BISMILLAHIR RAHMANIR RAHIIM

MUDIO ISLAMIC EXAMINATION BOARD (MIEB)

TERMINAL EXAMINATION JUNE – 2016
FORM THREE

BOOK – KEEPING

TIME: 3HOURS INDEX NO. ………………….

INSTRUCITONS :

 This paper consists of three sections A, B, and C

 Answer ALL questions from each section
 Remember to write your examination numbers on the top every page of answer sheet
provided
 Calculators and cellular phones are NOT allowed

SECTION A ( 20 MARKS)

1. Choose the most correct answer from the given alternatives and then write its letter in
the space provided below
(i) Errors are corrected via journal because
(a) It saves the book keepers time
(b) It saves entering them in the ledger
(c) It is too much easier to do so
(d) It provided a good explaining of the double entry system

(ii) The descending order in which current assets should be drawn in the balance
sheet is
(a) Debtors , stock, bank and cash
(b) Cash, debtors, bank and stocks
(c) Debtors , stocks, cash and bank
(d) Stock debtors, bank and cash

(iii) Which of the following should be entered in the journal proper

(i) payment of cash sales (ii) fixture bought on credit
(iii) credit sales of goods (iv) sales of surplus machine

(a) i and ii (b) ii and iii (c) iii and iv (d) ii and iv
 (iv) wages account is under cast by 200/= while sales account is under cast by 200/=
too, This is
(a) an error of omission
(b) an error of principle
(c) an error of commission
(d) a compensating error

(v) a suspense account is opened when

(a) the trial balance does not agree
(b) the balance sheet does not agree
(c) the business makes a net loss
(d) the profit and loss account does not balance

(vi) capital expenditure is the

(a) extra capital paid in by the proprietor
(b) money spent in running the business
(c) money spent in selling fixed asset
(d) money spent in buying fixed asset

(vii) a cheque paid by a business owner that in the possession of the payee but not
yet deposited with the bank is called
(a) standing order
(b) dishourened cheque
(c) un paid
(d) Un presented cheque

(viii) Given a cash float of 200,000 /= , if 166,000 is spent in the period how much will
reimbursed at he end of hat period
(a) 200,000/= (b) 54,000/= (c) 34,000/= (d) 166,000/=

(ix) If we take goods for personal use we should

(a) Debit drawings account credit purchases account
(b) Debit purchase account , credit drawings account
(c) Debit drawing account , credit stocks account
(d) Debit sales account , credit stocks account

(x) Give the cost of goods sold is 320,000/= and margin of 20-% then the sales figure
is
(a) 413, 280/= (b) 256, 000/= (c) 400,000/= (d) 328,000/=

i ii iii iv v vi vii viii ix x

2. Match the item in List A with those in List B by writing the correct letter against the
corresponding questions number in the space provided

List A List B
(i) Debt previously written off that is subsequently (A) Profit
paid by the debtors (B) Loss
(ii) A document sent to a customer sharing allowance (C) Assets
given by supplier in respect of unsatisfactory goods (D) Liabilities
(iii) Payment made out of payers bank direct to (E) Expenditures
payee’s bank on payee’s instructions (F) Expenses
(iv) Cost of fixed asset with depreciation deducted (G) Direct credit
(v) Total of money owed for assets supplied to the (H) Direct debit
business (I) Bad debts
(vi) Cost of operating he business (J) Bad debts recovered
(vii) Result of selling goods for less than they have cost (K) Net market value
the business (L) Net book value
(viii) Where an item is entered both debit and credit (M)Error of principle
entries are of the same incorrect amount (N) Error of original entry
(ix) The sum held as petty cash (O) Cash float
(x) Resources owned by the business (P) Cash refund
(Q) Credit note
(R) Debit note

List A i ii iii iv v vi vii viii ix x

List B

SECTION B ( 20 MARKS)

3. Explain the following terms

(i) Financial statements
(ii) Accrued expenses
(iii) Standing order
(iv) Journal entries

4. (a) Rent and rates paid during the year amounted to sh 300,000/=. The following
information was also provided
2010 Accrued prepaid
Jan 1 sh 25,000/= sh 19,000
Dec. 31 sh 40,000 sh 24,000

You are required to prepare combined Rent and Rates account for the year ended 31 st
December

(b) Mr. Odwa want to start a business , but before commencement he needs to learn

book – keeping . Outline five objectives for him to study this subject.
 SECTION C ( 60 MARKS)

5. You have extracted a trial balance and drawn up final accounts for the year ended 31
December 2008 . The debit side of the trial balance exceeded credit side total by
29, 200 /= a suspense account was opened for that difference
During 2009 the following errors made 2008 were revealed :

(a) Electricity bill of 3800/= had not been posted to the general ledger from the cash
book
(b) A sales of office equipment for 5,500/= had been entered in the discount received
account
(c) Purchases journal had been overcasted by 6000/=
(d) Cash drawings of 11,500 /= had been included in purchases account .
(e) A sales of goods to Ramla 69,000/= was posted to the persona account as 96,000/= ,
where the sales book entered correctly .
Required :
(i) Show the journal entries to correct the above errors ( Narrative not necessary)
(ii) Write up the suspense account dully balance

6. SOMENI a sole trade extracted the following trial balance from his books for the year
ended 31 march 2010

Trial balance as at 31 March 2010

S/N Details DR CR
1 Purchases and sales 224,000 419,000
2 Stock 1st April 2009 51,600 -
3 Capital 1st April 2009 - 72,000
4 Bank overdraft - 43,000
5 Cash 900 -
6 Carriage inwards 4,600 -
7 Discounts 14,400 9,300
8 Sales returns and purchase returns 8,100 5,700
9 Carriage outward 21,600 -
10 Rent and insurance 17,400 -
11 Provision for doubtful debts - 6,600
12 Office equipment 20,000 -
13 Delivery van 27,000 -
14 Debtors and creditors 119,100 61,200
15 Drawings 28,800 -
16 Bad debts w/o 400 -
17 Wages and salaries 89,000 -
18 General office expenses 4,500 -
19 Provision for depreciation
- Office equipment - 8,000
- Delivery vans - 5,400
_______
631,400 631,400
Additional information should be considered

(i) Stock as at 31 march 2010 was valued at 42,900/=

(ii) Wages and salaries accrued 2100/= and office expenses owing 200/= at 31 March
2010
(iii) Rent prepaid at 31 March 2010 was 1800/=
(iv) Increase the provision for doubtful debts to 8100/=
(v) Provide for depreciation on the office equipment at 20% p.a using straight line method
(vi) Provide for depreciation on delivery vans at 20% p.a using reducing balance method

You are required to prepare the trading , profit & loss account for the year
ended 31 March 2010 together with Balance sheet as at that date

7. Ngorika bus service operated between Dar es salaam and Arusha, the firm has two buses
as at 1st Jan 1984. Bus A purchased on 1/1/1979 for sh 400,000/= and bus B purchased on
1/4/1981 for Tsh 500,000/=. Depreciation is taken at 20% per year (on cost). During the
year ended 31/12/1984 the following transactions took place.
1/5/1984 Bus C bought for Tsh 600,000/=
1/10/1984 Bus D bought for Tsh 800,000/=
You are required to show the following accounts for the year ended 31/12/1984
(a) Buses A/C
(b) Profit & loss A/C
(c) Provision for depreciation
(d) Balance sheet

Wabillahit Tawfiiq