TOUCH OF CLASS LEARNING INSTITUTION

Stand No. 4966 Zororo , Highfield, Harare

077 931 2431 / 071 272 0388

PRINCIPLES OF ACCOUNTS FORM 3

PAPER
SECTION A
MID
ANSWER ALL YEAR
QUESTIONS EXAMINATION 2025 SESSION
1) Evaluate any three criterias to measure the size of the firm (6)
2) Contrast a command and a free market economy (4)
3) Explain any two factors of production (4)
4) Present arguments for and against privatization of state enterprises (6)
5) What role does small firms play to the economy of your country (5)
6)Additional
How usefulmaterials
is a sole trader as a form of business organization (6)
1. Answer paper
7) State any 4 characteristics of small firms in your country (4)
8) Explain any 3 problems faced by a small firm in your country (6)
TIME:
9) State2HRS
any three reasons why small firms continue to survive despite the problems they face(3)
INSTRUCTIONS TO CANDIDATES
10) Define nationalization (2)
11)1.Distinguish
Write yourbetween
name on nationalization
every answerand privatization (4)
sheet.
SECTION B
2. Answer ALL questions
ANSWER
3. If youTWO QUESTIONS
use more than one sheet of paper fasten the sheet together.
12a) What problems are encountered by small firms (10)
b) Explain how government attempt to assist small firms in your country (15)
INFORMATION FOR CANDIDATES
13a) Explain any 5 criterias used to measure the size of the firm (10)
1. The number of marks is given in brackets [ ] at the end of each question or part of the
b) How important are small firms in your country (15)
question.
14) Discuss the factors that affect the success of a business in your country (25)
15)2.Evaluate
You should spendofattechnological
the impact least five minutes reading through
development the questions
to businesses before you
in your country (25)begin
writing your answers.
16) ‘All businesses main aim is to maximize profits’ Discuss (25)
17a) Present arguments for and against nationalization of privately owned firms (10)
b) Explain any four business objectives (15)
Section A
1. Which of the following is an asset?
A. Sales
B. Capital
C. Debtors
D. Creditors
2. The person or business that the firm owes money to is called:
A. Debtor
B. Owner
C. Creditor
D. Banker
3. The rule for a real account is:
A. Debit the receiver, credit the giver
B. Debit what comes in, credit what goes out
C. Debit all expenses, credit all incomes
D. None of the above
4. The journal is also known as:
A. Ledger
B. Cash book
C. Day book
D. Trial balance
5. The double entry for a cash sale is:
A. Debit Sales, Credit Cash
B. Debit Purchases, Credit Cash
C. Debit Cash, Credit Sales
D. Debit Capital, Credit Sales
6. Capital is defined as:
A. Money borrowed
B. Money invested by the owner
C. Business income
D. Profit
7. The ledger that records all personal accounts is called:
A. General Ledger
B. Real Ledger
C. Sales Ledger
D. Private Ledger
8. Which is a nominal account?
A. Machinery
B. Salaries
 C. Bank
D. Debtors
9. In double entry bookkeeping, every transaction affects:
A. One account
B. Two or more accounts
C. Only the cash account
D. Only the capital account
10.The three types of accounts are:
A. Real, Capital, Cash
B. Real, Nominal, Personal
C. Income, Expense, Cash
D. Assets, Liabilities, Capital
11.The correct golden rule for personal accounts is:
A. Debit the receiver, credit the giver
B. Debit what comes in, credit what goes out
C. Debit all expenses, credit all incomes
D. Debit giver, credit receiver
12.If a business pays rent, what account is debited?
A. Cash
B. Rent
C. Capital
D. Sales
13.The ledger is a book of:
A. Source documents
B. Original entry
C. Final entry
D. Closing balances
14.Cash book is both a:
A. Journal and trial balance
B. Journal and ledger
C. Ledger and invoice
D. Receipt and invoice
15.The owner of a business is called:
A. Manager
B. Debtor
C. Creditor
D. Proprietor
16.Which of the following is a liability?
A. Cash
 B. Debtors
C. Furniture
D. Bank Loan
17.Goods bought for resale are called:
A. Purchases
B. Sales
C. Inventory
D. Income
18.An increase in an expense account is recorded as a:
