Book Keeping · Paper 1 · 2015
18 questions 🇹🇿 NECTA3-hour timed simulation · auto-graded · counts toward ranking
Pay & start exam →Section A
For each of the items (i) – (x), choose the correct answer from among the given alternatives and write its letter beside the item number in your answer booklet.
The following receipts and payments account were extracted from Msongola Charitable Club for the year ending 31st December, 2009. Msongola Charitable Club Receipts and Payments Account for the year ending 31st December, 2009 Additional information: 31.12.2008 31.12.2009 Sh. Sh. (a) Inventory in the bar at cost Owing for bar supplies Bar expenses owing Transport costs (b) The land and football stands were valued at 31st December, 2008 at land sh. 4,000,000; football stands sh. 2,000,000; the stands are to be depreciated by 10 percent per annum. (c) The equipment at 31st December, 2008 was valued at sh. 250,000, and is to be depreciated at 20 per cent per annum. (d) Subscriptions owing by members amounted to sh. 140,000 on 31st December, 2008 and sh. 175,000 on 31st December, 2009. From the information given above, prepare income and expenditure account subscriptions, account, bar trading account, transport cost account, purchases control account as well as bar expenses account.
| Receipts | Amount | Payments | Amount |
|---|---|---|---|
| Bank balance at 1.1.2009 | 52,400 | Payment for bar supplies | 3,862,00 |
| Subscriptions received for | Wages: | ||
| 2008 (arrears) | 140,000 | Grounds man and assistant | 1,993,900 |
| 2009 | 1,435,000 | Barman | 862,400 |
| 2010 (in advance) | 120,000 | Bar expenses | 23,400 |
| Bar sales | 6,128,000 | Repairs to stand | 74,000 |
| Donations received | 80,000 | Ground upkeep | 182,900 |
| Secretary’s expenses | 93,800 | ||
| Transport costs | 242,000 | ||
| Bank balance 31.12.2009 | 621,000 | ||
| 7,955,400 | 7,055,400 |
| 31.12.2008 | 31.12.2009 | |
|---|---|---|
| Sh. | Sh. | Sh. |
| Inventory in the bar at cost | 449,600 | 555,800 |
| Owing for bar supplies | 329,400 | 434,000 |
| Bar expenses owing | 22,500 | 33,600 |
| Transport costs | 26,500 |
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From the following information, prepare a sales ledger control account for the month of August 2012.
| Dr | Cr |
|---|---|
| Sales | |
| Purchases | 624,000 |
| Discount allowed and received | 3,050 |
| Salaries and wages | 31,680 |
| General expenses | 5,950 |
| Fixtures | 100,000 |
| Stock 1st July, 2010 | 124,900 |
| Debtors and creditors | 81,200 |
| Bank | 67,900 |
| Drawings | 45,200 |
| Capital | |
| Suspense | 11,340 |
| 1,095,200 | 1,095,220 |
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Which of these errors would be disclosed by the trial balance?
Given last year’s capital was sh. 745,000, closing capital is sh. 462,000 and drawings of sh. 134,000, then
The sales day book does not contain
Section B
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 | Column B |
|---|---|
| The profits of the company expressed as a percentage of the owners investment. | A Working capital ratio |
| The gross and net earnings expressed as a percentage of sales. | B Acid test ratio |
| Current assets compared to current liabilities. | C Inventory ratio |
| Very liquid assets compared to immediate liabilities. | D Earnings per share ratio |
| The number of days of sales held in stock. | E Payables ratio |
| The number of days of purchases represented by creditors. | F Dividend cover ratio |
| The number of days of sales represented by debtors. | G Inventory turnover ratio |
| The ratio of fixed interest capital to equity capital. | H Gross profit ratio |
| Compares the amount of profit earned per ordinary share with the amount of surplus paid. | I Equity ratio |
| The ratio of prior charge capital to ordinary share capital and reserve. | J Receivables ratio |
| K Gearing ratio | |
| L Return on capital employed ratio | |
| M Profit margin ratio | |
| N Debt ratio | |
| O Capital gearing ratio |
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Identify five errors that may be revealed by a Trial Balance.
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Outline five importance of a profit and loss account.
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Section C
Majura and Majuni enter a joint venture to share profits or losses equally resulting from dealings in second-hand digital TVs. Both parties take an active role in the business, each recording his own transactions. They have no joint banking account or separate set of books. 2011 July 1 Majura buys four TVs for a total of sh. 110,000. 3 Majura pays for repairs sh. 84,000. 4 Majuni pays office rent sh. 30,000 and advertising expenses sh. 9,000. 6 Majuni pays for packaging materials sh. 3,400. 7 Majuni buys for a TV in excellent condition for sh. 60,000. 31 Majura sells the five TVs to various customers, the sales being completed on this data and totalling sh. 310,000. Show the relevant accounts in the books of both joint venturers. On 31st December, 2008 the bank column of Tengeneza’s cash book showed a debit balance of sh. 15,000. The monthly bank statement written up to 31st December, 2008 showed a credit balance of sh. 29,500. On checking the cash book with the bank statement it was discovered that the following transactions had not been entered in the cash book: Dividends of sh. 2,400 had been paid directly to the bank. A credit transfer TRA and Customs VAT refund of sh. 2,600 had been collected by the bank. Bank charges sh. 300. A direct debit of sh. 700 for the Charity subscription had been paid by the bank. A standing order of sh. 2,000 for Tengeneza’s loan repayment had been paid by the bank. Tengeneza’s deposit account balance of sh. 14,000 was transferred into his bank current account. A further check revealed the following items: Two cheques drawn in favour of Tamale sh. 2,500 and Fadiga sh. 2,900 had been entered in the cash book but had not been presented for payment. Cash and cheques amounting to sh. 6,90 had been paid into the bank on 31st December, 2008 but were not credited by the bank until 2nd January, 2009.
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