IGCSE Accounting All Mark Scheme 2002 Summer 2018

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IGCSE ACCOUNTING 0452
Accounting
MARK SCHEMES COMBINED 2003 TO 2018
Combined & Compiled By:

M ARIF KARIM
Assessment Specialist
(Cambridge International Examination)
Head of Department (Humanities)
Saud International School, Riyadh KSA
Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
ACCOUNTING 0452/13
Paper 1 May/June 2017
MARK SCHEME
Maximum Mark: 120
Published
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.
Cambridge will not enter into discussions about these mark schemes.
Cambridge is publishing the mark schemes for the May/June 2017 series for most Cambridge IGCSE®,
Cambridge International A and AS Level and Cambridge Pre-U components, and some Cambridge O Level
components.
® IGCSE is a registered trademark.
This document consists of 11 printed pages.
© UCLES 2017 [Turn over

0452/13 Cambridge IGCSE – Mark Scheme May/June 2017
PUBLISHED
Question Answer Marks
Glossary for Question 1
(d)
A charge for year
B accumulated depreciation
C straight line
D net book value
(f)
A 426 000+90 000–40 000–25 000=451 000
B 426 000+90 000–40 000=476 000
C 426 000+90 000–40 000+25 000=501 000
D 426 000+90 000=516 000
(h)
A 72 000×1.6=115 200
B 80 000×1.6=128 000
C 72 000÷0.4=180 000
D 80 000÷0.4=200 000
(j)
A (14 000–2000)×0.2=2400
B (14 000+3600–2 000)×0.2=3120
C (14 000+3600)×0.2=3520
D (14 000+3600–2000)×0.25=3900
© UCLES 2017 Page 2 of 11

PUBLISHED
1(a) A (1) 1
1(b) C (1) 1
1(c) B (1) 1
1(d) B (1) 1
1(e) D (1) 1
1(f) B (1) 1
1(g) D (1) 1
1(h) A (1) 1
1(i) C (1) 1
1(j) B (1) 1

PUBLISHED
2(a) An income statement shows incomes and expenses (1) and is prepared for a period of time (1). 4
A statement of financial position shows assets and liabilities (1) and is prepared at a particular date (1).
2(b) asset liability income expense 4
bank loan 9(1)

insurance 9(1)
equipment 9(1)
depreciation charge 9(1)
2(c) Income statement $1500 (1) 2

Statement of financial position $4500 (1)
2(d) accounts of the same type can be kept together 1

helps to locate errors
allows tasks to be divided between different people
deters fraud
allows checking procedures to be introduced
any one for (1) mark
2(e)(i) Sales ledger – accounts of individual credit customers (1) 2

Purchases ledger – accounts of individual credit suppliers (1)
2(e)(ii) any suitable example for (1) mark 1

e.g. sales, purchases, insurance

PUBLISHED
2(f) cash book 2

petty cash book
sales journal
sales returns journal
purchases journal
purchases returns journal
general (nominal) journal
any two for (1) mark each
2(g) true or false 1
The recording of financial transactions is called accounting false (1)
3(a)(i) in the books of Pich 2
debit account $ credit account $

Roger 5000 (1) sales 5000 (1)
3(a)(ii) in the books of Roger 2

purchases 5000 (1) Pich 5000 (1)
3(b) Invoice (1) 2

Pich (1)
3(c) debit account $ credit account $ 3
bank 4875 (1) Roger 5000 (1)

discount allowed 125 (1)

PUBLISHED
3(d)(i) discount received account (1) 1
3(d)(ii) income statement (1) 1
3(e) A credit note (1) is issued by the supplier when goods are returned. 2
A debit note (1) may be issued by the customer when goods are returned.
3(f) Pich 12
Bad debts account
Date Details $ Date Details $
2016 2017
Dec 1 Amit 860 (1) Feb 28 Income statement 1960 (1)OF
2017
Feb 28 Ruth 1100 (1)
1960 1960
Provision for doubtful debts account

2017 2016
Feb 28 Balance c/d 2548 (3)* Mar 1 Balance b/d 2240 (1)
2017
Feb 28 Income statement 308 (1)OF
2548 2548
2017
Mar 1 Balance b/d 2548 (1)OF
* (64 800–1100) (1) × 0.04 (1) = 2548 (1)OF
Ruth account
2017 2017
Feb 28 Balance b/d 1100 (1) Feb 28 Bad debts 1100 (1)
+(1) for dates

PUBLISHED
3(g) Pich 3
Statement of Financial Position (extract) at 28 February 2017
Current assets $
Trade receivables 63 700 (1)
Provision for doubtful debts (2 548) (1)OF
61 152 (1)OF
4(a) A copy of the customer’s account as it appears in the books of the bank. (1) 1
4(b) 3 and 4 (1) 1
4(c) $ 4
original balance 2890
correction of error 90 (1)
bank charges (50) (1)
dishonoured cheque (200) (1)
updated balance 2730 (1)OF
accept alternative presentation
4(d) Yeo 6
Bank Reconciliation Statement at 30 April 2017
$
Balance in cash book (1) 2730 (1)OF
Add unpresented cheque 400 (1)
3130
Less uncredited deposit (180) (1)
Balance on bank statement (1) 2950 (1)OF
4(e) $2730 (1)OF 2

current assets (1)OF

PUBLISHED
4(f) insufficient funds in account 1

no signature on cheque
wrong signature
no date
words and figures do not agree
cheque is out of date
4(g) preparing of trial balance (1) OR preparing of control account (1) 1
5(a) more capital introduced to business 2

more expertise available
responsibilities are shared e.g. holidays, sickness
risk is shared
losses are shared
5(b)(i) To record the difference between the amounts earned from the partnership and the amounts withdrawn from the 1
partnership (1)
To show the retained profit of each partner (1)
To make it easier to calculate interest on capital (1)
To reveal excess drawings (1)
[max 1]
5(b)(ii) Ann owes money to the partnership. (1) 2

The partnership owes money to Bindu. (1)

PUBLISHED
5(c) Ann and Bindu 5

Appropriation Account for the year ended 28 February 2017
$ $
Profit for the year 24 500
Less interest on capital – Ann 3000 (1)
– Bindu 2500 (1) 5 500
Less salary – Ann 4 000 (1)
15 000
Shares of profit – Ann 9000 (1)OF
– Bindu 6000 (1)OF 15 000
5(d) Ann and Bindu 6

Current accounts
Details $ $ Details $ $
Ann Bindu Ann Bindu
Balance b/d 5 000 Balance b/d 3 000 (1)*
Drawings 12 500 10 000 (1)* Interest on capital 3 000 2 500 (1)OF*
Balance c/d 1 500 Salary 4 000 (1)
Shares of profit 9 000 6 000 (1)OF*
Balance c/d 1 500
17 500 11 500 17 500 11 500
Balance b/d 1 500 Balance b/d 1 500 (1)OF*
* mark for both items
5(e) effect $ 4
(understated or overstated)
gross profit overstated $750 (1)
profit for the year overstated $750 (1)
share of profit – Ann overstated $450 (1)
– Bindu overstated $300 (1)
5(f) It avoids inventory/current assets/profit being overstated. (1) 1

PUBLISHED
5(g) The loss arising from the damage is recorded in the same year as the damage occurred. (1) 1
6(a) factory distribution administrative 4

overheads costs expenses
factory rent 9
carriage outwards 9(1)
depreciation of office equipment 9(1)
factory supervisor’s salary 9(1)
repairs of delivery vehicles 9(1)
6(b)(i) Cost of raw materials 112 500 (1)+(5000–7500) (1)=110 000 (1)OF 2
6(b)(ii) Prime cost 110 000 (1)OF +82 000=192 000 (1)OF 2
6(b)(iii) Cost of production 192 000 OF +(41 800+6000) (1)=239 800 (1)OF 2

accept alternative formats

PUBLISHED
6(c) G Limited 9
Income Statement for the year ended 31 December 2016
$ $
Revenue 550 000 (1)
Inventory of finished goods – 1 Jan 2016 51 000
Cost of production 239 800 (1)OF
Purchases of finished goods 95 200 (1)
386 000
Inventory of finished goods – 31 Dec 47 300 (1)*
2016
Cost of sales 338 700
Gross profit 211 300 (1)OF
Distribution costs 61 800 (1)
Administrative expenses 95 100 (1)
Finance charges 16 100 (1) 173 000
Profit for the year 38 300 (1)OF
* mark for both inventory figures
6(d) It is cheaper to buy than produce (1) OR 1

Demand is higher than production at full capacity (1)
accept other suitable answers
6(e) Savings 7
old depreciation 6 000 (1)
repairs 9 000 (1)
raw materials 110 000 (1)OF×0.04 (1) 4 400
19 400
Less additional costs
new depreciation (10 000) (1)
additional interest (8 000) (1)
Increase in profit 1 400 (1)OF

ACCOUNTING 0452/21
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED
1(a) The bank statement is a copy of the account of the business as it appears in the books of the bank / the bank statement is 2
prepared from the viewpoint of the bank (1)
The bank account in the cash book is prepared from the viewpoint of the business (1)

PUBLISHED
1(b) Amjad 13
Cash Book
Date Details Discount Cash Bank Date Discount Cash Bank
allowed received
2017 $ $ $ 2017 $ $ $
Mar 1 Balances 38 2750 March 6 Office Equipment (1) 790
b/d
13 XY Limited (1) 4 196
29 Sales (1) 2148 Repairs to office (1) 160
equipment
30 Cash (1) 2000 21 Furniture Store (1) 9 351
31 Idris (1) 474 30 Bank c (1) 2000
31 Bank charges (1) 29
Insurance (1) 50
Balances c/d 4040
4 2186 5420 9 2186 5420
2017
April 1 Balances 186 4040
b/d
+(1) dates (1)OF (1)OF

PUBLISHED
1(c) Amjad 6
Bank Reconciliation Statement at 31 March 2017
$
Balance in cash book 4 040 (1) OF
Cheques not yet presented (1) 351 (1)
4 391
Amounts not yet credited (1) 2 000 (1)
Balance on bank statement 2 391 (1) OF
Alternative presentation $
Balance on bank statement 2 391 (1) OF
Amounts not yet credited (1) 2 000 (1)
4 391
Cheques not yet presented (1) 351 (1)
Balance in cash book 4 040 (1) OF
1(d)(i) The financial transactions are recorded at the actual cost (1) 2
Because of this it is difficult to compare transactions taking place at different times (1)
1(d)(ii) The accounting records only show information which can be expressed in monetary terms/non-monetary items cannot be 2
recorded (1)
There are many other factors which affect the performance of the business (1)

PUBLISHED
2(a) Sales invoice (1) 2

Credit note (1)
2(b) Cash book (1) 2

General journal (1)
2(c) Harum 6
Kalgi account
$ $
2017 2017
Mar 1 Balance b/d 520 Mar 10 Bank 520 (1)
4 Sales 224 (1) 12 Returns 96 (1)
18 Bank (dis chq) 520 (1) 28 Cash 600 (1)
30 Bad debts 48 (1)
1264 1264
2(d) Reduce credit sales/sell on a cash basis 2

Obtain references from new credit customers
Fix a credit limit for each customer
Improve credit control
Issue invoices and monthly statements promptly
Refuse further supplies until outstanding balance is paid
Allow cash discount for prompt payment
Charge interest on overdue accounts
Any 2 points (1) each

PUBLISHED
2(e) Error Entry required to correct the error 7
Debit Credit
Account $ Account $
Goods returned, $310, to Ali, a
credit supplier entered into the Ali 310 Alam 310
account of Alam.
Wages paid in cash, $1200, had Suspense 900 (1) Wages 900 (1)
been correctly entered in the
cash book but posted to the
wages account as $2100.
The total of the general expenses General 48 (1) Suspense 48 (1)
column in the petty cash book, expenses
$48, had not been posted to the
general expenses account.
The total of the discount received Suspense 228 (1) Discount 114 (1)
column in the cash book, $114, allowed
had been debited to the discount
allowed account
Discount 114 (1)
received
2(f) Comparability (1) 3

Reliability (1)
Understandability (1)

PUBLISHED
3(a) Meena and Rafah 8

Profit and Loss Appropriation Account for the year ended 30 April 2017
$ $
Interest on drawings – Meena 292
Rafah 204 496 (1)
8 030
Interest on capital – Meena 1 200 (1)
Rafah
3% × 20 000 × 6 / 12 = 300 (1)
3% × 30 000 × 6 / 12 = 450 (1) 750
1 950
Partner’s salary – Meena
6000 × 6 / 12 = 3000 (1)
7000 × 6 /12 = 3500 (1) 6 500 8 450
(420)
Share of loss – Meena 280 (1) OF
Rafah 140 (1) OF (420)
Alternative calculations *3% × 20 000 = 600 (1) + 3% × 10 000 × 6 / 12 = 150 (1)
** 6000 (1) + (100 × 6 / 12) = 500 (1)
3(b) Meena 5
Current account
$ $
2016 2017
May 1 Balance b/d 1 490 April 30 Interest on
capital 1 200 (1) OF
2017 Salary 6 500 (1) OF
April 30 Drawings 7 300 } Balance c/d 1 662
Int on drawings 292 }(1)
Share of loss 280 (1) OF
9 392 9 362
2017
May 1 Balance b/d 1 662 (1) OF

PUBLISHED
3(c) Inventory is not included in the calculation of the quick ratio (1) 2
Either The quick ratio shows whether the business would have any surplus liquid funds if all the current liabilities were paid
immediately from the liquid assets (1)
OR Shows the ability of the business to pay immediate / current liabilities from immediate/liquid assets (1)
3(d) Change from positive bank balance to overdraft 2

Increased level of inventory
Purchases of non-current assets
Repayment of long-term loan
Increase in current liabilities/increase in trade payables/increase in bank overdraft
Decrease in trade receivables
Increase in drawings
3(e) (19 400 + 15 100) : (17 350 + 2300 + 100) 2

34 500 : 19 750 (1)
1.75 : 1 (1)
3(f) Cannot meet debts when they fall due 2

Cannot take advantage of cash discounts
Cannot take advantage of business opportunities as they arise
May have difficulty in obtaining further supplies on credit/cannot replace inventory
Cannot meet day-to-day expenses
May not be able to take cash drawings
Or other suitable points
3(g) Introduce more cash as capital/admit another partner 2

Reduce drawings
Obtain long-term loan
Sell surplus non-current assets
Increase profit
Or other acceptable points

PUBLISHED
4(a) Costs which can be traced to a product/the cost of the essentials necessary for production (1) 2
It is the total of the direct materials, direct labour and direct expenses (1)
4(b)(i) The costs involved in operating the factory/factory indirect expenses (1) 2
They cannot be directly linked with/traced to the product being manufactured (1)
4(b)(ii) Any specific factory expense such as factory indirect wages, factory rates, depreciation of factory machinery, etc. 2
Any 2 suitable examples (1) each
4(c)(i) Goods which are partly completed (1) 1
4(c)(ii) Greater (1) 1

PUBLISHED
4(d) Msamati Manufacturing 10

Income Statement for the year ended 31 January 2017
$ $ $
Revenue 816 370
Opening inventory 56 120

Cost of production 669 950 }
Purchases of finished goods 17 200 } (1)
687 150
Less goods for own use 1 620 (1) 685 530 685 530
741 650 741 650
Less Closing inventory 61 340 * (1) both 680 310
Commission receivable (2700 + 130) 2 830 (1)
138 890
Administration expenses 38 160 }

Selling expenses 28 270 } (1)
Loan interest (5% × 15 000 × 10 / 12) 625 (1)
Depreciation
Office equipment
(15% × 32 000) 4800 (1)
Delivery vehicles
(25% × (68 000 – 17 000) 12 750 (1) 84 605
4(e) Either The expenses of the year were matched against the revenue of the same period (1) 2
Or Only the expenses for the year were included in the income statement (1)
Example – Either Commission receivable outstanding was added (1)

Or Loan interest outstanding was added (1)
Or Depreciation for the year was included (1)
4(f)(i) Will increase revenue and so increase gross profit (1) 2

Customers may find cheaper suppliers so revenue and gross profit may decrease (1)
Or other suitable comments
PUBLISHED
4(f)(ii) Will reduce cost of production and so increase gross profit (1) 2
Factory workers may take industrial action resulting in reduction of production/reduction of revenue and so gross profit may
decrease (1)
Or other suitable comment
4(g) Reduce/control expenses 2

Increase other income
Increase profit margin
Reduce costs of manufacturing
Increase sales activity
Any two points (1) each
5(a) Bradley 12
Delivery vehicles account
$ $
2015 2015
Jan 1 Balance A b/d 35 000 Dec 31 Balance c/d 75 000
Oct 1 BANK b 40 000 (1) 75 000
75 000
2016 Balance b/d 2016
Jan 1 A 35 000 Dec 31 Balance c/d 103 000
B 40 000 75 000 (1)
July 1 XZ Motors C 28 000 (1)
103 000 103 000
2017
Jan 1 Balance b/d
A 35 000
B 40 000
C 28 000 103 000 (1)

PUBLISHED
Provision for depreciation of delivery vehicles account

$ $
2015 2015
Dec 31 Balance c/d 24 375 Jan 1 Balance A c/d 13 125
Dec 31 Income 75 000
Statement
A 8 750 (1)
B 2 500 (1) 11 250
24 375 24 375
2016 2016 Balance b/d
Dec 31 Balance c/d 46 625 Jan 1 A 21 875
B 2 500 24 375 (1) OF
Dec 31 Income Statement
A 8 750 (1)
B 10 000 (1)
C 3 500 (1) 22 250
46 625
2017
Jan 1 Balance b/d
A 30 625
B 12 500
C 3 500 46 625 (1) OF
+ (1) dates

PUBLISHED
5(b) Bradley 6
Journal
Debit Credit
$ $
Disposal of delivery vehicle 28 000 (1)
Delivery vehicles 28 000 (1)
Provision for depreciation of delivery vehicles 3 500 (1) OF
Disposal of delivery vehicle 3 500 (1) OF
DDE Transport 25 500 (1)
Disposal of delivery vehicle 25 500 (1)
5(c) Increase in rate of cash discount allowed 2

Improvement in credit control
Introduction of interest charge on overdue accounts
Refusal of further supplies until outstanding balance cleared
5(d) Cash discount will be received 2

No/less interest will be charged on late payments
Improve relationship with suppliers
Reduction in liquid funds earlier
Deprived of use of money for other things earlier
5(e) If credit customers continue to pay before 30 days the money received can be used to pay the credit suppliers 2
Will not have the use of the money from credit customers as long as previously, before it is required to pay the credit suppliers
If the credit customers delay paying, the business will have to use existing money to pay the credit suppliers
If the business is unable to pay the credit suppliers within 30 days no cash discount will be received

ACCOUNTING 0452/22
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED
1(a) Shiromi 13
General Ledger
Rent and Account
2017 $
April 4 Bank 495 (1)
Motor Vehicle Account

2017 $
April 10 Bank 5 500 (1)
Sales Account
2017 $
April 21 Cash 600 }(1)
Bank 6 000 }
Drawings Account
2017 $
April 26 Cash 150 (1)
Purchases Account
2017 $
April 30 Total for Month 7 460 (1)
Purchases Returns Account

2017 $
April 30 Total for month 560 (1)
Discount received Account

2017 $

PUBLISHED
Purchases Ledger
Lincy account
2017 $ 2017 $
April 7 Returns 560 (1) April 5 Purchases 3 860 (1)
April 18 Bank 3 234 }(1)
Discount 66 }
Gail Account
2017 $ 2017 $
April 24 Bank 3 510 }(1) April 16 Purchases 3 600 (1)
Discount 90 }
+ (1) dates
1(b) Decrease in inventory 2

Decrease in bank/cash balance or increase in overdraft
Increase in trade payables
Increase in short term loans
Increase in other payables
Decrease in other receivables
Purchase of non-current assets
Repayment of long term liabilities
Note: Not decrease in trade receivables as sells for cash only
Any two reasons (1) each
1(c) May not be able to pay debts when they fall due 2
May not be able to take advantage of cash discounts
May not be able to take advantage of business opportunities as they arise
May have difficulty in obtaining further supplies
May not be able to take drawings
May not have sufficient funds to pay for day to day expenses

PUBLISHED
1(d) increase decrease no effect 4
Take out a short-term bank loan 9(1)

Repay a long-term bank loan 9(1)
Sell goods on credit terms instead of for cash 9(1)
Obtain a higher rate of cash discount 9(1)
1(e) These are goods for re-sale/These goods are purchased for re-sale not for business use/The inventory would increase/ 1
These are short-term assets
1(f) Lower profit for the year 2

Higher capital employed/Higher owner's capital(Equity)/Higher long term loans
Any 2 reasons (1) each

PUBLISHED
2(a) Book of prime (original) entry 4
Discount allowed Cash book (1)

Bad debts General journal (1)
Contra General journal (1)
Returns Sales returns journal (1)
2(b) Meaning 2
A contra entry is one which appears on the debit side of the purchases ledger control account and the credit side of the sales
ledger control account. (1)
Reason
The entry is made when a sales ledger account is set off against a purchases ledger account of the same person/business. (1)
2(c) Waheed 10
Sales ledger control account
2017 $ 2017 $
March 1 Balance b/d 2 346 March 1 Balance b/d 140
March 31 Bank (dis.chq) 350 (1) March 31 Bank 2 145 (1)
Sales 2 748 (2)CF/(1)OF Discount 55 (1)
Balance c/d 86 Returns 276 (1)
Contra 182 (1)
Bad debts 62 (1)
Balance c/d 2 670 (1)
5530 5 530
2017 $ 2017 $
April 1 Balance b/d 2 670 (1) April 1 Balance b/d 86 (1)
2(d) Overpayment by customer

Payment made by customer without deducting cash discount 2
Goods returned by customer after payment of balance due
Payment made in advance by customer

PUBLISHED
2(e) Satisfied (1) 2

Credit customers are now paying earlier/within credit period allowed/other valid answer (1)
2(f) Do not have to allow Waheed cash discount 1

May charge interest on overdue account
2(g) Have to wait longer for payment/Adversely affects liquidity position 1

Increase risk of bad debt
Any 1 point (1)
2(h) Waheed has the use of the funds for other purposes for 17 days 2
Waheed does not need to use his existing liquid funds to pay suppliers
Improved liquidity position
Any 2 comments (1) each

PUBLISHED
3(a) A1 Sports Club 12

Receipts and Payments Account for the year ended 30 April 2017
2017 $ 2016 $
April 30 Subscriptions 7 140 (1) March 1 3 180
Sales of 430 (1) 2017
equipment
Café sales 5 280 } (2)CF April 30 Café suppliers 3 796 (1)
} (1)OF Rates 960 (1)
Balance c/d 2 626 General expenses 910 (1)
Café wages 1 040 (1)
Loan Repaid 1 500 (1)
Loan interest 90 (1)
Equipment 4 000 (1)
15 476 15 476 (1)
2017
May 1 Balance b/d 2626 (1)
3(b) A1 Sports Club 8

Café Income Statement for the year ended 30 April 2017
$ $
Revenue 5 280 (1) OF
Cost of Sales
Opening Inventory 298 (1)
Purchases (3796 (1) – 311 (1) + 393 (1)) 3 878
4 176
Closing inventory 216 (1)
3 960
Café wages 1 040 (1) 5 000
Café profit 280 (1) OF
3(c) $7000 (1) 2

This is the amount of subscriptions which relates to this financial year (1)

PUBLISHED
3(d) Opening bank balance/closing bank balance 5

Purchase of equipment
Proceeds of sale of equipment
Repayment of loan
Café sales
Payments to café suppliers
Café wages
Subscriptions accrued at the start of the year
Any five items (1) each
4(a) 1
$ $
Premises 58 500
Fixtures and fittings 9 400
Inventory 9 700
Trade receivables 8 120 85 720
Trade payables 7 100
Loan 15 000
Bank overdraft 5 300 27 400
Capital 58 320 (1)

PUBLISHED
4(b) Virat - Statement of Affairs at 31 January 2017 14

Assets $ $ $
Non-current assets Cost Accumulated Book

depreciation value
Premises 58 500 58 500
Fixtures and Fittings 9 400 1 880 (1) 7 520 (1)OF
Motor Vehicle 15 200 3 800 (1) 11 400 (1)OF
83 100 5 680 77 420 (1)OF
Current Assets 10 750 (1)

Inventory (12 900 × 100/120) 11 430
Trade receivables (8120 + 3310) 130
Less Bad debts written off 11 300 (1)
Less Provision for doubtful debts 226 (1) 11 074 (1) OF
Cash 100 (1)
Total Assets 21 924
Capital and Liabilities 99 344

Capital
Balance 73 418 (1)OF
Non-current liabilities
Loan – A Singh (repayable 2019) 10 000 (1)
Current Liabilities 7 526 (1)

Trade Payables (7100 + 6%) 8 400 (1)
Bank overdraft (5300 + 3100) 15 926
Total Liabilities 99 344

PUBLISHED
4(c) Virat 5
Capital account
2017 $ 2016 $
Jan 31 Drawings 11 320 (1) Feb 1 Balance b/d 58 320 (1)OF
Balance c/d 73 418 (1) OF 2017
Jan 31 Motor Vehicle 15 200 (1)
Profit 11 218 (1)OF
84 738 84 738
2017
Feb 1 Balance b/d
4(d) Should compare with a business in the same trade 4

Should compare with a business of approximately the same size
Should compare with a business of the same type (sole trader)
The financial statements may be for one year which will not show trends
The financial statements may be for one year which is not a typical year
The financial year may end on different dates (when inventories are high/low)
The businesses may operate different accounting policies
The statements do not show non-monetary factors
It may not be possible to obtain all the information needed to make comparisons
Any 2 points (1) for basic statement and (1) for development

PUBLISHED
5(a) Duality (1) 1
5(b) To ensure that the totals of the trial balance agree 2

To allow draft financial statements to be prepared
To facilitate the correction of errors
To make sure that all the errors are discovered
5(c) Heng 6
Suspense account
2016 $ 2016 $
Dec 31 Balance 430 (1) Dec 31 Petty Cash 150 (1)
General exp 90 (1) Discount alld 1 024 (1)
Purchases Returns 454 (1)
Balance c/d 200 (1)OF
1 174 1 174
2017
Jan 1 Balance b/d 200
5(d) Either 2
All the errors have not been found (1)
There is still a balance on the suspense account (1)
Or – if the suspense account in (c) is closed –
All the errors have been discovered (1)
There is no balance remaining on the suspense account (1)

PUBLISHED
5(e) Error Profit for the year Non-current assets Current assets Current liabilities 10
$ $ $ $
1 281 overstated 281 overstated No effect No effect
2 100 overstated (1) No effect 100 overstated (1) No effect
3 No effect No effect 150 understated (1) No effect
4 90 understated (1) No effect No effect No effect
5 1024 overstated (1) No effect No effect No effect
6 No effect No effect 4 120 overstated (2) 4 120 overstated (2)
Or Or
2 060 overstated (1) 2 060 overstated (1)

ACCOUNTING 0452/23
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED
1(a) Shiromi 13
General Ledger
Rent and Account
2017 $
Motor Vehicle Account

2017 $
April 10 Bank 5 500 (1)
Sales Account
2017 $
April 21 Cash 600 }(1)
Bank 6 000 }
Drawings Account
2017 $
Purchases Account
2017 $
April 30 Total for Month 7 460 (1)
Purchases Returns Account

2017 $
Discount received Account

2017 $

PUBLISHED
Purchases Ledger
Lincy account
2017 $ 2017 $
April 7 Returns 560 (1) April 5 Purchases 3 860 (1)
April 18 Bank 3 234 }(1)
Discount 66 }
Gail Account
2017 $ 2017 $
April 24 Bank 3 510 }(1) April 16 Purchases 3 600 (1)
Discount 90 }
+ (1) dates
1(b) Decrease in inventory 2

Decrease in bank/cash balance or increase in overdraft
Increase in short term loans
Increase in other payables
Decrease in other receivables
Repayment of long term liabilities
Note: Not decrease in trade receivables as sells for cash only
Any two reasons (1) each
1(c) May not be able to pay debts when they fall due 2
May not be able to take advantage of business opportunities as they arise
May not have sufficient funds to pay for day to day expenses

PUBLISHED
1(d) increase decrease no effect 4
Take out a short-term bank loan 9(1)

Repay a long-term bank loan 9(1)
Sell goods on credit terms instead of for cash 9(1)
Obtain a higher rate of cash discount 9(1)
1(e) These are goods for re-sale/These goods are purchased for re-sale not for business use/The inventory would increase/ 1
These are short-term assets
1(f) Lower profit for the year 2

Higher capital employed/Higher owner's capital(Equity)/Higher long term loans

PUBLISHED
Discount allowed Cash book (1)

Bad debts General journal (1)
Contra General journal (1)
Returns Sales returns journal (1)
2(b) Meaning 2
A contra entry is one which appears on the debit side of the purchases ledger control account and the credit side of the sales
ledger control account. (1)
Reason
The entry is made when a sales ledger account is set off against a purchases ledger account of the same person/business. (1)
2(c) Waheed 10
2017 $ 2017 $
March 1 Balance b/d 2 346 March 1 Balance b/d 140
March 31 Bank (dis.chq) 350 (1) March 31 Bank 2 145 (1)
Sales 2 748 (2)CF/(1)OF Discount 55 (1)
Balance c/d 86 Returns 276 (1)
Contra 182 (1)
Bad debts 62 (1)
5530 5 530
2017 $ 2017 $
April 1 Balance b/d 2 670 (1) April 1 Balance b/d 86 (1)
2(d) Overpayment by customer

Payment made by customer without deducting cash discount 2
Goods returned by customer after payment of balance due
Payment made in advance by customer

PUBLISHED
2(e) Satisfied (1) 2

Credit customers are now paying earlier/within credit period allowed/other valid answer (1)
2(f) Do not have to allow Waheed cash discount 1

May charge interest on overdue account
2(g) Have to wait longer for payment/Adversely affects liquidity position 1

Increase risk of bad debt
Any 1 point (1)
2(h) Waheed has the use of the funds for other purposes for 17 days 2
Waheed does not need to use his existing liquid funds to pay suppliers
Improved liquidity position

PUBLISHED
3(a) A1 Sports Club 12

Receipts and Payments Account for the year ended 30 April 2017
2017 $ 2016 $
April 30 Subscriptions 7 140 (1) March 1 3 180
Sales of 430 (1) 2017
equipment
Café sales 5 280 } (2)CF April 30 Café suppliers 3 796 (1)
} (1)OF Rates 960 (1)
Balance c/d 2 626 General expenses 910 (1)
Café wages 1 040 (1)
Loan Repaid 1 500 (1)
Loan interest 90 (1)
Equipment 4 000 (1)
15 476 15 476 (1)
2017
May 1 Balance b/d 2626 (1)
3(b) A1 Sports Club 8

$ $
Cost of Sales
Opening Inventory 298 (1)
Purchases (3796 (1) – 311 (1) + 393 (1)) 3 878
4 176
Closing inventory 216 (1)
3 960
Café wages 1 040 (1) 5 000
Café profit 280 (1) OF
3(c) $7000 (1) 2

This is the amount of subscriptions which relates to this financial year (1)

PUBLISHED
3(d) Opening bank balance/closing bank balance 5

Proceeds of sale of equipment
Repayment of loan
Café sales
Payments to café suppliers
Café wages
Subscriptions accrued at the start of the year
Any five items (1) each
4(a) 1
$ $
Premises 58 500
Inventory 9 700
Trade receivables 8 120 85 720
Loan 15 000
Bank overdraft 5 300 27 400
Capital 58 320 (1)

PUBLISHED
4(b) Virat - Statement of Affairs at 31 January 2017 14

Assets $ $ $

depreciation value
Premises 58 500 58 500
Fixtures and Fittings 9 400 1 880 (1) 7 520 (1)OF
Motor Vehicle 15 200 3 800 (1) 11 400 (1)OF
83 100 5 680 77 420 (1)OF
Current Assets 10 750 (1)

Inventory (12 900 × 100/120) 11 430
Trade receivables (8120 + 3310) 130
Less Bad debts written off 11 300 (1)
Less Provision for doubtful debts 226 (1) 11 074 (1) OF
Cash 100 (1)
Total Assets 21 924
Capital and Liabilities 99 344

Capital
Balance 73 418 (1)OF
Loan – A Singh (repayable 2019) 10 000 (1)
Current Liabilities 7 526 (1)

Trade Payables (7100 + 6%) 8 400 (1)
Bank overdraft (5300 + 3100) 15 926

PUBLISHED
4(c) Virat 5
Capital account
2017 $ 2016 $
Jan 31 Drawings 11 320 (1) Feb 1 Balance b/d 58 320 (1)OF
Balance c/d 73 418 (1) OF 2017
Jan 31 Motor Vehicle 15 200 (1)
Profit 11 218 (1)OF
84 738 84 738
2017
Feb 1 Balance b/d
4(d) Should compare with a business in the same trade 4


PUBLISHED
5(a) Duality (1) 1
5(b) To ensure that the totals of the trial balance agree 2

To facilitate the correction of errors
To make sure that all the errors are discovered
5(c) Heng 6
Suspense account
2016 $ 2016 $
Dec 31 Balance 430 (1) Dec 31 Petty Cash 150 (1)
General exp 90 (1) Discount alld 1 024 (1)
Purchases Returns 454 (1)
Balance c/d 200 (1)OF
1 174 1 174
2017
Jan 1 Balance b/d 200
5(d) Either 2
All the errors have not been found (1)
There is still a balance on the suspense account (1)
Or – if the suspense account in (c) is closed –
All the errors have been discovered (1)
There is no balance remaining on the suspense account (1)

PUBLISHED
5(e) Error Profit for the year Non-current assets Current assets Current liabilities 10
$ $ $ $
1 281 overstated 281 overstated No effect No effect
2 100 overstated (1) No effect 100 overstated (1) No effect
3 No effect No effect 150 understated (1) No effect
5 1024 overstated (1) No effect No effect No effect
6 No effect No effect 4 120 overstated (2) 4 120 overstated (2)
Or Or
2 060 overstated (1) 2 060 overstated (1)

ACCOUNTING 0452/11
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED
1(a) A (1) 1
1(b) C (1) 1
1(c) D (1) 1
1(d) C (1) 1
1(e) D (1) 1
1(f) C (1) 1
1(g) D (1) 1
1(h) A (1) 1
1(i) A (1) 1
1(j) B (1) 1

PUBLISHED
2(a) capital = assets – liabilities (1), 1

or assets = capital + liabilities (1), or liabilities = assets – capital (1)
2(b) asset – something a business owns or which is owed to the business (1) (need all) 3
liability – something which a business owes to a third party (1)
inventory – goods bought for resale not yet sold (1)
2(c) duality (1) 1
2(d) debit account credit account 4
Taha receives a
cheque from Michael, bank (1) Michael (1)
a credit customer
Taha writes off of a
debt owed by Zoe bad debts (1) Zoe (1)
2(e) sales (ledger) (1) or Trade receivables (ledger) (1) 1
2(f) true false 4
it will increase the total of the non-current √

assets
it will increase the total of current assets √ (1)
it will decrease cash and bank √ (1)
it will require a credit entry in the provision √ (1)
for doubtful debts account
it will have no effect on profit for the year √ (1)

PUBLISHED
2(g) Andy 5
Factory Street Invoice no 1001
Toptown
Fred
Shop Road
Toptown 22 May 2017
Quantity Details Unit Amount

price $
20 Standard chair $50 1000 (1)
10 Luxury chair $75 (1) 750 (1)
1750
10% trade discount 175 (1) OF
1575 (1) OF
2(h) $1575 (1) OF 1
2(i) credit note (1) 1
2(j) Andy’s business buys or manufactures goods which it then sells. (1) 2
A service business provides a service to its customers or clients. (1)

PUBLISHED
3(a) Any reasonable comment for (1) mark e.g. 1

Because purchases represent costs to the business
Purchases are amounts which reduce profit
Purchases are amounts paid by the business
3(b) Book of prime (original) entry (1) 1
3(c) Zameer 8
Purchases account
$ $
Feb 21 Balance b/d 67 210 (1) Feb 28 Income 68 170 (1) OF
statement
28 Purchases 960 (1)
for the week
68 170 68 170
Rent payable account

$
$
Feb 21 Balance b/d 6 600 (1) Feb Income 7 200 (1) OF
28 statement
25 Bank 1 800 Balance c/d 1 200 (1)
8 400 8 400
Mar 1 Balance b/d 1 200 (1) OF
+(1) for dates
3(d) Revenue (1) 2

Revenue (1)

PUBLISHED
3(e) (i) sales 2

commission received
rent received
interest received
any one for (1) mark.
(ii) capital introduced

proceeds of sale of non-current asset
receipt of loan
4(a) at the lower of cost and net realisable value (1) 1
4(b)
$ 4
50×$40 2 000 (1)
1870 (1)×$60 112 200 (1) OF
total 114 200 (1) OF
4(c) $ $ 5
Inventory at 1 January 2 400 (1)
2016
Purchases 48 000 (1)
50 400
Inventory at 31 December 4 320 (1)
2016
Gross profit 68 120 (1) OF

PUBLISHED
4(d) $ $ 5
Trade receivables at 1 Jan 2016 7 900 (1)
Sales 114 200 (1) OF
122 100
Bad debts 200 (1)
Trade receivables at 31 Dec 2016 9 100 (1) 9 300
Receipts 112 800 (1) OF
4(e) To apply the matching (accruals) principle (1) 2

Because the income statement accounts for sales made during the year (1)
Because receipts may not arise in the same year as the sale is made (1)
accept other suitable answers [maximum 2]
4(f) cash discount (1) 1
4(g) increase decrease no effect 3
gross profit √ (1)

profit for the year √ (1)
working capital √ (1)

PUBLISHED
5(a) JW Limited 9
Trial Balance at 30 April 2017
debit credit
$ $
Gross profit 63 000 }
Distribution costs 24 000 }
Administrative expenses 16 000 } (1)
Interim dividend paid 6 000 }
Debenture interest 3 000 } (1)
Ordinary shares of $1 each 100 000 }
General reserve 50 000 } (1)
Retained earnings 23 700 (1) OF
Equipment at cost 260 000 }
Provision for depreciation of equipment 65 000 } (1)
Inventory 33 000 }
Trade receivables 14 000 } (1)
Bank 6 800 }
Trade payables 17 500 } (1)
10% debentures (repayable 2025) 30 000 (1)
356 000 356 000 (1) OF
5(b) $ 4
Gross profit 63 000
Expenses [24 000 + 16 000] (1) + 13 000 (1)] 53 000
Debenture interest 3 000 (1)
Profit for the year 7 000 (1) OF

PUBLISHED
5(c) JW Limited 8
Statement of Changes in Equity for the year ended 30 April 2017
Details Share General Retained Total
capital reserve earnings
$ $ $ $
On 1 May 2016 100 000 50 000 (1) 23 700 (1of) 173 700 (1) OF
Interim dividend paid (6 000) (1) (6 000)
Profit for the year 7 000 (1of) 7 000
Transfer to general reserve 10 000 (1) (10 000) (1) 0
On 30 April 2017 100 000 60 000 14 700 174 700

(1) OF row
5(d) 7 000 (1 OF) ×100=3.42% (1) OF 4

174 700 (1 OF)+30 000 (1)
OR
(7 000+3 000) (1 OF) ×100=4.89% (1) OF
174 700 (1 OF)+30 000 (1)
5(e) mark up applied to goods for resale is lower 2

poorer control of expenses
profit is lower
higher interest payable
poorer utilisation of resources
capital used less efficiently
capital employed is higher
any two for (1) mark

PUBLISHED
5(f) increase sale (1) 3

reduce cost of sales/find cheaper supplier (1)
reduce expenses (1)
reduce interest payments (1)
reduce capital employed (1)
reduce loans and debentures (1)
any three for (1) mark
6(a) Subscriptions paid in advance at the year-end (1) 1
6(b) current assets 4
cash and cash equivalents/bank $6120 (1)

inventory $710 (1)
subscriptions in arrears $980 (1)
current liabilities
subscriptions in advance $395 (1)
6(c) $ 4
Sales 13 610 }
Purchases (15 240) } (1)
Increase in inventory 270 (1)
(710 – 440)
(1 360)
Rent (1 200) (1)
Loss 2 560 (1) OF

PUBLISHED
6(d) The Hi-Jump 9

Income and Expenditure Account for the year ended 31 December 2016
$ $
Income
Subscriptions 52 905 (1)
Less expenditure
Shop loss 2 560 (1) OF
Rent 10 800 (1)
Club expenses 34 200 (1)
Bad debts 250 (1)
Depreciation - equipment 2 300 (3) * 50 110
Surplus 2 795 (1) OF
* 17 100 (1)+5 100 (1)–19 900 (1) =2 300
6(e) to provide a service to members 2

because the club can still make a surplus
because the loss is small in relation to subscriptions
because it encourages members to join this club rather than another one
because the rent would still be payable even if the shop closed
any two reasons for (1) mark each
6(f) the surplus would not change (1) 2

plus development
the shop’s loss would decrease (1)
OR rent in the income and expenditure account would increase (1)
[maximum 2]

ACCOUNTING 0452/12
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED
Glossary for Question 1
(d)
A charge for year
B accumulated depreciation
C straight line
D net book value
(f)
A 426 000+90 000–40 000–25 000=451 000
B 426 000+90 000–40 000=476 000
C 426 000+90 000–40 000+25 000=501 000
D 426 000+90 000=516 000
(h)
A 72 000×1.6=115 200
B 80 000×1.6=128 000
C 72 000÷0.4=180 000
D 80 000÷0.4=200 000
(j)
A (14 000–2000)×0.2=2400
B (14 000+3600–2 000)×0.2=3120
C (14 000+3600)×0.2=3520
D (14 000+3600–2000)×0.25=3900

PUBLISHED
1(a) A (1) 1
1(b) C (1) 1
1(c) B (1) 1
1(d) B (1) 1
1(e) D (1) 1
1(f) B (1) 1
1(g) D (1) 1
1(h) A (1) 1
1(i) C (1) 1
1(j) B (1) 1

PUBLISHED
2(a) An income statement shows incomes and expenses (1) and is prepared for a period of time (1). 4
A statement of financial position shows assets and liabilities (1) and is prepared at a particular date (1).
2(b) asset liability income expense 4
bank loan 9(1)

insurance 9(1)
equipment 9(1)
depreciation charge 9(1)
2(c) Income statement $1500 (1) 2

Statement of financial position $4500 (1)
2(d) accounts of the same type can be kept together 1

helps to locate errors
allows tasks to be divided between different people
deters fraud
allows checking procedures to be introduced
2(e)(i) Sales ledger – accounts of individual credit customers (1) 2

Purchases ledger – accounts of individual credit suppliers (1)
2(e)(ii) any suitable example for (1) mark 1

e.g. sales, purchases, insurance

PUBLISHED
2(f) cash book 2

petty cash book
sales journal
sales returns journal
purchases journal
purchases returns journal
general (nominal) journal
2(g) true or false 1
The recording of financial transactions is called accounting false (1)
3(a)(i) in the books of Pich 2

Roger 5000 (1) sales 5000 (1)
3(a)(ii) in the books of Roger 2

purchases 5000 (1) Pich 5000 (1)
3(b) Invoice (1) 2

Pich (1)
3(c) debit account $ credit account $ 3
bank 4875 (1) Roger 5000 (1)

discount allowed 125 (1)

PUBLISHED
3(d)(i) discount received account (1) 1
3(d)(ii) income statement (1) 1
3(e) A credit note (1) is issued by the supplier when goods are returned. 2
A debit note (1) may be issued by the customer when goods are returned.
3(f) Pich 12
Bad debts account
2016 2017
Dec 1 Amit 860 (1) Feb 28 Income statement 1960 (1)OF
2017
Feb 28 Ruth 1100 (1)
1960 1960

2017 2016
Feb 28 Balance c/d 2548 (3)* Mar 1 Balance b/d 2240 (1)
2017
Feb 28 Income statement 308 (1)OF
2548 2548
2017
* (64 800–1100) (1) × 0.04 (1) = 2548 (1)OF
Ruth account
2017 2017
Feb 28 Balance b/d 1100 (1) Feb 28 Bad debts 1100 (1)
+(1) for dates

PUBLISHED
3(g) Pich 3
Statement of Financial Position (extract) at 28 February 2017
Current assets $
Provision for doubtful debts (2 548) (1)OF
61 152 (1)OF
4(a) A copy of the customer’s account as it appears in the books of the bank. (1) 1
4(b) 3 and 4 (1) 1
4(c) $ 4
original balance 2890
correction of error 90 (1)
bank charges (50) (1)
dishonoured cheque (200) (1)
updated balance 2730 (1)OF
4(d) Yeo 6
$
3130
Less uncredited deposit (180) (1)
Balance on bank statement (1) 2950 (1)OF
4(e) $2730 (1)OF 2

current assets (1)OF

PUBLISHED
4(f) insufficient funds in account 1

no signature on cheque
wrong signature
no date
words and figures do not agree
cheque is out of date
4(g) preparing of trial balance (1) OR preparing of control account (1) 1
5(a) more capital introduced to business 2

more expertise available
responsibilities are shared e.g. holidays, sickness
risk is shared
losses are shared
5(b)(i) To record the difference between the amounts earned from the partnership and the amounts withdrawn from the 1
partnership (1)
To show the retained profit of each partner (1)
To make it easier to calculate interest on capital (1)
To reveal excess drawings (1)
[max 1]
5(b)(ii) Ann owes money to the partnership. (1) 2

The partnership owes money to Bindu. (1)

PUBLISHED
5(c) Ann and Bindu 5

Appropriation Account for the year ended 28 February 2017
$ $
Less interest on capital – Ann 3000 (1)
– Bindu 2500 (1) 5 500
Less salary – Ann 4 000 (1)
15 000
Shares of profit – Ann 9000 (1)OF
– Bindu 6000 (1)OF 15 000
5(d) Ann and Bindu 6

Current accounts
Details $ $ Details $ $
Ann Bindu Ann Bindu
Balance b/d 5 000 Balance b/d 3 000 (1)*
Drawings 12 500 10 000 (1)* Interest on capital 3 000 2 500 (1)OF*
Balance c/d 1 500 Salary 4 000 (1)
Shares of profit 9 000 6 000 (1)OF*
Balance c/d 1 500
17 500 11 500 17 500 11 500
Balance b/d 1 500 Balance b/d 1 500 (1)OF*
* mark for both items
5(e) effect $ 4
(understated or overstated)
gross profit overstated $750 (1)
profit for the year overstated $750 (1)
share of profit – Ann overstated $450 (1)
– Bindu overstated $300 (1)
5(f) It avoids inventory/current assets/profit being overstated. (1) 1

PUBLISHED
5(g) The loss arising from the damage is recorded in the same year as the damage occurred. (1) 1
6(a) factory distribution administrative 4

overheads costs expenses
factory rent 9
carriage outwards 9(1)
depreciation of office equipment 9(1)
factory supervisor’s salary 9(1)
repairs of delivery vehicles 9(1)
6(b)(i) Cost of raw materials 112 500 (1)+(5000–7500) (1)=110 000 (1)OF 2
6(b)(ii) Prime cost 110 000 (1)OF +82 000=192 000 (1)OF 2
6(b)(iii) Cost of production 192 000 OF +(41 800+6000) (1)=239 800 (1)OF 2


PUBLISHED
6(c) G Limited 9
$ $
Revenue 550 000 (1)
Inventory of finished goods – 1 Jan 2016 51 000
386 000
Inventory of finished goods – 31 Dec 47 300 (1)*
2016
Distribution costs 61 800 (1)
Finance charges 16 100 (1) 173 000
* mark for both inventory figures
6(d) It is cheaper to buy than produce (1) OR 1

Demand is higher than production at full capacity (1)
accept other suitable answers
6(e) Savings 7
old depreciation 6 000 (1)
repairs 9 000 (1)
raw materials 110 000 (1)OF×0.04 (1) 4 400
19 400
Less additional costs
new depreciation (10 000) (1)
additional interest (8 000) (1)
Increase in profit 1 400 (1)OF

ACCOUNTING 0452/12
Paper 1 March 2017
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge is publishing the mark schemes for the March 2017 series for most Cambridge IGCSE®,
Cambridge International A and AS Level components and some Cambridge O Level components.

0452/12 Cambridge IGCSE – Mark Scheme March 2017
PUBLISHED
Glossary for Q1
(c) 62 = 70 + 10 – 18
78 = 70 – 10 + 18
(e) A 120 × 0.85 = 120 – 18

B 128 – 18
C selling price
D cost
(g) A –200 + 2100 + 50

B 200 + 2100 – 90
C 200 + 2100 + 50
D 200 + 2100 + 90
(i) A 8000 + 4800 (prime cost)

B 8000 + 4800 + 4100 – 450
C 8000 + 4800 + 4100
D 8000 + 4800 + 4100 + 450
(j) A (3000 × ½) – 700 + 400

B (3000 × 2/3) – 700 + 400
C (3000 × ½) + 700 – 400
D (3000 × 2/3) + 700 – 400
1(a) C (1) 1
1(b) A (1) 1
1(c) C (1) 1
1(d) B (1) 1
1(e) A (1) 1
1(f) A (1) 1
1(g) C (1) 1
1(h) B (1) 1
1(i) D (1) 1
1(j) D (1) 1

PUBLISHED
2(a) Person issuing Amitav 1

Person receiving Barry (1) for both
2(b) If goods are returned 1

If goods are reported faulty
If there has been an overcharge on an invoice
Any one reason for (1)
2(c) Purchases returns journal (1) 1
2(d) To record business transactions 1

To be able to prepare financial statements
To know balances of credit customers and suppliers or bank
Any one reason for (1)
2(e) Every transaction has a two-fold aspect (1) 1
2(f) An expense account usually has a DEBIT (1) balance. At the end of the financial year the 4
cost for the year is transferred to the INCOME STATEMENT (1). This transfer is recorded
with an entry on the CREDIT (1) side of the expense account. Any balance remaining on
the account is included in the STATEMENT OF FINANCIAL POSITION. (1)
2(g) A financial report must be capable of being understood by the users of that report. (1) 1
2(h) By narrowing areas of difference in financial statements (1) 1
2(i) 4
Interested party Reason
Owner To see progress of business
Government department To check on tax payable
Trade payables To check on likelihood of receiving money
Bank manager To decide on whether to give/continue overdraft
Customer To check on viability of business for continued supply
of goods
Potential partner To see potential rewards for investment
Manager To see progress of business
Any two for (1) each Any two related reasons for (1) each
Reasonable alternatives may be rewarded

PUBLISHED
3(a)(i) current assets = 800 + 1300 + 180 + 250 = $2530 (1) 3
current liabilities = 830 + 510 = $1340 (1)
working capital = 2530 – 1340 = $1190 (1)OF
3(a)(ii) Simran’s capital = 1190 + 7200 (1) = $8390 (1)OF 2
3(b) 9
account debited $ account credited $
1 drawings 100 cash 100
2 bank 150 (1) cash 150 (1)
3 vehicle 2500 (1) capital 2500 (1)
4 Neel 50 (1) bank 48 (1)
discount received 2 (1)
5 wages 350 (1) bank 350 (1)
3(c)(i) 4 (1) 1
3(c)(ii) 3 (1) 1
3(c)(iii) 4 (1) 1
3(d) item – other payables (1) 2

section – current liabilities (1)
3(e) Simran 3
Cash book (bank column only)
Feb 1 Balance b/d 180 } (1) Feb 1 Neel 48 } (1)
Cash 150 } Wages 350 }
Balance c/d 68
398 398
Feb 2 Balance b/d 68 (1)OF
3(f) Simran 8
Sales ledger control account for February 2017
2017 $ 2017 $
Feb 1 Balance b/d 1 300 (1) Feb Bank 5 830 (1)
28
Feb 28 Sales 6 300 (1) Sales returns 190 (1)
Bank 95 (1) Cash 20 (1)
Bad debts 75 (1)
Balance c/d 1 580
7 695 7 695
Mar 1 Balance b/d 1 580 (1)OF

PUBLISHED
4(a) 1
debit side credit side
equipment 9
provision for depreciation of equipment 9 (1)for both
4(b) 13
vehicle A vehicle B equipment
$ $ $
depreciation charge for 7 500 (1) 2 800 (1)
the year ended
31 December 2015
net book value at 22 500 (1) 25 200 (1)
31 December 2015
depreciation charge for 5 625 (1) 5 000 (1) 4 600 (1)
the year ended
31 December 2016
accumulated 13 125 (1)OF 5 000 (1)OF 7 400 (1)OF
depreciation at
31 December 2016
net book value at 16 875 (1)OF 15 000 (1)OF 38 600 (1)OF
31 December 2016
4(c) Sonia 5
Statement of Financial Position (extract) at 31 December 2016
Cost Accumulated Net book
depreciation value
$ $ $
Vehicles 50 000 (1) 18 125 } 31 875 }
Equipment 46 000 (1) 7 400 }(1)OF 38 600 }(1)OF
96 000 25 525 70 475 (1)OF
4(d) Non-current assets (1) 1

PUBLISHED
5(a) LMN Chess Club 5

Receipts and Payments Account for the year ended 31 December 2016
2016 Receipts $ 2016 Payments $
Jan 1 Loan 1 000 (1) Dec 31 Loan 500 (1)
Dec 31 Subscriptions 4 100 Equipment 2 500
Entry fees 1 600 Rent 2 100
Coach travel 980 Travel 1 020 (1)
Trophies and prizes 670 (1)
Other expenses 450
Balance c/d 440
7 680 7 680
2017
Jan 1 Balance b/d 440 (1)
5(b) Subscriptions account 5

2016 $ 2016 $
Dec 31 Income and 3 800 (1)OF Dec 31 Bank 4 100 (1)
expenditure
account
Balance c/d 400 Balance c/d 100
4 200 4 200
2017 2017
Jan 1 Balance b/d 100 (1) Jan 1 Balance b/d 400 (1)
+(1) for dates
5(c) LMN Chess Club 10

Income $ $
Subscriptions 3 800 (1)OF
Tournaments [ 1600 (1) – 610 (1) ] 990
Surplus on coach travel [ 980 + 80 (1) – 1020 (1) ] 40
4 830
Expenditure
Depreciation – equipment [ 2500 – 300 (1) / 10 ] 220 (1)OF
Rent [ 2100 + 200] 2 300 (1)
Other expenses 450 (1)
2 970
Surplus 1 860 (1)OF

PUBLISHED
5(d) 4
Reason Example
Only the receipts and payments account contains Loan received
capital receipts
Only the receipts and payments account contains Equipment
capital expenditure Loan repayment
Only the income and expenditure account contains Depreciation
non-cash items
Figures in the income and expenditure account are Rent owed
adjusted for prepayments and accruals Subscriptions in advance
Subscriptions in arrears
Money owed for coach travel
Any two reasons for (1) each with a related example for (1) each
6(a) $ 5
At 1 July 2015 80 000 (1)
Profit for the year 78 600 (1)
Dividend paid (36 000) (1)
Transfer to general reserve (10 000) (1)
At 30 June 2016 112 600 (1)OF
6(b) D Limited 4
Statement of Financial Position at 30 June 2016
Capital and reserves $
Ordinary shares of $0.50 200 000 (1)
Retained earnings 112 600 (1)OF
General reserve 35 000 (1)
347 600 (1)OF
6(c) To distribute profit to shareholders (1) 1

OR To reward shareholders for their investment (1)
6(d) Because insufficient cash was available to pay more (1) 2

To retain cash/profits for investment in the business (1)
6(e) 78 600 (1) 100 4

ROCE = × = 17.56% (1of)
347 600 (1of) + 100 000 (1) 1
6(f) Profit has fallen 2

Selling price has decreased
Worse control of expenses
Worsening credit control/increased bad debts
Poorer control of inventory
Capital employed has increased/non-current liability created
Any two reasonable comments for (1) each

PUBLISHED
6(g) It may not be easy to sell the shares. 3

There will be loss of control by existing shareholders.
Dividends payable may increase.
If the interest rate is variable interest payable could increase.
The company would have to pay interest irrespective of profit made.

The bank may require security.
Any three reasonable comments for (1) each

ACCOUNTING 0452/22
Paper 22 March 2017
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge is publishing the mark schemes for the March 2017 series for most Cambridge IGCSE®,

PUBLISHED
1(a) Mandeep – Cash Book 10

Date Details Discount Cash Bank Date Details Discount Cash Bank
allowed received
2016 $ $ $ 2016 $ $ $
Dec 1 Balance b/d 150 Dec 1 Balance b/d 2 590
11 Jabin (1) 6 294 4 Repairs (1) 387
27 Sales (1) 6 795 15 Rama (1) 18 702
31 Cash c (1)OF 1 745 29 Drawings (1) 5 000
Balance c/d 1 640 31 Bank c (1) 1 745
Balance c/d 200
6 6 945 3 679 18 6 945 3 679
2017 2017
Jan 1 Balance b/d 200 Jan 1 Balance b/d 1 640
(1) (1)OF
+(1) dates

PUBLISHED
1(b) Mandeep 14
Inventory account
$ $
2016 2016
Jan 1 Balance b/d 12 650 Dec 31 Income Statement 12 650 (1)
Dec 31 Income Statement 13 420 (1) Dec 31 Balance c/d 13 420
2017
Jan 1 Balance b/d 13 420 (1)
Provision for depreciation of office fixtures account

$ $
2016 2016
Dec 31 Balance c/d 4 636 Jan 1 Balance b/d 3 420
Dec 31 Income Statement 1 216 (1)
4 636 4 636
2017
Jan 1 Balance b/d 4 636 (1)OF
General expenses account

$ $
2016 2016
Dec 31 Total payments 9 475 Dec 31
Balance c/d 375 Income Statement 9 850 (1)
9 850 9 850
2017

PUBLISHED
Rent receivable account

$ $
2016 2016
Dec 31 Jan 1 Total receipts 5 060
Income Statement 5 520 (1) Dec 31 Balance c/d 460
5 520 5 520
2017
Drawings account
$ $
2016 2016
Dec 31 Total drawings 8 950 Dec 31 Capital 8 950 (1)
8 950 8 950
Capital account
$ $
2016 2016
Dec 31 Drawings 8 950 (1) Jan 1 Balance b/d 63 000
Balance c/d 91 650 Dec 30 Motor vehicle 16 000 (1)
31 Profit for year 21 600 (1)
100 600 100 600
2017

PUBLISHED
2(a)(i) A statement in which the profit or loss for the year is calculated 1
2(a)(ii) A statement showing the assets and liabilities of a business on a certain date 1
2(a)(iii) Assets which are purchased for use not for resale 2
Assets whose values do not fluctuate frequently
Assets which will be kept by the business for more than 12 months
Assets which are acquired to aid the business earn revenue
Any two statements (1) each
2(a)(iv) Liabilities which are not due for repayment within 12 months 1
2(a)(v) Either The amount the business owes the owner of that business 1
Or Any resources provided for a business by the owner of that business
2(b) Goodwill/patents/trademarks/other suitable example 1
2(c) The current assets are more than three times the current liabilities/it is much higher than the “benchmark” of 2 : 1 2
The current liabilities can easily be paid from the current assets
Funds are not being used very effectively
Any two comments (1) each
2(d) Inventory is excluded from the calculation of the quick ratio (1) 2
Either Inventory is not regarded as a liquid asset (1)
Or The ratio shows whether the business would have surplus liquid funds if the current liabilities were paid
immediately from the liquid assets (1)
2(e) Introduce more cash as capital 2

Obtain long term loans
Reduce drawings
Reduce inventory level

PUBLISHED
2(f)(i) Transactions are recorded at actual cost (1) 2

It is difficult to compare transactions taking place at different times (1)
2(f)(ii) Only information which was be expressed in monetary terms is recorded (1) 2
Many important factors which affect the business are not recorded (1)

PUBLISHED
3(a) Doshi Manufacturing Company 12

Manufacturing Account for the year ended 31 January 2017
$ $ $
Cost of materials consumed
Opening inventory of raw materials 49 500
Purchases of raw materials 394 600
Less Purchases returns 16 400 378 200 (1) 427 700
Closing inventory of raw materials 41 100
386 600 (1)OF
Direct factory wages 297 100 (1)
Prime cost 683 700 (1)OF
Factory overheads
Factory supervisors' wages
(152 000 (1) + 12 000 (1)) 164 000
General expenses (3/5 × 160 000) 96 000 (1)
Depreciation factory machinery
(20% × (250 000 – 122 000) 25 600 (1)
Depreciation loose tools
(21 150 – 19 050) 2 100 (1) 287 700
971 400 (1)OF
Opening work in progress 28 750 *
1 000 150
Closing work in progress 31 250 *(1) both

PUBLISHED
3(b) Doshi Manufacturing Company 11

$ $ $
Revenue 1 246 850
Less returns inwards 12 250
1 234 600 (1)
Cost of sales
Opening inventory of finished goods 63 100
Carriage inwards 1 500 (1) 23 200
1 055 200
Closing inventory finished goods 59 100 996 100 (1)OF
Less Wages of office & sales staff
(108 700 (1) + 4 300 (1)) 113 000
General expenses
(2/5 × 160 000) 64 000 (1)
Depreciation office equipment
(15% × 72 000) 10 800 (1) 187 800
3(c) Low value items which are not easy to depreciate separately/Not practical to keep detailed records of such assets/other 1
suitable comment.

PUBLISHED
4(a) Purchases ledger 1
4(b) Lahiru has returned goods to Nusrath (1) 2

Credit purchases returns (returns outwards) account (1)
4(c)(i) 2½% 1
4(c)(ii) Prompt payment/payment within the specified period 1
4(d) Set off the amount Lahiru owes Nusrath against the amount Nusrath owes Lahiru/other suitable explanation 1
4(e) 3
Nusrath
Journal
Debit Credit
$ $
Lahiru (purchases ledger) 68 (1)

Lahiru (sales ledger) 68 (1)
Contra entry to set balance in purchases (1)
ledger against balance in sales ledger
4(f)(i) $564 1
4(f)(ii) Current assets 1

PUBLISHED
4(g) Lahiru 4
$ $
2017 2016
Feb 28 Balance c/d 716 Mar 1 Balance b/d 500 (1)
2017
Feb 28 Income statement 216 (1)
716 716
2017
+ (1) dates
4(h) The profit for the year is not overstated (1) 2

The trade receivables (current assets) are not overstated (1)
4(i) Either The sales for which a business is unlikely to be paid (1) are regarded as an expense of the year in which those 2
sales are made (1)
Or The provision for doubtful debts is an expense (1) and is matched against the revenue for the year in which
those debts are incurred (1)

PUBLISHED
5(a) $ $ 6
Payments to credit suppliers 32 725 (1)
Cash discount received 640 (1)
Trade payables 31 January 2017 5 350 (1) 38 715
Less Trade payables 1 February 2016 4 600 (1)
Interest on overdue account 15 (1) 4 615

Purchases for the year 34 100 (1) OF
Alternative calculation
Total trade payables account

$ $
2017 2016
Jan 31 Bank 32 725 (1) Feb 1 Balance b/d 4 600 (1)
Discount 640 (1) 2017
Balance c/d 5 350 (1) Jan 31 Interest 15 (1)
Purchases 34 100 (1)OF
38 715 38 715
5(b) Jai 7
Income Statement (Trading account section) for the year ended 31 January 2017
$ $
Cost of sales
Inventory 1 February 2016 2 900 (1)
OF
37 000
Less Inventory 31 January 2017 3 400 (1) 33 600 (1) OF
Gross profit 8 400 }(2) CF/(1) OF
5(c) 33 600 OF } (1) 33 600 2

= = 10.67 times (1) OF
(2900 + 3400) / 2 } 3150

PUBLISHED
5(d) Reduce inventory levels 2

More sales activity
5(e) Prudence 1
5(f) overstated understated 2
Current assets at 31 January 2017 9

Profit for the year ended 31 January 2017 9(1)
Profit for the year ending 31 January 2018 9(1)
5(g) Increase selling price 2

Reduce trade discount allowed to customers
Reduce purchase price
Find cheaper supplier
Obtain better trade discount

PUBLISHED
6(a) Amina 7
Journal
Debit Credit
$ S
Sales returns 960 (1)
Purchases returns 960 (1)
Suspense 1 920 (1)
No entry – (1)
Suspense 3 000 (1)
AK Stores 330 (1)

Suspense 330 (1)
6(b) 7
Effect on draft profit for the year of correcting the error
Error Increase Decrease No effect
$ $
1 1 000 (1)
2 484 (2)*
3 1 920 (2)*
4 9 (1)
5 9 (1)
* (1) position + (1) amount

ACCOUNTING 0452/13
Paper 1 October/November 2016
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge is publishing the mark schemes for the October/November 2016 series for most
Cambridge IGCSE®, Cambridge International A and AS Level components and some Cambridge O Level
components.
® IGCSE is the registered trademark of Cambridge International Examinations.

Page 2 Mark Scheme Syllabus Paper
Cambridge IGCSE – October/November 2016 0452 13
Glossary for Q1
(c) A +50 – 80 + 10 = $20 credit

B +50 – 80 – 10 = $40 credit
C +50 + 80 – 10 = $120 debit
D +50 + 80 + 10 = $140 debit
(f) A (60 000 – 6 000) x ½ + 4 000 – 18 000 = $13 000

B (60 000 – 6 000) x ½ = $27 000
C (60 000 – 6 000) x ½ + 2 000 = $29 000
D (60 000 – 6 000) x ½ + 4 000 = $31 000
(g) A 85 000 – 15 000 – 10 000 = $60 000

B 30 000 + 85 000 – 15 000 – 10 000 = $90 000
C 30 000 + 85 000 – 15 000 = $100 000
D 30 000 + 85 000 – 10 000 = $105 000
(i) A 6 100/90 000 × 365 = 25 days

B 6 100/84 000 × 365 = 27 days
C 7 400/90 000 × 365 = 31 days
D 7 400/84 000 × 365 = 33 days
Mark scheme
1 (a) D
(b) D
(c) B
(d) B
(e) B
(f) D
(g) C
(h) A
(i) B
(j) C
10 × (1) mark
[Total: 10]
© UCLES 2016
2 (a) A decrease in a non-current asset account requires a credit (1) entry.

An increase in a liability account requires a credit (1) entry.
An increase in an expense account requires a debit (1) entry. [3]
(b) Any reasonable example for (1) mark, e.g. bank overdraft, loan, trade payable [1]
(c)
debit entry credit entry
income statement (1) provision for depreciation (1)

[2]
(d) to simplify information in the ledger

to allow book-keeping duties to be shared
to reduce the number of entries in the ledger
as an aid for posting to the ledger
to gather and summarise information
to facilitate preparation of control accounts
to group similar transactions together
any one for (1) mark [1]
(e)
book of prime (original) entry source document
cash book cheque counterfoil/bank

statement/till roll
petty cash book receipt/voucher
sales journal sales invoice
sales returns journal credit note issued
purchases journal purchase invoice
purchases returns journal credit note received
general journal invoice for non-current asset
purchased on credit or other
suitable document
Any two books for (1) mark each plus two related documents for (1) mark each. Allow other
reasonable suggestions for document. [4]
(f) A trading business buys and sells goods. (1) A service business provides a service instead.
(1) A trading business produces a trading account (1) and a service business does not.(1) A
trading business holds inventory. (1) A service business holds no inventory. (1)
[max 2 for each type of business] [max 3]
© UCLES 2016
(g)
trading business service business both
only only
cost of sales √ (1)
gross profit √ (1)
discount allowed √ (1)
profit for the year √ (1)

[4]
(h)
principle
the same accounting treatment should be consistency (1)

applied to similar items at all times
transactions should be expressed in money measurement (1)

monetary terms
financial statements should assume that a going concern (1)

business will continue to operate indefinitely
[3]
[Total: 21]
© UCLES 2016
3 (a) (8 × 1200) + (4 × 1000) = $13 600 (1) [1]
(b) one month’s rent accrued/unpaid (1) [1]
(c)
Winston
Rent account
2015 $ 2015 $
Sept 4 Bank 6 000 } Sept 1 Balance b/d 1 000 (1)
2016 2016
Mar 1 Bank 7 400 } Aug 31 Income 13 600 (1)
statement
July 9 Bank 3 600 } (1) Balance c/d 2 400
17 000 17 000
Sept 1 Balance b/d 2 400 (1of)
+(1) for dates [5]
(d)
Winston
Sales ledger
Jared account
2016 $ 2016 $
Aug 1 Balance b/d 300 (1) Aug 6 Sales returns 40 (1)
Aug 3 Sales 480 (1) Aug 9 Bank 291 (1)
Aug 18 Sales 320 (1) Discount 9 (1)
allowed
Aug 31 Balance c/d 760
1 100 1 100
Sept 1 Balance b/d 760 (1of)
+(1) for dates [8]
(e)
account debited account credited
Jared (purchases ledger Jared (sales ledger account)

account) (1) (1)
[2]
(f) work in progress (1) [1]
© UCLES 2016
(g)
manufacturing income statement
account
purchases of raw √
materials
salesman’s wages √
carriage outwards √
purchases of finished √
goods
machine operator’s wages √
factory supervisor’s salary √
inventory of raw materials √
carriage inwards √
inventory of finished √
goods
Any two correct for (1) mark [4]
[Total: 22]
4 (a) to access additional capital

for additional expertise/more ideas
to share responsibilities/cover sickness and holidays
to shares losses/risks
Any one reason for (1) mark [1]
(b) to avoid disagreements in the future [1]
(c) capital contribution by each partner

profit sharing ratio
interest on capital
interest on drawings
partners’ salaries
interest on partners’ loans
Any two for (1) mark each [2]
© UCLES 2016
(d)
Drawings Rajiv (1) Bank (1)

[2]
(e)
Current account Rajiv (1) Drawings Rajiv (1)

[2]
(f)
Friedrich and Graham
Trial Balance at 31 July 2016
$ $
Bank 4 800
Cash 200
Fees 81 000 (1)
Rent 12 000 }
Wages 6 800 } (1)
Administration costs 19 500 }
Drawings – Friedrich 25 000 }

– Graham 16 100 } (1)
Equipment 24 200 }
Provision for depreciation 6 500 } (1)
Trade receivables 17 400 }

Other payables 1 100 } (1)
Capital account – Friedrich 20 000 }

– Graham 15 000 } (1)
Current account – Friedrich 900 (1of)

– Graham 3 300
126 900 126 900 (1)
[8]
[Total: 16]
© UCLES 2016
5 (a)
Boris
Total trade receivables account
2015 $ 2016 $
Jul 1 Balance b/d 300 (1) Jun 30 Bank/cash/cash 6 800 (1)
book
2016 Bad debts 250 (1)
Jun 30 Sales 7 770 (1) Sales returns 480 (1)
Balance c/d 540 (1of)
8 070 8 070
2016
Jul 1 Balance b/d 540
[6]
(b)
2016 $ 2015 $
Jun 30 Bank/cash/cash 4 320 (1) Jul 1 Balance b/d 710 (1)
book
Discount received 210 (1of) 2016
Balance c/d 680 (1) Jun 30 Purchases 4 500 (1)
5 210 5 210
2016
Jul 1 Balance b/d 680
[5]
(c)
Boris
$ $ $
Cost Acc dep NBV
Non-current assets 7 100 3 230 (1) 3 870 (1of)
Current assets
Inventory 700 (1)
Trade receivables 540 (1of)
1 240
Total assets 5 110
Capital
At 1 July 2015 5 010 (1)
Profit for the year 1 070 (1of)
Drawings (2 050) (1)
4 030 (1of)
Current liabilities
Trade payables 680 (1)
Other payables 100 (1)
Bank 300 (1)
1 080
Total liabilities 5 110
[11]
© UCLES 2016
(d) Drawings are high/too high (1)

Drawings are almost twice profit (1)
Drawings are about half the capital (1)
Excessive drawings are causing a shortage of cash in the business (1)
Funds should be left in the business so that it can function or grow (1)
Profits need to be higher to finance the level of drawings (1)
Drawings need to be lower to enable the business to continue/may have financial problems
in the future (1)
Answers to be based on OF profit [max 2]
[Total: 24]
6 (a)
Chess Club
$ $
Shop sales 6 700 (1)
Inventory at 1 January 2015 580 *
Purchases
5700 (1) + 350 (1) – 170 (1) 5 880
6 460
Inventory at 31 December 2015 310 * (1)
both
Cost of sales 6 150
550
Wages 1 200 (1)
Loss for the year 650 (1of)
[7]
(b)
Chess Club
$ $
Subscriptions
17 700 + 950 (1) – 550 (1) 18 100
Less expenditure
Loss for the year 650 (1of)
Depreciation of equipment (1)
3100 + 3800 – 5150 1 750 (1)
Rent 4 800 }
Wages 8 400 } (1)
Sundry expenses 4 300 }
19 900
Deficit 1 800 (1of)
[7]
© UCLES 2016
550 (1of) 100

(c) × = 8.94% (1of) [3]
6150 (1of) 1
(d)
Chess Club
Statement of revised profit
$ $
Revenue 8 610 (1of)
Cost of sales 6 150 (1of)
Gross profit 2 460 (1of)
Commission 1 722 (1of)
Computer costs 500 (1)
2 222
Profit for the year 238 (1of)
OR
$ $
Increase in revenue/gross profit 1 910 (1of)
Original wages 1 200 (1) 3 110
Commission 1 722 (1of)

Computer costs 500 (1)
Less original loss 650 (1of) 2 872
Profit for the year 238 (1of)
[6]
(e) Increase subscription rate

Increase membership
Increase selling price in shop
Reduce cost of sales in shop
Reduce expenses in shop
Sell off unused equipment
Obtain a loan
Start fundraising
Seek donations
Sponsorship
Or other acceptable suggestions
Any two reasonable suggestions for (1) mark each [2]
(f) Members have not invested capital in the organisation (1) and therefore cannot earn a return
on their investment (1). Any surplus is retained in the organisation (1). [max 2]
[Total: 27]
© UCLES 2016
ACCOUNTING 0452/21
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

1 (a)
Book of prime (original) entry
Cheque refund to credit customer Cash book (1)
Bad debts written off Journal (1)
Returns by credit customers Sales returns journal (1)
Interest charged on customer’s overdue Journal (1)

account
[4]
(b) To assist in the location of errors

To provide instant total of trade payables
To prove the arithmetical accuracy of the purchases ledger
To enable a statement of financial position to be prepared quickly
To provide a summary of transactions relating to trade payables
To help reduce fraud
Any 2 reasons (1) each [2]
(c) Amira
Purchases ledger control account

2016 2016
Sep 1 Balance b/d (1) 93 Sep 1 Balance b/d (1) 4210
30 Bank (1) 3705 30 Purchases (1) 5366
Dis. Received (1) 95 Interest (1) 12
Returns (1) 197 Cash (1) 150
Contra (1) 494 Balance c/d 68
Balance c/d 5222 ____
9806 9806
2016 2016
Oct 1 Balance b/d (1) 68 Oct 1 Balance b/d (1)OF 5222
+ (1) dates
[12]
(d) May be able to take advantage of cash discount

Improve the relationship with suppliers
Avoid paying interest
Any 1 advantage (1) [1]
(e) The business is deprived of the use of the money earlier than necessary
Any 1 disadvantage (1) [1]
[Total: 20]
© UCLES 2016
2 (a)
Date Document Book of prime entry Book of prime entry

used by Diana used by Udomo
Oct
8 Invoice $560 Purchases (1) Sales (1)
12 Debit note $115 No entry (1) No entry (1)
16 Credit note $100 Purchases returns (1) Sales returns (1)
24 Cheque $720 Cash book (1) Cash book (1)
31 Statement of account $460 No entry (1) No entry (1)
[10]
(b) (i) Debit note 12 October

Diane (1)
To request a reduction in the invoice (1) [2]
(ii) Credit note 16 October

Udomo (1)
To notify of a reduction of the invoice (1) [2]
(iii) Statement of account 31 October

Udomo (1)
To notify the customer of the amount owing at the month end (1) [2]
(c) Udomo
Diane account

2016 2016
Oct 1 Balance c/d 720 Oct 16 Returns (1) 100
8 Sales (1) 560 24 Bank (1) 720
___ 31 Balance c/d 460
1280 1280
2016
Nov 1 Balance b/d (1) 460
[4]
[Total: 20]
© UCLES 2016
3 (a) Subscriptions
Amount paid by members of a club to use the facilities provided by the club (1)
Accumulated fund
Surpluses which accumulate over the years/equivalent to capital of a business (1)
Receipts and payments account

Account summarising the money received and paid by a club during a financial year (1)
[3]
(b) Bolton Road Music Club

Shop Income Statement for the year ended 31 August 2016
$ $
Revenue 15 520 (1)
Less Cost of sales
Purchases (12 422 (1) + 1112 (1)) 13 534
Less Closing inventory 1 964 (1)
11 570
Shop wages (1850 – 100) 1 750 (1)
Shop insurance (1200 × 10%) 120 (1)
Shop rent & rates (50% × (3300 +300)) 1 800 (1) 15 240
Shop profit 280 (1)OF
[8]
(c) Bolton Road Music Club

Income and Expenditure Account for the year ended 31 August 2016
$ $
Income
Subscriptions (6300 (1) + 200 (1) – 500 (1)) 6 000
Profit on shop 280 (1)OF
6 280
Expenditure
Insurance (1200 × 90%) 1 080 (1)
Rent and rates (50% × (3300 + 300)) 1 800 (1)
Repairs to instruments 197}
General expenses 2 293}(1)
Loan interest (4% × 20 000 (1) × 6 months (1)) 400
Depreciation of instruments (15% × 4800) 720 (1) 6 490
Deficit 210 (1)OF
[11]
[Total: 22]
© UCLES 2016
4 (a) Bad debts

Amounts owing to a business which will not be paid by credit customers (1)
Bad debts recovered
When a credit customer pays some, or all, of the amount owed after the amount was
previously written off (1)
Provision for doubtful debts
An estimate of the amount a business will lose in a financial year because of bad debts (1)
[3]
(b) Prudence (1)

Accruals/matching (1) [2]
(c) Reduce credit sales/sell on a cash basis

Any 2 points (1) each [2]
(d) Nawaz
Journal
Debit Credit
$ $
Bad debts 250 (1)
Uzma 250 (1)
Income statement 2314 (1)

Bad debts 2314 (1)

Provision for doubtful debts 138 (1)
[6]
(e) Nawaz
Extract from Statement of Financial Position at 31 August 2016
Current assets $ $
Trade receivables (79650 – 250) 79 400
Less Provision for doubtful debts 1 588 (1)OF 77 812 (1)OF
[2]
[Total: 15]
© UCLES 2016
5 (a) Sandton Limited

Statement of Changes in Equity for the year ended 30 September 2016

$ $ $ $
On 1 October 2015 150 000 14 000 31 000 195 000
Profit for the year 14 750 14 750 (1)
Dividend paid (4 500) (4 500) (1)
Transfer to general reserve 5 000 (5 000) (1)
On 30 September 2016 150 000 19 000 36 250 205 250 (1)
[4]
© UCLES 2016
(b) Sandton Limited

Statement of Financial Position at 30 September 2016
Assets $ $ $

depreciation value
Premises 135 200 135 200
Fixtures and equipment 37 600 7 520 30 080 (1)
Motor vehicles 54 000 10 800 43 200 (1)
226 800 18 320 208 480 (1)
Current assets
Inventory 12 613
Trade receivables 10 840
Less Provision for doubtful debts 271 10 569 (1)
Other receivables 472
23 654 (1)
Total assets 232 134
Equity and liabilities
Equity and reserves

Ordinary share capital 150 000 (1)
General reserve (14 000 (1) + 5000 (1)) 19 000
Retained earnings (31 000 (1) + 5250 (1)) 36 250
205 250 (1)
3% Debentures (repayable 2020) 15 000 (1)
Current liabilities
Other payables 130
Bank overdraft 4 294 (1)
11 884 (1)
[14]
© UCLES 2016
10 840 365
(c) (i) × (1) whole formula = 25.94 days = 26 days (1)OF
152 500 1
[2]
7460 365
(ii) × (1) whole formula = 28.66 days = 29 days (1)OF
95 000 1
[2]
(iii) Trade receivables pay before the due date and trade payables are paid
before the due date
Liquidity is affected favourably
May have to allow cash discount and may receive cash discount
Or suitable comments based on OF answers to (i) and (ii)
Any 2 comments (1) each [2]
[Total: 24]
6 (a) (i) 30% × $285 000 = $85 500 (1) [1]
(ii) $285 000 + $85 500 OF = $370 500 (1)OF [1]
85 500 OF 100 }
(iii) × (1)whole formula = 23.08% (1)OF [2]
370 500 OF 1 }
36 000 100 }
(iv) × (1) whole formula = 9.72% (1)OF
370 500 OF 1 }
[2]
(b) Higher mark up

Lower cost price of goods
Higher selling price of goods
Lower rate of trade discount allowed to customers
Higher rate of trade discount received from suppliers
Different mix of goods
Or other suitable reason
(c) Different type of expenses

Higher amount of expenses
Lower amount of other income
© UCLES 2016
(d) Daniel
Statement of corrected profit for the year ended 31 July 2016
$
Draft profit for the year before corrections 41 000
Increase Decrease
in profit in profit
$ $
Error 1 110
Error 2 .......... 90 (2)
Error 3 450 (2) .........
Error 4 .......... 125 (2)
Error 5 34 (2) .........

