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, 07 th November 2014 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 in your answer booklet. (i) Which of the following will happen if sh. 7,500 was added to rent instead of being added to fixed assets? A Gross profit would not be affected B Gross profit would be affected C Gross and net profits would be affected D Net profits would not be affected E Neither gross profit nor net profit would be affected. (ii) In the trading account, the sales returns should be A added to cost of goods sold B deducted from purchases C deducted from sales D added to sales E added to purchases. (iii) When income statements are prepared, the bad debts account is closed by a transfer to the A balance sheet B profit and loss account C trading account D creditors account E debtors account. (iv) If current account is maintained then the partners’ share of profit must be A debited to partners’ capital accounts B credited to partners’ capital accounts C credited to profit and loss appropriation account D debited to partners’ current accounts E credited to partners’ current accounts. (v) 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.

(vi) 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. (vii) 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. (viii) 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. (ix) 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. (x) 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.

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 in your answer booklet. Column A Column B (i) A ledger for customers’ personal accounts. A Journal proper (ii) A ledger for suppliers’ personal accounts. B Nominal ledger (iii) The main book of accounts. C Private ledger (iv) Book of original entry used to record prompt receipts and D Bought journal payments. E Creditor’ control ledger (v) A ledger account for capital and drawing accounts. F Cash book (vi) A book of accounts used to record rare transactions. G Debtors’ control ledger (vii) Books of original entry used to record credit sales. H Return outward journal (viii) Books of original entry used to record credit purchases. I A ledger (ix) Books used for making small payments. J Petty cash book (x) A ledger for impersonal accounts. K Return inward journal L Sales ledger M Purchases invoice N Sales journal O Purchases ledger SECTION B (20 Marks) Answer all questions in this section. 3. (a) Give five distinctions between receipts and payments and income and expenditure accounts. (b) Highlight five importance of the balance sheet. 4. (a) A landlord charges his tenant an annual rent per annum. He accrues for rent owing at the end of each year and also adjusts for rent received in advance. Entries made by the landlord: On 1 st January, 2002, tenant owed sh. 180,000 for the year 2001. In December 2001, tenant paid sh. 400,000 for the year 2002. During the year 2002 landlord received cash for rent sh. 1,600,000. At close of 31st December, 2002, accrued rent was sh. 110,000 tenants had not paid and unearned rent revenue was sh. 30,000.

Ascertain the amount to be transferred to profit and loss account for the year ended 31st December, 2002 without using rent received account. (b) Outline four essentials of a bill of exchange (c) State five limitations of single entry system. SECTION C (60 Marks) Answer all questions in this section. 5. M/S Majuto is a sole trader. He extracted the following list of balances from the books of his business on 31 st March, 2011: Dr Cr Sh. Sh. Purchases and Sales 453,800 806,500 Sales and purchases returns 5,100 9,300 Discounts 11,200 3,900 Stock at 1st April, 2010 124,600 Motor van, at cost 125,000 Office equipment 96,000 Provision for depreciation of motor van 1.4.2010 38,000 Provision for depreciation of Office equipment 1.4.2010 21,500 Salaries and wages 176,200 Motor van running expenses 39,100 Sundry expenses 11,400 Rent and rates 32,000 Bad debts 3,750 Provision for doubtful debts 1st April, 2010 3,200 Debtors and creditors 128,700 91,000 Bank 80,400 Cash 600 Drawings 70,000 Capital 384,450 13,587,850 1,357,850 This additional information is available at 31 st 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.

Prepare a trading and profit and loss account for the year ended 31 st March, 2011 as well as a balance sheet as at that date. 6. (a) A trader known as Bushiri does not keep proper books of accounts. However, he provides the following particulars: 31-12-2010 31-12-2011 Sh. Sh. Cash at bank 45,000 30,000 Cash in hand 3,000 40,000 Stock in trade 400,000 450,000 Debtors 120,000 200,000 Creditors 300,000 200,000 Equipment 50,000 50,000 Furniture 40,000 40,000 Additional information: ● During the year 2011, Bushiri introduced sh. 60,000 as additional capital and withdrew sh. 40,000 as drawings. ● Write off depreciation on furniture at 10% and on equipment at 5%. Prepare statements of affairs at the end of years 2010 and 2011 as well as statement of profit or loss for the year ended 31 st December, 2011. (b) Summary of receipts and payments of Majimatitu Medical Aid Society for the year ended 31 st December, 2011 are as follows: Opening cash balance in hand sh. 80,000, subscriptions sh. 500,000. Donation sh. 150,000. Interest on investments @ 9% per annum sh. 90,000. Payments for medicine supply sh. 300,000. Honorarium to Doctors sh. 100,000. Salaries sh. 280,000. Sundry expenses sh. 10,000. Equipment purchase sh. 150,000. Charity show expenses sh. 15,000. Charity shows collections sh. 125,000. Additional information: 1-1-2011 31-12-2011 Sh. Sh. Subscription due 15,000 22,000 Subscription received in advance 12,000 7,000 Stock of medicine 100,000 150,000 Amount due for medicine supply 90,000 130,000 Value of equipment 210,000 300,000 Value of building 500,000 480,000 Prepare receipts and payments account as well as subscription account for the year ended 31 st December, 2011.

7. A businessman with his financial year end on 31 st. December bought two vans on 1 st January, 2001, No 1 for sh. 800,000 and No 2 for sh. 500,000. It also buys another van, No 3, on July 2003 for sh. 900,000 and another, No 4, on 1 st October, 2003 for sh. 720,000. The first two vans are sold, No 2 for sh. 229,000 on 30 th September, 2004, and No 2 for scrap for sh. 5,000 on 30 th June, 2005. Depreciation is on the straight line basis, 20 per cent per annum, ignoring scrap value in this particular case when calculating depreciation per annum. Show van account, accumulated provision for depreciation account as well as van disposal account for the years ended 31 st December, 2001, 2002, 2003, 2004 and 2005.