A. Credit
B. Debit
C. Liability
D. Capital
19.If goods are sold on credit to Martha, which account is debited?
A. Martha’s account
B. Sales account
C. Capital account
D. Purchases account
20.The bank column in the cash book records:
A. Only cash payments
B. Cheques received and issued
C. Only capital
D. Credit sales
21.What is the main purpose of a journal?
A. To record bank balances
B. To record all cash payments
C. To record all original transactions
D. To replace the cash book
22.A trial balance checks:
A. If profit was made
B. If journal entries are written
C. If accounts balance
D. Cash available
23.When goods are bought on credit:
A. Purchases are debited, creditor credited
B. Purchases are credited, cash debited
C. Sales are credited, debtor debited
D. Cash is debited, sales credited
24.Which of the following is not a book of original entry?
 A. Journal
B. Ledger
C. Purchases Day Book
D. Sales Day Book
25.If $100 is withdrawn from the bank for office use:
A. Debit bank, credit cash
B. Debit cash, credit bank
C. Debit bank, credit capital
D. Debit capital, credit bank
26.The purchases account is used for:
A. Buying fixed assets
B. Buying goods for resale
C. Selling goods
D. Cash drawings
27.A credit note is issued when:
A. A customer pays cash
B. Goods are returned
C. Goods are bought
D. Payment is overdue
28.What is the effect of recording a transaction only on one side?
A. Double entry is complete
B. Trial balance will not balance
C. Profit increases
D. Cash decreases
29.Drawings are:
A. Profits invested by the owner
B. Goods sold to customers
C. Cash or goods taken by the owner for personal use
D. Owner’s liabilities
30.Which account would you credit when you receive cash from a debtor?
A. Debtor's account
B. Cash account
C. Sales account
D. Capital account
Section B
1. a) Define the following accounting terms:
i. Asset
ii. Liability
iii. Drawings
iv. Revenue
v. Expense (5)
b) List and explain two methods of data processing used in accounting.(2)
c) State one advantages and two disadvantages of using computers in
accounting. (3)
2.From the following transactions you are required to complete journal entries
with dates.
2015
March1. Started the business with cash $8 000 and $11 000 in the bank.
2. Bought goods for resale worth $11 500 by cash.
3. Sold goods receiving cheque of $5 000.
4. Bought packaging materials for $1 000 cash.
5. Bought a furniture for $2 000 paying by cheque.
7. Bought goods on credit from A. Badza for $1 200
8. Sold goods for $5 000 cash.
10. Sold goods on credit to A. Maposa for $ 1000
12. Paid rates by cash $900.
15. Returned damaged goods worth $200 to A. Badza
18. Paid salaries and wages by cheque $400.
20. A Maposa returned goods worth $100
22. Bought goods for resale $3 000 paying by cheque.
26. Paid transport expenses for $400 cash.
27. Paid for insurance by cheque $600. (15)
3. The following balances were taken from the business of Paida
Motor vehicles 60 000
Office equipment 20 000
Inventory 9 000
Trade receivables 5 000
Trade payables 6 000
Bank 4 200
Rent owing 200
Calculate the capital (5)

4. The following was extracted from the books of Ben Gobvu.

Capital 30 600
Purchases 92 000
Sales 125 000
Inventory 1 July 2017 12 000
Returns inwards 5 000
Customs duty 8 000
Motor vehicle at cost 15 000
Furniture and fittings at cost 6 000
Provision for depreciation 1 July 2017 :
Motor vehicles 2 500
Furniture and fittings 420
Trade receivables 11 000
Trade payables 12 400
Commission received 600
Stationery 3 600
General expenses 7 000
Drawings 8 500
Bank 3 500
Additional information
i) Inventory was valued at 17000 on 30 June 2018
ii) Customs duty, 2000 was included in general expenses
iii) Depreciation is provided as follows:
Motor vehicles at 6% p.a on reducing balance method
Furniture and fittings at 4% p.a on cost
iv) Inventory of stationery was 300 on 30 June 2018
Required
a) Prepare a trial balance as at 30 June (15)
b) Prepare an income statement for the year ended 30 June 2018 (10)
c) The balance sheet as at 30 June 2018 (15)