___ ___
484 325 159
Corrected profit for the year 41 159(1)OF

For each error – (1) for figure and (1) for position
[9]
[Total: 19]
© UCLES 2016
1 (a)
Cheque refund to credit customer Cash book (1)
Interest charged on customer’s overdue Journal (1)

account
[4]
(b) To assist in the location of errors

To provide instant total of trade payables
To prove the arithmetical accuracy of the purchases ledger
To provide a summary of transactions relating to trade payables
(c) Amira

2016 2016
Sep 1 Balance b/d (1) 93 Sep 1 Balance b/d (1) 4210
30 Bank (1) 3705 30 Purchases (1) 5366
Dis. Received (1) 95 Interest (1) 12
Returns (1) 197 Cash (1) 150
Contra (1) 494 Balance c/d 68
9806 9806
2016 2016
Oct 1 Balance b/d (1) 68 Oct 1 Balance b/d (1)OF 5222
+ (1) dates
[12]
(d) May be able to take advantage of cash discount

(e) The business is deprived of the use of the money earlier than necessary
[Total: 20]
2 (a)
Date Document Book of prime entry Book of prime entry

used by Diana used by Udomo
Oct
8 Invoice $560 Purchases (1) Sales (1)
12 Debit note $115 No entry (1) No entry (1)
16 Credit note $100 Purchases returns (1) Sales returns (1)
24 Cheque $720 Cash book (1) Cash book (1)
31 Statement of account $460 No entry (1) No entry (1)
[10]
(b) (i) Debit note 12 October

Diane (1)
To request a reduction in the invoice (1) [2]
(ii) Credit note 16 October

Udomo (1)
To notify of a reduction of the invoice (1) [2]
(iii) Statement of account 31 October

Udomo (1)
To notify the customer of the amount owing at the month end (1) [2]
(c) Udomo
Diane account

2016 2016
Oct 1 Balance c/d 720 Oct 16 Returns (1) 100
8 Sales (1) 560 24 Bank (1) 720
1280 1280
2016
Nov 1 Balance b/d (1) 460
[4]
[Total: 20]
3 (a) Subscriptions
Amount paid by members of a club to use the facilities provided by the club (1)
Accumulated fund
Surpluses which accumulate over the years/equivalent to capital of a business (1)
Receipts and payments account

Account summarising the money received and paid by a club during a financial year (1)
[3]
(b) Bolton Road Music Club

Shop Income Statement for the year ended 31 August 2016
$ $
Revenue 15 520 (1)
Less Cost of sales
Purchases (12 422 (1) + 1112 (1)) 13 534
Less Closing inventory 1 964 (1)
11 570
Shop wages (1850 – 100) 1 750 (1)
Shop insurance (1200 × 10%) 120 (1)
Shop rent & rates (50% × (3300 +300)) 1 800 (1) 15 240
Shop profit 280 (1)OF
[8]
(c) Bolton Road Music Club

Income and Expenditure Account for the year ended 31 August 2016
$ $
Income
Subscriptions (6300 (1) + 200 (1) – 500 (1)) 6 000
Profit on shop 280 (1)OF
6 280
Expenditure
Insurance (1200 × 90%) 1 080 (1)
Rent and rates (50% × (3300 + 300)) 1 800 (1)
Repairs to instruments 197}
General expenses 2 293}(1)
Loan interest (4% × 20 000 (1) × 6 months (1)) 400
Depreciation of instruments (15% × 4800) 720 (1) 6 490
Deficit 210 (1)OF
[11]
[Total: 22]
4 (a) Bad debts
Amounts owing to a business which will not be paid by credit customers (1)
Bad debts recovered
When a credit customer pays some, or all, of the amount owed after the amount was
previously written off (1)
An estimate of the amount a business will lose in a financial year because of bad debts (1)
[3]
(b) Prudence (1)

Accruals/matching (1) [2]
(c) Reduce credit sales/sell on a cash basis

(d) Nawaz
Journal
Debit Credit
$ $
Bad debts 250 (1)
Uzma 250 (1)

Bad debts 2314 (1)

[6]
(e) Nawaz
Extract from Statement of Financial Position at 31 August 2016
Current assets $ $
Trade receivables (79650 – 250) 79 400
Less Provision for doubtful debts 1 588 (1)OF 77 812 (1)OF
[2]
[Total: 15]
5 (a) Sandton Limited

$ $ $ $
On 1 October 2015 150 000 14 000 31 000 195 000
Dividend paid (4 500) (4 500) (1)
On 30 September 2016 150 000 19 000 36 250 205 250 (1)
[4]
(b) Sandton Limited
Assets $ $ $

depreciation value
Premises 135 200 135 200
Fixtures and equipment 37 600 7 520 30 080 (1)
Motor vehicles 54 000 10 800 43 200 (1)
226 800 18 320 208 480 (1)
Current assets
Inventory 12 613
23 654 (1)
Equity and reserves

General reserve (14 000 (1) + 5000 (1)) 19 000
Retained earnings (31 000 (1) + 5250 (1)) 36 250
205 250 (1)
Current liabilities
Other payables 130
11 884 (1)
[14]
10 840 365
(c) (i) × (1) whole formula = 25.94 days = 26 days (1)OF
152 500 1
[2]
7460 365
(ii) × (1) whole formula = 28.66 days = 29 days (1)OF
95 000 1
[2]
(iii) Trade receivables pay before the due date and trade payables are paid
before the due date
Liquidity is affected favourably
May have to allow cash discount and may receive cash discount
Or suitable comments based on OF answers to (i) and (ii)
[Total: 24]
6 (a) (i) 30% × $285 000 = $85 500 (1) [1]
(ii) $285 000 + $85 500 OF = $370 500 (1)OF [1]
85 500 OF 100 }
(iii) × (1)whole formula = 23.08% (1)OF [2]
370 500 OF 1 }
36 000 100 }
(iv) × (1) whole formula = 9.72% (1)OF
370 500 OF 1 }
[2]
(b) Higher mark up

Lower cost price of goods
Higher selling price of goods
Lower rate of trade discount allowed to customers
Higher rate of trade discount received from suppliers
Different mix of goods
(c) Different type of expenses

Higher amount of expenses
Lower amount of other income
(d) Daniel
$
Draft profit for the year before corrections 41 000
Increase Decrease
in profit in profit
$ $
Error 1 110
Error 2 .......... 90 (2)
Error 3 450 (2) .........
Error 4 .......... 125 (2)
Error 5 34 (2) .........

___ ___
484 325 159
Corrected profit for the year 41 159(1)OF

For each error – (1) for figure and (1) for position
[9]
[Total: 19]
ACCOUNTING 0452/23
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

1 (a)
allowed received
2016 $ $ $ 2016 $ $ $
Sep 1 Balance b/d 193 Sep 1 Balance b/d 1560
5 Sales (1) 115 400 10 C Barnes (dis cheque)(1) 190
15 H Magagula (1) 12 468 21 Office equipment (1) 280
28 Cash c (1)OF 258 Repairs (1) 44
30 Balance c/d 948 28 Bank c (1) 258
30 Balance c/d 50
12 308 2074 308 2074

2016 2016
Oct 1 Balance b/d (1) Oct 1 Balance b/d (1)
50 OF 948
+ (1) dates
[10]
© UCLES 2016
(b) It is not possible to take out more cash than is in the cash box (1) [1]
(c) Obtain the correct bank balance

Identify errors in the bank account
Identify errors on the bank statement
Assist in discovering fraud and embezzlement
Identify cheques not credited by the bank
Identify cheques not presented
Identify any stale cheques
Understand/reconcile the differences between cash book and bank statement
(d) Cheques not presented

Cheques not credited
Cash book errors
Any 2 items (1) each [2]
(e)
Effect on Reason
working capital
Reduce credit No effect Trade receivables decrease and cash increases so

sales and increase total current assets is unchanged. No effect on
cash sales current liabilities
Create a provision Decrease (1) The current assets reduce. No change to the
for doubtful debts current liabilities. (1)
Take a long term Increase (1) The current assets increase. No change to the
bank loan current liabilities. (1)
Take a short term No effect (1) The current assets and the current liabilities
bank loan increase by the same amount (1)
Pay credit Increase (1) The current assets reduce by a smaller amount
suppliers early to than the current liabilities (1)
earn cash discount
[8]
[Total: 23]
© UCLES 2016
2 (a) Crossroads Limited

Statement of Financial Position at 31 October 2016
Assets $ $ $

depreciation value
Premises 363 000 363 000
Machinery and equipment 185 000 83 250 101 750 (1)
Fixtures and fittings 70 000 24 073 45 927 (1)
618 000 107 323 510 677 (1)
Current assets
Inventory 30 853
Other receivables 1 340 (1)
59 443 (1)
Equity and reserves

Retained earnings 75 000 (1)
506 000 (1)
Current liabilities
Other payables (800 + 320) 1 120 (2)
44 120 (1)
[15]
(b) Issued share capital

The amount of share capital which is actually issued to the shareholders (1)
Called-up share capital
The total amount the company has requested from the shareholders (1)
Paid-up share capital
That part of the called-up share capital for which a company has received the money from its
shareholders. (1) [3]
[Total: 18]
© UCLES 2016
3 (a) 1 November 2015 Balance b/d

This is the total of the provision for doubtful debts on that date (1)
Double entry – debit provision for doubtful debts account for previous year (1)
31 October 2016 Income statement

This is the difference between the opening and closing provision for doubtful
debts/the amount which is over-provided for doubtful debts (1)
Double entry – credit income statement (1)
31 October 2016 Balance c/d

This is the total of the provision for doubtful debts on that date (1)
Double entry – credit provision for doubtful debts account for next year (1) [6]
(b) $450 (1) deducted from the trade receivables (1) [2]
(c) Kristy
Journal
Debit Credit
$ $
Office equipment 740

Capital 740
Introduction of personal computer into the
business
Repairs to office equipment 40

Office equipment 226
Comp4u 266
Invoice received for repairs to equipment
and purchase of printer
[7]
© UCLES 2016
(d)
Capital expenditure Revenue expenditure
Wages paid to employees to (1)

build new office block
Insurance premium for new (1)

office block
Cost of painting new office (1)

block
Cost of moving furniture into (1)

new office block
[4]
(e)
Effect of error on profit
overstated understated
Proceeds of sale of old fixtures(sold at book

value) included in income statement (1)
Interest received on loan to employee

recorded as part repayment of loan (1)
[2]
[Total: 21]
© UCLES 2016
4 (a)
Effect on profit of correcting error
increase decrease
$ $
Wages owing at 31 August 2015, $450

were not recorded. 450
Discount allowed, $115, had been

recorded as discount received. 230
The provision for doubtful debts, $950,

should have been adjusted to 2 ½% of 50
trade receivables, who owed $36 000.
Inventory at 1 September 2014 had

been valued at net realisable value, 1400
$16 700 instead of at cost, $15 300.
(1) for amount and (1) for position for each item [8]
(b) Hamza
Income Statement for the year ended 31 August 2016
$ $
Revenue 385 500 (1)
Less Sales returns 7 500 (1) 378 000
Less Cost of sales

Opening inventory 14 100 (1)
Carriage inwards 2 100 (1)
328 700
Less Closing inventory 13 700 (1) 315 000 (1)OF
Gross profit 63 000 }(2)CF/
}(1)OF
Less General expenses 3 910 (1)
Wages and salaries 21 500 (1)
Rates and insurance 5 320 (1)
Depreciation: non-current assets 5 660 (1) 36 390
[14]
[Total: 22]
© UCLES 2016
5 (a) Straight line/fixed instalment

Revaluation
Any 1 method (1) [1]
(b) The loss in value of the non-current asset during the year (1) is set against the
revenue for the same period (1)
OR
The cost of the non-current asset is spread (1) over the years which benefit from
the use of that asset (1) [2]
(c) Prudence (1) [1]
(d) (i) Machine A $

Cost 1 August 2014 3000
Depreciation to 1 August 2014 600
Book value 1 August 2014 2400
Depreciation for year ended 31 July 2015 480 (1)
Book value at 1 August 2015 1920
Book value at 1 August 2016 1536 [2]
(ii) Machine B $
Cost 1 January 2015 3500
Book value 1 August 2015 2800
Book value at 1 August 2016 2240 [2]
© UCLES 2016
(e) (i) Tom

Machinery account

2014 2015
Aug 1 Balance (A) b/d 3000 July 31 Balance c/d 6500
2015
Jan 1 Bank (B) (1) 3500 ____
6500 6500
2015
Aug 1 Balance b/d (1) 6500
(ii) Provision for depreciation of machinery account

2015 2014
July 31 Balance c/d 1780 Aug 1 Balance b/d 600
2015
July 31 Income statement
(480OF + 700OF)
____ (1)OF 1180
1780 1780
2016 2015
July 31 Balance c/d 2724 Aug 1 Balance b/d
(1)OF 1780
2016
July 31 Income statement
(384OF + 560OF)
____ (1)OF 944
2724 2724
2016
Aug 1 Balance b/d
(1)OF 2724
+ (1) dates
[7]
(f) $
Cost 3000 (1)
Depreciation to date (600 + 480 + 384) 1464 (1)OF
Book value 1536
Proceeds of sale 1640
Profit (1)OF on sale 104 (1)OF [4]
[Total: 19]
© UCLES 2016
(290 000 − 224 025) } (1) 100

6 (a) × = 22.75% (1)
290 000 } 1
(65 975OF − 38 860) } (1) 100

× = 9.35% (1)OF [4]
290 000 } 1
(b) They trade in different type of goods

Joey has a higher mark-up
Joey has a lower cost price of goods
Joey sells at a higher price
Joey allows a lower rate of trade discount to customers
Joey received a higher rate of trade discount from suppliers
Or other suitable reason based on OF answer to (a)
(c) DT Traders has a higher gross profit

They have different types of expenses
Joey has higher expenses
DT Traders has more other income
Or other suitable reason based on OF answer to (a)
(d) DT Traders (1)

OR Joey (1)OF
If difference between OF gross profit % and OF profit for the
year % is lower than 8.25% achieved by DT Traders [1]
(e)
Increase Decrease No effect
Buy in bulk from suppliers to obtain

3(1)
trade discount
Offer cash discount to encourage

3(1)
credit customers to pay early
Pay employees monthly instead of

3(1)
weekly
Write off damaged inventory at

3(1)
year end
[4]
© UCLES 2016
(f) Historical cost

Transactions are recorded at actual cost. (1)
It is difficult to compare transactions taking place at different times. (1)
Non-financial factors
Only information which can be expressed in monetary terms is recorded. (1)
Many important factors which affect the business are not recorded. (1)
[4]
[Total: 17]
© UCLES 2016
ACCOUNTING 0452/11
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

Glossary for Q1
(c)
A 600 – 150 = 450
B 600 – 20 = 580
C 600 + 20 = 620
D 600 + 150 = 750
(d)
A and C 2000 + 100 -180 – 1750 = 170
B and D 2000 – 100 + 180 – 1750 = 330
(i)
A 9800 – 1120 – 8280 = 400
B 10 000 – 1120 – 8280 = 600
C 9800 – 850 – 8280 = 670
D 10 000 – 850 – 8280 = 870
(j)
A 800 – (820 – 70) = 50
B (820 + 70) – 800 = 90
C 1200 – (820 + 70 ) = 310
D 1200 – 820 = 380
1 (a) B
(b) B
(c) A
(d) A
(e) A
(f) C
(g) D
(h) C
(i) D
(j) B 10 × (1) mark
[Total: 10]
© UCLES 2016
2 (a) Going concern (1) [1]
(b) To check the arithmetical accuracy of the double entry (1)

OR
To help in the preparation of the financial statements (1) [1]
(c) Suspense (1) [1]
(d)
Debit side Credit side
Capital 9
Cash 9
Drawings 9
Rent 9
Sales returns 9
Bank overdraft 9
Machinery 9
Discount received 9
Provision for depreciation 9
Bad debts 9
(e) So that accounts of the same type can be kept together
To allow division of work

To allow easier reference
To allow checking procedures to be introduced
Any one reason (1) [1]
© UCLES 2016
(f)
Account Ledger
Insurance Nominal/general
Sales Nominal/general (1)
Discount allowed Nominal/general (1)
Philip, a credit customer Sales (1)
Purchases Nominal/general (1)
Amit, a credit supplier Purchases (1)

[5]
(g) (i) Trade discount –

to encourage bulk purchases
to reward business in the same trade
to allow customers to make a profit
Any one for (1) mark [1]
(ii) Cash discount - to reward prompt payment (1) [1]
(h) Cash discount (1) [1]
(i)
Goods taken Drawings (1) Purchases (1)
Computer transferred Office equipment (1) Capital (1)

[4]
(j) Business entity (1) [1]
© UCLES 2016
(k)
Karen To see progress of business

Trade payables/ suppliers To check on likelihood of receiving money
of goods
Reasonable alternatives may be rewarded [4]
(l) Financial information is relevant if it affects the business decisions (1) [1]
[Total: 27]
3 (a) Something which the business owns or something which is owed to the business (1) [1]
(b) Non-current asset –any reasonable definition (1) eg an item held for more than 12 months,
an item which is not for resale.
Current asset – any reasonable definition (1) eg short term, an item which can be turned into
cash quickly. [2]
(c) An amount which is owed by the business (1) [1]
(d) Non-current liability – any reasonable definition (1) eg long term debt
Current liability – any reasonable definition (1) eg an amount owed to be paid within a year
[2]
(e) (i) any reasonable suggestion (1) eg oven, computer [1]
(ii) any reasonable suggestion (1) eg flour, yeast, unsold loaves [1]
Other suitable answers are acceptable.
135 480 (1of)

(f) (i) = 9.51 times (1of)
14250 (1)
[3]
(ii) [(1300 + 700) × 1.2] (1) – 1400 (1) = 1000 (1) [3]
© UCLES 2016
(g) Any two possible reasons for (1) mark each e.g.
making a loss, excess drawings, purchase of non-current assets, bad debts, debtors not
paying, paying trade payables sooner, increased expenditure on inventory, repayment of
loan.
Other suitable answers are acceptable. [2]
[Total: 16]
4 (a)
Grindle
Fixtures and fittings account
2015 $ 2015 $
Jan 1 Balance b/d 17 200 (1) Aug 1 Disposal (1) 3 200 (1of)
Mar 1 Bill 3 600 (1) Dec 31 Balance c/d 17 600
20 800 20 800
2016
+1 dates [6]
(b) $17 600 (1) x 0.10 = $1760 (1) [2]
(c)
Grindle
Provision for depreciation of fixtures and fittings account
2015 $ 2015 $
Aug 1 Disposal 320 (1of) Jan 1 Balance b/d 5 800
Dec 31 Balance Dec 31 Income
c/d 7 240 statement 1 760 (1of)
7 560 7 560
2016
+1 dates Jan 1 Balance b/d 7 240 (1of)
[4]
(d) Capital expenditure (1) [1]
(e) None (1) [1]
(f)
Increase Decrease
9 (1)
[1]
[Total: 15]
© UCLES 2016
5 (a) A cost which can be linked to a specific unit of production (1) [1]
(b) Any two correct answers for (1) mark each

E.g. purchases of cloth, thread, buttons etc., carriage on material, machinists etc., royalties
[2]
(c) Factory overhead (1)

OR any example for (1) mark
e.g. factory supervisor’s salary, depreciation of factory machinery, rent of factory building [1]
(d) (i) 89 000 + 21 600 (1) – 100 (1) = $110 500 (1of) [3]
(ii)
Mistry Clothing
Income Statement for the year ended 30 June 2016
$ $
Revenue 203 220 (1)
Inventory at 1 July 2015 8 800 (1)
Cost of production 110 500 (1of)
155 500
Drawings (320) (1)
155 180
Inventory at 30 June 2016 19 700 (1)
Selling and distribution expenses 20 760
Administration expenses 31 760
52 520 (1)
[9]
(e) It is cheaper to buy than produce (1) OR
Demand is higher than production at full capacity (1) [1]
(f)
1800 (1)
= 2.4 : 1 (1)
750 (1) [3]
(g) Sales have slowed down (1)

Inventory has increased (1) [2]
[Total: 22]
© UCLES 2016
6 (a)
Amina and Doreen

Cash book (bank columns)
2016 $ 2016 $
Jan 1 Capital A 5 000 } Jan 1 Rent 2 700 (1)
Capital D 5 000 }(1) 20 Bertie 3 880 (1)
6 Sales 7 900 (1) 31 Wages 800 (1)
Balance c/d 10 520
17 900 17 900
Feb 1 Balance b/d 10 520 (1of)
[6]
(b) (i)
$ $
Revenue 8 500 (1)
Purchases 4 000 (1)
Closing (600) (1)
inventory
Cost of sales 3 400
[4]
(ii)
Amina and Doreen
Calculation of profit for the month ended 31 January 2016
$ $
Discount received 120 (1)
5 220
Rent 900 (1)
Wages 800 (1)
Depreciation fixtures and fittings 40 (1)
Depreciation delivery van 135 (1) 1 875
Profit for the month 3 345 (1of)
[7]
© UCLES 2016
(c)
Amina and Doreen

Statement of Financial Position at 31 January 2016
$ $ $
Accumulated
Non-current assets Cost NBV
depreciation
Delivery vehicle 8 100 (1) 135 (1of) 7 965
Fixtures and fittings 4 800 (1) 40 (1of) 4 760
12 900 175 12 725
Current assets
Inventory (150 × 4) 600 (1)
Trade receivable (50 × 10) 500 (1)
Bank 10 520 (1of)
Cash 100 (1) 13 520
Total assets 26 245
Capital Amina 13 100 (1)

Doreen 9 800 (1) 22 900
Current Amina 2 230 (1of)

Doreen 1 115 (1of) 3 345
26 245
[13]
[Total: 30]
© UCLES 2016
ACCOUNTING 0452/12
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

Glossary for Q1
(c)
A 600 – 150 = 450
B 600 – 20 = 580
C 600 + 20 = 620
D 600 + 150 = 750
(d)
A and C 2000 + 100 -180 – 1750 = 170
B and D 2000 – 100 + 180 – 1750 = 330
(i)
A 9800 – 1120 – 8280 = 400
B 10 000 – 1120 – 8280 = 600
C 9800 – 850 – 8280 = 670
D 10 000 – 850 – 8280 = 870
(j)
A 800 – (820 – 70) = 50
B (820 + 70) – 800 = 90
C 1200 – (820 + 70 ) = 310
D 1200 – 820 = 380
1 (a) B
(b) B
(c) A
(d) A
(e) A
(f) C
(g) D
(h) C
(i) D
(j) B 10 × (1) mark
[Total: 10]
© UCLES 2016
2 (a) Going concern (1) [1]
(b) To check the arithmetical accuracy of the double entry (1)

OR
To help in the preparation of the financial statements (1) [1]
(c) Suspense (1) [1]
(d)
Debit side Credit side
Capital 9
Cash 9
Drawings 9
Rent 9
Sales returns 9
Bank overdraft 9
Machinery 9
Discount received 9
Provision for depreciation 9
Bad debts 9
(e) So that accounts of the same type can be kept together

© UCLES 2016
(f)
Account Ledger
Insurance Nominal/general
Discount allowed Nominal/general (1)
Philip, a credit customer Sales (1)
Purchases Nominal/general (1)
Amit, a credit supplier Purchases (1)

[5]
(g) (i) Trade discount –

to encourage bulk purchases
to reward business in the same trade
to allow customers to make a profit
(ii) Cash discount - to reward prompt payment (1) [1]
(h) Cash discount (1) [1]
(i)
Goods taken Drawings (1) Purchases (1)
Computer transferred Office equipment (1) Capital (1)

[4]
(j) Business entity (1) [1]
© UCLES 2016
(k)
Karen To see progress of business

Trade payables/ suppliers To check on likelihood of receiving money
of goods
Reasonable alternatives may be rewarded [4]
(l) Financial information is relevant if it affects the business decisions (1) [1]
[Total: 27]
3 (a) Something which the business owns or something which is owed to the business (1) [1]
(b) Non-current asset –any reasonable definition (1) eg an item held for more than 12 months,
an item which is not for resale.
Current asset – any reasonable definition (1) eg short term, an item which can be turned into
cash quickly. [2]
(c) An amount which is owed by the business (1) [1]
(d) Non-current liability – any reasonable definition (1) eg long term debt
Current liability – any reasonable definition (1) eg an amount owed to be paid within a year
[2]
(e) (i) any reasonable suggestion (1) eg oven, computer [1]
(ii) any reasonable suggestion (1) eg flour, yeast, unsold loaves [1]
Other suitable answers are acceptable.
135 480 (1of)

(f) (i) = 9.51 times (1of)
14250 (1)
[3]
(ii) [(1300 + 700) × 1.2] (1) – 1400 (1) = 1000 (1) [3]
© UCLES 2016
(g) Any two possible reasons for (1) mark each e.g.
making a loss, excess drawings, purchase of non-current assets, bad debts, debtors not
paying, paying trade payables sooner, increased expenditure on inventory, repayment of
loan.
Other suitable answers are acceptable. [2]
[Total: 16]
4 (a)
Grindle
2015 $ 2015 $
Jan 1 Balance b/d 17 200 (1) Aug 1 Disposal (1) 3 200 (1of)
Mar 1 Bill 3 600 (1) Dec 31 Balance c/d 17 600
20 800 20 800
2016
+1 dates [6]
(b) $17 600 (1) x 0.10 = $1760 (1) [2]
(c)
Grindle
Provision for depreciation of fixtures and fittings account
2015 $ 2015 $
Aug 1 Disposal 320 (1of) Jan 1 Balance b/d 5 800
Dec 31 Balance Dec 31 Income
c/d 7 240 statement 1 760 (1of)
7 560 7 560
2016
+1 dates Jan 1 Balance b/d 7 240 (1of)
[4]
(d) Capital expenditure (1) [1]
(e) None (1) [1]
(f)
Increase Decrease
9 (1)
[1]
[Total: 15]
© UCLES 2016
5 (a) A cost which can be linked to a specific unit of production (1) [1]
(b) Any two correct answers for (1) mark each

E.g. purchases of cloth, thread, buttons etc., carriage on material, machinists etc., royalties
[2]
(c) Factory overhead (1)

OR any example for (1) mark
e.g. factory supervisor’s salary, depreciation of factory machinery, rent of factory building [1]
(d) (i) 89 000 + 21 600 (1) – 100 (1) = $110 500 (1of) [3]
(ii)
Mistry Clothing
Income Statement for the year ended 30 June 2016
$ $
Revenue 203 220 (1)
Inventory at 1 July 2015 8 800 (1)
Cost of production 110 500 (1of)
155 500
Drawings (320) (1)
155 180
Inventory at 30 June 2016 19 700 (1)
Selling and distribution expenses 20 760
Administration expenses 31 760
52 520 (1)
[9]
(e) It is cheaper to buy than produce (1) OR
Demand is higher than production at full capacity (1) [1]
(f)
1800 (1)
= 2.4 : 1 (1)
750 (1) [3]
(g) Sales have slowed down (1)

Inventory has increased (1) [2]
[Total: 22]
© UCLES 2016
6 (a)
Amina and Doreen

2016 $ 2016 $
Jan 1 Capital A 5 000 } Jan 1 Rent 2 700 (1)
Capital D 5 000 }(1) 20 Bertie 3 880 (1)
6 Sales 7 900 (1) 31 Wages 800 (1)
Balance c/d 10 520
17 900 17 900
[6]
(b) (i)
$ $
Revenue 8 500 (1)
Purchases 4 000 (1)
Closing (600) (1)
inventory
Cost of sales 3 400
[4]
(ii)
Amina and Doreen
Calculation of profit for the month ended 31 January 2016
$ $
5 220
Rent 900 (1)
Wages 800 (1)
Depreciation fixtures and fittings 40 (1)
Depreciation delivery van 135 (1) 1 875
Profit for the month 3 345 (1of)
[7]
© UCLES 2016
(c)
Amina and Doreen

$ $ $
Accumulated
Non-current assets Cost NBV
depreciation
Delivery vehicle 8 100 (1) 135 (1of) 7 965
Fixtures and fittings 4 800 (1) 40 (1of) 4 760
12 900 175 12 725
Current assets
Inventory (150 × 4) 600 (1)
Trade receivable (50 × 10) 500 (1)
Bank 10 520 (1of)
Cash 100 (1) 13 520
Total assets 26 245
Capital Amina 13 100 (1)

Doreen 9 800 (1) 22 900
Current Amina 2 230 (1of)

Doreen 1 115 (1of) 3 345
26 245
[13]
[Total: 30]
© UCLES 2016
ACCOUNTING 0452/21
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

Cambridge IGCSE – May/June 2016 0452 21
1 (a)
Katie
Stationery account

2015 2015
May 1 Balance b/d 182 Dec 6 A1 Stationers (1) 53
12 Cash (1) 95 2016
Nov 30 A1 Stationers (1) 217 Apl 30 Income Statement (1)OF 245
___ Balance c/d 196
494 494
2016
May 1 Balance b/d (1) 196
A1 Stationers account

2015 2015
July 9 Bank (1) 114 May 1 Balance b/d 114
Dec 6 Stationery (1) 53 Nov 30 Stationery (1) 217
2016
Apl 30 Balance c/d 164 ___
331 331
2016
May 1 Balance b/d (1)OF 164
Commission receivable account

2015 2015
May 1 Balance b/d 1680 Jun 16 Bank (1) 1680
2016 Sep 10 Bank (1) 1710
Apl 30 Income Statement (1)OF 2016
3300 Apl 30 Balance c/d 1590
4980 4980
2016
May 1 Balance b/d (1) 1590
+ (1) dates [14]
(b) General/nominal ledger (1) [1]
(c) Current assets (1)

It is an amount owing to Katie, payable in the next 12 months (1) [2]
[Total: 17]
© Cambridge International Examinations 2016

2 (a) (i) Cost is the purchase price of the goods plus any additional costs incurred in bringing the
inventory to its present condition and position (1)
(ii) Net realisable value is the estimated receipts from the sale of the inventory less any
costs of completing or selling the goods (1) [2]
(b) Inventory should always be valued at the lower of cost and net realisable value
This is an application of the principle of prudence
Over-valuing the inventory causes the profit for the year to be overstated
Over-valuing the inventory causes the current assets to be overstated
(c)
cost of sales (1)
profit for the year (1)

[2]
cost of goods sold }

(d) (i) Either (1) whole formula
average inventory }
average inventory }
Or × 365 whole formula [1]
cost of goods sold }
49 900 }
(ii) Either (1) whole formula = 6.65 times (1)
7500 }
7500
Or × 365 (1) whole formula = 54.86 days = 55 days (1) [2]
49 900
(e) Unsatisfied (1)

Or OF based on answer to (d) (ii)
Not selling goods as quickly as previously (1)

OR OF based on answer to (d) (ii) [2]
(f) Reduce inventory levels

Increase sales activity
Only replace inventory when necessary
Any one point (1) [1]

(g) (i) Cash represents the cash the trader possesses (1)
Bank represents an overdraft/what the trader owes the bank (1) [2]
(ii) Not enough money in the account

Cheque unsigned
Amount in words and figures disagree
Cheque undated/out of date
Takes account into unauthorised overdraft
Or other acceptable reason
Any two reasons (1) each [2]
(iii) Received (1) [1]
15 100
(iv) × = 2.50% (1) [1]
(585 + 15) 1
(v) This is a contra entry (1)

Money was transferred from the cash into the bank (1) [2]
(vi) Debited (1) [1]
(vii) Cash balance $2 debit (1)

Bank balance $638 debit (1) [2]
[Total: 23]

3 (a)
Hillcrest Athletics Club
$ $
Revenue 10 430 (1)
Less Cost of sales
Opening inventory 790 (1)
Purchases (7998 (1) + 1137 (1) – 1292 (1)) 7 843
8 633
Less Closing inventory 850 (1) 7 783
Profit on café 2 647 (1) OF
[7]
(b)
$
Subscriptions received 16 910 (1)
Add Opening prepayment 1 045 (1)
17 955
Add Closing accrual 285 (1)
18 240
Less Opening accrual 760 (1)
Subscriptions for the year 17 480 (1) OF
Alternative presentation acceptable [5]
(c)
Hillcrest Athletics Club
Income and Expenditure Account for the year ended 30 April 2016
$ $
Income Subscriptions 17 480 (1) OF
Café profit 2 647 (1) OF
Profit on sale of equipment
(1059 – 956) 103 (1)
20 230
Expenditure Rent, rates & insurance
(4860 (1) + 155 (1) – 180 (1)) 4 835
General expenses 14 794
Depreciation – equipment 2 445 22 074
Deficit 1 844 (1) OF
[9]
[Total: 21]

4 (a) $19 360 – (4% × 80 000 (1)) = $16 160 (1) [2]
8000 100
(b) (i) × = 4% (1) [1]
200 000 1
(6250 + 5000) (1) 100

(ii) × = 4.5% (1)OF [3]
(200 000 + 50 000) (1) 1
(c)
Nyeko Limited
Statement of Changes in Equity for the year ended 29 February 2016
Ordinary General Retained Total

share capital reserve earnings
$ $ $ $
On 1 March 2015 200 000 34 000 8 000 242 000 (1)
Share issue 50 000 50 000 (1)
Profit for the year 16 160 16 160 (1)OF
Dividend paid (for year (8 000) (8 000) (1)

ended 28 February 2015)
Dividend paid (for year (6 250) (6 250) (1)

ended 29 February 2016)
Transfer to general 6 000 (6 000) (1)

reserve
On 29 February 2016 250 000 40 000 3 910 293 910 (1)
OF OF OF OF
[7]

16 160 100
(d) (i) OF × (1) OF whole formula = 8.97% (1)OF [2]
180 200 1
(ii) Increase gross profit

Reduce expenses
16 160 100
(e) (i) OF × (1) OF whole formula = 6.68% (1)OF [2]
242 000 1
(ii) Increase profit for the year

Increase efficiency
Use resources more efficiently
Or other suitable point
(f) Reduction in profit available for ordinary shareholders

Prior claim on the profits of the company
Prior claim on the assets of the company in the event of a winding-up
[Total: 23]

5 (a)
Samar
Date $ Date Details $

2016 2015
Apl 30 Income statement (1) 38 May 1 Balance b/d (1) 474
Balance c/d 436 ___
474 474
2016
+ (1) dates
[4]
(b)
Samar
Extract from Statement of Financial Position at 30 April 2016
Current assets $ $
Less Provision for doubtful debts 436 (1)OF 17 004 (1)OF
[2]
(c) A bad debt is an amount owing to a business which will not be paid by a credit customer (1)
A provision for doubtful debts is an estimate of the amount which a business will lose in the
financial year because of bad debts (1) [2]
(d) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables (current assets) are not overstated (1) [2]
(e) Accruals/matching (1) [1]
(f) Reduce credit sales/sell on a cash basis

Invoice discounting/debt factoring

(g)
Samar
Journal
Debit Credit
$ $
Bank 49 (1)
Bad debts recovered 49 (1)
Recovery of debt previously written off (1)
Alternative presentation
M Khan 49 }(1)
Bad debts recovered 49 }
Bank 49 }(1)
M Khan 49
Recovery of debt previously written off (1)
[3]
[Total: 16]

6 (a)
Wasim
Suspense account

2016 2016
Mar 31 Difference on trial balance (1) 495 Mar 31 Purchases (1) 18
Balance c/d 190 Petty cash (1) 100
Discount Alld (1) 250
Discount Recd (1) 250
___ Stationery (1) 67
685 685
2016
Apl 1 Balance b/d (1)OF 190
[7]
(b)
Wasim
Journal
Error Debit Credit

number $ $
2 DDE Limited 150
DEC Limited 150
Correction of error – DDE Limited
wrongly credited
4 Motor repairs 283
Motor vehicles 283
Correction of error – repairs
wrongly debited
5 Fixtures 4400
Office Supplies Company 4400
Correction of reversal of entries
Any TWO of the above journal entries (1) debit entry

(1) credit entry
(1) narrative
[6]
(c) Error of commission (1) [1]

(d)
error number affects profit for the year does not affect the profit
for the year
1
2 (1)
3 (1)
4 (1)
5 (1)
6 (1)
7 (1)
[6]
[Total: 20]

ACCOUNTING 0452/22
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

1 (a) Reduce the number of entries in the main cash book
Removes the small cash payments from the main cash book
Reduces the number of entries in the ledger
Allows the chief cashier to delegate some of the work
Provides training for junior staff members
Accept other suitable reasons

(b) (i)
Carol
Petty Cash Book
Total Total Postage & General Ledger
Date Details
received paid stationery expenses accounts
$ 2016 $ $ $ $
23 April 1 Balanceb/d
77 Bank(1)
4 Tea and coffee(1) 11 11
16 Stationery(1) 25 25
19 Taxi fare(1) 8 8
23 T Nhete(1) 38 38
30 Balancec/d 82 25 19 38
18
100 2016 100

May1 Balanceb/d(1)OF
18
(1) Dates
(1) OF Totalling analysis columns
(1) OF Totalling total columns [9]

(ii)
Carol
Cash Book
allowed received
2016 $ $ $ 2016 $ $ $
Apl1 Balanceb/d 210 Apl1 Balanceb/d 1437
20 B Mamba(1) 23 897 Petty cash(1) 77
28 Sales(1) 2970 9 K Mzolo(1) 9 441
29 Cashc(1)OF 3080 29 Bankc(1) 3080
30 Balancec/d 100 2022
23 3180 3977 9 3180 3977
2016
100 (1) 2022
May 1 Balancesb/d
(1)OF
+ (1)OF totalling discount columns

+ (1) dates [10]
[Total: 21]

2 (a)
$
Receipts from credit customers 61 230 (1)
Cash discount allowed 1 570 (1)
Returns from credit customers 2 070 (1)
Bad debts 260 (1)
Amount owing by customers 29 February 2016 16 190 (1)
Credit sales 81 320 (1) OF

2016 *Sales(1)OF 81 320 2016 Bank 61 230 (1)

Feb 29 Feb 29 Discount alld 1 570 (1)
Returns 2 070 (1)
Bad debts 260 (1)
_____ Balance c/d 16 190 (1)
81 320 81 320
2016 Balance b/d 16 190

Mar1
*Balancing figure [6]
(b)
$ $
Credit purchases 70 150 (1)
Less Returns to credit suppliers 1 110 (1)
Cash discount received 1 860 (1)
Amount owing to credit suppliers
29 February 2016 7 040 (1) 10 010
Amount paid to credit suppliers 60 140 (1)OF

2016 2016
Feb 29 Returns(1) 1 110 Feb 29 Purchases(1) 70 150
Discount recd (1) 1 860
*Bank(1)OF 60 140
Balance c/d(1) 7 040 _____
70 150 70 150
2016
Mar1 Balance b/d 7 040
*Balancing figure
[5]

(c)
Aneela
Bank account

2015 2016
Mar1 Capital(1) 45 000 Feb 29 Non-current assets
Loan(1) 10 000 (1) 20 500
2016 Trade payables
Feb 29 Trade receivables 61 230 (1)OF 60 140
(1) *Expenses(1)OF 18 620
_______ Balance c/d(1) 16 970
116 230 116 230
2016
*Balancing figure
[7]
[Total: 18]
3 (a) Share losses

Share responsibilities
Share risks
Share decision-making
Additional finance may be available
Additional skills and experience are available
(b) Share profits

Decisions must be recognised by all partners
Decisions may take longer to implement
One partner’s actions can bind the other partners
Disagreements can occur
All partners are responsible for the debts of the business
(c) Greater security than capital [1]
Repaid before capital in a winding-up

Extra funds may be required for a limited period only

Any 1 comment (1)
(d) To be able to meet debts when they fall due

To be able to take advantage of cash discounts
To be able to take advantage of business opportunities as they arise
To ensure that there is no difficulty if obtaining supplies/services on credit
Or other suitable explanation


(e) Alternative presentation of current accounts
Current accounts
Abid Faiz Abid Faiz

$ $ $ $
2015 2015
Apl 1 Balance 110 Apl 1 Balance 800
b/d b/d(1)
2016 2016
Mar 31 Drawings 6 000 7 000 Mar 31 Interest
(1) on
Interest Capital(1) 2 400 1 650
on
drawings 120 140 Salary (1) 5 000
(1)
Balance 1 770 Profit 2 920 1 460
c/d share (1)
Balance 910
c/d
6 230 8 910 6 230 8 910
+ (1) OF for each balance if shown in statement of financial position making a total of
(8) for the current accounts [13]

Abid and Faiz

Statement of Financial Position at 31 March 2016
$ $ $
Assets
Non-current assets
Fixtures and equipment (book
104 000
value)
Motor vehicles (book value) 28 520
132 520 (1)
Current assets
Bank 16 080
35 400 (1)
Capital and liabilities

Abid Faiz Total
Capital accounts 80 000 55 000 (1) both 135 000
Current accounts
Opening balance (110) 800 (1) both
Interest on capital 2 400 1 650 (1) both
Salary 5 000 (1)
Profit share 2 920 1 460 (1) both
5 210 8 910
Drawings 6 000 7 000 (1)
Interest on drawings 120 140 (1) both
6 120 7 140
Closing balance (910) (1) OF 1 770 (1) OF
860
135 860
Loan – Abid 20 000 (1)
Current liabilities
Trade payables 11 900 }
Other payables 160 }(1)
12 060

[13]
13170 100 }
(f) × (1) whole formula OF= 8.45% (1) OF [2]
(167 920 − 12 060) 1 }

(g) Shows the profit earned for each $100 used in the business (1)
The higher the percentage the more efficiently the capital is being employed (1)
Or other acceptable answer

[Total: 22]
4 (a)
Yasmin
Manufacturing Account for the year ended 30 April 2016
$ $
Cost of materials used
Purchases of raw materials 28 600 (1)
Carriage on raw materials 1 500 (1) 30 100
Less Closing inventory of raw materials 3 150 (1)
26 950
Direct wages 32 300 (1)
Prime cost 59 250 (1)
Factory overheads
Indirect factory wages 11 860 (1)
General factory expenses 3 340 (1)
Rates (¾ × 6000) 4 500 (1)
Depreciation – Machinery (35 000 × 20%) 7 000 (1)
Tools (1000 – 830) 170 (1) 26 870
86 120 (1) OF
Less Closing work in progress 2 920 (1)
Cost of production 83 200 (1) OF
[13]
(b) (i)

98 900
Less Closing inventory of finished goods 6 800 (1)
Cost of sales 92 100 (1) OF
[4]
(ii)
Revenue 113 640
Cost of sales 92 100 OF
[1]
21540 100 }
(c) (i) OF × (1)OF whole formula = 18.95% (1) OF [2]
113 640 1 }

(ii) Increase selling price

Increase mark-up
Reduce cost of manufacturing
Purchase cheaper raw materials
Buy in bulk to obtain trade discount
Reduce factory wages
Reduce factory overheads
Or other suitable methods

Any 2 ways (1) each [2]
[Total: 22]
5 (a) Work can be shared amongst several people

Easier for reference as same types of account are kept together
Easier to introduce checking procedures
Reduce the possibility of fraud
Or other suitable advantage

(b) (i) Purchases ledger (1)
(ii) Nominal (general) ledger (1)
(iii) Nominal (general) ledger (1) [3]
(c) Paul
Rent and rates account
2015 2015
Jan1 Balance b/d Dec 31 Income statement
Rates900 Rates3870 (1)
Rent3200 4 100 Rent9600 (1) 13 470
Apl1 Bank (rates)(1) 3 960 Balance c/d
May1 Bank (rent)(1) 4 800 (rates) 990
Dec 31 Balance c/d
(rent) 1 600 _____
14 460 14 460
2016 2016
Jan1 Balance b/d Jan1 Balance b/d
(rates)(1)OF 990 (rent)(1)OF
1 600
+ (1) dates [7]
(d) This is an application of the principle of prudence


(e)
overstated understated no effect
Profit for the year ended (1)
31 December 2014
31 December 2015
Cost of sales for the year ended (1)
31 December 2015
Current assets at (1)
31 December 2014
31 December 2015
[5]
[Total: 18]
3 500 100 }
6 (a) (i) × (1) whole formula = 4.64% (1) [2]
(59 600 + 15 800) 1 }
(ii) Increase in expenses/not controlling expenses as well

Decrease in other income
Change in type of expense
Decrease in gross profit percentage
(b) David
Journal
Debit Credit
$ $
Office expenses 114 (1)
Cash 114 (1)
Correction of error of omission (1)
Suspense 900 (1)
Sales 900 (1)
Correction of error of transposition (1)
[6]

(c)
David
Statement of corrected profit for the year ended 31 January 2016
$
Profit for the year before corrections 3 500
Increase Decrease
in profit in profit
$ $
Error 1 114
Error 2 900 (2)
Error 3 600 (2)
Error 4 1 628 (2)
Error 5 24 (2)
900 2 366 1 466

Corrected profit for the year 2 034 (1)OF
For each error – (1) for position and (1) for figure [9]
[Total: 19]

ACCOUNTING 0452/23
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

1 (a) Reduce the number of entries in the main cash book
Accept other suitable reasons

(b) (i)
Carol
Petty Cash Book
Total Total Postage & General Ledger
Date Details
received paid stationery expenses accounts
$ 2016 $ $ $ $
23 April 1 Balanceb/d
77 Bank(1)
4 Tea and coffee(1) 11 11
16 Stationery(1) 25 25
19 Taxi fare(1) 8 8
23 T Nhete(1) 38 38
30 Balancec/d 82 25 19 38
18
100 2016 100

May1 Balanceb/d(1)OF
18
(1) Dates
(1) OF Totalling total columns [9]

(ii)
Carol
Cash Book
allowed received
2016 $ $ $ 2016 $ $ $
Apl1 Balanceb/d 210 Apl1 Balanceb/d 1437
20 B Mamba(1) 23 897 Petty cash(1) 77
28 Sales(1) 2970 9 K Mzolo(1) 9 441
29 Cashc(1)OF 3080 29 Bankc(1) 3080
30 Balancec/d 100 2022
23 3180 3977 9 3180 3977
2016
100 (1) 2022
May 1 Balancesb/d
(1)OF

+ (1) dates [10]
[Total: 21]

2 (a)
$
Cash discount allowed 1 570 (1)
Returns from credit customers 2 070 (1)
Bad debts 260 (1)
Amount owing by customers 29 February 2016 16 190 (1)
Credit sales 81 320 (1) OF

2016 *Sales(1)OF 81 320 2016 Bank 61 230 (1)

Feb 29 Feb 29 Discount alld 1 570 (1)
Returns 2 070 (1)
Bad debts 260 (1)
_____ Balance c/d 16 190 (1)
81 320 81 320
2016 Balance b/d 16 190

Mar1
*Balancing figure [6]
(b)
$ $
Credit purchases 70 150 (1)
Less Returns to credit suppliers 1 110 (1)
Cash discount received 1 860 (1)
Amount owing to credit suppliers
29 February 2016 7 040 (1) 10 010
Amount paid to credit suppliers 60 140 (1)OF

2016 2016
Feb 29 Returns(1) 1 110 Feb 29 Purchases(1) 70 150
Discount recd (1) 1 860
*Bank(1)OF 60 140
Balance c/d(1) 7 040 _____
70 150 70 150
2016
*Balancing figure
[5]

(c)
Aneela
Bank account

2015 2016
Mar1 Capital(1) 45 000 Feb 29 Non-current assets
Loan(1) 10 000 (1) 20 500
2016 Trade payables
Feb 29 Trade receivables 61 230 (1)OF 60 140
(1) *Expenses(1)OF 18 620
_______ Balance c/d(1) 16 970
116 230 116 230
2016
*Balancing figure
[7]
[Total: 18]
3 (a) Share losses

Share risks
(b) Share profits

(c) Greater security than capital [1]
Repaid before capital in a winding-up

Extra funds may be required for a limited period only

Any 1 comment (1)

To ensure that there is no difficulty if obtaining supplies/services on credit


(e) Alternative presentation of current accounts
Current accounts
Abid Faiz Abid Faiz

$ $ $ $
2015 2015
Apl 1 Balance 110 Apl 1 Balance 800
b/d b/d(1)
2016 2016
Mar 31 Drawings 6 000 7 000 Mar 31 Interest
(1) on
Interest Capital(1) 2 400 1 650
on
drawings 120 140 Salary (1) 5 000
(1)
Balance 1 770 Profit 2 920 1 460
c/d share (1)
Balance 910
c/d
6 230 8 910 6 230 8 910
(8) for the current accounts [13]

Abid and Faiz

$ $ $
Assets
Non-current assets
Fixtures and equipment (book
104 000
value)
Motor vehicles (book value) 28 520
132 520 (1)
Current assets
Bank 16 080
35 400 (1)

Abid Faiz Total
Capital accounts 80 000 55 000 (1) both 135 000
Current accounts
Opening balance (110) 800 (1) both
Interest on capital 2 400 1 650 (1) both
Salary 5 000 (1)
Profit share 2 920 1 460 (1) both
5 210 8 910
Drawings 6 000 7 000 (1)
Interest on drawings 120 140 (1) both
6 120 7 140
Closing balance (910) (1) OF 1 770 (1) OF
860
135 860
Loan – Abid 20 000 (1)
Current liabilities
Other payables 160 }(1)
12 060

[13]
13170 100 }
(f) × (1) whole formula OF= 8.45% (1) OF [2]
(167 920 − 12 060) 1 }

(g) Shows the profit earned for each $100 used in the business (1)
The higher the percentage the more efficiently the capital is being employed (1)
Or other acceptable answer

[Total: 22]
4 (a)
Yasmin
$ $
Carriage on raw materials 1 500 (1) 30 100
Less Closing inventory of raw materials 3 150 (1)
26 950
Factory overheads
Indirect factory wages 11 860 (1)
General factory expenses 3 340 (1)
Rates (¾ × 6000) 4 500 (1)
Depreciation – Machinery (35 000 × 20%) 7 000 (1)
Tools (1000 – 830) 170 (1) 26 870
86 120 (1) OF
[13]
(b) (i)

98 900
Less Closing inventory of finished goods 6 800 (1)
[4]
(ii)
Revenue 113 640
Cost of sales 92 100 OF
[1]
21540 100 }
(c) (i) OF × (1)OF whole formula = 18.95% (1) OF [2]
113 640 1 }

(ii) Increase selling price

Increase mark-up
Reduce cost of manufacturing
Purchase cheaper raw materials
Buy in bulk to obtain trade discount
Reduce factory wages
Reduce factory overheads
Or other suitable methods

Any 2 ways (1) each [2]
[Total: 22]

Easier for reference as same types of account are kept together
Reduce the possibility of fraud

(b) (i) Purchases ledger (1)
(ii) Nominal (general) ledger (1)
(c) Paul
2015 2015
Jan1 Balance b/d Dec 31 Income statement
Rates900 Rates3870 (1)
Rent3200 4 100 Rent9600 (1) 13 470
Apl1 Bank (rates)(1) 3 960 Balance c/d
May1 Bank (rent)(1) 4 800 (rates) 990
Dec 31 Balance c/d
(rent) 1 600 _____
14 460 14 460
2016 2016
Jan1 Balance b/d Jan1 Balance b/d
(rates)(1)OF 990 (rent)(1)OF
1 600
+ (1) dates [7]
(d) This is an application of the principle of prudence


(e)
31 December 2014
31 December 2015
Cost of sales for the year ended (1)
31 December 2015
31 December 2014
31 December 2015
[5]
[Total: 18]
3 500 100 }
6 (a) (i) × (1) whole formula = 4.64% (1) [2]
(59 600 + 15 800) 1 }
(ii) Increase in expenses/not controlling expenses as well

Change in type of expense
Decrease in gross profit percentage
(b) David
Journal
Debit Credit
$ $
Cash 114 (1)
Correction of error of omission (1)
Suspense 900 (1)
Sales 900 (1)
[6]

(c)
David
Statement of corrected profit for the year ended 31 January 2016
$
Increase Decrease
in profit in profit
$ $
Error 1 114
Error 2 900 (2)
Error 3 600 (2)
Error 4 1 628 (2)
Error 5 24 (2)
900 2 366 1 466

For each error – (1) for position and (1) for figure [9]
[Total: 19]

ACCOUNTING 0452/11
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

1 (a) A
(b) A
(c) D
(d) C
(e) B
(f) A
(g) C
(h) B
(i) C
(j) B
2 (a) capital at start of year plus profit for the year plus capital introduced minus drawings [1]
= capital at end of year (1)
(b)
Account(s) debited$ Account(s) credited$

1 Purchases 1 000 Pamela 1 000
2 Delivery van 17 000 (1) Bank 12 000 (1)
AM Motors 5 000 (1)
3 Wages 250 (1) Bank 250 (1)
4 Ali 960 (1) Sales 960 (1)
5 Cash 110 (1) Bank 110 (1)
[9]
(c) Transaction 3 (1) [1]

(d) Transaction 4 (1) [2]
$360 (1)
(e) Transaction 5 (1) [1]
(f) capital employed = owner’s capital + non-current liabilities (1) [1]
OR
capital employed = total assets – current liabilities (1)
(g) cash book (1) [1]
(h) general journal (1) [1]
(i)
asset liability expense income
premises
accrued wages
decrease in provision for doubtful debts
bank loan
depreciation charge
carriage outwards
Any two items correct for (1) mark [3]
[Total: 20]
3 (a)
It contains details of the quantity and price of goods False (1)
supplied.
It shows the value of trade discount given. False (1)
It shows the balance owing at the start of the period. True (1)
It is sent to remind the customer of the amount owed. True (1)
[4]

(b)
Dilip James
invoice (1)
credit note (1)
debit note (1)
[3]
(c) Dilip – sales returns journal (1)

James – purchases returns journal (1) [2]
(d) Invoice – when goods are sold (1)

Credit note – when goods are returned (1)
Statement of account – at end of the period, usually a month (1) [3]
(e)
Dilip
James account
2016 $ 2016 $
Mar 1 Balance b/d 300 (1) Mar 3 Bank 291 (1)
6 Sales 496 (1) Discount allowed 9 (1)
13 Sales returns 144 (1)
31 Balance c/d 352
796 796
Apr 1 Balance b/d 352 (1of)
+(1) for dates [7]
(f) Item – trade receivables (1)

Section – current assets (1) [2]
(g) For early payment (1) [1]
[Total: 22]

4 (a)
Name of accounting
Explanation
principle or policy
Duality Every transaction has a two-fold aspect
Prudence (1) Profits should not be overstated
Money measurement (1) Financial statements only include items which can be
expressed in monetary terms
Going concern Accounting assumes that a business will continue to
operate indefinitely (1)
Business entity A distinction is made between the financial transactions of
a business and those of its owner(s) (1)
Reliability (1) Accounting information should be free from error and bias
Consistency The same accounting treatment should be applied to
similar items at all times (1)
[6]
(b) different accounting policies

different locations
different capital structures
different type of business
different type of goods sold
different year end
non-monetary items
different size of business
Accept other reasonable answer
(c)
User Reason
Bank manager To make decision regarding loan or overdraft (1)
Credit supplier To ensure credit worthiness of customer (1)
To establish credit limit (1)
Investor To see the return on his investment (1)
Other reasonable answers accepted.

[3]

(d) Prime cost = direct materials plus direct labour (1) plus direct expenses (1) [2]
(e)
manufacturing income
account statement
depreciation of factory machinery
depreciation of delivery van
royalties
factory rent
salesman’s commission
factory supervisor’s salary
sales returns
closing inventory of work in progress
(1) mark for any two items correct [4]
(f) Items of production which are partial completed (1) [1]
(g) Because a boat takes longer to make than a bread roll (1) [1]
[Total: 19]
5 (a)
Rohinton
Cash book (bank columns only)
2016 $ 2016 $
Feb 1 Balance b/d 3 188 (1) Feb 1 Insurance 720 (1)
Balance c/d 2 468
3 188 3 188
[3]

(b)
Rohinton
Bank reconciliation statement at 31 January 2016
$ $
Balance per updated cash book (1) 2 468 (1of)
Add: unpresented cheques – Arun 402 (1)
– Charles 780 (1) 1 182
3 650
Less: uncredited deposit – Ling (195) (1)
Balance per bank statement (1) 3 455 (1)
OR
Rohinton
Bank reconciliation statement at 31 January 2016
$ $
Balance per bank statement (1) 3 455 (1)
Less: unpresented cheques – Arun 402 (1)
– Charles 780 (1) (1 182)
2 273
Add: uncredited deposit – Ling 195 (1)
Balance per updated cash book (1) 2 468 (1of)
[7]
(c)
Rohinton
Statement of affairs at 31 January 2016
$ $
Non-current assets
Fixtures and fittings – cost 4 000 (1)
– depreciation4000 × 0.15 ÷ 12 (50) (1) 3 950
Current assets
Inventory 1 211 (1)
Trade receivable 70 (1)
Other receivables – rent 2 000 (1)
– insurance 660 (1) 2 660
Bank 2 468 (1of)
Cash 710 (1) 7 119
Current liabilities
Trade payable (550) (1)
Net assets 10 519
Capital 10 519 (1of)

[10]

(d)
$
Capital – at 31 January 2016 10 519 (1of)
– at 1 January 2016 10 000 (1)
Profit for the month 519 (1of)
[3]
[Total: 23]
6 (a) Annual depreciation $3720 (1)
11 160(1) / 3720 = 3 years (1) [3]
(b)
David and Harold
Income Statement for the year ended 31 March 2016
$ $
Revenue (sales) 142 000 (1)
Inventory at 1 April 2015 36 000
119 100
Inventory at 31 March 2016 26 800
Cost of sales 92 300 (1)
Depreciation 3 720 (1of)
Rent 12 000 }
Wages 16 500 }(1)
Other operating expenses 11 300 (1)
43 520
[8]
(c)
David and Harold
Appropriation Account for the year ended 31 March 2016
$
Salary – David (12 000) (1)
(5 820)
Share of residual loss – David (3 880)

– Harold (1 940) (5 820) (1of)
[3]

(d)
$
Salary 12 000 (1of)
Share of loss (3 880) (1of)
Total 8 120 (1of)
[3]
(e) Interest on drawings might encourage partners to reduce drawings. (1) [1]
49 700 100
(f) (1of) × = 35% (1of) [2]
142 000 1
(g) Cost of sales = [142 000 (1) × (1 – 0.45)(1)] = $78 100 (1)
(36 000 + 83 100) (1) – 78 100 = 41 000 (1)
OR
$
Opening inventory 36 000 }
Purchases 83 100 }(1)
Cost of sales (78 100)* (3)
Expected closing inventory 41 000 (1of)
*142 000 (1) – 63 900 (1) = $78 100 (1) [5]
(h) Any reasonable answer for (1) mark [1]
E.g. Theft, pilferage, damage, obsolescence, more/higher sales activity
[Total: 26]

ACCOUNTING 0452/12
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

1 (a) A
(b) B
(c) D
(d) B
(e) A
(f) C
(g) B
(h) A
(i) D
(j) C [10]
2 (a) Assets – liabilities = capital (1) [1]
Or suitable alternative
(b)
drawings (1) cash (1)
[2]
(c) Decreased (1) [1]
(d) Goods for own use [1]

Private expenses paid by business
Business asset taken over by owner
Any one (1) mark

(e) Capital employed = owner’s capital + non-current liabilities (1) [1]
OR
Capital employed = assets less current liabilities (1)
(f) The recording of all financial transactions in the books of account (1) [1]
(g) Any one of: [1]
To avoid multiple entries in the ledger

Different books of prime entry can be maintained by different people
Acts as an aid for posting to the ledger by analysing a transaction into debit and credit entry
Helps to reduce the amount of detail in the ledger as only totals are posted to the ledger
Provides evidence of transactions since they are recorded from source documents
Helps in the auditing/tracking process/facilitates cross referencing
Easy reference to source of transaction
Helps in gathering and summarising of accounting information
Groups together similar types of transactions in one book in date order
(h)

cash book cheque counterfoil
sales journal sales invoice (1)
sales returns journal credit note issued(1)
purchases journal purchase invoice (1)
petty cash book voucher (1)
[4]
(i) Any correct answer for (1) mark [1]
E.g. depreciation, bad debt, creation of/increase in/decrease in provision for doubtful debts,
correction of error, purchase/sale of non-current asset on credit, drawings of goods etc.
(j) Duality / dual aspect (1) [1]
[Total: 14]

3 (a) A statement comprised of revenues and expenses (1) for a specific period (1) [2]
(b) To know if he has made a profit/has an adequate return on his investment (1) [1]
(c)
User Reason
credit supplier to check on likelihood of being paid
manager to see efficiency and progress of the business
bank/lender to check on suitability for loan
government to use in tax calculation
OR other suitable user
(1) mark for any suitable user plus related reason for (1) mark [2]
(d) To check the arithmetical accuracy of the double entry (1) [1]
OR
As a basis for the preparation of the financial statements (1)
(e)
machinery
bank overdraft
inventory
capital
purchases
discount received
carriage outwards
trade receivables
Any two correct answers = 1 mark [4]
(f) (i) Machinery } [2]

Inventory}
Trade receivables}
all 3 correct for (2) marks, any 2 correct for (1) mark

(ii) Bank overdraft (1) [3]
(g) Suspense (1) [1]
(h) Any two for 2 marks: [4]
Omission (1) transaction totally omitted from the books (1)

Commission (1) transaction posted to wrong account of right class (1)
Principle (1) transaction posted to account of wrong class (1)
Original entry (1) transaction incorrectly recorded in book of prime entry (1)
Reversal (1) debit entry posted on credit side and vice versa (1)
Compensating (1) errors cancel one another out (1)
[Total: 18]
4 (a)
$
Year 1 10 000 × 0.25 2500 (1)
Year 2 7500 × 0.25 1875 (1)
Total 4375 (1)
[3]
(b)
Virginia
Motor vehicle account
2015 $ 2015 $
Jan 1 Balance b/d 10 000 (1) May 28 Disposal 10 000 (1)
May 28 Bank 17 000 (1) Dec 31 Balance c/d 17 000
27 000 27 000
2016
Jan 1 Balance b/d 17 000 (1of)
Provision for depreciation of motor vehicle account
2015 $ 2015 $
May 28 Disposal 4375 (1of) Jan 1 Balance b/d 4375 (1of)
Dec 31 Balance c/d 4250 Dec 31 Income 4250 (1)
statement
8625 8625
2016
Jan 1 Balance b/d 4250 (1of)

Motor vehicle disposal account
2015 $ 2015 $
May 28 Motor vehicle May 28 Provision for
10 000 (1) depreciation 4 375 (1of)
Dec 31 Income Cash 7 210 (1)
statement (1) 1 585 (1of)
11 585 11 585
+(1) for dates

[14]
(c) Statement of financial position (1) [2]
Non-current assets (1)
(d) The cost of the non-current asset and the revenues arising from its use are matched (1) in an
accounting period (1) [2]
OR
The cost of the non-current asset is spread (1) over its useful life (1)
(e) Prudence (1) [1]
(f) Small items of equipment e.g. loose tools (1) [1]
[Total: 23]
5 (a) Separate legal identity from its owner (1) [max 3]

Limited liability (1)
Can issue shares to raise capital (1)
May find it easier to obtain loans/issue debentures (1)
Continuity (1)
Other reasonable answers acceptable
(b)
definition term
the value of shares which a company called up capital (1)
has requested from its shareholders
the value of shares for which the paid up capital (1)
company has received cash
[2]

(c)
AC Industries Limited
Statement of Changes in Equity for the year ended 31 March 2016

$ $ $ $
On 1 April 2015 100 000 20 000 36 800 156 800 (1)
Share issue 10 000 ................ .................. 10 000 (1)
Profit for the year ............... ................ 19 300 19 300 (1)
Dividend paid ............... ................ (7 000) (7 000) (1)
Transfer to general reserve ............... 5 000 (5 000) – (1)
On 31 March 2016 110 000 25 000 44 100 179 100 (1of)
[6]

(d)
$
Non-current assets 189 800 (1of)
Current assets
Inventory 17 800 (1)
25 800
Equity and reserves (1)

Ordinary share capital 110 000 }
General reserve 25 000 }(1of)
Retained earnings 44 100 }
179 100 (1of)
Non-current liabilities (1)

Bankloan 15 000 (1)
Current liabilities
Trade payables 19 000 (1)
21 500
Accept alternative presentation [10]
(e) To reduce the overdraft [1]

To fund an increase in inventory
To purchase new non-current assets
Growth/expansion
Any reasonable answer for (1) mark

(f) Quick (acid test) ratio (1) [4]
8 000 (1) = 0.37: 1 (1of)

21 500 (1of)
(g) Liquidity is poor (1) [Max 4]

Both ratios appear low (1)
There is insufficient cash to meet current liabilities as they fall due (1)
Current assets do exceed current liabilities (1)
There is already a bank overdraft (1)
Too high a proportion of current assets is made up of inventory (1)
Trade payables are much higher than trade receivables (1)
Overdraft facilities could be withdrawn at any time (1)
Relationship with credit suppliers could be damaged (1)
Award OF for comments linked to (d) and (f)
[Total: 30]
6 (a)
$
Opening balance 6 100 (1)
Receipts (10 100 + 3550) 13 650 (1)
Payments (2800 + 3920 + 2400 + 2750 + 1880) (13 750) (1)
Closing balance 6 000 (1of)
[4]
(b)
Cambridge Club
Subscriptions account
2015 $ 2016 $
Apr 1 Balance b/d 200 (1) Mar Bank 10 100 (1)
31
2016 Balance c/d 100
Mar Income and
31 expenditure (1of)
account 10 000
10 200 10 200
2016
Apr 1 Balance b/d 100 (1)
+( 1) for dates [5]

(c)
Cambridge Club
Calculation of shop profit for the year ended 31 March 2016
$ $
Sales 3 550 (1)
Opening inventory 710 *
Purchases 2800 (1)– 350 (1) + 510 (1) 2 960
3 670
Closing inventory 560 *(1) 3 110
both
Profit 440 (1of)
Accept alternative formats [6]
(d)
Cambridge Club
Income and Expenditure Account for the year ended 31 March 2016
$ $
Subscriptions 10 000 (1of)
Shop profit 440 (1of)
10 440
Less: expenditure
Rent paid for sports ground 2 400 (1)
Wages of football coach 2 750 (1)
Depreciation on equipment
( 3600 + 3920 – 5920 ) 1 600 (2) 8 630
Surplus 1 810 (1of)
[8]
(e) Increase the selling price (1) [max 2]

Buy cheaper goods (1)
Other valid points acceptable
[Total: 25]

ACCOUNTING 0452/13
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

1 (a) A
(b) B
(c) D
(d) B
(e) A
(f) C
(g) B
(h) A
(i) D
(j) C [10]
2 (a) Assets – liabilities = capital (1) [1]
Or suitable alternative
(b)
drawings (1) cash (1)
[2]
(c) Decreased (1) [1]
(d) Goods for own use [1]

Private expenses paid by business
Business asset taken over by owner
Any one (1) mark

(e) Capital employed = owner’s capital + non-current liabilities (1) [1]
OR
Capital employed = assets less current liabilities (1)
(f) The recording of all financial transactions in the books of account (1) [1]
(g) Any one of: [1]
To avoid multiple entries in the ledger

Different books of prime entry can be maintained by different people
Acts as an aid for posting to the ledger by analysing a transaction into debit and credit entry
Helps to reduce the amount of detail in the ledger as only totals are posted to the ledger
Provides evidence of transactions since they are recorded from source documents
Helps in the auditing/tracking process/facilitates cross referencing
Easy reference to source of transaction
Helps in gathering and summarising of accounting information
Groups together similar types of transactions in one book in date order
(h)

cash book cheque counterfoil
sales journal sales invoice (1)
sales returns journal credit note issued(1)
purchases journal purchase invoice (1)
petty cash book voucher (1)
[4]
(i) Any correct answer for (1) mark [1]
E.g. depreciation, bad debt, creation of/increase in/decrease in provision for doubtful debts,
correction of error, purchase/sale of non-current asset on credit, drawings of goods etc.
(j) Duality / dual aspect (1) [1]
[Total: 14]

3 (a) A statement comprised of revenues and expenses (1) for a specific period (1) [2]
(b) To know if he has made a profit/has an adequate return on his investment (1) [1]
(c)
User Reason
credit supplier to check on likelihood of being paid
manager to see efficiency and progress of the business
bank/lender to check on suitability for loan
government to use in tax calculation
OR other suitable user
(1) mark for any suitable user plus related reason for (1) mark [2]
(d) To check the arithmetical accuracy of the double entry (1) [1]
OR
As a basis for the preparation of the financial statements (1)
(e)
machinery
bank overdraft
inventory
capital
purchases
discount received
carriage outwards
trade receivables
Any two correct answers = 1 mark [4]
(f) (i) Machinery } [2]

Inventory}
Trade receivables}
all 3 correct for (2) marks, any 2 correct for (1) mark

(ii) Bank overdraft (1) [3]
(g) Suspense (1) [1]
(h) Any two for 2 marks: [4]

Compensating (1) errors cancel one another out (1)
[Total: 18]
4 (a)
$
Year 1 10 000 × 0.25 2500 (1)
Year 2 7500 × 0.25 1875 (1)
Total 4375 (1)
[3]
(b)
Virginia
Motor vehicle account
2015 $ 2015 $
Jan 1 Balance b/d 10 000 (1) May 28 Disposal 10 000 (1)
May 28 Bank 17 000 (1) Dec 31 Balance c/d 17 000
27 000 27 000
2016
Provision for depreciation of motor vehicle account
2015 $ 2015 $
May 28 Disposal 4375 (1of) Jan 1 Balance b/d 4375 (1of)
Dec 31 Balance c/d 4250 Dec 31 Income 4250 (1)
statement
8625 8625
2016
Jan 1 Balance b/d 4250 (1of)

Motor vehicle disposal account
2015 $ 2015 $
May 28 Motor vehicle May 28 Provision for
10 000 (1) depreciation 4 375 (1of)
Dec 31 Income Cash 7 210 (1)
statement (1) 1 585 (1of)
11 585 11 585
+(1) for dates

[14]
(d) The cost of the non-current asset and the revenues arising from its use are matched (1) in an
accounting period (1) [2]
OR
The cost of the non-current asset is spread (1) over its useful life (1)
(e) Prudence (1) [1]
(f) Small items of equipment e.g. loose tools (1) [1]
[Total: 23]
5 (a) Separate legal identity from its owner (1) [max 3]

Limited liability (1)
Can issue shares to raise capital (1)
May find it easier to obtain loans/issue debentures (1)
Continuity (1)
Other reasonable answers acceptable
(b)
definition term
the value of shares which a company called up capital (1)
has requested from its shareholders
the value of shares for which the paid up capital (1)
company has received cash
[2]

(c)

$ $ $ $
On 1 April 2015 100 000 20 000 36 800 156 800 (1)
Share issue 10 000 ................ .................. 10 000 (1)
Profit for the year ............... ................ 19 300 19 300 (1)
Dividend paid ............... ................ (7 000) (7 000) (1)
Transfer to general reserve ............... 5 000 (5 000) – (1)
On 31 March 2016 110 000 25 000 44 100 179 100 (1of)
[6]

(d)
$
Non-current assets 189 800 (1of)
Current assets
25 800
Equity and reserves (1)

Ordinary share capital 110 000 }
General reserve 25 000 }(1of)
Retained earnings 44 100 }
179 100 (1of)

Bankloan 15 000 (1)
Current liabilities
21 500
Accept alternative presentation [10]
(e) To reduce the overdraft [1]

To fund an increase in inventory
To purchase new non-current assets
Growth/expansion
Any reasonable answer for (1) mark

(f) Quick (acid test) ratio (1) [4]
8 000 (1) = 0.37: 1 (1of)

21 500 (1of)
(g) Liquidity is poor (1) [Max 4]

Both ratios appear low (1)
There is insufficient cash to meet current liabilities as they fall due (1)
Current assets do exceed current liabilities (1)
There is already a bank overdraft (1)
Too high a proportion of current assets is made up of inventory (1)
Trade payables are much higher than trade receivables (1)
Overdraft facilities could be withdrawn at any time (1)
Relationship with credit suppliers could be damaged (1)
Award OF for comments linked to (d) and (f)
[Total: 30]
6 (a)
$
Receipts (10 100 + 3550) 13 650 (1)
Payments (2800 + 3920 + 2400 + 2750 + 1880) (13 750) (1)
Closing balance 6 000 (1of)
[4]
(b)
Cambridge Club
2015 $ 2016 $
Apr 1 Balance b/d 200 (1) Mar Bank 10 100 (1)
31
Mar Income and
31 expenditure (1of)
account 10 000
10 200 10 200
2016
Apr 1 Balance b/d 100 (1)
+( 1) for dates [5]

(c)
Cambridge Club
Calculation of shop profit for the year ended 31 March 2016
$ $
Sales 3 550 (1)
Opening inventory 710 *
Purchases 2800 (1)– 350 (1) + 510 (1) 2 960
3 670
Closing inventory 560 *(1) 3 110
both
Profit 440 (1of)
(d)
Cambridge Club
$ $
Subscriptions 10 000 (1of)
Shop profit 440 (1of)
10 440
Less: expenditure
Rent paid for sports ground 2 400 (1)
Wages of football coach 2 750 (1)
Depreciation on equipment
( 3600 + 3920 – 5920 ) 1 600 (2) 8 630
Surplus 1 810 (1of)
[8]
(e) Increase the selling price (1) [max 2]

Buy cheaper goods (1)
Other valid points acceptable
[Total: 25]

CAMBRIDGE INTERNATIONAL EXAMINATIONS
MARK SCHEME for the March 2016 series
0452 ACCOUNTING
0452/22 Paper 22, maximum raw mark 120
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of
the examination. It shows the basis on which Examiners were instructed to award marks. It does not
indicate the details of the discussions that took place at an Examiners’ meeting before marking began,
which would have considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner
Report for Teachers.
Cambridge is publishing the mark schemes for the March 2016 series for most Cambridge IGCSE®
and Cambridge International A and AS Level components.

