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CSEE 🇹🇿 NECTA

Book Keeping · Paper 1 · 2014

14 questions

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Questions (14)

Section A

1. 2 marks

The value of closing inventories is found by

A. adding opening stock to purchases
B. deducting purchases from opening stock
C. looking in the stock account
D. doing a stock taking
E. adding closing stock to sales account.
2. 10 marks

Match the items in Column A with the responses in Column B by writing the letter of the correct response beside the item number in your answer booklet. Column A (i) A ledger for customers’ personal accounts. (ii) A ledger for suppliers’ personal accounts. (iii) The main book of accounts. (iv) Book of original entry used to record prompt receipts and payments. (v) A ledger account for capital and drawing accounts. (vi) A book of accounts used to record rare transactions. (vii) Books of original entry used to record credit sales. (viii) Books of original entry used to record credit purchases. (ix) Books used for making small payments. (x) A ledger for impersonal accounts.

(i) A ledger for customers’ personal accounts. 1 mk
(ii) A ledger for suppliers’ personal accounts. 1 mk
(iii) The main book of accounts. 1 mk
(iv) Book of original entry used to record prompt receipts and payments. 1 mk
(v) A ledger account for capital and drawing accounts. 1 mk
(vi) A book of accounts used to record rare transactions. 1 mk
(vii) Books of original entry used to record credit sales. 1 mk
((viii) Books of original entry used to record credit purchases. 1 mk
(ix) Books used for making small payments. 1 mk
(x) A ledger for impersonal accounts. 1 mk

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6. 1 mark

Which of these statements is incorrect?

A. Profit is another word for capital.
B. Loss decreases capital.
C. Profit increases capital.
D. Drawings decreases capital.
E. Profit is added to the capital.
7. 1 mark

A bank reconciliation statement is a statement

A. Sent by the bank when the account is overdrawn
B. drawn to verify cash book balance with the bank statement balance
C. drawn up by the bank to verify the cash book
D. sent by the bank to the customers when errors are made
E. sent by the bank customers to the friends.
8. 1 mark

What is meant by the term revenue expenditure?

A. The extra capital paid by the proprietor.
B. Money spent on non-current assets or adding value to them.
C. The cost of running the business on day to day basis.
D. Money spent on selling non-current assets.
E. Cost of painting fixed asste.
9. 1 mark

The recommended method of departmental account is to

A. allocate expenses in proportion sales
B. charge against each department its controllable costs
C. allocate expenses in proportion to purchases
D. charge against each department its uncontrollable costs
E. allocate expenses in equal proportion.
10. 1 mark

If the two totals of a trial balance do not agree, the difference must be entered in

A. a real account
B. the trading account
C. a nominal account
D. the capital account
E. a suspense account.

Section B

0. 0 marks

Ascertain the amount to be transferred to profit and loss account for the year ended 31st December, 2002 without using rent received account.

(a) Ascertain the amount to be transferred to profit and loss account for the year ended 31st December, 2002 without using rent received account. 0 mk
(b) Outline four essentials of a bill of exchange 0 mk
(c) State five limitations of single entry system. 0 mk

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3. 20 marks

Answer all questions in this section.

(a) Give five distinctions between receipts and payments and income and expenditure accounts. 10 mk
(b) Highlight five importance of the balance sheet. 10 mk

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Section C

5. 60 marks

M/S Majuto is a sole trader. He extracted the following list of balances from the books of his business on 31st ​March, 2011: This additional information is available at 31st ​March, 2011: (i) Stock was valued at sh. 201,000. (ii) Salaries and wages accrued sh. 4,900. (iii) Rent and rates prepaid sh. 7,900. (iv) An additional sh. 2,700 is to be written off as bad debts, and the provision for doubtful debts is to be adjusted to 2% of debtors after writing off bad debts. (v) Goods taken by Majuto for his private use during the year amounted at cost to sh. 3,700. No record of this has yet been made in the books. (vi) Depreciation is to be written off as follows: motor van sh. 20,000, office equipment at 15% using the straight line method.

DrCr
Purchases and Sales453,800
Sales and purchases returns5,100
Discounts11,200
Stock at 1st April, 2010124,600
Motor van, at cost125,000
Office equipment96,000
Provision for depreciation of motor van 1.4.2010
Provision for depreciation of Office equipment 1.4.2010
Salaries and wages176,200
Motor van running expenses39,100
Sundry expenses11,400
Rent and rates32,000
Bad debts3,750
Provision for doubtful debts 1st April, 2010
Debtors and creditors128,700
Show all 20 rows
Bank80,400
Cash600
Drawings70,000
Capital
Total1,358,750
(a) Prepare the Trading Account for the year ended 31st March, 2011. 0 mk
(b) Prepare the Profit and Loss Appropriation Account for the year ended 31st March, 2011. 0 mk
(c) Prepare the Balance Sheet as at 31st March, 2011. 0 mk

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