THE UNITED REPUBLIC OF TANZANIA NATIONAL EXAMINATIONS COUNCIL CERTIFICATE OF SECONDARY EDUCATION EXAMINATION 062 BOOK KEEPING (For Both School and Private Candidates) Time: 3 Hours Friday, 08 th November 2013 p.m. Instructions 1. This paper consists of sections A, B and C. 2. Answer all questions. 3. Calculators and cellular phones are not allowed in the examination room. 4. Write your Examination Number on every page of your answer booklet(s).

SECTION A (20 Marks) Answer all questions in this section. 1. For each of the items (i) - (x), choose the correct answer from among the given alternatives and write its letter beside the item number. (i) Which of the following should be charged in the Profit and Loss Account? A Royalty. B Work in progress. C Direct materials. D Office rent. E Carriage on raw materials. (ii) Manufacturing account is used to calculate A production costs paid in the year B total cost of goods produced C production costs of goods completed D gross profit cost of goods sold E prime cost of goods manufactured. (iii) When there is no partnership agreement then profits and losses must be shared A in the same proportion as capitals B equally to all partners C equally after adjusting for interest on capital D equally after adjusting for interest on drawings E equal proportion minus interest on drawings. (iv) What is meant by gross profit? A Excess of sales over cost of goods sold. B Sales after deducting purchases. C Sales plus closing minus purchases. D Excess of cost of goods sold over sales. E Excess of income over expenditure. (v) Customers’ personal accounts are found in A the private ledger B general ledger C purchase ledger D nominal ledger E sales ledger. (vi) Which of the following should be entered in the Journal? A Payment for cash purchases. B Fixtures bought on credit. C Credit sale of goods. D Sales of surplus machinery. E Credit purchase of goods. (vii) If drawing account is not maintained, interest on drawing must be A credit to drawing account B debited to drawing account C debited to capital account D credited to current account E debited to current account.

(viii) An allowance for doubtful debts is created A when debtors become bankrupt B when there is a need to do so C when debtors cease to be in business D to provide possible bad debts E to write-off bad debts during the period. (ix) Depreciation can be described as the A amount spent to buy a non-current asset B salvage value of a non-current asset C cost of the non-current asset consumed during its period D amount of money spent replacing non-current asset E cost of old assets plus new assets purchased. (x) If it is required to maintain fluctuating capitals then the partners’ share of profits must be A debited to partners’ capital account B credited to partners’ capital account C debited to partners’ current account D credited to partners’ current account E credited to partners’ appropriation account. 2. Match the items in Column A with the responses in Column B by writing the letter of the correct response beside the item number. Column A Column B (i) Chronological record undertaken by a business which relate to a specific item. A B Amount Particulars (ii) The main book of accounts. C Trial balance (iii) A column which shows the reference number of the item entered in the account. D Double entry (iv) Obligations which have to be paid within a year from the date on the balance sheet. E F Balancing ledger Accounting cycle (v) Data is recorded and processed until it becomes part of the financial statements. G H Transaction Current liabilities (vi) Recording item twice in the books of account. I Posting (vii) A column which gives brief explanation of the entry made in the account. (viii) Making the second entry of a double entry. (ix) Movement of money’s worth from one person to another. (x) Making both side of the account to be equal. J K L M N Balance sheet Folio Assets A ledger Liabilities O Account

SECTION B (20 Marks) Answer all questions in this section. 3. (a) Give seven distinctions between Provision and Reserve. (b) List three purposes of a cash book. 4. (a) King Majuto is employed by a firm on salary commission basis. His monthly salary is sh. 150,000. He is entitled for commission as follows: On first sales of sh. 1,000,000 - 2% On the next sales of sh. 2,000,000 - 5% On the balance of sales - 10% King Majuto sold goods worth sh. 6,000,000 for the month of April 2011. Calculate King Majuto’s total income for the month of April 2011. (b) The following information was extracted from the final accounts of Majani Mapana’s business on 31 st July, 2012. Transactions during the year: Sh. Sales 300,000 Purchases 130,000 Stock (1/8/2011) 36,000 Fixed assets 200,000 Current assets 90,000 Current liabilities 74,000 Total expenses 20,000 Stock (31/7/2012) 25,000 Calculate the following financial ratios: (i) Margin (ii) Mark-up (iii) Return on capital (iv) Working capital ratio (v) Rate of stock turnover. (c) Indicate the accounts to be debited or credited from the following transactions. Transaction Account to be debited Account to be credited (i) Paid wages by cheque (ii) Paid electricity in cash. (iii) Purchased office chair on credit. (iv) Sold goods for cash. (v) Withdrew cash from bank for office use.