Cambridge IGCSE – March 2016 0452 22
1 (a)
Abhinav – Petty Cash Book
Total Postage and Ledger
Total received Date Details Travel Cleaning
paid stationery accounts
$ 2016 $ $ $ $ $
24.00 Feb 1 Balance b/d
96.00 Bank
4 Stamps 14.00 14.00 } (1)
7 Copy paper and cartridges 33 00 33.00 }
4.00 (1) 10 Refund from stationery
13 Train fare 9.50 9.50 (1)
15 Office Supply Ltd 29.00 29.00 (1)
21 Taxi fare 9.90 9.90 (1)
26 Window cleaner 17.00 17.00 (1)
112.40 47.00 19.40 17.00 29.00
29 Balance c/d 11.60
124.00 124.00
11.60 (1) Mar 1 Balance b/d
(1) Dates
(1) OF Totalling total columns
[10]

(b) (i) $108.40 (1)OF [1]
(ii)
debit credit
Petty cash (1) Cash/bank/cash book (1)

[2]
(c)
Abhinav
Postage and stationery account
$ $
2016 2016
Feb 29 Petty cash 47 (1) Feb 29 Petty cash 4 (1)
[2]
(d) (i) Consistency (1) [1]
(ii) Money measurement (1) [1]
(iii) Realisation (1) [1]
(iv) Going concern (1) [1]
[Total: 19]
2 (a)
Aireville Limited
Cash Book (bank columns only)
$ $
2016 2016
Jan 1 Error correction 1 000 (1) Jan 1 Balance b/d 3 420
Balance c/d 2 940 Bank charges 190 (1)
PB Limited
(Dis. Chq.) 330 (1)
3 940 3 940
2016
[4]

(b)
Aireville Limited
Bank Reconciliation Statement at 31 December 2015
$
Balance on bank statement (1 800) (1)
Amounts not yet credited – cash sales (1) 1 560) (1)
(240)
Cheques not yet presented – M Raja (1) 2 700) (1)
Balance in cash book (2 940) (1of)
Aireville Limited
$
Balance in cash book (2 940) (1of)
Cheques not yet presented – M Raja (1) 2 700) (1)
(240)
Amounts not yet credited – Cash sales (1) 1 560) (1)
Balance on bank statement (1 800) (1)
[6]
(c)
Aireville Limited
Statement of Changes in Equity for the year ended 31 December 2015
share reserve earnings
capital
$ $ $ $
On 1 January 2015 300 000 24 000 45 000 369 000 (1)
Share issue 50 000 50 000 (1)
Dividend paid (for 2014) (25 000) (25 000) (1)
Dividend paid (for 2015) (15 000) (15 000) (1)
On 31 December 2015 350 000 34 000 44 000 428 000 (1of)
[7]
(d) Prior claim on the profits of the company

Interest must be paid irrespective of whether there is a profit
Prior claim on the assets of the company in a winding-up
Funds must be available when repayment is due
Or other relevant point
[Total: 19]

3 (a)
Daksha
Statement of Affairs at 31 January 2016
Assets $ $ $
Non-current assets Cost Depreciation Book

to date value
Premises 90 000 90 000 (1)
Fixtures and fittings 27 200 5 440 (1) 21 760 (1of)
Motor vehicle 8 000 1 600 (1) 6 400 (1of)
125 200 7 040 118 160
Current assets
Inventory 3 300 (1)
Less Provision for doubtful debts 117 (1) 3 783 (1)
Other receivables 327 (1)
Petty cash 100 (1)
7 510
Capital
Balance 93 200 (1of)
Loan 30 000 (1)
Current liabilities
Bank overdraft 360 (1)
2 470
[15]
(b)
Daksha
Capital account
$ $
2016 2015
Jan 31 Drawings 4 200 (1) Feb 1 Balance 97 200 (1)
Loss for year 11 800 (1of) 2016
Balance c/d 93 200 (1of) Jan 31 Bank/Cash 12 000 (1)
109 200 109 200
2016
Feb 1 Balance b/d 93 200
[5]
[Total: 20]

4 (a)
Lodi Sports Club
Receipts and Payments Account for the year ended 31 January 2016
$ $
2016 2015
Jan 31 Subscriptions 14 700 (1) Feb 1 Balance b/d 210
Sale of equipment 275 (1) 2016
Balance c/d 739 Jan 31 Rent 3 900 (1)
General expenses 1 454 (1)
Insurance 1 550 (1)
Equipment 7 200 (1)
Bank loan 1 250 (1)
Bank interest 150 (1)
15 714 15 714
2016
1 Feb Balance b/d 739 (1of)
[9]
(b) 150 (1) × $100 (1) = $15 000

OR ($14 700 – ($200 + $500)(1) + $1000 (1)) = $15 000
OR $14 000 (1) + $1000 (1) = $15 000 [2]
(c)
Statement of financial position
section amount ($)
Bank loan Non-current liabilities (1) 3750 (1)
Interest on bank loan Current liabilities (1) 50 (1)
Rent Current assets (1) 300 (1)
[6]
[Total: 17]

5 (a)
Mohan
Motor vehicles account
$ $
2014 2014
Jan 1 Balance b/d Dec 31 Balance c/d 40 000
A – 12 000
B – 13 000 25 000
July 1 Bank C 15 000 (1)
40 000 40 000
2015 2015
Jan 1 Balance b/d Dec 31 Balance c/d 40 000
A – 12 000
B – 13 000
C – 15 000 40 000 (1)
40 000 40 000
2016
Jan 1 Balance b/d
A – 12 000
B – 13 000
C – 15 000 40 000 (1)
Provision for depreciation of motor vehicles account

$ $
2014 2014
Dec 31 Balance c/d 17 600 Jan 1 Balance b/d
A – 7 200
B – 3 900 11 100
Dec 31 Income statement
A – 2 400 (1)
B – 2 600 (1)
C – 1 500 (1) 6 500
17 600 17 600
2015 2015
Dec 31 Balance c/d 25 600 Jan 1 Balance b/d
A – 9 600
B – 6 500
C – 1 500 17 600 (1of)
Dec 31 Income statement
A – 2 400}
B – 2 600}(1)
C – 3 000 (1) 8 000
25 600 25 600
2016
Jan 1 Balance b/d
A –12 000
B – 9 100
C – 4 500 25 600 (1of)
+ (1) dates [11]

(b)
Mohan
Extract from Statement of Financial Position at 31 December 2015
depreciation value
$ $ $
Motor vehicles 40 000 of 25 600 (1of) 14 400 (1of)
(c) 3900 (1)

+ 2600 of}
2600 of} (1)
9100 of [2]
(d)
transferring the original cost of the motor

Disposal (1) Motor vehicles (1)
vehicle from the asset account
Provision for
transferring the accumulated depreciation on
depreciation of Disposal (1)
the motor vehicle from the provision account
motor vehicles (1)
recording the proceeds of sale of the motor

Cash (1) Disposal (1)
vehicle
[6]
[Total: 21]

6 (a)
Ratio Annie
Rate of inventory turnover to two decimal

7.26 times (2)
places
Percentage of profit for the year to capital

4.13% (2)
employed (ROCE) (to two decimal places)
Trade receivables collection period

40 days (2)
(rounded up to the next whole day)
Calculations to show the breakdown of marks:
Rate of inventory turnover

30 500
(1) whole formula = 7.26 times (1)
(3 600 + 4 800) ÷ 2
Percentage of profit for the year to capital employed

3 800 (1) 100
× = 4.13% (1)
92 000 1

4 350 365
× (1) whole formula = 39.69 = 40 days (1) [6]
40 000 1
(b) Different type of goods (1)

EITHER Food has a lower gross profit margin than clothing (1)
OR The food store is cutting prices to sell more goods (1) [2]
(c) Total revenue from sales may increase so profit may increase (1)
Customers may look for cheaper suppliers, so profits may actually fall (1) [2]
(d) Mark and Tony (1)

Annie’s expenses/revenue is 14.25%: Mark and Tony’s ratio is 5.15% (1) [2]
(e) Different type of goods (1)

EITHER Food sells more quickly than clothing (1)
OR Food is in greater demand than clothing
OR Food store will probably have a lower value of inventory
OR Food is cheaper than clothing (1) [2]
(f) EITHER Reduce inventory levels (1)

OR Increase sales activity (1) [1]
(g) Increase profit for the year/increase efficiency/use resources more effectively
Reduce long term liabilities
Any 1 (1) [1]

(h) Mark and Tony (1) OF

They take an average of 34 days to collect debts whereas Annie takes an average of 40
days (1) OF [2]
(i) The businesses should be of approximately the same size/same capital

The results are for one year only and will not show trends
The financial year may end at different times of the trading cycle
The businesses may have different types of expenses
Or other valid points
Any 2 (1) each
Not the following which are given in the question

Type of goods
Type of business (sole trader/partnership)
Life of business [2]
(j)
Create a provision for doubtful debts (1)
Delay payments to credit suppliers (1)
Obtain a long term loan (1)
Obtain permission from the bank to

(1)
increase the overdraft
[4]
[Total: 24]

0452 ACCOUNTING
and Cambridge International A and AS Level components.

1 (a) B
(b) B
(c) D
(d) A
(e) B
(f) B
(g) C
(h) A
(i) A
(j) D
(1) mark each [10]
2 (a) Assets less (1) liabilities equal capital
Current assets less (1) current liabilities equal working capital
Owner’s capital plus (1) non-current liabilities equals capital employed [3]
(b)
Account debited Account credited
Drawings (1) Bank (1)

[2]
(c) Business entity (1)

A distinction is made between the financial transactions of a business and those of its
owner(s) (1) [2]
(d) Prepaid amount (1) [1]

(e) Accruals (matching) (1)

Income should be matched with costs (1) in an accounting period (1) [3]
(f)
Account Ledger
Premises Nominal/general
Sales Nominal/general
Drawings Nominal/general
Amit, a credit customer Sales
Purchases returns Nominal/general
Discount allowed Nominal/general
Enoch, a credit supplier Purchases
(g) So that accounts of the same type can be kept together

(h) The total sales are credited to the sales account (1)
Each sale is debited to the individual debtor's account on a daily basis (1) [2]
(i) Sales returns journal – return of goods sold on credit

Purchases journal – purchase of good bought on credit
Purchases returns journal – return of goods bought on credit
Cash book – cash sales/receipt from credit customer/any sort of payment
Petty cash book – any minor expense
General journal – correction of error/purchase of non-current asset on credit
Any two books for (1) each and any two examples for (1) each
Allow any reasonable example [4]
[Total: 21]

3 (a) To check the arithmetical accuracy of the double entry (1)

As a basis for the preparation of the financial statements (1) [2]
(b)
Deepa
Trial Balance at 31 December 2015
Debit Credit
$ $
Fixtures and fittings 17 000 }
Provision for depreciation of fixtures and fittings 7 500 }(1)
Sales 72 000 }
Sales returns 3 100 }(1)
Purchases 36 800 }
Purchases returns 2 260 }(1)
Drawings 5 200 }
Bank 2 700 }(1)
Inventory 12 450 }
Rent 2 400 }(1)
Wages 21 810 }
Discount allowed 1 000 }(1)
Ali (a credit customer) 600 }(1)
Kelvin (a credit customer) 970 }
Jules (a credit supplier) 4 210 }(1)
114 130 114 130
[9]

(c) (i)
$
Sales ( 72 000 – 3100 ) 68 900 (1)
× 0.6 (1)
OR
$
Sales 68 900 (1)
Gross profit (at 0.4) 27 560 (1)
[3]
(ii)
$ $
Inventory at 1 January 2015 12 450
Purchases 36 800
Purchases returns (2 260) 34 540 (1)
46 990
Inventory at 31 December 2015 (5 650) (1of)
OR
$ $
Purchases 36 800
Purchases returns (2 260) (34 540) (1)
6 800
Inventory at 1 January 2015 (12 450)
Inventory at 31 December 2015 (5 650) (1of)
[3]
(d)
Deepa
Ali account
2016 $ 2016 $
1 Jan Balance b/d 600 (1) 8 Jan Bank 582 (1)
6 Jan Sales 800 (1) Discount allowed 18 (1)
10 Jan Sales returns 120 (1)
31 Jan Balance c/d 680
1 400 1 400
1 Feb Balance b/d 680 (1of)
+1 for dates
[7]

(e) Advantage
Money can be used elsewhere
Cash is not tied up
Reduces risk of theft/deterioration/obsolescence/damage
Reduces inventory holding cost e.g. insurances
Any one advantage (1) mark
Disadvantage
If buying in smaller quantity risk of losing quantity discounts
Risk of inventory running out
Risk of not meeting customer demand
Any one disadvantage (1) mark [2]
(f) Current assets (1) [1]
(g) Long term loan/debt (1)

OR debentures (1)
OR mortgage (1) [1]
[Total: 28]
4 (a) A provision for doubtful debts stops current assets from being overstated (1) and profit from
being overstated (1) [2]
(b)
Nesbit Limited
2014 $ 2014 $
Dec 31 Balance c/d 1 900 Dec 31 Income statement 1 900 (1)
1 900 1 900
2015 2015
Dec 31 Balance c/d 2 200 (1) Dec 31 Income statement 300 (1)
2 200 2 200
2016
+1 for dates [6]
(c)
Nesbit Limited
Income Statement (extract) for the year ended 31 December 2015
$
Expenses
Bad debts 1 000 (1)
Increase in provision for 300 (1of)
doubtful debts
[2]

(d)
Nesbit Limited
$
Current assets
Provision for doubtful debts 2 200 (1of)
41 800 (1of)
[3]
(e) Provision for depreciation (1) [1]
(f)
capital revenue
cost
expenditure expenditure
cost of machinery
delivery charges (1)
installation costs (1)
supply of cleaning materials (1)
machine oil (1)
[4]
(g) Proceeds of sale of non-current asset

Issue of shares/Capital introduced by owner
Receipt of loan
[Total: 19]
5 (a)
prime cost overheads
section of the section of the
income statement
manufacturing manufacturing
account account
office rent (1)
factory supervisor’s salary (1)
carriage on raw materials (1)
purchase of finished goods (1)
salesman’s commission (1)
[5]

(b) Advantage
– more capital introduced to business
– more expertise available
– responsibilities are shared e.g. holidays, sickness
– risk is shared
– losses are shared
Any one for (1) mark
Disadvantage
– profits must be shared
– decision making may be more difficult
– disagreements may occur
(c) To avoid disagreements in the future (1) [1]
(d) Interest on capital – to reward partners who invest more (1)

Interest on drawings – to discourage drawings (1) [2]
(e)
Sumit and Theo
Appropriation account for the year ended 31 December 2015
$ $
Interest on drawings – Sumit 1 800 }
– Theo 1 200 3 000 }(1)
67 000
Salary – Sumit (7 000) (1)
Interest on capital – Sumit (10 000) (1)
– Theo (15 000) (25 000) (1)
35 000
Profit shares – Sumit 21 000 (1of)
– Theo 14 000 35 000 (1of)
[6]
(f)
Theo
Current account
2015 $ 2015 $
Jan 1 Balance b/d 6 900 (1) Dec 31 Interest on capital 15 000 (1of)
Dec 31 Drawings 12 000 (1) Share of profit 14 000 (1of)
Interest on 1 200 (1)
drawings
Balance c/d 8 900
29 000 29 000
2016
[6]
[Total: 22]

6 (a)
error working capital owner’s capital
1 Increase $3000 Increase $3000
2 No effect (1) No effect (1)
3 Decrease $99 (1) Decrease $99 (1)
4 Decrease $70 (1) Decrease $70 (1)
5 No effect (1) Increase $2500 (1)
[8]
(b)
Error 2 commission (1)
Error 3 original entry (1)
Error 4 reversal (1)
Error 5 omission (1)
[4]
(c)
Akira
Journal
Error Details Debit Credit
number $ $
2 D Bones 1500 (1)
J Jones 1500 (1)
3 Bank charges 99 (1)
Bank 99 (1)
4 Stationery 70 (1)
Petty cash 70 (1)
5 Motor vehicles 2500 (1)
Capital 2500 (1)
[8]
[Total: 20]

MARK SCHEME for the October/November 2015 series
0452 ACCOUNTING
Cambridge IGCSE®, Cambridge International A and AS Level components and some
Cambridge O Level components.

1 (a)
Shahid Ayub
Cash Book
Allowed Received
2015 $ $ $ 2015 $ $ $
Aug 1 Balance b/d (1) 50 Aug 1 Balance b/d 7150
24 Mariam Soliman (1) 13 507 9 El Nil Supply Company
30 Sales (1) 3224 (dis cheque) (1) 362
31 Cash c (1)OF 3174 18 Drawings (1) 54
Balance c/d 3885 31 Bank c (1) 3174
Balance c/d 100
13 3274 7566 3274 7566

Sept 1 Sept 1 Balance b/d
100 3885
(1) (1)OF
+ (1) dates [9]

(b) (i) $316 (1)
(ii) Mariam Soliman (1) [2]
(c)
Transaction Document Book of prime (original) entry
August 9 Goods Sales invoice (1) Sales Journal (1)
13 Returns Credit note (1) Sales Returns Journal (1)
24 Payment Cheque (OR Cash book (1)

Paying in book) (1)
[6]
(d)
Mariam Soliman
Shahid Ayub Account
$ $
2015 2015
Aug 13 Returns 24 (1) Aug 1 Balance b/d 520
24 Bank/Cash 507 (1) 9 Purchases 340 (1)
Discount 13 (1)
31 Balance c/d 316
860 860
2015
Sept 1 Balance b/d 316 (1)O/F
Three column running balance presentation acceptable
+(1) for dates [6]
[Total: 23]

2 (a)
Grace Zindi
Income Statement for the year ended 31 July 2015
$ $
Income from Clients (28 500 (1) + 3400 (1)) 31 900
Commission receivable (7600 (1) + 250 (1)) 7 850
39 750
Wages 21 600 (1)
Rates and Insurance ((3900 (1) – 300 (1)) × ¾ (1)) 2 700
General Expenses 990 (1)
Heat and Light 710 (1)
Provision for Doubtful Debts (1% × 3400) 34 (1)
Depreciation motor vehicles (12 500 – 4500 (1) × 20% (1)) 1 600
Depreciation office equipment (11 400 + 6900 (1) – 14 500 (1)) 3 800 31 434
[16]
(b)
Grace Zindi
Capital Account
$ $
2015 2014
31 July Cash/Drawings 15 500 (1) 1 Aug Balance b/d 85 000 (1)
Rates & 2015
Insurance
Drawings 900 (1) 31 July Profit 8 316 (1)OF
Balance c/d 76 916
93 316 93 316
2015
1 Aug Balance b/d 76 916 (1)OF
+(1) For dates
Three column running balance presentation acceptable [6]
(c) Revenue for the year is matched against the costs of the same period (1)
Example
Either Insurance prepaid at year-end was deducted
Or Commission receivable outstanding at year-end was added
Or Amount owing from clients at year-end was added (1)
[2]
(d) The business is treated as being separate from the owner (1)
Example
The proportion of rates and insurance relating to the owner’s flat was excluded from the
business expenses (1)
[2]
[Total: 26]

3 (a) Physical deterioration

Economic reasons
Passage of time
Depletion
(b) The depreciation is calculated on the net cost price (1) and the same amount is written off
each year (1) [2]
(c) The same percentage is written off each year (1) but it is calculated on the net book value of
the asset (1) [2]
(d) Ensures that non-current assets are shown at more realistic values (1)
Ensures that the profit for the year is not overstated (1) [2]
(e) Accruals (matching) (1) [1]

(f) (i)
Natasha Salim
Machinery Account
$ $
2013 2014
Oct 1 Bank 4 000 (1) Sept 30 Balance c/d 10 000
2014
Jan 1 ABC Machines 6 000 (1)
10 000 10 000
2014 2015
Oct 1 Balance b/d 10 000 (1)OF Feb 1 Disposal 4 000 (1)
Sept 30 Balance c/d 6 000
10 000 10 000
2015
Oct 1 Balance b/d 6 000 (1)OF
(ii)
Provisions for depreciation of machinery account
2014 $ 2014 $
Sept 30 Balance c/d 2 000 Sept 30 Income
Statement
800(1) + 1200 (1) 2 000
2 000 2 000
2015 2014
Feb 1 Disposal 800 (1) Oct 1 Balance b/d 2 000 (1)OF
Sept 30 Balance c/d 2 160 2015
Sept 30 Income
Statement 960 (1)
2 960 2 960
2015
(2)CF

[12]
(g)
$
Proceeds of Sale 2 100
Provision for depreciation 800 (1)OF
2 900
Less Cost Price 4 000 (1)
Profit/Loss (1) on disposal 1 100 (1)OF
[Total: 25]

4 (a)
Moses and Tobias Lyambo
Corrected Statement of Financial Position at 31 October 2015
$ $ $
Assets
Non-current assets
Premises at cost 80 000
Fixtures and Equipment at book value
(24 80 – 3100) 21 700 (1)
101 700 (1)
Current Assets
Inventory 6 950
Trade Receivable 5 200
Provision for doubtful debts 130 (1) 5 070
Bank (1500 – 70) 1 430 (1)
Cash 500 (1)
13 950 (1)OF

M lyambo T lyambo Total
Capital Accounts 65 000 35 000 100 000 (1)
Current Accounts
Balance (2 000) 3 500 (1)
Share of Profit 9 000 9 000 (1)
7 000 12 500
Drawings 8 000 5 500 (1)
1 000 (1) 7 000 (1) 6 000 (1)OF
106 000 (1)OF
Current liabilities
Trade Payables 8 520
Other Payables 1 130 (1)
9 650 (1)
Accept current account calculations outside statement

[16]
(b) Introduce more capital

Mortgage premises
Or other suitable way
Any two ways (1) each [2]

(c) Introduce more capital

Mortgage premises
(d)
Sale of surplus equipment (1)
Delay payment to credit suppliers (1)
Paying surplus cash into bank (1)
Writing off a bad debt (1)
[4]
[Total: 24]

5 (a)
Kelbrook Limited
Extract from Statement of Financial Position at 30 September 2015
$
Equity and Reserves
Ordinary Share Capital 90 000 (1)
General Reserve (4000 (1) + 2000 (1) 6 000
Retained Earnings (5500 (1) + 2500 (1)) 8 000
104 000
[5]
(b)
Current ratio
Workings Answer to two
decimal places
(5100 + 8500) : (6100 + 4300 + 1400)
13 600 : 11 800 (1) 1.15 : 1 (1)
Quick ratio
decimal places
8500 : (6100 + 4300 + 1400)
8500 : 11 800 (1) 0.72 : 1 (1)
Return on capital employed (ROCE)

9000 } × 100 decimal places
90 000 +6000 + 8000} (1) 1
OR 8.65% (1)
9000 } ×100
102 200 +13 600 – 11 800} (1) 1
[6]

(c) Ratio has fallen

Current assets only just cover the current liabilities
May have problems in meeting debts when they fall due
Is below the generally-accepted “benchmark”
Or other suitable comments based on answer to (b)
(d) Change from positive bank balance to overdraft/increase in overdraft/reduction

in bank balance
Increased expenditure on inventory/increase in inventory
Increase in current liabilities
Any 1 reason (1) [1]
(e) Increase the profit

Reduce the capital employed
8500 365
(f) (i) × (1) = 69 days (1) [2]
45000 1
(ii) On average credit customers are taking 9 days more than is allowed
This may affect the ability of the business to pay current liabilities
This may affect the ability of the business to take advantage of
opportunities when they arise
Or other suitable comments based on answer to (f)(i)
(g) On average are taking 22 days more than is allowed to pay credit suppliers
This may be caused by the credit customers taking too long to pay
May result in further supplies being refused
[Total: 22]

0452 ACCOUNTING

1 (a)
Shahid Ayub
Cash Book
Allowed Received
2015 $ $ $ 2015 $ $ $
Aug 1 Balance b/d (1) 50 Aug 1 Balance b/d 7150
24 Mariam Soliman (1) 13 507 9 El Nil Supply Company
30 Sales (1) 3224 (dis cheque) (1) 362
31 Cash c (1)OF 3174 18 Drawings (1) 54
Balance c/d 3885 31 Bank c (1) 3174
Balance c/d 100
13 3274 7566 3274 7566

Sept 1 Sept 1 Balance b/d
100 3885
(1) (1)OF
+ (1) dates [9]

(b) (i) $316 (1)
(ii) Mariam Soliman (1) [2]
(c)
Transaction Document Book of prime (original) entry
August 9 Goods Sales invoice (1) Sales Journal (1)
13 Returns Credit note (1) Sales Returns Journal (1)
24 Payment Cheque (OR Cash book (1)

Paying in book) (1)
[6]
(d)
Mariam Soliman
Shahid Ayub Account
$ $
2015 2015
Aug 13 Returns 24 (1) Aug 1 Balance b/d 520
24 Bank/Cash 507 (1) 9 Purchases 340 (1)
Discount 13 (1)
31 Balance c/d 316
860 860
2015
+(1) for dates [6]
[Total: 23]

2 (a)
Grace Zindi
$ $
Income from Clients (28 500 (1) + 3400 (1)) 31 900
Commission receivable (7600 (1) + 250 (1)) 7 850
39 750
Wages 21 600 (1)
Rates and Insurance ((3900 (1) – 300 (1)) × ¾ (1)) 2 700
General Expenses 990 (1)
Heat and Light 710 (1)
Provision for Doubtful Debts (1% × 3400) 34 (1)
Depreciation motor vehicles (12 500 – 4500 (1) × 20% (1)) 1 600
Depreciation office equipment (11 400 + 6900 (1) – 14 500 (1)) 3 800 31 434
[16]
(b)
Grace Zindi
Capital Account
$ $
2015 2014
31 July Cash/Drawings 15 500 (1) 1 Aug Balance b/d 85 000 (1)
Rates & 2015
Insurance
Drawings 900 (1) 31 July Profit 8 316 (1)OF
Balance c/d 76 916
93 316 93 316
2015
1 Aug Balance b/d 76 916 (1)OF
+(1) For dates
(c) Revenue for the year is matched against the costs of the same period (1)
Example
Either Insurance prepaid at year-end was deducted
Or Commission receivable outstanding at year-end was added
Or Amount owing from clients at year-end was added (1)
[2]
(d) The business is treated as being separate from the owner (1)
Example
The proportion of rates and insurance relating to the owner’s flat was excluded from the
business expenses (1)
[2]
[Total: 26]

3 (a) Physical deterioration

Economic reasons
Passage of time
Depletion
(b) The depreciation is calculated on the net cost price (1) and the same amount is written off
each year (1) [2]
(c) The same percentage is written off each year (1) but it is calculated on the net book value of
the asset (1) [2]
(d) Ensures that non-current assets are shown at more realistic values (1)
Ensures that the profit for the year is not overstated (1) [2]
(e) Accruals (matching) (1) [1]

(f) (i)
Natasha Salim
Machinery Account
$ $
2013 2014
Oct 1 Bank 4 000 (1) Sept 30 Balance c/d 10 000
2014
Jan 1 ABC Machines 6 000 (1)
10 000 10 000
2014 2015
Oct 1 Balance b/d 10 000 (1)OF Feb 1 Disposal 4 000 (1)
Sept 30 Balance c/d 6 000
10 000 10 000
2015
(ii)
Provisions for depreciation of machinery account
2014 $ 2014 $
Sept 30 Balance c/d 2 000 Sept 30 Income
Statement
800(1) + 1200 (1) 2 000
2 000 2 000
2015 2014
Feb 1 Disposal 800 (1) Oct 1 Balance b/d 2 000 (1)OF
Sept 30 Income
Statement 960 (1)
2 960 2 960
2015
(2)CF

[12]
(g)
$
Proceeds of Sale 2 100
Provision for depreciation 800 (1)OF
2 900
Less Cost Price 4 000 (1)
Profit/Loss (1) on disposal 1 100 (1)OF
[Total: 25]

4 (a)
Moses and Tobias Lyambo
Corrected Statement of Financial Position at 31 October 2015
$ $ $
Assets
Non-current assets
Fixtures and Equipment at book value
(24 80 – 3100) 21 700 (1)
101 700 (1)
Current Assets
Inventory 6 950
Trade Receivable 5 200
Provision for doubtful debts 130 (1) 5 070
Bank (1500 – 70) 1 430 (1)
Cash 500 (1)
13 950 (1)OF

M lyambo T lyambo Total
Capital Accounts 65 000 35 000 100 000 (1)
Current Accounts
Balance (2 000) 3 500 (1)
Share of Profit 9 000 9 000 (1)
7 000 12 500
Drawings 8 000 5 500 (1)
1 000 (1) 7 000 (1) 6 000 (1)OF
106 000 (1)OF
Current liabilities
Trade Payables 8 520
Other Payables 1 130 (1)
9 650 (1)
Accept current account calculations outside statement

[16]
(b) Introduce more capital

Mortgage premises

(c) Introduce more capital

Mortgage premises
(d)
Sale of surplus equipment (1)
Delay payment to credit suppliers (1)
Paying surplus cash into bank (1)
Writing off a bad debt (1)
[4]
[Total: 24]

5 (a)
Kelbrook Limited
Extract from Statement of Financial Position at 30 September 2015
$
Equity and Reserves
Ordinary Share Capital 90 000 (1)
General Reserve (4000 (1) + 2000 (1) 6 000
Retained Earnings (5500 (1) + 2500 (1)) 8 000
104 000
[5]
(b)
Current ratio
decimal places
(5100 + 8500) : (6100 + 4300 + 1400)
13 600 : 11 800 (1) 1.15 : 1 (1)
Quick ratio
decimal places
8500 : (6100 + 4300 + 1400)
8500 : 11 800 (1) 0.72 : 1 (1)

9000 } × 100 decimal places
90 000 +6000 + 8000} (1) 1
OR 8.65% (1)
9000 } ×100
102 200 +13 600 – 11 800} (1) 1
[6]

(c) Ratio has fallen

Current assets only just cover the current liabilities
May have problems in meeting debts when they fall due
Is below the generally-accepted “benchmark”
Or other suitable comments based on answer to (b)
(d) Change from positive bank balance to overdraft/increase in overdraft/reduction

in bank balance
Increased expenditure on inventory/increase in inventory
Increase in current liabilities
(e) Increase the profit

Reduce the capital employed
8500 365
(f) (i) × (1) = 69 days (1) [2]
45000 1
(ii) On average credit customers are taking 9 days more than is allowed
This may affect the ability of the business to take advantage of
opportunities when they arise
Or other suitable comments based on answer to (f)(i)
(g) On average are taking 22 days more than is allowed to pay credit suppliers
This may be caused by the credit customers taking too long to pay
May result in further supplies being refused
[Total: 22]

0452 ACCOUNTING

1 (a) (i) Lack of funds

No signature
Amount in words and figures differ
No date
(ii) This is a contra entry (1)

Cash has been withdrawn from the bank for business use (1) [2]
(iii) Money received from sales: some retained in cash and some paid into the bank (1) [1]
13 100
(iv) = = 2½% (1) [1]
(507 + 13 ) 1
(v) Debited (1) to the discount allowed account (1) [2]
(vi) 944 – 667 = 277 (1) [1]
(b)
Paul Chew
Bank Reconciliation Statement at 30 September 2015
$ $
Balance shown on bank statement (43) (1)
Add Amounts not credited 560 (1)
Cheque not yet credited – Yeung & Co 267 (1) 827
784
Less Cheque not yet presented – K Tan 507 (1)

Balance shown in cash book 277 (1) OF
Alternative form of presentation acceptable [5]

(c)
Paul Chew’s Kim Chan’s
book of book of
Document prime prime
(original) (original)
entry entry
Paul Chew sold goods on

Sales Purchases
credit to Kim Chan Invoice (1)
Journal (1) Journal (1)
Kim Chan notified Paul

Chew of an overcharge Debit note (1) No entry (1) No entry (1)
Paul Chew notified Kim Sales

Purchases
Chan that he agreed the Returns
Credit note (1) Returns
overcharge Journal (1)
Journal (1)
Paul Chew sent Kim Chan

a summary of the month’s
Statement of account (1) No entry (1) No entry (1)
transactions
[12]
[Total: 25]

2 (a)
Ishmael Makumbo
$ $
2014 2014
Sept 1 Balance b/d 2 100 (1) Sept 2 Bank 4 200 (1)
2015 2015
Aug 31 Income statement 8 400 (1) Jan 3 Bank 2 100 }(1)
May 4 Bank 2 100 }
Aug 31 Balance c/d 2 100
10 500 10 500
2015
Sept 1 Balance b/d 2 100 (1)OF
+ (1) for dates
(b) Current assets (1)

It is an amount owing to Ishmael Makumbo (1) [2]
(c)
Ishmael Makumbo
Motor expenses account
$ $
2014 2014
Sept 7 Bank 274 (1) Sept 1 Balance b/d 274 (1)
2015 2015
Feb 1 Cash 96 (1) Aug 31 Income statement 209 (1)
483 483
2015
Sept 1 Balance b/d 113 (1)
+ (1) for dates


(d)
Ishmael Makumbo
Journal
Debit Credit
$ $
Drawings 300 (1)

Purchases 300 (1)
Goods taken for own use (1)
Drawings 108 (1)

Telephone expenses 108 (1)
Personal telephone expenses
transferred to drawings account (1)
One composite journal entry acceptable [6]
[Total: 20]

3 (a) Error 1 – Error of omission (1)

2 – Error of principle (1)
3 – Error of reversal (1) [3]
(b)
Sally Rickard
Corrected Trial Balance at 31 October 2015
Debit Credit
$ $
Revenue 160 400 (1)
Wages 27 000
Motor expenses (1600 + 430) 2 030 (1)
General expenses (7250 + 150) 7 400 (1)
Equipment and fixtures at cost 10 000
Motor vehicle at cost (13930 – 430) 13 500 (1)
Provision for depreciation of equipment and fixtures 1 050
Provision for depreciation of motor vehicles 5 750
Trade receivables (26 800 – 520) 26 280 (1)
Provision for doubtful debts 670
Cash (350 – 150) 200 (1)
Bank overdraft (4810 – 520) 4 290 (1)
Loan from AB Loans 10 000
Drawings 12 500 (1)
Capital 95 000 (1)OF
Inventory 1 November 2014 7 100 (1)
285 310 285 310 (1)OF
[13]

(c)
Effect on profit
Accounting
principle
Increase Decrease
An amount owing by a credit Prudence OR

customer should have been (1) Accruals /
written off matching (1)
The general expenses includes

Accruals/
rates which were prepaid until (1)
matching (1)
31 December 2015.
Goods invoiced and despatched

to a customer were not recorded
(1) Realisation (1)
as the customer did not receive
them until 3 November 2015
Business
No record had been made of (1)
Entity (1)
goods taken for personal use
[8]
[Total: 24]

4 (a) (i) Cost of sales } (1)

Average inventory } [1]
(ii) 32 500 } (1) = 5.42 times (1)

6 000 } [2]
(iii) Higher inventory levels

Lower sales activity
(b) (i) Lower of cost and net realisable value (1) [1]
(ii) Prudence (1) [1]
(c)
Extract from Statement of Financial Position at 31 July 2015
Sanch Syed
Mirza Mirza Total
$ $ $
Capital account 30 000 (1) 60 000 (1) 90 000
Current account (3 500) (1) 2 500 (1) (1 000)

26 500 62 500 89 000 (1)
[5]
Profit for the year (or profit for the year before interest) 100 }(1)
(d) (i) × [1]
Capital employed 1 }
9 000 }(1) 100

(ii) × = 10.11% (1) OF [2]
89 000 OF } 1
(iii) Lower profit for the year

Higher capital employed

(e) (i) To compensate him for investing the most capital

To encourage Sanchi to invest more
(ii) To penalise Sanchi for making more drawings

To discourage Sanchi from making excessive drawings
Any 1 reasons (1) mark [1]
(iii) To compensate Sanchi for extra workload

To reward Sanchi for extra skills
Any 1 reasons (1) mark [1]
trade payable 365 }(1)

(f) (i) × [1]
credit purchases 1 }
4 000 365 }(1)

(ii) × = 49 days (1) [2]
31 000 1 }
(iii) Exceeds credit allowed

May find it difficult to obtain further supplies
May damage relationship with suppliers
May not be able to take advantage of cash discount from suppliers
Or other relevant comment
(g) Reduces liquidity

May find it difficult to pay trade payables
May find it difficult to pay running expenses
May lead to bank overdraft
Cannot take advantage of business opportunities when they arise
May not be able to take advantage of cash discount from suppliers
[Total: 27]

5 (a)
$
Subscription received 6 180 (1)
Less amount for previous year 360 (1)
5 820
Less amount for following year 270 (1)
5 550
Add amount prepaid at start 450 (1)
Subscription for the year 6 000 (1)
Alternative forms of presentation acceptable [5]
(b)
Hills Road Youth Club
Refreshment Income Statement for the year ended 31 October 2015
$ $
Sales of refreshments 3 100 (1)
Cost of sales
Purchases 2 650 (1)
2 930
Closing inventory 310 (1) 2 620
Profit in refreshments 480 (1)
[5]
(c)
Hills Road Youth Club
Income and Expenditure Account for the year ended 31 October 2015
$ $
Profit on refreshments 480 (1)OF
6 480
Repairs to equipment 220
Insurance (1350 (1) – 270 (1)) 1 080
Rent of premises (1430 (1) + 130 (1)) 1 560
Depreciation of equipment
((6000 + 2000) (1) – 6800 (1)) 1 200 6 600
Deficit 120 (1)OF
[9]

(d) Income and expenditure account includes non-monetary items

Income and expenditure account has adjustments for accruals and prepayments
Income and expenditure account includes only revenue items
(e) The members of the club have not invested any capital (1) so there can be no
dividends/profit share which represent a return on capital invested (1) [2]
(f) Accumulated fund arises from the surpluses the club has made (1) [1]
[Total: 24]

0452 ACCOUNTING

1 (a) B
(b) A
(c) D
(d) D
(e) B
(f) A
(g) C
(h) B
(i) A
(j) C (1) each
[10]

2 (a) The book where transactions (and other entries) are first recorded. (1) [1]
(b) Cash book/petty cash book/sales journal/sales returns journal/purchases journal/purchases

returns journal/general journal/returns inwards and returns outwards journals
(c)
asset liability expense
fixtures and fittings
insurance
bank overdraft
cash
trade payable
wages
accrued electricity
Increase in provision for

doubtful debts
Unpaid commission
receivable
(1) Mark for every two correct [4]
(d) Statement of financial position (1) [1]
Income statement (1) [1]

(e)
Debit entry Credit entry
$ $
1 Bank account 8 000 Capital account 8 000
2 Bank account 2 000 (1) Loan account 2 000 (1)
3 (Delivery) Van account/ 5 200 (1) A1 Motors 5 200 (1)

Motor vehicles account account
4 Purchases account 3 700 (1) Bank account 3 700 (1)
5 Rent account 1 000 (1) Bank account 1 000 (1)
6 Petty cash/Cash 100 (1) Bank account 100 (1)

[10]
(f)
$ $
8 000
2 000 10 000 (1)
3 700
1 000
100 (4 800) (1)
5 200 (1)of
[3]
[Total: 22]

3 (a) Raw materials (1) work in progress (1) finished goods/purchased finished goods (1) [3]
(b) Lower of cost and net realisable value (1) [1]
(c)
Drawings (1) Purchases (1)

[2]
(d) Business entity (1) [1]
(e) To check for errors and omissions in his books of account

To check the errors in the bank statement
To identify stale cheques
To identify unpresented cheques
To identify amounts not credited
To calculate the correct bank balance in his cash book
To verify the balance in his cash book
To correct/amend his cash book
(f) A copy of the customer’s account as it appears in the books of the bank (1) [1]
(g) An item in the cash book not in the bank statement
Unpresented cheque/uncredited deposit/book-keeper error

An item in the bank statement not in the cash book.
Bank charges/bank interest/dishonoured cheque/standing order/credit transfer/direct

debit/bank error/dishonoured cheque
[Total: 11]

4 (a) An estimate (1) of the amount which will be lost (1) when debts go bad (1) which reduces the
value of trade receivables (1)
Max 2 [2]
(b)
Samuel
2015 $ 2014 $
30 April Income 70 (1of) 1 May Balance b/d 450 (1)

statement
Balance c/d 380 (1)
450 450
2015
1 May Balance b/d 380 (1of)
+(1) for dates

[5]
(c) Below/after gross profit/after trading account/(on credit side) as other income.
Profit and loss section/(debit side) as an expense [1of]
(d) Accruals/matching (1)

Prudence (1) [2]
(e) Trade receivables (1)

Capital/profit (1) [2]
[Total: 12]

5 (a)
$
Trade receivables 700 }
Trade payables (400) }(1)
Inventory 1 100 (1)
Provision for depreciation of equipment (4 100) } (1)
Prepaid rent 250 (1)
Bank 2 100 (1)

[6]
(b)
Nzita
2014 $ 2015 $
Feb 1 Balance b/d 700 (1) Jan 31 Bank/Cash 28 900 (1)

Jan 31 Sales 29 100 (1of)
29 800 29 800
2015
Feb 1 Balance b/d 900 (1of)
Nzita
2015 $ 2014 $
Jan 31 Bank/Cash 12 600 (1) Feb 1 Balance b/d 400 (1)
Balance c/d 650 2015

Jan 31 Purchases 12 850 (1of)
13 250 13 250
2015
[8]

(c)
Nzita
$ $
Sales/Revenue 29 100 (1of)
Inventory 1 Feb 2014 1 100
Purchases 12 850 (1of)
13 950
Inventory 31 January 2015 1 400 (1 for

both)
Rent 3100 (1) + (250–150) (1) 3 200
Wages 5 200
Sundry expenses 2 650
Depreciation of equipment 1 680 (1)
12 730

+ 1 for IAS terminology
[9]
(d)
Nzita
Statement of Financial Position (extract) at 31 January 2015
Capital at 1 Feb 2014 15 350 (1of)
19 170
Drawings 6 600 (1)
Capital at 31 January 2015 12 570 (1of)

[4]

(e) 16 550/29 100 (1of) × 100 = 56.87% (1of) [2]
(f) Lower selling prices

Introduction of trade discount
Sales promotions
Higher purchases prices not passed on to customers
Change in mix of goods sold
Higher cost of sales
Any two (1of) each [2]
[Total: 31]

6 (a) Capital (1)

Revenue (1)
Current (1)
Non-current (1)
Understated (1)
Overstated (1) [6]
(b)
Error 2 (1) Error of commission (1)
Error 4 (1) Error of principle (1)

[4]
(c)
Error Debit Credit
$ $
1 Discount allowed 30 (1)

Suspense 60 (1)
Correction of misposting of
discounts (1)
2 Joanie 85 (1)
Yolanda 85 (1)
receipt of cash (1)

Suspense 10 (1)
sales returns journal total (1)
4 Stationery 150 (1)

Office equipment 150 (1)
Correction of revenue
expenditure treated as capital
expenditure (1)
[13]

(d) Leroy
Suspense account
2015 $ 2015 $
Sept 30 Balance b/d 70 (1of) Sept 30 Discount 60 (1of)

allowed and
received
Sales returns 10 (1of)
70 70
[3]
(e)
No effect Increase Decrease
$ $ $
Draft profit 5 170
Error 1 60 (2)
Error 2 (1)
Error 3 10 (2)
Error 4 150 (2)
Corrected 4 950
profit (1)OF
Marks with figures: 1 for figure, 1 for direction
[8]
[Total: 34]

0452 ACCOUNTING

1 (a) B
(b) A
(c) D
(d) D
(e) B
(f) A
(g) C
(h) B
(i) A
(j) C (1) each
[10]

2 (a) The book where transactions (and other entries) are first recorded. (1) [1]
(b) Cash book/petty cash book/sales journal/sales returns journal/purchases journal/purchases

returns journal/general journal/returns inwards and returns outwards journals
(c)
asset liability expense
fixtures and fittings
insurance
bank overdraft
cash
trade payable
wages
accrued electricity

doubtful debts
Unpaid commission
receivable
(1) Mark for every two correct [4]
(d) Statement of financial position (1) [1]

(e)
$ $
2 Bank account 2 000 (1) Loan account 2 000 (1)
3 (Delivery) Van account/ 5 200 (1) A1 Motors 5 200 (1)

Motor vehicles account account
4 Purchases account 3 700 (1) Bank account 3 700 (1)
6 Petty cash/Cash 100 (1) Bank account 100 (1)

[10]
(f)
$ $
8 000
2 000 10 000 (1)
3 700
1 000
100 (4 800) (1)
5 200 (1)of
[3]
[Total: 22]

3 (a) Raw materials (1) work in progress (1) finished goods/purchased finished goods (1) [3]
(b) Lower of cost and net realisable value (1) [1]
(c)
Drawings (1) Purchases (1)

[2]
(d) Business entity (1) [1]
(e) To check for errors and omissions in his books of account

To check the errors in the bank statement
To identify stale cheques
To identify unpresented cheques
To identify amounts not credited
To calculate the correct bank balance in his cash book
To verify the balance in his cash book
To correct/amend his cash book
(f) A copy of the customer’s account as it appears in the books of the bank (1) [1]
(g) An item in the cash book not in the bank statement
Unpresented cheque/uncredited deposit/book-keeper error

An item in the bank statement not in the cash book.
Bank charges/bank interest/dishonoured cheque/standing order/credit transfer/direct

debit/bank error/dishonoured cheque
[Total: 11]

4 (a) An estimate (1) of the amount which will be lost (1) when debts go bad (1) which reduces the
value of trade receivables (1)
Max 2 [2]
(b)
Samuel
2015 $ 2014 $
30 April Income 70 (1of) 1 May Balance b/d 450 (1)

statement
Balance c/d 380 (1)
450 450
2015
1 May Balance b/d 380 (1of)
+(1) for dates

[5]
(c) Below/after gross profit/after trading account/(on credit side) as other income.
Profit and loss section/(debit side) as an expense [1of]
(d) Accruals/matching (1)

Prudence (1) [2]
(e) Trade receivables (1)

Capital/profit (1) [2]
[Total: 12]

5 (a)
$
Trade receivables 700 }
Trade payables (400) }(1)
Inventory 1 100 (1)
Provision for depreciation of equipment (4 100) } (1)
Prepaid rent 250 (1)
Bank 2 100 (1)

[6]
(b)
Nzita
2014 $ 2015 $
Feb 1 Balance b/d 700 (1) Jan 31 Bank/Cash 28 900 (1)

Jan 31 Sales 29 100 (1of)
29 800 29 800
2015
Nzita
2015 $ 2014 $
Jan 31 Bank/Cash 12 600 (1) Feb 1 Balance b/d 400 (1)
Balance c/d 650 2015

Jan 31 Purchases 12 850 (1of)
13 250 13 250
2015
[8]

(c)
Nzita
$ $
Sales/Revenue 29 100 (1of)
Inventory 1 Feb 2014 1 100
Purchases 12 850 (1of)
13 950
Inventory 31 January 2015 1 400 (1 for

both)
Rent 3100 (1) + (250–150) (1) 3 200
Wages 5 200
Sundry expenses 2 650
Depreciation of equipment 1 680 (1)
12 730

+ 1 for IAS terminology
[9]
(d)
Nzita
Statement of Financial Position (extract) at 31 January 2015
Capital at 1 Feb 2014 15 350 (1of)
19 170
Drawings 6 600 (1)
Capital at 31 January 2015 12 570 (1of)

[4]

(e) 16 550/29 100 (1of) × 100 = 56.87% (1of) [2]
(f) Lower selling prices

Introduction of trade discount
Sales promotions
Higher purchases prices not passed on to customers
Change in mix of goods sold
Higher cost of sales
Any two (1of) each [2]
[Total: 31]

6 (a) Capital (1)

Revenue (1)
Current (1)
Non-current (1)
Understated (1)
Overstated (1) [6]
(b)
Error 2 (1) Error of commission (1)
Error 4 (1) Error of principle (1)

[4]
(c)
Error Debit Credit
$ $

Suspense 60 (1)
discounts (1)
2 Joanie 85 (1)
Yolanda 85 (1)
receipt of cash (1)

Suspense 10 (1)
sales returns journal total (1)
4 Stationery 150 (1)

Correction of revenue
expenditure treated as capital
expenditure (1)
[13]

(d) Leroy
Suspense account
2015 $ 2015 $
Sept 30 Balance b/d 70 (1of) Sept 30 Discount 60 (1of)

allowed and
received
Sales returns 10 (1of)
70 70
[3]
(e)
No effect Increase Decrease
$ $ $
Draft profit 5 170
Error 1 60 (2)
Error 2 (1)
Error 3 10 (2)
Error 4 150 (2)
Corrected 4 950
profit (1)OF
Marks with figures: 1 for figure, 1 for direction
[8]
[Total: 34]

0452 ACCOUNTING

1 (a) A
(b) B
(c) D
(d) C
(e) C
(f) C
(g) A
(h) B
(i) B
(j) D (1) mark each
[Total: 10]

2 (a) Debit note: a document from a customer asking for a reduction in the value of an invoice
received by them. (1)
Credit note: a document sent to the customer showing the reduction of an invoice. (1)
Statement of account: to summarise a customer’s transactions for the month. (1) [3]
(b) So that accounts of the same type can be kept together

(c)
Account Ledger
Delivery van/Motor vehicles Nominal/general
Susan Sales (1)
Carriage inwards Nominal/general (1)
Drawings Nominal/general (1)
Adam Purchases (1)

[5]
(d) Current assets (1) [1]
(e)
Purchases (1) Alice (1)

[2]
(f)
Discount allowed Discount received
in the books of Ivy (1)
in the books of Alice (1)

[2]
(g) Statement of account (1) [1]
[Total: 15]

3 (a) Any two for (1) each e.g. plant and equipment, factory premises, office premises, delivery
vehicle [2]
(b)
non-current asset current asset
lasting more than 12 months lasting less than 12 months
bought to keep and use in the bought to resell/expected to turn into

business cash within 12 months
depreciated not depreciated

Any one comment (1), comparison comment (1) [2]
(c) Amount received when a non-current asset is sold

Receipt of a loan
Share issue/capital introduced
Any one example (1) [1]
(d)
Capital Revenue
Purchase of inventory (1)
Purchase of stationery (1)
Legal fees on purchase of land (1)
Construction costs of factory (1)

[4]
(e) Disposal (1) [1]
(f) Consistency (1) [1]
(g) Historical/only deals with the past

Difficulties of definition
Non-financial aspects
Unable to predict future
Doesn’t identify the cause of a problem
[Total: 12]

4 (a)
Esme
$ $
2014 2014
Jan 1 Balance b/d 9 500 (1) Dec 31 Sales returns 1 050 (1)
Dec 31 Sales 95 100 (1) Bank/Cash 92 750 (1)
Bank 450 (1) Discount allowed 2 100 (1)
Balance c/d 50 Bad debt 300 (1)
PLCA/Contra 100 (2)*
Balance c/d 8 800
105 100 105 100
2015 2015
Jan 1 Balance b/d 8 800 (1of) Jan 1 Balance b/d 50 (1)
Note * (2) for 100, (1) for 180
Esme
$ $
2014 2014
Dec 31 Purchases rets 1 950 (1) Jan 1 Balance b/d 7 000 (1)
Bank/Cash 59 000 (1) Dec 31 Purchases 63 600 (1)
SLCA/Contra 100 (1of)
Balance c/d 8 700
70 600 70 600
2015
[18]
(b) Provide total of trade receivables

Check for the arithmetical accuracy of the sales ledger
Reduce fraud
To check for errors or fraud
Provide summary of transactions involving debtors
Enable financial statements to be prepared quickly
(c) Payment before specified date (1) [1]
[Total: 20]

5 (a)
Elliott
Cash Book
Date Details Cash Bank Date Details Cash Bank
$ $ $ $
2015 2015
May 1 Capital 12 000 (1) May 31 Rent 3 000 (1)
May 31 Sales 2 250 (1) 4 200 (1) Purchases 5 000 (1)
Cash 2 000 (1) Drawings 3 600 (1)
Sundry expenses 150 (1)
Bank 2 000 (1)
Balance c/d 100 6 600
2 250 18 200 2 250 18 200

June 1 Balance b/d 100 (1of) 6 600 (1of)
[11]
(b) Cost of sales Purchases 5000 (1of) – closing inventory 1100 (1) = 3900 (1of)
OR (5 × 300) (1) + (6 × 400) (1) = 3900 (1of)
Expenses Rent 1000 (1) + other expenses (150 + 80) (1) = 1230 (1of)
Profit for the month Sales 6450 (1of) – (3900 + 1230) (1of) = 1320 (1of) [9]

(c)
Elliott
Statement of Financial Position at 31 May 2015
$
Non-current assets
Vehicle 1 800 (1)
Current assets
Inventory 1 100 (1)
Other receivable 2 000 (1)
Bank 6 600 (1of)
Cash 100 (1of)
9 800
Total assets 11 600
Capital at 1 May 2015 13 800 (1)

Profit 1 320 (1of)
15 120
Drawings 3 600 (1)
Capital at 31 May 2015 11 520
Current liabilities
Other payable 80 (1)
[9]
(d) Elliott’s drawings are greater than his profit (1) [1]
[Total: 30]

6 (a)
General Stores Limited
2014 $ 2014 $
1 Jan Balance b/d 31 500 (1) 1 Mar Disposal 6 000 (1)
1 Mar Bank 17 400 (1) 31 Dec Balance c/d 42 900
48 900 48 900
2015
1 Jan Balance b/d 42 900 (1of)
+1 for dates [5]
(b) 42 900 (1of) × 0.3 = $12 870 (1of) [2]
(c)
General Stores Limited
$ $
Revenue 227 000 (1)
Inventory 1 January 2014 41 200
Purchases 129 000
170 200
Inventory 31 December 2014 44 520 1 for both
Sales assistants’ wages 15 900 }
Office salaries 12 060 } (1)
Depreciation 12 870 (1of)
Rent 24 000 (1)
Sundry expenses 6 220 (1) 71 050
Profit from operations 30 270
Interest 15 000 (1)
[10]

(d)
General Store Limited

$ $ $ $
On 1 January 2014 100 000 20 000 4 810 124 810
Profit for the year .……… ……..... 15 270 15 270 (1of)
Dividend paid ……… ……… (10 000) (10 000) (1)
Transfer to general reserve ……… 5 000 (5 000) – (1)
On 31 December 2014 100 000 25 000 5 080 (1of) 130 080 (1of)
[5]
(e) 30 270/227 000 (1of) × 100 = 13.33% (1of)
OR
15 270 / 227 000 (1of) × 100 = 6.73% (1of) [2]
(f) Neighbouring shop may sell different mix of goods (1) with a higher gross profit margin (1).
Neighbouring shop may have different policies (1) for instance for depreciation (1).
Illustration with figures e.g. if depreciation rate was 10% then net profit margin would be
3.8% higher (1).
Neighbouring shop controls expenses better (1).
Neighbouring shop may own premises and avoid rent payment (1). Illustration with figures
e.g. rent accounts for 10.57% of revenue (1).
If using profit after interest also allow

Neighbouring shop may have more equity/capital (1) and not have the interest cost (1).
Illustration with figures e.g. interest amounts to 6.6% of sales (1). [Max 6]
(g) Increase selling prices/increase gross profit margin/reduce cost of sales

Reduce expenses/rent cheaper premises
Find cheaper lenders of finance to reduce interest charges
Review depreciation rate – do fixtures only have a life of 3 to 4 years
Turn overdrafts and short term loans into long term loans to reduce interest rate
Any 3 for (1) mark each. [3]
[Total: 33]

MARK SCHEME for the May/June 2015 series
0452 ACCOUNTING
Cambridge is publishing the mark schemes for the May/June 2015 series for most

1 (a) C
(b) B
(c) A
(d) B
(e) C
(f) D
(g) A
(h) D
(i) A
(j) A
(1) mark each [Total: 10]
2 (a)
Asset Liability
Office equipment
Prepaid rent (1)
Accrued wages (1)
Bank loan (1)
Inventory of goods for resale (1)
Inventory of stationery for office use (1)
Amount due to creditor (1)

[6]
(b) An asset account has a debit (1) balance.

A liability account has a credit (1) balance.
An expense account has a debit (1) balance.
An income account has a credit (1) balance. [4]

(c) Any suitable answer e.g. insurance, telephone, wages etc. (1) [1]
(d) Income statement (1) [1]
(e)
Every transaction has a two fold aspect True
Costs must be matched against related income True (1)
Revenue can be recorded before it is earned False (1)
Staff expertise can be recorded in the financial statements False (1)

[3]
(f) Lamoudi
Insurance account
2014 $ 2014 $
1 Jan Balance b/d 300 (1) 31 Dec Income statement 1380 (1o.f.)
1 Apr Bank/Cash 1440 (1) Balance c/d 360
1740 1740
2015
1 Jan Balance b/d 360 (1)
+1 for dates [5]
(g) To check the arithmetical accuracy of the double entry (1)

OR
As a basis for the preparation of the financial statements/final accounts (1) [1]

(h) Ebenon
Debit Credit
$ $
Motor vehicles 38 000 }
Provision for depreciation of motor vehicles 10 000 }(1)
Sales 190 000 }
Rent 4 000 }
Wages and salaries 41 000 }(1)
Drawings 23 000 }(1)
Trade receivables 7 000 }(1)
Bank overdraft 1 500 }
Cash 100 }(1)
Purchase returns 600 }
Inventory 12 000 }(1)
Capital 27 800 (1o.f.)
234 900 234 900

[8]
(i) 1 January 2014 (1) [1]
[Total: 30]

3 (a)
Book of prime (original) entry Source document
Cash book Cheque counterfoil
Any two of:

Sales journal Sales invoice
Sales returns journal Sales credit note issued
Purchases journal Purchase invoice
Purchases returns journal Credit note received/debit note issued
General journal Notification of debtor going bankrupt/other suitable
answer
Petty cash book Voucher
for (1) mark each for (1) mark each

[4]
(b) To avoid multiple entries in the ledger (1)

Different books of prime entry can be maintained by different people (1)
Acts as an aid for posting to the ledger by analysing a transaction into debit and credit entry (1)
Helps to reduce the amount of detail in the ledger as only totals are posted to the ledger (1)
Provides evidence of transactions since they are recorded from source documents (1)
Helps in the auditing/tracking process/facilitates cross-referencing (1)
Easy reference to source of a transaction (1)
Helps in gathering and summarising of accounting information (1)
Groups together similar types of transactions in one book in date order (1)
Reduces number of entries in ledger (1)
Max. 1 [1]
(c) Discount allowed (1) Discount received (1) [2]
(d) The debtor’s bank refused payment (1) [1]
(e)
Pierre (1) Bank (1)

[2]
(f) Bank reconciliation statement (1) [1]
(g) Paying more from the bank account then there is in it (1). This means that the business owes
the bank money (the bank is a current liability) (1). [2]

(h)
Debit balance Credit balance
Cash book (1)
Bank statement (1)

[2]
(i)

[2]
[Total: 17]
4 (a) Green Meadow Limited

$
Non-current assets
Plant and equipment 184 000
Motor vehicles 87 000
271 000 (1)*
Current assets
Inventory 63 000
Cash and cash equivalents/Bank 2 000
122 000 (1)*
Capital and reserves (1)

8% preference share capital 100 000 (1)
290 000
6% Debentures (2019) 50 000 (1)
Bank loan 10 000 (1)
60 000
Current liabilities
Trade payables 43 000 (1)*
* indicates heading required for mark [10]

(b) $
Closing profit 65 000
Opening profit 51 500
13 500 (1)
Add back:
Ordinary dividend 10 000 (1)
Preference dividend 8 000 (1)
Profit for the year 31 500 (1o.f.) [4]
(c) $
Profit for the year 31 500 (1o.f.)
Add back:
35 000 (1o.f.)
(d) × 100 = 10% (1o.f.) [4]
290 000 (1o.f.) + 60 000 (1o.f.)
(e) To compare with other businesses

To compare with rate of finance cost on debentures etc.
(f) To avoid dilution of control (1)/because debentures don’t have voting rights (1)
Ensure existing owners retain control of business (1)
[Total: 24]
5 (a) Gross profit $400 (1)
Cost of sales $600 (1)
Purchases 600 (1o.f.) – (60 – 40) (1) = $580
Profit for the year $150 (1)
Expenses 400 (1o.f.) – 150 (1o.f.) = $250 [7]
(b) The brother has better control of his expenses (1).

The brother has a larger business and experiences economies of scale on overheads such
as rent (1).
The brother buys goods for resale at a lower price (1).
The brother sells the goods at a higher price (1).

50 (1)
(c) × 365 (1) = 30.42 = 31 days (1o.f.) [4]
600 (1o.f.)
(d) Increasing sales

Decreasing inventory levels
More efficient purchasing of inventory
Change in type of goods sold
Increase in business activity
Lower inventory levels
More sales activity
Any two for (1) each [2]
(e) Increase in finance

Additional knowledge/skills/expertise
Share risks
Sharing of tasks and responsibilities
Can discuss decision-making
Losses can be shared between partners
[Total: 16]
6 (a) Healthy Ways Sports Club

2014 $ 2014 $
1 Jan Balance b/d 350 (1) 1 Jan Balance b/d 100 (1)
31 Dec Income and 19 300 (1o.f.) 31 Dec Bank/Cash 19 100 (1)
expenditure a/c
19 700 19 700
2015 2015
1 Jan Balance b/d 500 (1) 1 Jan Balance b/d 50 (1) [6]
(b) Healthy Ways Sports Club

2014 $ 2014 $
31 Dec Bank/Cash 3710 (1) 1 Jan Balance b/d 590 (1)
Balance c/d 820 31 Dec Purchases 3940 (1o.f.)
4530 4530
2015
1 Jan Balance b/d 820 (1) [4]

(c) Healthy Ways Sports Club

Café Income Statement for the year ended 31 December 2014
$ $
Revenue/Sales 4900 (1)
Purchases 3940 (1o.f.)
4540
Inventory at 31 December 2014 800 (1) 3740
1160
Staff wages 1800 (1)
Loss for the year (640) (1o.f.) [6]
(d) Healthy Ways Sports Club

$ $
Subscriptions 19 300 (1o.f.)
Loss from cafe 640 (1o.f.)
Staff wages (7 200 + 300) 7 500 (1)
Rent and insurance 4 800 }
Sundry expenses 1 850 } (1)
Depreciation 18 700 + 4 600 (1) – 20 100 (1) 3 200 17 990
Surplus 1 310 (1o.f.) [7]
[Total: 23]

0452 ACCOUNTING

1 (a) D
(b) A
(c) D
(d) A
(e) D
(f) B
(g) C
(h) C
(i) A
(j) D
2 (a) Capital = assets less liabilities (1) [1]
(b) Something which is owned by a business/owed to a business (1) [1]

(d)
Account Ledger Trial balance
Insurance Nominal/general Debit
Drawings Nominal (1) Debit (1)
Sales Nominal (1) Credit (1)
Grant (a credit customer) Sales (1) Debit (1)
Aziz (a credit supplier) Purchases (1) Credit (1)
Provision for depreciation of van Nominal (1) Credit (1)

[10]
(e) So that accounts of the same type can be kept together (1)
Ease of maintenance/navigation
Speed
Easier to check/locate error
Frees up the general ledger
Divides the work between several people [1]
(f) A list of balances of ledger accounts (1) at a particular date (1) [2]

OR
As a basis for preparation of financial statements (1) [1]
(h) Suspense (1) [1]
(i) Any two of:

Compensating (1) errors cancel one another out (1) [4]
[Total: 22]

3 (a) Ali
Farhad account
2015 $ 2015 $
1 Jan Balance b/d 300 (1) 8 Jan Sales returns 125 (1)
5 Jan Sales 250 (1) 19 Jan Bank 291 (1)
Discount allowed 9 (1)
Balance c/d 125
550 550
2015
1 Feb Balance b/d 125 (o.f.)
(b)
Document Reason
5 January Invoice (1) To inform Farhad of the quantity of goods bought and their
price/as a demand for payment (1)
8 January Credit note (1) To inform Farhad of the allowance he was being given for
goods returned (1)
[4]
(c)
Ali sold goods, $250, to Sales journal (1)

Farhad
Farhad returned half of the Sales returns journal (1)

goods bought on 5 January
Farhad paid the amount Cash book (1)

owed on 1 January having
deducted 3% cash discount
[3]
(d) Ali
Rent account
2014 $ 2014 $
15 May Bank 1800 (1) 1 Jan Balance b/d 400 (1)
21 Oct Bank 2000 (1o.f.) 31Dec Income statement 2680 (1)
Balance c/d 720
3800 3800
2015
1 Jan Balance b/d 720 (1) +1 for dates [6]
(e) Under current assets (1) O.F. as Other receivables (1) O.F. [2]

(f) Trade payables

Bank
Government
Prospective partner or investors
Tax authorities
Employees
Competitors or customers
Any 2 for (1) each [2]
[Total: 23]
4 (a) $
Fixtures and fittings 12 000 (1) – 2 400 (1) 9 600
Motor vehicle 15 000 (1) × 0.6 (1) 9 000
Inventory 8 340 (1)
Trade receivables 1 600 (1) – 48 (1) 1 552
Bank 90 (1)
Trade payables (1 100) (1)
Other payables 190 (1) + 230 (1) (420)
Net assets 27 062 (1o.f.) [12]
(b) (i) $
Closing net assets 27 062 (1o.f.)
Opening net assets (18 454) (1)
Change 8608 (1o.f.) [3]
(ii) Drawings are included. Change in net assets is adjusted by the drawings to arrive at net
profit. [1]
(c) Gross profit margin

Net profit margin
Inventory turnover
(d) Prudence – a business should not overstate profits/assets (1) and so should value inventory
at the lower of cost and net realisable value (1)
Realisation – a business should not account for profit until it is realised (1) and should use
cost price rather than selling price for inventory valuation (1) [4]
[Total: 22]

5 (a)
$
Current assets 3100 + 750 + 100 3950 (1)
Current liabilities 470 + 900 + 190 1560 (1)
Working capital 2390 (1o.f.)

[3]
(b) Current ratio 3950/1560 (1)(o.f.) = 2.53 : 1 (1o.f.)

Quick ratio 850/1560 (1)(o.f.) = 0.54 : 1 (1o.f.) [4]
(c) Inventory holding is very high.

Too much cash is tied up in inventory.
The current ratio has increased whilst the quick ratio has decreased which indicates that
inventory has increased.
2014 ratios appear fairly ‘normal’.
2015 current ratio may be too high.
2015 quick ratio may be too low.
Business may be unable to pay liabilities when they fall due.
Trade payables are greater than trade receivables.

Prepaid insurance
Stock may be turned into cash to pay debts.
Bank is in overdraft.
Higher than ideal current ratio
Lower than ideal quick ratio
Quick assets less than liabilities
Business may face bankruptcy/at risk
Any four for (1) mark each [max. 4]
(d)
Transaction Account debited $ Account credited $
1 Bank 10 000 (1) Loan 10 000 (1)
2 Motor vehicles 8 000 (1) Bank 8 000 (1)
3 Purchases 300 (1) John 300 (1)
4 Cash 80 (1) Sales 80 (1)
Mark for name of account and amount [8]
[Total: 19]

6 (a) Quik Flo Limited

Factory equipment account
2014 $ 2015 $
1 May Balance b/d 18 000 (1) 30 Apr Disposal 2 000 (1)
2015
30 Apr Bank 5 000 (1) Balance c/d 21 000
23 000 23 000
2015
1 May Balance b/d 21 000 (1o.f.) [4]
(b) Quik Flo Limited

$ $
Raw materials at 1 May 2014 5 000
53 000
Raw materials at 30 April 2015 4 400
Cost of raw materials consumed (1) 48 600 (1o.f.)
Factory wages 20 500 (1)
Prime cost 69 100 (1o.f.)
Factory depreciation (21 000 x 10%) 2 100 (1)
Supervisor’s salary 10 800 (1)
Rent 14 400 (1) 27 300
96 400
Work in progress at 1 May 2014 2 000 }
Work in progress at 30 April 2015 (1 200) } (1)
Cost of production 97 200 (1o.f.) [9]
(c) Quik Flo Limited

Income Statement for the year ended 30 April 2015
$ $
Revenue 140 000
Finished goods at 1 May 2014 8 500
Cost of production 97 200 (1o.f.)
105 700
Finished goods at 30 April 2015 (9 000) (1) both 96 700
Gross profit 43 300 (1o.f.)
Profit on disposal 600 (1)
Office salaries 15 150 }
Selling and distribution costs 9 100 } (1)
Rent 3 600 (1)
Office depreciation 500 (1)
Finance charges 800 (1) 29 150
Profit for the year 14 750 [8]
(d) Units of production which have been started but which have not been completed (1) [1]
(e) Increase in costs of raw materials (higher prices) direct labour (higher rates) (1)
Increase in level of production (1) [2]
[Total: 24]

0452 ACCOUNTING

1 (a) C
(b) B
(c) A
(d) B
(e) C
(f) D
(g) A
(h) D
(i) A
(j) A
2 (a)
Asset Liability
Office equipment
Prepaid rent (1)
Accrued wages (1)
Bank loan (1)
Inventory of goods for resale (1)
Inventory of stationery for office use (1)
Amount due to creditor (1)

[6]
(b) An asset account has a debit (1) balance.

A liability account has a credit (1) balance.
An expense account has a debit (1) balance.
An income account has a credit (1) balance. [4]

(c) Any suitable answer e.g. insurance, telephone, wages etc. (1) [1]
(d) Income statement (1) [1]
(e)
Every transaction has a two fold aspect True
Costs must be matched against related income True (1)
Revenue can be recorded before it is earned False (1)
Staff expertise can be recorded in the financial statements False (1)

[3]
(f) Lamoudi
Insurance account
2014 $ 2014 $
1 Jan Balance b/d 300 (1) 31 Dec Income statement 1380 (1o.f.)
1 Apr Bank/Cash 1440 (1) Balance c/d 360
1740 1740
2015
1 Jan Balance b/d 360 (1)
+1 for dates [5]

OR
As a basis for the preparation of the financial statements/final accounts (1) [1]

(h) Ebenon
Debit Credit
$ $
Motor vehicles 38 000 }
Provision for depreciation of motor vehicles 10 000 }(1)
Sales 190 000 }
Rent 4 000 }
Wages and salaries 41 000 }(1)
Drawings 23 000 }(1)
Cash 100 }(1)
Purchase returns 600 }
Capital 27 800 (1o.f.)
234 900 234 900

[8]
(i) 1 January 2014 (1) [1]
[Total: 30]

3 (a)
Book of prime (original) entry Source document
Cash book Cheque counterfoil
Any two of:

Sales journal Sales invoice
Sales returns journal Sales credit note issued
Purchases journal Purchase invoice
Purchases returns journal Credit note received/debit note issued
General journal Notification of debtor going bankrupt/other suitable
answer
Petty cash book Voucher
for (1) mark each for (1) mark each

[4]
(b) To avoid multiple entries in the ledger (1)

Different books of prime entry can be maintained by different people (1)
Acts as an aid for posting to the ledger by analysing a transaction into debit and credit entry (1)
Helps to reduce the amount of detail in the ledger as only totals are posted to the ledger (1)
Provides evidence of transactions since they are recorded from source documents (1)
Helps in the auditing/tracking process/facilitates cross-referencing (1)
Easy reference to source of a transaction (1)
Helps in gathering and summarising of accounting information (1)
Groups together similar types of transactions in one book in date order (1)
Reduces number of entries in ledger (1)
Max. 1 [1]
(c) Discount allowed (1) Discount received (1) [2]
(d) The debtor’s bank refused payment (1) [1]
(e)
Pierre (1) Bank (1)

[2]
(f) Bank reconciliation statement (1) [1]
(g) Paying more from the bank account then there is in it (1). This means that the business owes
the bank money (the bank is a current liability) (1). [2]

(h)
Debit balance Credit balance
Cash book (1)
Bank statement (1)

[2]
(i)

[2]
[Total: 17]
4 (a) Green Meadow Limited

$
Non-current assets
Plant and equipment 184 000
271 000 (1)*
Current assets
Inventory 63 000
Cash and cash equivalents/Bank 2 000
122 000 (1)*
Capital and reserves (1)

8% preference share capital 100 000 (1)
290 000
6% Debentures (2019) 50 000 (1)
Bank loan 10 000 (1)
60 000
Current liabilities
Trade payables 43 000 (1)*
* indicates heading required for mark [10]

(b) $
Closing profit 65 000
Opening profit 51 500
13 500 (1)
Add back:
Ordinary dividend 10 000 (1)
Preference dividend 8 000 (1)
(c) $
Profit for the year 31 500 (1o.f.)
Add back:
35 000 (1o.f.)
(d) × 100 = 10% (1o.f.) [4]
290 000 (1o.f.) + 60 000 (1o.f.)
(e) To compare with other businesses

To compare with rate of finance cost on debentures etc.
(f) To avoid dilution of control (1)/because debentures don’t have voting rights (1)
Ensure existing owners retain control of business (1)
[Total: 24]
5 (a) Gross profit $400 (1)
Cost of sales $600 (1)
Purchases 600 (1o.f.) – (60 – 40) (1) = $580
Profit for the year $150 (1)
Expenses 400 (1o.f.) – 150 (1o.f.) = $250 [7]
(b) The brother has better control of his expenses (1).

The brother has a larger business and experiences economies of scale on overheads such
as rent (1).
The brother buys goods for resale at a lower price (1).
The brother sells the goods at a higher price (1).

50 (1)
(c) × 365 (1) = 30.42 = 31 days (1o.f.) [4]
600 (1o.f.)
(d) Increasing sales

Decreasing inventory levels
More efficient purchasing of inventory
Change in type of goods sold
Increase in business activity
Lower inventory levels
More sales activity
(e) Increase in finance

Additional knowledge/skills/expertise
Share risks
Sharing of tasks and responsibilities
Can discuss decision-making
Losses can be shared between partners
[Total: 16]
6 (a) Healthy Ways Sports Club

2014 $ 2014 $
1 Jan Balance b/d 350 (1) 1 Jan Balance b/d 100 (1)
31 Dec Income and 19 300 (1o.f.) 31 Dec Bank/Cash 19 100 (1)
expenditure a/c
19 700 19 700
2015 2015
1 Jan Balance b/d 500 (1) 1 Jan Balance b/d 50 (1) [6]
(b) Healthy Ways Sports Club

2014 $ 2014 $
31 Dec Bank/Cash 3710 (1) 1 Jan Balance b/d 590 (1)
Balance c/d 820 31 Dec Purchases 3940 (1o.f.)
4530 4530
2015
1 Jan Balance b/d 820 (1) [4]

(c) Healthy Ways Sports Club

$ $
Revenue/Sales 4900 (1)
Purchases 3940 (1o.f.)
4540
Inventory at 31 December 2014 800 (1) 3740
1160
Staff wages 1800 (1)
Loss for the year (640) (1o.f.) [6]
(d) Healthy Ways Sports Club

$ $
Subscriptions 19 300 (1o.f.)
Loss from cafe 640 (1o.f.)
Staff wages (7 200 + 300) 7 500 (1)
Rent and insurance 4 800 }
Sundry expenses 1 850 } (1)
Depreciation 18 700 + 4 600 (1) – 20 100 (1) 3 200 17 990
Surplus 1 310 (1o.f.) [7]
[Total: 23]

www.dynamicpapers.com

0452 ACCOUNTING

1 (a) Control/limit/keep track of petty cash expenditure

The cash remaining and the vouchers received should equal the imprest
Can help to reduce fraud
Any one advantage (1) [1]
(b) See petty cash book on next page [11]
(c) (i) $78 (1 o.f.)
(ii) Bank (or Cash) (1) [2]
(d) Stationery (1) [1]
(e) Kuda Maposa

Journal
Debit Credit
$ $
1 Drawings 300 (1)

Purchases 300 (1)
Goods taken for personal use (1)
2 Motor vehicles 12 000 (1)

Capital 12 000 (1)
Motor vehicle purchased using private funds (1)
3 Machinery 865 }(1)

Machinery repairs 125 }
Valley Machines 990 (1)
Invoice received for purchase of new machine and
repairs to existing machine (1)
[9]
[Total: 24]

(b) Kuda Maposa – Petty Cash Book
Total Date Details Total Postage Stationery General Ledger

Received Paid Expenses accounts
$ 2015 $ $ $ $ $
100 Mar 1 Balance b/d
10 (1) 6 Postage 13 13 (1)
11 Tea and coffee 5 5 (1)
14 Stationery 27 27 (1)
18 T Masuka 15 15 (1)
21 Refund for stationery
26 Window cleaner 12 12 (1)
29 P Zhonga 16 16 (1)
88 13 27 17 31
30 Balance c/d 22
110 110
22 (1 April 1 Balance b/d

o.f.)
(1) Dates
(1 o.f.) Totalling analysis columns
(1 o.f.) Matching totals on total columns [11]

2 (a) (i) 15% (1)
(ii) $187 (1)
(iii) $217 (1) [3]
(b) Jai Kapur (1) [1]
(c) Goods returned

Overcharge
Allowance for faulty/damaged goods
(d) Debit note (1) [1]
(e)
Books of Jai Kapur Books of Vijay Singh
Account debited Account credited Account debited Account credited
Sales returns (1) Vijay Singh (1) Jai Kapur (1) Purchases returns (1)
[4]
(f) Vijay Singh

$ $
2015 2015
April 1 Balance b/d 475 (1) April 30 Sales returns 46 (1)
30 Sales 590 (1) Bank 387 (1)
Bank (dis. chq.) 26 (1) Discount allowed 13 (1)
Interest 8 (1) Bad debt 32 (1)
Balance c/d 21 Contra 150 (1)
Balance c/d 492
1120 1120
2015 2015
May 1 Balance b/d 492 (1 o.f.) May 1 Balance b/d 21 (1)
+ (1) dates
(g) This is when the balance of an account in the purchases ledger is set against the balance of
an account of the same person in the sales ledger. (1) It is used when a trader both buys
goods from and sells goods to another business. (1) [2]
(h) The customer had not paid the balance owed by the end of the period of credit allowed. (1)
[1]

(i) To assist in the location of errors

To provide an instant total of trade receivables
To prove the arithmetical accuracy of the sales ledger
To provide a summary of transactions relating to trade receivables
(j) An error in the sales ledger would not be revealed (1)

Any fraud would not be revealed (1)
Any two points (1) each [2]
[Total: 28]
3 (a) Malala Khan

Statement of Affairs at 31 May 2015
Assets Cost Depreciation Book

to date value
$ $ $
Machinery 28 600 11 440 (1) 17 160 (1 o.f.)
Motor vehicles 24 000 13 875 (1) 10 125 (1 o.f.)
52 600 25 315 27 285
Inventory 6 750 (1)

Other receivables 101 (1) 14 495
41 780
Liabilities
Long-term loan 10 000 (1)

Bank overdraft 4 080 (1) 12 180
22 180
Capital 19 600 (1 o.f.)

41 780
Any suitable format acceptable [12]

(b) Malala Khan

Capital account
$ $
2015 2014
May 31 Drawings 1 990 (1) June 1 Balance 20 000 (1)
Drawings 420 (1) 2015
Loss for year 2 990 (1 o.f.) Jan 1 Bank 5 000 (1)
Balance c/d 19 600 (1 o.f.)
25 000 25 000
2015
June 1 Balance b/d 19 600
(c)
Reduce the credit period allowed to credit customers (1)
Sell a motor vehicle which is no longer used (1)
Arrange with the bank to have a loan for six months (1)
Allow cash discount to credit customers who pay (1)

promptly
[4]

To ensure that there is no difficulty in obtaining further supplies
Any three points (1) each [3]
[Total: 25]

4 (a) Syed Zilani

$ $ $
Revenue 77 100
Cost of sales
Less Goods for own use 580 61 450 (1)
Less Closing inventory 4 100 (1) 57 350
Gross profit 19 750 (1 o.f.)
19 793
Wages 10 140
Insurance (2 800 (1) – 400 (1)) 2 400
Advertising 1 120 (1)
Bad debts 90 (1)
Provision for doubtful debts (2% × 6 500) 130 (1)
Rates (2 160 (1) – 720 (1)) 1 440
General expenses 151
Depreciation – Equipment (20% × 9 300) 1 860 (1) 17 331
Profit for the year 2 462 (1 o.f.)
Horizontal format acceptable [14]
(b) Either
Profit should not be overstated
Or
Profit should not be anticipated, but possible losses should be provided for (1)
Example
Either Creation of provision for doubtful debts
Or Providing for depreciation of equipment (1) [2]
(c) Comparability
Relevance
Understandability
Any one objective (1) [1]
(d) Should compare with a business in the same trade

Should compare with a business of approximately the same size/same capital
Any two points (1) for basic statement and (1) for development [4]
[Total: 21]

5 (a)
Error Increase Decrease
$ $
Sales returns, $420, had not been recorded 420 (2)
Inventory on 1 March 2014 was overstated by $1500 1500 (2)
The income statement included rent and rates, $6150, for 15 months 1230 (2)
to 31 May 2015
Discount allowed, $180, had been recorded as discount received 360 (2)
(1) for position and (1) for figure in each case [8]
(b) (7350 + 1120) : ((6870 + 5000)

8470 : 11 870 (1)
0.71 : 1 (1) [2]
(c) Liquid assets are less than the current liabilities

Cannot meet the immediate liabilities from the immediate assets
Is dependent on selling inventory to meet the current liabilities
Is below the generally accepted “benchmark”/is inadequate/unsatisfactory
Or other suitable comment based on the answer to (b)
(d) Excludes the inventory from the calculation [1]
Trade receivables 365

(e) × [1]
Credit sales 1
7 350 365 (1)

(f) × = 38 days (1) [2]
71 500 1
(g) On average credit customers are taking 8 days more than is allowed
This may affect the ability of the business to take advantage of opportunities when they arise
Or other suitable comments based on answer to (f)

(h) Offer cash discount for prompt payment

Improve credit control/send invoices or statements promptly
Refuse further supplies until outstanding balance paid
Invoice discounting and debt factoring
(i) On average suppliers are paid 4 days earlier than is required

This may enable him to take advantage of cash discounts
This will improve relations with credit suppliers
Deprives the business of the use of the money earlier than necessary
[Total: 22]


0452 ACCOUNTING

1 (a) Nyasha Chingono

Purchases journal
Date Details $ $
2015
3 April Wholesalers Limited 358 (1)
12 John Moyo 480

Less 25% trade discount 120 360 (1)
30 Transfer to purchases a/c 718 (1)
Purchases returns journal
Date Details $ $
2015
18 April John Moyo 160
Less 25% trade discount 40 120 (1)
30 Transfer to purchases returns a/c 120 (1)

[5]
(b) Nyasha Chingono

John Moyo account
$ $
2015 2015
18 Apr Returns 120 (1) 1 Apr Balance b/d 560
27 Bank 546 (1) 12 Purchases 360 (1)
Discount 14 (1)
Purchases account
$ $
2015
30 Apr Total for month 718 (1 o.f.)
Purchases returns account
$ $
2015
30 Apr Total for month 120 (1 o.f.)
+ (1) dates

(c) May be able to take advantage of cash discounts

Any one advantage (1)

The business is deprived of the use of the money earlier than necessary
Any one disadvantage (1) [2]
(d) Sales returns

Explanation The total sales returns for the month (1)
Source of information Sales returns journal (1)
Contra
Explanation This is the total set off against accounts in the purchases ledger
during the month (1)
Source of information Journal (1)
Interest charged
Explanation This is the total interest charged on credit customers’ accounts
which are overdue (1)
Source of information Journal (1) [6]
(e) Reduce credit sales/sell on a cash basis

Improve credit control/issue invoices and monthly statements promptly
800 365 } (1)

(f) × = 24 days (1) [2]
12 600 1 }
(g) Unsatisfied
Or o.f. based on answer to (f) [1]

[Total: 27]

2 (a) Obtain correct bank balance

Identify errors on the bank account
Assist in discovering fraud and embezzlement
Identify amounts not credited by the bank
Identify any stale cheques
(b) David Jones

$ $
2015 2015
1 Feb Balance b/d 114 1 Feb Bank charges 62 (1)
Bank interest 130 (1) K Taylor
Balance c/d 101 (Dis. chq.) 143 (1)
Insurance 40 (1)
Error correction 100 (1)
345 345
2015
1 Feb Balance b/d 101 (1 o.f.) [6]
(c) David Jones

Bank Reconciliation Statement at 31 January 2015
$
Balance on bank statement 154 (1)
Add Amounts not credited – cash sales (1) 235 (1)
389
Less Cheques not presented – M Sharp (1) 490 (1)
Balance in cash book (101) (1 o.f.)
David Jones
Bank Reconciliation Statement at 31 January 2015
$
Balance in cash book (101) (1 o.f.)
Add Cheques not presented – M Sharp (1) 490 (1)
389
Less Amounts not credited – cash sales (1) 235 (1)
Balance on bank statement 154 (1) [6]
(d) (i) Cash book balance (1)
(ii) Either
The statement of financial position would not balance if the bank statement balance was
included (2)
Or
Only balances on the books of the business can be included in the statement of financial
position of the business (2) [3]

(e) Assess prospects of any requested loan/overdraft being repaid when due
Assess prospects of any interest on loan/overdraft being paid when due
Assess security available to cover any loan/overdraft
[Total: 19]

3 (a) Akhtar Hussain

Inventory account
$ $
2014 2015
1 April Balance b/d 3560 31 Mar Income Statement 3560 (1)
3560 3560
2015 2015
31 Mar Income Statement 4150 (1) 31 Mar Balance c/d 4150
4150 4150
2015
1 April Balance b/d 4150 (1)
Bad debts account

$ $
2015 2015
10 Jan ABC Stores 136 31 Mar Income Statement 190 (1)
31 Mar XY Limited 54 (1)
190 190

$ $
2015 2014
31 Mar Income Statement 120 (1) 1 April Balance b/d 1130
Balance c/d 1010 (1)
1130 1130
2015
1 April Balance b/d 1010 (1)
Provision for depreciation of machinery account

$ $
2015 2014
1 Mar Disposal 2250 (1) 1 April Balance b/d 4500
31 Balance c/d 3500 (1) 2015
31 Mar Income Statement 1250 (1)
5750 5750
2015
1 April Balance b/d 3500 (1 o.f.)
Disposal of machinery account

$ $
2015 2015
1 Mar Machinery 3000 (1) 1 Mar Bank 550
Prov. for Dep. 2250 (1)
31 Income Statement 200 (1 o.f.)
3000 3000
Drawings account
$ $
2015 2015
1 Feb Bank 1000 31 Mar Capital 1000 (1)
1000 1000
+ (1) dates

(b) Akthar Hussain

Journal
Debit Credit
$ $
Motor vehicles 9000 }

Motor repairs 360 } (1)
PJ Autos 9360 (1)
Invoice received for purchase of new vehicle and motor repairs (1)
[3]
(c) Capital expenditure

Money spent on acquiring, improving and installing non-current assets (1)
Revenue expenditure
Money spent on running a business on a day-to-day basis (1) [2]
(d)
non-current assets at 31 March 2015 (1)
profit for the year ended 31 March 2015 (1)

[2]
[Total: 24]
4 (a) Rania Gharib

$ $
Revenue 63 660
Cost of sales
Opening inventory 4 700 *
Purchases (40 120 (1) + 3 720 (1) + 820 (1) – 2 950 (1)) 41 710
46 410
Closing inventory 3 150 * (1) for both
43 260
21 220
Wages 9 520
Rent and rates 5 200 (1)
Insurance (840 (1) – 120 (1)) 720
Depreciation fixtures and fittings (6 900 + 1 100 – 7 300) 700 (2) 16 140

43 260 (1 o.f.) 43 260

(b) = = 11.02 times (1 o.f.) [3]
(4 700 + 3150) ÷ 2 (1) 3 925
(c) Lower inventory levels

More sales activity
(d) It shows the profit earned for each $100 used in the business (1)
It shows how efficiently the capital is being employed (1) [2]
5 080 o.f.}(1) 100

(e) × = 6.12% (1 o.f.) [2]
83 000 } 1
(f) Higher profit for the year

Lower capital employed
(g)
gross profit for the year ended 31 January 2014
credit balance on capital account on 1 February (1)

2014
gross profit for the year ended 31 January 2015 (1)
profit for the year ended 31 January 2015 (1)
current assets at 31 January 2015 (1)

[4]
[Total: 27]

5 (a) Craven Limited


$ $ $ $
On 1 April 2014 200 000 17 000 9 000 226 000
Profit for the year ................ ................ 43 000 43 000 (1)
Dividend paid ................ ................ (16 000) (16 000) (1)
Transfer to general reserve ................ 15 000 (15 000) ............... (1)
On 31 March 2015 200 000 32 000 21 000 253 000 (1)
[4]
(b) Craven Limited

Assets $ $
Non-current assets
Fixtures and equipment at book value 54 000
Motor vehicles at book value 22 500
255 500 (1)
Current assets
47 000 (1 o.f.)

