PRESIDENT’S OFFICE

REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

SINGIDA MUNICIPAL COUNCIL
FORM TWO SPECIAL EXAMINATION
BOOK KEEPING
TIME: 2:30 HRS JULY 2023.
INSTRUCTIONS:
 This paper consist of three section A, B and C
 Answer all questions from all sections

SECTION A (15 Marks).

Answer all questions in this section.

1. For each of the items (i)-(x) choose the correct letter among the given alternative and write its letter beside
the item number in the answer sheets.

i) What is the name of the book of original entry used to record the sale of fixed assets on credit?
A. Sales ledger C. Sales ledger
B. General journal D. Purchases ledger

ii) The following are sources of government revenue except.

A. Grants and aid C. Retirement benefits
B. Loans D. Borrowing

iii) The cost of putting goods into saleable condition should be charged to
A. Income statement C. Suspense account.
B. Balance sheet D. Trial balance.

iv) A cheque paid by you , but not yet passed through the banking system;
A. Unpresented cheques C. Dishonored cheque.
B. A credit transfer D. A standing order

v) The cost of borrowing money is known as;

A. Tax C. Interest.
B. Loan D. Drawings.

vi) The document which gives the description of goods bought on credit is;
A. Cash receipt C. Purchases invoice.
B. Credit note D. Sales invoice.

vii) The term “expenses” denotes

A. Payment or incurring of the debt for an asset
B. Cost of services used for generating income
C. Asset bought and sold
D. Cost incurred in buying an asset

viii) A trade discount is best described as;

A. A discount given if the invoice is paid
B. A discount for cash payment
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 C. A discount given to suppliers
D. A discount given to encourage bulk purchasing.

ix) Bookkeeping is the branch of accounting which deals with;

A. Analysis and interpretation of data
B. Recording, classifying, summarization of data and interpretation
C. Recording of financial business in the books of accounts
D. Credit transactions of the business.

x) A statement prepared to show the financial position of the business is known as;
A. Trial balance
B. Balance sheet
C. Journal
D. Ledger

i ii iii iv v vi vii viii ix x

2. Match the explanations of the accounting concept in Column A with the corresponding names in Column B
by writing the letter of the correct response beside the item number in your answer booklet.

Column A Column B
(i) The concept which separates business affairs A. Accounting period concept
from business ownership. B. Accrual concept
(ii) The concept which assumes that business C. Business entity concept
operations will continue for a long period of time D. Dual aspect concept
without ceasing. E. Matching concept
(iii) The concept which relates expenses incurred F. Going concern concept
during the accounting period with the revenue G. Accounting principles.
recognized during the same period. H. Money measurement principle.
(iv) The period of time that covers a certain
accounting functions being monthly, quarterly
half year or annually.
(v) A set of rules that are universal applied and
followed by an organization when reporting
financial information.
SECTION B (40 Marks).
Answer all questions in this section.
3. (a) Mention five (5) reasons for disagreement between cash book and bank statement
balance.
i) _____________________________________________________
ii) _____________________________________________________
iii) _____________________________________________________
iv) _____________________________________________________
v) _____________________________________________________

(b) Mention five source documents used in the business transactions.

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 i) ____________________________________________________
ii) ____________________________________________________
iii) ____________________________________________________
iv) ____________________________________________________
v) ____________________________________________________

4. Complete the following table and show which accounts are to be debited and which are credited.
Transactions Account to be Account to be
debited credited
Example: Furniture A/C Cash A/C
Bought office furniture for cash
(i) A debtor “ Kamara” pays us by cheque.
(ii) Bought goods for cash
(iii) Paid cash into the bank
(iv) Withdrawing cash from bank for office use
(v) Goods returned by us to Makame

5. From the following information related to Ilham a trader record the following transactions in the sales
journal
May 1: Sold goods to Hizaah.
20 exercise books @ Tshs. 500
20 boxes of pencil for Tshs. 2,000

May 15: Sold to Hibba training center.

15 Atlases @ Tshs 1,200
30 Graph papers @ Tshs. 50.
May 25: Invoice issued to Korushusho for goods sold Tshs. 9,000.

6. Rule a suitable petty cash book of Mwananchi in January 2020 with the following
analysis payment columns: Postage, Travelling, sundry expenses and Ledger.
Jan 1: Petty cashier received imprest from Main cashier shs. 40,000.
Jan 2: Paid for stamps shs. 4,000, sugar shs. 8000.
Jan 3: Paid for Daladala shs. 4,500.
Jan 4: Received cash shs. 7,500 from an employee payment voucher No; 8
Jan 5: Paid Juma shs. 10,000, Stationary shs. 8,000.

SECTION C (45 Marks).

Answer all questions in this section.

7. Post the following details into the statement of financial position as at 31st December 2019.

Capital ………………………………………….. 140,000.

Net profit ………………………………………... 60,000.
Drawings ………………………………………… 50,000.
Creditors………………………………………….. 20,000
Loans from NBC …………………………………. 120,000.
Bank overdraft …………………………………….. 40,000.
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 Machinery ………………………………………… 130,000.
Motor van………………………………………….. 40,000.
Furniture …………………………………………… 25,000.
Premises …………………………………………… 53,000.
Stock ………………………………………………. 17,000.
Debtors …………………………………………….. 15,000.
Cash at bank………………………………………... 30,000.
Cash in hand ……………………………………….. 20,000

8. On 31st December 2019,the cash book balance of Mzee wa Mjegeje was Tshs. 25,370/= whereas the bank
statement showed a credit balances of 25,670/=. In an investigation the following were discovered:
(a) Cheques not presented for payment Tshs. 12,340/=
(b) Cheques paid into the bank but not credited by the bank Tshs. 12,160/=
(c) Items shown in the bank statement but not yet enered in the cash book:
(i) Bank charges Tshs. 240/= (iii) Dividends collected by bank Tshs. 820/=
(ii) Standing order Tshs. 460/=
Required:
(a) Adjust the Cash Book to show the correct Cash Book balance.
(b) Prepare a Bank Reconciliation Statement starting with the adjusted Cash Book Balance.
9. When extracting the trial balance of Mulisa & Co ltd as at 31st December 2000 it was observed that the total
debits exceeded the total credits by shs 476,000.
Investigations revealed the following errors:
i. Sales had been overcast by shs 30,000.
ii. Return outwards account had not been credited with an amount of shs 122,640.
iii. A payment by debtor of shs 300,000 by direct bank transfer had not been entered in the debtors
account.
iv. Cash purchases of shs 4,640 had been recorded in the cash book only.
v. Shs 44,000 received from debtor had been debited to his account.
Required.
a. Show the necessary journal entries to correct the errors.
b. Show the suspense account after taking into account the errors in (a) above.

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