SECTION C (60 Marks) Answer all questions in this section. 5. J. Kazimoto is the proprietor of a shop selling paintings and ornaments. For the purposes of this financial statements, he wishes the business to be divided into two departments: Department A Paintings Department B Ornaments The following balances have been extracted from his nominal ledger at 31 st August, 2010. Dr Cr Sh. Sh. Sales Department A 750,000 Sales Department B Inventory Department A, 1 st September, 2009 12,500 500,000 Inventory Department B, 1 st September, 2009 10,000 Purchases Department A 510,000 Purchases Department B 380,200 Wages of sales assistants Department A 72,000 Wages of sales assistants Department B 68,0000 Picture framing costs 3,000 General office salaries 132,000 Fire insurance - buildings 3,600 Lighting and heating 6,200 Repair to premises 1,750 Internal telephone 300 Cleaning 1,800 Accountancy charges 14,900 General office expenses 5,100 Rent and rates 5,700 Administration expenses 15,000 Air conditioning 6,000 Inventory at 31 st August, 2010 was valued at: Department A sh. 14,100 Department B sh. 9,120 The proportion of the total floor area occupied by each department was: Department A two-fifths Department B three-fifths You are required to prepare J. Kazimoto’s departmental income statement for the year ending 31 st August 2010, apportioning the costs, where necessary, to show the net profit or loss of each department. The appointment should be made by using the methods as shown: Area - Fire insurance, lighting and heating, repairs, telephone, cleaning air conditioning; Turnover  General office salaries, Accountancy, general office expenses, rent and rates, administration expenses.

6. Heri Majaliwa is a sole trader who keeps records of his cash and bank transactions. His transactions for the month of March were as follows: March 1 4 6 8 10 11 14 18 23 24 26 28 31 Cash in hand sh. 10,000 cash at bank sh. 567,200 Heri received a cheque for sh. 124,600 from W. Wanguvu which was paid directly into the bank. This represented sales. Paid wages in cash sh. 3,900. Sold goods for cash sh. 15,200. Received cheque from G. Dasuna for sh. 31,500, in full settlement of a debt of sh. 34,400; this was paid directly into the bank. Paid sundry expenses in cash sh. 7,300. Purchased goods by cheque for sh. 80,000. Paid J. Samaki a cheque of sh. 18,500 in full settlement of a debt of sh. 20,100. Withdrew sh. 4,500 from the bank for office purposes. Paid wages in cash sh. 3,900. Sold goods for cash sh. 9,400. Paid salaries by cheque sh. 23,000. Retained cash amounting to sh. 15,000 and paid the remainder into the bank. You are required to enter above transactions within T - accounts and bring down the balances. 7. (a) From the following transactions prepare the suspense account and pass journal entries to rectify the following errors assuming the existence of suspense account. (i) A cash sale of old furniture sh. 150,000 had been passed through the sales account. (ii) Payment of rent sh. 34,000 was debited to the personal account of the landlord. (iii) Goods ought from Makala amounting to sh. 275,000 were posted to the credit of his account as sh. 257,000. (iv) Sales day book was overcast by sh. 100,000. (v) While carrying forward total of one page of the purchases book to the next page, the amount of sh. 647,500 was written as sh. 617,500. (vi) Purchases returns to G. Donge worth sh. 155,000 were not recorded in purchases returns book, but the account of G. Donge was duly debited for the amount. (vii) Drawings of goods by proprietor costing sh. 15,000 were not recorded in the books of account. The suspense account had a debit balance of sh. 16,000 prior to the above adjustments.

(b) From the following particulars extracted from the books of a trader under the single entry system, you are required to find out figures for credit sales, credit purchases by showing the total debtors account, total creditors account as well as bills receivable account. Balance on 1 st January, 2011: Total debtors Sh. 527,000 Bills receivable 40,000 Total creditors 264,000 Transactions during the year: Cash paid to creditors 702,500 Discount allowed by suppliers 26,500 Cash receive from customers 1,354,000 Discount allowed to customers 42,000 Returns from customers 16,250 Returns to suppliers 13,300 Bills receivable dishonoured 11,000 Bad debts previously written off, now recovered 10,000 Cash sales during the year 158,000 Cash purchases during the year 123,000 Bad debts written off 35,400 Cash received against bills receivable 142,000 Balance on 31 st December, 2011: Total debtors 556,000 Total creditors 284,000 Bills receivable 10,000