Equity and Reserves
General reserve (17 000 (1) + 15 000 (1)) 32 000
Retained earnings (9 000 (1) + 12 000 (1)) 21 000
253 000 (1 o.f.)
5% Debentures 15 000 (1)
Current liabilities
Bank 8 125
34 500 (1)


(c) Ordinary shareholders are members of the company

Ordinary shares carry voting rights
Ordinary share dividend is a share of the profit
Ordinary share dividend is variable
Ordinary share dividend is paid after any dividend on preference shares
Ordinary shareholders are repaid last in the event of a winding up
Any two features (1) each [2]
(d) Debentures are long-term loans

Debenture-holders are not members of the company
Debentures do not carry voting rights
Debentures carry a fixed rate of interest
Debenture interest is not dependent on the company’s profit
Debentures are often secured on the assets of the company
Debenture-holders are repaid before the shareholders in the event of a winding up
Any two features (1) each [2]
(e) Reduction in profit available for ordinary shareholders

Prior claim on the assets of the company in the event of a winding up
[Total: 23]


0452 ACCOUNTING

1 (a) Control/limit/keep track of petty cash expenditure

(b) See petty cash book on next page [11]
(c) (i) $78 (1 o.f.)
(ii) Bank (or Cash) (1) [2]
(d) Stationery (1) [1]
(e) Kuda Maposa

Journal
Debit Credit
$ $
1 Drawings 300 (1)

Purchases 300 (1)
Goods taken for personal use (1)

Capital 12 000 (1)
Motor vehicle purchased using private funds (1)
3 Machinery 865 }(1)

Machinery repairs 125 }
Valley Machines 990 (1)
Invoice received for purchase of new machine and
repairs to existing machine (1)
[9]
[Total: 24]

(b) Kuda Maposa – Petty Cash Book
Total Date Details Total Postage Stationery General Ledger

Received Paid Expenses accounts
$ 2015 $ $ $ $ $
10 (1) 6 Postage 13 13 (1)
18 T Masuka 15 15 (1)
21 Refund for stationery
26 Window cleaner 12 12 (1)
29 P Zhonga 16 16 (1)
88 13 27 17 31
30 Balance c/d 22
110 110
22 (1 April 1 Balance b/d

o.f.)
(1) Dates
(1 o.f.) Totalling analysis columns
(1 o.f.) Matching totals on total columns [11]

2 (a) (i) 15% (1)
(ii) $187 (1)
(iii) $217 (1) [3]
(b) Jai Kapur (1) [1]
(c) Goods returned

Overcharge
Allowance for faulty/damaged goods
(d) Debit note (1) [1]
(e)
Books of Jai Kapur Books of Vijay Singh
Account debited Account credited Account debited Account credited
Sales returns (1) Vijay Singh (1) Jai Kapur (1) Purchases returns (1)
[4]
(f) Vijay Singh

$ $
2015 2015
April 1 Balance b/d 475 (1) April 30 Sales returns 46 (1)
30 Sales 590 (1) Bank 387 (1)
Bank (dis. chq.) 26 (1) Discount allowed 13 (1)
Interest 8 (1) Bad debt 32 (1)
Balance c/d 21 Contra 150 (1)
Balance c/d 492
1120 1120
2015 2015
May 1 Balance b/d 492 (1 o.f.) May 1 Balance b/d 21 (1)
+ (1) dates
(g) This is when the balance of an account in the purchases ledger is set against the balance of
an account of the same person in the sales ledger. (1) It is used when a trader both buys
goods from and sells goods to another business. (1) [2]
(h) The customer had not paid the balance owed by the end of the period of credit allowed. (1)
[1]

(i) To assist in the location of errors

To provide an instant total of trade receivables
To prove the arithmetical accuracy of the sales ledger
To provide a summary of transactions relating to trade receivables
(j) An error in the sales ledger would not be revealed (1)

Any fraud would not be revealed (1)
[Total: 28]
3 (a) Malala Khan

Statement of Affairs at 31 May 2015
Assets Cost Depreciation Book

to date value
$ $ $
Machinery 28 600 11 440 (1) 17 160 (1 o.f.)
Motor vehicles 24 000 13 875 (1) 10 125 (1 o.f.)
52 600 25 315 27 285
Inventory 6 750 (1)

Other receivables 101 (1) 14 495
41 780
Liabilities
Long-term loan 10 000 (1)

22 180
Capital 19 600 (1 o.f.)

41 780
Any suitable format acceptable [12]

(b) Malala Khan

Capital account
$ $
2015 2014
May 31 Drawings 1 990 (1) June 1 Balance 20 000 (1)
Drawings 420 (1) 2015
Loss for year 2 990 (1 o.f.) Jan 1 Bank 5 000 (1)
Balance c/d 19 600 (1 o.f.)
25 000 25 000
2015
June 1 Balance b/d 19 600
(c)
Reduce the credit period allowed to credit customers (1)
Sell a motor vehicle which is no longer used (1)
Arrange with the bank to have a loan for six months (1)
Allow cash discount to credit customers who pay (1)

promptly
[4]

[Total: 25]

4 (a) Syed Zilani

$ $ $
Revenue 77 100
Cost of sales
Less Goods for own use 580 61 450 (1)
19 793
Wages 10 140
Insurance (2 800 (1) – 400 (1)) 2 400
Advertising 1 120 (1)
Bad debts 90 (1)
Rates (2 160 (1) – 720 (1)) 1 440
Depreciation – Equipment (20% × 9 300) 1 860 (1) 17 331
(b) Either
Profit should not be overstated
Or
Profit should not be anticipated, but possible losses should be provided for (1)
Example
Either Creation of provision for doubtful debts
Or Providing for depreciation of equipment (1) [2]
(c) Comparability
Relevance
Understandability
Any one objective (1) [1]
(d) Should compare with a business in the same trade

Any two points (1) for basic statement and (1) for development [4]
[Total: 21]

5 (a)
Error Increase Decrease
$ $
Sales returns, $420, had not been recorded 420 (2)
Inventory on 1 March 2014 was overstated by $1500 1500 (2)
The income statement included rent and rates, $6150, for 15 months 1230 (2)
to 31 May 2015
Discount allowed, $180, had been recorded as discount received 360 (2)
(1) for position and (1) for figure in each case [8]
(b) (7350 + 1120) : ((6870 + 5000)

8470 : 11 870 (1)
0.71 : 1 (1) [2]
(c) Liquid assets are less than the current liabilities

Cannot meet the immediate liabilities from the immediate assets
Is dependent on selling inventory to meet the current liabilities
Is below the generally accepted “benchmark”/is inadequate/unsatisfactory
Or other suitable comment based on the answer to (b)
(d) Excludes the inventory from the calculation [1]
Trade receivables 365

(e) × [1]
Credit sales 1
7 350 365 (1)

(f) × = 38 days (1) [2]
71 500 1
(g) On average credit customers are taking 8 days more than is allowed
This may affect the ability of the business to take advantage of opportunities when they arise
Or other suitable comments based on answer to (f)


(i) On average suppliers are paid 4 days earlier than is required

This may enable him to take advantage of cash discounts
This will improve relations with credit suppliers
Deprives the business of the use of the money earlier than necessary
[Total: 22]

0452 ACCOUNTING
components.

Glossary for Q1
(a) A 29 500 – 18 100 + 11 300 – 15 000 = 7700

B 29 500 + 18 100 – 11 300 – 15 000 = 21 300
C 29 500 – 18 100 + 11 300 + 15 000 = 37 700
D 29 500 + 18 100 – 11 300 + 15 000 = 51 300
(d) A (750/15) × 4 months

B (750/12) × 4 months
C (750/12) × 8 months
D (750/15) × 11 months
(e) A 78 – 22 – 6
B 78 – 22
C from question
D from question
Mark scheme
1 (a) B
(b) C
(c) D
(d) D
(e) A
(f) B
(g) A
(h) C
(i) C
(j) A

2 (a) An item which an organisation owns/which is owed to the organisation (1) [1]
(b) A statement of financial position is a statement of all the assets and liabilities of an
organisation (1) at a specific date (1). An income statement is a statement of all the
revenues and costs of an organisation (1) for a specific period (1). [4]
(c)
Debit Credit
Cash
Capital (1)
Bonnie – a credit customer (1)
Loan from the bank (1)
Other operating expenses (1)
Purchases returns (1)

[5]
(d)
Feb Account to be debited $ Account to be credited $
1 Purchases 600 Abdul 600
2 Cash 150 (1) Sales 150 (1)
3 Bank 100 (1) Cash 100 (1)
4 Drawings 50 (1) Cash 50 (1)
5 Sara 510 (1) Sales 510 (1)
6 Abdul 600 (1) Bank 600 (1)

[10]
(e)
John
Feb 1 Balance b/d 450 (1) Feb 6 Abdul 600 (1)
3 Cash 100 (1)
7 Balance c/d 50
----------- -----------
600 600
----------- -----------
+1 for dates
[5]

(f) Drawings (1) [1]
[Total: 26]

3 (a) (i)
Alex
Provision for depreciation account
2014 2014
Apr 1 Disposal account 6 800 (1) Jan 1 Balance b/d 6 800 (1)
------------- -------------
16 400 16 400
------------- 2015 -------------
Jan 1 Balance b/d 9 600
(1of)
+1 for dates
[5]
(ii)
Alex
Disposal account
2014 2014
Apr 1 Motor vehicle 17 000 (1) Apr 1 Prov depreciation 6 800
(1OF)
Bank 9 400 (1)
Income statement 800 (1of)
------------- -------------
17 000 17 000
------------- -------------
[4]
(b)
Alex
Cost Accumulated Net book value
depreciation
$ $ $
Motor vehicles 24 000 (1) 9 600 (1of) 14 400 (1of)
[4]
(c) 14 400 (1of) × 40% = 5 760 (1of) [2]
(d) general journal (1) cash book (1) [2]
(e) Money spent on day to day running expenses (1)

Suitable example (1) [2]
[Total: 19]

4 (a) Total sales = 165 600 + 44 400 = 210 000 (1)

Cost of sales = 210 000 × 2/3 (1) = 140 000 (1of)
Purchases = 140 000 – 21 600 (1) + 28 800 (1) = 147 200 (1of) [6]
(b)
Kriti
2014 $ 2014 $
Jan 1 Balance b/d 13 400 Jan 1 Balance b/d 120
(1 for
both)
Dec 31 Credit sales 165 600 (1) Dec 31 Bad debts 2 800 (1)
Bank 90 (1) Bank 155 010 (1)
Balance c/d 200 Discount allowed 4 560 (1)
PLCA 1 300 (1)
Balance c/d 15 500
2015 179 290 2015 179 290
Jan 1 Balance b/d 15 500 (1of) Jan 1 Balance b/d 200 (1)
+1 for dates
[10]
(c) Check for errors in sales ledger

May reduce fraud
Provides quick total of trade receivables
Provides summary of trade receivables transactions
(d) Customer overpays

Customer returns goods after payment
Customer did not deduct discount before payment
(e) A provision for doubtful debts does not affect an individual debtor’s account (1) [1]
[Total: 20]

5 (a)
Cost Overhead section of the Income statement
manufacturing account
Office rent
Factory rent (1)
Carriage outwards (1)
Depreciation of machinery (1)
Depreciation of office equipment (1)
Discount allowed (1)
Salesman’s salary (1)
Administration costs (1)

[7]
(b)
Harrington
Manufacturing Account (extract) for the year ended 31 December 2014
$ $
Inventory of raw materials at
1 January 2014 5 600
Less purchases returns 1 000 (1)
70 100
Less drawings 2 000 (1)
68 100
70 200
75 800
Inventory of raw materials at
31 December 2014 4 200 (1) for both
Cost of raw materials consumed (1) 71 600 (1OF)
Direct labour 52 550 (1)
Prime cost (1) 124 150 (1of)
[9]
(c) To set prices OR to compare the cost of manufacturing with the cost of buying the goods
in. (1) [1]
(d) 4200 (1) + 1800 (1) + 5500 (1) = 11 500 [3]
[Total: 20]

6 (a)
Increase Decrease
$ $ $
Draft profit 26 200
Error 1 400 (1)
Error 2 600 (1)
Error 3 2 000 (1)
Error 4 50 (1) ______
2 450 _600__ __1 850__
Corrected profit 28 050 (1of)

[5]
(b)
Arun
$
Non-current assets
32 900 (1)
Current assets
Trade receivables (8700 – 600) 8 100 (1)
Cash and cash equivalents (1100 + 50) 1 150 (1)
25 550
Total assets 58 450
Capital at 1 February 2014 28 400 (1)

56 450
Drawings 10 000 (1) + 2000 (1) 12 000
Capital at 31 January 2015 44 450
Current liabilities
[10]

(c) Accruals (matching)

Costs and revenues should be matched (1) within an accounting period (1)
Any suitable example (1)
Business entity
The business is treated as being separate from the owner (1). The business records are from
the viewpoint of the business (1).
Any suitable example (1) [6]
(d)
Increase Decrease
Gross profit margin (1)
Rate of inventory turnover (in days) (1)
Net profit margin (1)
Return on capital employed (1)

[4]
[Total: 25]

0452 ACCOUNTING
components.

1 (a) Bad debts

Amounts owing to a business (1) which will not be paid by the credit customer (1)
Bad debts recovered

Amounts received (1) from a credit customer after the amount was written off as a
bad debt (1)

An estimate (1) of the amount which a business will lose because of bad debts (1) [6]
(b) Reduce credit sales/sell on a cash basis

(c) A provision for doubtful debts ensures that

the profit for the year is not overstated (1)
the trade receivables are not overstated (1) [2]
(d) Nisha Sharma

Journal
Debit Credit
$ $
1 Bad debts 150 (1)

AX Limited 150 (1)
Amount owed by AX Limited written off (1)
2 Provision for doubtful debts 21 (1)

Reduction in provision for doubtful debts
(1)
[6]
(e)
Overstated Understated
$ $
Bad debts written off 150
Adjustment to provision for doubtful debts 21 (2)OF

(1) for direction and (1) for amount for each item [4]
[Total: 20]

$640 100
2 (a) × = $800 (1) [1]
1 80
(b) Any returns must be recorded at the price which the customer was originally charged for
those goods. (1) [1]
(c)
February Transaction Document
4 Payment Cheque counterfoil (1)
8 Purchases Invoice (1)
14 Purchases returns Credit note (1)

[3]
(d) Nirmal Singh

Ansari Road account
$ $
2015 2015
Feb 14 Returns 280 (1) Feb 1 Balance b/d 560 (1)
26 Bank 546 (1) 8 Purchases 640 (1)
Discount 14 (1)
28 Balance c/d 360
1200 1200
2015
Mar 1 Balance b/d 360 (1)O/F
T Marks account
$ $
2015 2015
Feb 4 Bank 200 (1) Feb 1 Balance b/d 200 (1)
28 Balance c/d 690 10 Bank (dis chq) 200 (1)
19 Purchases 480 (1)
28 Interest 10 (1)
890 890
2015
Mar 1 Balance b/d 690 (1)O/F
+ (1) dates [13]
[Total: 18]

3 (a) Amla Khan

Rates and insurance account
$ $
2014 2014
Jan 1 Balance b/d Jan 1 Balance b/d
Insurance 700 (1) Rates 480 (1)
Dec 31 Bank - rates 2560 (1) Dec 31 Income statement
Insurance 2400 (1) Rates 1920 (1)
Insurance 2300 (1) 4220
Balance c/d
Rates 160
Insurance 800 960
5660 5660
2015
Jan 1 Balance b/d
Rates 160
Insurance 800 960 (2) CF
(1) OF
+ (1) dates [9]
(b) Current assets (1)

Both the rates and insurance are prepaid at the end of the year (1) [2]
(c) Amla Khan

$ $
2014 2014
Dec 31 Income statement 1200 (1) Oct 1 Bank 800 (1)
Dec 31 Balance c/d 400
1200 1200
2015
Jan 1 Balance b/d 400 (1)OF
+ (1) dates [4]
(d) Current assets (1)

Rent receivable is owed by the tenant (1) [2]
[Total: 17]

4 (a) Gross profit = 164 000 – 125 542 = 38 458 (1)
38 458 } (1) 100

× = 23.45% (1) [3]
164 000 } 1
(b) Decrease in selling price

Increase in trade discount allowed to customers
Selling at lower mark-up
Increase in cost price
Reduction in trade discount allowed by suppliers
Not taking advantage of bulk buying
(c) Profit for the year = 38 458 OF – 24 748 = 13 710 (1)OF
13 710 OF } (1) 100

× = 8.36% (1)OF [3]
164 000 } 1
(d) (18 150 + 15 300 + 120) : (10 960 + 7 150)

= 33 570 : 18 110 (1) (whole formula)
= 1.85 : 1 (1) [2]
(e) Current assets almost twice the current liabilities

Can meet the current liabilities from the current assets
Slightly lower than the “benchmark” of 2:1
Appears to be adequate
Comments to be based on answer to (d)
(f) (15 300 + 120) : (10 960 + 7 150)

= 15 420 : 18 110 (1) (whole formula)
= 0.85: 1 (1) [2]
(g) Increase in bank overdraft/change from debit to credit bank balance

Increase in inventory
Increase in dividends paid
15 300 365
(h) × (1) (whole formula)
154 400 1
= 36.17 = 37 days (1) [2]

(i) Unsatisfied (1) – if answer to (h) is 31 days or over

Or Satisfied (1) – if answer to (h) is 30 days or less
Taking 7 days more than credit period allowed

Have to wait longer than expected to receive the money
May have knock-on effect for paying trade payables
May mean shortage of funds available for other things
Or appropriate comments based on OF answer to (h)
Any 1 comment (1) [2]
[Total: 19]

5 (a) LWS Limited

Income Statement for the year ended 30 November 2014
$ $
Fees from clients (199 500 (1) + 4500 (1)) 204 000
Other income 17 300 221 300

Wages (98 200 (1) + 12 600 (1)) 110 800
Insurance (3450 (1) – 690 (1)) 2 760
Depreciation
Equipment (20% x (65 000 – 23 400) 8 320 (1)
Fixtures and fittings
((10% × 24 000)(1) + (10% × 7200 × 5/12) (1)) 2 700 160 720
[10]
(b) LWS Limited

Statement of Changes in Equity for the year ended 30 November 2014

$ $ $ $
On 1 December 2013 350 000 95 000 13 200 458 200
Dividend paid – interim (17 500) (17 500) (1)
Dividend paid – final (35 000) (35 000) (1)
Share issue 50 000 50 000 (1)
On 30 November 2014 400 000 107 000 9 280 516 280 (1)OF
[6]
(c) Long term loans

Debenture holders are not members of the company
Do not carry voting rights
Carry a fixed rate of interest
Interest is not dependent on the company’s profit
Are often secured on the assets of the company
Debenture holders are repaid before the shareholders in a winding-up
Any 2 features (1) each [2]

(d) Carry a fixed rate of dividend

Dividend may not be paid if there is not enough profit
Dividend is paid before ordinary share dividend
Preference shareholders are members of the company
Do not usually carry voting rights
Capital is repaid before ordinary share capital in a winding-up
Are not secured on the assets of the company
(e) No prior claims on the profit

No fixed interest or dividend to pay
All the shares will rank equally for dividend
No prior claims on the assets in a winding-up
No fixed date for repayment
[Total: 22]

6 (a) Additional finance is available

Additional knowledge, skills and experience are available
The risks are shared
The losses are shared
The responsibilities are shared
Discussions can take place before decisions are taken
Any 2 advantages (1) each [2]
(b) To avoid misunderstandings and disagreements in the future (1) [1]
(c) Ben and Tom Panesar

Profit and Loss Appropriation Account for the year ended 31 January 2015
$ $
Interest on drawings Ben 490 }
Tom 1 040 }(1) 1 530
29 450
Interest on capital *Ben
3% × 90 000 × 6/12 1 350 (1)
3% × 100 000 × 6/12 1 500 (1)
2 850
Tom
3% × 60 000 1 800 (1)
4 650
Partnership salary Tom
(3000 (1) + 8000 (1)) 11 000 15 650
Residual profit 13 800
Share of profit Ben 9 200 (1)OF

Tom 4 600 (1)OF
13 800
[8]
*OR 3% x 90 000 2 700 (1)

3% x 10 000 × 6/12 150 (1)

(d) Ben and Tom Panesar

$ $ $
Assets
Non-current assets
Premises (cost) 95 000
Machinery and equipment (book value) 46 500
141 500 (1)
Current assets
Inventory 28 750
Bank 5 870
64 980 (1)

Ben Tom Total
Capital accounts 100 000 60 000 160 000 (1) both
Current accounts
Interest on loan 600 (1)
Interest on capital 2 850 1 800 (1)OF (both)
Salary 11 000 (1)OF
Profit share 9 200 4 600 (1)OF (both)
12 050 18 000
Drawings 9 800 20 800 (1) (both)
Interest on drawings 490 1 040 (1) (both)
10 290 21 840
Closing balance 1 760 (1)OF (3 840) (1)OF
(2 080)
157 920
Loan – Tom 15 000 (1)
Current liabilities
Other payables 1 390
33 560 (1)
[13]
[Total: 24]

Alternate presentation of current accounts.
Current accounts
Ben Tom Ben Tom
$ $ $ $
2015 2015
Jan 31 Drawings (1) 9 800 20 800 Jan 31 Interest on loan (1)OF 600
Interest on Interest on
Drawing (1) 490 1 040 capital (1)OF 2 850 1 800
Balance c/d 1 760 Salary (1) 11 000
Profit share (1)OF 9 200 4 600
Balance c/d 3 840
12 050 21 840 12 050 21 840
(8) for the current accounts

0452 ACCOUNTING
Cambridge is publishing the mark schemes for the October/November 2014 series for
most Cambridge IGCSE®, Cambridge International A and AS Level components and some


Easier for reference as the same types of account are kept together
Reduces the possibility of fraud
(b) Any non-current asset, inventory, capital drawings, loan, sales, purchases,
returns, expenses, incomes, provisions etc.
Any 1 example (1) [1]
(c)
Sahira Ali
Waheed Khan account
$ $
2014 2014
October 16 Returns 168 (1) Oct 1 Balance b/d 390
24 Bank/cash 380 (1) 13 Purchases 336 (1)
Discount 10 (1)
31 Balance c/d 168 ___
726 726
2014
Nov 1 Balance b/d 168 (1)
OF
Iqbal Wholesalers account
$ $
2014 2014
Oct 31 Balance c/d 936 Oct 1 Balance b/d 650
5 Purchases 280
___ 31 Interest __6 (1)
936 936 (1)
2014
OF
+ (1) dates
Three column running balance format acceptable
[9]
Trade payables 365

(d) × [1]
Credit purchases 1

3 100 365 (1) (whole formula)

(e) × = 53.37 = 54 days (1) [2]
21 200 1
(f) May be able to take advantage of cash discounts

(g) The business is deprived of the use of the money earlier than necessary
(h) To avoid overstating the profit for the year

To avoid overstating the current assets
To apply the principle of prudence
(i) The estimated receipts from the sale of the inventory (1) less any costs of
completing the goods or costs of selling the goods (1) [2]

(j)
Overstated Understated No effect
Gross profit for the year ended

31 October 2013
(1)

31 October 2014
(1)
Profit for the year ended

31 October 2013
(1)

31 October 2014
(1)
Current assets at 31 October 2013 (1)
[6]
[Total: 27]

2 (a)
Mochudi Manufacturing Company
Manufacturing Account for the year ended 31 July 2014
$ $
Less Returns 1 100 98 400 (1)
89 800 (1)
Direct wages (94 200 + 3100) 97 300 (1)
Prime cost 187 100 (1) OF
Factory overheads
Wages of factory supervisors 41 050 (1)
Factory general expenses 19 400 (1)
Factory rates and insurance (¾ × (5000 – 400)) 3 450 (1)
Depreciation Machinery (15% × 102 000) 15 300 (1)
Loose tools (4400 – 3300) 1 100 (1) 80 300
267 400 (1) OF
Closing work in progress 8 200 (1)
Horizontal format acceptable
[12]

(b)
$ $
Revenue 400 400
Cost of sales
278 500
Closing inventory of finished goods 21 100 257 400 (1) OF
Gross profit 143 000 (1 )OF
Less Office staff salaries 33 100 (1)
Sales staff salaries 18 900 (1)
Office general expenses (17 530 – 280) 17 250 (1)
Rates and insurance (¼ × (5000 – 400) 1 150 (1)
Depreciation office fixtures and fittings
(12½% × 56 000) 7 000 (1) 77 400
[10]
(c)
Effect on profit for the year

$ $
1 200 (1)
2 810 (1)
3 940 (1)
4 1050 (1)
[4]
[Total: 26]

3 (a)
Leeford Athletics Club
$ $
2014 2013
Oct 31 Income & Nov 1 Balance b/d 1 200 (1)
Expenditure 12 000 (1) 2014
Oct 31 Bank/cash 7 920 (1)
Balance c/d 2 880
_ __ ___
12 000 12 000
2014
Nov 1 Balance b/d 2 880 (1) OF
+ (1) dates

[5]
(b) Current assets (1) OF

Answer to be based on closing balance in (a) [1]
(c)
$ $
2013 2014
Nov 1 Balance b/d 4 590 (1) Oct 31 Equipment 4 000 (1)
2014 General
Oct 31 Subscriptions 7 920 (1) expenses 9 310 (1)
Sale of equipment 1 500 (1) Loan interest 400 (1)
Open day receipts 770 (1) Rent 4 500 (1)
18 240 18 240
2014
[10]
(d)
Item $ Reason
Sale of equipment 700 (1) Only the loss (1) on the equipment is charged not
the capital receipt. (1)
Rent of clubhouse 3 600 (1) The accruals (matching) principle is applied.(1)

Only the expense for the year is charged to the
income and expenditure account (1)
[6]
[Total: 22]

4 (a) 1 June 2013 Balance – rates $70

Explanation This represents rates prepaid (1). This was paid in the year ended
31 May 2013 but relates to the year ended 31 May 2014. (1)
Statement of financial position section Current assets (1) [3]
1 June 2013 Balance – rent $120

Explanation This represents rent accrued (1). This relates to the year ended
31 May 2013 and remained unpaid at the end of the year. (1)
Statement of financial position section Current liabilities (1) [3]
(b) 31 May 2014 Bank $2570

This represents the total amount paid (1) by cheque (1) for rent and rates during
the year ended 31 May 2014. [2]
31 May 20134 Income statement $2280

This is the amount transferred to the income statement (1) which represents
the rent and rates for that financial year (1). [2]
(c) Only the rent and rates relating to the current year are transferred to the income
statement. (1) Adjustments are made for accruals and prepayments (1) [2]
47 600 − 38 400 } (1) 100

(d) × = 19.33% (1) [2]
47 600 } 1
(e) Selling goods at lower prices

Purchasing goods at higher prices
Changes in the proportions of goods sold
(f) Assess prospects of any requested loan/overdraft being repaid when due
(g) Lender
Investor
Credit supplier
Customer
Owner
Manager (if any)
Employee/trade union
Government body
Competitor
Take-over bidder
Potential partner
Or other suitable interested person
Any 2 persons (1) each [2]
[Total: 20]

5 (a)
Watson Limited
$ $ $
Cost Depreciation Net Book
to date value
Non-current Assets
Premises 99 000 99 000
Fixtures & fittings 65 000 2 300 42 000 (1)
Motor behicles 33 000 11 000 22 000 (1)
197 000 34 000 163 000 (1)
Current Assets
Inventory 19 300
Provision for doubtful debts 1 400 26 600 (1)
Other receivables 300 }
Cash 500 } (1)
46 700 (1) OF 46 700 (1) OF
Current Liabilities
Other payables 350 }
Bank 2 050 } (1)
Proposed dividend 2 000 (1) 20 700 (1) OF
Net Current Assets 26000
189 000
Non-current Liabilities
4% Debentures 10 000
179 000
Capital and Reserves
General reserve (20 000 (1)
+ 12 000 (1) ) 32 000
Retained profit 27 000 (1)
Shareholders’ funds 179 000 (1) OF
Accept other suitable formats
[15]
(b) Debentures are long-term loans

Debenture holders are repaid before shareholders in the event of a
winding up
Debentures are repaid by a set date

(c) Reduction in profit available for ordinary shareholders

Or other acceptable point
Any 1 point (2) [2]
(d) (i) The number of times a business sells and replaces its inventory in a
given period of time. [1]
Cost of sales
(ii) [1]
Average inventory
243 200 }
(iii) = 11.64 times (1) [2]
22 500 + 19 300 / 2 } (1)
(e) Rate falling over the three years

May indicate reduction in efficiency
May indicate that sales are slowing down
May indicate the inventory is too high
Comment to be based in OF answer to (d)(iii)
[Total: 25]

0452 ACCOUNTING


Reduces the possibility of fraud
(b) Any non-current asset, inventory, capital drawings, loan, sales, purchases,
returns, expenses, incomes, provisions etc.
(c)
Sahira Ali
Waheed Khan account
$ $
2014 2014
October 16 Returns 168 (1) Oct 1 Balance b/d 390
24 Bank/cash 380 (1) 13 Purchases 336 (1)
Discount 10 (1)
31 Balance c/d 168 ___
726 726
2014
OF
Iqbal Wholesalers account
$ $
2014 2014
Oct 31 Balance c/d 936 Oct 1 Balance b/d 650
5 Purchases 280
___ 31 Interest __6 (1)
936 936 (1)
2014
OF
+ (1) dates
[9]
Trade payables 365

(d) × [1]
Credit purchases 1

3 100 365 (1) (whole formula)

(e) × = 53.37 = 54 days (1) [2]
21 200 1

(g) The business is deprived of the use of the money earlier than necessary
(h) To avoid overstating the profit for the year

To avoid overstating the current assets
(i) The estimated receipts from the sale of the inventory (1) less any costs of
completing the goods or costs of selling the goods (1) [2]

(j)

31 October 2013
(1)

31 October 2014
(1)

31 October 2013
(1)

31 October 2014
(1)
[6]
[Total: 27]

2 (a)
Mochudi Manufacturing Company
$ $
Less Returns 1 100 98 400 (1)
89 800 (1)
Direct wages (94 200 + 3100) 97 300 (1)
Prime cost 187 100 (1) OF
Factory overheads
Wages of factory supervisors 41 050 (1)
Factory rates and insurance (¾ × (5000 – 400)) 3 450 (1)
Depreciation Machinery (15% × 102 000) 15 300 (1)
Loose tools (4400 – 3300) 1 100 (1) 80 300
267 400 (1) OF
[12]

(b)
$ $
Revenue 400 400
Cost of sales
278 500
Closing inventory of finished goods 21 100 257 400 (1) OF
Gross profit 143 000 (1 )OF
Less Office staff salaries 33 100 (1)
Sales staff salaries 18 900 (1)
Office general expenses (17 530 – 280) 17 250 (1)
Rates and insurance (¼ × (5000 – 400) 1 150 (1)
Depreciation office fixtures and fittings
(12½% × 56 000) 7 000 (1) 77 400
[10]
(c)

$ $
1 200 (1)
2 810 (1)
3 940 (1)
4 1050 (1)
[4]
[Total: 26]

3 (a)
$ $
2014 2013
Oct 31 Income & Nov 1 Balance b/d 1 200 (1)
Expenditure 12 000 (1) 2014
Oct 31 Bank/cash 7 920 (1)
Balance c/d 2 880
_ __ ___
12 000 12 000
2014
+ (1) dates

[5]
(b) Current assets (1) OF

Answer to be based on closing balance in (a) [1]
(c)
$ $
2013 2014
Nov 1 Balance b/d 4 590 (1) Oct 31 Equipment 4 000 (1)
2014 General
Oct 31 Subscriptions 7 920 (1) expenses 9 310 (1)
Sale of equipment 1 500 (1) Loan interest 400 (1)
Open day receipts 770 (1) Rent 4 500 (1)
18 240 18 240
2014
[10]
(d)
Item $ Reason
Sale of equipment 700 (1) Only the loss (1) on the equipment is charged not
the capital receipt. (1)
Rent of clubhouse 3 600 (1) The accruals (matching) principle is applied.(1)

Only the expense for the year is charged to the
income and expenditure account (1)
[6]
[Total: 22]

4 (a) 1 June 2013 Balance – rates $70

Explanation This represents rates prepaid (1). This was paid in the year ended
31 May 2013 but relates to the year ended 31 May 2014. (1)
Statement of financial position section Current assets (1) [3]
1 June 2013 Balance – rent $120

Explanation This represents rent accrued (1). This relates to the year ended
31 May 2013 and remained unpaid at the end of the year. (1)
Statement of financial position section Current liabilities (1) [3]
(b) 31 May 2014 Bank $2570

This represents the total amount paid (1) by cheque (1) for rent and rates during
the year ended 31 May 2014. [2]
31 May 20134 Income statement $2280

This is the amount transferred to the income statement (1) which represents
the rent and rates for that financial year (1). [2]
(c) Only the rent and rates relating to the current year are transferred to the income
statement. (1) Adjustments are made for accruals and prepayments (1) [2]
47 600 − 38 400 } (1) 100

(d) × = 19.33% (1) [2]
47 600 } 1
(e) Selling goods at lower prices

Purchasing goods at higher prices
Changes in the proportions of goods sold
(f) Assess prospects of any requested loan/overdraft being repaid when due
(g) Lender
Investor
Credit supplier
Customer
Owner
Manager (if any)
Employee/trade union
Government body
Competitor
Take-over bidder
Potential partner
[Total: 20]

5 (a)
Watson Limited
$ $ $
Cost Depreciation Net Book
to date value
Non-current Assets
Premises 99 000 99 000
Fixtures & fittings 65 000 2 300 42 000 (1)
Motor behicles 33 000 11 000 22 000 (1)
197 000 34 000 163 000 (1)
Current Assets
Inventory 19 300
Provision for doubtful debts 1 400 26 600 (1)
Cash 500 } (1)
46 700 (1) OF 46 700 (1) OF
Current Liabilities
Other payables 350 }
Bank 2 050 } (1)
Proposed dividend 2 000 (1) 20 700 (1) OF
Net Current Assets 26000
189 000
4% Debentures 10 000
179 000
General reserve (20 000 (1)
+ 12 000 (1) ) 32 000
Retained profit 27 000 (1)
Shareholders’ funds 179 000 (1) OF
Accept other suitable formats
[15]
(b) Debentures are long-term loans

Debenture holders are repaid before shareholders in the event of a
winding up
Debentures are repaid by a set date

(c) Reduction in profit available for ordinary shareholders

Any 1 point (2) [2]
(d) (i) The number of times a business sells and replaces its inventory in a
given period of time. [1]
Cost of sales
(ii) [1]
Average inventory
243 200 }
(iii) = 11.64 times (1) [2]
22 500 + 19 300 / 2 } (1)
(e) Rate falling over the three years

May indicate reduction in efficiency
May indicate that sales are slowing down
May indicate the inventory is too high
Comment to be based in OF answer to (d)(iii)
[Total: 25]

0452 ACCOUNTING

1 (a) Removes small cash payments from the main cash book
Reduces the number of entries in the main cash book
Or other suitable reasons
(b) At the end of the period the chief cashier will make up or reimburse (1) the cash remaining so
that each month starts off with the same amount (1). [2]
(c) The chief cashier knows exactly how much is spent each month
Can help reduce fraud
(d) $207 (1) CF [1]
(e)
Debit Credit
Petty cash book (1) Bank (or Cash) (1)

[2]
(f) Total of column, $108, is debited to the cleaning account in the ledger (1) [1]
(g) B Smith account is debited with $36 (1)

W Jones account is debited with $18 (1) [2]

(h)
Peter Pickard
Sales Journal
Date Details $ $
2014
Aug S Bower
5 Goods 1480
Less trade discount 296 1184 (1)
C Brooke
13 Goods 1340
____
31 Transferred to sales account 2323 (1)OF
[3]
Sales Returns Journal
Date Details $ $
2014
Aug S Bower
19 Goods 160
___
31 Transferred to sales returns account 128 (1)OF
[2]
Sales Ledger
S Bower account
2014 2014
Aug 5 Sales 1184 (1)OF Aug 19 Sales returns 128 (1)OF
[2]
C Brooke account
2014
Aug 13 Sales 1139 (1)OF
[1]

Nominal (General) Ledger

Sales Account
2014
Aug 31 Total for month 2323 (1)OF
[1]
Sales Returns account

2014
[1]
2340 365 
(i) ×  (1) whole formula = 28.85 = 29 days (1)CF [2]
29 600 1 
(j) Satisfied (if the answer to (i) is 30 days or less)

Or
Unsatisfied (if the answer to (i) is more than 31 days) [1]
(k) The business may not have enough liquid funds (1) with which to pay the credit suppliers
until money is received from credit customers (1).
Or
If the credit customers pay within the set time (1), the business may be able to pay the credit
suppliers within the set time (1) without any significant impact on the bank balance.
Or
If credit customers fail to pay within the set time it may be necessary to obtain short-term
funds (1) in order to pay the credit suppliers (1).

Any 1 point (1) mark each [2]
[Total: 26]

2 (a) Reduce credit sales

Offer cash / settlement discount for early payment
Only sell to reliable customers
(b)
Alina Tan
Journal
Debit Credit
$ $
Bad debts 66 (1)

Yeung & Co 66 (1)
Bad debt written off (1)

[3]
(c) An estimate or prediction (1) of the amount which a business will lose in a financial year
because of bad debts (1) [2]
(d) Accruals (matching) (1)

Prudence (1) [2]
(e)
Alina Tan
Journal
Debit Credit
$ $

Reduction in provision for doubtful

debts (1)
[3]

(f) When a debtor pays some, or all, of the amount owed (1) after the amount was written off as
a bad debt (1) [2]
(g) Capital expenditure:

Revenue expenditure:
Money spent on running a business on a day-to-day basis (1)
Capital receipts:
Amount received which do not form part of the day-to-day trading activities (1)
Revenue receipts:
Amount received in the day-to-day trading activities from revenue and other items of income
(1) [4]
(h)
non-current assets profit for the year ended
at 31 March 2014 31 March 2014
Overstated Understated Overstated Understated
(1) (1)
[2]
[Total: 20]

3 (a) Share losses

Share risks
Any 2 advantages (1) mark each. [2]
(b)
Shahid and Hamza Hussain
$ $
Receipts from customers 76 400
Less Wages (41 600 (1) – 1500 (1)) 40 100
Insurance (12 / 14 × 1232) 1 056 (2)
General expenses (3090(1) + 94(1)) 3 184
Depreciation motor (20% × (25 000 – 9000) 3 200 (2)
vehicles
Depreciation equipment (2900 + 1150 – 3150) 900 (2) 48 440

[11]
(c)

Profit and Loss Appropriation Account for the year ended 31 July 2014
$ $
Interest on drawings S Hussain 300}
H Hussain 240} (1)CF 540
28 500
Interest on capital S Hussain
(5% × 80 000 × 6 mths +
5% × 60 000 × 6 mths) 3 500 (1)
H Hussain 6 500 3 000 (1)
Partner’s salary S Hussain 9 000 (1)CF 15 500
Share of profit S Hussain 6 500 (1)OF 13 000
H Hussain 6 500 (1)OF 13 000

[7]

(d)
Hamza Hussain
Current account
$ $
2013 2014
Aug 1 Balance b / d 1 960 July 31 Interest on 3 000 (1)OF
capital
Profit share 6 500 (1)OF
Balance c/d 700
2014
July 31 Drawings 8 000 (1)
Interest on 240 (1)
drawings
10 200 10 200
2014
Aug 1 Balance b/d 700 (1)OF
Balance b/d can be on either side

[5]
[Total: 25]

4 (a)
$
Returns to credit suppliers 2 100 (1)
Balance 30 September 2014 1 990 (1)
35 690
Less Interest charged on overdue account 40 (1)
Credit purchases for the year 35 650 (2)CF (1)OF
Total Trade Payables account

$ $
2014 2014
Sept 30 Bank 31 600 (1) Sept 30 Interest 40 (1)
Returns 2 100 (1) Purchases 35 650 (2)CF
Balance c/d 1 990 (1) _____ (1)OF
35 690 35 690
[6]
(b)
$
Discount allowed to credit customers 900 (1)
Bad debts written off 100 (1)
Credit sales for the year 40 050 (2)CF (1)OF
Total Trade Receivables account

$ $
2014 2014
Sept 30 Sales 40 050 (2)CF Sept 30 Bank 35100 (1)OF
Discount 900 (1)
Bad debts 100 (1)
Balance 3 950 (1)
c/d
40 050 40 050
[6]

(c)
Grace Mhando
Income Statement for the year ended 30 September 2014
$ $
Revenue (sales) 40 050 (1)OF
Less Cost of sales
Less: Purchases returns 2 100 (1)OF
33 550
Add: Carriage inwards 1 090 (1)
34 640
Less Closing Inventory 2 600 (1)OF
Gross profit (20%) 32 040
8 010 (2)OF

[7]
(d) Assessment of the liquidity position

Identify how long it takes to pay credit suppliers
Identify future prospects of the business
Establishment of a credit limit
(e) Bank manager

Lender
Manager (if any)
Employee
Government body
Competitor
Take-over bidder
Potential partner
Investors
Owner

[Total: 23]

480 000 - 310 000 100

5 (a) (1) × = 35.42% (1)CF [2]
480 000 1
(b) Reduction in selling price

Selling at a lower mark-up
Decrease in trade discount allowed by suppliers
170 000 OF - 94 000 100

(c) (1) × = 15.83% (1)OF [2]
480 000 1
(d) Reduce expenses

Increase gross profit percentage
76 000 OF 100
(e) (1) × = 11.97% (1)OF [2]
635 000 1
(f) It shows the profit earned for each $100 used in the business. (1)
The higher the percentage the more efficiently the capital is being employed. (1) [2]
(g) 86 800 : 71 800 (1) = 1.21 : 1 (1) [2]
(h) 56 000 : 71 800 (1) = 0.78 : 1 (1) [2]
(i) Inventory is not included in the calculation of the quick ratio (1)
Either
Inventory is not regarded as a liquid asset – a buyer has to be found and then the money
collected (1)
Or
The quick ratio shows whether the business would have any surplus liquid funds if all the
current liabilities were paid immediately from the liquid assets (1) [2]

(j)
Issue of additional shares
Cheque paid to credit supplier
Repayment of long term loan
Purchase of goods on credit
Sale of unused non-current asset
Cheque paid for repairs to non-

current asset
[6]
(k) To be able to meet debts when they fall due

[Total: 26]

0452 ACCOUNTING

1 (a) B
(b) C
(c) D
(d) C
(e) C
(f) A
(g) D
(h) A
(i) A
(j) C (1) each
[10]

2 (a) Capital = assets – liabilities (1)

OR other acceptable version of formula [1]
(b)
$ Capital account $
1 Bank account 10 000 10 000
2 Motor vehicles account 6 500 (1) Capital account 6 500 (1)
3 Purchases account 2 000 (1) Zed account 2 000 (1)
[6]
(c) Can withdraw more from bank than put in/can have overdraft (1)
Cannot take more cash than is physically present (1) [2]
(d)
Arun Journal
Debit Credit
$ $
Rupa (account in purchases ledger) 37 (1)
Rupa (account in sales ledger) 37 (1)
[2]
(e) Save on administration costs (1)

The debt can be settled by using one cheque only (1) [2]
(f)
Applying the same accounting treatment to Consistency
similar items at all times
Assuming a business will continue to Going concern (1)

operate indefinitely
Expressing transactions in monetary terms Money measurement (1)

[2]

(g)
Debit Credit
Rent receivable
Sales returns (1)
Inventory (1)
Provision for depreciation (1)

[4]
[Total: 19]

3 (a)
Advertising account
$ $
2013 2014
Nov 1 Bank/cash 450 (1) Aug 31 Income Statement 915 (1)OF
2014 Balance c/d 155 (1)CF
May 1 Bank/cash 620 (1)
1070 1070
2014
Sept 1 Balance b/d 155 (1)OF
+ (1) dates [6]
(b)
Book of prime entry Source document
Sales journal Sales invoice (1)
Purchases journal Purchases invoice (1)
Sales returns journal Credit note issued (1)
Purchases returns journal Credit note received (1)
Petty cash book Voucher/receipt (1)
Cash book Cheque counterfoil/cheque/receipt/paying-in slip (1)
[6]
(c) Reduces the number of entries in the ledger

Acts as an aid for posting to the ledger
Helps to gather and summarise accounting information/facilitate preparation of control
accounts
Groups together similar types of transactions
Allows work to be divided between several people
(d)
Account(s) to be debited Account(s) to be credited
$ $
Amber Retail 100 (1) Sales 187 (1)
Business Supplies 65 (1)
Custom Print 22 (1)
[4]
[Total: 18]

4 (a)
Journal
Debit Credit
$ $

Suspense 160 (1)
Motor vehicle expenses 150 (1)

Motor vehicles 150 (1)
Suspense 100 (1)

Purchases 100 (1)
Drawings 55 (1)
Purchase 55 (1)
[9]
(b)
Suspense Account
$ $
Difference on Sales returns 80 (1)
Trial balance 60 Purchase returns 80 (1)
Purchases 100 (1)
160 160
[3]
(c) Error of principle (1) [1]
[Total: 13]

5 (a)
$ $
2013 2014
July 1 Balance b/d 4 100 (1) June 30 Sales returns 1 001 (1)
2014 Cash/bank 45 702 (1)
June 30 Sales 48 610 (1) Discount allowed 890 (1)
Interest 77 (1) Bad debts 274 (1)
Balance c/d 4 920
52 787 52 787
2014
July 1 Balance b/d 4 920 (1)OF

$ $
2014 2013
June 30 Purchases returns 910 (1) July 1 Balance b/d 3 161 (1)
Cash/bank 37 691 (1) 2014
Discount received 663 (1) June 30 Purchases 39 101 (1)
Balance c/d 2 998
42 262 42 262
2014
[14]
(b)
Book of prime entry
Credit sales Sales journal (1)
Returns of credit purchases Purchases returns journal (1)
Receipts from credit customers Cash book (1)
Interest charged on overdue accounts Journal (1)
[5]
(c)
$ $
2014 2013
June 30 Balance c/d 246 (1)OF July 1 Balance b/d 205 (1)
(5%×4920) 2014
June 30 Income statement 41 (1)OF
246 246
2014
July 1 Balance b/d 246 (1)OF
[4]
(d) The provision was $246 OF but the actual bad debts were higher. (1)
The provision may not be adequate. (1)
Comment to be based on OF provision in (c) [2]
[Total: 25]

6 (a) The partnership was making losses

The drawings exceeded the partners’ profit share, interest and salary
(b)
$ $
Fixtures and fittings (100 000 – 10 000) 90 000 (1)
Delivery van (40 000 – 12 000) 28 000 (1)
Inventory 56 400 }
Trade receivables 19 000 }(1) 193 400
Bank 6 600 (1)

Trade payables 25 400 (1) 32 000
Net assets at 31 December 2013 161 400 (1)CF
[6]
(c)
$ $
Net assets at 31 December 2013 161 400 (1)OF
Add Drawings – Dina 18 000 }(1)
Lee 17 000 } 35 000
196 400
Less Net assets 1 January 2013 150 000 (1)
[4]
(d)
Dina and Lee
Appropriation Account for the year ended 31 December 2013
$ $
Less interest on capital: Dina 10 000 (1)
Lee 6 000 (1)
16 000
Salary: Lee 15 000 (1) 31 000
15 400
Share of profit: Dina 7 700 (1)OF
Lee 7 700 (1)OF 15 400
[6]

(e)
Current Accounts
Dina Lee Dina Lee
$ $ $ $
2013 2013
Jan 1 Balance b/d (1) 5 200 4 800 Dec 31 Interest on capital (1)OF 10 000 6 000
Dec 31 Drawings (1) 18 000 17 000 Salary (1) 15 000
Balance c/d 6 900 Share of Profit (1)OF 7 700 7 700
Balance c/d 5 500
23 200 28 700 23 200 28 700
2014 2014
Jan 1 Balance (1)OF 5 500 Jan 1 Balance b/d (1)OF 6 900
[7]
(f) 1 (56 400 + 19 000) (1) : (6600 + 25 400) (1)

= 75 400 : 32 000
= 2.36 : 1 (1)OF
2 19 000 (1) : (6600 + 25 400) (1)

= 19 000 : 32 000
= 0.59 : 1 (1)OF [6]
(g) (i) Holding excessive inventory/increase in inventory (1)

Reduction in bank balance because of one of the following (1)
OR increase in partners’ drawings
OR repayment of long term loan
Answer to be appropriate to ratio calculated in (f) Part 2 [2]
(ii) Cannot meet debts when due

Or other suitable comments based on answer to (f) Part 1
[Total: 35]

0452 ACCOUNTING

1 (a) B
(b) C
(c) D
(d) C
(e) C
(f) A
(g) D
(h) A
(i) A
(j) C (1) each
[10]

2 (a) Capital = assets – liabilities (1)

OR other acceptable version of formula [1]
(b)
$ Capital account $
1 Bank account 10 000 10 000
2 Motor vehicles account 6 500 (1) Capital account 6 500 (1)
3 Purchases account 2 000 (1) Zed account 2 000 (1)
[6]
(c) Can withdraw more from bank than put in/can have overdraft (1)
Cannot take more cash than is physically present (1) [2]
(d)
Arun Journal
Debit Credit
$ $
Rupa (account in purchases ledger) 37 (1)
Rupa (account in sales ledger) 37 (1)
[2]
(e) Save on administration costs (1)

The debt can be settled by using one cheque only (1) [2]
(f)
Applying the same accounting treatment to Consistency
similar items at all times
Assuming a business will continue to Going concern (1)

operate indefinitely
Expressing transactions in monetary terms Money measurement (1)

[2]

(g)
Debit Credit
Rent receivable
Sales returns (1)
Inventory (1)
Provision for depreciation (1)

[4]
[Total: 19]

3 (a)
Advertising account
$ $
2013 2014
Nov 1 Bank/cash 450 (1) Aug 31 Income Statement 915 (1)OF
2014 Balance c/d 155 (1)CF
May 1 Bank/cash 620 (1)
1070 1070
2014
Sept 1 Balance b/d 155 (1)OF
+ (1) dates [6]
(b)
Book of prime entry Source document
Sales journal Sales invoice (1)
Purchases journal Purchases invoice (1)
Sales returns journal Credit note issued (1)
Purchases returns journal Credit note received (1)
Petty cash book Voucher/receipt (1)
Cash book Cheque counterfoil/cheque/receipt/paying-in slip (1)
[6]
(c) Reduces the number of entries in the ledger

Helps to gather and summarise accounting information/facilitate preparation of control
accounts
Allows work to be divided between several people
(d)
Account(s) to be debited Account(s) to be credited
$ $
Amber Retail 100 (1) Sales 187 (1)
Business Supplies 65 (1)
Custom Print 22 (1)
[4]
[Total: 18]

4 (a)
Journal
Debit Credit
$ $

Suspense 160 (1)

Suspense 100 (1)

Purchases 100 (1)
Drawings 55 (1)
Purchase 55 (1)
[9]
(b)
Suspense Account
$ $
Difference on Sales returns 80 (1)
Trial balance 60 Purchase returns 80 (1)
Purchases 100 (1)
160 160
[3]
(c) Error of principle (1) [1]
[Total: 13]

5 (a)
$ $
2013 2014
July 1 Balance b/d 4 100 (1) June 30 Sales returns 1 001 (1)
2014 Cash/bank 45 702 (1)
June 30 Sales 48 610 (1) Discount allowed 890 (1)
Interest 77 (1) Bad debts 274 (1)
Balance c/d 4 920
52 787 52 787
2014

$ $
2014 2013
June 30 Purchases returns 910 (1) July 1 Balance b/d 3 161 (1)
Cash/bank 37 691 (1) 2014
Discount received 663 (1) June 30 Purchases 39 101 (1)
Balance c/d 2 998
42 262 42 262
2014
[14]
(b)
Book of prime entry
Credit sales Sales journal (1)
Returns of credit purchases Purchases returns journal (1)
Receipts from credit customers Cash book (1)
Interest charged on overdue accounts Journal (1)
[5]
(c)
$ $
2014 2013
June 30 Balance c/d 246 (1)OF July 1 Balance b/d 205 (1)
(5%×4920) 2014
June 30 Income statement 41 (1)OF
246 246
2014
July 1 Balance b/d 246 (1)OF
[4]
(d) The provision was $246 OF but the actual bad debts were higher. (1)
The provision may not be adequate. (1)
Comment to be based on OF provision in (c) [2]
[Total: 25]

6 (a) The partnership was making losses

The drawings exceeded the partners’ profit share, interest and salary
(b)
$ $
Fixtures and fittings (100 000 – 10 000) 90 000 (1)
Delivery van (40 000 – 12 000) 28 000 (1)
Inventory 56 400 }
Trade receivables 19 000 }(1) 193 400
Bank 6 600 (1)

Trade payables 25 400 (1) 32 000
Net assets at 31 December 2013 161 400 (1)CF
[6]
(c)
$ $
Net assets at 31 December 2013 161 400 (1)OF
Add Drawings – Dina 18 000 }(1)
Lee 17 000 } 35 000
196 400
Less Net assets 1 January 2013 150 000 (1)
[4]
(d)
Dina and Lee
$ $
Less interest on capital: Dina 10 000 (1)
Lee 6 000 (1)
16 000
Salary: Lee 15 000 (1) 31 000
15 400
Share of profit: Dina 7 700 (1)OF
Lee 7 700 (1)OF 15 400
[6]

(e)
Current Accounts
Dina Lee Dina Lee
$ $ $ $
2013 2013
Jan 1 Balance b/d (1) 5 200 4 800 Dec 31 Interest on capital (1)OF 10 000 6 000
Dec 31 Drawings (1) 18 000 17 000 Salary (1) 15 000
Balance c/d 6 900 Share of Profit (1)OF 7 700 7 700
Balance c/d 5 500
23 200 28 700 23 200 28 700
2014 2014
Jan 1 Balance (1)OF 5 500 Jan 1 Balance b/d (1)OF 6 900
[7]
(f) 1 (56 400 + 19 000) (1) : (6600 + 25 400) (1)

= 75 400 : 32 000
= 2.36 : 1 (1)OF
2 19 000 (1) : (6600 + 25 400) (1)

= 19 000 : 32 000
= 0.59 : 1 (1)OF [6]
(g) (i) Holding excessive inventory/increase in inventory (1)

Reduction in bank balance because of one of the following (1)
OR increase in partners’ drawings
OR repayment of long term loan
Answer to be appropriate to ratio calculated in (f) Part 2 [2]
(ii) Cannot meet debts when due

Or other suitable comments based on answer to (f) Part 1
[Total: 35]

0452 ACCOUNTING

1 (a) B
(b) C
(c) C
(d) C
(e) C
(f) B
(g) B
(h) B
(i) A
(j) A (1) mark each
[Total: 10]

2 (a) 1 Invoice (1)

2 Debit note (1)
3 Statement of account (1) [3]
(b) (i) Debit (1)

(ii) Cash discount (1)
(iii) For prompt payment (1) [3]
(c)
$ $
1 Hal account 300 Sales account 300
2 Cash account 300 (1) Hal account 300 (1)
3 Bank account 250 (1) Cash account 250 (1)
4 Drawings account 400 (1) Bank account 400 (1)
5 Bank account 600 (1) Mabel account 600 (1)

[8]
(d) Transaction 3 (1) [1]
(e) 620 (1) – 10 (1) = 610 (2)

OR
660 (1) – 100 (1) + 50 (1) = 610 (1) [4]
(f) Current assets (1) [1]
(g) Inventory
Trade receivables
Other receivables
Cash
Answer to be consistent with answer to (f)

Any 1 item (1) [1]
[Total: 21]

3 (a) A prepayment is an amount paid in advance for a service which has not yet been received
(1)
An accrual is an amount owed for a service which has been received but not yet paid for (1)
[2]
(b)
Insurance Account
$ $
2013 2014
July 1 Balance b/d 180 (1) June 30 Income
Aug 2 Bank/Cash 2 340 (1) Statement 2 325 (1)OF
Balance c/d 195
2 520 2 520
2014
July 1 Balance b/d 195 (1)CF
+ (1) dates [5]
(c) (i) Profit and loss/expenses (1) [1]
(ii) Accruals/matching (1) [1]
(d) (i) Service business (1) [1]
(ii) Sales/revenue/sales returns

Inventory (opening and closing)
Purchases/purchases returns
Carriage
Cost of sales
Goods for own use
Gross profit
(e) (i) Prudence (1) [1]
(ii) At the lower (1) of cost and net realisable value (1) [2]
(f)
$
Scrap value 10 × $2 20 (1)
Less selling expenses 7 (1)
Net realisable value 13 (1)CF
[3]

(g) (i) It is a record of what has happened in the past.

There is a gap between the year end and the preparation of the statements.
Items are recorded at cost so may not be realistic/difficult to judge effect of inflation.
May not know what policies the business is using so problems of comparison.
Only information which can be expressed in monetary terms in recorded – other
important factors are not recorded.
Different definitions can make comparisons difficult.
Or other reasonable comment

(ii)
Income statement Statement of financial

position
Debit Credit Assets Liabilities
Bank overdraft
Depreciation charge for (1)

the year
Prepaid rent (1)
Discount received (1)
Commission received (1)

[4]
[Total: 24]

4 (a)
Error Affects balancing of trial balance Does not affect balancing of trial
balance
1
2 (1)
3 (1)
4 (1)
5 (1)
[4]
(b)
Statement of corrected profit
$ .
Draft profit for the year 26 800.
Error 1 160. (1)
Error 2 1 000. (1)
Error 3 250. (1)
Error 4 No effect. (1)
Error 5 (600) (2)
Corrected profit for the year 27 610. (1)OF
[7]
(c) Error of commission (1) [1]
[Total: 12]

5 (a)
$ $
Cost 1 200
Depreciation year 1 240 240 (1)
960
Depreciation year 2 192 192 (1)
Total depreciation 432 (1)

[3]
(b)
$ $
2013 2013
Jan 1 Balance b/d 31 200 (1) June 1 Disposal 1 200 (1)
Aug 1 Bank/cash 2 500 (1) Dec 31 Balance c/d 32 500
33 700 33 700
2014
Provision for depreciation Account

$ $
2013 2013
June 1 Disposal 432 (1)OF Jan 1 Balance b/d 9 702 (1)
Dec 31 Balance c/d 13 916 Dec 31 Income Statement 4 646 ***
14 348 14 348
2014
***Calculation of depreciation for the year

$ $
Cost of asset – Opening balance 31 200
Less disposal 1 200 (1)
30 000
Plus addition 2 500 (1) 32 500
Depreciation – Opening balance 9 702

Less disposal 432 OF 9 270 (1)OF
23 230
20% × 23 230 OF = 4646 (1)OF
Disposal account
$ $
2013 2013
June 1 Fixtures and Fittings 1 200 (1) June 1 Prov for Depreciation 432 (1)OF
Bank/Cash 600 (1)
Dec 31 Income Statement 168 (1)OF
1 200 1 200
[15]

(c)
Ajith
Extract from Income Statement for the year ended 31 December 2013
$
Expenses
Loss on disposal of fixtures and 168 (1)OF
fittings
Depreciation – fixtures and fittings 4 646 (1)OF
Ajith
Extract from Statement of Financial Position at 31 December 2013
$
Non-current assets
Fixtures and fittings at cost 32 500 (1)OF
Depreciation to date 13 916 (1)OF
18 584
[4]
[Total: 22]

6 (a) To obtain limited liability

To obtain extra capital
(b) Preference share capital [1]
(c) For reinvestment in the business

To plough back profits
To set aside profit for dividends in the future
If there is not enough actual cash available to pay a dividend
(d)
ABC Limited $
Profit for the year before interest 15 000
Less debenture interest 1 500 (1)
XYZ Limited $
Profit for the year before interest 15 000
Less debenture interest 8 000 (1)
Profit for the year after interest 7 000 (1)
[4]
(e)
ABC Limited
$ $
Less Ordinary share dividend
(260 000 shares × $0.03) 7 800 (2)
Transfer to general reserve 5 000 (1) 12 800
Profit retained in the year 700
Retained profit b/f 29 300 (1)
Retained profit c/f 30 000 (1)OF
XYZ Limited
$ $
Less Ordinary share dividend
(62 000 shares × $0.05) 3 100 (2)
Profit retained in the year 3 900
Retained profit b/f 14 100 (1)
Retained profit c/f 18 000 (1)OF
[11]

(f) ABC has more equity

XYZ Limited has more long term loans/debentures/debt
ABC’s dividend paid is less expensive than XYZ’s loan interest paid
ABC paid a higher total dividend than XYZ
XYZ paid a higher total loan interest than ABC
ABC made a transfer to general reserve
(g)
ABC Limited
Statement of Financial Position at 31 December 2013
$
Non-current assets 100 000 (1)
Net current assets 80 000 (1)
180 000
165 000
Capital and reserves

Ordinary share of $0.50 each 130 000 (1)
Retained profit 30 000 (1)OF
165 000
[6]
(h) Shares in ABC had a return of 6% (1) but shares in XYZ had a return of 5% (1)
ABC had a lower amount of loan capital (1) so less risky (1) [4]
[Total: 31]

International General Certificate of Secondary Education
0452 ACCOUNTING
Cambridge is publishing the mark schemes for the May/June 2014 series for most IGCSE, GCE
Advanced Level and Advanced Subsidiary Level components and some Ordinary Level components.
IGCSE – May/June 2014 0452 21
1 (a) Nasir Manufacturing Limited

$ $
148 100
122 000 (1)
Direct wages (136 000 + 2 200) 138 200 (1)
Direct expenses 16 300 (1)
Factory overheads
Wages of factory supervisors 31 400 }
General factory expenses 19 208 }(1)
Rates & insurance (¾ × (6 360 – 120)) 4 680 (2)
Depreciation Plant & machinery
(20% × (94 000 – 33 840) 12 032 (1)
Loose tools
(2 650 + 310 – 2 740) 220 (1) 67 540
344 040 (1)OF
Opening work in progress 11 020 (1)
355 060
(b) Nasir Manufacturing Limited

$ $ $
Revenue 539 000
Cost of sales
Opening inventory finished goods 18 100 (1)
Purchases finished goods 16 900 (1)
Less Returns 200 (1) 16 700
377 800
Less Closing inventory finished goods 19 300 (1) 358 500
[Total: 20]

2 (a) Leroy Smith

Stationery account
$ $
2013 2013
April 1 Balance b/d 144 (1) Aug 1 Drawings 26 (1)
June 30 Bank 368 (1) 2014
Mar 31 Income
statement 394 (1)
___ Balance c/d 92 (1)
512 512
2014
April 1 Balance b/d 92 (1)
Three column running balance format acceptable [6]
(b) The business entity principle has been applied when the stationery taken for personal use
was transferred from the stationery account to the drawings account. [2]
(c) Leroy Smith

$ $
2013 2013
April 1 Balance (rates) b/d 380 (1) April 1 Balance (rent) b/d 260 (1)
2014 2014
Mar 31 Bank (rates) 2470 } (1) Mar 31 Income
Bank (rent) 3380 } statement 5400 (1)
____ Balance (rates) c/d 570 (1)
6230 6230
2014
Three column running balance format acceptable [6]
(d) The accruals principle has been applied when only the expense for the year was transferred
to the income statement. [2]
(e) Capital receipts

Amounts received which do not form part of the day-to-day trading activities. (1)
Capital expenditure
Money spend on acquiring improving and installing non-current assets. (1)
Revenue receipts
Amounts received in the day-to-day trading activities from revenue and other items of
income. (1)
Revenue expenditure
Money spent on running a business on a day-to-day basis. (1) [4]

(f)
(1) (1)
[2]
[Total: 22]
3 (a) (i) The straight line method of depreciation uses the same amount of depreciation each
year. [1]
(ii) This method is used where each year is expected to benefit equally from the use of the
asset. [1]
(b) (i) The reducing balance method of depreciation uses the same percentage rate of
depreciation each year, but it is calculated on the book value at the end of each year.
[1]
(ii) This method is used where the greater benefits from the use of the asset will be gained
in the early years of its life. [1]
(c) 1 Computer equipment – reducing balance method (1)

2 Buildings – straight line method (1)
3 Motor vehicle – reducing balance method (1) [3]
(d) (i) The asset is valued at the end of each year and the difference between the opening and
closing value is the depreciation for the year. [1]
(ii) This method is used where it is impractical or difficult to maintain detailed records of the
asset. [1]
(iii) Loose tools, packing cases, small items of equipment

Or other suitable example

(e) Tony Yeo

Equipment account
$ $
2013 2013
May 1 Balance b/d 8 600 Oct 31 Disposals 2 000 (1)
Nov 1 New2You 3 400 (1) 2014
Apl 30 Balance c/d 10 000
12 000 12 000
2014
May 1 Balance b/d 10 000 (1)OF [3]
Provision for depreciation of equipment account

$ $
2013 2013
Oct 31 Disposals 800 (2) May 1 Balance b/d 3 260
2014 2014
Apl 30 Balance c/d 4 120 Apl 30 Income statement
20% × 6600 1 320 (1)
20% × 3400 × ½ 340 (1)
4 920 4 920
2014
May 1 Balance b/d 4 120 (1)OF [5]
Disposal of equipment account

$ $
2013 2013
Oct 31 Equipment 2 000 (1)OF Oct 31 Prov for dep 800 (1)OF
Cash 750 (1)
2014
Apl 30 Income statement 450 (1)OF
2 000 2 000 [4]
[Total: 22]
4 (a) $30 000 × 5% = $1 500 (1)
$50 000 × 6% = $3 000 (1)
$70 000 × 8% = $5 600 (1) [3]
(b) To indicate that part of the profit is for long term use within the company and is not available
for distribution. [1]
(c) $ $
Profit before interest and dividends 18 600
Less Debenture interest 1 500 (1)
Preference share dividend 3 000 (1)
Ordinary share dividend 5 600 (1)
Profit retained in the year 4 500 (1)OF [5]

(d) LWS Ltd

Extract from Statement of Financial Position at 30 April 2014
$
140 000 Ordinary shares of $0.50 each 70 000 }
50 000 6% Preference shares of $1 each 50 000 }(1)
Retained profits (7 500 (1) + 4 500 (1)OF) 12 000 [4]
(e) Non-current liabilities [1]
(f) (i) Current liabilities [1]
(ii) $750 [1]
[Total: 16]
5 (a) To ensure that the totals of the trial balance agree (1)
To allow draft financial statements to be prepared (1) [2]

(b) Uzma Khan

Journal
Debit Credit
$ $
1 Suspense 270 (1)

Rent 270 (1)
2 Drawings 400 (1)

Wages 400 (1)
Correction of error, drawings
debited to wages (1)

Suspense 43 (1)
Correction of error, discount not
transferred to ledger (1)
4 Mona 200 (1)

Suspense 1800 (1)
Amina 2000 (1)
Correction of error, receipt from
Amina $2000 entered as $200 in
Mona’s account (1)
4 Alternative presentation
Mona 200 (1)

Suspense 200 }
Suspense 2000 } (1)
Amina 2000 (1)
Correction of error, receipt from
Amina $2000 entered as $200 in
Mona’s account (1)
[13]
(c)
Error
$ $
2 400 (2)
3 43 (2)
4 No effect (2)
[6]
[Total: 21]

6 (a)
Ratio Year ended 31 March
2014
percentage of gross profit to revenue (sales) 31.11 % (2)
percentage of profit for the year to revenue (sales) 7.78 % (2)OF
current ratio 1.09 : 1 (2)
quick ratio 0.69 : 1 (2)

[8]
Calculations
Percentage of gross profit to revenue

450 000 − 310 000 (1) 100
× = 31.11% (1)
450 000 1
Percentage of profit for the year to revenue

140 000 O/F − 105 000 (1)OF 100
× = 7.78% (1)OF
450 000 1
Current ratio
(21 500 + 100 + 37 400) : (36 800 + 12 200 + 5 000) (1) = 1.09 : 1 (1)
Quick ratio
(100 + 37 400) : (36 800 + 12 200 + 5 000) (1) = 0.69 : 1 (1)
(b) Increase in selling price

Reduction in trade discount allowed to customers
Selling at a higher mark-up
Decrease in cost price
Increase in trade discount allowed by suppliers
Taking advantage of bulk buying
Or other suitable reason based on answer to (a)
(c) Year ended 31 March 2013 (1)

In 2013 the expenses were 17.85% of revenue: in 2014 the expenses were 23.33% of
revenue. (2)
Or suitable answer based on answers to (a) [3]

(d)

(1)
Purchase of non-current asset (1)

on credit
[3]
(e) Unsatisfied (1)

The ratio of liquid assets to current liabilities has fallen from 0.90:1 to 0.69:1. (1)
She cannot pay immediate liabilities from liquid assets. (1)
Or suitable answer based on answer to (a) [3]
[Total: 19]

0452 ACCOUNTING
1 (a) Paul Katanga Cash Book
Allowed Received
2014 $ $ $ 2014 $ $ $
Apl 1 Balance b/d 75 Apl 1 Balance b/d 2 190
8 Moloi Stores (1) 84 5 Office equipment (1) 580
28 Sales (1) 2 500 Repairs (1) 40
30 Cash c (1) 2 215 21 Moloi Stores (dishonoured
Balance c/d 907 cheque) (1) 84
24 T Nekundi (1) 8 312
29 Drawings (1) 300
30 Bank c (1) 2 215
Balance c/d 60
2 575 3 206 8 2 575 3 206

2014 2014
May 1 Balance b/d (1) 60 May 1 Balance b/d (1) OF 907
+(1) dates [12]

(b) Paul Katanga

Moloi Stores account
$ $
2014 2014
Ap 1 Balance b/d 50 Apl 8 Bank 84 (1)
Ap 2 Sales 34 (1) Apl 30 Bad debts 84 (1)
21 Bank (Dis chq) 84 (1) ___
168 168
[4]
Paul Katanga
T Nekundi account
$ $
2014 2014
Apl 17 Returns 64 (1) Apl 1 Balance b/d 320
Apl 24 Bank 312 } Apl 13 Purchases 208 (1)
Discount 8 } (1)
Apl 30 Balance c/d 144 ___
528 528
2014
May 1Balance b/d 144 (1) OF
[4]
(c) Realisation [1]
(d) Going concern [1]
[Total: 22]
2 (a)
bad debts written off Journal (1)
discounts allowed Cash book (1)
returns by credit customers Sales returns journal (1)
contra entries Journal (1)

[4]
(b) Overpayment of amount owing

Failure to deduct cash discount due
Goods returned after account settled
Payment made in advance
Any two items (1) each [2]

(c)
debit credit no entry
credit purchases
cash purchases (1)
refund from credit supplier (1)
cheques paid to credit suppliers (1)
discount allowed (1)
discount received (1)
interest charged by credit supplier (1)
on overdue account
contra entry (1)

carriage charged by credit supplier (1)
bad debts written off (1)

[9]
$5 300  365
(d) (1) × = 23.97 = 24 days (1) [2]
$80 700  1
(e) To consider liquidity position

To see total amount owing to other credit suppliers
To determine the credit limit
To determine the period of credit to be allowed
[Total: 19]

3 (a) Profit/loss available for distribution (10 050 + 500) – (6600 + 5000) = (1050) (1)
Share of loss for each partner 1050 ÷ 2 = 525 (1) [2]
(b) Ian McMillan

Current account
$ $
2013 2014
Feb 1 Balance b/d 3000} Jan 31 Capital 5000 (1)
2014 Loan interest 450 (1)
Jan 31 Drawings 4000} Int. on capital 3000 (1)
Int. on drawings 200} (1)
Share of loss 525} (1) OF
Balance c/d 725} ____
8450} 8450
2014
Feb 1 Balance b/d 725 (1) OF
+ (1) Dates
(c) Drawings and interest on drawings exceeded the interest on capital,

interest on loan and share of profit
Or
Share of loss, drawings and interest on drawings exceeded the interest on
capital and interest on loan [2]
(d) Easier to see the profit retained by each partner

Easier to calculate interest on capital
(e) The collection period for both years is within the period of credit allowed
The collection period is very satisfactory in each year
The collection period has increased in 2014
Any two comments (1) each [2]
(f) Offer cash discount for prompt payment

Invoice and discount factoring
Or other relevant points
[Total: 17]

4 (a) Valley Football Club

$ $
2013 2013
Feb 1 Balance b/d 192 (1) Feb 1 Balance b/d 384 (1)
2014 2014
Jan 31 Income and 9 600 (1) Jan 31 Bank 9 216 (1)
Expenditure Balance c/d 480
Balance c/d 288 _____
10 080 10 080
2014 2014
Feb 1 Balance b/d 480 (1) Feb 1 Balance b/d 288 (1)
+ Dates (1)
(b) Valley Football Club

Income and Expenditure Account for the year ended 31 January 2014
$ $
Income
Subscriptions 9 600 (1) OF
Competition receipts 877
Less competition expenses 394 483 (1)
10 083
Expenditure
Rent and rates (4160 (1) – 320 (1)) 3 840
Insurance (300 (1) + 20 (1) – 80 (1)) 240
Depreciation – Equipment
Depreciation – (20% × (12 400 + 2 000)) 2 880 (2) 11 231
Deficit 1 148 (1) OF
(c) $15 400 – $1 148 OF = $14 252 (1) OF [1]
(d) The members have not invested any capital (1) so there can be no dividend which
represents a return on the amount invested (1) [2]
[Total: 21]

5 (a) Nadia Sayed

Income Statement for the year ended 28 February 2014
$ $ $
Revenue 72 000 (1)
Cost of sales
Less Purchases returns 1 100 (1)
54 900
60 900
Closing inventory – remaining 5 000 (1)
Closing inventory – missing 1 900 (1) OF 6 900 54 000 (1) OF
Gross profit 18 000 (2)
(b) 3% × (18 650 – 150) = 555 [1]
(c) Nadia Sayed

Journal
Debit Credit
$ $
Bad debts 150 (1)
Sabar Stores 150 (1)
Debt written off (1)
Income statement 555 (1) OF

Provision for doubtful debts 555 (1) OF
Creation of provision for doubtful debts (1)
[6]
(d) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables are not overstated (1) [2]
(e) The matching principle requires the costs for the year to be matched against the revenue of
the same period (1)
Comment relating this principle to provision for doubtful debts (1) [2]
[Total: 21]

6 (a)
Entries required to correct the error
Error Debit Credit
Account $ Account $
2 Credit note, $210, received Pete 420 (1) Purchases 210 (1)
from a supplier, Pete, Purchases 210 (1)
entered as invoice returns
3 Total of the discount No entry – (1) Discount 44 (1)

received column in the cash allowed
book, $44, debited to Or Discount 44 (1)
discount allowed account Suspense 88 (1) received
[6]
(b)
Error effect on draft profit for the year

$ $
1 No effect (2)
(1) position
2 420 (1) figure
(1) position
(1) figure
3 88
[6]

(c)
Year ended
ratio
30 April 2014
percentage of gross profit to revenue (sales) 28.61% (2)
percentage of profit for the year to revenue (sales) 8.61% (2)
Calculations
Gross profit 39 500 – 28 200 = 11 300 (1)

Percentage of gross profit to revenue (sales)
11 300 100
× = 28.61% (1)
39 500 1
Profit for the year 11 300 – 7 900 = 3 400 (1)

Percentage of profit for the year to revenue (sales)
3 400 100
× = 8.61% (1) [4]
39 500 1
(d) Selling goods at higher prices

Purchasing goods at lower prices
Change in proportions of different goods
Or other comment based on answer to (c)
(e) Decreased
Or other suitable answer based on answer to (c) (1)
The percentage of profit for the year to revenue (sales) decreased

The percentage of expenses to revenue (sales) increased
[Total: 20]

0452 ACCOUNTING

1 (a) Removes small cash payments from the main cash book
(b) At the end of the period the chief cashier will make up or reimburse (1) the cash remaining so
that each month starts off with the same amount (1). [2]
(c) The chief cashier knows exactly how much is spent each month
(d) $207 (1) CF [1]
(e)
Debit Credit
Petty cash book (1) Bank (or Cash) (1)

[2]
(f) Total of column is debited to the cleaning account in the ledger (1) [1]
(g) B Smith account is debited with $36 (1)

W Jones account is debited with $18 (1) [2]

(h)
Peter Pickard
Sales Journal
Date Details $ $
2014
Aug S Bower
5 Goods 1480
C Brooke
13 Goods 1340
____
Transferred to sales account 2323 (1)OF
31
[3]
Date Details $ $
2014
Aug S Bower
19 Goods 160
___
Transferred to sales returns account 128 (1)OF
31
[2]
Sales Ledger
S Bower account
2014 2014
Aug 5 Sales 1184 (1)OF Aug 19 Sales returns 128 (1)OF
[2]
C Brooke account
2014
Aug 13 Sales 1139 (1)OF
[1]

Nominal (General) Ledger

Sales Account
2014
[1]
Sales Returns account

2014
[1]
2340 365 
(i) ×  (1) whole formula = 28.85 = 29 days (1)CF [2]
29 600 1 
(j) Satisfied (if the answer to (i) is 30 days or less)

Or
Unsatisfied (if the answer to (i) is more than 31 days) [1]
(k) The business may not have enough liquid funds (1) with which to pay the credit suppliers
until money is received from credit customers (1).
Or
If the credit customers pay within the set time (1), the business may be able to pay the credit
suppliers within the set time (1) without any significant impact on the bank balance.
Or
If credit customers fail to pay within the set time it may be necessary to obtain short-term
funds (1) in order to pay the credit suppliers (1).

