by TZS 40/=
6. Inventory at the close of business has been valued at TZS 13,551/=

Required:

Prepare Julius’s Income statement for the year ending 31^st May, 2022 and a Statement of financial position as at that date.

9. The following information is available from the books for Abigail Wholesale Store on 1^st September, 2021:

Balances in purchases ledger TZS 120,000 (CR)

Balances in sales ledger TZS 7,100 (CR)

Balances in purchases ledger TZS 4,800 (DR)

Balances in sales ledger TZS 163,100 (DR)

During September 2021:

Sales 140,000

Purchases 88,000

Returns inwards from debtors 55,000

Returns outwards from creditors 7,300

Receipts from debtors 91,300

Payments to creditors 76,700

Discount allowed 4,000

Discount received 2,200

Bad debts written off 3,800

Provision for bad debts increased by 600

Debtorscheque dishonored 7,500

Interest charged to debtors on overdue accounts 500

Sales ledger debit transferred to purchases Ledger 9,600

Notes:

1. 10% sales and discount allowed relate cash transactions
2. 5% of the goods bought during the month were destroyed by fire, the insurance company had agreed to pay adequate claim.

You are required to prepare:

1. A sales ledger control account
2. A purchases ledger control account