Bismillahir Rahmanir Rahiim

MUDIO ISLAMIC EXAMINATION BOARD (MIEB)

FORM THREE MID TERM EXAMINATION - 2016
BOOK – KEEPING
TIME 3HOURS INDEX NO

INSTRUCTIONS:-
 This paper consists of section A, B, and C
 Answer ALL questions

SECTION A (20 marks)

MULTIPLE CHOICES
1. From the given alternatives choose the correct answer and write it’s letter in the space
provided.
(i) Working capital means
A) Amount of capital invested by the owner
B) Excess of current assets over current liabilities
C) Capital less drawings
D) Total of fixed assets + current assets

(ii) When trial balance totals do not agree the difference is entered in

A) Balance account C) Errors account

B) Suspense account D) Profit and loss account

(iii) When final accounts are prepared the bad debts account is closed by a transfer to the:-

A) Balance sheet C) Trading account

B) Profit and loss account D) Provision for doubtful debts

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

A) Dr drawings, Cr purchases a/c

B) Dr purchases, Cr drawings c/c
C) Dr drawing a/c, Cr stock a/c
D) Dr sales a/c, Cr stock c/c

(x) A provision for doubtful debts is created

A) When debtors become bankrupt
B) When debtors cease to be in business
C) To provide for possible bad debts
D) To write off bad debts

(xi) In the trading account the sales returns should be

A) Added to cost of goods sold C) Deducted from sales

B) Deducted from purchases D) Added to sales
 (xii) Purchases day book consists of

A) Cash purchases C) A list of invoices

B) Suppliers ledger accounts D) Payment for goods

(xiii) Debit notes are entered in the

A) Purchases returns day book
B) Sales returns day book
C) Purchases account
D) Purchases returns account

(xiv) Balance sheet:-

A) A list of balances after calculating net profit
B) A statement of all liabilities
C) Trial balance at different dates
D) List of balances before calculating net profit

(xv) Gross profit

A) excess of cost of goods sold over sales
B) excess of sales over cost of goods sold
C) purchases + sales
D) net profit less expenses

i ii iii iv v vi vii viii ix x

2. match the item in column A with the response in column B by writing the letter of the correct
response beside the item number

LIST A LIST B
i) goods returned by the business to its suppliers A. trade discount
ii) Results when goods are sold for more than they cost B. Impersonal
account
iii) Accounts in which property of all kinds is recorded C. Receipts
iv) A form a knowledging receipt of money for goods services D. Profit
rendered
v) Goods sold by the business E. Fixed assets
vi) Reduction given to a customer when calculating the selling F. Current assets
prices of goods
vii) System used for controlling expenditure of small cash items G. Real accounts
viii) All accounts other than Debtors and creditors accounts H. Imprest
ix) Asset bought which have long life and are to be used in the I. Carriage
business outwards
x) Cost of transporting goods to the customers J. Sales
K. Returns
outwards
Answers
LIST A i ii iii iv v vi vii viii ix x
 LIST B

SECTION B (20 marks)

3. Ntegana exporters and importers had the following information as n 31st December 2010
Stock 1/1/2010 ……………………………………………………………. 1,800,000/=
Net purchases ……………………………………………………………….. 2,600,000/=

Expenses ………………………………………………………………….... 1,200,000/=

Mark – up …………………………………………………………………... 20%
Expenses ……………………………………………………………………. 440,000/=
Net profit …………………………………………………………………… 200,000/=
Calculate:-
i) Cost of sales
ii) Gross profit
iii) Average stock
iv) Rate of stock turn
v) Net profit

4. Give short notes on the following

(i) Bad debts
(ii) Accrued expenses
(iii) Balance sheet
(iv) Suspense account
(v) Sources of government revenue
SECTION C (60 marks)
5. A trial balance of XYZ does not balance and suspense account had been opened with a credit
balance of 510. The following errors are then discovered.
(i) Cash purchases of 450 were recorded in both cash book and ledger as 540.
(ii) Total of motor expenses account was under cast by 70.
(iii) Cash received from a debtor 150 is entered in the cash book only.
(iv) Sales account was under cast by 350.
(v) Insurance account was over cast by 80.
(vi) Cheque payment to a creditor of 490 had been debited to the drawing account.
(vii) Cash receive from Asha Tsh 5000/= had not been entered in the books.
(viii) Credit sales to Jailan for sh 4000/= has been omitted in the books.
Required:-
a) Show journal entries to correct the errors.
b) Write up suspense account showing correction of errors.
c) The net profit figure originally, calculated for the year ended 31st December 2005 was
12,250. Calculate the corrected Net profit.

6. (a) A business started on 1/January/2009 and its financial year end is 31st December
annually. The table show the bad debt written off and the estimated doubtful debts at the
end of the year.
Year to Debtors at the end of the Bad debts written off Provision for doubtful debts
st
31 December year (after bad debts
written off)
2009 12,000 298 100
2010 15,000 386 130
2011 14,000 344 115
2012 18,000 477 150
Show the following:-
(a) Bad debts A/C
(b) Provision for doubtful debts
(c) Profit and loss a/c
(d) Balance sheet extracts for each of the year

(b) The following are list of debtors as at 1st January 2002

Juma 6,000/=
Asha 12,000/=
Abdul 5,000/=
Jaffary 7,000/=
At the end of the year all the debtors paid except Juma only. The company decided to write
off Juma.
Required show:-
(a) Debtors a/c
(b) Bad debt a/c

7. From the following trial balance of J. shoppers prepare Trading profit and loss for the year
ended 31st December 2009.
Trial balance as at 31st December 2009
Dr Cr
Sales 80,000
Purchases 70,000
Sales Returns 1,000
Purchases Returns 1200
Stock 1/1/2009 20,000
Provision for doubtful debts 160
Wages and salaries 7,200
Telephone 2,000
Store sittings 8,000
Motor van 6,000
Debtors and creditors 1,960 1400
Bad debts 40
Capital 35,800
Bank balance 600
Drawings 3,600
Total 118,600 118,600

Additional information:-
(a) Closing stock at 31st December 2009 is 24,000/=
(b) Provision for bad debts to be increased to 10% of debtors.

Wabillahit Tawfiiq