Any 1 point (1) mark each [2]
[Total: 26]

2 (a) Reduce credit sales

Offer cash / settlement discount for early payment
Only sell to reliable customers
(b)
Alina Tan
Journal
Debit Credit
$ $
(1)
Bad debts 66 (1)
Yeung & Co 66
(1)
Bad debt written off
[3]
(c) An estimate or prediction (1) of the amount which a business will lose in a financial year
because of bad debts (1) [2]
(d) Accruals (matching) (1)

Prudence (1) [2]
(e)
Alina Tan
Journal
Debit Credit
$ $
(1)
Income statement 45
Reduction in provision for doubtful (1)

debts
[3]

(f) When a debtor pays some, or all, of the amount owed (1) after the amount was written off as
a bad debt (1) [2]
(g) Capital expenditure:

Money spent on running a business on a day-to-day basis (1)
Capital receipts:
Amount received which do not form part of the day-to-day trading activities (1)
Revenue receipts:
Amount received in the day-to-day trading activities from revenue and other items of income
(1) [4]
(h)
(1) (1)
[2]
[Total: 20]

3 (a) Share losses

Share risks
Any 2 advantages (1) mark each. [2]
(b)
$ $
Receipts from customers 76 400
Less Wages (41 600 (1) – 1500 (1)) 40 100
Insurance (12 / 14 × 1232) 1 056 (2)
General expenses (3090(1) + 94(1)) 3 184
Depreciation motor (20% × (25 000 – 9000) 3 200 (2)
vehicles
Depreciation equipment (2900 + 1150 – 3150) 900 (2) 48 440

[11]
(c)

Profit and Loss Appropriation Account for the year ended 31 July 2014
$ $
Interest on drawings S Hussain 300}
H Hussain 240} (1)CF 540
28 500
Interest on capital S Hussain
(5% × 80 000 × 6 mths +
5% × 60 000 × 6 mths) 3 500 (1)
H Hussain 6 500 3 000 (1)
Partner’s salary S Hussain 9 000 (1)CF 15 500
Share of profit S Hussain 6 500 (1)OF 13 000
H Hussain 6 500 (1)OF 13 000

[7]

(d)
Hamza Hussain
Current account
$ $
2013 2014
Aug 1 Balance b / d 1 960 July 31 Interest on 3 000 (1)OF
capital
Profit share 6 500 (1)OF
Balance c/d 700
2014
July 31 Drawings 8 000 (1)
Interest on 240 (1)
drawings
10 200 10 200
2014
Balance b/d can be on either side

[5]
[Total: 25]

4 (a)
$
35 690
Less Interest charged on overdue account 40 (1)
Credit purchases for the year 35 650 (2)CF (1)OF
Total Trade Payables account

$ $
2014 2014
Sept 30 Bank 31 600 (1) Sept 30 Interest 40 (1)
Returns 2 100 (1) Purchases 35 650 (2)CF
Balance c/d 1 990 (1) _____ (1)OF
35 690 35 690
[6]
(b)
$
Discount allowed to credit customers 900 (1)
Credit sales for the year 40 050 (2)CF (1)OF
Total Trade Receivables account

$ $
2014 2014
Sept 30 Sales 40 050 (2)CF Sept 30 Bank 35100 (1)OF
Discount 900 (1)
Bad debts 100 (1)
Balance 3 950 (1)
c/d
40 050 40 050
[6]

(c)
Grace Mhando
$ $
Revenue (sales) 40 050 (1)OF
Less Cost of sales
Less: Purchases returns 2 100 (1)OF
33 550
Add: Carriage inwards 1 090 (1)
34 640
Less Closing Inventory 2 600 (1)OF
Gross profit (20%) 32 040
8 010 (2)OF

[7]
(d) Assessment of the liquidity position

(e) Bank manager

Lender
Manager (if any)
Employee
Government body
Competitor
Take-over bidder
Potential partner
Investors
Owner

[Total: 23]

480 000 - 310 000 100

5 (a) (1) × = 35.42% (1)CF [2]
480 000 1
(b) Reduction in selling price

Selling at a lower mark-up
Decrease in trade discount allowed by suppliers
170 000 OF - 94 000 100

(c) (1) × = 15.83% (1)OF [2]
480 000 1
(d) Reduce expenses

76 000 OF 100
(e) (1) × = 11.97% (1)OF [2]
635 000 1
(f) It shows the profit earned for each $100 used in the business. (1)
(g) 86 800 : 71 800 (1) = 1.21 : 1 (1) [2]
(h) 56 000 : 71 800 (1) = 0.78 : 1 (1) [2]
(i) Inventory is not included in the calculation of the quick ratio (1)
Either
collected (1)
Or
current liabilities were paid immediately from the liquid assets (1) [2]

(j)
Issue of additional shares
Repayment of long term loan
Purchase of goods on credit
Sale of unused non-current asset
Cheque paid for repairs to non-

current asset
[6]
(k) To be able to meet debts when they fall due

[Total: 26]

0452 ACCOUNTING
1 (a) D
(b) B
(c) A
(d) C
(e) B
(f) C
(g) D
(h) C
(i) C
(j) B
(1) each [10]

2 (a)
Account Ledger
Insurance nominal/general (1)
Sales nominal/general (1)
Purchases nominal/general (1)
Lottie, a supplier purchases (1)
Matthew, a credit customer sales (1)
Capital nominal/general (1)

[6]
(b) Cash book

Petty cash book
General journal
Any one (1) [1]
(c) To reduce number of entries/detail in sales account

Allows work to be shared between several people
Provides list of credit sales
(d) Elinor account

$ $
Apl 1 Balance b/d 120 (1) Apl 17 Returns 46 (1)
16 Sales 320 (1) 30 Balance c/d 394 (1)
440 440
May 1 Balance b/d 394 (1)OF
Sales account
$
Apl 30 Credit sales
for month 920 (1)
Sales returns account

$
Apl 30 Sales returns
for month 151 (1)
+ (1) dates [8]
(e) 260 × 0.95 (1) = $247 (1)

OR 260 – 13 (1) = $247 (1)
OR 260 – 5% = $247 (2) [2]
(f) Sales ledger control account. (1) [1]

[Total: 20]

3 (a) Highfield Manufacturing Limited

Bad debts account
2014 $ 2014 $
Feb 28 Debtor 1100 (1) Feb 28 Income
Statement 1100 (1)
1100 1100
Bad debts recovered account

2014 $ 2014 $
Feb 28 Income Feb 28 Bank/cash/
Statement 200 (1) debtor 200 (1)
200 200

2014 $ 2014 $
Feb 28 Balance c/d 3755 (1) Mar 1 Balance b/d 2966 (1)
2015
Feb 28 Income
____ Statement (1) 789 (1)OF
3755 3755
2015
Mar 1 Balance b/d 3755 (1)OF [9]
(b) (i) Any expense/loss for the financial year (1) is matched/set against the revenue for that
same period (1) [2]
(ii) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables/ current assets are not overstated (1) [2]
(c) Direct materials plus direct labour (1) plus direct expenses (1)
OR
Cost of production excluding overheads (2) [2]
(d) Cost of production (1) [1]
(e) (i)
Ordinary shares Preference shares
Variable rate of dividend Fixed rate of dividend

Carry voting rights Do not carry voting rights
Rank after preference shares for Rank before ordinary shares for payment
payment of dividend of dividend
Rank after preference shares in a winding Rank before ordinary shares in a winding
up up
Any 1 comparative statement (2) [2]

(ii)
Ordinary shares Debentures
Variable rate of dividend Fixed rate of interest

Holders receive dividend Holders receive interest
Holders are members of the company Holders are creditors
Are equity Are long term loans
Rank after debentures in a winding up Rank before ordinary shares in a winding up
(f) $3000 (1) × 8/12 = $2000 (1) [2]
(g) Shareholders
Potential investors
Lenders
Bank
Trade creditors
Customers
Employees
Manager
Accountant
Government
Tax authorities
Any 2 parties (1) each [2]
[Total: 24]
4 (a) An amount paid by a member for the right to use the facilities of a club (1) [1]
(b) Some members of the club may be in arrears with their subscriptions (1) and other members
may have prepaid their subscriptions (1) [2]
(c)
Sole trader Club or society
Capital Accumulated fund (1)
Profit for the year Surplus (1)
Loss for the year Deficit (1)

[3]

(d)
Debit Credit Receipts Income and
and expenditure
payments account
account
Depreciation charge
Proceeds of sale of equipment (1) (1)
Loss on disposal of equipment (1) (1)
Unpaid subscriptions written off (1) (1)
Purchase of new equipment (1) (1)
Profit on sale of refreshments (1) (1)
[10]
(e) Speedy Runners Sports Club

Income Statement (Trading Account) for the year ended 31 December 2013
$ $
Revenue 6150
Inventory – 1 January 380
Purchases (2480 (1) – 200 (1) + 220 (1)) 2500

2880
Inventory – 31 December 340 (1)OF
Cost of sales 2540 (1)

____
Gross profit 3610 [5]
(f) Members have not invested any capital (1) so there can be no drawings which represent
amounts taken from the return on an investment (1) [2]
(g) Financial statements are only useful if the information they contain can be compared with
previous periods or other businesses (2) [2]
[Total: 25]
5 (a) Timing (1) [1]

(b) Miguel
2014 $ 2014 $
May 8 Gordon 920 (1) May 8 Balance b/d 2720
Balance c/d 1985 Insurance 120 (1)
____ Interest 65 (1)
2905 2905
2014
May 8 Balance b/d 1985 (2) CF
(1) OF [5]
(c) Miguel
Bank reconciliation statement at 7 May 2014
$ $
Balance on bank statement (1) (922) (1)
Add Amounts not yet credited Sales 2132 (1)
Charles 111 (1) 2243
1321
Less Cheques not yet presented Vehicle repairs 180 (1)
Francis 3126 (1) 3306
Balance in cash book (1) (1985) (1) OF
Miguel
$ $
Add Cheques not yet presented Vehicle repairs 180 (1)
Francis 3126 (1) 3306
1321
Less Amounts not yet credited Sales 2132 (1)
Charles 111 (1) 2243
Balance on bank statement (1) (922) (1) [8]
(d) $66 (1) [1]
[Total: 15]
6 (a) Anton and Belle

$ $
Interest on drawings – Anton 1 600 (1)
Belle 500 (1) 2 100
75 000
Interest on capital – Anton 10 000 (1)
Belle 8 000 (1)
18 000
Partner’s salary – Anton 12 000 (1) 30 000
45 000
Profit shares – Anton 30 000 (1) OF
Belle 15 000 (1) OF 45 000 [8]

(b) Anton
Current account
2013 $ 2014 $
Jan 1 Balance b/d 10 400 (1) Dec 31 Int on Cap 10 000 (1) OF
2014 Salary 12 000 (1)
Dec 31 Drawings 32 000 (1) Profit share 30 000 (1) OF
Int on drawings 1 600 (1)
Balance c/d 8 000
52 000 52 000
2014
Jan 1 Balance b/d 8 000 (2) CF
(1) OF [8]
(c) $146 000 (1) + ($51 000 + $13 000) (1) = $210 000 (1)
($180 000 + $8000 + $10 000) (1) + $12 000 (1) = $210 000 (1) [3]
72 000 } (1)
(d) whole formula × 100 = 34.71% (2)CF/(1)OF [3]
210 000 OF}
(e) $72 900 (1) – $51 000 (1) + $15 000 (1) = $36 900 (1) [4]
[Total: 26]

0452 ACCOUNTING
1 (a) A
(b) C
(c) C
(d) C
(e) C
(f) A
(g) A
(h) A
(i) C
(j) C
(1) each [10]

2 (a) Asset – anything owned by or owed to the business (1)

Liability – anything owed by the business (1)
Owner’s capital – funds and resources provided by the owner
OR amount owed by the business to the owner (1) [3]
(b)
Asset Liability
Inventory
Motor vehicle (1)
Creditor (1)
Debtor (1)
Bank loan (1)
Cash (1)
[5]
(c)
$ $
2 Plant and equipment 6 000 (1) Bank 3 000 (1)

ABC Finance 3 000 (1)
3 Drawings 500 (1) Cash 500 (1)
4 Interest payable 210 (1) Bank 210 (1)
5 ABC Finance 1 000 (1) Bank 1 000 (1)
6 Income statement 600 (1) Provision for 600 (1)

depreciation
[11]
210 } (1)
(d) × 100 = 7% (1) [2]
3000 }
(e) A business has paid out more from the bank than it has paid in (2) [2]
(f) Unpresented cheque (1) [1]
[Total: 24]

3 (a) (i) Any non-current asset, any expense, any income, purchases, sales, returns, inventory,
loan, capital, drawings, etc.
(ii) Sales ledger

Purchases ledger
(iii) Work can be shared between several people

Easier for reference
Same type of accounts are kept together
Any 1 point (2) [2]
(b)
Financial statement Type of organisation
Ordinary share capital Statement of financial Limited company

position
Accumulated fund Statement of financial Club or society (1)

position (1)
Interest on capital Appropriation account (1) Partnership (1)
Ordinary share dividends Appropriation account (1) Limited company (1)

paid
Debenture interest Income statement (1) Limited company (1)

[8]
(c)
Debentures Ordinary shares
Fixed rate of interest Variable rate of dividend

Holders receive interest Holders receive dividend
Holders are creditors Holders are members of the company
Are long term loans Are equity
Do not carry voting rights Carry voting rights
Rank before ordinary shares in a Rank after debentures in a winding up
winding up
Any 2 comparative statements (2) marks each [4]
(d) For reinvestment in the business

To plough back profits
For allocating dividends in the future
If there is not enough actual cash available to pay a dividend
[Total: 18]

4 (a) Suspense (1) [1]
(b)
Matsumi
Trial balance at 30 April 2014
Dr Cr
$ $
Bank overdraft 2 320
Cash 100
Fixtures and fittings at cost 6 800
Provision for depreciation at 1 May 2013 1 360
Fees receivable 28 105
Interest payable 200
Rent payable 6 000
Advertising 430
Wages 8 005
Loan account 3 000
Capital at 1 May 2013 2 950
Drawings 16 200
37 735 37 735
Any 2 correct items (1) [6]
(c) The trial balance was drawn up before the preparation of the income statement/before profit
for the year has been calculated (2) [2]
(d) A service business

OR accept an example of a service business (1) [1]
(e) (6800 – 1360) × 20% = 1088 (2) [2]
(f) Provision for depreciation account

2014 $ 2013 $
Apl 30 Balance c/d 2448(1) May 1 Balance b/d 1360(1)
2014
Apl 30 Income Statement 1088(1)OF
2448 2448
2014
Mar 1 Balance b/d 2448(1)OF
[4]
[Total: 16]

5 (a) Raw materials (1)

Direct labour (1)
Finished goods (1)
Work in progress (1)
Inventory (1)
Current assets (1) [6]
(b) (i) Randeep

Manufacturing Account for the year ended 31 March 2014
$ $
Opening inventory of raw materials 16 200 *(1)both
Purchases of raw materials 159 000}
Carriage on raw materials 4 800}(1) 163 800
180 000
Closing inventory of raw materials 17 500 *
162 500 (1)
Factory overheads
Supervisor’s salary 20 000 (1)
Factory rent 30 000 (1)
Depreciation – factory machinery 38 000 (1) 88 000
[9]
(ii) Randeep
$ $
Revenue 410 000 (1)
Cost of sales
Opening inventory finished goods 9 100 *(1)both
331 600
Closing inventory of finished goods 8 200* 323 400
Administration and selling costs 64 600 (1)
[6]
(c) Salary of factory supervisor

Factory rent
Depreciation of factory machinery
Administration and selling costs
Any 1 indirect cost (1) [1]

(d) Office rent/rates

Office salaries
Office general expenses
Office insurance
Salaries/commission of sales staff
Advertising expenses
Any example of office or sales expense
Any 2 examples (1) each [2]
[Total: 24]

6 (a)
Purchase of non-current asset Day-to-day running expense

Provides benefit for over 1 year Provides benefit for less than 1 year
Appears in statement of financial Appears in income statement
position
(b)
Salesman’s commission
Carriage of raw materials (1)
Purchases of goods for resale (1)
Purchases of plant and equipment (1)
Payment of insurance (1)
Legal fees on purchase of property (1)
[5]
(c) (41 000 + 28 000) : (44 000 + 2200) (1) whole formula
1.49 : 1 (1) [2]

(d) Morwenna
Statement of Financial Position at 30 April 2014
$ $ $
Non current assets Cost Depreciation Net book
to date value
(15 000 (1) + 1000 (1)) 16 000 4 500 11 500 (1)OF
Motor vehicles
(18 000 (1) – 800 (1)) 7 200 6 200 11 000 (1)OF
33 200 10 700 22 500
Current assets
Inventory (41 000 (1) – 10 250 (1)) 30 750
58 750
Current liabilities
Other payables 3 000 (1)
Bank 2 200 (1) 49 200 9 550
32 050
Financed by
Capital 32 050
(2) OF for capital if no goodwill
(1) OF for capital if goodwill included
[14]
(e) 58 750 OF : 49 200 OF (1) whole formula

1.19 : 1 (1) OF [2]
(f) Actual current ratio below that originally calculated

Shortage of liquid funds/there is an overdrawn bank balance
Trade payables higher than trade receivables
Rather a lot of money is tied up in inventory
Can only just meet current liabilities from current assets
Cannot take advantage of business opportunities which may arise
May have difficulty in paying trade payables
May depend on receipts from trade receivables to pay trade payables
Comments to be based on answer to (e)
Any three comments (1) each [3]
[Total: 28]

0452 ACCOUNTING
1 (a) D
(b) B
(c) A
(d) C
(e) B
(f) C
(g) D
(h) C
(i) C
(j) B
(1) each [10]

2 (a)
Account Ledger
Insurance nominal/general (1)
Sales nominal/general (1)
Purchases nominal/general (1)
Lottie, a supplier purchases (1)
Matthew, a credit customer sales (1)
Capital nominal/general (1)

[6]
(b) Cash book

Petty cash book
General journal
Any one (1) [1]
(c) To reduce number of entries/detail in sales account

Allows work to be shared between several people
Provides list of credit sales
(d) Elinor account

$ $
Apl 1 Balance b/d 120 (1) Apl 17 Returns 46 (1)
16 Sales 320 (1) 30 Balance c/d 394 (1)
440 440
May 1 Balance b/d 394 (1)OF
Sales account
$
Apl 30 Credit sales
for month 920 (1)

$
Apl 30 Sales returns
for month 151 (1)
+ (1) dates [8]
(e) 260 × 0.95 (1) = $247 (1)

OR 260 – 13 (1) = $247 (1)
OR 260 – 5% = $247 (2) [2]
(f) Sales ledger control account. (1) [1]

[Total: 20]

3 (a) Highfield Manufacturing Limited

Bad debts account
2014 $ 2014 $
Feb 28 Debtor 1100 (1) Feb 28 Income
Statement 1100 (1)
1100 1100

2014 $ 2014 $
Feb 28 Income Feb 28 Bank/cash/
Statement 200 (1) debtor 200 (1)
200 200

2014 $ 2014 $
Feb 28 Balance c/d 3755 (1) Mar 1 Balance b/d 2966 (1)
2015
Feb 28 Income
____ Statement (1) 789 (1)OF
3755 3755
2015
Mar 1 Balance b/d 3755 (1)OF [9]
(b) (i) Any expense/loss for the financial year (1) is matched/set against the revenue for that
same period (1) [2]
(ii) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables/ current assets are not overstated (1) [2]
(c) Direct materials plus direct labour (1) plus direct expenses (1)
OR
Cost of production excluding overheads (2) [2]
(d) Cost of production (1) [1]
(e) (i)
Ordinary shares Preference shares
Variable rate of dividend Fixed rate of dividend

Rank after preference shares for Rank before ordinary shares for payment
payment of dividend of dividend
Rank after preference shares in a winding Rank before ordinary shares in a winding
up up

(ii)
Ordinary shares Debentures
Variable rate of dividend Fixed rate of interest

Holders receive dividend Holders receive interest
Holders are members of the company Holders are creditors
Are equity Are long term loans
Rank after debentures in a winding up Rank before ordinary shares in a winding up
(f) $3000 (1) × 8/12 = $2000 (1) [2]
(g) Shareholders
Potential investors
Lenders
Bank
Trade creditors
Customers
Employees
Manager
Accountant
Government
Tax authorities
Any 2 parties (1) each [2]
[Total: 24]
4 (a) An amount paid by a member for the right to use the facilities of a club (1) [1]
(b) Some members of the club may be in arrears with their subscriptions (1) and other members
may have prepaid their subscriptions (1) [2]
(c)
Sole trader Club or society
Capital Accumulated fund (1)
Profit for the year Surplus (1)
Loss for the year Deficit (1)

[3]

(d)
Debit Credit Receipts Income and
and expenditure
payments account
account
Depreciation charge
Proceeds of sale of equipment (1) (1)
Loss on disposal of equipment (1) (1)
Unpaid subscriptions written off (1) (1)
Purchase of new equipment (1) (1)
Profit on sale of refreshments (1) (1)
[10]
(e) Speedy Runners Sports Club

Income Statement (Trading Account) for the year ended 31 December 2013
$ $
Revenue 6150
Inventory – 1 January 380
Purchases (2480 (1) – 200 (1) + 220 (1)) 2500

2880
Inventory – 31 December 340 (1)OF
Cost of sales 2540 (1)

____
Gross profit 3610 [5]
(f) Members have not invested any capital (1) so there can be no drawings which represent
amounts taken from the return on an investment (1) [2]
(g) Financial statements are only useful if the information they contain can be compared with
previous periods or other businesses (2) [2]
[Total: 25]
5 (a) Timing (1) [1]

(b) Miguel
2014 $ 2014 $
May 8 Gordon 920 (1) May 8 Balance b/d 2720
Balance c/d 1985 Insurance 120 (1)
____ Interest 65 (1)
2905 2905
2014
May 8 Balance b/d 1985 (2) CF
(1) OF [5]
(c) Miguel
$ $
Balance on bank statement (1) (922) (1)
Add Amounts not yet credited Sales 2132 (1)
Charles 111 (1) 2243
1321
Less Cheques not yet presented Vehicle repairs 180 (1)
Francis 3126 (1) 3306
Miguel
$ $
Add Cheques not yet presented Vehicle repairs 180 (1)
Francis 3126 (1) 3306
1321
Less Amounts not yet credited Sales 2132 (1)
Charles 111 (1) 2243
Balance on bank statement (1) (922) (1) [8]
(d) $66 (1) [1]
[Total: 15]
6 (a) Anton and Belle

$ $
Interest on drawings – Anton 1 600 (1)
Belle 500 (1) 2 100
75 000
Interest on capital – Anton 10 000 (1)
Belle 8 000 (1)
18 000
Partner’s salary – Anton 12 000 (1) 30 000
45 000
Profit shares – Anton 30 000 (1) OF
Belle 15 000 (1) OF 45 000 [8]

(b) Anton
Current account
2013 $ 2014 $
Jan 1 Balance b/d 10 400 (1) Dec 31 Int on Cap 10 000 (1) OF
2014 Salary 12 000 (1)
Dec 31 Drawings 32 000 (1) Profit share 30 000 (1) OF
Int on drawings 1 600 (1)
Balance c/d 8 000
52 000 52 000
2014
Jan 1 Balance b/d 8 000 (2) CF
(1) OF [8]
(c) $146 000 (1) + ($51 000 + $13 000) (1) = $210 000 (1)
($180 000 + $8000 + $10 000) (1) + $12 000 (1) = $210 000 (1) [3]
72 000 } (1)
(d) whole formula × 100 = 34.71% (2)CF/(1)OF [3]
210 000 OF}
(e) $72 900 (1) – $51 000 (1) + $15 000 (1) = $36 900 (1) [4]
[Total: 26]


0452 ACCOUNTING
Cambridge is publishing the mark schemes for the October/November 2013 series for most IGCSE,
GCE Advanced Level and Advanced Subsidiary Level components and some Ordinary Level
components.
IGCSE – October/November 2013 0452 23
1 (a)
Transaction Document
October 4 Bought goods on credit from

Fatima Waheed Invoice (1)
October 12 Paid the amount owing to Cheque counterfoil

Sajid Manzoor by cheque Or receipt (1)
[2]
(b)
Transaction Book of prime (original) entry
October 14 Returned goods to Fatima Waheed Purchases returns journal (1)
October 31 Received notification from

Fatima Waheed that interest
would be charged Journal (1)
[2]
(c)
Fatima Waheed account
$ $
2013 2013
Oct 14 Returns 60 (1) Oct 1 Balance b/d 450
31 Balance c/d 639 4 Purchases 240 (1)
___ 31 Interest 9 (1)
699 699
2013
Nov 1 Balance b/d 639 (1)O/F
[4]
Sajid Manzoor account

$ $
2013 2013
Oct 12 Bank 273 (1) Oct 1 Balance b/d 280
Discount 7 (1) 21 Purchases 360}
31 Balance c/d 450 26 Purchases 90} (1)
730 730
2013
[4]

Fatima Waheed account

Debit Credit Balance
2013 $ $ $
Oct 1 Balance 450 450 Cr
4 Purchases 240 (1) 690 Cr
14 Returns 60 (1) 630 Cr
31 Interest 9 (1) 639 Cr
(1)O/F
[4]
Sajid Manzoor account

2013 $ $ $
Oct 1 Balance 280 280 Cr
12 Bank 273 (1) 7 Cr
Discount 7 (1) 0
21 Purchases 360} 360 Cr
26 Purchases 90} (1) 450 Cr
(1)O/F
[4]
(d) To notify the customer of the amount outstanding

To provide a summary of the transactions for the month
To enable the customer to compare his records and check for errors
Or other suitable statement
Any 2 statements (1) each [2]
(e) A credit note is issued by a credit supplier because of returns, faulty goods or
an overcharge. (1)
A debit note is issued by a credit customer to notify the supplier of any returns, faulty goods
or overcharge. (1) [2]
[Total: 16]

2 (a)
Donald Mackey
Cash Book (Bank columns only)
$ $
2013 2013
Nov 1 Balance b/d 741 (1) Nov 1 Insurance 58 (1)
Correction (1) 100 (1) A Smith (Dis.chq.) 340 (1)
___ Balance c/d 443 (1)
841 841
2013
[7]
(b)
Bank Reconciliation Statement at 1 November 2013
$ $
Add amounts not credited – cash sales (1) 844 (1)
bank error (1) 91 (1) 935
541
Less cheques not presented – Ian Campbell (1) 98 (1)
Balance shown in cash book 443 (1)O/F
Bank Reconciliation Statement at 1 November 2013

$ $
Add cheques not presented – Ian Campbell (1) 98 (1)
541
Less amounts not credited – cash sales (1) 844 (1)
bank error (1) 91 (1) 935
[8]
(c) The balance sheet would not balance if the bank statement balance was included (1)
because only balances on the books of the business can be included in the balance sheet of
the business (1). [2]
[Total: 17]

3 (a)
Glenbrook Ltd
Balance Sheet at 31 October 2013
$ $ $
to date value
Premises 105 000 – 105 000
Plant and machinery 40 000 19 200 20 800 (1)
Office equipment 16 000 7 000 9 000 (1)
161 000 26 200 134 800 (1)OF
Current assets
Inventory 9 300 (1)
Petty cash 100 (1)
21 378
Current liabilities
Net current assets (3 750) (1)OF

131 050
111 050

5% Preference shares of $1 each 40 000 (1)
Ordinary shares of $0.50 each 60 000 (1)
Retained profits (6200 (1) + 4850 (1)) 11 050
111 050

(b) Preference shares receive a fixed rate of dividend: debentures receive a fixed rate of interest
Preference share dividend may not be paid if there is no profit: debenture interest is payable
irrespective of profits
In the event of a winding-up, debenture holders are repaid before preference shareholders
Preference shareholders are members of the company: debenture holders are creditors
Debentures are often secured on the non-current assets of the company: preference shares
are not secured
Any 2 statements (2) each [4]
(c) (i) Information provided in financial statements must be reliable (1)

Either
It must be capable of being depended upon as a true representation of the events it
represents (1)
Or
It must be capable of being independently verified (1)
Or
It must be free from bias (1)
Or
It must be free from significant errors (1)
Or
It must be prepared with suitable caution being applied to any judgments
and estimates (1) [2]
(ii) Comparability (1)

Relevance (1)
Understandability (1) [3]
[Total: 25]

4 (a) To reduce the possibility of fraud [2]
(b) This is what Asma Anwar owes one or more of her credit customers (1) because of
overpayment, returns after goods have been paid for etc. (1) [2]
(c) Sales
Explanation This is the total credit sales for the month (1)
Source of information Sales journal (1)
Discount
Explanation This is the total discount allowed to credit customers (1)
Source of information Cash book (1)
Contra
Explanation This is the total set off against accounts in the purchases ledger
during the month (1)
Source of information Journal (1) [6]
(d)
Amount
Inventory type Calculation
$
Type A 500 × ($2.15 + $1.00) 1575 (1)
Type B 600 × $1.80 1080 (1)
Total 2655 (1)

OF
[3]
(e) Inventory is always valued at the lower of cost and net realisable value. (1)
Type A was valued at cost and Type B was valued at net realisable value. (1)
Principle – prudence. (1) [3]
(f) 140 000 × 100 = 112 000

125 [1]
(g) 112 000 = 112 000 OF}(1) = 5.89 times (1) OF

18 200 + 19 800 ÷ 2 19 000 } [2]
(h) Lower inventory levels

More sales activity
[Total: 21]

5 (a) The expenses percentage has increased (1) so the efficiency of the business has
decreased (1) [2]
(b) Reduce expenses

Any 1 point (2) [2]
(c) (i) The total funds being used by a business [1]
(ii) The profit earned for every $100 used in the business [1]
(iii) Decrease in capital employed [2]
(d)
Reduce the trade discount allowed to customers
effect on gross profit percentage one other effect on the business
Increase (1) Fall in sales as customers buy elsewhere

(2)
Reduce the cash discount allowed to customers
effect on gross profit percentage one other effect on the business
No effect (1) Customers delaying payment

Fall in sales as customers buy elsewhere
(2)
[6]
(e) 1 Accounts only record information which can be expressed in monetary terms. (1)
Many important factors which influence the performance of the business will not appear
in the financial statements. (1)
2 Transactions are recorded at the actual cost. (1)

Because of inflation it is difficult to compare transactions which have taken place at
different times. (1) [4]
[Total: 18]

6 (a)
Error Overstated Understated No effect

$ $
2 No effect (2)
3 315 (2)
4 700 (2)
5 No effect (2)
[8]
(b) Error number 2 – Error of commission (1)

Error number 3 – Error of principle (1) [2]
(c) Maria Nlovu

Journal
Debit Credit
$ $
2 Carriage inwards 111 (1)

Carriage outwards 111 (1)
Correction of error, carriage outwards
wrongly debited (1)
3 Repairs to motor vehicles 315 (1)

Correction of error, motor vehicles
wrongly debited (1)
4 Rent received 350 (1)

Rent paid 350 (1)
Suspense 700 (1)
Correction of error, rent paid entered in
rent received account (1)
5 Helmut 90 (1)
Suspense 90 (1)
Correction of error, entry made on wrong
side of Helmut’s account (1)
[13]
[Total: 23]


0452 ACCOUNTING
components.
1 (a) D
(b) D
(c) D
(d) B
(e) A
(f) B
(g) C
(h) A
(i) A
(j) C (1) mark each
[Total: 10]

2 (a) Dividends (1)

Transfer to general reserve (1) [2]
(b) Shareholders have a legally separate identity from that of the company in which they hold
shares
OR
Shareholders are only responsible for the debts of the company up to the amount they
agreed to pay for their shares [2]
(c) Maximum (1)

Called up (1)
Money/cash/payment (1) [3]
8 500 000
(d) × = $0.04 [1]
100 1 000 000
(e) To spread the cost of a non-current asset over its useful life [1]
(f) (i) 8000 – 1600 = 6400 (1) – 1600) = 4800 (1) [2]
(ii) 8000 – 2000 = 6000 (1) – 1500) = 4500 (1) [2]
(g) Revaluation (1)

Packing cases/loose tools/other appropriate example (1) [2]
(h) Disposal account [1]
[Total: 16]

3 (a) Any two from –
To see the return on his investment

To see if he is generating funds for re-investment
To decide whether to continue in business or close the business
To compare the profit with previous years
To compare the profit with that of other businesses
To ensure that drawings do not exceed profit
To plan for the future/assist decision-making
To know if expenses can be controlled better/if improvements can be made
To calculate ratios/calculate profitability/measure performance
To compare profit with the salary if he worked elsewhere
For legal or tax purposes
(b)
Account Trial balance Balance sheet section
Debit or credit
Drawings Debit (1) Capital (1)
Provision for doubtful debts Credit (1) Current assets (1)
Credit supplier Credit (1) Current liabilities (1)
Bank overdraft Credit (1) Current liabilities (1)
Long term bank loan Credit (1) Non-current liabilities (1)
Provision for depreciation Credit (1) Non-current assets (1)
[12]
(c) Any two from –
Omission (1) example of transaction totally omitted from the books (1)
Commission (1) example of transaction posted to correct side of wrong
account of right class (1)
Principle (1) example of transaction posted to correct side of wrong
account of wrong class (1)
Original entry (1) example of transaction incorrectly recorded in book of
prime entry (1)
Reversal (1) example of debit entry posted on credit side and vice versa (1)
Compensating (1) example of two or more errors cancelling each other out (1)
Naming any 2 errors (1) each

+ (1) each for appropriate example [4]
[Total: 18]

4 (a)
Document Alan Vicky
Invoice (1)
Credit note (1)
Debit note (1)
Statement of account (1)
[4]
(b)
Insurance account
$ $
2012 2013
July 1 Balance b/d 200 (1) June 30 Income statement 1300 (1)OF
Sept 1 Bank/cash 1320 (1) Balance c/d 220
1520 1520
2013
July 1 Balance b/d 220 (1)
+ (1) dates
[5]
(c)
Stationery account
$ $
2012 2013
June 30 Bank/cash 810 (1) ___
870 870
2013
+ (1) dates
[5]

(d) One from –

Trial balance
Any one (1) [1]
(e)
$ $
2013 2013
Aug 1 Balance b/d 1690 (1) Aug 1 Bank charges 61 (1)
Diga 658 (1) Water rates 205 (1)
Howat 512 (1) Rent 1000 (1)
____ Balance c/d 1594
2860 2860
2013
Aug 1 Balance b/d 1594 (1) OF
[7]
(f)
Bank Reconciliation Statement at 1 August 2013
$ $
Balance shown in cash book 1594 (1)OF
Add Cheques not yet presented Nash 701 (1)
Zamir 451 (1) 1152
2746
Less Amounts not yet credited Cash sales 1112 (1)
Balance shown on bank statement 1634 (1)
$ $
Add Amounts not yet credited Cash sales 1112 (1)
2746
Less Cheques not yet presented Nash 701 (1)
Zamir 451 (1) 1152
[5]
[Total: 27]

5 (a)
$ $
2012 2012
Aug 1 Balance b/d 60 (1) Aug 1 Balance b/d 70 (1)
2013 00 2013
July 31 Income and July 31 Bank 3100 (1)
Expenditure 3190 (1)OF Bad debts 50 (1)
3260 3260
2013 2013
[7]
(b)
Top Shot Badminton Club
$ $
Revenue 5200 (1)
Less Cost of sales
Inventory 1 August 2012 400 (1)
Purchases (2800 – 150) 2650 (1)
3050
Less Inventory 31 July 2013 480 (1) 2570
Profit 2630 (1)OF
[5]
(c)
Income and Expenditure Account for the year ended 31 July 2013
$ $
Subscriptions 3190 (1)OF
5820
Rent 1400}
Wages 1200} (1)
Other costs 370 (1)
Bad debts 50 (1)
Depreciation – equipment (6200 + 3800 – 8100) 1900 (2) 4920
Surplus for the year 900 (1)OF
[8]

(d)
Balance Sheet at 31 July 2013
$ $ $
Non-current Assets
Equipment at valuation 8 100 (1)
Current Assets
Inventory 480 (1)
Subscriptions accrued 40 (1)
Bank 1 420 (1)
1 940
Current Liabilities
Subscriptions prepaid 10 (1)
Net current assets 1 930

10 030
Accumulated Fund
Plus Surplus for the year 900 (1)OF
10 030
[7]
(e)
Bank balance Income and expenditure account
No adjustments made for accruals and Items are adjusted for accruals and
prepayments prepayments
Includes all money received and paid Includes only revenue receipts and
expenditures
Includes only monetary items Includes non-monetary items
Any four reasons (1) each [4]
[Total: 31]

6 (a)
Amina
Revised Income Statement for the year ended 31 August 2014
$ $
Revenue (95 000 + 9500) 104 500 (1)
Less Cost of production (60 000 – 4000) 56 000 (1)
Depreciation of equipment (10% × 80 000) 8 000 (1) 64 000
Gross profit 40 500
Less Other costs 25 000
Loan interest (4% × 80 000) 3 200 (1) 28 200
Profit for the year (1) 12 300 (1)CF
Amina
$ $
Original profit 10 000
Add Increase in selling price 9 500 (1)
Decrease in repairs 4 000 (1) 13 500
23 500
Less Interest on loan 3 200 (1)
Depreciation 8 000 (1) 11 200
Revised profit for the year (1) 12 300 (1)CF
[6]
(b) Advice – Purchase the equipment (1)

Reason – Profit for the year is increased (1)
Or suitable advice and reason based on OF answer to (a) [2]
(c) Any one from –
May not be able to obtain the loan

Interest must be paid irrespective of profit
Loan has to be re-paid at a future date
May not want the commitment of a liability
Estimated costs may be too low
Loan interest may increase
Or other appropriate comment
Any 1 comment (2) marks [2]
10 000 100
(d) (i) × = 15.62% (1)
64 000 1
(12 300 (1)OF + 3 200 (1)) 100

(ii) × = 10.76% (1) OF [5]
(64 000 + 80 000) (1) 1
[Total: 15]


0452 ACCOUNTING
components.
1 (a) D
(b) D
(c) D
(d) B
(e) A
(f) B
(g) C
(h) A
(i) A
(j) C (1) mark each
[Total: 10]

2 (a) Dividends (1)

Transfer to general reserve (1) [2]
(b) Shareholders have a legally separate identity from that of the company in which they hold
shares
OR
Shareholders are only responsible for the debts of the company up to the amount they
agreed to pay for their shares [2]
(c) Maximum (1)

Called up (1)
Money/cash/payment (1) [3]
8 500 000
(d) × = $0.04 [1]
100 1 000 000
(e) To spread the cost of a non-current asset over its useful life [1]
(f) (i) 8000 – 1600 = 6400 (1) – 1600) = 4800 (1) [2]
(ii) 8000 – 2000 = 6000 (1) – 1500) = 4500 (1) [2]
(g) Revaluation (1)

Packing cases/loose tools/other appropriate example (1) [2]
(h) Disposal account [1]
[Total: 16]

3 (a) Any two from –
To see the return on his investment

To see if he is generating funds for re-investment
To decide whether to continue in business or close the business
To compare the profit with previous years
To compare the profit with that of other businesses
To ensure that drawings do not exceed profit
To plan for the future/assist decision-making
To know if expenses can be controlled better/if improvements can be made
To calculate ratios/calculate profitability/measure performance
To compare profit with the salary if he worked elsewhere
For legal or tax purposes
(b)
Account Trial balance Balance sheet section
Debit or credit
Drawings Debit (1) Capital (1)
Provision for doubtful debts Credit (1) Current assets (1)
Credit supplier Credit (1) Current liabilities (1)
Bank overdraft Credit (1) Current liabilities (1)
Long term bank loan Credit (1) Non-current liabilities (1)
Provision for depreciation Credit (1) Non-current assets (1)
[12]
Omission (1) example of transaction totally omitted from the books (1)
Commission (1) example of transaction posted to correct side of wrong
account of right class (1)
Principle (1) example of transaction posted to correct side of wrong
account of wrong class (1)
Original entry (1) example of transaction incorrectly recorded in book of
prime entry (1)
Reversal (1) example of debit entry posted on credit side and vice versa (1)
Compensating (1) example of two or more errors cancelling each other out (1)

+ (1) each for appropriate example [4]
[Total: 18]

4 (a)
Document Alan Vicky
Invoice (1)
Credit note (1)
Debit note (1)
Statement of account (1)
[4]
(b)
Insurance account
$ $
2012 2013
Sept 1 Bank/cash 1320 (1) Balance c/d 220
1520 1520
2013
+ (1) dates
[5]
(c)
Stationery account
$ $
2012 2013
June 30 Bank/cash 810 (1) ___
870 870
2013
+ (1) dates
[5]

(d) One from –

Trial balance
Any one (1) [1]
(e)
$ $
2013 2013
Aug 1 Balance b/d 1690 (1) Aug 1 Bank charges 61 (1)
Diga 658 (1) Water rates 205 (1)
Howat 512 (1) Rent 1000 (1)
2860 2860
2013
[7]
(f)
$ $
Add Cheques not yet presented Nash 701 (1)
Zamir 451 (1) 1152
2746
Less Amounts not yet credited Cash sales 1112 (1)
$ $
Add Amounts not yet credited Cash sales 1112 (1)
2746
Less Cheques not yet presented Nash 701 (1)
Zamir 451 (1) 1152
[5]
[Total: 27]

5 (a)
$ $
2012 2012
2013 00 2013
July 31 Income and July 31 Bank 3100 (1)
Expenditure 3190 (1)OF Bad debts 50 (1)
3260 3260
2013 2013
[7]
(b)
$ $
Revenue 5200 (1)
Less Cost of sales
Inventory 1 August 2012 400 (1)
Purchases (2800 – 150) 2650 (1)
3050
Less Inventory 31 July 2013 480 (1) 2570
Profit 2630 (1)OF
[5]
(c)
$ $
Subscriptions 3190 (1)OF
5820
Rent 1400}
Wages 1200} (1)
Other costs 370 (1)
Bad debts 50 (1)
Depreciation – equipment (6200 + 3800 – 8100) 1900 (2) 4920
Surplus for the year 900 (1)OF
[8]

(d)
$ $ $
Non-current Assets
Equipment at valuation 8 100 (1)
Current Assets
Inventory 480 (1)
Subscriptions accrued 40 (1)
Bank 1 420 (1)
1 940
Current Liabilities

10 030
Accumulated Fund
Plus Surplus for the year 900 (1)OF
10 030
[7]
(e)
Bank balance Income and expenditure account
No adjustments made for accruals and Items are adjusted for accruals and
prepayments prepayments
Includes all money received and paid Includes only revenue receipts and
expenditures
Includes only monetary items Includes non-monetary items
Any four reasons (1) each [4]
[Total: 31]

6 (a)
Amina
$ $
Revenue (95 000 + 9500) 104 500 (1)
Less Cost of production (60 000 – 4000) 56 000 (1)
Depreciation of equipment (10% × 80 000) 8 000 (1) 64 000
Gross profit 40 500
Less Other costs 25 000
Loan interest (4% × 80 000) 3 200 (1) 28 200
Profit for the year (1) 12 300 (1)CF
Amina
$ $
Original profit 10 000
Add Increase in selling price 9 500 (1)
Decrease in repairs 4 000 (1) 13 500
23 500
Less Interest on loan 3 200 (1)
Revised profit for the year (1) 12 300 (1)CF
[6]
(b) Advice – Purchase the equipment (1)

Reason – Profit for the year is increased (1)
Or suitable advice and reason based on OF answer to (a) [2]
(c) Any one from –
May not be able to obtain the loan

Interest must be paid irrespective of profit
Loan has to be re-paid at a future date
May not want the commitment of a liability
Estimated costs may be too low
Loan interest may increase
Or other appropriate comment
Any 1 comment (2) marks [2]
10 000 100
(d) (i) × = 15.62% (1)
64 000 1
(12 300 (1)OF + 3 200 (1)) 100

(ii) × = 10.76% (1) OF [5]
(64 000 + 80 000) (1) 1
[Total: 15]


0452 ACCOUNTING
components.
1 (a) D
(b) C
(c) D
(d) B
(e) C
(f) A
(g) B
(h) A
(i) A
(j) B (1) mark each
[Total: 10]

2 (a) Book-keeping (1)

Accounting (1)
Balance sheet (1)
Assets (1)
Liabilities (1)
(b) Insurance account

$ $
2012 2013
Aug 1 Balance b/d 350 July 31 Income statement 1190 (1)
Nov 15 Bank 1200 (1) Balance c/d 360
1550 1550
2013
+(1) dates [4]
(c) Insurance was prepaid [1]
(d)
Debit Credit
Bank overdraft (1)

Sales (1)
Capital (1)
Drawings (1)
[5]
(e) One from –
To check the arithmetical accuracy of the double entry

To assist in the preparation of financial statements
(f) (i) Principle [1]
(ii) The totals of the trial balance will still agree (1)
The non-current assets are overstated and expenses are understated (1) [2]

(g) Statement of account (1)

Invoice (1)
Debit note (1) [3]
[Total: 23]
3 (a) 2 years [2]
(b) Delivery vans account

2012 2012
Jan 1 Balance b/d 74 000 (1) July 1 Disposal (1) 24 000 (1)
Aug 1 Bank 14 000 (1) Dec 31 Balance c/d 78 000
DM Ltd (1) 14 000 (1)

______ ______
102 000 102 000
2013
[6]
(c)
Van Calculation Depreciation charge for

the year
$
A (20 000 – 11 562) × 25% 2 110 (1)
B – – (1)
C (30 000 – 13 125) × 25% 4 219 (1)
D 28 000 × 25% 7 000 (1)
Total 13 329 (1) OF
[5]
(d) Provision for depreciation of delivery vans account

$ $
Aug 1 Balance b/d 350 July 31 Income statement 1190 (1)
2012 2012
July 1 Disposals 10 500 (1) Jan 1 Balance b/d 35 187 (1)
Dec 31 Balance c/d 38 016 Dec 31 Income
______ statement 13 329 (1) OF
48 516 48 516
2013
Jan 1 Balance b/d 38 016 (1) OF
[4]

(e) Balance Sheet extract at 31 December 2012

Cost Depreciation Net book
to date value
$ $ $
Delivery vans 78 000 38 016 39 984
(1) (1) OF (1) OF
[3]
(f) Consistency [1]
(g) Three from –
Wear and tear

Obsolescence/economic factors
Passage of time
Depletion
[Total: 24]

4 (a) Solomon
Statement of Affairs at 31 August 2013
$ $ $
Non-current Assets
Vehicle (at valuation) 4 800 (1)
Current Assets
Inventory 6 200 }
Bank 4 700 }(1)
14 400
Current Liabilities
Trade payables 2 500 )
Other payables 650 )(1) 3 150
16 050
Financed by
Capital
Balance 16 050 (2) CF
(1) OF
[6]
(b) Calculation of profit for the year

$
Capital 31 August 2013 16 050 (1) OF
Less Capital 1 September 2012 15 500 (1)
550
Add Drawings (18 000 + 450) 18 450 (1)
19 000
Less Capital introduced (2000 + 1000) 3 000 (1)
Capital account
$ $
2013 2012
Aug 31 Drawings Sept 1 Balance b/d 15 500 (1)
(18 000 + 450) 18 450 (1) 2013
Balance c/d 16 050 (1) Aug 31 Rent 2 000 }
OF Bank 1 000 }(1)
_____ Profit for year 16 000 (1) OF
34 500 34 500
2013
[5]

(c) Solomon
Income Statement for the year ended 31 August 2013
$ $
Revenue (94 450 (1) + 3100 (1)) 97 550
Less Cost of sales
Purchases (71 700 (1) + 2500 (1)) 74 200
Less Goods for own use 450 (2)
73 750
[8]
(d) Advantages
Any two from –
Extra capital
Additional expertise
Sharing of losses
Sharing of responsibilities
Sharing of risks
Sharing of ideas
Any 2 advantages (1) each
Disadvantages
Any two from –
Sharing of profits
Possibility of disagreements
Slower decision-making
Any 2 disadvantages (1) each [4]
[Total: 23]

5 (a) Bad debts

Amounts owing to a business which will not be paid by the debtor (1)

Estimate of the amount which a business may lose in a financial year because of bad
debts (1) [2]
(b) Provision for doubtful debts account

$ $
2013 2012
Aug 31 Balance c/d 594 (2) Sept 1 Balance b/d 322 (1)
(19 800 × 3%) Aug 31 Income
____ statement 272 (1)OF
594 594
2013
Sept 1 Balance b/d 594 (1) OF
[5]
(c) Balance Sheet extract at 31 August 2013

Current Assets $ $
Trade receivable 19 800 (1)
Less Provision for doubtful debts 594 (1) OF 19 206
[2]
(d)
Manufacturing Manufacturing Income

Account Account Statement
Direct cost Indirect cost
Depreciation of delivery (1)

van
Purchases of raw (1)

materials
Factory supervisor’s (1)

salary
Salesman’s commission (1)

Carriage inwards (1)
[5]
[Total: 14]

6 (a)
Transaction Debit entry Credit entry
$ $
2 Drawings 200 (1) Purchases 200 (1)
3 Bank 600 (1) Tabitha 625 (1)

4 Samir 1400 (1) Sales 1400 (1)

[7]
(b)
$
Opening working capital 12 100
Transaction 1 800 (1)
2 (200) (1)
3 (25) (1)
4 400 (1)
Closing working capital 13 075 (1) OF

[5]
(c)
Transaction Current ratio Quick (acid test) ratio
2 Decrease (1) No effect (1)
3 Decrease (1) Decrease (1)
4 Increase (1) Increase (1)

[6]

(d)
Capital Capital Revenue Revenue

expenditure receipt expenditure Receipt
Purchase of goods (1)

for resale
Purchase of (1)
equipment
Proceeds of sale of (1)

fixtures
Payment of (1)
advertising
Credit sales (1)

[6]
(e) 1 Balance sheet (1)
2 Income statement (1) [2]
[Total: 26]

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0452 ACCOUNTING
components.
1 (a)
Saira Rehman – Petty Cash Book
Total Date Details Total Postage & Catering Cleaning Ledger

received paid stationery supplies accounts
$ 2013 $ $ $ $ $
56 Oct 1 Balance b/d
144 (1) Bank/cash
4 Stamps and stationery 19 19 (1)
3 (1) 10 Refund for personal postage
14 Abdul Shakeel 34 34 (1)
23 Syed Arshad 16 16 (1)
28 Cleaning 80 80 (1)
158 19 9 80 50
31 Balance c/d 45
203 Balance b/d 203
45 (1) Nov 1 Balance b/d

OF
155 (1)
OF Bank/cash
Dates (1)
OF Totals of analysis columns (1)
OF Totals of total columns (1) [12]

(b) Debit Abdul Shakeel account $34 (1)

Debit Syed Arshad account $16 (1) [2]
(c) Credit Postage and stationery account (2) [2]
(d) The amount available for the day-to-day running of the business (1)
The difference between the current assets and the current liabilities (1) [2]
(e)
Transaction Effect on Reason
working capital
Returned damaged No effect Inventory (current assets) decreases by $35

goods, $35, to Annie (1) Trade payables (current liabilities) decrease
Khan, a credit supplier by the same amount
(1)
Paid Loans & Co Decrease $15 Bank (current assets) decreases by $2015
$2015, representing (1) Other payables (current liabilities) decrease
repayment of a $2000 by $2000
short-term loan and $15 (1)
interest
Received a cheque for Decrease $10 Current assets decrease by $10

$190 from Uzma Ali, a (1) (bank increases by $190 and trade
credit customer, in full receivables decrease by $200)
settlement of $200 (1)
owing
[6]
[Total: 24]

2 (a) (i)
Susan Kunaka account
$ $
2013 2013
July 1 Balance b/d 20 July 24 Bank 150 (1)
4 Sales (1) 192 30 Bad debts 62 (1)
212 212
[3]
(ii)
Bad debts account
$ $
2013 2013
June 30 Debtors 420 (1) July 31 Income
July 30 S Kunaka 62 (1) statement 482 (1)OF
482 482
[3]
(iii)
$ $
2013 2013
July 31 Income July 16 Cash
statement (XY Stores) 103 (1)
(OR bad debts) 103 (1) ___
103 103
[2]
(iv)
$ $
2013 2012
July 31 Income Aug 1 Balance b/d 1200 (1)
statement 360 (1)
Balance c/d 840 (1) ____
1200 1200
2013
[4]
Alternatively the total of the bad debts recovered account could be transferred to
the bad debts account (1)
The net amount of bad debts transferred to the income statement would then be
$379 (1)

(a) (i) Alternative presentation

2013 $ $ $
July 1 Balance 20 20 Dr
4 Sales 192 (1) 212 Dr
24 Bank 150 (1) 62 Dr
30 Bad debts 62 (1) 0
[3]
(ii)
Bad debts account
2013 $ $ $
June 30 Balance 420 (1) 420 Dr
July 30 S Kunaka 62 (1) 482 Dr
31 Income statement 482 (1)OF 0
[3]
(iii)
2013 $ $ $
July 16 Cash (XY Stores) 103 (1) 103 Cr
31 Income statement
(OR bad debts) 103 (1) 0
[2]
(iv)
2012 $ $ $
Aug 1 Balance 1200 (1) 1200 Cr
2013
July 31 Income statement 360 (1) 840 Cr
(2)C/F
(1))O/F
[4]
$379 (1)

(b)
$ $
Profit for the year ended 31 July 2013 - 360 (2)O/F
Current assets at 31 July 2013 - 360 (2)O/F
[4]
(c) (i) Trade receivables × 365

Credit sales 1 [1]
(ii) 28 000 × 365 (1) = 45.6 = 46 days (1)

224 000 1 [2]
(iii) May not be able to pay creditors on time

May be refused further supplies on credit
May overdraw on bank account
May not be able to take advantage of business opportunities
[Total: 21]

3 (a)
Steven Wright
$ $ $
Revenue 169 000 (1)
Less Cost of sales
Less Goods for own use 1 000 (1) 131 000
140 000
Less Closing inventory 17 000 (2)C/F
(1)O/F
123 000
Gross profit 41 000(2)
Commission received 1 215(1)
42 215
Less Wages
(26 500 + 750) 27 250 (1)
General expenses
(3970 – 170) 3 800 (1)
((2% × 14 200) – 260) 24 (2)
Loan interest
(6% × 6000 × 6 months) 180 (1)
(20% × 30 000) 6 000 (1)
Motor vehicle
(25% × (16 000 – 7000)) 2 250 (1) 39 504
(1)O/F
[18]
(b) Consistency (1)

Matching (accurals) (1)
Accounting (business) entity (1) [3]
[Total: 21]

4 (a)
Samira El Badry
Suspense account
$ $
2013 2013
Aug 31 Difference on Aug 31 Amrik Bhatti 36 (1)
trial balance 116 (1) 31 Rent received 200 (1)
Purchases returns 100 (1) Rent paid 200 (1)
Discount received 286 (1) Balance c/d 66
502 502
2013
Samira El Badry
Suspense account
2013 $ $ $
Aug 31 Difference on 116 (1) 116 Dr
trial balance
Purchases returns 100 (1) 216 Dr
Discount received 286 (1) 502 Dr
Amrik Bhatti 36 (1) 466 Dr
Rent received 200 (1) 266 Dr
Rent paid 200 (1) 66 Dr
(1)O/F
[7]
(b) It would appear that not all the errors have been discovered (1) as there is still a balance on
the suspense account (1)
Or – if the candidate’s suspense account is closed –
It would appear that all the errors have been discovered (1) as there is no balance remaining
on the suspense account (1) [2]
(c) Only errors that affect the balancing of the trial balance are corrected using a suspense
account. (1)
Error 3 (The omission of goods for own use) does not affect the balancing of the trial balance
and so is not corrected using that account. (1) [2]

(d) (i) August 6 Purchases

Explanation – Samira El Badry has purchased goods on credit from Tahir Stores Ltd (2)
Double entry – Debit purchases account (1) [3]
(ii) August 6 Carriage

Explanation – Tahir Stores Ltd have charged Samira El Badry for the cost of delivering
goods to her premises (2)
Double entry – Debit carriage inwards account (1) [3]
(iii) August 31 Interest

Explanation – Tahir Stores Ltd have charged Samira El Badry interest on the amount
she owes (2)
Double entry – Debit interest payable account (1) [3]
(e) Liability [1]
[Total: 21]
5 (a) (i) Share losses

Share risks
(ii) Share profits

(b) To avoid misunderstandings and disagreements later [1]

(c)
Carol Chen Current account
$ $
2012 2013
Nov 1 Balance b/d 5 100 (1) Oct 31 Int. on capital 2 000}
2013 Salary 15 000}(1)
Oct 31 Drawings 20 400} Profit share 7 560 (1)
Int. on drawings 612}(1) Balance c/d 1 552
26 112 26 112
2013
Nov 1 Balance b/d 1 552 (1)O/F
2012 $ $ $
Nov 1 Balance b/d 5 100 (1) 5 100 Dr
2013
Oct 31 Drawings 20 400} 25 500 Dr
Int. on drawings 612} (1) 26 112 Dr
Int. on capital 2 000} 24 112 Dr
Salary 15 000}(1) 9 112 Dr
Profit share 7 560 (1) 1 552 Dr
(1)O/F
[5]
(d) The balance represents the amount owing by Carol Chen to the business.
Or appropriate answer based on candidate’s answer to (c) [2]
(e)
account to be debited account to be credited
Tony Chen current account (1) Tony Chen capital account (1)
[2]
(f) Financial information is only relevant if it can be used –

To confirm or correct prior expectations about past events
To assist in forming, revising or confirming expectations about the future
As the basis for financial decisions
In time to be able to influence decisions
Explanation of any 1 point (2) [2]
[Total: 14]

6 (a)
Formula Workings to one decimal place Answer
(220 000 – 185 900) × 100 =

Gross profit × 100 (1) 220 000 1
Revenue 1 15.5% (1)
34 100} (1) × 100
220 000} 1
(34 100 – 20 240) × 100 =

Profit for the year × 100 220 000 1
Revenue 1 6.3% (1)
(1) 13 860} (1) × 100
220 000} 1
Profit for the year × 100 13 860 O/F × 100

Capital employed 1 110 880 1 12.5% (1)OF
(1)
[8]

(b) (i) Kelly Limited –

Has a higher selling price
Is selling goods at a higher mark-up
Has a lower cost price
Is taking advantage of bulk buying
Is allowing customers a lower rate of trade discount
(ii) Kelly Limited –

Has higher expenses
Has less control over expenses
Has different types of expenses (fixed/variable)
Has lower amount of other income
(c) (i) This shows the profit earned for each $100 used in the business. (1)
(ii) Patrick Murphy

Or appropriate answer based on answer to (a)(iii) [1]
(d) Should compare with a business of approximately the same size

[Total: 19]


0452 ACCOUNTING
components.
1 (a)
Saira Rehman – Petty Cash Book
Total Date Details Total Postage & Catering Cleaning Ledger

received paid stationery supplies accounts
$ 2013 $ $ $ $ $
56 Oct 1 Balance b/d
144 (1) Bank/cash
4 Stamps and stationery 19 19 (1)
3 (1) 10 Refund for personal postage
14 Abdul Shakeel 34 34 (1)
23 Syed Arshad 16 16 (1)
28 Cleaning 80 80 (1)
158 19 9 80 50
31 Balance c/d 45
203 Balance b/d 203
45 (1) Nov 1 Balance b/d

OF
155 (1)
OF Bank/cash
Dates (1)
OF Totals of analysis columns (1)
OF Totals of total columns (1) [12]

(b) Debit Abdul Shakeel account $34 (1)

Debit Syed Arshad account $16 (1) [2]
(c) Credit Postage and stationery account (2) [2]
(d) The amount available for the day-to-day running of the business (1)
The difference between the current assets and the current liabilities (1) [2]
(e)
Transaction Effect on Reason
working capital
Returned damaged No effect Inventory (current assets) decreases by $35

goods, $35, to Annie (1) Trade payables (current liabilities) decrease
Khan, a credit supplier by the same amount
(1)
Paid Loans & Co Decrease $15 Bank (current assets) decreases by $2015
$2015, representing (1) Other payables (current liabilities) decrease
repayment of a $2000 by $2000
short-term loan and $15 (1)
interest
Received a cheque for Decrease $10 Current assets decrease by $10

$190 from Uzma Ali, a (1) (bank increases by $190 and trade
credit customer, in full receivables decrease by $200)
settlement of $200 (1)
owing
[6]
[Total: 24]

2 (a) (i)
$ $
2013 2013
July 1 Balance b/d 20 July 24 Bank 150 (1)
4 Sales (1) 192 30 Bad debts 62 (1)
212 212
[3]
(ii)
Bad debts account
$ $
2013 2013
June 30 Debtors 420 (1) July 31 Income
July 30 S Kunaka 62 (1) statement 482 (1)OF
482 482
[3]
(iii)
$ $
2013 2013
July 31 Income July 16 Cash
statement (XY Stores) 103 (1)
(OR bad debts) 103 (1) ___
103 103
[2]
(iv)
$ $
2013 2012
July 31 Income Aug 1 Balance b/d 1200 (1)
statement 360 (1)
Balance c/d 840 (1) ____
1200 1200
2013
[4]
$379 (1)

(a) (i) Alternative presentation

2013 $ $ $
July 1 Balance 20 20 Dr
4 Sales 192 (1) 212 Dr
24 Bank 150 (1) 62 Dr
30 Bad debts 62 (1) 0
[3]
(ii)
Bad debts account
2013 $ $ $
June 30 Balance 420 (1) 420 Dr
July 30 S Kunaka 62 (1) 482 Dr
31 Income statement 482 (1)OF 0
[3]
(iii)
2013 $ $ $
July 16 Cash (XY Stores) 103 (1) 103 Cr
31 Income statement
(OR bad debts) 103 (1) 0
[2]
(iv)
2012 $ $ $
2013
July 31 Income statement 360 (1) 840 Cr
(2)C/F
(1))O/F
[4]
$379 (1)

(b)
$ $
Profit for the year ended 31 July 2013 - 360 (2)O/F
Current assets at 31 July 2013 - 360 (2)O/F
[4]
(c) (i) Trade receivables × 365

Credit sales 1 [1]
(ii) 28 000 × 365 (1) = 45.6 = 46 days (1)

224 000 1 [2]
(iii) May not be able to pay creditors on time

May be refused further supplies on credit
May overdraw on bank account
May not be able to take advantage of business opportunities
[Total: 21]

3 (a)
Steven Wright
$ $ $
Revenue 169 000 (1)
Less Cost of sales
140 000
Less Closing inventory 17 000 (2)C/F
(1)O/F
123 000
Gross profit 41 000(2)
Commission received 1 215(1)
42 215
Less Wages
(26 500 + 750) 27 250 (1)
General expenses
(3970 – 170) 3 800 (1)
((2% × 14 200) – 260) 24 (2)
Loan interest
(6% × 6000 × 6 months) 180 (1)
(20% × 30 000) 6 000 (1)
Motor vehicle
(25% × (16 000 – 7000)) 2 250 (1) 39 504
(1)O/F
[18]
(b) Consistency (1)

Matching (accurals) (1)
Accounting (business) entity (1) [3]
[Total: 21]

4 (a)
Samira El Badry
Suspense account
$ $
2013 2013
Aug 31 Difference on Aug 31 Amrik Bhatti 36 (1)
trial balance 116 (1) 31 Rent received 200 (1)
Purchases returns 100 (1) Rent paid 200 (1)
Discount received 286 (1) Balance c/d 66
502 502
2013
Samira El Badry
Suspense account
2013 $ $ $
Aug 31 Difference on 116 (1) 116 Dr
trial balance
Purchases returns 100 (1) 216 Dr
Discount received 286 (1) 502 Dr
Amrik Bhatti 36 (1) 466 Dr
Rent received 200 (1) 266 Dr
Rent paid 200 (1) 66 Dr
(1)O/F
[7]
(b) It would appear that not all the errors have been discovered (1) as there is still a balance on
the suspense account (1)
Or – if the candidate’s suspense account is closed –
It would appear that all the errors have been discovered (1) as there is no balance remaining
on the suspense account (1) [2]
(c) Only errors that affect the balancing of the trial balance are corrected using a suspense
account. (1)
Error 3 (The omission of goods for own use) does not affect the balancing of the trial balance
and so is not corrected using that account. (1) [2]

(d) (i) August 6 Purchases

Explanation – Samira El Badry has purchased goods on credit from Tahir Stores Ltd (2)
Double entry – Debit purchases account (1) [3]
(ii) August 6 Carriage

Explanation – Tahir Stores Ltd have charged Samira El Badry for the cost of delivering
goods to her premises (2)
Double entry – Debit carriage inwards account (1) [3]
(iii) August 31 Interest

Explanation – Tahir Stores Ltd have charged Samira El Badry interest on the amount
she owes (2)
Double entry – Debit interest payable account (1) [3]
(e) Liability [1]
[Total: 21]
5 (a) (i) Share losses

Share risks
(ii) Share profits

(b) To avoid misunderstandings and disagreements later [1]

(c)
$ $
2012 2013
Nov 1 Balance b/d 5 100 (1) Oct 31 Int. on capital 2 000}
2013 Salary 15 000}(1)
Oct 31 Drawings 20 400} Profit share 7 560 (1)
Int. on drawings 612}(1) Balance c/d 1 552
26 112 26 112
2013
Nov 1 Balance b/d 1 552 (1)O/F
2012 $ $ $
Nov 1 Balance b/d 5 100 (1) 5 100 Dr
2013
Oct 31 Drawings 20 400} 25 500 Dr
Int. on drawings 612} (1) 26 112 Dr
Int. on capital 2 000} 24 112 Dr
Salary 15 000}(1) 9 112 Dr
Profit share 7 560 (1) 1 552 Dr
(1)O/F
[5]
(d) The balance represents the amount owing by Carol Chen to the business.
Or appropriate answer based on candidate’s answer to (c) [2]
(e)
account to be debited account to be credited
Tony Chen current account (1) Tony Chen capital account (1)
[2]
(f) Financial information is only relevant if it can be used –

[Total: 14]

6 (a)
(220 000 – 185 900) × 100 =

Gross profit × 100 (1) 220 000 1
Revenue 1 15.5% (1)
34 100} (1) × 100
220 000} 1
(34 100 – 20 240) × 100 =

Profit for the year × 100 220 000 1
Revenue 1 6.3% (1)
(1) 13 860} (1) × 100
220 000} 1
Profit for the year × 100 13 860 O/F × 100

Capital employed 1 110 880 1 12.5% (1)OF
(1)
[8]

(b) (i) Kelly Limited –

Has a higher selling price
Is selling goods at a higher mark-up
Has a lower cost price
Is taking advantage of bulk buying
Is allowing customers a lower rate of trade discount
(ii) Kelly Limited –

Has higher expenses
Has less control over expenses
Has different types of expenses (fixed/variable)
Has lower amount of other income
(c) (i) This shows the profit earned for each $100 used in the business. (1)
(ii) Patrick Murphy

Or appropriate answer based on answer to (a)(iii) [1]
(d) Should compare with a business of approximately the same size

[Total: 19]


0452 ACCOUNTING
1 (a) C
(b) B
(c) D
(d) A
(e) D
(f) C
(g) C
(h) B
(i) B
(j) A
(1) Mark each [Total: 10]
2 (a) Asset – Liabilities = Capital [1]
(b) Bookkeeping – detailed recording of all financial transactions of a business (2)

Accounting – preparing financial statements at regular intervals from the bookkeeping
records (2) [4]
(c) Teresa
Trial Balance at 31 January 2013
$ $
Drawings 29 100 (1)
Vehicles 16 200
Rent 3 400
Inventory at 1 February 2012 19 100 (1)
Equipment 12 100
Sales 210 100
Purchases 131 600
Carriage inwards 400 (1)
Discount received 1 100 (1)
Bank overdraft 17 000
Wages 21 800
Capital 19 400 (1) OF
264 200 264 200 (1) CF
[8]

(d) Any two from –

Omission (1)
A transaction is completely omitted from the books (2)
Commission (1)
A transaction is posted to the wrong account of the same class (2)
Principle (1)
A transaction is posted to an account of the wrong class (2)
Original entry (1)
An incorrect figure is used when the transaction is first recorded (2)
Reversal (1)
A debit entry is posted on the credit side and vice versa (2)
Compensating (1)
Two or more errors cancel each other out (2)

Describing the two named errors (2) each [6]
(e) Teresa
Capital account
$ $
2013 2012
Jan 31 Drawings 29 100 (1) Feb 1 Balance b/d 19 400 (1) OF
Balance c/d 38 500 2013
Jan 31 Profit for year 48 200 (1)
67 600 67 600
2013
Feb 1 Balance b/d 38 500 (1) OF
[Dates and narratives not required] [4]
(f) To monitor progress (1) using accounting ratios (1)

For decision-making (1) for future planning (1)
For comparison purposes (1) with previous years or other businesses (1) [2]
[Total: 25]
3 (a)
Consistency (1)
Duality (1)
Money measurement (1)
Prudence (1)
Going concern (1)

[5]

(b) One from –

Jacqui made bulk purchases
Jacqui is in the same trade
Jacqui is a regular customer
(c) (i) 5% × $60 = $3 [1]
(ii)
Account to be debited Account to be credited
Discount allowed (1) Jacqui (1)

[2]
(iii) One from –
Jacqui made prompt payment
Jacqui paid before the due date
(d)
Trading business Service business
Accountant } for both

Hairdresser }
Car dealer } for both
Computer component }
manufacturer
[2]
[Total: 14]

4 (a) Clothilde
$ $
Carriage on raw materials 1 100 (1)
195 500
Less Closing inventory of raw materials 6 200
Cost of materials consumed (1) 189 300 (1) OF
Prime cost (1) 275 300 (1) OF
Factory overheads
Supervisor’s salary 15 000
Factory rent 80% × 30 000 24 000 (1)
Factory power 80% × 25 000 20 000 (1)
Factory insurance 80% × 5000 4 000 (1)
Depreciation of machinery 3 000 66 000 (1) CF
341 300 (1) OF
Opening work in progress 5 800 (1)
347 100
Production cost of goods completed (1) 341 000 (1) OF
[16]
(b) $
Production cost of goods completed 341 000 (1) OF
Opening inventory of finished goods 19 600
360 600
Closing inventory of finished goods 26 600 (1) for both inventories
[3]
(c) $334 000 (1) OF + 50% = $501 000 (1) OF [2]
[Total: 21]

5 (a) Ledger account [2]
(b) Rent account

$ $
2012 2012
Jan 1 Balance b/d 6 000 (1) Dec 31 Income
Feb 28 Bank /Cash 18 000 (1) statement 37 200 (1) OF
Sept 1 Bank /Cash 19 800 (1) Balance c/d 6 600
43 800 43 800
2013
+ (1) dates
[6]
Commission payable account
$ $
2012 2012
Dec 31 Bank /Cash 18 100 (1) Jan 1 Balance b/d 1 700 (1)
Balance c/d 1 150 Dec 31 Income
______ statement 17 550 (1) OF
19 250 19 250
2013
+ (1) dates
[5]
Stationery account
2012 2012
Jan 1 Balance b/d 120 (1) Dec 31 Income
Dec 31 Bank /Cash 1 880 (1) statement 1 910 (1) CF
____ Balance c/d 90
2 000 2 000
2013
Jan 1 Balance b/d 90 (1) OF
+ (1) dates
[5]
(c)
Ledger account Balance sheet
Heading Item
Commission payable Current liabilities (1) Other payables (1)
Stationery Current assets (1) Other receivables (1)

[4]

(d) Journal
Debit Credit
$ $
Sales 250 (1)

Cash 250 (1)
Drawings 150 (1)

Purchases 150 (1)
[4]
[Total: 26]

6 (a) (i) At 31 March 2012

3.07 : 1 (2) CF
At 31 March 2013
1.67 : 1 (2) CF [4]
(ii) Any one from –

Increase in trade receivables
Change in bank balance to overdrawn
(b) (i) At 31 March 2012

1.71 : 1 (2) CF
At 31 March 2013
0.67 : 1 (2) CF [4]
(ii) Any one from –

May have difficulty in paying debts when due
May not be able to obtain further supplies on credit
Cannot take advantage of business opportunities when they arise
Any one effect (2) [2]

Purchase of inventory
Dividends paid/tax paid
Increase in debtors/non payment by debtors

(d) Jarvis Limited

Appropriation Account for the year ended 31 March 2013
$ $
Less Transfer to general reserve 10 000 (1)
Ordinary share dividend paid
(6000 (1) + 8000 (1)) 14 000 24 000
2 000 (1) OF
Retained profit brought forward 29 000 (1)
Retained profit carried forward 31 000 (1)
[7]
(e) Any one from –

To set aside profit for re-investment
To indicate that part of the profit is not available for distribution
To set aside profit for payment of future dividends
(f) Authorised share capital

The total share capital a company is allowed to issue (1)
Issued share capital

The amount of the share capital which a company has actually issued to shareholders (1) [2]
[Total: 24]


0452 ACCOUNTING
1 (a) A
(b) D
(c) C
(d) C
(e) A
(f) C
(g) A
(h) B
(i) D
(j) B

2 (a)
Capital Revenue Capital Revenue
receipt receipt expenditure expenditure

vehicle
Purchase of goods for (1)

resale
Legal fees on (1)

purchase of property
[5]
(b) A 600 × $15 $9000 (2)

B 100 × $11.50 $1150 (2)
C 50 × $15 $750 (2) [6]
(c) Raw materials (1)

Finished goods (1) [3]
(d) Amount in manufacturing account = $8000 × 60% = $4800 (2)
Amount in income statement = $8000 × 40% = $3200 (2)
Amount in balance sheet = $2000 (1) [5]
(e) Trading account [2]
[Total: 21]

3 (a)
Document Book of prime entry
Sales invoice Sales journal (1)
Credit note Sales returns journal (1)
Statement of account No entry (2)

[4]
(b) Hannah account

$ $
Mar 1 Balance b/d 200 (1) Mar 12 Returns 64 (1)

6 Sales 256 (1) 28 Bank/cash 196 (1)
Discount 4 (1)
31 Balance c/d 192
456 456
Apr 1 Balance b/d 192 (1) OF
+ (1) Dates
[7]
(c) Trade discount – Bulk buying (1)

Regular customer/encourage repeat custom (1)
In the same trade (1)
MAX 2
Cash discount – Prompt payment (1)

Payment before the due date (1)
MAX 2 [4]
[Total: 15]

4 (a)
Debit Credit
Opening balance trade receivables (1)

Credit sales (1)
Sales returns (1)
Receipts from credit customers (1)
Bad debts (1)
Dishonoured cheques (1)
Interest on overdue account (1)
[8]
(b) (i) 924 × 100 = 2 %

46 200 1 [2]
(ii) Increase in value of trade receivables/increase in credit sales

Increase in rate of provision/anticipating higher bad debts
(iii) Tellwright Ltd

Journal
Debit Credit
$ $
Increase in provision for doubtful debts (1)
[3]
(c) Either
Matching (1)
To match the amount of sales for which the business is unlikely to be paid against the sales
of the year in which the sale was made (2)
Or
Prudence (1)
To avoid overstating the profits for the year/anticipate losses but not profits
Or to avoid overstating the trade receivables/current assets (2) [3]
[Total: 18]

5 (a) Economic reasons

Obsolescence/out of date
Depletion
Passage of time
(b) Machinery account

$ $
2011 2012
Jan 1 Bank 27 000(1) July 1 Disposal (A) 9 000 (1)
Dec 31 Balance c/d 18 000
27 000 27 000
2012
Jan 1 Balance b/d 18 000(1)OF
+ (1) Dates [4]

$ $
2011 2011
6 000 6 000
2012 2012
Jul 1 Disposal (A) 3 000(1) Jan 1 Balance b/d 6 000(1) OF
Dec 31 Balance c/d 8 000 Dec 31 Income statement
A 1000 (1)
B & C 4000 (1) 5 000
11 000 11 000
2013
Jan1 Balance b/d 8 000(1) OF
+ (1) Dates [7]
(c) Disposal account

$ $
2012 2012
July 1 Machinery 9 000 (1) July 1 Prov for Dep 3 000(1) OF
Bank 5 800 (1)
Dec 31 Income statement 200(1) OF
9 000 9 000
[4]
[Total: 18]

6 (a) Sukesh
Statement of Affairs at 31 December 2011
$ $ $
Non-current Assets
Vehicle at cost 16 000
20 000(1)
Current Assets
Inventory 9 200
15 900(1)
Current Liabilities
Bank overdraft 420 }(1)
Loan (1/10 × 10 000) 1 000 (1) 10 520
Net Current assets 5 380

25 380
Loan (9/10 × 10 000) 9 000(1)
16 380
Financed by
Capital
Balance 16 380(1) OF
[6]
(b) $
Opening trade receivables 6 500
Less Closing trade receivables 4 100
2 400
Add Sales for the year 52 200 (1)
54 600
Less Cash from credit customers 54 300 (1)
Bad debts 300 (1) CF
Alternative calculations acceptable [3]
(c) $
Opening trade payables 9 100
Less Closing trade payables 9 300
(200)
Add Purchases for the year 36 000 (1)
35 800
Less Cash paid to credit suppliers 35 400 (1)
Discount received 400 (1) CF

(d) Sukesh
$ $
Revenue (52 200 (1) + 6200 (1)) 58 400
Less Cost of sales
Purchases (36 000 (1) + 900 (1)) 36 900
46 100
Gross profit 21 100(1) OF
Add Discount received 400(1) OF
21 500
Less Loan interest 450 (1)
Rent 6 000
Insurance (200 (1) + 800 (1) – 250 (1) 750
Other running costs 2 500
Bad debts 300 (1) OF
10 000
Profit for the year 11 500(1) OF
[14]
(e) To spread the cost of the asset over its useful life (2) [2]
(f) Bank
Suppliers/creditors
Lenders
Managers
Employees
Potential partners
Tax authorities
Customers/debtors
Competitors
Investors
Trade unions
Potential purchaser of the business
Any 4 acceptable answers (1) each [4]
(g) 37 300 (1) OF = 4.14 times (1) OF

9 000 (1) CF [3]
(h) (i) Duarte (1) OF
(ii) Any suitable comment to imply that Duarte’s inventory is selling faster
Answer to be based on OF answer to (g)
Any one acceptable reason (2)

[3]
[Total: 38]


0452 ACCOUNTING
1 (a) To record small cash payments

Removes small cash payments from the main cash book
Provides training for any junior staff members
(b) Chief cashier knows exactly how much is spent in each month/can control expenditure of
petty cash
(c) See following page [12]
(d) At the month end (1) the totals debited to postage account (1) [2]
(e) Cheques not presented

Amounts not credited
Cash book errors
(f) Standing orders

Direct debits
Credit transfers
Dishonoured cheques
Bank charges/interest
Bank errors
[Total: 21]

Question 1 (c)
Annie Rongsen – Petty Cash Book
Total Date Details Total paid Postage Travel Sundries Ledger

received accounts
$ 2013 $ $ $ $ $
67 (1) Bank/cash
4 Postages 19 19 (1)
8 Taxi fares 16 16 (1)
20 (1) 13 Loan repayment
19 Parcel post 4 4 (1)
23 R Singh 24 24 (1)
29 Window Cleaner 12 12 (1)
75 23 16 12 24
31 Balance c/d 35
110 110
35 (1) OF Apr 1 Balance b/d
55 (1) OF Bank/cash
(1) Dates
(1) OF totals of analysis columns
(1) OF totals and total columns [12]
2 (a)
Ashraf Zayed
Income statement for the year ended 28 February 2013
$ $
Revenue 323 000 (1)
Cost of sales
Cost of production 267 100 (1)
271 400
(b) Production did not meet demand

It was cheaper to buy rather than make
Could not make those particular items
Not economical to make such a small amount
(c)
Ashraf Zayed
Journal
Debit Credit
$ $
Transfer of carriage outwards to income statement (1)
[6]

(d)
Ashraf Zayed
Motor insurance account
$ $
2012 2013
Jun 1 Bank 720 (1) Feb 28 Drawings 360 (1)
Income
statement 270 (1)
OF
Balance c/d 90
720 720
2013
Mar 1 Balance b/d 90 (1) OF
+ (1) Dates
Accept three column running balance presentation [5]
(e) The accruals (matching) principle requires the revenue of the accounting period to be
matched against the costs of the same period. (1)
The insurance relating to the financial year ended 28 February 2013 has been transferred to
the income statement. (1) [2]
(f)
$ $
Profit of the year ended 28 February 2013 270 (2) O/F .......
[2]
(g) Applying the business (accounting entity principle the business is treated as being
completely separate from the owner. (1)
Only the transactions of the business are recorded in the business’ books. (1) [2]
[Total: 24]

3 (a) Sanath Jaffer

Debit Credit
$ $
Capital 53 000
Drawings 6 100
Revenue 66 000
Purchases 43 350
Purchases returns 1 150
Inventory 3 700 (2)
Non-current assets 50 400
Suspense (1) 70 (1) OF
(1) CF
126 720 126 720
[7]
(b)
Debit Credit
Account $ Account $
(ii) General expenses 400 (1) Non-current assets 400 (1)
(iii) - - (1) Suspense 80 (1)
(iv) Suspense 100 (1) Purchases returns 100 (1)
(v) Suspense 50 (1) General expenses 50 (1)
[8]

(c) Either
Error number (i) (1)
Reasons it is an error or omission
Neither a debit nor a credit entry has been made so the books balance
Any 1 reason (1)
Or
Error number (ii) (1)
Reason it is an error of principle
A double entry has been made but in the wrong class of account.
(d) Money measurement [1]
(e) Realisation [1]
(f) (i) Work can be shared amongst several people

Make fraud more difficult
(ii) 1 Any non-current asset, inventory, capital, drawings, loan, sales, purchases, returns,
expenses, incomes, etc. (1)
2 Credit customers/debtors/trade receivables (1)
3 Credit suppliers/creditors/trade payables (1)
[3]
[Total: 23]

4 (a) Sildean Ltd

Calculation of retained profit for the year ended 30 April 2013
$ $
23 200
Less Interim ordinary share dividend 14 000 (1)
Profit retained in the year 4 200 (1) CF
Alternative forms of presentation acceptable

[4]
(b) Sildean Ltd

Balance Sheet at 30 April 2013
$ $ $
to date value
206 000 12 500 193 500
Current assets
Inventory 16 300}
Petty cash 200}(1)
Provision for doubtful debts 462 14 938 (1)
31 438
Current liabilities
Trade payables 14 156}
Bank overdraft 7 982}(1)
Other payables (deb. int.) 1 600 (1) 23 738
201 200
161 200

General reserve (10 000 (1) + 5000(1)) 15 000
Retained profits (2000 (1) + 4200 (1)OF) 6 200
161 200

[10]

(c) (i) 31.438 (OF) : 23 738 (OF) (1)

1.32 (1) OF [2]
(ii) (31 438 (OF) – 16 300) : 23 738 (OF) (1)

0.64 (1) (OF) [2]
(iii) Shows whether the company can pay its immediate (current) liabilities from the liquid
assets (current assets less inventory) (1)
Indication of the liquidity of the company (1)
Or suitable answer based on O/F answer to (ii) [2]
(iv) Issue additional shares

Issue additional debentures
Obtain long term loan
Reduced dividends paid
(d) Ordinary shareholders are members of the company

Ordinary shareholders receive a dividend
(e) Debentures are loans

Debentures holders are repaid before the shareholders in the event of a winding up
[Total: 26]

5 (a) Tom and Gill Kayumba

Statement of corrected profit for the year ended 31 March 2013
$ $
Add Advertising prepaid 600 (2)
Goods taken for own use 1 000 (2)
Motor vehicle expenses accrued 320 (2) 1 920
24 420
Less Stationery purchased 260 (2)
Corrected profit for the year 24 160 (1) O/F
(b) Tom and Gill Kayumba

$ $
Interest on drawings Tom Kayumba 1 040}
Gill Kayumba 1 300}(1) 2 340
26 500
Interest on capital Tom Kayumba
5% × 60 000 × 6 mths 1 500 (1)
5% × 80 000 × 6 mths 2 000 (1)
3 500
Gill Kayumba
5% × 40 000 2 000 (1)
5 500
Partnership salary Gill Kayumba
(5000 (1) + 7000 (1)) 12 000 17 500
Share of profit Tom Kayumba
2000 (1) +
(½ x 7000) (1) OF 5 500
Gill Kayumba
½ x 7000 (1) OF 3 500 9 000

(c) (i) To reward the partner investing more capital

To encourage partners to invest in the business
Any 1 point (1) [1]
(ii) To discourage the partners from making drawings

To discourage drawings early in the financial year
To help the cash flow of the business
Any 1 point (1) [1]

(e) Year ended 31 March 2012 (1)
The expenses/revenue were 11.90% in 2012 and 14.30% in 2013 (1)

Although the profit for the year/revenue was higher in 2013 this was caused by an increase
in gross profit/revenue (1) [3]
[Total: 26]


0452 ACCOUNTING
1 (a)
Nathan Kershaw
$ $
Income from clients 94 060 (1)
Commission received (1050 (1) + 190 (1)) 1 240
95 300
Wages (42 000 (1) – 7800 (1)) 34 200
Office expenses (6250 (1) + 540 (1)) 6 790
Rates and insurance (10 000 (1) – 600 (1)) 9 400
Depreciation –
Motor vehicle (25% × (12 480 – 5460)) 1 755 (2)
Office equipment (15% × 9800) 1 470 (2) 53 615
[14]
(b)
Error Overstated Understated No effect

$ $
2 210 (2)
3 10 (2)
4 150 (2)
[6]
[Total: 20]

2 (a)
Valley Music Club
Receipts and Payments Account for the year ended 28 February 2013
$ $
2012 2013
Mar 1 Balance b/d 3 090 (1) Feb 28 Rent 2 200 (1)
2013 Refreshment
Feb 28 Subscriptions 5 000 (1) suppliers 950 (1)
Subscriptions 550 (1) Concert expenses 2 140 (1)
Concert tickets 1 960 (1) General expenses 3 460 (1)
Sale of Balance c/d 4 790
Instruments 190 (1)
Refreshment
revenue* 2 750 (2) CF (1) OF
13 540 13 540
2013
Mar 1 Balance b/d 4 790 (1) for both balances
+ (1) dates [13]
Accept any reasonable wording – e.g. sales instead of sale of instruments
(b)
Valley Music Club
Café Income Statement for the year ended 28 February 2013
$ $
Revenue 2750 (1)OF
Cost of sales
Opening inventory 190
Purchases (950 (1) + 170 (1)) 1120
1310
Less Closing inventory 260
1050
General expenses (¼ × 3460) 865 (1)
Depreciation fixtures and fittings (2600 – 2150) 450 (1) 2365
Profit on café (1) 385 (2CF/1OF)
[8]
[Total: 21]
3 (a) Dishonoured cheque – a cheque which the bank refuses to pay (1)
Cheque not presented – cheque paid by the business but which has not yet been presented
to the bank for payment/not yet paid by the bank (1) [2]
(b) Standing order – an instruction by a customer to the bank to pay fixed amounts at stated
dates to a named person or firm (1)
Direct debit – authority given to the bank to make payments (at irregular dates and
amounts) on request by a named person or firm (1) [2]

(c)
Cash Book (bank columns only)
$ $
2013 2013
May 1 Balance b/d 2141 (1) May 1 Error correction (1) 1000 (1)
Rent 280 (1)
Aziz & Co (1) 110 (1)
2141 2141
2013
May 1 Balance b/d 751 (1) OF
[7]
(d)
$ $
Balance shown on bank statement (1) 681 (1)
Add Cheques not credited – Khalid 530 (1)
1211
Less Cheques not presented –
Assistant’s salary 450 (1)
Bank error (1) 10 (1) 460
(OF from qu 3c)
$ $
Balance shown in cash book (1) 751 (1) OF (qu 3c)
Add Cheques not presented –
Assistant’s salary 450 (1)
Bank error (1) 10 (1) 460
1211
Less Cheques not credited – Khalid 530 (1)
Balance on bank statement (1) 681 (1)
[8]
(e) April 24 Bank

Safiya Shendi introduced additional capital (1) to the business bank account (1).
[2]
April 30 Purchases
Safiya Shendi withdrew goods (1) for her own use (1). [2]
April 30 Loss
This is the loss for the year (1) which reduces Safiya Shendi’s capital (1) in the business. [2]
[Total: 25]

4 (a) Calculation of credit purchases

(suitable alternative presentations acceptable)
$
Discounts received from credit suppliers 880 (1)
Trade payables at 30 April 2013 2 950 (1)
Credit purchases for the year 39 500 (2)CF(1)OF
[6]
(b) Calculation of amount received from credit customers

$ $
Credit sales for the year 55 490 (1)
Trade receivables at 30 April 2013 4 600 (1)
Bad debts 210 (1) 4 810
Receipts from credit customers 50 680 (2)CF
(1)OF
[5]
(c) Calculation of expenses paid

$ $
Capital introduced 80 000 (1)
Receipts from credit customers 50 680 (1)OF
130 680
Non-current assets 55 000 (1)
Balance at bank 30 April 2013 27 940 (1) 117 360
Expenses paid 13 320 (2)CF
(1)OF
[7]
(d) To apply the principle of prudence

To ensure that the current assets are not overstated
To ensure that the profit is not overstated
Inventory should be valued at the lower of cost and net realisable value

(e)

30 April 2013 (2)
30 April 2014 (2)
[4]
(f) Assessment of the liquidity position

[Total: 28]
5 (a) To see the average time the trade receivables take to pay their accounts. [1]
(b) No (1)
She has to wait 6 more days (1) for them to settle their accounts. (1) [3]
(c) No (1) unless justified by suitable reason

It is shorter than the payment period for the previous year (1) but is still 10 days longer than
the period of credit allowed. (1) [3]


Any 1 point (2) [2]

(e)
Transaction Effect on working Reason

capital
Goods, $135, were No change (1) Current assets increase

purchased on credit from Current liabilities increase by same
Abu & Co amount (1)
Paid $280 to Farouk, a Increase $20 (1) Current assets decrease by $280
credit supplier, in full Current liabilities decrease by $300
settlement of $300 owing (1)
Withdrew $150 from the No change (1) No change in current assets (bank
bank to restore the petty decreases and petty cash
cash imprest increases)
No change in current liabilities
(1)
[6]
(f) Satisfied: Yes (1)

The profit earned for every $100 used in the business has increased/the business is more
profitable (2)
OR The capital is now being used more efficiently (2) [3]
(g)
Transaction Effect on return on Reason

capital employed
Additional capital, Decrease (1) No change in profit for the year (1)
$10 000, was placed in Capital employed has increased (1)
the business bank
account
Fixtures, $500, were No change (1) No change in profit for the year (1)
purchased by cheque No change in capital employed
(non-current assets increase and
current assets decrease) (1)
[6]
(h) Only items which can be recorded in monetary terms are shown in the financial
statements (1)
There are many important factors which influence the performance of a business which will
not appear in the financial statements. (1) [2]
[Total: 26]


0452 ACCOUNTING
1 (a) To record small cash payments

Removes small cash payments from the main cash book
Provides training for any junior staff members
(b) Chief cashier knows exactly how much is spent in each month/can control expenditure of
petty cash
(c) See following page [12]
(d) At the month end (1) the totals debited to postage account (1) [2]
(e) Cheques not presented

Amounts not credited
Cash book errors
(f) Standing orders

Direct debits
Credit transfers
Dishonoured cheques
Bank charges/interest
Bank errors
[Total: 21]

Question 1 (c)
Annie Rongsen – Petty Cash Book
Total Date Details Total paid Postage Travel Sundries Ledger

received accounts
$ 2013 $ $ $ $ $
67 (1) Bank/cash
4 Postages 19 19 (1)
8 Taxi fares 16 16 (1)
20 (1) 13 Loan repayment
19 Parcel post 4 4 (1)
23 R Singh 24 24 (1)
29 Window Cleaner 12 12 (1)
75 23 16 12 24
31 Balance c/d 35
110 110
35 (1) OF Apr 1 Balance b/d
55 (1) OF Bank/cash
(1) Dates
(1) OF totals of analysis columns
(1) OF totals and total columns [12]
2 (a)
Ashraf Zayed
Income statement for the year ended 28 February 2013
$ $
Revenue 323 000 (1)
Cost of sales
271 400
(b) Production did not meet demand

It was cheaper to buy rather than make
Could not make those particular items
Not economical to make such a small amount
(c)
Ashraf Zayed
Journal
Debit Credit
$ $
Transfer of carriage outwards to income statement (1)
[6]

(d)
Ashraf Zayed
Motor insurance account
$ $
2012 2013
Jun 1 Bank 720 (1) Feb 28 Drawings 360 (1)
Income
statement 270 (1)
OF
Balance c/d 90
720 720
2013
Mar 1 Balance b/d 90 (1) OF
+ (1) Dates
Accept three column running balance presentation [5]
(e) The accruals (matching) principle requires the revenue of the accounting period to be
The insurance relating to the financial year ended 28 February 2013 has been transferred to
the income statement. (1) [2]
(f)
$ $
Profit of the year ended 28 February 2013 270 (2) O/F .......
[2]
(g) Applying the business (accounting entity principle the business is treated as being
completely separate from the owner. (1)
Only the transactions of the business are recorded in the business’ books. (1) [2]
[Total: 24]

3 (a) Sanath Jaffer

Debit Credit
$ $
Capital 53 000
Drawings 6 100
Revenue 66 000
Purchases 43 350
Purchases returns 1 150
Inventory 3 700 (2)
Non-current assets 50 400
Suspense (1) 70 (1) OF
(1) CF
126 720 126 720
[7]
(b)
Debit Credit
Account $ Account $
(ii) General expenses 400 (1) Non-current assets 400 (1)
(iii) - - (1) Suspense 80 (1)
(iv) Suspense 100 (1) Purchases returns 100 (1)
(v) Suspense 50 (1) General expenses 50 (1)
[8]

(c) Either
Error number (i) (1)
Reasons it is an error or omission
Neither a debit nor a credit entry has been made so the books balance
Any 1 reason (1)
Or
Error number (ii) (1)
Reason it is an error of principle
A double entry has been made but in the wrong class of account.
(d) Money measurement [1]
(e) Realisation [1]
(f) (i) Work can be shared amongst several people

Make fraud more difficult
(ii) 1 Any non-current asset, inventory, capital, drawings, loan, sales, purchases, returns,
expenses, incomes, etc. (1)
2 Credit customers/debtors/trade receivables (1)
3 Credit suppliers/creditors/trade payables (1)
[3]
[Total: 23]

4 (a) Sildean Ltd

Calculation of retained profit for the year ended 30 April 2013
$ $
23 200
Less Interim ordinary share dividend 14 000 (1)
Profit retained in the year 4 200 (1) CF
Alternative forms of presentation acceptable

[4]
(b) Sildean Ltd

$ $ $
to date value
206 000 12 500 193 500
Current assets
Inventory 16 300}
Petty cash 200}(1)
Provision for doubtful debts 462 14 938 (1)
31 438
Current liabilities
Trade payables 14 156}
Bank overdraft 7 982}(1)
Other payables (deb. int.) 1 600 (1) 23 738
201 200
161 200

General reserve (10 000 (1) + 5000(1)) 15 000
Retained profits (2000 (1) + 4200 (1)OF) 6 200
161 200

[10]

(c) (i) 31.438 (OF) : 23 738 (OF) (1)

1.32 (1) OF [2]
(ii) (31 438 (OF) – 16 300) : 23 738 (OF) (1)

0.64 (1) (OF) [2]
(iii) Shows whether the company can pay its immediate (current) liabilities from the liquid
assets (current assets less inventory) (1)
Indication of the liquidity of the company (1)
Or suitable answer based on O/F answer to (ii) [2]
(iv) Issue additional shares

Issue additional debentures
Reduced dividends paid
(d) Ordinary shareholders are members of the company

Ordinary shareholders receive a dividend
(e) Debentures are loans

Debentures holders are repaid before the shareholders in the event of a winding up
[Total: 26]

5 (a) Tom and Gill Kayumba

$ $
Add Advertising prepaid 600 (2)
Goods taken for own use 1 000 (2)
Motor vehicle expenses accrued 320 (2) 1 920
24 420
Less Stationery purchased 260 (2)
(b) Tom and Gill Kayumba

$ $
Interest on drawings Tom Kayumba 1 040}
Gill Kayumba 1 300}(1) 2 340
26 500
Interest on capital Tom Kayumba
5% × 60 000 × 6 mths 1 500 (1)
5% × 80 000 × 6 mths 2 000 (1)
3 500
Gill Kayumba
5% × 40 000 2 000 (1)
5 500
Partnership salary Gill Kayumba
(5000 (1) + 7000 (1)) 12 000 17 500
Share of profit Tom Kayumba
2000 (1) +
(½ x 7000) (1) OF 5 500
Gill Kayumba
½ x 7000 (1) OF 3 500 9 000

(c) (i) To reward the partner investing more capital

To encourage partners to invest in the business
Any 1 point (1) [1]
(ii) To discourage the partners from making drawings

To discourage drawings early in the financial year
To help the cash flow of the business
Any 1 point (1) [1]

(e) Year ended 31 March 2012 (1)
The expenses/revenue were 11.90% in 2012 and 14.30% in 2013 (1)

Although the profit for the year/revenue was higher in 2013 this was caused by an increase
in gross profit/revenue (1) [3]
[Total: 26]


0452 ACCOUNTING
1 (a) A
(b) D
(c) C
(d) C
(e) A
(f) C
(g) A
(h) B
(i) D
(j) B

2 (a)
Capital Revenue Capital Revenue
receipt receipt expenditure expenditure

vehicle
Purchase of goods for (1)

resale
Legal fees on (1)

purchase of property
[5]
(b) A 600 × $15 $9000 (2)

B 100 × $11.50 $1150 (2)
C 50 × $15 $750 (2) [6]
(c) Raw materials (1)

Finished goods (1) [3]
(d) Amount in manufacturing account = $8000 × 60% = $4800 (2)
Amount in income statement = $8000 × 40% = $3200 (2)
Amount in balance sheet = $2000 (1) [5]
(e) Trading account [2]
[Total: 21]

3 (a)
Document Book of prime entry
Sales invoice Sales journal (1)
Credit note Sales returns journal (1)
Statement of account No entry (2)

[4]
(b) Hannah account

$ $
Mar 1 Balance b/d 200 (1) Mar 12 Returns 64 (1)

6 Sales 256 (1) 28 Bank/cash 196 (1)
Discount 4 (1)
31 Balance c/d 192
456 456
Apr 1 Balance b/d 192 (1) OF
+ (1) Dates
[7]
(c) Trade discount – Bulk buying (1)

Regular customer/encourage repeat custom (1)
In the same trade (1)
MAX 2
Cash discount – Prompt payment (1)

Payment before the due date (1)
MAX 2 [4]
[Total: 15]

4 (a)
Debit Credit
Opening balance trade receivables (1)

Credit sales (1)
Sales returns (1)
Receipts from credit customers (1)
Bad debts (1)
Dishonoured cheques (1)
Interest on overdue account (1)
[8]
(b) (i) 924 × 100 = 2 %

46 200 1 [2]
(ii) Increase in value of trade receivables/increase in credit sales

Increase in rate of provision/anticipating higher bad debts
(iii) Tellwright Ltd

Journal
Debit Credit
$ $
Increase in provision for doubtful debts (1)
[3]
(c) Either
Matching (1)
To match the amount of sales for which the business is unlikely to be paid against the sales
of the year in which the sale was made (2)
Or
Prudence (1)
To avoid overstating the profits for the year/anticipate losses but not profits
Or to avoid overstating the trade receivables/current assets (2) [3]
[Total: 18]

5 (a) Economic reasons

Obsolescence/out of date
Depletion
Passage of time
(b) Machinery account

$ $
2011 2012
Jan 1 Bank 27 000(1) July 1 Disposal (A) 9 000 (1)
27 000 27 000
2012
Jan 1 Balance b/d 18 000(1)OF
+ (1) Dates [4]

$ $
2011 2011
6 000 6 000
2012 2012
Jul 1 Disposal (A) 3 000(1) Jan 1 Balance b/d 6 000(1) OF
Dec 31 Balance c/d 8 000 Dec 31 Income statement
A 1000 (1)
B & C 4000 (1) 5 000
11 000 11 000
2013
Jan1 Balance b/d 8 000(1) OF
+ (1) Dates [7]
(c) Disposal account

$ $
2012 2012
July 1 Machinery 9 000 (1) July 1 Prov for Dep 3 000(1) OF
Bank 5 800 (1)
Dec 31 Income statement 200(1) OF
9 000 9 000
[4]
[Total: 18]

6 (a) Sukesh
Statement of Affairs at 31 December 2011
$ $ $
Non-current Assets
Vehicle at cost 16 000
20 000(1)
Current Assets
Inventory 9 200
15 900(1)
Current Liabilities
Bank overdraft 420 }(1)
Loan (1/10 × 10 000) 1 000 (1) 10 520
Net Current assets 5 380

25 380
Loan (9/10 × 10 000) 9 000(1)
16 380
Financed by
Capital
Balance 16 380(1) OF
[6]
(b) $
Opening trade receivables 6 500
Less Closing trade receivables 4 100
2 400
Add Sales for the year 52 200 (1)
54 600
Less Cash from credit customers 54 300 (1)
Bad debts 300 (1) CF
(c) $
Opening trade payables 9 100
Less Closing trade payables 9 300
(200)
Add Purchases for the year 36 000 (1)
35 800
Less Cash paid to credit suppliers 35 400 (1)
Discount received 400 (1) CF

(d) Sukesh
$ $
Revenue (52 200 (1) + 6200 (1)) 58 400
Less Cost of sales
Purchases (36 000 (1) + 900 (1)) 36 900
46 100
Gross profit 21 100(1) OF
Add Discount received 400(1) OF
21 500
Less Loan interest 450 (1)
Rent 6 000
Insurance (200 (1) + 800 (1) – 250 (1) 750
Other running costs 2 500
Bad debts 300 (1) OF
10 000
Profit for the year 11 500(1) OF
[14]
(e) To spread the cost of the asset over its useful life (2) [2]
(f) Bank
Suppliers/creditors
Lenders
Managers
Employees
Potential partners
Tax authorities
Customers/debtors
Competitors
Investors
Trade unions
Potential purchaser of the business
Any 4 acceptable answers (1) each [4]
(g) 37 300 (1) OF = 4.14 times (1) OF

9 000 (1) CF [3]
(h) (i) Duarte (1) OF
(ii) Any suitable comment to imply that Duarte’s inventory is selling faster
Answer to be based on OF answer to (g)
Any one acceptable reason (2)

[3]
[Total: 38]


0452 ACCOUNTING
components.
1 (a)
Nadia Dhari
Statement of Affairs at 30 June 2012
$ $ $
to date value
Fixtures & fittings 7 000 2 520 (1) 4 480 (1)
Motor vehicles 12 000 7 200 (1) 4 800 (1)
19 000 9 720 9 280
Current assets
Inventory 2 800 (1)
Trade receivables (3500 (1) – 70 (1)) 3 430
Bank 4 120 (1)
10 570
Current liabilities
Other payables 350 (1) 3 450
16 400
Loan 3 000 (1)
13 400
Financed by
Capital
Balance 13 400 (1) O/F
13 400
[13]

$
Closing capital 13 400 (1) O/F
Drawings – cash 2 800 (1)
goods 350 (1)
16 550
Less Opening capital 8 200 (1)
8 350
Less Capital introduced 5 000 (1)
Profit for the year 3 350 (2) O/F
Nadia Dhari
Capital Account
2012 $ 2011 $
June 30 Cash 2 800 (1) July 1 Balance b/d 8 200 (1)
Purchases 350 (1) Dec 1 Bank 5 000 (1)
Balance c/d 13 400 (1) 2012
O/F June 30 Profit 3 350 (2) O/F
16 550 16 550
2012
July 1 Balance b/d 13 400
[7]
3430 365
(c) × = 43.32 = 44 days (2) [2]
28900 1
(d) Unsatisfied (1)

Or satisfied if answer to (c) is 30 or below [1]
(e) The business may not have enough liquid funds with which to pay the credit suppliers until
money is received from credit customers.
Or
If the credit customers pay within the set time the business may be able to pay the credit
suppliers within the set time without any significant impact on the bank balance.
Or
If the credit customers fail to pay within the set time it may be necessary to obtain short-term
funds in order to pay the credit suppliers.
Any 1 point (2) [2]
[Total: 25]

2 (a) (i)
Sajeev Kumar
Fixtures account
2010 $ 2011 $
Aug 1 Bank 2 600 (1) July 31 Balance c/d 2 600
2011 2012
Aug 1 Balance b/d 2 600 July 31 Balance c/d 4 040
Dec 1 A1 Supplies 1 440 (1)
2012 4 040 4 040
Aug 1 1 Balance b/d 4 040 (1)
[3]
(ii)
Provision for depreciation of fixtures account
2011 $ 2011 $
July 31 Balance c/d 650 July 31 Income statement 650 (1)
2012 –––– 2011
July 31 Balance c/d 1 540 Aug 1 Balance b/d 650 (1) OF
2012
July 31 Income statement 650 (1)
240 (1) 890
1 540 1 540
2012
Aug 1 Balance b/d 1 540 (1) OF
[5]
(b)
account to be account to be
debited credited
Transferring the accumulated Provision for Disposal of fixtures

depreciation on the fixtures from the depreciation of
ledger fixtures (1) (1)
Transferring the original cost of the Disposal of fixtures Fixtures

fixtures from the ledger (1) (1)
Recording the proceeds of sale of the Cash Disposal of fixtures

fixtures (1) (1)
[6]

(c)
Money spent on purchasing, improving Money spent on running the business
or extending non-current assets on a day-to-day basis
Money spent on items which increase Money spent on the costs of running the
the profit-earning ability of the business business
Money spent of items which will be Money spend on items which only
used in the business over several years benefit the business for one financial
year
Are recorded in the statement of Are recorded in the income statement

financial position
Explanation of any one difference (2) [2]
(d) (i) Profit for the year ended 31 July 2012
Effect Overstated by $300 (1)

Reason An expense has been omitted from the income statement (1)
(i) Capital employed at 31 July 2012

Reason The non-current assets include $300 which is an expense (1)
Or
The total capital is overstated because the profit for the year was overstated (1)
[4]
(e) (i) Selling goods at higher prices

Reduction in cost of sales
(ii) More expenses

Reduction in other income
Change in type of expenses
Expenses not controlled as well as previously
(iii) Decreased (1)

The percentage of expense to sales (revenue) has increased (1) [2]
[Total: 26]

3 (a)
Daisy Matumo
Income statement for the year ended 31 October 2012
$ $
Fees (35 120 (1) + 520 (1)) 35 640
Rent received (2 750 (1) – 150 (1)) 2 600
38 240
Less Wages (18 750 (1) + 450 (1) – 300(1)) 18 900
Office expenses 11 265
Loss on disposal
((3 450 – 3 025) (1) – 200 (1)) 225
Depreciation – equipment 150 (2) 30 540
3 7 700 (1) O/F
(20% × 3 000 × )
12
[12]
(b)
Daisy Matumo
Capital account
2012 $ 2011 $
Oct 31 Drawings 6 200 (1) Nov 1 Balance b/d 60 000 (1)
Balance c/d 61 500 2012
Oct 31 Profit 7 700 (1) O/F
67 700 67 700
2012
Nov 1 Balance b/d 61 500 (1) O/F
[4]
(c) 7 700 × 100 = 12.52% (2) C/F

100 1 (1) O/F [2]
(d) Error 2 Effect Increase (1)

Reason The capital employed decreases because of the drawings.
There is no change in the profit. (1)
Error 3 Effect No effect (1)

Reason There is no change in the capital employed.
[4]
[Total: 22]

4 (a)
Parnell Sport Club
Receipts and Payments Account for the year ended 31 July 2012
2011 $ 2012 $
Aug 1 Balance b/d 3 200 (1) July 31 Equipment 9 530 (1)
2012 Rent 2 400 (1)
July 31 Sale of equipment 320 (1) General expenses 2 760 (1)
Subscriptions Insurance 1 800 (1)
2011 180 (1) Suppliers 2 840 (1)
2012 12 000 (1)
Cash sales 3 450 (1)
Balance c/d 180
19 330 19 330
2012
Aug 1 Balance b/d 180 (1) O/F
[11]
(b) Current liability [1]
(c) Subscriptions are amounts paid by members of a club or society to use the facilities provided
by the club [1]
(d) This is a non-current asset and the income and expenditure account only contains revenue
expenditure.
(1) for basic statement + (1) for development [2]
(e) Part of the payment for insurance is for the next financial year. (1)
Either
The income and expenditure account includes only expenses for that year
This is an application of the matching/accruals principle (1) [2]
(f) Calculation of purchases for the year

$
Payments to suppliers 2 840 (1)
Amount owing 31 July 2012 670 (1)
3 510
Less Amounts owing 1 August 2011 750 (1)
Purchases for the year 2 760 (1)
2012 $ 2011 $
July 31 Bank 2 840 (1) Aug 1 Balance b/d 750 (1)
Balance c/d 670 (1) 2012 2 760 (1)
3 510 July 31 Purchases * 3 510
[4]

(g) $
Shop sales 3 450
Shop purchases 2 760 O/F
Profit 690 (1) O/F
[1]
(h) 690 × 100 = 25% (2) C/F

2 760 1 (1) O/F [2]
[Total: 24]
5 (a)
Tun and Min
Journal
Debit Credit
$ $

Tun Capital 7000 (1)
Motor vehicle introduced by Tun (1)
Min Capital (1)

3000
Min Current (1)
3000
Debit balance on Min’s current account (1)
transferred to his capital account
[6]
(b)
Tun and Min
Balance Sheet extract at 30 September 2012
$ $ $
Tun Min Total
Capital account 47 000 (1) 47 000 (1) 94 000
Current account (1 180) (1) 230 (1) (950)
45 820 47 230 93 050 (1) [5]
(c) This represents the amount owing by Tun to the business [2]
(d) To compensate for an unequal workload

Or In recognition of work done in the business [2]
(e) To discourage the partners from making excessive drawings [2]

(f) Interest on capital 1 880 × 100 = 4% (2) [2]

47 000 1
(g) Should compare with a business in the same trade

Should compare with a business of the same type (partnership)
The accounts may be for one year only which will not show trends
The accounts may be for one year only which may not be a typical year
Any two acceptable points (2) each [4]
[Total: 23]


0452 ACCOUNTING
components.
1 Key
(a) C [1]
(b) B [1]
(c) B [1]
(d) C [1]
(e) A [1]
(f) C [1]
(g) D [1]
(h) D [1]
(i) B [1]
(j) A [1]
[Total 10]

2 (a) (i) [Sales] invoice [1]
(ii) Credit note [1]
(b) Revenue (sales), purchases, carriage inwards, Sales returns, purchase returns, inventory
(any two) [2]
(c) $14.00 [1]
(d) Consistency [1]
(e) Original Entry [1]
(f) $28.00 [1]
(g) (i) A bad debt is an amount owing/debtor (1) which they are unable or unwilling (1) to pay
[2]
(ii) An estimate (1) of the amount which a business will lose because of bad debts (1) [2]
(iii) 3% x 48000 = $1 440 (1)

$1440 – $1350 = $90 (1) [2]
(h) 80000 shares (1) x $0.30 per share = $24000 OF (1) [2]
[Total 16]

3 (a) Walek – Cash Book (bank columns)
September Detail Dr September Detail Cr

$ $
1 Balance b/d 2 400 14 Wages 250 (1)
3 Lashki 640 (1) 21 Yovell 370 (1)
16 Yovell 370 (1) 28 Wages 280 (1)
30 Sales 3 560 (1) 29 Bruton 1 980 (1)
30 Balance c/d 4 090
6 970 6 970
Oct 1 Balance b/d 4 090

(1) OF
Mark for date, detail and amount.

[8]

(b) Sales account

September $
4 Sharon 420 (1)
27 Bank 3 650 (1)
Do not accept Cash or Sales for the month
Purchases account
September $
9 Bruton 1 980 (1)
Wages account
September $
14 Bank 250 }
28 Bank 250 } (1)
Lashki account
September $
3 Bank` 640 (1)
Sharon account
September $
4 Sales 420 (1)
Yovell account
September $ September $
21 Bank (dis chq) 370 (1) 16 Bank 370 (1)
Bruton account
29 Bank 1 980 (1) 9 Purchases 1 980 (1)
1 mark for date [11]

(c) Walek – Bank Reconciliation Statement at 30 September 2012
$
Balance shown on bank statement 2 510 (1)
Add: amounts not yet credited – cash sales 3 560 (1)
6 070
Less Cheques not yet presented – Bruton 1 980 (1)
Balance shown in cash book 4 090 (1) OF
Marks for amounts not narratives

Accept statements in reverse order [4]
(d) The bank statement is a copy of the account of the business as it appears in the books
of the bank. This is from the viewpoint of the bank (1) – the business depositing money
is a creditor of the bank. (1)
The bank account in the cash book is prepared from the viewpoint of the business (1) – the
bank is a debtor of the business which has deposited the money (1).
[4]
[Total: 27]

4 (a)
Mbane - Trial Balance at 31 October 2012
Dr Cr
$ $
Capital 2 600 (1)
Motor Vehicle 4 400
Purchases 12 400
Revenue 30 800 (1)
Inventory at 1 November 2011 4 500 (1)
Cash at bank 5 200 (1)
Motor expenses 860
Drawings 8 640
36 600 36 600 (2) CF
(1) OF for matching totals if arithmetically correct;

if both stock figures included then once counts as an alien [7]
(b)
Mbane
$ $
Cost of sales
16 900
Inventory at 31 October 2012 3 300 (1)
13 600
17 200 (1) OF
Gross profit
Expenses 600 (1)

General expenses 860 (1)
1 460
[8]
(c) (i) Working capital = current assets – current liabilities (CA-CL) [1]
(ii) Working capital = $ 5 300 [2]

(d)
Increase Decrease No change
Increased revenue (sales) (1)
Increased trade payables (1)
Increased motor expenses

(1)
Reduced drawings (1)
[4]
(e) (i) Current Assets : Current Liabilities (CA : CL) [1]
(ii) 8500 : 3200 (1) = 2.7 : 1 (1) OF [2]
[Total: 25]
5 (a) Straight line, reducing (diminishing) balance, revaluation (any two (1) each) [2]
$ 6 400 – $ 800
(b) (i) Depreciation = (1) for correct formula
4 years
2010 = $ 1 400 (1) OF

2011 = $ 1 400 (1) OF if same figure [3]
(ii) Net book value = $6400 (1) – $2800 (1)OF = $3600 [2]
(c)
Agricola
Disposal of Tractor Account
2012 $ 2012 $
Jan 1 Tractor 6 400 (1) Jan 1 Prov for Depr 2 800 (1) OF
Bank/Cash 2 600 (1)
Dec 31 Income Statement 1 000 (1) OF
(Profit/Loss)
1 mark for date

Accept P/L and IS for income statement [5]
(d) (i) The sale proceeds were less than the net book value (worth)
The expected life might have been shorter than assumed
The expected scrap value was less than assumed
Depreciation should have been higher
Accept a valid non-accounting reason (eg: properly maintain asset) [2]
(ii) Increase the rate of depreciation (NOT decrease/lower)

Assume a shorter life
Assume a lower scrap value
Use a different method eg revaluation

(e) Agricola
Journal
Debit Credit
$ $
1 Cattle Feeds Ltd 320 (1)
Cattle & Co. 320 (1)
Correction of error – Cattle & Co. wrongly debited (1)
2 Repairs to Machinery 30 (1)
Machinery 30 (1)
Correction of error –repairs to machinery entered (1)
in asset account
[6]
[Total: 22]
6 (a) (i)
Conrad’s supermarket Congo’s shop
Percentage of gross profit to = 35.0% (2) = 55.0% (2)

revenue (sales)
Accept 35 Accept 55
[4]
(ii) Supermarket/Conrad turnover is higher but gross profit percentage lower

Supermarket prices may be lower than shop/Congo prices
Different goods have different profit margins
Customers may be willing to pay higher prices for fresh items
Supermarket has to carry greater stock
Any acceptable comment

Any one comment (2) based on OF [2]
(b) (i)
Percentage of net profit to = 12.0% (2) = 36.7% (2)

revenue (sales)
Accept 12 Accept 36.7
[4]
(ii) Supermarket has higher expenses than shop

Supermarket pays more rent than shop (or similar examples)
Shop better at controlling expenses


(c) (i)
Return on Opening Capital = 15.0% (2) = 35.2% (2)

employed
[4]
(ii) Supermarket made higher profit for the year on less capital
Shop made better use of capital employed

(d) May reduce prices (1) so could be selling at a gross loss (1)
May be selling at a lower profit margin (1) and not covering costs (1)
May have higher expenses (1) which reduces profit (1)

(1) for identification and (1) for expansion [2]
[Total: 20]


0452 ACCOUNTING
components.
1 Key
(a) C [1]
(b) B [1]
(c) B [1]
(d) C [1]
(e) A [1]
(f) C [1]
(g) D [1]
(h) D [1]
(i) B [1]
(j) A [1]
[Total 10]

(any two) [2]
(c) $14.00 [1]
(d) Consistency [1]
(f) $28.00 [1]
[2]
(iii) 3% x 48000 = $1 440 (1)

$1440 – $1350 = $90 (1) [2]
[Total 16]


$ $
1 Balance b/d 2 400 14 Wages 250 (1)
3 Lashki 640 (1) 21 Yovell 370 (1)
16 Yovell 370 (1) 28 Wages 280 (1)
30 Sales 3 560 (1) 29 Bruton 1 980 (1)
6 970 6 970

(1) OF

[8]

(b) Sales account

September $
4 Sharon 420 (1)
27 Bank 3 650 (1)
Purchases account
September $
9 Bruton 1 980 (1)
Wages account
September $
14 Bank 250 }
28 Bank 250 } (1)
Lashki account
September $
3 Bank` 640 (1)
Sharon account
September $
4 Sales 420 (1)
Yovell account
21 Bank (dis chq) 370 (1) 16 Bank 370 (1)
Bruton account
29 Bank 1 980 (1) 9 Purchases 1 980 (1)

$
6 070

[4]
[Total: 27]

4 (a)
Dr Cr
$ $
Capital 2 600 (1)
Motor Vehicle 4 400
Purchases 12 400
Revenue 30 800 (1)
Motor expenses 860
Drawings 8 640
36 600 36 600 (2) CF

(b)
Mbane
$ $
Cost of sales
16 900
13 600
17 200 (1) OF
Gross profit
Expenses 600 (1)

1 460
[8]

(d)

(1)
[4]
(ii) 8500 : 3200 (1) = 2.7 : 1 (1) OF [2]
[Total: 25]
$ 6 400 – $ 800
4 years
2010 = $ 1 400 (1) OF

2011 = $ 1 400 (1) OF if same figure [3]
(c)
Agricola
2012 $ 2012 $
Bank/Cash 2 600 (1)
(Profit/Loss)
1 mark for date



(e) Agricola
Journal
Debit Credit
$ $
Machinery 30 (1)
in asset account
[6]
[Total: 22]
6 (a) (i)

revenue (sales)
Accept 35 Accept 55
[4]


(b) (i)

revenue (sales)
[4]



(c) (i)

employed
[4]


[Total: 20]


0452 ACCOUNTING
components.
1 Key
(a) D [1]
(b) C [1]
(c) B [1]
(d) B [1]
(e) A [1]
(f) A [1]
(g) C [1]
(h) C [1]
(i) B [1]
(j) A [1]
[Total: 10]
2 (a) Cash book, petty cash book, sales journal, sales returns journal, purchases journal,
purchases returns journal, (day books), journal [any two, 1 mark each] [2]
(b)
Income Expense
Debenture interest (1)
Factory overheads (1)
Commissions earned (1)

[3]
(c) To see the liquidity position of the business (1) and if his account will be paid (1). [2]
(d) Error (of addition, account on incorrect side, transposition, balance missing), single sided
entry, entry made twice. [any two,2 marks each] [4]

(e)
Increase Reduce Have no effect
Bank charges (1)
Credit Transfer (1)
Dishonoured cheque (1)

[3]
(f) Goodwill, brands, (other acceptable item) [any one] [1]
(g) (i) Error of original entry [1]
(ii)
Dr Cr
$ $
Malik (1) 180 }(1)
Purchases (1) 180 }

[3]
(h) Lindie – provision for doubtful debts
Provision at 1 November 2011 3% × 28 000 = 840 (1)
Provision at 31 October 2012 3% × 32 000 = 960 (1)
Increase = 120 (1)
[or 3% × (32 000 – 28 000) = 120] (3) [3]
[Total: 22]

3 (a) Prince
Balance Sheet at 30 September 2012
Cost Provision for Net book

Depreciation value
Non-current assets $ $ $
Equipment 3 500 600 2 900 )
Motor vehicle 4 500 1 000 3 500 ) (1)
8 00 1 600 6 400
Current assets
Inventory 3 300 (1)
Bank 500 (1)
6 800
Current Liabilities
3 600
9 600
Bank loan repayable 2018 2 800 (1)
Total assets 6 800
Financed by: Capital 6 800 (1) [9]
(b) (i) Current ratio = current assets / current liabilities [1]
(ii) (3300 + 3000 + 500) / (2700 + 900) (1) for workings

= 1.89 : 1 (1)OF [2]
(iii) No (1);
Answer is less than 2:1 which is the usual benchmark (1), unable to pay all liabilities (1)
[3]
(c) (i) Quick ratio = (current assets – inventory) / current liabilities [1]
(ii) (3000 + 500) / 3600 (1) for workings

= 0.97 : 1 (1)OF [2]
(iii) No (1);
Answer is less than 1:1 which is the usual benchmark (1) , unable to pay all liabilities (1)
[3]
(d) Send statement, other reminders, offer cash discount, charge interest on late accounts,
refuse further supplies until paid (and similar comments).
[Any one, 2 marks] [2]
(e) Delaying payment of trade payables, increasing cash/credit sales, reducing credit period for
trade receivables, sell fixed assets, introduce extra capital, take out long term loan, reduce
drawings, introduce more capital, sell shares. [Any one, 2 marks] [2]
[Total: 25]

4 (a) Inventory means the goods held for resale by a business at any time. [1]
(b) Mirror type Units in stock Cost or net realisable Total value
value per unit
$ $
Wall mirror 15 55 825 (1)
Table mirror 50 15 750 (1)
Hand mirror 36 20 720 (2)
2295 [4]
(c) Mlongo
$ $
Returns inwards 215 (1)
7 785
Cost of sales
Purchases 4 650 (1)
Carriage Inwards 50 (1)
6 000
Inventory at 31 October 2012 2 295 (1)OF
3 705
Gross profit 4 080
Expenses
Other operating expenses (680 + 120) 800 (1)
Rent (780 – 260) 520 (1)
1 420
(d) (i) Rate of inventory turnover = cost of sales / average inventory [1]
(ii) Rate of inventory turnover 2.1 (1) times (1) [2]
(e) Rate of inventory turnover will increase (1) as inventory is being replaced quicker (1) [2]
(f) Luxury goods, large scale manufacture (ships, airplanes) [Any one] [1]
[Total: 20]

5 (a) The costs and expenses of an accounting period must be matched against the revenue (of
the same period). [2]
(b) Joolia
Water account
2012 2012
10 July Bank 58.50) 1 July Balance b/d 58.50 (1)
12 August Bank 75.00)
14 Sept Bank 45.80) (1) 30 Sept Income statement 183.10 (1)
30 Sept Balance c/d 62.30
241.60 241.60
1 October Balance b/d 62.30 (1)

+ (1) for all dates correct [5]
(c) Profit will be too high as accrued wages have not been included in expenses for the period.
[1]
(d) Purchases (Ledger) [1]
(e) 7 September Bank

Explanation: Amount paid to HiClass Foods Ltd for purchases (on credit/amounts due) (1)
Double Entry: Credit Bank Account (1)
7 September Discount
Explanation: Amount claimed as discount for prompt payment (1)
Double Entry: Credit Discount Received Account (1)
12 September Purchases
Explanation: Amount bought on credit from HiClass Foods Ltd (1)
Double Entry: Debit Purchases Account (1)
15 September Purchase Returns

Explanation: Goods returned to HiClass Foods Ltd as unsuitable/not required (1)
Double Entry: Credit Purchase Returns Account / Returns Outwards (1)
30 September Balance c/d

Explanation: Amount owing to HiClass Foods Ltd at end of month (1)
Double Entry: Credit HiClass Foods Ltd ( October account ) (1) [10]
[Total 19]

6 (a) Ordinary share capital: 100 000 shares @ $1.50 = 150 000 (1)
Preference share capital: 120 000 shares @ $1.00 = 120 000 (1)
Total share capital 270 000 (1) [3]
(b) (i) The total amount the company has requested from shareholders. [2]
(ii) That part of the called up capital for which cash has been received. [2]
(c) • Ordinary share dividends vary according to amount of profit made (1) Preference Shares
are usually a fixed rate (1)
• If business is wound up Preference shareholders are repaid before Ordinary shares (2).
• Ordinary shares carry voting rights (1), Preference shares usually have no (or less)
voting rights (1) [Any two, two marks each) [4]
(d) • Ordinary shares are capital (1), Debentures are a long term loans (1)
• Debentures are paid interest (1), Ordinary shares receive dividends (1)
• If company is wound up debentures are repaid before Ordinary shares (2)
Debenture holders carry no voting rights (1), Ordinary shares carry voting rights (1)
[Any two, 2 marks each] [4]
(e) To distribute profit to the shareholders, reward shareholders for investment, to encourage
investment. [Any one, 2 marks] [2]
(f) Ordinary shares $1 800 (2)
Preference shares $360 (3) (Allow 2 marks for $720) [5]
(g) Limited liability if business becomes bankrupt

Partners have to work in the business where shareholders may only invest
(Any other suitable comment 2 marks ) [2]
[Total 24]


0452 ACCOUNTING
components.
1 (a) Zabeel
Manufacturing Account for the year ended 31 October 2012
$ $
52 200
Carriage on purchases 480 (1)
52 680
Less Closing inventory of raw materials 4 300 (1) 48 380
Direct factory wages (46 000 + 2150) 48 150 (1)
Prime cost 96 530 (1) O/F
Factory overheads
Indirect wages 11 210 (1)
General expenses (21 660 – 370) 21 290 (1)
Rates and insurance (60% x 6000) 3 600 (1)
Depreciation – Machinery (20% x 64 500) 12 900 (1)
Loose tools (980 + 130 – 820) 290 (1) 49 290
145 820 (1) O/F
Production cost of goods completed 135 620 (1) O/F
[14]
(b) Zabeel
Income Statement for the year ended 31 October 2012
$ $
Revenue 183 400 (1)
Less Cost of sales
144 820
Less Closing inventory of finished goods 12 620 (1) 132 200
Gross profit 48 600 (1) O/F
[6]
(c) (i) Lower of cost and net realisable value [1]
(ii) Prudence [1]
(d) (i) Realisation [1]
(ii) Business entity [1]
[Total: 24]

2 (a) Nancy Tanwin

Rent received account
2012 $ 2011 $
Oct 31 Income Nov 1 Balance/bank/cash 432 (1)
statement 2592 (2)C/F 2012
(1)O/F Jan 1 Bank 1296} (1)
Oct 31 Balance c/d 216 July 1 Bank 1080}
2808 2808
2012
Nov 1 Balance b/d 216 (1) O/F
+ (1) Dates [6]
(b) Current liabilities (1)

Nancy Tanwin has a liability to provide a benefit for which she has already been paid. (1) [2]
(c) Nancy Tanwin

Advertising expenses account
2011 $ 2011 $
Nov 15 Cash 74} Nov 1 Balance b/d 74 (1)
2012 } (1) 2012
June 1 Bank 1200} Oct 31 Income
Statement 500 (2)C/F
(1)O/F
1274 1274
2012
+ (1) Dates [6]
(d)
Effect on capital employed Tick
Overstate
Understated
[1]

(e) Nancy Tanwin

Statement of corrected profit/loss for the year ended 31 October 2012
$
Profit for the year before corrections (550)
Increase Decrease
in profit in profit
$ $
Error 1 20
Error 2 1100 (2)
Error 3 No effect (2)
Error 4 310 (2)
Error 5 260 (2)
____ ___
1360 330 1030
Corrected profit for the year 480 (1) O/F
[9]
[Total: 24]
3 (a) The liability of the ordinary shareholders for the debts of the company is limited to the
amount they agree to pay the company for their shares. [2]
(b) Ordinary shareholders are members (owners) of the company: debenture holders are
lenders.
Ordinary shares carry voting rights: debentures do not carry voting rights.
Ordinary shareholders receive a dividend; debenture holders receive interest.
Ordinary shareholders receive a variable return on their shares: debentures holders received
a fixed interest rate.
Ordinary share dividend is a share of profit and may not be paid if there is no profit:
debenture interest is an expense and is payable irrespective of profits
In the event of a winding-up, debentures are repaid before ordinary shares.
Debentures have to be repaid but ordinary shares do not

(c) White Rose Ltd

Profit and Loss Appropriation Account for the year ended 31 August 2012
$ $
Ordinary share dividend – paid (1) 5 250 (1)
proposed (1) 7 000 (1) 22 250
Retained profit for the year 13 750 (1) O/F
Retained profit carried forward 21 050 (1) O/F
[9]
(d) White Rose Ltd

Extract from Balance Sheet at 31 August 2012
$
General reserve (18 500 + 10 000) 28 500 (2)
Retained profit 21 050 (2) C/F
(1) O/F
[5]
(e) White Rose Ltd

$
5% Debentures of $100 each 100 000 (2)
[2]
[Total: 22]


Easier for reference as the same type of accounts are kept together
Any 1 point (1) [1]
(b) Ruth Van Zyl

Purchases Ledger Control account
2012 $ 2012 $
Sept 1 Balance b/d 210 (1) Sept 1 Balance b/d 9 530 (1)
30 Returns 1 160 (1) 30 Purchases 11 740 (1)
Bank 8 730 (1) Interest 90 (1)
Discount 270 (1) Balance c/d 160
Balance c/d 11 150 ______
21 520 21 520
2012 2012
Oct 1 Balance b/d 160 (1) Oct 1 Balance b/d 11 150 (2)C/F
O/F (1)O/F
+(1) Dates [11]
(c) Assist in the location of errors

Provide instant total of trade payables
Proves the arithmetical accuracy of the purchases ledger/the ledger they control
Enables a balance sheet to be prepared quickly
Provides a summary of the transactions relating to trade payables
May reduce fraud

(d) Item Entry in sales ledger control account
(ii) Sales returns Credit (1)
(iii) Bad debt written off Credit (1)
(iv) Provision for doubtful debts No entry (1)
(v) Credit customer’s cheque dishonoured Debit (1)

[4]
(e) Ruth Van Zyl

Journal
Debit Credit
$ $
Wilhelm 15 (1)
Interest receivable 15 (1)
Interest charged on overdue account (1)
Ansie (purchases ledger account) 500 (1)

Ansie (sales ledger account) 500 (1)
Transfer of balance of purchases (1)

ledger account to sales ledger
account
[6]
[Total: 24]

5 (a) Total trade receivables account

2011 $ 2012 $
Oct 1 Balance b/d 4 950 (1) Sept 30 Bank 56 360 (1)
2012 Discount 1 640 (1)
Sept 30 Sales * 60 600 (1) Bad debts 1 260 (1)
______ Balance c/d 6 290 (1)
65 550 65 550
Calculation of sales for the year

$
Receipts from customer 56 360 (1)
Discounts allowed 1 640 (1)
Bad debts 1 260 (1)
Amount owing 30 September 2012 6 290 (1)
65 550
Less Amounts owing 1 August 2011 4 950 (1)
Sales for the year 60 600 (1)
[6]
(b) 25 x 60 600 OF = 12 120 (2) O/F [2]

125 1
(c) Sales 60 600 O/F

Gross profit 12 120 O/F
Cost of sales 48 480 (2) O/F [2]
(d) 48 480 O/F = 8.08 times (2) C/F

6 000 (1) O/F [2]
(e) Reduce inventory levels

Generate more sales activity
Only replace inventory when needed
(f) (5800 + 6290 + 100) : (6150 + 1240)

= 12 190 (1) C/F : 7390 (1) C/F
= 1.649 : 1
= 1.65 : 1 (1) C/F
[3]

(g) (6290 + 100) : (6150 + 1240)

= 6390 (1) C/F : 7390 (1) C/F
= 0.864 : 1
= 0.86 : 1 (1) C/F [3]
(h) Inventory is not included in the calculation of the quick ratio (1)
Either
collected. (1)
Or
current liabilities were paid immediately from the liquid assets. (1)
[2]
(i) Introduce additional capital

Reduce drawings
Any 1 point (2) [2]
[Total: 26]


0452 ACCOUNTING
components.
1 (a) Zabeel
$ $
52 200
52 680
Factory overheads
Loose tools (980 + 130 – 820) 290 (1) 49 290
145 820 (1) O/F
[14]
(b) Zabeel
$ $
Revenue 183 400 (1)
Less Cost of sales
144 820
[6]
(ii) Prudence [1]
[Total: 24]

2 (a) Nancy Tanwin

2012 $ 2011 $
(1)O/F Jan 1 Bank 1296} (1)
2808 2808
2012
+ (1) Dates [6]

(c) Nancy Tanwin

2011 $ 2011 $
2012 } (1) 2012
(1)O/F
1274 1274
2012
+ (1) Dates [6]
(d)
Overstate
Understated
[1]

(e) Nancy Tanwin

$
Increase Decrease
in profit in profit
$ $
Error 1 20
Error 2 1100 (2)
Error 4 310 (2)
Error 5 260 (2)
____ ___
1360 330 1030
[9]
[Total: 24]
lenders.

(c) White Rose Ltd

$ $
proposed (1) 7 000 (1) 22 250
[9]
(d) White Rose Ltd

$
General reserve (18 500 + 10 000) 28 500 (2)
(1) O/F
[5]
(e) White Rose Ltd

$
[2]
[Total: 22]


Any 1 point (1) [1]
(b) Ruth Van Zyl

2012 $ 2012 $
Balance c/d 11 150 ______
21 520 21 520
2012 2012
O/F (1)O/F
+(1) Dates [11]

May reduce fraud


[4]
(e) Ruth Van Zyl

Journal
Debit Credit
$ $
Wilhelm 15 (1)
Ansie (purchases ledger account) 500 (1)

Ansie (sales ledger account) 500 (1)

account
[6]
[Total: 24]


2011 $ 2012 $
2012 Discount 1 640 (1)
______ Balance c/d 6 290 (1)
65 550 65 550

$
Bad debts 1 260 (1)
65 550
[6]
(b) 25 x 60 600 OF = 12 120 (2) O/F [2]

125 1

(d) 48 480 O/F = 8.08 times (2) C/F

6 000 (1) O/F [2]

(f) (5800 + 6290 + 100) : (6150 + 1240)

= 12 190 (1) C/F : 7390 (1) C/F
= 1.649 : 1
= 1.65 : 1 (1) C/F
[3]

(g) (6290 + 100) : (6150 + 1240)

= 6390 (1) C/F : 7390 (1) C/F
= 0.864 : 1
= 0.86 : 1 (1) C/F [3]
Either
collected. (1)
Or
[2]

Reduce drawings
Any 1 point (2) [2]
[Total: 26]

UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

MARK SCHEME for the May/June 2012 question paper

for the guidance of teachers
0452 ACCOUNTING
Mark schemes must be read in conjunction with the question papers and the report on the
examination.
• Cambridge will not enter into discussions or correspondence in connection with these mark schemes.
Cambridge is publishing the mark schemes for the May/June 2012 question papers for most IGCSE,
GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level
syllabuses.
Page 2 Mark Scheme: Teachers’ version Syllabus Paper
1 Key
(a) C [1]
(b) D [1]
(c) D [1]
(d) A [1]
(e) B [1]
(f) B [1]
(g) D [1]
(h) C [1]
(i) A [1]
(j) A [1]
[Total: 10]
2 (a) Invoice [1]
(b) To show the financial position of a business on a certain date. [1]
(c)
Asset Liability
Inventory (1)
Rent receivable prepaid (1)
Trade payables (1)

[3]
(d) To calculate how much it has cost the business to manufacture the goods (1) produced in the
financial year (1). [2]
© University of Cambridge International Examinations 2012

(e) (i) Money measurement (1)
(ii) Relevance (1) [2]
(f) (300 × $10.30) (1) = $3090 – 4% = $3090 – $123.60 = $2966.40 (1) [2]
(g) Land, buildings, machinery, equipment, fixtures, motor vehicles, goodwill

Any 2 (1) each [2]
(h) The business is treated as being completely separate from the owner. (1)
The accounting records relate only to the business, (1) [2]
(i) (200 × $100) (1) = $20 000 × 3% × ½ = $300 (1) [2]
(j) Payments $2100

Less opening accrual 350 (1)
1750
Plus closing accrual 470 (1)
Charge for the year 2220 (1)
[3]
[Total: 20]
3 (a) To assist in the preparation of financial statements

To check for arithmetical accuracy/errors (must include arithmetical)

(b) Hans Lee

Dr Cr
$ $
Revenue 110 000
Purchases 65 000
Inventory (1 May 2011) 11 500 (1)
Trade payables 1 900 }(1)
Machinery 7 400
Expenses 31 600
Capital 11 500 }
Drawings 7 600 }(1)
Suspense (1) 2 100 (1) OF
126 500 126 500 (1)

[7]
(c) Hans Lee

Journal
Debit Credit
$ $
1 Purchases 1 600 (1)

Suspense 1 600 (1)
2 Suspense 300 (1)

John Tan 300 (1)
3 Drawings 200 (1)

Suspense 200 (1)
[6]

(d)
Error 1 (1)
Error 2 (1)
Error 3 (1)
[3]
(e) All the errors have NOT YET been discovered. (1)
There is a balance remaining on the suspense account/Trial Balance. (1) [2]
[Total: 19]
4 (a) To avoid recording small cash payments in the main cash book (2)
To reduce the number of entries in the main cash book (2)
(b) The petty cashier starts each month with the same amount of money. (1)
At the end of the period the amount spent is reimbursed so the cash remaining is equal to
the imprest amount. (1) [2]
(c) Refer to next page [12]
(d) Postages and stationery account

2012 $ 2012 $
April 30 Petty cash 60 (1) April 30 Petty cash 4 (1)

2012 $
April 30 Petty cash 38 (1)
Catering supplies account

2012 $
Cleaning account
2012 $
[5]
(e) $24 (1) O/F from (c) [1]
[Total: 22]

4 continued Theba – Petty Cash Book
Total Date Details Total Paid Postages and stationery Motor Catering Cleaning
Received expenses supplies
$ $ $ $ $ $
97 April 1 Balance b/d
103 (1) Bank
4 Postage stamps 24 24 (1)
4 (1) 12 Stationery 36 36 (1)
17 Fuel 38 38 (1)
21 Stationery refund
24 Catering supplies 12 12 (1)
29 Cleaning 70 70 (1)
180 60 38 12 70
30 Balance c/d 24
204 May 1 204

Balance b/d
Bank/Cash
24 (1)
176 (1)
O/F
Totals of analysis columns (1);

Totals of total columns (1)
Dates (1) [12]

5 (a) Additional finance

Additional knowledge and skills
Sharing of risks
Discussions can take place before taking decisions
Any 2 (1) each [2]
(b) Profits have to be shared

Decisions have to be recognised by all partners/disagreements may arise
Decisions may take longer to put into effect
One partner’s actions are binding on all partners
Any 2 (1) each [2]
(c) Raoul and Hassan

Journal
Debit Credit
$ $
Bank 6000 (1)

Capital Raoul 6000 (1)
Inventory 4000 (1)

Capital Hassan 4000 (1)
Rent 600 (1)

Shop fittings 750 (1)
Bank ( or Cash Book ) 1350 (2)
[8]
(d) Raoul and Hassan

Profit and Loss Appropriation Account for the year ended 31 March 2012
$ $ $
Profit for the year 8800 (1)
Less Interest on capital – Raoul 180 (1)
Hassan 120 (1) 300
Partner’s salary – Rauol 3000 (1) 3300
5500
Profit shares – Raoul 2200 (2)(1) OF
Hassan 3300 (2)(1) OF 5500
[8]

(e) Raoul
Current account
2012 $ 2012 $
Mar 31 Balance c/d 5380 Mar 31 Interest on cap 180 (1)O/F
Salary 3000 (1)
____ Profit share 2200 (1)O/F
5380 5380
April 1 Balance b/d 5380 (1)O/F
[4]
(f) Increase Raoul’s salary

Allow commission on sales
Change the profit-sharing ratio
Any 1 (2) [2]
[Total: 26]
6 (a) (i) Current assets – current liabilities (1)

(36 000 + 60 000) – (63 000 + 17 000) = 96 000 – 80 000 (1)
= $16 000 (1) OF [3]
(ii) Current assets : current liabilities (1)

96 000 : 80 000 (1) = 1.2 : 1 (1) OF [3]
(iii) Current assets – inventory : current liabilities (1)

60 000 : 80 000 (1) = 0.75 : 1 (1) OF [3]
(b) (i) Cole Limited (1)

Cole Limited can pay the immediate liabilities from the current assets and/or Fanza
Limited’s ratio is lower than is usually acceptable (2) [3]
(ii) Cole Limited (1)

Cole Limited can meet the immediate liabilities from the liquid assets but Fanza may
have difficulty in paying current liabilities when they fall due/Fanza Limited’s ratio is lower
than is usually acceptable (2) [3]
(c) Receive a fixed rate of dividend

The dividend is paid before ordinary share dividend
Capital is returned before ordinary share capital in a winding up
Preference shares are part of the capital of the company
Any 2 (2) each [4]

(d) Receive a fixed rate of interest

Interest is paid irrespective of the profit of the company
Are long term loans
Debentures are repaid before share capital in a winding up
Any 2 (2) each [4]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.
1 Key
(a) A [1]
(b) C [1]
(c) B [1]
(d) B [1]
(e) A [1]
(f) D [1]
(g) D [1]
(h) C [1]
(i) C [1]
(j) B [1]
[Total: 10]
2 (a) Purchases (ledger)/Trade Payables / Creditors [1]
(b) Cost and net realisable value [1]
(c)
Income Expense
Bad debt recovered (1)
[3]
(d) (i) When a transaction is entered using the correct amount and on the correct side (1), but
in the wrong class of account. (1)
Example – Motor Vehicles debited to the account of Motor Expenses
Any suitable example of an error of principle (2)
(ii) Compensating errors occur when two or more errors cancel each other out (2)
Example – sales account undercast and wages account undercast
Any suitable example of a compensating error (2) [8]

(e) 4% × $28 000 = $1120 [1]
(f) (i) $120 – $87.60 = $32.40 (1)
(ii) $87.60 (1) [2]
(g) Payments $715

475
[3]
(h) (6000 × $1.50) or $9000 (1) × 3% × ½ = $135 (1) [2]
[Total: 21]
3 (a) Mitchell April 8

Amanda paid $120 in cash to Mitchell (1)
Julian April 9
Amanda received a cheque, $194, from Julian (1)
Julian was allowed $6 cash discount for prompt payment (1)
Sylvia April 14
Amanda received a cheque, $180 from Sylvia (1)
Sylvia April 21
The cheque, $180, previously received from Sylvia was dishonoured by the bank (1)
Equipment April 26
Amanda purchased equipment, $2000, by cheque (1)
Sales April 28
Amanda sold good for cash $1300 (1) [7]
(b) This is a contra entry. (1)

Office cash was paid into the bank (1) [2]
(c) (i) The cash balance represents the cash in hand (1)
The bank balance represents a bank overdraft (1) [2]
(ii) Cash balance – current asset (1)

Bank balance – current liability (1) [2]
(iii) It is not possible to take out more cash than is available [2]

(d) Amanda
Mitchell account
$ $
2012
Julian account
$ $
2012
Discount 6 (1)
Sylvia account
$ $
2012 2012
April 21 Bank (dis.chq 180 (1) April 14 Bank 180 (1)
Equipment account
$ $
2012
Sales account
$ $
2012
Discount allowed account

$ $
2012
+ (1) for dates [9]
[Total: 24]
4 (a) (i) Expenses are overstated (1)

Profit for the year is understated (1) [2]
(ii) Non-current assets are understated (1)

Owner’s capital (Profit )is understated (1) [2]

(b)
Capital Revenue
Purchase of computer (1)
Purchase of laser printer (1)
Replacement of hard disc in computer (1)

[3]
(c) (i) ($4800 + $750) (1) O/F based on answer to (b) – $600 (1) = $4950
$4950
= $1650 (1) O/F [4]
3 years (1)
(ii) ($4800 + $750) O/F based on answer to (b) – $1650 (1) O/F
= $3900 (1) O/F [2]
(d)
Non-current Non-current Current asset
tangible asset intangible asset
Office building (1)
Motor vehicle (1)
Goodwill (1)

[4]
[Total: 17]

5 (a) Rachel Smith

$ $ $
Revenue 63 100 (1)
Less Cost of sales
40 600
44 750
Less Closing inventory 3 750 (1) 41 000 (1) OF
Less Carriage outwards 540

Bad debts 190 (1)
Property tax (6000 – 1200) 4 800 (2)
Wages (7100 + 180) 7 280 (2)
Depreciation – Equipment 1 920 (1) 16 500
[16]
22 100 O/F} 100

(b) (i) (1) × = 35.02% (1) O/F [2]
63 100 } 1
(ii) Increase selling prices

Reduce cost of purchases
5 600 O/F} 100

(c) (i) (1) × = 8.87% (1) O/F [2]
63 100 } 1
(ii) Reduce expenses

Increase gross profit
[Total: 24]
6 (a) The business will continue to operate for an indefinite period of time (1) and there is no
intention to close down or significantly reduce the size of the business. (1) [2]
(b) (i) Current assets : Current liabilities [1]
(ii) 11 400 : 13 800 (1) = 0.83 : 1 (1) [2]

(iii) Unsatisfied (1)

The business cannot meet the immediate liabilities from the immediate assets (2) [3]
(c)
Capital (1)
Current assets (1)
Current liabilities (1)

[4]
(d) To assess whether the interest can be paid when due

To assess whether the loan can be repaid when due
To assess whether there is security for the loan
(e) There are not enough non-current assets for security of the loan
There is not enough profit to cover the loan interest
The business would not be able to re-pay the loan on time
Drawings for the year exceed the profit for the year
(f) Introduce additional capital

Admit a partner/form a limited company
Mortgage
Loans from other sources
Any 2 (2) each [4]
[Total: 24]



0452 ACCOUNTING
examination.
syllabuses.
1 Key
(a) C [1]
(b) D [1]
(c) D [1]
(d) A [1]
(e) B [1]
(f) B [1]
(g) D [1]
(h) C [1]
(i) A [1]
(j) A [1]
[Total: 10]
2 (a) Invoice [1]
(c)
Asset Liability
Inventory (1)
Trade payables (1)

[3]

(f) (300 × $10.30) (1) = $3090 – 4% = $3090 – $123.60 = $2966.40 (1) [2]

Any 2 (1) each [2]
(i) (200 × $100) (1) = $20 000 × 3% × ½ = $300 (1) [2]
(j) Payments $2100

1750
[3]
[Total: 20]


(b) Hans Lee

Dr Cr
$ $
Revenue 110 000
Purchases 65 000
Inventory (1 May 2011) 11 500 (1)
Machinery 7 400
Expenses 31 600
Capital 11 500 }
Drawings 7 600 }(1)
126 500 126 500 (1)

[7]
(c) Hans Lee

Journal
Debit Credit
$ $

Suspense 1 600 (1)
2 Suspense 300 (1)

John Tan 300 (1)
3 Drawings 200 (1)

Suspense 200 (1)
[6]

(d)
Error 1 (1)
Error 2 (1)
Error 3 (1)
[3]
[Total: 19]
(c) Refer to next page [12]

2012 $ 2012 $

2012 $

2012 $
Cleaning account
2012 $
[5]
(e) $24 (1) O/F from (c) [1]
[Total: 22]

$ $ $ $ $ $
103 (1) Bank
4 (1) 12 Stationery 36 36 (1)
17 Fuel 38 38 (1)
29 Cleaning 70 70 (1)
180 60 38 12 70
30 Balance c/d 24
204 May 1 204

Balance b/d
Bank/Cash
24 (1)
176 (1)
O/F

Dates (1) [12]


Sharing of risks
Any 2 (1) each [2]

Any 2 (1) each [2]

Journal
Debit Credit
$ $
Bank 6000 (1)

Inventory 4000 (1)

Capital Hassan 4000 (1)
Rent 600 (1)

[8]

$ $ $
Hassan 120 (1) 300
5500
Hassan 3300 (2)(1) OF 5500
[8]

(e) Raoul
Current account
2012 $ 2012 $
Salary 3000 (1)
5380 5380
[4]

Any 1 (2) [2]
[Total: 26]

(36 000 + 60 000) – (63 000 + 17 000) = 96 000 – 80 000 (1)
= $16 000 (1) OF [3]

96 000 : 80 000 (1) = 1.2 : 1 (1) OF [3]

60 000 : 80 000 (1) = 0.75 : 1 (1) OF [3]



Any 2 (2) each [4]


Are long term loans
Any 2 (2) each [4]
[Total: 23]

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om
0452 ACCOUNTING
examination.
syllabuses.
1 (a) The cash book is a book of prime (original) entry because it is written up from business documents. (1)
The cash book is part of the double entry system as it acts as ledger accounts for cash and bank. (1) [2]
(b) Stewart Hanson

Cash Book
allowed received
2012 $ $ $ 2012 $ $ $
Jan 1 Balances b/d 100 1942 Jan 3 Paul Yim (1) 12 398
28 Sales (1) 1970 8 Office equipment (1) 1795
30 Cash c (1) 2020 13 Drawings (1) 250
20 Sue West (dis.
cheque) (1) 115
30 Bank c (1) 2020
31 Balances c/d 50 1404
2012 2070 3962 12 2070 3962

Feb 1 Balances b/d
50 1404
(1)OF (1)OF
+ (1) dates [10]

(c) (i) Between 8 and 29 January the payments from the bank exceeded the money in the
bank account. [2]
(ii) Purchase of equipment could possibly have been delayed until later in the month. [2]
(d) The personal motor expenses have been treated as drawings and not as a business
expense. [2]
(e) Journal
Debit Credit
$ $
Bad debts 115 (1)

Sue West 115 (1)
Amount owed by Sue West written
off as a bad debt (1)
[3]
(f)
Bank (1) Bad debts recovered (1)
OR
Sue West } Bad debts recovered }

Bank } (1) Sue West } (1)
[2]
(g) Reduce credit sales/sell on a cash basis

[Total: 25]

2 (a) To assist in the location of errors

To provide instant totals of trade receivables and trade payables
To prove the arithmetical accuracy of the sales and purchases ledgers
To enable a balance sheet to be prepared quickly
To provide a summary of transactions relating to trade receivables and trade payables
To provide an internal check on sales and purchases ledgers – may reduce fraud
(b) The purchases ledger control account acts as a check on the purchases ledger. If there is an
error in the purchases ledger it will not be revealed by a control account prepared from the
individual accounts in the ledger. [2]
(c) Fatima Ayub

2012 $ 2012 $
April 1 Balance b/d 38 April1 Balance b/d 4 260 (1) for
both
balances
30 Purchases returns 243 (1) 30 Purchases 6 680 (1)
Bank 3 705 (1) Interest charged 11 (1)
Discount received 95 (1) Balance c/d 22 (1)
Contra entry 320 (1)
10 973 10 973
2012 2012
May 1 Balance b/d 22 (1) May 1 Balance b/d 6 572 (1)OF
+ (1) dates [12]
(d) Overpayment to supplier

Payment made without deducting cash discount
Goods returned to supplier after payment of balance due
Payment made in advance to supplier
(e) A contra entry is one which appears on the debit of the purchases ledger control account and
the credit of the sales ledger control account. (1)
This entry is made when a sales ledger account is set off against an a purchases ledger
account of the same person/business. (1) [2]
[Total: 20]

3 (a) Mark Mutanda

$ $
Rent received (2 600 – 200) 2 400 (2)
Decrease in provision for doubtful debts
(154 – 136) 18 (2)
84 518
Less Insurance (5 630 – 2 320) 3 310 (2)
Wages and salaries (33 000 + 3 200) 36 200 (2)
Rates 5 200 (1)
Loan interest (900 + 300) 1 200 (2)
Office expenses (17 177 – 214) 16 963 (2)
Depreciation – Office equipment
(1 900 + 600 (1) – 2 100 (1)) 400
Depreciation – Fixtures & fittings
(10% × 5250) 525 (1) 63 798
Profit for the year 20 720 (1)OF [18]
(b) Mark Mutanda

Capital account
2012 $ 2011 $
Jan 31 Office expenses Feb 1 Balance b/d 200 000 (1)
(drawings) 214 (1) 2012
Cash (drawings) 16 000 (1) Jan 31 Profit 20 720 (1)OF
Balance c/d 204 506
220 720 220 720
2012
Feb 1 Balance b/d 204 506 (1)OF
+ (1) dates [6]
20 720 (1)OF 100

(c) × = 9.42% (1)OF [3]
200 000 + 20 000 (1) 1
(d) This shows the profit earned for every $100 used in the business. (1)
(e) Lower profit for the year

Any 1 point (2) [2]

4 (a) The accumulated fund represents the surpluses (less any deficits) the club has made since it
was formed. [2]
(b) Dhavari Sports Club

Calculation of Corrected Surplus for the year ended 31 March 2012
$ $
Original surplus 17 400
Add Insurance prepaid 300 (1)
Expenditure overcast 100 (1)
17 800
Less Depreciation of equipment 1 400 (1)
Bank charges 150 (1)
Subscriptions prepaid 600 (1) 2 150
Corrected surplus 15 650 (1)OF [6]
(c) The income and expenditure account includes only revenue items
The income and expenditure account includes non-monetary items
The income and expenditure account adjusts figures for accruals and prepayments
The receipts and payments account shows total money paid and received
(d) Dhavari Sports Club

Balance Sheet at 31 March 2012
$ $ $
Non-current assets
Sports equipment at valuation 11 600 (1)
81 600 (1)
Current assets
Shop inventory 8 500
Subscriptions owing 1 500 (1)
Petty cash 200 (1)
10 500 (1)OF
Current liabilities
Bank overdraft (1 400 + 150) 1 550 (1)
Subscriptions prepaid 600 (1) 6 450 (1)OF
85 650
Loan (repayable 1 January 2015) 10 000 (1)
75 650
Financed by
Accumulated fund
Opening balance 60 000
Plus Surplus for the year 15 650 (1)OF
75 650
[12]
[Total: 24]

5 (a) The cost of inventory is the actual purchase price of the goods (1) plus any additional costs
incurred in bringing the goods to their present position and condition. (1) [2]
(b) The net realisable value is the estimated receipts from selling the goods (1) less any costs of
completing the goods or costs of selling. (1) [2]
(c) This ensures that the profit is not overstated (1)

This ensures that the inventory is not overstated (1) [2]
(d)
(ii) profit for the year ended

31 December 2012 (2)
(iii) credit balance on capital (2)

account on 1 January 2013
[4]
(e) Cost of sales = 80% × 87 000 = 69 600 (1)
6 000 + 7 400
Average inventory = = 6700 (1)
2
69 600
Rate of turnover = = 10.39 times (1) [3]
6 700
(f) Lower inventory levels

More sales activity
(g) The business should be selling similar goods

The business should be of a similar size
Any 1 point (1) [1]
(h) To assess the liquidity position

To calculate the payment period for trade payables
To identify future prospects

(i) (i) Employee

To assess the ability of the business to continue operating
To consider the prospects for jobs and wages
Any 1 point (1) [1]
(ii) Bank manager

To assess the prospect of any requested loan/overdraft being repaid when due
To assess the prospects of any interest on loan/overdraft being paid when due
To determine the security available to cover any loan/overdraft
Any 1 point (1) [1]
[Total: 20]



0452 ACCOUNTING
examination.
syllabuses.
1 (a)
Dalia Said
Purchases journal
Date Details $ $
2012
March 2 Essam Wholesalers 1950 (1)
8 Ramy El Din 680

Less 20% Trade discount 136 544 (1)
____
31 Transfer to Purchases a/c 2494 (1)
[3]
Date Details $ $
2012
March 14 Ramy El Din 120
__
31 Transfer to Purchases 96 (1)
returns a/c
[2]
(b) Dalia Said

Essam Wholesalers account
2012 $ 2012 $
Mar 21 Bank 1911 (1) Mar 2 Purchases 1950 (1)
Discount 39 (1) ____ (1)
1950 (1) 1950 (1)
[3]
Ramy El Din account

2012 $ 2012 $
Mar 14 Returns 96 (1) Mar 8 Purchases 544 (1)
28 Bank 300 (1)
31 Balance c/d 148 (1) ___ (1)
544 (1) 544 (1)
2012
Apl 1 Balance b/d 148 (1)O/F
[4]

(c) Purchases ledger/Creditors ledger [1]
2600 365
(d) × (1) = 28.41 = 29 days (1) [2]
33 400 1
(e) Money can be used for other things within the business
May avoid bank charges/bank interest
Any 1 point (1) [1]
(f) Loss of cash discounts

Creditors may refuse further supplies
Creditors may insist on cash purchases in future
Damage to good relationship with suppliers
May be charged interest
Any 1 point (1) [1]
(g) Offer cash discount for prompt payment

[Total: 20]

2 (a) Simon Nyemba

Commission received account
2011 $ 2011 $
Feb 1 Balance b/d 280 (1) Feb 5 Bank 280} (1)
2012 Aug 3 Bank 312} (1)
Jan 31 Income 2012
Statement 608 (2) Jan 31 Balance c/d 296 (1)
O/F
888 (1) 888 (1)
2012
Feb 1 Balance b/d 296 (1)
+ (1) dates [6]
(b) Simon Nyemba

Property tax account
2011 $ 2012 $
Feb 1 Balance b/d 520} (1) Jan 31 Income
Apl 24 Bank 1620} (1) statement 3220 (2)O/F
Oct 4 Bank 1620} (1) Balance c/d 540 (1)
3760 (1) 3760 (1)
2012
Feb 1 Balance b/d 540} (1)
+ (1) dates [6]
(c) Accruals (matching) [1]
(d) (i) Current assets (1)
(ii) Current assets (1) [2]
(e) Journal
Debit Credit
$ $

Total discount allowed transferred to the
income statement (1)
[3]
Continued/

(f) Simon Nyemba

2012 $ 2011 $
Jan 31 Income Feb 1 Balance b/d 460 (1)
Statement 31 (2)
O/F
Balance c/d 429 (1) ___ (1)
460 (1) 460 (1)
2012
+ (1) dates [5]
(g) Prudence
OR
Accruals (matching) [1]
[Total: 24]
3 (a) Herman Wagner

$ $
Cost of materials consumed (1)
Opening inventory of raw materials 14 300 (2)
Purchases of raw material 168 900 (2)
Carriage on purchases 2 600 (2)
185 800 (2)
Less Closing inventory of raw materials 16 400 (2) 169 400 (1)
Factory overheads
Indirect wages (43 600 – 10 000) 33 600 (2)
General expenses (24 450 – (¼ × 6200)) 22 900 (2)
Depreciation – Factory machinery
(20% × (98 000 – 35 280)) 12 544 (2)
Loose tools
(950 + 45 – 890) 105 (2) 69 149 (2)
432 249 (1) O/F
Add Opening work in progress 6 520 (1)
438 769 (2)

[16]

(b) (i) Inventory of raw materials

Goods remaining at the year-end which were originally purchased for converting into
finished articles (1)
Example – wood, nails, screws, handles or other suitable example (1) [2]
(ii) Inventory of work in progress

Furniture which is partly made at the year end (1)
Example – partly made table/ wardrobe/chair/other suitable example (1) [2]
(iii) Inventory of finished goods

Completed furniture which is awaiting sale (1)
Example – finished table/wardrobe/chair/other suitable example (1) [2]
(c) This is an application of the principle of materiality.

It is not practical to keep detailed records of loose tools.
(d)
(170 200 - 144 000 ) (1) × 100 = 17.47% [3]
(130 000 + 20 000 ) (1) 1
(e) Unsatisfied (1)
The ratio is lower than the previous year. (1)

The capital is not being employed as efficiently as in the previous year. (1)
Accept answer based on the answer to (d) [3]
[Total: 31]

4 (a) Creekside Ltd

$ $ $
to date value
Premises 120 000 (1) 120 000 (1)
Plant and machinery 90 000 (1) 15 500 (1) 74 500 (1)
Fixtures and fittings 32 000 (1) 6 400 (1) 25 600 (1)
242 000 (1) 21 900 (1) 220 100 (1) O/F
Current assets
Cash 200 (1)
45 800 (1)
Current liabilities
Bank overdraft 5 340 (1) 32 300 (1)
Net current assets 13 500 (1) O/F
233 600 (1)
203 600 (1)

Ordinary shares of $1 each 100 000 (1)
Retained profits (6 500 (1) + 7 100 (1)) 13 600 (1)
203 600 (1)
[15]
(b) (i) $1600 [1]
(ii) Effect Profit for the year is reduced (1)

Reason Debenture interest is an expense (1 [2]
(c) (i) $2000 [1]
(ii) Reduction in profit (or dividend) available for ordinary shareholders

Any 1 point (2) [2]

(d) The new shares rank equally with the existing ordinary shares with regard to dividend.
The new shares rank equally with the existing ordinary shares with regard to repayment in a
winding up.
The percentage of ownership of the existing ordinary shareholders is diluted.
Any 1 point (2) [2]
[Total: 23]
5 (a) Bethany Searle

Journal
Debit Credit
$ $
2 Suspense 340 (1)

Rent received 340 (1)
3 Purchases returns 24 (1)

Stationery 24 (1)
4 - – (1)
Suspense 100 (1)
5 Sales 1000 (1)

Suspense 1000 (1)
[8]

(b) Bethany Searle

Statement of corrected profit for the years ended 31 March 2012
$
Effect on profit
Increase Decrease
$ $
Error 1 96 (2)
2 340 (2)
3 No effect (2)
4 No effect (2)
5 ___ (2) 1 000 (2)

436 (2) 1 000 (2) 564 (2)
[9]
(c) (19 540 + 100) : (21 570 + 2 880)

= 19 640 : 24 450 (1) = 0.80 : 1 (1) [2]
(d) Shows whether the immediate liabilities can be paid from liquid assets
Shows whether the business relies on the sale of inventory to pay the immediate liabilities
(e) The quick ratio does not include inventory. (1)

Either
Inventory is not regarded as a liquid asset (1)
Or
Inventory is two stages away from being a liquid asset. (1) [2]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.
(b) Stewart Hanson

Cash Book
allowed received
2012 $ $ $ 2012 $ $ $
30 Cash c (1) 2020 13 Drawings (1) 250
20 Sue West (dis.
cheque) (1) 115
30 Bank c (1) 2020
2012 2070 3962 12 2070 3962

Feb 1 Balances b/d
50 1404
(1)OF (1)OF
+ (1) dates [10]

bank account. [2]
expense. [2]
(e) Journal
Debit Credit
$ $
Bad debts 115 (1)

Sue West 115 (1)
[3]
(f)
Bank (1) Bad debts recovered (1)
OR

[2]

[Total: 25]


(c) Fatima Ayub

2012 $ 2012 $
both
balances
10 973 10 973
2012 2012
+ (1) dates [12]

[Total: 20]

3 (a) Mark Mutanda

$ $
Rent received (2 600 – 200) 2 400 (2)
(154 – 136) 18 (2)
84 518
Less Insurance (5 630 – 2 320) 3 310 (2)
Rates 5 200 (1)
Loan interest (900 + 300) 1 200 (2)
Office expenses (17 177 – 214) 16 963 (2)
(1 900 + 600 (1) – 2 100 (1)) 400
(10% × 5250) 525 (1) 63 798
(b) Mark Mutanda

Capital account
2012 $ 2011 $
(drawings) 214 (1) 2012
Balance c/d 204 506
220 720 220 720
2012
+ (1) dates [6]
20 720 (1)OF 100

(c) × = 9.42% (1)OF [3]
200 000 + 20 000 (1) 1

Any 1 point (2) [2]

was formed. [2]

$ $
17 800

$ $ $
Non-current assets
81 600 (1)
Current assets
Petty cash 200 (1)
10 500 (1)OF
Current liabilities
Bank overdraft (1 400 + 150) 1 550 (1)
85 650
75 650
Financed by
Accumulated fund
75 650
[12]
[Total: 24]


(d)


[4]
(e) Cost of sales = 80% × 87 000 = 69 600 (1)
6 000 + 7 400
Average inventory = = 6700 (1)
2
69 600
6 700

More sales activity

Any 1 point (1) [1]


(i) (i) Employee

Any 1 point (1) [1]
(ii) Bank manager

Any 1 point (1) [1]
[Total: 20]

Prepared by D. El-Hoss
IGCSE Accounting 2003 – 2012
Mark Schemes
Table of Contents (1)
Old Syllabus
2003 -2009
June 2003 Paper 1 Page 3
June 2004 Paper3 Page 31
June 2005 Paper 1 www.igcseaccounts.com
Page 43
All Questions Copyright of Cambridge International Examinations

IGCSE Accounting 2003 – 2011
Mark Schemes
New Syllabus
2010-2011
June 2010 Paper 1(1) Page 137
June 2010 Paper 1 (2) Page 144
June 2010 Paper 2(3)
June 2011 Paper 1(1) www.igcseaccounts.com
Page 177
Page 184
June 2011 Paper2(2) Page 218

June 2003
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 40
www.igcseaccounts.com
SYLLABUS/COMPONENT: 0452/01
ACCOUNTING
Paper 1 (Multiple Choice)


IGCSE EXAMINATIONS – JUNE 2003 0452 1
Question Question
Key Key
Number Number
1 D 21 A
2 D 22 C
3 A 23 C
4 B 24 C
5 A 25 D
6 A 26 C
7 B 27 C
8 C 28 B
9 D 29 B
10 C 30 B
11 A 31 B
12 B 32 D
13 C 33 B
14 A 34 B
15 A 35 D
16 www.igcseaccounts.com
B 36 A
17 A 37 B
18 B 38 A
19 B 39 B
20 D 40 B
TOTAL 40
© University of Cambridge Local Examinations Syndicate 2003

June 2003
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 90
ACCOUNTING
Paper 2 (Structured Questions)


Question Part
Mark Scheme Details
Number Mark
1 (a) Trade creditors, accrued expense(s), bank overdraft
Or acceptable alternative 1
(b) N.P. is undervalued/understated 1
(c) One from: Correction of errors

Opening entries
Purchase/sale of fixed asset
Other transfers/adjustments 1
(d) 1. P/L Appropriation (1)

2. P/L (1)
3. P/L Appropriation (1) 3
(e) 1. Revenue
2. Capital
3. Capital 3
(f) Asset (1) or expense (1) 2
(g) Cost 1/1/01 20000

- Depn. 31/12/01 (30%) 6000 (1) C/F
N.B.V. 31/12/01 14000 (1)
- Depn. 31/12/02 (30%)
N.B.V. 31/12/02
O/Fs 4200
9800
(1)
(1) 4
(h) Current liabilities 1
(i) Imprest system 1
(j) Error of commission 1
(k) Advantage of business due to its:

- reputation
- well-established clientele Or other acceptable
- location reason for paying
- good staff relations/reliable workforce premium price
- goodwill 1
19


Question Part
Mark Scheme Details
Number Mark
2 (a) Danbi Wyske
Trial Balance as at 30 April 2003
Dr Cr
$ $
Stock 1 May 2002 4000 (1)
Sales 80000 (1)
Purchases 62000 (1)
Debtors 10000 (1)
Creditors 9000 (1)
Electricity 3000 (1)
Cash at bank 5000 (1)
Drawings 8000 (1)
Equipment at cost 45000 (1)
Provision for depreciation of
equipment 16000 (1)
Rent and insurance paid 6000 (1)
Capital 45000 (2) -1 O/F
150000 150000 14
(b) Suspense Account 1
www.igcseaccounts.com 15
2 (a) An own figure mark for the Capital figure should only be awarded if a credit balance
is shown.


Question Part
Mark Scheme Details
Number Mark
3 (a) (i) $12000 (1)
(ii) Purchase returns (accept ‘returns’) (1)
(iii) Closing stock (accept ‘Stock at 31 March 2003’) (1)
(iv) $5000 (1)
(v) received (1)
(vi) £15000 (1) 6
(b)
$30000 x 100 (1) = 15% (1) C/F
200000 2
(c) Capital employed: $200000

+ 50000
250000
$30000 x 100 (1) = 12% (2) O/F 1

250000 (1) 3
(d) N.P. as percentage of capital employed:

- measures overall profitability of the business in relation to resources
used
- indicates adequacy of return on owner’s investment
- enables comparisons to be made, e.g. against other investments,
earlier years, similar firms
- assists decision-making, e.g. in production, cost of borrowing or other
acceptable points 4
For each reason given: 2 marks 15

4 (a) Karl
Cash Book
Date Discount Cash Bank Date Discount Cash Bank

$ $ $ $ $ $
2003 1 Balances b/d 200 2500 2003 6 Cash 300 (1)
April 4 M Fynne 10 (1) 190 (1) April 8 S Ghalli 15 (1) 600 (1)
Page 4
6 Bank 300 (1) 10 Wages 250 (1)

14 J Bildt 40 (1) 1460 (1) 17 Cash 400 (1)
17 Bank 400 (1) 21 T Daktyl 30 (1) 800 (1)
28 Sales (cash) 800 (1) 25 Wages 350 (1)
30 Cash 500 (1) 30 Bank 500 (1)
Balances 600 2550
c/d
50 (1) 1700 4650 45 (1) 1700 4650
May 1 Balances b/d 600 (1) 2550 (1) C/Fs 21

Mark Scheme
(b) Nominal Ledger

Discount Allowed Account
IGCSE EXAMINATIONS – JUNE 2003
2003 $
April 30 Total for April (or similar

acceptable wording) (1) 50 (1)

Discount Received Account
0452
Syllabus
2003 $
April 30 Total for April (or similar
acceptable wording) (1) 45 (1) 4
2
Paper
25


Question Part
Mark Scheme Details
Number Mark
5 (a) Carrie Okie
Balance Sheet as at 1 April 2002
$ $
Fixed assets 50000 (1)
Current assets 20000 (1)
Less Current liabilities 15000 (1) 5000
55000
Capital 55000 (1) 4

(Horizontal format also acceptable)
(b) Balance Sheet as at 31 March 2003

$ $
Fixed assets 75000 (1)
Less Depreciation (20%) 15000 (1) 60000 (1)
Current assets 30000 (1)
Less Current liabilities 20000 (1) 10000
70000
Capital 1/4/02 55000 (1) O/F

Add Net profit 25000 (2) 1 O/F
80000
Less Drawings 10000 (1)
70000 (1) O/F
(Horizontal layout also acceptable) 10
$ $ $
Fixed assets 75000 (1) Capital 1/4/02 55000 (1) O/F
Less Depreciation 15000 (1) 60000 (1) Add Net profit 25000 (2) 1 O/F
80000
Current assets 30000 (1) Less Drawings 10000 (1)
70000 (1)
Current
liabilities 20000 (1)
90000 90000
(10)
(c) Prudence is observed by:
- not overstating profits,

as depreciation is charged in P/L a/c 1 mark per acceptable
- allowing for foreseeable loss point x 2
asset values shown in B/S) 2
16

June 2003
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 100
ACCOUNTING
Paper 3 (Structured Questions – Extended)

Page 1
Mark Scheme Syllabus Paper
1 (a) Work can be shared between several people.

Easier for reference as same type of accounts are kept together.
Easier to introduce checking procedures.
Or other suitable point [2]
(b) The names of any two suitable accounts – either real or nominal
accounts – which would appear in the general ledger. (1) each
[2]
(c)
$ $
2003 2003
Apl 30 Purchases Apl 1 Balances b/d 1960
returns 135 (1) 30 Purchases 4190 (1)
Bank 3830 (1)
Discount
received 180 (1)
Balances c/d 2005
6150 6150
2003
www.igcseaccounts.com May 1 Balances b/d 2005 (1) O/F
Dates (1) [6]
Sales Ledger Control account
$ $
2003 2003
Apl 1 Purchases 1750 Apl 1 Balances b/d 100
30 Sales 5150 (1) 30 Sales returns 270 (1)
Bank (refund) 100 (1) Bank 4990 (1)
Bad debts 74 (1)
Balances c/d 1456
7000 7000
2003
May 1 Balances b/d 1456 (1) O/F
Dates (1) [8]
[Total 18]

Page 2
(c) Alternative presentation –
Dr Cr Balance
$ $ $
2003
Apl 1 Balances 1960 1960 Cr
30 Purchases 4190 (1) 6150 Cr
Purchases returns 135 (1) 6015 Cr
Bank 3830 (1) 2185 Cr
Discount received 180 (1) 2005 Cr (1) O/F
Dates (1) [6]
Dr Cr Balance
$ $ $
2003
Apl 1 Balances 1750 100 1650 Dr
30 Sales 5150 (1) 6800 Dr
Sales returns 270 (1) 6530 Dr
Bank
Discount allowed
4990 (1)
110 (1)
1540 Dr
1430 Dr
Bank (refund) 100 (1) 1530 Dr
Bad debts 74 (1) 1456 Dr (1) O/F
Dates (1) [8]
[Total 18]

Page 3
2 (a)
Amir Sadiq
Trading and Profit and Loss Account for the year ended 31 March 2003
$ $ $
Sales 92100 (1)
Less Sales returns 1200 (1) 90900
Less Cost of Sales -
Opening stock 9900 (1)
Purchases 68500 (1)
Less goods for own use 300 (1) 68200
78800
Less Closing stock 10200 (1) 68600 (1)
Gross Profit 22300 (1) O/F
Reduction in provision for doubtful debts 50 (1) 300
22600
Wages 11940 + 1080 13020 (1)
Insurance 1470 - 210 1260 (1)
Depreciation -
Motor vehicles 20% x 4750 950 (1)
Fixtures and equipment 3400 - 2800 600 (1) 19100
Net Profit
www.igcseaccounts.com 3500 (1) O/F
[17]
Horizontal presentation acceptable.

Page 4
(b) Cost of goods sold = 68600 O/F = 6.83 times (1) O/F
Average stock 10050
[2]
(c) (i) Accounts are prepared on the basis that the business will continue to
operate for an indefinite period of time.
[2]
(ii) Lower of cost and net realisable value.

[1]
[Total 22]

Page 5
3 (a)
Mary
Bank Reconciliation Statement as at 31 January 2003
Balance as per cash book (1780) (1)

Plus cheque not yet presented – David 270 (1)
(1510)
Less amount not yet credited 800 (1)
Balance as per bank statement (2310) (1)
[4]
(b) (i)
$ $
Current Assets
Stock 6600
Debtors 5400
Insurance prepaid 120
Cash 240 12360
Current Liabilities
Creditors 4620
Rent received in advance 160
Bank overdraft 1780
General expenses accrued 700 7260
Working capital 5100 (1) O/F
Any 2 correct items (1)

[5]
(ii) 1. Current ratio
12360 O/F : 7260 O/F (1) = 1.70: 1 (1) O/F

[2]
2. Quick ratio
(12360 O/F - 6600) : 1260 O/F (1) = 0.79: 1 (1) O/F

[2]

Page 6
(c) (i) May have problems paying debts as they fall due
Cannot make the most of opportunities as they occur
Difficulties in obtaining further supplies

Any two suitable points – (2) each
[4]
(ii) Injection of more capital

Long-term loans
Sale of surplus fixed assets
Reduce drawings

Any two suitable points – (2) each
[4]
[Total 21]

Page 7
4 (a) April 1 Sales

Suzi sold goods, $10100, on credit to John Karunda.
(2)
April 30 Bank
John paid $1000 to Suzi by cheque.
(2)
May 6 Bank (dishonoured cheque)

John's cheque was dishonoured by the bank. The amount was
debited to John's account to show he still owes this amount.
(2)
December 1 Cash
John paid $850 in cash to Suzi.
(2)
January 3 Bad debts

Suzi wrote off the amount owed by John as a bad debt.
(2)
[10]
(b) Provision for doubtful debts account
$ $
2003 2002
Jan 31 Balance c/d 800 (2) Feb 1 Balance b/d 900 (1)
Profit and Loss 100 (1) O/F
900 900
2003
Feb 1 Balance b/d 800 (1) O/F
Dates (1) [6]

Page 8
Alternative presentation –
Dr Cr Balance
$ $ $
2002
Feb 1 Balance 900
900 Cr (1)
2003
100 (1) O/F
Jan 31 Profit and Loss
800 Cr (3) C/F
(1) O/F
Dates (1) [6]
(c) Obtain references from new credit customers

Issue invoices and statements promptly
Follow up overdue accounts promptly
Supply goods on a cash basis only
Refuse further supplies until outstanding account is paid

Any 4 suitable points – (1) each
www.igcseaccounts.com [4]
[Total 20]

Page 9
5 (a)
Cobbydale Sports Club

Income and Expenditure Account for the year ended 30 April 2003
$ $
Income
Subscriptions (6800 + 300) 7100 (1)
Open day - Ticket sales 3250
Less expenses 1950 1300 (2)
8400
Expenditure
Insurance 670
Rent of premises (2420 + 220) 2640 (1)
Depreciation - Equipment 550 (1) 5290
Surplus for the year 3110 (1) O/F
[7]
(b) (i) Either

Loan from member
This is not regarded as income for the year as it represents a long-
term liability.
Or
This is not regarded as revenue expenditure as it is the purchase of a
fixed asset.
Or
Closing bank balance
This is neither income nor expenditure for the year as it represents

the amount of money in the bank on 30 April.
[2]
(ii) Either
Subscriptions owing Or Rent owing
In each case the item represents an amount relating to the current year
which has not actually been received/paid. The matching principle must be
applied so that the amount relates to the current period of time.
Or
This is a non-monetary expense but must be taken into account in
calculating the surplus/deficit for the period so that the matching principle is
applied.
Or
Surplus for the year
This is the difference between the income and expenditure and is the ‘profit’
for the year and does not represent money paid/received.
[2]

Page 10
(c)
Cobbydale Sports Club
$ $ $
Fixed Assets Cost Depreciation to Book value
date
Equipment 3500 (1) 550 (1) O/F 2950 (1) O/F
Current Assets
Subscriptions due 300 (1)
Bank 1080 (1)
1380
Current Liabilities
Accrual – Rent 220 (1) 1160
4110
Accumulated Fund
Surplus for the year 3110 (1) O/F
Long-Term Liabilities
Loan* 1000 (1)
4110
* Alternatively, allow as current liability as question does not specify date of repayment.
[8]
[Total 19]

Grade thresholds taken for Syllabus 0452 (Accounting) in the June 2003 examination.
maximum minimum mark required for grade:

mark
A C E F
available
Component 1 40 - 24 18 15
Component 2 90 78 63 46 34
Component 3 100 73 49 - -
The threshold (minimum mark) for B is set halfway between those for Grades A and C.
The threshold (minimum mark) for D is set halfway between those for Grades C and E.
The threshold (minimum mark) for G is set as many marks below the F threshold as the E
threshold is above it.
Grade A* does not exist at the level of an individual component.


MARK SCHEME for the June 2004 question papers
0452 ACCOUNTING
0452/01 Paper 1 (Multiple Choice), maximum mark 40
0452/02 Paper 2 (Structured Questions), maximum mark 90
0452/03 Paper 3 (Structured Questions – Extended),

maximum mark 100
These mark schemes are published as an aid to teachers and students, to indicate the requirements
of the examination. They show the basis on which Examiners were initially instructed to award marks.
They do not indicate the details of the discussions that took place at an Examiners’ meeting before
marking began. Any substantial changes to the mark scheme that arose from these discussions will
be recorded in the published Report on the Examination.
All Examiners are instructed that alternative correct answers and unexpected approaches in
candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills
demonstrated.
Mark schemes must be read in conjunction with the question papers and the Report on the
Examination.
• CIE will not enter into discussion or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the June 2004 question papers for most IGCSE and GCE
Advanced Level syllabuses.

Grade thresholds taken for Syllabus 0452 (Accounting) in the June 2004 examination.
maximum minimum mark required for grade:

mark
A C E F
available
Component 1 40 - 24 18 15
Component 2 90 80 66 46 32
Component 3 100 72 48 - -
The threshold (minimum mark) for G is set as many marks below the F threshold as the E

June 2004
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 40
ACCOUNTING


ACCOUNTING – JUNE 2004 0452 1
Question Question
Key Key
Number Number
1 B 21 A
2 B 22 B
3 B 23 B
4 A 24 D
5 C 25 B
6 B 26 A
7 A 27 B
8 B 28 C
9 C 29 A
10 A 30 A
11 B 31 A
12 A 32 A
13 B 33 C
14 B 34 A
15 B 35 A
16 D 36 D
17 A 37 A
B 38 C
19 B 39 D
20 B 40 D
TOTAL 40

June 2004
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 90
ACCOUNTING
Paper 2 (Structured Questions)


Question Part
Number Mark
1 (a) Machinery, equipment, premises, motor vehicles, or acceptable
1
alternatives
(b) (i) Invoice 1

(ii) Purchases Journal/Purchases Day Book/Purchases Book/Purchases 1
(iii) Sales Ledger/Sales 1
(c) (i) $
Cost 46000
6000(1) 40000 2
- scrap value = = 8000(1)
5
(ii) 8000 20%(1)
× 100 = OF 2
40000(1)
(d) Use of incorrect figure in first place, with double entry carried out
1
correctly for wrong amount. (Suitable example acceptable.)
(e) Customer is in same type of trade; for bulk purchases, or acceptable

1
alternative. Accept: To enable customer to make profit.
(f) Suspense account. 1
(g) ROCE (or N.P. as %age of capital employed); GP: sales; NP: sales.
1
Gross profit margin, Net profit margin.
(h)
$
Paid in year 18000
+ Balance at 31/3/04 4000 (1)
22000
- Balance at 1/4/03 3000 (1)
P/L charge 19000 (1) 3
15
Question Part
Number Mark
2 (a) (i) $25000 (1)
(ii) Assets (1)
(iii) $3000 (1)
(iv) Creditors (1)
(v) Capital (1)
(vi) $20000 (1)
(vii) Drawings (1) 7
(b) (i) 40000

$ (1) = 2 : 1 (1) 2
20000
(ii) 40000 − 24000
Must be shown as ratio n:1
$ (1) = 0.8 : 1 (1) 3
20000 (1)
12


Question Part
Number Mark
3 (a) (i)
Purchases account
$
30 April 2004 Purchases for month 50000 (1)
Total/Purchases Journal
Purchases Day Book/Creditors

$
30 April 2004 Returns for month 6000 (1)
(accept as above)
Sales account
$
30 April 2004 Sales for month 85000 (1)
(accept as above)

$
30 April 2004 Returns for month 8000 (1)
(accept as above) 4
Marks are for details and correct amount in correct column. Lose 1 mark for any
(Horizontal format also acceptable) wrong or missing date
(ii) Nominal (General) Ledger 1
(b) 1. Carriage inwards is added to cost of Purchases/Cost of Goods sold (1) in

the Trading A/c/Trading and Profit and Loss A/c (1)
2. Carriage outwards is shown as an expense (1) in the P/L A/c/Trading and
4
Profit and Loss A/c (1)
(c) (i) Error of principle 1

(ii) Effect on:
1. P/L Account
Purchases/Cost of Goods sold are overstated (1), so Gross profit/Net
Profit/Profit is understated (1)
2. Balance Sheet
Office equipment/fixed assets is understated (1)
Capital/Net profit/profit is understated (1) 4
(iii) DR CR
$ $
Office equipment (machinery) 10000 (1)
Purchases 10000 (1) 2
16


Question Part
Number Mark
4 (a) (i) Debtors $ $
Balances at 1/4/03 8000 (1)
Add Sales for year 90000 (1) 98000
Less Cash received 83000 (1)

Discount allowed 5000 (1) 88000
Balances at 31/3/04 10000 (1)
(ii) Creditors
Balances at 1/4/03 6000 (1)
Add Purchases for year 77000 (1) 83000
Less Cash paid 74000 (1)

Discount received 3000 (1) 77000
Balances at 31/3/04 6000 (1) 10
(b) Trading Account for the year ended 31 March, 2004

(1) (1) $ $
Sales (90000 + 10000) 100000
Less Cost of goods sold
Stock 1/4/03 14000 (1)
Add Purchases 77000 (1)
91000
Less Stock 31/3/04 16000 (1) 75000 (1)
Needs words
"Cost of Goods
Sold"
Gross Profit 25000 (1)OF 7
(c) (i) 75000 (1) OF = 5 times (1) OF

15000 (2)
(ii) Any Profitability aspect Basic statement =1

one of: Stock replacement Suitable development =1
Comparisons Max. mark 2 2
Identifying causes of fluctuations
Remedial/corrective action
23


Question Part
Number Mark
5 (a) (i)
Wood and Coe
Profit and Loss account for the year ended 30 April 2004
$ $
Gross profit 58000
Add Discount received 1000 (1)
59000
Less Discount allowed 2000 (1)

General expenses (4500 (1) + 500 (1)) 5000
Rent (13000 (1) – 3000 (1)) 10000
Depreciation (20% x $40000) 8000 (2)
Wages and salaries (14500 (1) + 1500 (1)) 16000 41000
Net profit c/d 18000 (1)OF 11
(ii) Appropriation Account for the year ended 30 April 2004
$ $ $
Net profit b/d 18000
Less Interest on capital:
Wood (10% x $70000) 7000 (2)
Coe (10% x $20000) 2000 (2) 9000
Salary – Coe 15000 (1) 24000
(no mark if shown in P/L A/c) (6000)
Shares of loss:
Wood 2 3 4000 (2)OF
Coe 13 2000 (2)OF 6000

- 9
(b) Interest on drawings discourages large or early cash withdrawals (2)

Thus could improve cash/working capital position (2)
Also produces additional residual income/profits for division between 4
partners (2)
Any 2 from 3, maximum 4.
24

June 2004
INTERNATIONAL GCSE
MARK SCHEME
MAXIMUM MARK: 100
ACCOUNTING
Paper 3 (Structured Questions – Extended)

Page 1
Question 1
(a)
Insurance account
2003 $ 2004 $
April 1 Balance 60 (1) Mar 31 Profit & Loss 258 (1)O/F
July 1 Bank 264 (1) Balance c/d 66 (1)
324 324
2004
O/F
+ (1) Dates
[6]
Insurance account
2003 $ $ $
April 1 Balance 60 (1) 60 Dr
July 1 Bank 264 (1) 324 Dr
2004
Mar 31 Profit & Loss 258 (1) 66 Dr
www.igcseaccounts.com O/F (2)C/F
(1)O/F
+ (1) Dates
[6]
(b) (i) A narrative is a brief explanation of why the entry is being made.
[1]
(ii) A narrative is necessary because of the great variety of transactions

which are recorded in the journal, so the reason for each entry can be
understood in the future.
[2]

Page 2
(c)
Journal
Debit Credit
$ $
1. Drawings 60 (1)
Purchases 60 (1)
2. Motor vehicles 15 000 (1)

Motor expenses 600 (1)
PJ Motors 15 600 (1)
Purchase of new motor on credit
and repairs to old motor (1)
3. Stationery 20 (1)
Purchases 20 (1)
Correction of error, stationery
debited to purchases account (1)
[10]
[Total 19]
Question 2
(a)
Playground Company
Manufacturing Account for the year ended 31 December 2003
$ $
Cost of raw material
Less Closing stock of raw material 2 700 (1) 45 800
Direct factory wages (26900 + 650) 27 550 (1)
Prime Cost (1) 73 350 (1)
Factory indirect wages 18 400
Factory fuel and power (4700 + 150) 4 850 (1)
Depreciation – Factory machinery 1 450 (1) 29 630
102 980 (1) O/F
Less Closing stock of work in progress 1 920 (1)
Cost of Production(1) 101 060 (1) O/F
[12]

Page 3
(b)
Playground Company
Trading Account for the year ended 31 December 2003
$ $
Sales 151 400 (1)
Less Cost of sales
Cost of Production 101 060 (1) O/F
Less Closing stock of finished goods 4 910 (1) 96 150 (1) O/F
Gross Profit 55 250 (1) O/F
[5]
(c) Reasons why departmental final accounts are required -
More meaningful than a single set of results

Identifies the profit of each department
Enables trading results to be analysed
Enables overall profitability to be increased
Poor performance of a department can be identified and investigated
Any 2 points (1) each www.igcseaccounts.com [2]
[Total 19]
Question 3
(a) When suspense account is required –

When a trial balance fails to balance [1]
(b) The second error requires a correcting entry in the suspense account (1)
This is required because this error affects the balancing of the trial balance (2)
[3]

Page 4
(c)
Mary Manake
$ $ $
Fixed Assets
At cost (40000 – 5000) 35 000 (1)
Less Depreciation (8000 – 500) 7 500 (1) 27 500
Current Assets
Stock 8 500
Debtors 6 100
Prepayments 30 (1)
14 630 (1)O/F
Current Liabilities
Creditors 5 200
Bank overdraft (2010 + 70) 2 080 (1) 7 280 (1)O/F
Working Capital 7 350 (1)O/F
34 850
Capital
Balance at 1 May 2003 34 000
Net Profit (8440 + 30 – 70 + 150 – 400) 8 150
(1) (1) (1) (2) 42 150
Drawings 7 300
34 850 (1)O/F
Presentation (1)
Horizontal presentation acceptable
[14]
[Total 18]
Question 4
(a) Reason for providing a provision for doubtful debts –
Ensures that the profits are not overstated (prudence)

Ensures that the debtors are shown in the Balance Sheet at a more realistic amount
(prudence)
Application of the matching principle as the amount of sales unlikely to be paid
for are treated as an expense of that particular year
Or other suitable reason.
Any one reason (2) marks [2]

Page 5
(b) (i)
Ahmed account
2003 $ 2003 $
May 1 Sales 100(1) July 31 Bank 80(1)
2004
__ Jan 31 Bad debts 20(1)
100 100
[3]
(ii)
Bad debts account

2004 $ 2004 $
Jan 31 Ahmed 20(1) Mar 31 Profit & Loss 20(1)
20 20
[2]
(iii)
2004 $ 2003 $
Mar 31 Profit & Loss* 50(1) Sept 1 Cash** 50(1)
50 50
*Alternatively transfer to Bad debts account, in which case the transfer
from Bad debts account to Profit & Loss Account will be $30 on the
debit side of Bad debts account
** Alternatively allow “Zaki”, as may be using method where the amount
is credited to customer’s account and then debited and transferred to
bad debts recovered account
[2]
(iv)
2004 $ 2003 $
Mar 31 Profit & Loss 50(2) April 1 Balance b/d 250(1)
Balance c/d 200(1) ___
250 250
2004
April 1 Balance b/d 200(1)
O/F
[5]
[12]

Page 6
(b) Alternative presentation

(i)
Ahmed account

2003 $ $ $
May 1 Sales 100(1) 100 Dr
July 31 Bank 80(1) 20 Dr
2004
Jan 31 Bad debts 20(1) 0
[3]
(ii)
Bad debts account

2004 $ $ $
Jan 31 Ahmed 20(1) 20 Dr
Mar 31 Profit & Loss 20(1) 0
[2]
(iii)
2003 $ $ $
Sept 1 Cash** 50(1) 50 Cr
2004
Mar 31 Profit & Loss* 50(1) 0
*Alternatively transfer to Bad Debts account, in which case the transfer from Bad
debts account to Profit & Loss Account will be $30 on the debit side of Bad debts
account
** Alternatively allow “Zaki”, as may be using method where the amount is credited
to customer’s account and then debited and transferred to bad debts recovered
account
[2]
(iv)
2003 $ $ $
April 1 Balance 250(1) 250 Cr
2004
Mar 31 Profit & Loss 50(2) 200 Cr
(2) C/F
(1) O/F
[5]
[12]

Page 7
(c)
(i) Write Zanetti’s account off as a bad debt (1)
Amount now outstanding for over 1 year with little hope of recovery (1)
Or other acceptable explanation
(ii) No entries in accounting records are necessary (1)
Account is still likely to be paid, there is no evidence yet that it will not be
paid by Lim (1)
(iii) Create a provision for doubtful debts of $280 (1)
Must ensure that he does not overstate his net profit for the year (1)
[6]
[Total 20]
Question 5
(a) (i) Margin – when the gross profit is expressed as a percentage of the selling price
[2]
(ii) Mark-up – when the gross profit is expressed as a percentage of the cost price
[2]
(b) (i)
Year ended 31 January 2004

[6]
Gross profit as a percentage of sales 25200 x 100 = 28% (1)
90000 1
Net profit as a percentage of sales 10800 x 100 = 12% (1)

90000 1
Collection period for debtors 6300 x 365 = 35 days (1)

66000(1) 1 (34.84 days)
Payment period for creditors 5700 x 365 = 40 days (1)

52000(1) 1

Page 8
(b) (ii) All responses to be based on own figure calculations in (b) (i)
Gross profit as a percentage of sales –

Purchasing goods more cheaply
Reducing trade discounts to customers
Increasing selling prices
Net profit as a percentage of sales-

Increase in gross profit percentage
Reduction in expenses
Differences in types of expenses (fixed/variable)
Collection period for debtors –

Less efficient credit control
Allowing longer credit to maintain sales
Not allowing cash discounts to debtors
Payment period for creditors –

Shortage of liquid funds
Knock-on effect of debtors taking longer to pay
Suppliers not allowing cash discounts
In each case other suitable points acceptable

In each case – any 2 points (1) each [8]
(c) Interested parties –
Zaraki (Proprietor) -
Assessment of past performance
Planning for the future
Identifying areas where corrective action is required
Manager (if any) –

Planning for the future
Bank manager –
Assessment of prospects of any requested loan/overdraft being repaid when due
Assessment of prospects of any interest on loan/overdraft being paid when due
Assessment of the security available to cover any loan/overdraft
Lenders –
Assessment of prospects of any requested loan being repaid when due
Assessment of prospects of interest on loan being paid when due
Assessment of the security available to cover the loan
Creditors for goods –

Assessment of the liquidity position
Identifying how long the business normally takes to pay creditors
Identifying future trading prospects of the business
In each case other suitable reasons acceptable
Three parties to be identified – (1) each giving a total of (3)

One reason required in each case – (1) giving a total of (3)
[6]
[Total 24]


MARK SCHEME for the June 2005 question paper
0452 ACCOUNTING
0452/01 Paper 1 (Multiple Choice), maximum raw mark 40
Examination.
Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses’.

Grade thresholds for Syllabus 0452 (Accounting) in the June 2005 examination.
Minimum Minimum mark required for grade

mark
A C E F
available
Component 1 40 N/A 22 17 14
The threshold (minimum mark) for G is set as many marks below F threshold as the E

JUNE 2005
IGCSE
MARK SCHEME
MAXIMUM MARK: 40
ACCOUNTING


IGCSE – JUNE 2005 0452 1
Question Question
Key Key
Number Number
1 B 21 D
2 C 22 D
3 A 23 A
4 A 24 A
5 A 25 C
6 C 26 B
7 D 27 A
8 A 28 B
9 B 29 A
10 C 30 D
11 D 31 B
12 D 32 C
13 A 33 C
14 C 34 D
15 C 35 B
16 A 36 A
17
18
A
D
37
38
B
C
19 B 39 B
20 A 40 D


0452 ACCOUNTING
This mark scheme is published as an aid to teachers and students, to indicate the requirements of the
examination. It shows the basis on which Examiners were initially instructed to award marks. It does
not indicate the details of the discussions that took place at an Examiners’ meeting before marking
began. Any substantial changes to the mark scheme that arose from these discussions will be
recorded in the published Report on the Examination.
demonstrated.
Examination. www.igcseaccounts.com
Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.

Maximum Minimum mark required for grade:

mark
A C E F
available
Component 2 90 73 58 39 30
The threshold (minimum mark) for G is set as many marks below F threshold as the
E threshold is above it.

June 2005
IGCSE
MARK SCHEME
MAXIMUM MARK: 90
ACCOUNTING
Paper 2


IGCSE – JUNE 2005 0452 2
Question Question (including any source details) Part mark

number
1 (a) Cash book, Sales journal, Purchases journal, Sales returns
journal, Purchases returns journal, Journal, Petty cash book
(any two). [2]
(b) An expense incurred in the accounting period but unpaid at the

end of the period. [1]
(c) Current liabilities. [1]
(d) Suspense account. [1]
(e) Profit and Loss Account. [1]
(f) Error of original entry. [1]
(g) Business will continue trading for the foreseeable future. [1]
(h) (i) $1,800 [1]
(ii) $1,800 [1]
(iii) $8,400 [1]
(iv) Dr Cr
Profit and Loss Account
$
1 800 (1)OF
$
(accept Depreciation account)

Provision for depreciation 1 800 (1)OF [2]
[Total: 13]


IGCSE – JUNE 2005 0452 2

number
2 (a) Bonnie Clyde
$ $
Fixed Assets
Machinery at cost 20 000 (1)
Provision for depreciation 12 000 (1)
Net book value 8 000 (1)
Current Assets
Stock 3 000 (1)
Debtors 1 000 (1)
Bank 500 (1)
4 500
Current Liabilities
Creditors 700 (1)
Working capital 3 800
11 800
Long term Liability
Bank loan
(accept if under capital) 2 800 (1)
9 000
Capital
Balance at 1 April 2004 6 000 (1)
13 500
less drawings 4 500 (1)
9 000 (1) for

matching
totals
[Horizontal format acceptable] [12]
(b) (i) Current assets less current liabilities (1)

Capital needed for day to day running of business (1)
(ii) Working capital
$4 500 (1OF) less $700 (1)OF = $3 800 (1) [4]
[Total: 16]


IGCSE – JUNE 2005 0452 2

number
3 (a) Zafira
Cash Book
Dr Cr
$ $
Balance b/d 620 (1) Bank charges 15 (1)
Bank interest 20 (1) Insurance (D/debit) 40 (1)
Aisha 130 (1) Dishonoured cheque,
(credit transfer) Yanni (either) 65 (1)
650
Balance c/d
770
770
Balance b/d 650 (1)OF
[Running balance acceptable] [7]
Bank reconciliation statement at 30 April 2005

(b) Balance on updated cash book 650 (1)OF
(from (a) above)
Adjustments:
www.igcseaccounts.com900
add: unpresented cheque 250
(1)
less: amount not yet credited 310 (1)
Balance on bank statement 590 (2)
[Amounts must have narrative] (1)OF
[5]
(c) Incorrect entry in cash book
Transposition of figures in cash book
Addition error on cash book page
Item on bank statement omitted from cash book
- or similar explanations [Any two - 2 marks each]
[Repeating part (b) = 0]
[4]
[Total: 16]


IGCSE – JUNE 2005 0452 2

number
4 (a) Redd - Purchases Ledger
Block account
2005 $ 2005 $
8 March Purchases 100 (1) 5 March Purchases 320 (1)
returns
30 March Bank 220 (1) 29 March Purchases 270 (1)
31 March Balance c/d 270 (1)
590 590
1 April Balance
b/d 270
(1)OF
Quayle account
2005 $ 2005 $
31 March Bank 485 (1) 17 March Purchases 500 (1)
Discount 15 (1)
500 500
+ (1) for all dates

[need not show year] [10]
[Running balance acceptable]
(b) Rent account
2004
2 April Bank 900 (1)
2 July Bank 700 (1)
31 July Bank 200
30 Sept Bank 900
2005 (1) 2005

4 Jan Bank 900 31 March P/L Account 3 600 (1)
29 March Bank 800 (1) Balance c/d 800 (1)
4 400 4 400
1 April Balance b/d 800 (1)OF
[Must have narrative] [8]

[Running balance acceptable] + (1) for all dates


IGCSE – JUNE 2005 0452 2

number
(c) (i) Costs should be offset against revenues from the same
accounting period. (2) Accept example.
(ii) The rent paid in advance on 29 March 2005 relates to the

following accounting year and is therefore subtracted from
the amount charged to Profit and Loss Account for the year
ended 31 March 2005. (2) [4]
[Total: 22]
5 (a) $
Total bank deposits 15 270
Less: cash sales 2 680 (1)
12 590
less: Debtors at 1 April 2004 3 140 (1)
9 450
add: Debtors at 31 March 2005 4 080 (1)
Credit sales for year 13 530 (1)
[Amounts need narrative]

[4]
(b) William
Trading and Profit and Loss Account
for the year ended 31 March 2005
$ $
Sales -credit 13 530 (1)OF
-cash 2 680 (1)
16 210
Stock at 1 April 2004 1 780 (1)

Purchases 9 560 (1)
11 620
Stock at 31 March 2005 1 920 (1)
Cost of goods sold 9 700 (1)
Rent 600
Electricity 360
Motor expenses 800 (2) *
Insurance 580
Wages 1 370
3 710
Net profit 2 800 (1)OF
* 5 items = 2 marks
1 error = 1 mark
2 errors = 0 marks
Error = wrong figure, alien or omission [11]


IGCSE – JUNE 2005 0452 2

number
(c) Gross profit/Sales x 100
6 510 (1)OF/16 210 (1)OF x 100 = 40.16% (1)OF [3]
(d) (i) Gross profit increased (1) by $90(1) [2]
(ii) Revised gross profit percentage:

6 600 (1)OF/16 300 (1)OF x 100 = 40.49% (1)OF [3]
[Total: 23]


0452 ACCOUNTING
demonstrated.
Examination.
Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses’.


mark
A C E F
available
Component 3 100 71 44 N/A N/A

JUNE 2005
IGCSE
MARK SCHEME
MAXIMUM MARK: 100
ACCOUNTING
Paper 3


IGCSE – JUNE 2005 0452 3
Question 1
(a) Current Accounts

James Susan James Susan
$ $ $ $
2004 2004
May 1 Balance b/d 400 May 1 Balance b/d 2 000
2005 2005
Apl 30 Drawings 6 000 10 000(1) Apl 30 Interest on capital 1 050 600(1)
Interest on drawings 300 500(1) Partner’s salary 7 000(1)
Balance c/d 3 350(1) Share of profit 4 250 4 250(1)
Balance c/d 1 400(1)
6 700 13 850 6 700 13 850
2005 2005
May 1 Balance b/d 1 400 May 1 Balance b/d 3 350
(1)O/F (1)O/F
The marks for interest on capital, profit shares, drawings, and interest on drawings are for both
figures
Alternatively allow two separate “T” accounts [9]
James Current Account

$ $ $
May 1 Balance 400 400 Dr
2005
Apl 30 Drawings 6 000 6 400 Dr
Interest on drawings 300 6 700 Dr
Interest on capital 1 050 5 650 Dr
Share of profit 4 250 1 400 Dr (2)C/F
(1)O/F
Susan Current Account

$ $ $
2004
May 1 Balance 2 000 2 000 Cr
2005
Apl 30 Drawings 10 000 8 000 Dr
Interest on drawings 500 8 500 Dr
Interest on capital 600 7 900 Dr
Partner’s salary 7 000 (1) 900 Dr
Share of profit 4 250 3 350 Cr (2)C/F
(1)O/F
Drawings (1) for both figures

Interest on drawings (1) for both figures
Interest on capital (1) for both figures
Profit shares (1) for both figures [9]


IGCSE – JUNE 2005 0452 3
(b) Capital Accounts

James Susan Anna James Susan Anna
$ $ $ $ $ $
2005 2005
May 1 Goodwill 8 000 (1) 2 000 (1) 2 000 (1) May 1 Balance b/d 35 000 (1) 20 000 (1)
Balance c/d 33 000 (1) 24 000 (1) 24 000 (1) Bank 26 000 (1)
Goodwill 6 000 (1) 6 000 (1)
41 000 26 000 26 000 41 000 26 000 26 000
2005
May 2 Balance b/d 33 000 24 000 24 000
(1)O/F (1)O/F (1)O/F
Alternatively allow three separate “T” accounts [14]
Total [23]
James Capital Account

$ $ $
2005
May 1 Balance 35 000 (1) 35 000 Cr
Goodwill 6 000 (1) 41 000 Cr
Goodwill 8 000 (1) 33 000 Cr (2)C/F
(1)O/F
Susan Capital Account
$ $ $
2005
May 1 Balance 20 000 (1) 20 000 Cr
Goodwill 6 000 (1) 26 000 Cr
Goodwill 2 000 (1) 24 000 Cr (2)C/F
(1)O/F
Anna Capital Account

$ $ $
2005
May 1 Bank 26 000 (1) 26 000 Cr
Goodwill 2 000 (1) 24 000 Cr (2)C/F
(1)O/F
[14]
Total [23]


IGCSE – JUNE 2005 0452 3
Question 2
(a) To ensure no transactions are forgotten/overlooked (not relying on human memory)

To enable profit to be calculated
To enable the financial position of the business to be ascertained
(b) The accounting records of a business are maintained from the viewpoint of the business.
The business and the owner of the business are regarded as being separate entities.
The personal transactions of the owner of the business are not recorded in the accounting
records of the business. Any 2 items (1) each [2]
(c) Jane Joda

Trading Account for the year ended 31 March 2005
$ $ $
Sales - Credit 10 900 (1)O/F
Cash 6 600 (1) 17 500
Less Cost of sales

Opening stock 9 500 (1)
Purchases 22 000 (1) 31 500
Less Closing stock 17 500 (1) 14 000 (1)
Gross Profit 3 500 (2)C/F
(1)O/F
(d) (i) Comparison with the results of other businesses (1) of a similar size/type (1) [2]
(ii) Improve profitability

Increase sales (in total or of certain products)
Review stock levels
Direct investment into new areas
Any one point required –
(1) for basic point
(1) for suitable development [2]
(iii) Any two of the following –

Information must be -
capable of being independently verified
free from bias
free from significant errors
prepared with suitable caution being applied to any judgements and estimates which
are necessary
Any two items (2) each [4]
Total [20]


IGCSE – JUNE 2005 0452 3
Question 3
(a) (i) 1 Current ratio
$22 000 : $14 500 (1) = 1.52 : 1 (1)
2 Quick ratio
($22 000 – 12 000) : $14 500 (1) = 0.69 : 1 (1) [4]
(ii) Quick ratio [1]
Stock is not regarded as a liquid asset – a buyer has to be found and then the money
collected. Some stock may prove to be unsaleable.
The quick ratio shows whether the business would have any surplus liquid funds if all
the current liabilities were paid immediately from the liquid assets.
Any one reason (2) marks [2]
(b) Return on capital employed (using closing capital figure)
$4950 100
× (1) = 9.43% (1) [2]
$52500 1
(c) (i) Collection period for debtors
$9500 365 www.igcseaccounts.com

× (1) = 50.04 days (51 days) (1) [2]
$69300 1
(ii) 1 Not satisfied – if (c)(i) is more than 30 days

Or – satisfied if (c)(i) is less than 30 days [1]
2 Debtors are allowed 30 days credit but on average are taking 51 days
Or suitable explanation based on O/F answer to (c)(i). [1]
(d) (i) Payment period for creditors
$6300 365
× (1) = 48.31 days (49 days) (1) [2]
$47600 1
(ii) Advantage of paying creditors before due date –
May be able to take advantage of cash discounts

Improves the relationship with suppliers
One advantage required (1) [1]
(iii) Disadvantage of paying creditors before due date –
One disadvantage required (1) [1]
Total [17]


IGCSE – JUNE 2005 0452 3
Question 4
(a) (i) The Income and Expenditure Account is equivalent to a Profit and Loss Account of a
trading organisation. (1) It is used to calculate the annual surplus or deficit. (1)
Or other suitable points [2]
(ii) The accumulated fund is equivalent to the capital of a trading organisation, the
difference between the assets and the liabilities. (1) The annual surpluses (less any
deficits) accumulate within a non-trading organisation to form the accumulated fund. (1)
[2]
(b) Siltones Music Society

Receipts and Payments Account for the year ended 31 March 2005
2004 $ 2005 $
Apl 1 Balance 2 210 (1) Mar 31 Concert expenses 1 250 (1)
2005 Rent 1 820 (1)
Mar 31 Subscriptions 5 800 (1) General expenses 215 (1)
Concert receipts 1 900 (1) Insurance 325 (1)
Proceeds of sale of instruments 700 (1) Purchase of new instruments 3 350 (1)
Balance c/d 3 650
10 610 10 610
2005
Apl 1 Balance b/d 3 650 (1)O/F
[10]
(c) Siltones Music Society
2004 $ 2005 $
Apl 1 Balance b/d 1000 (1) Mar 31 Bank 5800 (1)
2005
Mar 31 Balance c/d 800 (1)
Income and Expenditure (1) 4000 (1)
5800 5800
2005
Apl 1 Balance b/d 800 (1)
Dates (1) [7]
Siltones Music Society


$ $ $
2004
Apl 1 Balance 1000 (1) 1000 Dr
2005
Mar 31 Bank 5800 (1) 4800 Cr
Income and Expenditure (1) 4000 (1) 800 Cr (2)
Dates (1)
[7]
Total [21]


IGCSE – JUNE 2005 0452 3
Question 5
(a) To make the totals of the trial balance agree (1) and so that draft final accounts may be
prepared. (1) [2]
(b) Ahmed Shafiq

Journal
Debit Credit
$ $
1. Suspense account 390 (1)
Commission received account 390 (1)
2. Mutua account 400 (1)

Mutola account 400 (1)
Suspense account 800 (1)
3. Stationery account 20 (1)

Purchases account 20 (1)
4. Discount allowed account 15 (1)

Limo 15 (1)
5. Sales returns account 420 (1)

Purchases returns account 240 (1)
Suspense account 660 (1)
[12]
(c) Ahmed Shafik

Statement of corrected net profit for the year ended 31 January 2005
$
Net profit before corrections 16 000
Effect on net profit
+ –
$ $
Error 1 390
2 No effect (1)
3 No effect (1)
4 15 (1)
5 660 (1)
390 675 285
Corrected net profit 15 715 (1) O/F
[5]
Total [19]


0452 ACCOUNTING
0452/01 Paper 1 – Multiple Choice, maximum raw mark 40
demonstrated.
Examination.
The minimum marks in these components needed for various grades were previously published with
these mark schemes, but are now instead included in the Report on the Examination for this session.
CIE is publishing the mark schemes for the May/June 2006 question papers for most IGCSE and
syllabuses.


Question Question
Key Key
Number Number
1 C 21 C
2 D 22 C
3 A 23 D
4 B 24 B
5 C 25 A
6 B 26 B
7 C 27 C
8 B 28 A
9 C 29 D
10 C 30 C
11 B 31 B
12 C 32 D
13 B 33 C
14 A 34 B
15 D 35 A
16 A 36 D
17
18
B
B
37
38
D
A
19 D 39 C
20 C 40 C


0452 ACCOUNTING
demonstrated.
Examination.
syllabuses.


Question Question (including any source details) Part

Number Mark
1 (a) Cash book [1]
(b) Matching [1]
(c) Fixed assets [1]
(d) A transaction completely omitted from the books e.g. cash sales not recorded [1]
(e) Income Expense

Interest on bank deposit (1)
Bad debt written off (1) [4]
(f) Interest on capital, partners salaries, interest on drawings (any two) [2]
(g) Current assets less current liabilities [2]
(h) (i) $200 less $65 = $135 [1]
(ii) Missing voucher or $10 lost/pilfered from cash box [2]
(i) (i) Current assets less stock/current liabilities [2]
(ii) Shows whether the business has sufficient liquid assets to meet its [2]
current liabilities
Total marks [19]



Number Mark
2 (a) Loretti Journal
$ $
Office furniture 1 500 (1)
Stock 12 000 (1)
Bank 5 300 (2)
Cash 200 (1)
Loan – Hassan 3 000 (1)
Capital – Loretti 16 000 (2)
19 000 19 000
[8]
See next page for 2 (b)





Number Mark
3 (a) Hilota – Trial balance at 31 March 2006
$ $
Fixed assets 22 000 (1)
Stock at 1 April 2005 3 200 (1)
Balance at bank 1 550 (1)
Sales 56 500 (1)
Rent 4 000
Wages 7 200 (1)
Capital 20 000 (1)
Drawings 9 600 (1)
Totals 85 800 85 800 (1)
to agree
total
[12]
(b) Hilota
Trading account for the year ended 31 March 2006
$ $
Sales 56 500 (1)
less sales returns 500 (1)
56 000
37 400
less closing stock 3 800 (1)
Cost of goods sold 33 600 (1)
[7]
(c) Gross profit percentage = Gross profit/net sales

= 22 400 (1)(OF)/56 000 (1) x 100
= 40.00% (1) [3]
(d) If no sales returns, use gross sales:

Gross profit percentage = 22 900 (1)(OF)/56 500 (1) x 100
= 40.43% (1) [3]
Total marks [25]



Number Mark
4 (a) Stock is valued at the lower (1) of cost (1) and net realisable value (1) [3]
(b) Rudi- stock valuation
$ $
Part A005: 250 (1) units @ $1.30 per unit (1) 325.00 (1)
Part B017: 600 (1) units @ $1.80 per unit (2) 1 080.00 (1)
Part C060: 150 (1) units @ $2.50 per unit (1) 375.00 (1)
add: carriage inwards 3 x $25 = 75.00 (1)
450.00
Total value of stock 1 855.00 (1)
[12]
(c) Prudence [2]
Total marks [17]
5 (a) Rajit
Summary Balance Sheet at 31 December 2005

depreciation value
$ $ $
Fixed assets 62 500
(1) 12 500 (1) 50 000 (1)
Current assets 47 000 (1)
less current liabilities 19 000 (1)
Net current assets/working capital 28 000 (1)
78 000
Financed by
Capital at 1 January 2005 74 000 (1)
Add Profit for the year 13 000 (1)
87 000
less drawings 9 000 (1)
78 000
(1) to agree
balance
[10]
(b) Return on capital employed = profit/opening capital

= 13 000 (1)/74 000 (1)
= 17.57% (1) [3]
Total marks [13]


0452 ACCOUNTING
demonstrated.
Examination.
syllabuses.


1 (a)
Tarek Wahid
Cash Book
Allowed Received
$ $ $ $ $ $
2006 2006
April 1 Balances b/d 125 6 750 April 5 Asmaa El Zein
(dishonoured cheque) (1) 230
10 Mohammed Riyas (1) 12 468
16 Motor vehicle (1) 9 900
29 Sales (1) 2 150
Motor expenses (1) 80
30 Cash (1) 2 175
24 Salma Abbas (1) 14 546
Balance c/d 1 363
30 Bank (1) 2 175
Balance c/d 100
12 2 275 10 756 14 2 275 10 756
May 1 Balance b/d (1) O/F 100 May 1 Balance b/d (1) O/F 1 363
+ (1) Totalling discount columns
[11]


(b) The bank statement is a copy of the account of the business as it appears in the books of the
bank. This is from the viewpoint of the bank – the business depositing money is a creditor of
the bank.
The bank account in the cash book is prepared from the viewpoint of the business – the
bank is a debtor of the business which has deposited the money. [2]
(c)
Tarek Wahid
Calculation of bank statement balance at 30 April 2006
$
Balance as per cash book (1363) (1) O/F
Plus cheque not yet presented – Salma Abbas 546 (1)
(817)
Less amount not yet credited 2175 (1) O/F
Balance as per bank statement (2992) (1) O/F
Alternative presentation acceptable [4]
(d) $1363 (1) O/F

Liability (1) O/F [2]
[Total 19]
2 (a)
Susan Sawka
Mar 1 Balance b/d
$ 2006
120 (1) Mar 1 Balance b/d
$
9 500 (1)
Bank 8 780 (1)
Contra item 380 (1)
Balance c/d 7 485 (1) O/F
16 920 16 920
April 1 Balance b/d 7 485 (1) O/F
+ (1) for dates [10]

Susan Sawka

2006 $ $ $
Mar 1 Balances 120 (1) 9 500 (1) 9 380 Cr
31 Purchases 7 420 (1) 16 800 Cr
Purchases returns 135 (1) 16 665 Cr
Bank 8 780 (1) 7 885 Cr
Discount received 20 (1) 7 865 Cr
Contra item 380 (1) 7 485 Cr (2) O/F


(b) Reasons for a debit balance
Overpayment of amount due

Cash discount not deducted before payment made
Returned goods after payment of amount due
Payment made to creditor in advance
(c) A purchases ledger control account acts as a check on the purchases ledger. If there is an
individual accounts in that ledger. [2]
(d) Payment period for creditors
7 485 O/F from (a) x 365 = 30.56 days = 31 days (1) O/F
89 400 (1) 1
[2]
(e) 1 Not satisfied – if (d) is more than 14 days (1)

Or – satisfied – if (d) is less than 14 days
2 Susan is allowed 14 days credit but is taking an average of 31 days (1)

Or suitable explanation based on O/F answer to (d) [2]
www.igcseaccounts.com [Total 18]
3 (a)
Safat Judo Club
Income and Expenditure Account for the year ended 31 January 2006
$ $
Income
Subscriptions (10 650 – 250 (1) – 400 (1)) 10 000
Competition – entrance fees 800
less cost of prizes 210 590 (2)
10 590
Expenditure
General expenses 2 645}
(1)
Travelling expenses 830}
Rent (2 600 – 50 (1) – 100 (1)) 2 450
Loss on sale of motor vehicle (2 000 – 1 750) 250 (1)
Depreciation – motor vehicle (10 000 – 8 500) 1 500 (1) 7 675
Surplus for the year 2 915 (1) O/F
Horizontal presentation acceptable [10]


(b)
Safat Judo Club
Balance Sheet at 31 January 2006
$ $
Fixed Assets
Motor vehicle at valuation 8 500 (1)
Current Assets
Rent prepaid 100 (1)
Bank (3 150 + 13 200 - 16 285) 65 (2)
165
Current Liabilities
Subscriptions prepaid 400 (1) (235)
8 265
Accumulated Fund
Opening balance (3 150 + 2 000 + 250 – 50) 5 350 (2)
Surplus for the year 2 915 (1) O/F
8 265
(c) Reasons why bank balance does not equal surplus/deficit –
R & P A/c shows total money paid and received

I & E A/c adjusts figures for accruals and prepayments
I & E A/c includes non-monetary items such as depreciation
I & E A/c includes only revenue items
Any 2 acceptable points (1) each [2]
[Total 20]


4 (a)
John Chan
Sales Ledger
Wan Tan account
2006 $ 2006 $
April 1 Balance b/d 880 April 17 Bank 858 (1)
11 Sales 320 (1) Discount 22 (1)
30 Balance c/d 320 (1)
1 200 1 200
2006
May 1 Balance b/d 320 (1) O/F
Carol Lee account
2006 $ 2006 $
April 1 Balance b/d 270 April 21 Returns 72 (1)
6 Sales 168 (1) 28 Cash 300 (1)
29 Bad Debts 66 (1)
438 438
+ (1) for dates
[10]
John Chan
Sales Ledger
Wan Tan account

2006 $ $ $
April 1 Balance b/d 880 880 Dr
11 Sales 320 (1) 1 200 Dr
17 Bank 858 (1) 342 Dr
Discount 22 (1) 320 Dr (2) O/F


Carol Lee account

2006 $ $ $
April 1 Balance 270 270 Dr
6 Sales 168 (1) 438 Dr
21 Returns 72 (1) 366 Dr
28 Cash 300 (1) 66 Dr
29 Bad debts 66 (1) O/F 0
+ (1) for dates

[10]
(b) (i) Matching OR Prudence [1]
(ii) Matching
To ensure that the amount of sales for the year which are unlikely to be paid are treated
as an expense of that particular year.
OR
Prudence
To ensure that the profit is not overstated and that the asset of debtors in the Balance
Sheet shows a more realistic amount. [2]
(c) (i) The $80 transferred to the Profit and Loss Account is the difference between the
provision for doubtful debts at the start of the year and the provision required to carry
forward to next year. In this case it is the amount of surplus provision not required. (2)
(ii) This amount will be credited to the Profit and Loss Account. (1) [3]
(d) Collection period for debtors –
7 190 x 365 (1) = 31.43 days = 32 days (1)

83 500 1
[2]
(e) Ways of improving the collection period for debtors
Offer cash discount for prompt payment

Refuse further supplies on credit until any outstanding balance is paid
Any 3 acceptable points (1) each [3]
[Total 21]


5 (a)
David and Janet Szabo
Capital accounts
David Janet David Janet

2006 $ $ 2005 $ $
Jan 1 Current a/c (1) 3 000 Mar 1 Balance b/d (1) 19 000 14 000
Feb 28 Balance c/d 16 000 16 000 2006
Feb 1 Cash (1) 2 000
19 000 16 000 19 000 16 000
2006
Mar 1 Balance b/d (1) 16 000 16 000
+ (1) for dates
Alternatively allow 2 separate “T” accounts

[5]
David Capital account

2005 $ $ $
Mar 1 Balance 19 000 19 000 Cr
2006
Jan 1
Current account
3 000 16 000 Cr
Janet Capital account

2005 $ $ $
Mar 1 Balance 14 000 14 000 Cr
2006
Feb 1 Cash 2 000 16 000 Cr
Opening balances (1) for both figures

David current account transfer (1)
Janet cash introduced (1)
Closing balances (1) for both figures
+ (1) for dates [5]


(b)
David and Janet Szabo
Departmental Trading and Profit and Loss Account for the year ended 28 February 2006
Men’s Clothing Ladies’ Clothing

Department Department
$ $ $ $
Sales 16 000 32 000 (2)
Less Cost of sales

Opening stock 1 000 2 200 (1)
Purchases 12 000 26 700 (1)
13 050 29 050
Less Closing stock 1 500 1 800 (1)
11 550 27 250 (1)
Gross Profit 4 450 4 750 (1)O/F
Less expenses 1 420 2 840 (2)
Net Profit 3 030 1 910 (1)O/F
(c) A new partner joining an existing partnership will benefit from the Goodwill built up by the
existing partners, who must be compensated for this. [2]
(d) (i) Explanation of –

Will have a share in the profits
Can take part in decision-making
Prospects for the future
(ii) Explanation of –
Will be personally liable for the debts of the firm
Will have greater responsibility
Will probably have to invest capital
[Total 22]


0452 ACCOUNTING
examination.
• CIE will not enter into discussions or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the May/June 2007 question papers for most IGCSE, GCE


Question Question
Key Key
Number Number
1 B 21 B
2 D 22 B
3 B 23 D
4 B 24 C
5 A 25 D
6 B 26 A
7 C 27 B
8 C 28 D
9 A 29 C
10 A 30 C
11 D 31 A
12 C 32 C
13 A 33 D
14 C 34 D
15 B 35 A
16 B 36 D
17
18
C
D
37
38
A
B
19 B 39 B
20 B 40 B
© UCLES 2007


0452 ACCOUNTING
indicate the details of the discussions that took place at an Examiners’ meeting before marking began.
demonstrated.
examination.


1 (a) Statement (of account) [1]
(b) Rent, rates, water, insurance in advance (or similar)

Utilities (e.g. gas, electricity, telephone) paid in advance
Not prepayments [1]
(c) Nominal or general (not personal or private)

Not journal [1]
(d) List of balances in the general (nominal) ledger at a given date [1]
(e) Profit and loss appropriation account [1]
(f) Outstanding lodgements, uncredited or unpresented cheques

Items found in updating cash book, e.g. direct debits, bank interest, charges,
dishonoured cheques, bank or cash book errors [2]
(g) error of omission, commission, principle, compensating error, error of original entry,
complete reversal (any one) [1]
(h) Purchase of shop – capital [1]
Broken glass – revenue [1]
Cash register – capital [1]
Advertisement – revenue [1]
(i) Net profit percentage = (GP – expenses)/sales × 100%
GP = 32 000 [1], Expenses = 20 000, NP = 12 000 [1]OF

Sales = 80 000 [1] – must be shown in calculation
Net profit percentage = 15.00% [1]OF
(need not show % sign, but no other sign or description allowed) [4]
[Total: 16]
© UCLES 2007


2 (a) (i) 5000 [1]
(ii) 1 April 2006 (must include year) [1]
(iii) 80 000 [1]
(iv) Inwards/(accept “in”) [1]
(v) 37 000 [1]
(vi) 5600 [1]
(vii) Net profit (must show “net”) [1]
(viii) 27 800 [1]OF only if wrong gross profit [8]
(b) Rate of stock turnover = Cost of sales / average stock
= 88 000 [1] / (42 000 + 36 000) [1] /2 [1]
= 2.26 times [1]OF

(accept 2.25 times)
Alternative (reciprocal) calculation gives 161 or 162 days [4]
(c) (i) Newsagent, petrol station, food store etc.
hairdressing salon, clothing shop, but not bank [2]
(ii) Furniture, carpets, cars, machines, etc. [2]
[Total: 16]
© UCLES 2007


3 (a) Note: Date, narrative and amount required for each mark
Complete reversal of account – no marks
Sales
30 April Trading Account 500 [1] 3 April Cash (sales) 500 [1]
(or Profit & Loss A/c) (not “Bank”)
Ahmed
1 April Balance b/d 2 850 [1] 12 April Bank 1 200 [1]
29 April Bank 650 [1]
30 April Balance c/d 1 000
2 850 2 850
1 May Balance b/d 1 000 [1]OF
Rent
1 April Bank 900 [1] 30 April Balance c/d 600
30 April Profit & Loss A/c 300 [1]
900 (not Trading A/c) 900
1 May Balance b/d 600 [1]OF only if Bank entry is correct
Electricity
6 April Bank 120 [1] 30 April Profit and Loss A/c 180 [1]OF
30 April Balance c/d 60 (not Trading A/c)
180 180
1 May Balance b/d 60 [1]
Wages
29 April Cash 700 [1] 30 April Profit and Loss A/c 700 [1]
Drawings
21 April Cash 800 [1] 30 April Capital 800 [1]
(or balance c/d)
[16]
(b) Send statement of account

Offer cash discount – not trade discount
Refuse further business
Refer to debt collectors
Charge interest
Offer future incentives
Etc. Any two, 2 marks each [4]
[Total: 20]
© UCLES 2007


4 (a) Note – Narrative and correct amount required for each mark
Correct dates required for additional marks
Complete reversal of account – no marks
Account in note or memorandum form – no marks
Provision for depreciation – cooker

2006 2006
31 March Balance c/d 180 31 March Profit and Loss A/c 180 [1]
(or Depreciation A/c)
1 April Balance b/d 180 [1]
2007 2007
31 March Balance c/d 360 31 March Profit & Loss A/c 180 [1]
360 360
1 April Balance b/d 360 [1]

+ [1] for dates
Provision for depreciation – motor van

2007 2007
31 March Balance c/d 1 500 31 March Profit & Loss A/c 1 500 [1]
(or Depreciation A/c)
1 April Balance b/d 1 500 [1]
+ [1] for dates
(b) Net book values:
(i) the cooker: $ 840 [1]OF
(ii) the motor van $ 4 500 [1]OF based on one year only [2]
(c) Paula
Balance Sheet at 31 March 2007 (extract)

depreciation value
Fixed assets $ $ $
Machinery (cooker) 1200 [1] 360 [1]OF 840 [1]OF*
Motor van 6000 [1] 1500 [1]OF 4500 [1]OF*
Totals 7200 1860 5340
* OF marks based on answers in part (a) [6]
[Total: 16]
© UCLES 2007


5 (a) To prepare final account

To check arithmetical accuracy of books
To check accounts balance
To locate errors
Other acceptable reason [1]
(b) Ismail Khan

Trial balance at 30 April 2007
$ $
Sales 125 000 [1]
Stock 14 500 [1]
Purchases 76 000 [1]
Bank (overdraft) 2 300 [1]
Machinery 9 000 [1]
Debtors 1 700 [1]
Creditors 2 800 [1]
Expenses 37 500 [1]
Capital 15 500 [1]
Drawings 8 000 [1]
Suspense 1 100 [1]OF*
146 700 146 700
*OF mark awarded if account balances. May be shown

Separately but must be labelled “Suspense” [11]
(c) www.igcseaccounts.com
Dr Cr
Suspense 2 000 [1]
Sales 2 000 [1]
To correct cash sales omitted [1]
(error of single entry)
Drawings 400 [1]

Suspense 400 [1]
To correct error in drawings account [1]
(error of double entry)
Cash 500 [1]

Suspense 500 [1]
To include cash balance in trial balance [1]
(error of single entry)
[9]
(d) Nil [1]OF [1]
[Total: 22]
© UCLES 2007


0452 ACCOUNTING
demonstrated.
examination.


1 (a) Work can be shared between several people

Easier for reference as same type of accounts are kept together
Any 1 point [1] [1]
(b)
Purchases Ledger
Oman El Gamal account
2007 $ 2007 $
Mar 19 Bank 429 [1] Mar 8 Purchases 440 [1]
Discount recd 11 [1]
440 440
Mohammed El Wakil account

2007 $ 2007 $
Mar 24 Purchase returns 128 [1] Mar 21 Purchases 304 [1]
26 Cash 110 [1]
31 Balance c/d 66 [1] 304
304 2007
Apr 1 Balance b/d 66 [1]
www.igcseaccounts.com O/F
+ [1] Dates
[9]
(b) Alternative presentation

Omar El Gamal account
2007 $ $ $
Mar 8 Purchases 440 [1] 440 Cr
19 Bank 429 [1] 11 Cr
Discount recd 11 [1] 0
Mohammed El Wakil account

2007 $ $ $
Mar 21 Purchases 304 [1] 304 Cr
24 Purchase returns 128 [1] 176 Cr
26 Cash 110 [1] 66 Cr [2]C/F
[1]O/F
+ [1] Dates
[9]
© UCLES 2007


(c)
Nominal Ledger
Purchases account
2007 $
Mar 31 Total from
purchases journal 744 [1]
Cash 990 [1]

2007 $
Mar 31 Total from
returns journal 128 [1]
[3]
(c) Alternative presentation
Purchases account
2007 $ $ $
Mar 31 Total from
purchases journal 744 [1] 744 Dr
Cash 990 [1] 1 734 Dr

2007 $ $ $
Mar 31 Total from
returns journal 128 [1] 128 Cr
[3]
(d) Assist in the location of errors
Provide instant totals of debtors/creditors
Proves the arithmetical accuracy of sales/purchases ledgers
Enable the Balance Sheet to be prepared quickly
Provide a summary of the transactions relating to debtors/creditors
Provide an internal check on sales/purchases ledgers – may reduce fraud
Any 2 points [1] each [2]
(e)
Item Entry in sales ledger
control account
(ii) Cheques received from debtors credit [1]
(iii) Trade discount allowed to debtors no entry [1]
(iv) Contra item transferred to purchases ledger credit [1]

[3]
[Total: 18]
© UCLES 2007


2 (a) (i) So that the profits for the year are not over-stated [1]
(ii) So that the debtors in the Balance Sheet are shown at a realistic amount [1] [2]
(b) Matching principle [1]
(c) (i)
J.Ukata account
2006 $ 2006 $
Feb 4 Sales 900 Mar 1 Bank 873 [1]
[1]
Mar 1 Sales 80 Discount 27 [1]
2007
Jan 31 Bad debts 80 [1]
980 980
(ii)
Bad debts account
2007 $ 2007 $
Jan 31 J.Ukata 80 [1] Jan 31 Profit & Loss 80 [1] O/F
80 80
(iii)
2007 $ 2006 $
Jan 31 Profit & Loss* 35 [1] Dec 31 Cash 35 [1]
35 35
(iv)
2007 $ 2006 $
Jan 31 Balance c/d 200 [1] Feb 1 Balance b/d 150 [1]
2007
Jan 31 Profit & Loss 50 [1]
200 200
2007
Feb 1 Balance b/d 200 [1]O/F
[12]
* Alternatively, transfer to bad debts account. The transfer from bad debts to profit & loss
would then be $45.
© UCLES 2007


(i)
J.Ukata account
2006 $ $ $
Feb 4 Sales 900 900 Dr
[1]
Mar 1 Sales 80 980 Dr
Bank 873 [1] 107 Dr
Discount 27 [1] 80 Dr
2007
Jan 31 Bad debts 80 [1] 0
(ii)
Bad debts account
2007 $ $ $
Jan 31 J.Ukata 80 [1] 80 Dr
Profit & Loss 80 [1]O/F 0
(iii)
2006 $ $ $
Dec 31 Cash 35 [1] 35 Cr
2007
Jan 31 Profit & Loss* 35 [1] 0
(iv)
2006 $ $ $
Feb 1 Balance 150 [1] 150 Cr
2007
Jan 31 Profit & Loss 50 [1] 200 Cr [2]C/F
[1]O/F
[12]
* Alternatively, transfer to bad debts account. The transfer from bad debts to profit & loss
would then be $45.
(d)
Item Overstated Understated
$ $
(ii) Net profit for the year ended 31
January 2007 50 [1] No effect [1]
(iii) Total of current assets in Balance

Sheet at 31 January 2007 200 O/F [1] No effect [1]
[4]
[Total: 19]
© UCLES 2007


3 (a)
Jamil and Sara Suliman
Trading Account for the year ended 30 April 2007
$ $ $
Sales 30 000 [1]
Less cost of sales
Opening stock 5 000 [1]
Purchases 26 000 [1]
31 000
Less Closing stock – Stock remaining 4 500 [1]
Stock lost 2 500 [2] C/F
[1] O/F
7 000
24 000
(b) Calculation of net profit –
$
Gross profit 6000 O/F
Less Expenses 4600
Net profit 1400 [1] O/F
[1]
(c) Calculation of partners’ share of the residual net profit/loss –
$ $
Net profit 1400 [1] O/F
Interest on capital – Jamil 2000
Sara 1000 3000 [1]
(1600)
Share of loss – Jamil 800
[1] O/F
Sara 800 (1600)
[3]
(d)
Current accounts
Jamil Sara Jamil Sara
2006 $ $ 2006 $ $
May 1 Balance b/d 200 May 1 Balance b/d 600 [1]
2007 2007
Apr 30 Drawings 3100 2800 [1] Apr 30 Interest on capital 2000 1000 [1]
Share of Loss 800 800 [1] O/F Balances c/d 2100 2000
4100 3600 4100 3600
2007
May 1 Balances b/d 2100 2000 [1] O/F
In all cases the marks are for suitable wording and two figures
Alternatively allow two separate “T” accounts [5]
© UCLES 2007


(d) Alternative presentation

Jamil Current account
2006 $ $ $
May 1 Balance 200 200 Dr
2007
Apr 30 Drawings 3100 3300 Dr
Share of loss 800 4100 Dr
Interest on Capital 2000 2100 Dr
Sara Current account

2006 $ $ $
May 1 Balance 600 600 Cr
2007
Apr 30 Drawings 2800 2200 Dr
Share of loss 800 3000 Dr
Interest on Capital 1 000 2000 Dr
Opening balances [1] for suitable wording and two figures

Drawings [1] for suitable wording and two figures
Share of loss [1] O/Fs for suitable wording and two figures
Interest on capital [1] for suitable wording and two figures
Closing balances [1] O/Fs for two figures
[5]
(e) (i) To enter goodwill on the books
account(s) to be $ account(s) to be $
debited credited
Goodwill 20 000 [1] Jamil Capital 10 000 [1]
Sara Capital 10 000 [1]
(ii) To write off the goodwill
account(s) to be $ account(s) to be $
debited credited
Jamil Capital 8000 [1] Goodwill 20 000 [1]
Sara Capital 8000 [1]
Fatima Capital 4000 [1]
[7]
[Total: 24]
© UCLES 2007


4 (a)
Peter Mpho
Balance Sheet at 31 January 2007
$ $ $
Fixed Assets
Equipment at valuation 47 000 [1]
137 000
Current Assets
Stock 17 500
Debtors (19 200 + 150) 19 350 [1]
Petty cash 100
36 950 [1]O/F
Current Liabilities
Creditors 29 000
Bank overdraft (300 – 1050) 750 [1]
Accrual 200 [1]
29 950 [1]O/F
Working Capital 7 000 [1]O/F

144 000
Capital
Opening Balance 145 000
*Net Profit (13 500 – 200 + 600 – 3000 – 1050 + 150)
[1] [1] [1] [1] [1] 10 000 [1]O/F
155 000
Drawings (10 400 + 600) www.igcseaccounts.com 11 000 [1]
144 000
*Calculation of net profit

Original figure 13 500
Add goods for own use 600
carriage outwards 150 750
14 250
Less wages owing 200
revaluation of equipment 3000
bank charges 1050 4 250
10 000
(b) (ii) Reliability [1]

(iii) Comparability [1]
(iv) Understandability [1]
[3]
(c) Financial information is only relevant if it can be used –

Explanation of any 1 point [2] [2]
[Total: 19]
© UCLES 2007


5 (a) (i) Current ratio 70 000 : 40 000 = 1.75 : 1 [1]
(ii) Quick ratio (70 000 – 34 000) : 40 000 = 0.90 : 1 [1]
29 000 365
(iii) Collection period for debtors × [1] = 39 days [1]
275 000 1
40 000 365
(iv) Payment period for creditors × [1] = 32 days [1] [6]
465 000 1
(b) Does not include stock in the calculation [1]

Either
collected. Some stock may prove to be unsaleable. [1]
Or
current liabilities were paid immediately from the liquid assets. [1] [2]
(c) Satisfied if (a) (ii) is higher than the ratio for 2005
Not satisfied if (a) (ii) is lower than the ratio for 2005 [1]
(d) Increase in current liabilities greater than the increase in current assets
Increase in creditors and no significant change in current assets
Decrease in debtors and no significant change in current liabilities
Decrease in bank and no significant change in current liabilities
Decrease in stock and no significant change in current liabilities
Or suitable response based on own figure calculation in (a) (i)
Any 1 acceptable point [2] [2]
(e) (i) Not satisfied if (a) (iii) is more than the ratio for 2005
Satisfied if (a) (iii) is less than the ratio for 2005 [1]
(ii) Debtors are taking 9 days longer to pay than the previous year
Or suitable explanation based on O/F answer to (a) (iii) [2]
(f) Debtors are taking longer to pay so this may have a knock-on effect and
mean that the creditors may have to wait longer for their accounts to be paid.
Or suitable explanation based on O/F answer to (a) (iii) and (a) (iv) [2]
(g) Rate of stock turnover [1]
© UCLES 2007


(h) The accounts may be for 1 year only and not show trends
The accounts may not be for a typical year
The financial year may end at a different point in the trading cycle
The businesses may operate different accounting policies e.g. depreciation
The accounts do not show non-monetary items but these are important in the success of a
business
It is not always possible to obtain all the information about a business in order to make a true
comparison
Any 3 correct points [1] each [3]
[Total: 20]
© UCLES 2007


0452 ACCOUNTING
examination.


Question Question
Key Key
Number Number
1 C 21 B
2 D 22 B
3 A 23 D
4 A 24 B
5 D 25 A
6 A 26 D
7 B 27 C
8 D 28 C
9 A 29 C
10 C 30 A
11 B 31 D
12 B 32 A
13 C 33 C
14 B 34 A*
15 D 35 C
16 A 36 B
17 D 37 C
C 38 B
19 B 39 D
20 C 40 B
* Question cancelled – refer to Examiner Report for details.
© UCLES 2008


0452 ACCOUNTING
demonstrated.
examination.


Marking Guidelines
• Where a candidate makes an arithmetical error or selects the wrong figure in an account or a
calculation so that totals or the results of the calculation are wrong but are correct on his own
figures, he will lose the mark for selecting the original figure but may earn an own figure mark for
the result, total or calculation.
• Where particular wording is shown on the mark scheme accept any reasonable spelling and
abbreviation as long as the meaning is clear.
• For example, for ‘Balance brought down’ accept Balance b/down, Balance b/d, Balance,
Bal b/down, Bal b/d, Bal, Brought down, b/down, b/d, B/b/d, B/f, but not Bbd, bd, or any variation
of ‘Balance carried down’.
• Where a ledger account is to be prepared, each mark is usually for the date, narrative and
amount together but if the candidate has correctly prepared the account but not shown some or
all of the dates he may earn some marks according to the mark scheme.
• If a ledger account is completely reversed no marks will be awarded for individual entries but
there may be marks available for own figure balances carried and brought down.
• Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx. An
answer of just the correct figure xx may be accepted but not if any other description such as %,
times, days etc. is shown and not if shown as negative when it should be positive.
• Where a calculation is to be shown to two decimal places, an answer rounded up or down may
be accepted (e.g. 2.85 or 2.86 if the true answer is 2.853) but not an answer shown to only the
nearest whole number or one decimal place (e.g. 2.8 or 3).
• Where dollars and cents are shown in a question and exact cents are required in a calculated
answer (e.g. $35.60) many candidates will show $35.6 as their calculators will suppress the final
0. Although wrong this may be accepted.
• Ledger accounts may be accepted in either two sided or the running balance format and the mark
scheme will show how marks should be allocated.
• Where a final account is requested, a list of items will not normally earn any marks.
• If candidates are required to prepare a Balance Sheet, either a two sided or a vertical
presentation will be accepted and the mark scheme will show how marks are to be awarded.
© UCLES 2008


1 (a) (i) and (ii) to calculate profit or loss,

to know what assets and liabilities the business has,
to compare with previous years,
to compare with other businesses,
to calculate accounting ratios,
for use by other parties e.g. bank
other acceptable but specific answers (1) mark each [2]
(b) (i) stock, debtors, prepayments, cash, bank, etc. – any one [1]
(ii) creditors, accrued expenses, bank overdraft, etc. – any one [1]
(loan but only if stated repayable within one year)
(c) Matching, prudence not consistency [1]
(d) Suspense account [1]
(e) Current liabilities [1]
(f) An amount owed (by a debtor) (1) which he is unable or unwilling to pay (1). [2]
Accept words making these points.
(g) (i) $100 (must be amount not description of imprest) [1]
(ii) $70 [1]
(h) (i) Current assets (accept CA) (1) less (accept – or :) current liabilities (accept CL) (1) [2]
(ii) A business needs sufficient working capital for

• the day-to-day running of the business
• to pay expenses, liabilities, etc. as they fall due
(2 marks for either or similar comment – if given as answer to (i) may award 2
marks but only once) [2]
[Total: 15]
© UCLES 2008


2 (a)
Emilie
Cash Book, March 2008
$ $ $ $ $ $
1 Balance b/down 1700 3000
3 Jules (1) 6 (1) 194 (1) 5 Andre (1) 1200 (1)
6 Michel (1) 85 (1) 7 Wages (1) 330 (1)
7 Sales (1) 1850 (1)
(Note: date and correct narrative required for mark, discount, cash and bank marks
may be awarded if either date or narrative (but not both) is missing, no marks for
balances brought down, no requirement to balance the account, no totals required.) [11]
(b) Cash sales 1850 (1)

Credit sales 200 (1)
Total sales 2050 (1)OF [3]
Correct figures only, do not accept $194 or $188 for credit sales. Do not award total
mark if any aliens shown.
(c)
Emilie
Trading Account for the week ended 7 March 2008
$ $
Sales (accept total from (b)) 2050 (1)OF
Stock at 1 March 1700 (1)
Purchases (correct figure only) 1200 (1)
2900
Stock at 7 March 1650 (1)
Cost of goods sold 1250 (1)OF
Gross profit 800 (1)OF
[6]
[Total: 20]
© UCLES 2008


3 (a) 200 units (1) @ $3.20 (1) = $ 640 (1)OF [3]
Accept if just shown as figures, 3 marks for just the correct answer.
(b) 100 units @ $3.20 = $ 320 (1)

150 units @ $3.00 = $ 450 (1)
100 units @ £3.00 = $ 300 (1)
Total $1 070 (1)OF [4]
Do not award total mark if any aliens
(c) 300 units (1) @ $3.00 (1) = $ 900 (1)OF [3]
Accept if just shown as figures, 3 marks for just the correct answer.
(d) Opening stock (units) 200 (1)

Purchases (units) 350 (1)
550
Closing stock (units) 300 (1)
Sold (units) 250 (1)OF [4]
If closing stock is added, award final mark but not stock mark.
(e) www.igcseaccounts.com
$
Opening stock (value) 640 (1)OF
Purchases (value) 1070 (1)OF
1710
Closing stock (value) 900 (1)OF
Cost of goods sold 810 (1)OF [4]
Award these marks if correct or if correctly calculated on own figures from (a), (b) and
(c).
[Total: 18]
© UCLES 2008


4 (a)
Solomon
Year ended 31 March 2008
$ $
Sales 47 500 (1)
30 300
Closing stock 1 800 (1)
Cost of sales (goods sold) 28 500 (1)OF
(words must appear somewhere)(do not award if any aliens)
Gross profit (do not award if any other aliens) 19 000 (1)OF
Expenses
Electricity 1 800 (1)
Motor expenses 1 380 (1)
Depreciation 2 400 (1)
Rent (6 000 (1) – 1 200*(1)) 4 800 (2)
Wages (8 600 (1) + 400*(1)) 9 000 (2)
(*if wrongly added or subtracted, no mark, accept if shown as separate items with no total)
Total 20 100
Net loss 1 100 (1)OF
(accept Net profit if figure shown as negative (–) or in brackets, or is a profit on own
figures; do not award if any aliens) [15]
(b) www.igcseaccounts.com
Solomon
Capital account, year ended 31 March 2008
2008 $ 2007 $
31 March Net loss 1 100 (1)OF 1 April Balance b/d 36 000 (1)
31 March Drawings 24 000 (1) (not Capital)
31 March Balance c/d 10 900 (1)OF _____
36 000 36 000
2008
1 April Balance b/d 10 900
Narrative and amount (but not date) required for mark.

Must be an account, not a list or a sum. [4]
(c) [Increase sales, buy more cheaply, increase prices] = increase gross profit, reduce [any
named] expenses = increase net profit (any two, one mark each) [2]
(d) Introduce more capital into the business, reduce drawings, [reduce net loss, make or
increase income or net profit] (any two, one mark each) accept ‘take in a partner with
capital’ [2]
[Total: 23]
© UCLES 2008


5 (a)
Purchase of taxi (1)
Installing meter (1)
Taxi licence (1)
Taxi insurance (1)
Filling taxi with fuel (1)
Servicing engine (1)

[6]
(b) (i) 18 000 (1) × 30% (1) = 5 400 (1)OF [3]
If no calculation shown but correct figure award 3 marks;

If e.g. used wrong % but calculation correct award 2 marks.
(ii) 12 600 (1)OF × 30% (1) = 3 780 (1)OF [3]
If no calculation shown but correct figure award 3 marks;

If calculations for more than one year then do not award result mark but may award
starting mark and rate mark;
If e.g. used wrong basis or % but calculation correct award up to 2 marks.
(c) (12 600 OF – 3 780 OF) (1) = 8 820 OF (1) [2]

or (18 000 – 9 180 OF) (1)
If no calculation but correct figure then award 2 marks.
[Total: 14]
© UCLES 2008


0452 ACCOUNTING
demonstrated.
examination.


1 (a) Ascertain the true bank balance at a certain date

Assist in detecting fraud and embezzlement
Identify any “stale” cheques
Demonstrate that any differences between the cash book balance and that on the statement
are due to genuine reasons
(b) Cash Book (bank columns only)
2008 $ 2008 $
May 1 Balance b/d 2073 (1) May 1 Insurance 360 (1)
Lobatse Traders
(dishon. chq.) 314 (1)
Bank charges 11 (1)
Correction of error 90 (1)
2073 2073
May 1 Balance b/d 1298 (1)O/F
[6]
(c) Bank Reconciliation Statement at 30 April 2008
$ $
Add amounts not yet credited – Cash 500 (1)
1750
Less cheques not yet presented – Ghanzi & Co 390 (1)
bank error 62 (2) 452
[6]
$ $
Add cheques not yet presented – Ghanzi & Co 390 (1)
bank error 62 (2) 452
1750
Less amounts not yet credited – Cash 500 (1)
[6]
(d) $1298 (1)O/F

Asset (1) [2]
© UCLES 2008


(e) Current ratio

(6322 + 5670 + 100 + 1298 O/F) : 7250 (1)O/F
= 13390 O/F : 7250
= 1.85 : 1 (1)O/F [2]
(f) Does not include stock in the calculation (1)
Either
collected. Some stock may prove to be unsaleable. (1)
Or
current liabilities were paid immediately from the liquid assets. (1) [2]
[Total: 20]
2 (a) Ensures that profits are not overstated (prudence)

Ensures that debtors are shown in balance sheet at more realistic amount (prudence)
Application of matching principle as the amount of sales unlikely to be paid for are treated as
an expense of that particular year

(b) 2007 February 1 Balance
The provision for doubtful debts in existence at that date brought down from the previous
financial year. (2)
2008 January 31 Profit and loss

The amount transferred to the profit and loss account representing the surplus provision no
longer required. (2)
$600 shown at the end of the account

The new provision for doubtful debts carried forward to the next financial year. (2) [6]
(c) If debtors delay payment the business may be forced to delay paying its creditors unless
liquid funds are available.
If debtors pay within the set time the business may be able to pay its creditors within the set
time without any significant impact on the bank balance.
© UCLES 2008


(d) Collection period for debtors
30 000 365
× (1) = 40.78 days = 41 days (1) [2]
268 500 1
(e) Payment period for creditors
20 200 365
× (1) = 30.40 days = 31 days (1) [2]
242 500 1

(g) Subscriptions account

2007 $ 2008 $
Apl 1 Balance b/d 320 (1) Mar 31 Cash 8720 (1)
2008
Mar 31 Balance c/d 400 (1)
Income & Expenditure(1) 8000 (1)O/F ____
2008
8720 8720
+ (1) dates
[7]
2007 $ $ $
Apl 1 Balance 320 (1) 320 Dr
2008
Mar 31 Cash 8720 (1) 8400 Cr
Income & Expenditure (1) 8000 (1)O/F 400 Cr (2)
+ (1) dates
[7]
[Total: 22]
© UCLES 2008


3 (a) Journal
Debit Credit
$ $
1 Stationery 20 (1)
Abdul Current 20 (1)
2 Suspense 300 (1)

Purchases 300 (1)
3 Suspense 100 (1)

Bad Debts 50 (1)
Bad Debts Recovered 50 (1)
4 Amina Capital 2200 (1)

Amina Current 2200 (1)
[9]
(b) Suspense account

2008 $ 2008 $
Apl 30 Purchases 300 (1) Apl 30 Difference on trial
Bad debts 50 (1) balance 400 (1)
Bad debts recovered 50 (1) ___
400 400
[4]
Suspense account
$ $ $
2008
Apl 30 Difference on trial balance 400 (1) 400 Cr
Purchases 300 (1) 100 Cr
Bad debts 50 (1) 50 Cr
Bad debts recovered 50 (1) 0
[4]
© UCLES 2008


(c) Abdul and Amina Mahmoud

Statement of corrected net profit for the year ended 30 April 2008
$
Net profit before corrections 12 900
Effect on net profit

Increase Decrease
$ $
Error 1 20
2 300 (1)
3 100 (1)
4 No effect (1)
___ __
400 20 380
Corrected net profit 13 280 (1)O/F
[4]
(d) Increase gross profit e.g. increase profit margin, increase selling prices etc.
Reduce expenses e.g. reduce staffing levels, reduce advertising etc.
Increase other income e.g. rent out part of premises, earn more discount
[Total: 19]
© UCLES 2008


4 (a) (i) Stocks are valued at the lower of cost and net realisable value. [1]
(ii) Prudence [1]
(b) Gideon Yeboah

Manufacturing Account for the year ended 31 March 2008
$ $
Cost of raw materials
Opening stock of raw materials 21 230 (1)
Purchases 255 620 (1) 276 850
Less Closing stock of raw materials 19 410 (1)
257 440
Direct factory wages (194 060 + 4800) (1) 198 860
Factory general expenses (133 910 – 210) 133 700 (1)
(103 000 + 21 000 – 92 000) 32 000 (1) 165 700
622 000 (1)O/F
Add opening work in progress 11 680 (1)
633 680
Less closing work in progress 12 130 (1)
Cost of production 621 550 (1)O/F
(c) Gideon Yeboah
Trading Account for the year ended 31 March 2008
$ $
Sales 825 000 (1)
Less Cost of sales
Opening stock of finished goods 46 900 (1)
681 650
Less Closing stock of finished goods 53 170 (1) 628 480
Gross profit 196 520 (1)O/F
[Total: 19]
© UCLES 2008


5 (a) Ensures that the loss in value of motor vehicles is spread over the period in which they are
earning revenue. [2]
(b) (i) Motor vehicles account

2006 $ 2006 $
Jan 1 Ansari Road Dec 31 Balance c/d 60 000
Motors 60 000 (1) _____
60 000 60 000
2007 2007
Jan 1 Balance b/d 60 000 Jun 30 Disposals 20 000 (1)
_____ Dec 31 Balance c/d 40 000 (1)O/F
60 000 60 000
2008
Jan 1 Balance b/d 40 000 (1)O/F
(ii) Provision for depreciation of motor vehicles account

2006 $ 2006 $
Dec 31 Balance c/d 12 000 Dec 31 Profit & loss 12 000 (1)
12 000 12 000
2007 2007
Jun 30 Disposals 4 000 (2) Jan 1 Balance b/d 12 000 (1)O/F
Dec 31 Balance c/d 14 400 (1)O/F Dec 31 Profit & loss 6 400 (2)O/F
18 400 18 400
2008
Jan 1 Balance b/d 14 400 (1)O/F
(iii)
Disposal of motor vehicle account
2007 $ 2007 $
Jun 30 Motor vehicles 20 000 (1)O/F Jun 30 Prov. for Dep. 4 000 (1)O/F
Dec 31 Profit & loss (1) 1 000 (1)O/F Apollo Traders 17 000 (1)
21 000 21 000
+ (1) dates
[18]
© UCLES 2008


(b) (i) Motor vehicles account

2006 $ $ $
Jan 1 Ansari Road Motors 60 000 (1) 60 000 Dr
2007
Jun 30 Disposals 20 000 (1) 40 000 Dr(2)O/F

2006 $ $ $
Dec 31 Profit & loss 12 000 (1) 12 000 Cr(1)O/F
2007
Jun 30 Disposals 4 000 (2) 8 000 Cr
Dec 31 Profit & loss 6 400 (2)O/F 14 400 Cr(2)O/F
(iii) Disposal of motor vehicle account

2007 $ $ $
Jun 30 Motor vehicles 20 000 (1)O/F 20 000 Dr
Prov. for Dep. 4 000 (1)O/F 16 000 Dr
Apollo Traders 17 000 (1) 1 000 Cr
Dec 31 Profit & loss (1) 1 000 (1)O/F 0
+ (1) dates
[Total: 20]
© UCLES 2008



0452 ACCOUNTING
examination.


Question Question
Key Key
Number Number
1 B 21 D
2 A 22 D
3 A 23 B
4 C 24 D
5 A 25 D
6 B 26 B
7 C 27 C
8 C 28 A
9 C 29 D
10 B 30 D
11 A 31 A
12 C 32 A
13 D 33 A
14 A 34 B
15 D 35 D
16 C 36 B
17 C 37 C
B 38 C
19 D 39 C
20 B 40 D
© UCLES 2009



0452 ACCOUNTING
examination.


1 (a) Realisation [1]

(not accruals or matching)
(b)
Asset Liability
(i) Prepayment √ (1)
(ii) Bank overdraft √ (1)
(iii) Provision for depreciation √ (1)

[3]
(c) A cheque issued and entered in the cash book (1) but not yet shown on the bank statement
as paid by the bank (1) [2]
(accept “cheques not presented to the bank” for 1 mark)
(d) “Net realisable value” (accept NRV) [1]
(e) Trading (and Profit and Loss) account [1]

(accept Profit & Loss account or Income statement)
(f) Current assets (1) less current liabilities (1) not “CA less CL” [2]
(g) (i) Land, buildings, plant, equipment, fixtures, motor vehicles

(other acceptable fixed asset) [1]
(ii) Any suitable revenue expense [1]
(h) Gross profit percentage = gross profit/sales × 100%
= 22 500 (1) / 75 000 (1) × 100%
= 30% (1)OF [3]
(need not show % sign but must not have any other term e.g. “times”)
[Total: 15]
© UCLES 2009


2 (a) $ 200.00 – $ 129.00 = $ 71.00 (1) [1]

(accept $71 without .00)
(b) $ 20.00 + 17.00 + 21.00 +14.50 = $ 72.50 (1) [1]

(accept $72.5 without final 0 and throughout)
(c) $ 200.00 (1) – $ 72.50 (1)(OF from (b)) = $127.50 [2]

(award (2) for $127.50 but must show workings for OF mark)
(d) (i) Missing voucher, error or fraud (1)
(ii) Missing or stolen cash (1) [2]
(e) Always complete (get) a petty cash voucher (1) with an invoice or receipt for expenditure (1)
Record all petty cash transactions (1) [2]
(do not accept general comments about business records – must relate to petty cash)
(f) See next page
© UCLES 2009


Date Details Total Date Details Total Postage/ Refrshmnts Flowers Cleaning Other/Loan
stationery
April $ April $ $ $ $ $ $
1 Balance b/d 129.00(1) 5 Postage 20.00 20.00 (1)
(not “bank” or 200.00(1)
but accept (if no bank
“imprest” or entry)
“float”)
1 Bank (not 71.00(1) 10 Refreshments 17.00 17.00 (1)
“cash”)
29 Menon/loan 100.00(1) 13 Menon/loan 100.00 100.00 (1)
(not “cash”)
17 Flowers 21.00 21.00 (1)
24 Stationery 14.50 14.50 (1)
28 Cleaning 10.00 10.00 (1)
_________ www.igcseaccounts.com
30 Balance c/d 117.50 _______ _______ _______ _______ _______
300.00 __300.00 34.50 17.00 21.00 10.00 100.00

May
1 Balance b/d 117.50(1) + (1) for all
(accept (OF) to dates (Dr
“imprest”) agree with and Cr)
bal c/d
1 Bank (not 82.50(1)
“cash”) (OF) to
total $200
(for both debits and credits, mark is for narrative detail, correct total and correct extension) [12]
[Total: 20]
© UCLES 2009


3 (a) Purchases journal (day book) (1)

(accept “purchases”, “purchases book”, not “account” or “ledger”)
(b)
OFFICE SUPPLY COMPANY INVOICE
Tom Charter 15 April 2009
3 Mountain Close
Tobermore
Item Quantity Price per unit Total
$ $
Boxes of staples 20 7.50 150.00 (1) (i)
Packets of 25 (1) (ii) 14.00 350.00
envelopes
500.00
Less Trade (1) (iii) discount @ 3 % 15.00 (1) (iv)
Net amount 485.00 (1) (v)
(correct figures only)

______
Terms: 2 ½ % Cash (1) (vi) discount for settlement within 14 days
[6]
© UCLES 2009


(c) Opening stock 7 600 (1)

Less purchases returns (2 300) (1)
97 400
Less closing stock 9 200 (1)
Cost of goods sold 88 200 [4]

(narrative not required, award if correct numbers are shown)
(d) Rate of stock turnover = cost of goods sold / average stock
= (88 200 (1)(OF) / (7 600 + 9 200)(1) / 2(1)) times

(award 2 marks for 8 400)
= 10.5 times (1)(OF) (must be 10.5 – do not award for “10” or “11”)
(award 4 marks if 10.5 shown without workings, otherwise only award marks in accordance
with workings shown)
(accept 10.5 without “times”, but do not accept with %, ratio or other description. Accept 34,
34.76 or 35 days if reciprocal formula is used) [4]
(e) (i) Food, drinks, petrol, etc. (2)
(ii) Jewellery, household appliances, cars, furniture etc. (2) [4]

[Total: 19]
© UCLES 2009


4 (a) Rupa
March March
6 Bank (not cash) 120.00 (1) 1 Balance b/d 120.00 (1)
(not repairs) (accept accrued/owing/outstanding)
12 Bank (not tyres) 150.00 (1)
31 Balance c/d 80.00 (1) 31 Profit & Loss (not Trading)

(accept accrued/owing) Account* 230.00 (1)OF
350.00 350.00
April
1 Balance b/d 80.00 (1)
(correct figure only)
(+ (1) for all correct dates) [7]
(*award OF mark if Cr or Dr and amount closes account)
(b) Mopsa
Rent account
April April
27 Bank (not cash, 500.00 (1) 1 Balance b/d 150.00 (1)
not rent, landlord etc) (accept accrued/owing/outstanding)
30 Balance c/d 100.00 (2) 30 Profit & Loss
(accept accrued/owing) Account* 450.00 (1)OF
600.00 600.00
May
1 Balance b/d 100.00 (1)
(correct figure only)
(+ (1) for all correct dates) [7]
(*award OF mark if Cr or Dr and amount closes account)
(c)
understated √ (2)
overstated
[2]
[Total: 16]
© UCLES 2009


5 (a) Gordon
Capital account
2008
1 April Balance b/d 6 400 (1)
(accept capital)
2009 2009
31 March Drawings 12 000 (1) 31 March Net profit 12 900 (1)
31 March Balance c/d 7 300 (1)(OF)*

19 300 19 300
1 April Balance b/d 7 300
(*award OF mark if Dr or Cr balance, and no alien figures)

(dates not required, narrative and figures only) [4]
(b) Gordon – Balance sheet at 31 March 2009

depreciation value
Fixed assets $ $ $
Plant and equipment 8 000 1 600 6 400 (1)
Motor vehicles 4 000 1 000 3 000 (1)
(correct narratives) 12 000 2 600 9 400
Current assets
Stock www.igcseaccounts.com 1 900
Debtors 3 400
Bank 700
6 000 (1)
(must show narrative and figures)
Current liabilities
Creditors 2 100 (1)
Net current assets (working capital) 3 900 (1)

(award 1 mark if horizontal balance sheet and CA and CL are correct)
13 300
Less long term liability

(may be shown under “Financed by”) 7 300 (1)OF
(total to agree with total below,
must be arithmetically correct)
Financed by:
Capital 7 300 (1)
(or balance from part (a) only)
[8]
© UCLES 2009


5 (c) (i) Current assets / Current liabilities

6 000 (1)OF / 2 100 (1)OF = 2.86:1 (1)OF
(accept 2.85 but not 2.8, 2.9 or 3, other correct OF calculations on same basis)
(ii) Current assets – stock / Current liabilities

(6 000 – 1 900) = 4 100 (1)OF / 2 100 (1)OF = 1.95:1 (1)OF
(or debtors 3 400 + bank 700 = 4 100 (1))
(do not accept 1.9 or 2, accept other correct OF calculations on same basis) [6]
(d)
current ratio
quick ratio √ (2)

[2]
[Total: 20]
© UCLES 2009



0452 ACCOUNTING
examination.


1 (a)
(i) Tony and Alice Mundondo
2007 $ 2008 $
Mar 1 Valley Motors 9 500 (1) Feb 29 Balance c/d 9 500
9 500 9 500
2008 2009
Mar 1 Balance b/d 9 500 Feb 28 Balance c/d 20 300
2008
Jul 1 Bank 10 800 (1) _____
20 300 20 300
2009
Mar 1 Balance b/d 20 300 (1)
2008 $ 2008 $
Feb 28 Balance c/d 1 900 Feb 29 Profit & loss 1 900 (1)
1 900 1 900
2009 2008
Feb 28 Balance c/d 5 240 Mar 1 Balance b/d 1 900 (1)O/F
2009
Feb 28 Profit & loss
1 900 (1)
____ 1 440 (1) 3 340
5 240 5 240
2009
Mar 1 Balance b/d 5 240 (1)O/F
+ (1) dates [9]
(a) Alternative presentation

(i) Tony and Alice Mundondo

2007 $ $ $
Mar 1 Valley Motors 9 500 (1) 9 500 Dr
2008
July 1 Bank 10 800 (1) 20 300 Dr (1)

2008 $ $ $
Feb 29 Profit & loss 1 900 (1) 1 900 Cr (1)O/F
2009
Feb 28 Profit & loss 1 900 (1)
1 440 (1) 3 340 5 240 Cr (1)O/F
+ (1) dates [9]
© UCLES 2009


(b) Tony and Alice Mundondo

Extract from Balance Sheet at 28 February 2009
Fixed assets Cost Depreciation Net book

to date value
$ $ $
Motor vehicles 20 300 5 240 15 060
(1)O/F (1)O/F (1)O/F
[3]
(c) transaction account to be account to be

debited credited
(i) eliminating original cost of motor disposal of motor motor vehicles
vehicle from ledger vehicle (1) (1)
(ii) eliminating accumulated depreciation provision for disposal of motor

from ledger deprecation (1) vehicle (1)
(iii) recording part exchange allowance Valley Motors disposal of motor

made by Valley Motors (1) vehicle (1)
[6]
(d) (i) Fixed assets are valued at the end of each financial year. (1)
This value is compared with the previous valuation (or the cost if it is the first year
of ownership) and the amount by which the asset has fallen in value is the
depreciation for the year. (1) [2]
(ii) Hand tools

Packing cases
Or other suitable example
Any 1 example (1) mark [1]
[Total: 21]
© UCLES 2009


2 (a) Morag MacDonald

Profit and Loss Account for the year ended 31 December 2008
$ $
Fees from clients (75 050 + 9 000) 84 050 (1)
Rent received (2 750 – 150) 2 600 (1)
Reduction in provision for doubtful
debts (250 – 225) ___25 (1)
86 675
Less Property tax 1 800
(1)
Repairs and maintenance 2 930
Wages (45 000 + 2 000) 47 000 (1)
Stationery and office supplies
(1 790 – 35) 1 755 (1)
Insurance (1 680 – 240) 1 440 (1)
(50% × (10 800 – 8 100)) 1 350 (1) 56 275
Net profit 30 400 (1)O/F
(b) To be able to meet debts when they fall due

Any 1 point (2) marks [2]
(c) Introduce further capital

Reduce drawings
Sell surplus fixed assets
Obtain long term loans
(d) (ii) Effect Working capital decreases by $40 (1)

Explanation Current assets decrease by $50 as net debtors decreases.
There is no change in the current liabilities. (1)
(iii) Effect Working capital does not change (1)

Explanation The current assets do not change as the cash increases and the
debtors decrease by $200. There is no change in the current
liabilities. (1)
(iv) Effect Working capital increases by $4 (1)

Explanation Current assets decrease by $96 and the current liabilities
decrease by $100. (1)
[6]
[Total: 19]
© UCLES 2009


3 (a) Mohammed Hanif

2009 $ 2009 $
Apl 1 Balance b/d 4100 (1) Apl 1 Balance b/d 72 (1)
30 Sales 5300 (1) Bank 3850 (1)
Bank (dis.chq.) 65 (1) Discount allowed 150 (1)
Inter-ledger
transfer 240 (1)
9465 9465
2009
May 1 Balance b/d 4833 (1)O/F
+ (1) Dates
Mohammed Hanif

2009 $ $ $
Apl 1 Balances 4100 (1) 72 (1) 4028 Dr
30 Sales 5300 (1) 9328 Dr
Bank (dis.chq) 65 (1) 9393 Dr
Bank www.igcseaccounts.com
3850 (1)
9073
5223
Dr
Dr
Discount allowed 150 (1) 5073 Dr
Inter-ledger transfer 240 (1) 4833 Dr (1)O/F
+ (1) Dates [10]
(b) Overpayment of amount due by debtor

Cash discount not deducted by debtor before payment made
Goods returned by debtor after payment of amount due
Payment made in advance by debtor
Any 1 reason (1) mark [1]
© UCLES 2009


(c) Item Entry in purchases ledger

control account
(ii) Cash purchases No entry (1)
(iii) Discount received Debit (1)
(iv) Interest charged by supplier on

overdue account Credit (1)
[3]
(d) Financial information is only relevant if it can be used –
To correct or confirm prior expectations about past events

As a basis for financial decisions
(e) (ii) Money measurement

Accounts only record information which can be expressed in monetary terms. (1)
This means that many factors which affect the performance of a business will not
appear in the accounting records. (1)
[2]
(iii) Time factor

Accounting statements are a record of what has happened in the past. (1)
Either They are not necessarily a guide to future performance (1)
Or Significant events can occur between the end of the financial period and the
time when the accounting statements are available. (1) [2]
[Total: 20]
© UCLES 2009


4 (a) Lobatse Rugby Club

2008 $ 2008 $
Apl 1 Balance b/d 50 (1) Apl 1 Balance b/d 100 (1)
2009 2009
Mar 31 Income & Mar 31 Bank 2250 (1)
expenditure (1) 2500 (1) Balance c/d _200
2550 2550
2009
+ (1) Dates
Lobatse Rugby Club

2008 $ $ $
Ap 1 Balances 50 (1) 100 (1) 50 Cr
2009
Mar 31 Bank 2250 (1) 2300 Cr
Income &
expenditure (1) 2500 (1) 200 Dr (1)
+ (1) Dates [7]
(b) Lobatse Rugby Club

$ $
Income
Subscriptions 2500 (1)O/F
Sports day – entrance fees 520
less expenses 370 150 (2)
Interest received 100 (1)
2750
Expenditure
Secretarial expenses 210
(1)
Advertising 40
General expenses (490 – 20) 470 (1)
Rent (1530 + 30) 1560 (1)
Depreciation – equipment
(4400 + 1800) × 10% 620 (1) 2900
Deficit for the year (1) 150 (1)O/F
© UCLES 2009


(c) (i) Either

Opening balance or closing balance (1)
Opening/closing bank balance is neither income nor expenditure for the year as it
represents the amount of money in the bank on that particular date. (1)
Or
Transfer to bank deposit account (1)
Transferring money from one bank account to another is neither income nor
expenditure. (1)
Or
Purchase of equipment (1)
This is not regarded as revenue expenditure as it is the purchase of a fixed asset.
(1) [2]
(ii) Either
Subscriptions prepaid on 1 April 2008 (1)
This item represents an amount received during the previous financial year which
relates to the current financial year. Application of matching principle. (1)
Or
Subscriptions owed by member 31 March 2009 (1)
This item represents an amount relating to the current financial year which has not
yet been received. Application of matching principle. (1)
Or
Rent accrued (1)
This item represents an amount relating to the current financial year which has not
yet been received. Application of matching principle. (1)
Or
Depreciation of equipment (1)
This is a non-monetary expense but must be taken into account in calculating the
surplus/deficit. Application of matching principle. (1)
Or
Deficit for the year (1)
This is the difference between the income and expenditure and is the “loss” for the
year and does not represent money paid/received. (1)
Alternatively accept surplus with a suitable comment if a surplus is shown in
the answer to (b). [2]
[Total: 21]
© UCLES 2009


5 (a) Selling goods at lower prices

Allowing higher rates of trade discount for bulk buying
Not passing on increased costs to customers
Buying more expensive goods
Any 2 reasons (1) mark each [2]
(b) Reduce expenses e.g. reduce staffing levels, reduce advertising etc.
Increase gross profit e.g. increase profit margin, increase selling prices etc.
Increase other income e.g. rent out part of premises, earn more discount etc.
Any 1 reason (1) mark [1]
(c) (i) 25% – 10% = 15% (1)
(ii) 21% – 9% = 12% (1) [2]
(d) Percentage of expenses to sales has reduced so the efficiency of the business in
controlling expenses has increased.
Or suitable answer based on O/F answers to (c) [2]
(e) Payment period for creditors

44 500 365
× (1) = 50.76 days = 51 days (1)
320 000 1
Collection period for debtors

38 500 365
× (1) = 35.13 days = 36 days (1) [4]
400 000 1
(f) In both years the debtors are paying Kalpna Khan earlier than she is paying the
creditors (though the gap is smaller in the second year). (1)
She is able to make use of the money within the business for this period. (1)
Or other suitable comments up to (2) marks [2]
© UCLES 2009



Refuse further supplies on credit until outstanding balance paid
Invoice discount and debt factoring
(h) (i) Non-monetary factors

One example – goodwill, quality of management, or other suitable example (1)
Such items will not appear on the accounting statements but can influence the
profitability and prospects of a business. (1)
(ii) Accounting policies

One example – methods of depreciation, methods of stock valuation, or other
suitable example (1)
These will affect calculation of the profit and the profitability ratios and the value of
the assets. (1)
[4]
[Total: 19]
© UCLES 2009



0452 ACCOUNTING
examination.


MARKING GUIDELINES
• Award marks only in accordance with the mark scheme.
calculation, so that totals or the results of the calculation are wrong but are correct on his own
figures, he will lose the mark for selecting the original figure but may earn an own figure (OF)
mark for the result, total or calculation.
For example, for “Balance brought down” accept Balance b/down, Balance b/d, Balance, Bal
b/down, Bal b/d, Bal, Brought down, b/down, b/d, but not Bbd, bd, or any variation of “Balance
carried down”.
amount together. If the candidate has correctly prepared the account but not shown some or all
of the dates he may earn some marks according to the mark scheme.
there may be marks available for own figure balances carried and brought down
• Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx. An
answer of just the correct figure xx may be accepted but not if any other description such as %,
times, days etc is shown and not if shown as negative when it should be positive.
•
Where a calculation is to be shown to two decimal places, an answer rounded up or down may
answer (e.g. $35.60) many candidates will show $35.6 as their calculators will suppress the final
0. Although wrong this may be accepted. The $ sign is not required.
© UCLES 2010


1
Question Question
Key Key
Number Number
(a) C (f) D
(b) D (g) B
(c) B (h) C
(d) B (i) A
(e) C (j) D
[Total: 10]
2 (a) Property (Land and buildings)(only one mark)

Plant and equipment (machinery)(only one mark)
Office equipment
Motor vehicles Any two [2]
(b)
Sales returns account (1)
[1]
(c) Consistency www.igcseaccounts.com [1]
(d) Net book value = Cost (1) less accumulated depreciation (1) [2]
(e) Income statement (Trading and profit and loss account) [1]
(must include the word “trading”)
(f) Accruals (matching), not prudence [1]
(g) (i) Percentage of gross profit to sales

= (75 000 (1) – 52 500 (1)) / 75 000 (1) × 100%
= 30.00% (1)OF [4]
(ii) Percentage of net profit to sales

= (22 500 (1)OF – 7 500 (1)) / 75 000 (1) × 100%
= 20.00% (1)OF [4]
(h) Number of shares = $5 000 (1) / $0.50 = 10 000 (1)

Total dividend = 10 000 × $0.15 (1)
= $1 500 (1)OF [4]
(For 5000 (1) × 0.50 × 0.15 (1) = 375, award 2 marks as shown)
[Total: 20]
© UCLES 2010


3 (a) Sumaru
Cash book, April 2010
April Cash Bank

Dr Dr
$ $
3 Ahar (1)* 1 500 (1)
9 Cash sales (1)* 4 000 (1)
12 Bannu (1)* 2 000 (1)
22 Dooly (1)* 1 650 (1)
28 Eduardo (1)* 900 (1)
*Mark is for date and name [10]
(b)
Name of account Dr Cr
$ $
Sales (1) 4000 (1)
(accept cash sales but not sales ledger)
[2]
(c)
Date Dr Cr
30 April Suspense (1) 360 (1)
Cash book (bank) (1) 360 (1)
To correct balance entered at 1 April 2010 (1)
(Award marks for amount only if correctly shown as Dr or Cr with account name.) [5]
(d) Send statement

Offer cash discount (not trade discount)
Limit credit (no more credit sales)
Charge interest on overdue amounts
Use debt collection methods (any two, 2 marks each) [4]
[Total: 21]
© UCLES 2010


4 (a) (i) Lower (1) of cost (1) and net realisable value (1) [3]
(ii) $2 700 (1) [1]
(iii) Reduces profit (not overstated or understated) (1) by $300 (1) [2]
(b) Timpani Limited

$ $
Non-current (fixed) assets
Plant and equipment at cost 20 000 (1)
Accumulated depreciation 12 000 (1)
Net book value 8 000 (1)
Current assets
Inventory (stock) 2 700 (1)
Trade receivables (debtors) 1 000 (1)
Bank 500 (1)
4 200
Current Liabilities
Trade payables (creditors) 700 (1)
Bank loan (must be shown as current liability) 2 800 (1)
3 500
Net current assets 700
Total assets www.igcseaccounts.com 8 700
Equity
Share capital 5 000 (1)
8 700
Note: award marks for acceptable layout, not list of balances. [11]
(c)
Successful Not Successful
Reduce dividend (2)
Reduce depreciation (2)
Reduce trade payables (creditors) (2)
[6]
(d) (i) Going concern (1)
(ii) Expected sale values (2) [3]

(accept net realisable value)
[Total: 26]
© UCLES 2010


5 (a)
Capital Revenue
Hire charges (2)
Cash discount received from motor (2)
dealer for prompt payment for new car
Part exchange value of used car (2)
[6]
(b) (i) Cost $12 000 (1) @ 30% (1) = $3 600 (1)OF [3]
(Award only the component marks but not the mark for $3600 if other calculations are
shown, e.g. net book value or for other years.)
(ii) Net book value = $8 400 (1)OF [1]

(Award this mark if correct by reference to answer to (i).)
(c)
Disposal of motor vehicles

2010 $ 2010 $
April 1 Motor vehicle* 12 000 (1) April 1 Depreciation* 3 600 (1)
Bank (Insurance) 5 000 (1)
Income statement 3 400 (2)OF
(Profit & loss account)
12 000 12 000
(Mark is for reasonable narrative and amount, not date.)

(*Award 2 marks for “Net book value 8400”, but 0 for “Balance b/down 8400”.) [5]
(d) (i) The rate may be too low as large loss arose on scrapping car.
An increased rate, up to 60%, would reduce loss. [2]
(Award marks for similar comments.)
(ii) Straight line method (1) over life of car, or using scrap value (1)
or Based on estimated mileage over three years (2)
or other reasonable suggestion and explanation. [2]
[Total: 19]
© UCLES 2010


6 (a) $
Deposits to bank 15 270 (1)
Less: cash sales 2 680 (1)
12 590
Add: receivables at 31/3/10 4 080 (1)
16 670
Less: receivables at 1/4/09 3 140 (1)
Credit sales 13 530 (1)OF
(Award total figure only if no aliens, e.g. cash book balance b/fwd shown.) [5]
(b) Wilma
Trading account for the year ended 31 March 2010
$ $
Revenue (sales) – credit 13 530 (1)OF
– cash 2 680 (1)
16 210
Inventory (stock) at 1 April 2009 1 780 (1)

Purchases 9 560 (1)
11 620
Inventory (stock) at 31 March 2010 1 920 (1)
Cost of goods sold 9 700 (1)OF
Gross profit www.igcseaccounts.com 6 510 (1)OF [8]
(c) (i) Rate of inventory (stock) turnover

= Cost of goods sold / average inventory (stock)
= 9 700 (1)OF / [(1 780 + 1 920)/2 = 1 850 (1)OF]
= 5.24 (1)OF times (1) [4]
(Note – a calculation mark may be awarded even if the formula is wrong.)
(ii) Collection period for trade receivables (debtors)

= (Debtors / credit sales) × 365 days
= (4 080 (1) / 13 530 (1)OF) × 365 days
= 110 (1)OF (accept 111) days (1) [4]
(Note – a calculation mark may be awarded even if the formula is wrong.)
(d)
Gross profit (1)
Percentage of gross profit to sales (1)
Rate of inventory (stock) turnover (1)
[3]
[Total: 24]
© UCLES 2010



0452 ACCOUNTING
examination.


MARKING GUIDELINES
• Award marks only in accordance with the mark scheme. If a script contains an answer which is
not anticipated please refer to Principal Examiner before awarding any marks.
• For example, for “Balance brought down” accept Balance b/down, Balance b/d, Balance, Bal
carried down”.
• If a candidate gives two alternative answers without crossing one out, mark both answers and
give credit for the better answer. If one is crossed out, mark the other answer.
of the dates, he may earn some marks according to the mark scheme.
• If a ledger account is completely reversed, no marks will be awarded for individual entries but
• www.igcseaccounts.com
Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx.
An answer of just the correct figure xx may be accepted but not if any other description such as
%, times, days etc. is shown and not if shown as negative when it should be positive.
answer (e.g. $35.60), many candidates will show $35.6, as their calculators will suppress the final
© UCLES 2010


1
Question Question
Key Key
Number Number
(a) B (f) B
(b) A (g) A
(c) A (h) D
(d) A (i) A
(e) B (j) D
[Total marks: 10]
2 (a) Return on capital employed ( or Return on Net Assets ).

Percentage of gross profit to sales or GP margin or GP%.
Percentage of net profit to sales or NP margin or NP%.
Any two, (1) each [2]
(b)
Current asset Current liability
Inventory (stock) (1)
Trade payables (creditors) (1)
Other receivables (prepayments) (1)
[3]
(c)
Bank column Cash column
Debit side
Credit side (1)
If more than one tick then 0 [1]
(d) Income statement (trading/profit and loss account) [1]
(e) Error of principle [1]
(f) Matching or prudence or conservatism [1]
© UCLES 2010


(g) (i) rate of inventory (stock) turnover

= cost of goods sold/average stock
= ( OS + Purch + CI – CS ) [*1 for + CI; 1 for other figs]
(4 000 + 45 500 + 2 500 - 5 600) = 46 400 (2 * as above)
=
(4 000 + 5 600)/2 = 4 800 (1)
= 9.66 times (1)OF [4]
(ii) Payment period for trade payables

= creditors / credit purchases × 365 days
= 3 750 (1)/45 500 (1) × 365 days

= 30 days (2) (to nearest whole day)
[OF for correct formula] [4]
(h) Hooper – wages account

_____________________________________________________
Bank (Cash) 32 800 (1) Balance b/d 300 (1)
(or Accruals)
Balance c/d 450 (1) Income statement 32 950 (1) OF
(or Accruals) (Profit & Loss account)
33 250 33 250
Balance b/d 450 (1) [5]
Narrative and amount for mark

No aliens or extraneous items for OF
[Total marks: 22]
3 (a) (i) Arthur

$30 000 × 3% (1) = $900 (1) OF [2]
(ii) Nancy
$40 000 × 3% (1) = $1 200 (1) OF [2]
(b) (i) Arthur

$35 000 × 4% (1) = $1 400 (1) OF [2]
(ii) Nancy
$15 000 × 4% (1) = $600 (1) OF [2]
© UCLES 2010


(c) Net profit 89 000

Interest on drawings 2 000 (1)OF
91 000
Less salary 15 000 (1)
Interest on capital 2 100 (1)OF
17 100
Shared 2:3 Arthur:Nancy

Arthur 29 560 (2)OF as below
Nancy 44 340 (2)OF as below
73 900
2 OF for profit share only if based on Profit (not Capital )

1 OF for profit share if any aliens (Drawings) [7]
(d) Arthur – current account

_____________________________________________________
Interest on drawings 1 400 (1)OF Interest on capital 900 (1) OF
Drawings 35 000 (1) Salary 15 000 (1)
Balance c/d 9 060 (1)OF Residual profit 29 560 (1)OF
45 460 45 460
Balance b/d 9 060
No OF if aliens or extraneous items [6]
(e)
Increase (2)
Reduce
Unchanged
[2]
[Total marks: 23]
4 (a) Used to prepare final accounts.

Can trace or identify errors.
Other sensible comment.
One reason [1]
© UCLES 2010


(b) Deali
Trial Balance at 31 March 2010
$ $
Bank (overdraft) 2 300 (1)
Equipment 9 000 (1)
Trade payables (creditors) 2 800 (1)
Expenses 37 500 (1)
Capital 15 500 (1)
Drawings 8 000 (1)
Suspense 1 100 (1)OF
146 700 146 700
OF only if arithmetically correct [11]
(c) Dr Cr
Suspense (1) 1 100 (1)
Revenue (sales) (1) 1 100 (1)
Sales omitted from the ledger (1) must be related to error

Marks for narrative not dependent upon correct figures.
Marks carried with narrative. [5]
© UCLES 2010


(d) Deali
Summary Income Statement (Trading and Profit and Loss Account)
$ $
90 500
Expenses 37 500 (1)
Net profit 16 100 (1) OF
[Total marks: 25]
5 (a) (i) A bad debt is an amount owing to the business (1) which the debtor is unable or
unwilling to pay (1). [2]
(ii) A provision for doubtful debts is an estimate (not %)(1) of the amount likely to be lost
through bad debts (1). [2]
(b)
Dr Cr
$ $
Bad debts (income statement) (1) 850 (1)
(profit and loss account)
Veeku ) 300 )
)(1) or Debtors (1) )(1)
Wlanda ) 550 )
) )
[4]
© UCLES 2010


(c) Balance on sales ledger 12 600 (1)

Less: bad debts written off 850 (1)
11 750
Provision for doubtful debts @ 4% = 470 (1)OF [3]
(d)
Dr Cr
$ $
Income statement (1) 470 (1)
(Profit and Loss account) OF
Provision for doubtful debts(1) 470 (1)
OF
[4]
(e) Bad debts account

____________________________________________________
Debtors 850 (1) Income statement 850 (1)
(Profit and loss)
or Veeku 300
Wland 550 [2]
____________________________________________________
Balance c/d 470 Income statement 470 (1) OF
(Profit and loss)
Balance b/d 470 (1) OF [2]
(f) Bad debts recovered account

____________________________________________________
Income statement 300 (1) Bank (Cash/Veeku) 300 (1)
(Profit and loss) OF [2]
[Total marks: 21]
© UCLES 2010


6 (a) Managers, bank or other lender, creditors, customers, suppliers.

Employees, Government, competitors, potential investors.
Other acceptable comment.
Any two, 2 marks each [4]
(b)
Capital Revenue
New factory extension (1)
Repainting old factory (1)
Architect’s fees for designing extension (1)
New plant and equipment for extension (1)

[4]
(c) (i) Factory cost 30 000 (1) + Architect’s fees 3 000 (1)
Total cost 33 000

Over useful life 20 years 20 (1)
= 1 650 (1) OF [4]
(ii) Plant and equipment 6 000 – residual value 800 = 5 200

5 200 (1)
Over useful life 4 years (1)
= 1 300 (1) OF [3]
(d) Land has an indefinite expected life.

Land does not wear out.
Land is not consumed by use.
Land increases in value over time.
Other acceptable comment (allow NEVER).
Any two, 2 each [4]
[Total marks: 19]
© UCLES 2010



0452 ACCOUNTING
examination.


MARKING GUIDELINES
• Award marks only in accordance with the mark scheme. If a script contains an answer which is
not anticipated please refer to Principal Examiner before awarding any marks.
carried down”.
• If a candidate gives two alternative answers without crossing one out, mark both answers and
give credit for the better answer. If one is crossed out, mark the other answer.
of the dates, he may earn some marks according to the mark scheme.
• If a ledger account is completely reversed, no marks will be awarded for individual entries but
• www.igcseaccounts.com
Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx.
An answer of just the correct figure xx may be accepted but not if any other description such as
%, times, days etc. is shown and not if shown as negative when it should be positive.
answer (e.g. $35.60), many candidates will show $35.6, as their calculators will suppress the final
© UCLES 2010


1
Question Question
Key Key
Number Number
(a) B (f) B
(b) A (g) A
(c) A (h) D
(d) A (i) A
(e) B (j) D
[Total marks: 10]
2 (a) Return on capital employed ( or Return on Net Assets ).

Percentage of gross profit to sales or GP margin or GP%.
Percentage of net profit to sales or NP margin or NP%.
Any two, (1) each [2]
(b)
Current asset Current liability
Inventory (stock) (1)
Trade payables (creditors) (1)
Other receivables (prepayments) (1)
[3]
(c)
Bank column Cash column
Debit side
Credit side (1)
If more than one tick then 0 [1]
(d) Income statement (trading/profit and loss account) [1]
(f) Matching or prudence or conservatism [1]
© UCLES 2010


(g) (i) rate of inventory (stock) turnover

= cost of goods sold/average stock
= ( OS + Purch + CI – CS ) [*1 for + CI; 1 for other figs]
(4 000 + 45 500 + 2 500 - 5 600) = 46 400 (2 * as above)
=
(4 000 + 5 600)/2 = 4 800 (1)
= 9.66 times (1)OF [4]
(ii) Payment period for trade payables

= creditors / credit purchases × 365 days
= 3 750 (1)/45 500 (1) × 365 days

= 30 days (2) (to nearest whole day)
[OF for correct formula] [4]
(h) Hooper – wages account

_____________________________________________________
Bank (Cash) 32 800 (1) Balance b/d 300 (1)
(or Accruals)
Balance c/d 450 (1) Income statement 32 950 (1) OF
(or Accruals) (Profit & Loss account)
33 250 33 250
Balance b/d 450 (1) [5]
Narrative and amount for mark

No aliens or extraneous items for OF
[Total marks: 22]
3 (a) (i) Arthur

$30 000 × 3% (1) = $900 (1) OF [2]
(ii) Nancy
$40 000 × 3% (1) = $1 200 (1) OF [2]
(b) (i) Arthur

$35 000 × 4% (1) = $1 400 (1) OF [2]
(ii) Nancy
$15 000 × 4% (1) = $600 (1) OF [2]
© UCLES 2010


(c) Net profit 89 000

Interest on drawings 2 000 (1)OF
91 000
Less salary 15 000 (1)
Interest on capital 2 100 (1)OF
17 100
Shared 2:3 Arthur:Nancy

Arthur 29 560 (2)OF as below
Nancy 44 340 (2)OF as below
73 900
2 OF for profit share only if based on Profit (not Capital )

1 OF for profit share if any aliens (Drawings) [7]
(d) Arthur – current account

_____________________________________________________
Interest on drawings 1 400 (1)OF Interest on capital 900 (1) OF
Drawings 35 000 (1) Salary 15 000 (1)
Balance c/d 9 060 (1)OF Residual profit 29 560 (1)OF
45 460 45 460
Balance b/d 9 060
No OF if aliens or extraneous items [6]
(e)
Increase (2)
Reduce
Unchanged
[2]
[Total marks: 23]
4 (a) Used to prepare final accounts.

Can trace or identify errors.
Other sensible comment.
One reason [1]
© UCLES 2010


(b) Deali
Trial Balance at 31 March 2010
$ $
Equipment 9 000 (1)
Trade payables (creditors) 2 800 (1)
Expenses 37 500 (1)
Capital 15 500 (1)
Drawings 8 000 (1)
146 700 146 700
OF only if arithmetically correct [11]
(c) Dr Cr
Suspense (1) 1 100 (1)
Revenue (sales) (1) 1 100 (1)
Sales omitted from the ledger (1) must be related to error

Marks for narrative not dependent upon correct figures.
Marks carried with narrative. [5]
© UCLES 2010


(d) Deali
Summary Income Statement (Trading and Profit and Loss Account)
$ $
90 500
Expenses 37 500 (1)
Net profit 16 100 (1) OF
[Total marks: 25]
5 (a) (i) A bad debt is an amount owing to the business (1) which the debtor is unable or
unwilling to pay (1). [2]
(ii) A provision for doubtful debts is an estimate (not %)(1) of the amount likely to be lost
through bad debts (1). [2]
(b)
Dr Cr
$ $
Bad debts (income statement) (1) 850 (1)
(profit and loss account)
Veeku ) 300 )
)(1) or Debtors (1) )(1)
Wlanda ) 550 )
) )
[4]
© UCLES 2010


(c) Balance on sales ledger 12 600 (1)

Less: bad debts written off 850 (1)
11 750
Provision for doubtful debts @ 4% = 470 (1)OF [3]
(d)
Dr Cr
$ $
Income statement (1) 470 (1)
(Profit and Loss account) OF
Provision for doubtful debts(1) 470 (1)
OF
[4]
(e) Bad debts account

____________________________________________________
Debtors 850 (1) Income statement 850 (1)
(Profit and loss)
or Veeku 300
Wland 550 [2]
____________________________________________________
Balance c/d 470 Income statement 470 (1) OF
(Profit and loss)
Balance b/d 470 (1) OF [2]
(f) Bad debts recovered account

____________________________________________________
Income statement 300 (1) Bank (Cash/Veeku) 300 (1)
(Profit and loss) OF [2]
[Total marks: 21]
© UCLES 2010


6 (a) Managers, bank or other lender, creditors, customers, suppliers.

Employees, Government, competitors, potential investors.
Other acceptable comment.
Any two, 2 marks each [4]
(b)
Capital Revenue
New factory extension (1)
Repainting old factory (1)
Architect’s fees for designing extension (1)
New plant and equipment for extension (1)

[4]
(c) (i) Factory cost 30 000 (1) + Architect’s fees 3 000 (1)
Total cost 33 000

Over useful life 20 years 20 (1)
= 1 650 (1) OF [4]
(ii) Plant and equipment 6 000 – residual value 800 = 5 200

5 200 (1)
Over useful life 4 years (1)
= 1 300 (1) OF [3]
(d) Land has an indefinite expected life.

Land does not wear out.
Land is not consumed by use.
Land increases in value over time.
Other acceptable comment (allow NEVER).
Any two, 2 each [4]
[Total marks: 19]
© UCLES 2010



0452 ACCOUNTING
examination.


1 (a) To remove small cash payments from the main cash book.
To reduce the number of entries in the main cash book and the expenses in the ledger.
To allow the chief cashier to delegate some of the work.

Any 2 reasons (1) each. [2]
(b) The petty cashier starts each period with the same amount of money (1).
At the end of the period the chief cashier will make up the cash remaining so that it is equal
to the imprest amount (1). [2]
(c) The chief cashier is aware of exactly how much is spent in each period.
The cash remaining and the total of the vouchers received should always be equal to the
imprest amount.
Or other suitable advantage.

Any 1 advantage (1). [1]
(d) The petty cashier will receive $88. [1]
(e) (i) Debit travelling expenses account with $11. [2]
(ii) Debit N Jones account with $21 (2).

Debit W Smith account with $18 (2). [4]
(f) To spread the cost of fixed assets over their useful lives.
To apply the accruals principle – recognising the time difference between payment for the
fixed asset and its loss in value.
To provide a more realistic view of the fixed assets.
To record the loss in value of fixed assets – the part of the cost of the fixed asset consumed
during the period of use.
The annual depreciation charge represents the cost of using the fixed asset to earn revenue.
Or other acceptable reason.

Any 2 reasons (1). [2]
(g) Where a choice of method is available, the one with the most realistic outcome should be
selected and used consistently from one accounting period to the next. [2]
© UCLES 2010


(h) (i) Straight line (equal instalment) method

$
Cost 8000
Less scrap value 500
7500
Annual depreciation 7500 (1) = $2500 (1)

3 years (1) [3]
(ii) Reducing (diminishing) balance method

$
Cost 8000
Depreciation for year ending 31 January 2011 (60% × 8000) 4800 (1)
3200
1280
512
[3]
[Total: 22]
© UCLES 2010


2 (a) To calculate how much it has cost the business to manufacture the goods produced in the
financial year. [2]
(b) Production did not meet demand.

It was cheaper to buy the goods rather than make them.
Those particular items could not be made by the business.

Any 2 reasons (1) each. [2]
(c) Ahmed Zaki

$ $
Opening inventory (stock) of raw materials 33 400 (1)

441 560
Less Closing inventory (stock) of raw materials 35 230 (1)
406 330
Factory overheads
Indirect factory wages (130 200 + 1520) 131 720 (1)
Factory general expenses (198 280 – 400) 197 880 (1)
(162 000 + 19 500 – 150 000)
31 500 (2) 361 100
1 092 700 (1)O/F
1 106 900
Cost of production 1 093 000 (1)O/F
[Total: 17]
© UCLES 2010


3 (a) Provision for doubtful debts

2½% × (15 530 – 90) (1) = $386 (1) [2]
(b) Journal
Debit Credit
$ $
(i) Bad debts 90 (1)
K Singh 90 (1)
Bad debt written off (1)
(ii) Income statement (profit and loss) 300 (1)

Bad debts 300 (1)
Transfer of total bad debts written off to
income statement (profit and loss) (1)
(iii) Income statement (profit and loss) 386 (1)O/F

Provision for doubtful debts 386 (1)O/F
[9]
(c) Shilpa Gandhi

Extract from Balance Sheet at 31 January 2010
Current Assets $ $
Trade receivables (trade debtors)
Less Provision for doubtful debts
15 440
386 (1)O/F 15 054 (1)O/F
[2]
(d) Calculation of total value of inventory (stock)

$
Type A 360 units × $23 per unit 8 280 (2)
Type B (520 – 40) units × $12 per unit 5 760 (2)
14 040 (1)O/F
[5]
(e) Either Prudence

Or Consistency [1]
[Total: 19]
© UCLES 2010


4 (a) (i) Mark-up is the gross profit measured as a percentage of the cost price. [1]
(ii) Margin is the gross profit measured as a percentage of the selling price. [1]
(b) (i) Cost of sales = (25 200 + 347 200) – 28 000 = 344 400 (1)
Gross profit = 430 500 – 344 400 = 86 100 (1)
86 100 100
Percentage profit mark-up = O/F × (1)O/F = 25% (1)O/F [4]
344 400 1
(ii) Sales = 430 500

Gross profit = 86 100
86 100 O/F 100

Percentage profit margin = × (1)O/Fs = 20% (1)O/F [2]
430 500 O/F 1
(c) Increase selling prices.

Obtain cheaper supplies.
Change mix of sales.
Or other acceptable point.

Any 2 points (1) each. [2]
(d) Current assets = 28 000 + 36 300 + 100 = 64 400 }
Current liabilities = 29 600 + 13 200 = 42 800 } (1)
Current ratio = 64 400 : 42 800 (1) = 1.50 : 1 (1) [3]
(e) Liquid assets = 36 300 + 100 = 36 400 }

Current liabilities = 29 600 + 13 200 = 42 800 } (1)
Quick ratio = 36 400 : 42 800 (1) = 0.85 : 1 (1) [3]
(f) Answer to be based on O/Fs in (e).

Not satisfied (1)
Immediate liabilities cannot now be met out of liquid assets without selling stock (2).
Or other suitable comment. [3]
(g) (ii) No effect (1)
(iii) Decrease (1) [2]
[Total: 21]
© UCLES 2010


5 (a) (i) Preference shares:

Receive a fixed rate of dividend.
The dividend is paid before the ordinary share dividend.
Preference shares do not usually carry voting rights.
Capital is returned before the ordinary share capital in a winding up.
(ii) Ordinary shares:

They are also known as equity shares.
The dividend is paid after the preference share dividend.
The dividend may vary according to profits.
Ordinary shares usually carry voting rights.
Ordinary shares are the last to be repaid in a winding up.
(b) Ellis Ltd

Extract from Balance Sheet at 31 March 2010
Capital and Reserves $

100 000 5% Preference shares of $1 each 100 000 (2)
600 000 Ordinary shares of $.50 each 300 000 (2)
Profit and Loss account (retained profits) (10 000 (1) + 5000 (1)) 15 000
[6]
(c) Ellis Ltd
Current liabilities $
Other payables – Debenture interest (4% × 100 000) 4 000 (2)
Preference share dividend (5% × 100 000) 5 000 (2)
Ordinary share dividend ($0.05 × 600 000 shares) 30 000 (2)
[6]
[Total: 20]
© UCLES 2010


6 (a) To avoid misunderstandings/disagreements later. [2]
(b) (i) To discourage the partners from making excessive drawings. [2]
(ii) To compensate for an unequal work-load.

OR In recognition of work done in the business. [2]
(c) Ben and Jane Mwanga

$ $
Profit for the year (net profit) 12 000 (1)
Add Interest on drawings – Ben 320 (1)
Jane 600 (1) 920
12 920
Less Interest on capital – Ben 3 000 (1)
Jane 1 800 (1)
4 800
Partners’ salary – Jane 10 000 (1) 14 800
(1 880)
Share of loss – Ben (1 175) (1)O/F
Jane (705) (1)O/F (1 880)
[8]
(d) Ben and Jane Mwanga

$
Profit for the year (net profit) before corrections 12 000
Increase Decrease
in profit in profit
$ $
Error 1 1000
2 30 (2)
3 No effect (2)
4 ____ 50 (2)
1000 80
920
Corrected profit for the year 12 920 (1)O/F
[7]
[Total: 21]
© UCLES 2010



0452 ACCOUNTING
examination.


1 (a) The bank statement is a copy of the account of the business as it appears in the books of the
the bank. (2)
The bank account in the cash book is prepared from the viewpoint of the business – the bank
is a debtor of the business which has deposited the money. (2) [4]
2010 $ 2010 $
May 1 Dividend 262 (1) May 1 Balance b/d 1668 (1)
Error correction (1) 100 (1) Bank charges 38 (1)
1706 1706
May 1 Balance b/d 1344 (1)OF [7]
(c) Bank Reconciliation Statement at 1 May 2010
$ $
Add amounts not yet credited – cash sales (1) 650 (1)
(950)
Less cheques not yet presented – Peter Smith (1) 344 (1)
bank error (1) 50 (1) 394
Balance shown in cash book (1344) (1)OF [8]
Bank Reconciliation Statement at 1 May 2010
$ $
Balance shown in cash book (1344) (1)OF
bank error (1) 50 (1) 394
(950)
Balance shown on bank statement (1600) (1) [8]
(d) Answer to be based on OF balance in (b)

$1344 (1) OF
Liability (1) OF [2]
[Total: 21]
© UCLES 2010


2 (a) The liability of the members (shareholders) of a company for the debts of the company is
limited to the amount they agree to pay the company for their shares. [2]
(b) Preference shares receive a fixed rate of dividend: debentures receive a fixed rate of
interest.
Preference shareholders are members of the company: debenture holders are not members
of the company.
Preference shares are part of the capital of the company: debentures are long term loans.
Preference shareholders are repaid after the debenture holders in the event of the company
being wound up.
(c) (i) Authorised capital is the maximum amount of share capital a company is allowed to
issue. (2)
(ii) Called-up capital is the total amount of capital a company has requested from its
shareholders. (2)
(iii) Paid-up capital is that part of the called up capital for which a company has actually
received the money from its shareholders. (2) [6]
(d) DEC Ltd

$ $
Dividends paid – Preference 1 400 (2)
Dividends proposed – Preference 2 800 (2)
Ordinary 12 000 (2) 19 200
Retained profit for the year 2 800 (1)
Retained profit brought forward (profit & loss balance) 4 300 (1)
Retained profit carried forward 7 100 (1)OF
[11]
[Total: 23]
© UCLES 2010


3 (a) A narrative explains the reasons for the entries which are to be made in the ledger. [2]
(b) Journal
Debit Credit
$ $
Zaffar Khan 170 (1)

Zubin Khan 170 (1)
Correction of error Zaffar Khan incorrectly credited (1)
Equipment 1000 (1)

Correction of error equipment debited to office expenses (1)
Stationery 19 (1)
Purchases 19 (1)
Correction of error stationery debited to purchases account (1)

Mariam Sitar 25 (1)
Correction of error no entry made for sales returns (1)
[12]
(c) Error 2 Effect – www.igcseaccounts.com

Increase (1)
Reason – Expenses are being reduced so the profit increases. (2)
Error 3 Effect – No effect (1)

Reason – The cost of sales is being reduced, but the expenses are being
increased. The profit does not alter. (2)
Error 4 Effect – Decrease (1)

Reason – The sales are being decreased so the profit will also decrease. (2) [9]
[Total: 23]
© UCLES 2010


4 (a) Balance 1 April 2009

Explanation – This is the amount of rates (property tax) prepaid during the previous
financial year which related to the current financial year. (2)
Double entry – credit rates (property tax) account for year ended 31 March 2009. (1)
Bank 1 July 2010

Explanation – This is the total amount of rates (property tax) paid by cheque. (2)
Double entry – credit bank column in cash book. (1)
Income statement (profit and loss) 31 March 2010

Explanation – This is the rates (property tax) relating to the current financial year
transferred to the income statement (profit and loss). (2)
Double entry – debit income statement (profit and loss). (1)
[9]
(b) The balance represents the amount of rates (property tax) still outstanding for the financial
year ended 31 March 2010. [2]
(c) (i) The accruals (matching) principle requires the revenue of the accounting period to be
(ii) The total rates relating to the financial year ended 31 March 2010 were transferred to the
income statement. (2) [4]
(d) Business entity www.igcseaccounts.com [1]
(e) Realisation [1]
[Total: 17]
© UCLES 2010


5 (a) Accountant – service business (1)

Baker – trading business (1)
Travel agent – service business (1) [3]
(b) Calculation of fees

$
Cheques received during the year 21 250 (1)
Add amounts owing 30 April 2010 1 820 (1)
23 070
Less amounts owing 1 May 2009 1 770 (1)
Fees for the year 21 300 (1)
Calculation in ledger account format acceptable [4]
(c) Martha Musa

Income Statement (Profit and Loss Account) for the year ended 30 April 2010
$ $
Fees 21 300 (1)OF
Rent received (2750 – 150) 2 600 (2)
23 900
Rates (property tax) and insurance 1 660 (1)
Loss on disposal (6000 – 4000 – 1800) 200 (2)
Depreciation – office equipment
(25% × 8000 × 6 months) 1 000 (2) 10 800
Profit for the year (net profit) 13 100 (1)OF
[Total: 18]
© UCLES 2010


(54 000 - 38 000) (1) 100

6 (a) (i) × = 29.63% (2)
54 000 1
(16 000 - 9 000) (1) 100

(ii) × = 12.96% (2) [6]
54 000 1
(b) All comments and reasons to be based on OFs from (a)
Gross profit percentage has fallen from 35.50% to 29.63%.

Is earning $29.63 per $100 sales compared to $35.50 previously.
The business is less profitable in respect of gross profit.

Any 1 comment (2)
Reduction in selling prices.

Increase in cost of supplies.
Change in proportions of different goods.
Not passing on increased costs to customers.

Any 1 reason (2)
Net profit percentage has increased from 10.45% to 12.96%.
The business is more profitable.

Any 1 comment (2)
Increased control of expenses.

Change in types of expenses.

(c) Cannot meet liabilities when they are due.

May experience difficulties in obtaining further supplies on credit.
Cannot take advantage of cash discounts.
Cannot take advantage of business opportunities as they arise.
[Total: 18]
© UCLES 2010



0452 ACCOUNTING
examination.


1 (a) The bank statement is a copy of the account of the business as it appears in the books of the
the bank. (2)
The bank account in the cash book is prepared from the viewpoint of the business – the bank
is a debtor of the business which has deposited the money. (2) [4]
2010 $ 2010 $
May 1 Dividend 262 (1) May 1 Balance b/d 1668 (1)
1706 1706
May 1 Balance b/d 1344 (1)OF [7]
(c) Bank Reconciliation Statement at 1 May 2010
$ $
(950)
bank error (1) 50 (1) 394
Balance shown in cash book (1344) (1)OF [8]
Bank Reconciliation Statement at 1 May 2010
$ $
Balance shown in cash book (1344) (1)OF
bank error (1) 50 (1) 394
(950)
Balance shown on bank statement (1600) (1) [8]
(d) Answer to be based on OF balance in (b)

$1344 (1) OF
Liability (1) OF [2]
[Total: 21]
© UCLES 2010


2 (a) The liability of the members (shareholders) of a company for the debts of the company is
limited to the amount they agree to pay the company for their shares. [2]
(b) Preference shares receive a fixed rate of dividend: debentures receive a fixed rate of
interest.
Preference shareholders are members of the company: debenture holders are not members
of the company.
Preference shares are part of the capital of the company: debentures are long term loans.
Preference shareholders are repaid after the debenture holders in the event of the company
being wound up.
(c) (i) Authorised capital is the maximum amount of share capital a company is allowed to
issue. (2)
(ii) Called-up capital is the total amount of capital a company has requested from its
shareholders. (2)
(iii) Paid-up capital is that part of the called up capital for which a company has actually
received the money from its shareholders. (2) [6]
(d) DEC Ltd

$ $
Dividends paid – Preference 1 400 (2)
Dividends proposed – Preference 2 800 (2)
Ordinary 12 000 (2) 19 200
Retained profit for the year 2 800 (1)
Retained profit brought forward (profit & loss balance) 4 300 (1)
Retained profit carried forward 7 100 (1)OF
[11]
[Total: 23]
© UCLES 2010


3 (a) A narrative explains the reasons for the entries which are to be made in the ledger. [2]
(b) Journal
Debit Credit
$ $
Zaffar Khan 170 (1)

Zubin Khan 170 (1)
Correction of error Zaffar Khan incorrectly credited (1)
Equipment 1000 (1)

Correction of error equipment debited to office expenses (1)
Stationery 19 (1)
Purchases 19 (1)
Correction of error stationery debited to purchases account (1)

Mariam Sitar 25 (1)
Correction of error no entry made for sales returns (1)
[12]
(c) Error 2 Effect – www.igcseaccounts.com

Increase (1)
Reason – Expenses are being reduced so the profit increases. (2)
Error 3 Effect – No effect (1)

Reason – The cost of sales is being reduced, but the expenses are being
increased. The profit does not alter. (2)
Error 4 Effect – Decrease (1)

Reason – The sales are being decreased so the profit will also decrease. (2) [9]
[Total: 23]
© UCLES 2010


4 (a) Balance 1 April 2009

Explanation – This is the amount of rates (property tax) prepaid during the previous
financial year which related to the current financial year. (2)
Double entry – credit rates (property tax) account for year ended 31 March 2009. (1)
Bank 1 July 2010

Explanation – This is the total amount of rates (property tax) paid by cheque. (2)
Double entry – credit bank column in cash book. (1)
Income statement (profit and loss) 31 March 2010

Explanation – This is the rates (property tax) relating to the current financial year
transferred to the income statement (profit and loss). (2)
Double entry – debit income statement (profit and loss). (1)
[9]
(b) The balance represents the amount of rates (property tax) still outstanding for the financial
year ended 31 March 2010. [2]
(c) (i) The accruals (matching) principle requires the revenue of the accounting period to be
(ii) The total rates relating to the financial year ended 31 March 2010 were transferred to the
income statement. (2) [4]
(d) Business entity www.igcseaccounts.com [1]
(e) Realisation [1]
[Total: 17]
© UCLES 2010


5 (a) Accountant – service business (1)

Baker – trading business (1)
Travel agent – service business (1) [3]
(b) Calculation of fees

$
Cheques received during the year 21 250 (1)
Add amounts owing 30 April 2010 1 820 (1)
23 070
Less amounts owing 1 May 2009 1 770 (1)
Fees for the year 21 300 (1)
Calculation in ledger account format acceptable [4]
(c) Martha Musa

Income Statement (Profit and Loss Account) for the year ended 30 April 2010
$ $
Fees 21 300 (1)OF
Rent received (2750 – 150) 2 600 (2)
23 900
Rates (property tax) and insurance 1 660 (1)
Loss on disposal (6000 – 4000 – 1800) 200 (2)
Depreciation – office equipment
(25% × 8000 × 6 months) 1 000 (2) 10 800
Profit for the year (net profit) 13 100 (1)OF
[Total: 18]
© UCLES 2010


(54 000 - 38 000) (1) 100

6 (a) (i) × = 29.63% (2)
54 000 1
(16 000 - 9 000) (1) 100

(ii) × = 12.96% (2) [6]
54 000 1
(b) All comments and reasons to be based on OFs from (a)
Gross profit percentage has fallen from 35.50% to 29.63%.

The business is less profitable in respect of gross profit.

Any 1 comment (2)
Reduction in selling prices.

Increase in cost of supplies.
Change in proportions of different goods.
Not passing on increased costs to customers.

Any 1 reason (2)
Net profit percentage has increased from 10.45% to 12.96%.
The business is more profitable.

Any 1 comment (2)
Increased control of expenses.

Change in types of expenses.

(c) Cannot meet liabilities when they are due.

May experience difficulties in obtaining further supplies on credit.
Cannot take advantage of cash discounts.
Cannot take advantage of business opportunities as they arise.
[Total: 18]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) A [1]
(b) B [1]
(c) D [1]
(d) B [1]
(e) C [1]
(f) A [1]
(g) B [1]
(h) C [1]
(i) D [1]
(j) B [1]
[Total: 10]
2 (a) Cash book, petty cash book, sales day book (journal), sales returns day book (journal),
purchases day book (journal), purchases returns day book (journal), journal.
(Any two, 1 mark each). [2]
(b) To calculate the [net] profit [or loss] [for the year] – not gross profit. [1]
(c)
Income Expense
[3]
(d) The petty cashier has a fixed amount of money (the imprest) (1) and is reimbursed the
amount of the actual expenses each period (1) to maintain this amount. [2]


(e) (i) Consistency [1]
(ii) Reliability [1]
(f) Current assets (1) less Current liabilities (1) [2]
(g) (i) Working capital = Trade receivables + bank + inventory – trade payables
= (1300 + 3500 + 2900) (7700) (1) – 1800 (1)
= 5900 (1)OF [3]
(ii) Quick ratio = current assets less inventory / current liabilities

= (7700 – 2900) (4800) (1) / 1800 (1)
= 2.67 : 1 (1)OF (accept 2.66 : 1) [3]
(h) Ordinary shares (equity shares), preference shares. [2]
[Total: 20]


3 (a) Alcazar – credit sales

$
Bank deposits 15 270 (1)
Less cash sales 2 680 (1)
12 590
Add trade receivables at 31 March 2011 4 080
Less trade receivables at 1 April 2010 3 140
940 (1)
13 530 (1)OF [4]
(b)
Alcazar
$ $
Revenue – credit sales 13 530 (1)OF
– cash sales 2 680 (1)
16 210
Less Cost of sales
Inventory at 1 April 2010 1 780 (1)
Purchases 9 560 (1)
11 620
Inventory at 31 March 2011 1 920 (1)
9 700
Gross profit (must be correct caption) 6 510 (1)OF
Rent 600 (1)
Electricity 360 (1)
Insurance 580 (1)
Wages 1 370 (1)
2 910
[Net] Profit [for the year] (must have caption) 3 600 (1)OF [12]
(c) (i) Gross profit / sales = 6510 (1)OF / 16210 (1)OF = 40.16% (1)OF [3]
(ii) Net profit / sales = 3600 (1)OF / 16210 (1)OF = 22.21% (1)OF [3]
(d) (i) New gross profit / new sales = 9010 (1)OF / 18710 (1)OF = 48.16% (1)OF [3]
(ii) Increased (1)OF [1]
[Total: 26]


4 (a) An other payable (accrued expense) is an amount due and payable [in respect of expenses
incurred in an accounting period] (1) which remains unpaid at the end of that period (1). [2]
(b)
Khalim
Fuel expenses account
2010
1 May Balance b/d 30 (1)
2011 2011
30 April Bank 340 (1) 30 April Income statement 360 (1)OF
Balance c/d 50 (1) (accept profit/loss acc) 000
390 390
(+ 1 for all correct dates)

[6]
(c)
Non-current Non-current Current
tangible intangible
Warehouse (1)
Goodwill www.igcseaccounts.com
(1)
Motor van (1)
Trade receivables (1)
[4]
(d) At the lower (1) of cost (1) and net realisable value (1) [3]
(e)
Chair type Units in stock Cost or net Total value
realisable value
per unit
$ $
Armchair 15 (1) 55 (1) 825
Dining chair 36 (1) 20 (2) 720
Folding chair 60 (1) 15 (1) 900
2 445 (1)
[8]
[Total: 23]


5 (a) Straight line method, revaluation method (1 mark each) [2]
(b) Depreciation
(i) Year 1 4500 (1) @ 40% (1) = 1800 (1)OF
(ii) Year 2 (4500 – 1800) = 2700 (2)OF @ 40% = 1080 (1)OF
(iii) Year 3 (2700 – 1080) = 1620 (2)OF @ 40% = 648 (1)OF

[9]
(c)
Piranha Limited
Balance Sheet at end of third year (extract)
Cost Provision for Net book value

Depreciation
$ $ $
Non-current assets
Computer system 4500 (1) 3528 (1)OF 972 (1)OF
[3]
(d) Depreciation rate should have been higher (1) because net book value after three years
($972) is greater than expected scrap value after three years ($750) (1) [2]
(e)
Net profit (2)
Working capital (2)

[6]
[Total: 22]


6 (a)
Error 1
Dr Cr
Suspense 180 (1)
[Carlo] – [loan] 180 (1)
Error 2
Cash [book] 850 (1)
Sales 850 (1)
Error 3
Purchases 900 (1)
Suspense 900 (1)
Error 4
Fixtures and fittings 1200 (1)
Repairs 1200 (1)

(b)
Monica
Suspense account
[Difference on] trial balance (1) 720 (1) Purchases (1) 900 (1)
Carlo – loan account (1) 180 (1) 000
900 900
[6]


(c)
Monica
Statement of corrected profit for the year ended 28 February 2011
Draft profit 3600 (1)

Error 1: no effect
Error 2: add: sales 850 (1)
Error 3: less: purchases (900) (1)
Error 4: add: repairs 1200 (1)
Corrected profit 4750 (1)OF
[5]
[Total: 19]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) A [1]
(b) B [1]
(c) D [1]
(d) B [1]
(e) C [1]
(f) A [1]
(g) B [1]
(h) C [1]
(i) D [1]
(j) B [1]
[Total: 10]
(c)
Income Expense
[3]


= (1300 + 3500 + 2900) (7700) (1) – 1800 (1)
= 5900 (1)OF [3]

= (7700 – 2900) (4800) (1) / 1800 (1)
= 2.67 : 1 (1)OF (accept 2.66 : 1) [3]
[Total: 20]



$
12 590
940 (1)
13 530 (1)OF [4]
(b)
Alcazar
$ $
16 210
Less Cost of sales
Purchases 9 560 (1)
11 620
9 700
Rent 600 (1)
Electricity 360 (1)
Insurance 580 (1)
Wages 1 370 (1)
2 910
[Total: 26]


(b)
Khalim
2010
2011 2011
390 390

[6]
(c)
tangible intangible
Warehouse (1)
(1)
Motor van (1)
[4]
(e)
realisable value
per unit
$ $
Armchair 15 (1) 55 (1) 825
Dining chair 36 (1) 20 (2) 720
Folding chair 60 (1) 15 (1) 900
2 445 (1)
[8]
[Total: 23]


(b) Depreciation
(i) Year 1 4500 (1) @ 40% (1) = 1800 (1)OF
(ii) Year 2 (4500 – 1800) = 2700 (2)OF @ 40% = 1080 (1)OF
(iii) Year 3 (2700 – 1080) = 1620 (2)OF @ 40% = 648 (1)OF

[9]
(c)
Piranha Limited

Depreciation
$ $ $
Non-current assets
[3]
(e)
Net profit (2)
Working capital (2)

[6]
[Total: 22]


6 (a)
Error 1
Dr Cr
Suspense 180 (1)
[Carlo] – [loan] 180 (1)
Error 2
Cash [book] 850 (1)
Sales 850 (1)
Error 3
Purchases 900 (1)
Suspense 900 (1)
Error 4
Repairs 1200 (1)

(b)
Monica
Suspense account
900 900
[6]


(c)
Monica

Error 1: no effect
[5]
[Total: 19]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) A [1]
(b) B [1]
(c) D [1]
(d) B [1]
(e) C [1]
(f) A [1]
(g) B [1]
(h) C [1]
(i) D [1]
(j) B [1]
[Total: 10]
(c)
Income Expense
[3]


= (1300 + 3500 + 2900) (7700) (1) – 1800 (1)
= 5900 (1)OF [3]

= (7700 – 2900) (4800) (1) / 1800 (1)
= 2.67 : 1 (1)OF (accept 2.66 : 1) [3]
[Total: 20]



$
12 590
940 (1)
13 530 (1)OF [4]
(b)
Alcazar
$ $
16 210
Less Cost of sales
Purchases 9 560 (1)
11 620
9 700
Rent 600 (1)
Electricity 360 (1)
Insurance 580 (1)
Wages 1 370 (1)
2 910
[Total: 26]


(b)
Khalim
2010
2011 2011
390 390

[6]
(c)
tangible intangible
Warehouse (1)
(1)
Motor van (1)
[4]
(e)
realisable value
per unit
$ $
Armchair 15 (1) 55 (1) 825
Dining chair 36 (1) 20 (2) 720
Folding chair 60 (1) 15 (1) 900
2 445 (1)
[8]
[Total: 23]


(b) Depreciation
(i) Year 1 4500 (1) @ 40% (1) = 1800 (1)OF
(ii) Year 2 (4500 – 1800) = 2700 (2)OF @ 40% = 1080 (1)OF
(iii) Year 3 (2700 – 1080) = 1620 (2)OF @ 40% = 648 (1)OF

[9]
(c)
Piranha Limited

Depreciation
$ $ $
Non-current assets
[3]
(e)
Net profit (2)
Working capital (2)

[6]
[Total: 22]


6 (a)
Error 1
Dr Cr
Suspense 180 (1)
[Carlo] – [loan] 180 (1)
Error 2
Cash [book] 850 (1)
Sales 850 (1)
Error 3
Purchases 900 (1)
Suspense 900 (1)
Error 4
Repairs 1200 (1)

(b)
Monica
Suspense account
900 900
[6]


(c)
Monica

Error 1: no effect
[5]
[Total: 19]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) To notify the customer of the amount outstanding at the end of the month.
To provide the customer with a summary of the month’s transactions.
(b) Fiona Fraser [1]
(c)
Journal Debit Credit
$ $
Interest payable 2 (1)
Fiona Fraser 2 (1)
Interest charged by creditor on overdue account (1)

[3]
(d)
(i) Purchases (1) Fiona Fraser (1)
(ii) Fiona Fraser (1) Purchases returns (1)

(e) (i) Cash book (1)
(ii) Sales journal (1)
(iii) Sales returns journal (1) [3]
(f) Goods returned

Allowance for damaged/faulty goods
Correction of overcharge
(g) (i) $225.40 (1)
(ii) The amount was paid within the period of credit allowed (1) [2]
[Total: 15]


2 (a) Paul Muyambo

Statement of Affairs 31 January 2011
$ $ $
Non-current Assets
Machinery at book value 32 500
Less Depreciation for the year 8 125 (1) 24 375 (1)
Motor vehicle at valuation 10 300
Less Depreciation for the year 1 200 9 100 (1)
33 475
Current Assets
23 946
Current Liabilities
36 475
Financed by
Capital
Balance www.igcseaccounts.com 36 475
(2) C/F
(1) O/F


(b) Calculation of profit or loss for the year ended 31 January 2011
$ $
Capital at 31 January 2011 36 475 (1) O/F
Drawings cash 5 575 (1)
Drawings goods 1 700 (1) 7 275
43 750
Less Capital 1 February 2010 42 500 (1)
Capital introduced 3 000 (1) 45 500
Loss for the year 1 750 (2) O/F
Capital account
$ $
2011 2010
Jan 31 Drawings cash 5 575 (1) Feb 1 Balance b/d 42 500 (1)
Drawings goods 1 700 (1) 2011
Loss for year 1 750 (2) Jan 31 Bank/cash 3 000 (1)
O/F
_____ O/F ______
45 500 45 500
2011
Feb 1 Balance b/d 36 475
[Total: 20]


3 (a) Drawings and interest on drawings exceeded the interest on capital and share of profit. [2]
(b) Current accounts
Omar Fatima Omar Fatima

$ $ $ $
2010 2010
Apl 1 Balance b/d (1) 215 Apl 1 Balance b/d (1) 1 945
2011 2011
Mar 31 Drawings (1) 2 900 9 600 Mar 31 Interest on
Interest on capital (1) 2 400 1 600
Drawings (1) 87 288 Salary (1) 12 000
Share of loss (1) 1 230 820 Balance c/d (1) 2 032
Balance c/d (1) ____ 4 837 15 545
4 432 15 545 4 432 15 545
2011 2011
Apl 1 Balance (1) 2 032 Apl 1 Balance b/d (1) 4 837
O/F O/F
Alternatively accept two separate “T” accounts
Omar Aziz Current account
2010 $ $ $
April 1 Balance 215 (1) 215 Dr
2011
Mar 31 Interest on capital 2 400 2 185 Cr
Drawings 2 900 715 Dr
Interest on drawings 87 802 Dr
Share of loss 1 230 2 032 Dr
(2) C/F (1) O/F
Fatima Aziz current account

2010 $ $ $
April 1 Balance 1 945 (1) 1 945 Cr
2011
Mar 31 Interest on capital 1 600 3 545 Cr
Salary 12 000 (1) 15 545 Cr
Drawings 9 600 5 945 Cr
Interest on drawings 288 5 657 Cr
Share of loss 820 4 837 Cr
(2) C/F (1) O/F
Need correct entries for interest on capital, interest on drawings, drawings and share
of loss to earn the (1) for these items [11]


(c)
Aziz Stores
Omar Aziz Fatima Aziz Total

$ $ $
Capital accounts 60 000 (1) 40 000 (1) 100 000

Current accounts (2 032) (1) O/F 4 837 (1) O/F 2 805
57 968 44 837 102 805 (1) O/F [5]
(d) Easier to see the profit retained by each partner

Easier to calculate the interest on capital

(e) The members of a limited liability company have limited liability and their personal assets are
not at risk is the business fails. [2]
[Total: 22]


4 (a) (i) Income and expenditure account (1)
(ii) Surplus (or excess of income over expenditure) (1)
(iii) Accumulated fund (1) [3]
(b) Muara Swimming Club

Receipts and Payments Account for the year ended 28 February 2011
$ $
2010 2011
Mar 1 Balance b/d 3 450 (1) Feb 28 Equipment 1 200 (1)
2011 Rent 2011 1 690 (1)
Feb 28 Subscriptions 2010 270} Competition
2011 5 400} (1) expenses 645 (1)
2012 180} General
Equipment proceeds 890 (1) expenses 732 (1)
Competition receipts 780 (1) Insurance 496 (1)
Loan – Swim-for-all 1 000 (1) Balance c/d 7 207 (1)
11 970 11 970
2011
Mar 1 Balance b/d 7 207 (1) O/F [12]
(c) Subscriptions account
$ $
2010 2011
Mar 1 Balance b/d 270 (1) Feb 28 Bank 270 (1)
2011 Bank 5400 (1)
Feb 28 Income and Bank 180 (1)
expenditure (1) 5400 (1)
Balance c/d 180 (1) ____
5850 5850
2011
Mar 1 Balance b/d 180 (1) [8]

2010 $ $ $
Mar 1 Balance 270 (1) 270 Dr
2011
Feb 28 Bank 270 (1) 0
Bank 5400 (1) 5400 Cr
Bank 180 (1) 5580 Cr
Income and
expenditure (1) 5400 (1) 180 Cr (2) [8]
[Total: 23]


5 (a) (i) Balance 1 November 2009

Explanation – This is the amount of rent owing by the tenant for the financial year
ended 31 October 2009 (2)
Double entry – Credit rent receivable account for the year ended 31 October 2009 (1) [3]
(ii) Bank 2 November 2009

Explanation – This is the total amount of rent received from the tenant by cheque,
including $100 for the previous year (2)
Double entry – Debit bank column in cash book (1) [3]
(iii) Income statement 31 October 2010

Explanation – This is the rent receivable relating to the current financial year
transferred to the income statement (2)
Double entry – Credit income statement (1) [3]
(b) The balance represents the amount of rent prepaid by the tenant for the following financial
year. [2]
(c) (i) Capital expenditure is money spent on acquiring, improving and installing fixed assets. (1)
Revenue expenditure is money spent on running a business on a day-to-day basis. (1) [2]
(ii) Capital receipts are amounts received which do not form part of the day-to-day trading
activities. (1)
Revenue receipts are amounts received in the day-to-day trading activities from revenue
and other items of income. (1) [2]


(d) Leo Yang

Statement of corrected profit for the six months ended 30 April 2011
$ $
Profit 7 900
Add Purchase of new equipment 16 800 (1)
Rent received 1 200 (1) 18 000
25 900
Less Sale of old equipment 9 200 (1)
Loan from Sports-aid 10 000 (1)
Purchase of stationery 110 (1)
Loan interest paid 200 (1) 19 510
Corrected net profit 6 390 (1)
Leo Yang
Income Statement for the six months ended 30 April 2011
$ $
Fees 14 000
Add Rent received 1 200 (1)
15 200
Less General expenses 8 500
Stationery 110 (1)
Loan interest 200 (1) 8 810
www.igcseaccounts.com6 390 (1)
Profit for the six months
+ (1) for omission of sale of equipment

+ (1) for omission of purchase of equipment
+ (1) for omission of loan [7]
[Total: 22]


5300 365
6 (a) × (1) = 45.52 = 46 days (1) [2]
42500 1
(b) Unsatisfied if O/F in (a) is over 30 days (1)

They are not receiving the amount due within the period of credit allowed (2)
Or
Satisfied if O/F in (a) is 30 days or below (1)
They are receiving the amount due within the period of credit allowed (2) [3]
4100 365
(c) × (1) = 28.34 = 29 days (1) [2]
52800 1
(d) Disadvantage if O/F in (c) is over 24 days (1)

She is receiving the amount due 5 (O/F) days later than in the previous year (2)
Or
Advantage if O/F in (c) is 24 days or below (1)
She is receiving the amount due x (O/F) days earlier than in the previous year (2) [3]
(e) Offer cash discount for prompt payment

Refuse further supplies on credit until outstanding balance paid

(f) (4100 + 3800) : (5300 + 2900) (1) = 0.96 : 1 (1) [2]
(g) Unsatisfied if O/F in (f) is less than 2:1 (1)

She is unable to meet her immediate liabilities from her immediate assets (1)
Or
Satisfied if O/F in (f) is 2:1 or over (1)
She is able to meet her immediate liabilities from her immediate assets (1) [2]
(h) Introduce additional capital

Reduce drawings
[Total: 18]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Paul Ahmadi account
$ $
2011 2011
___ 30 Balance c/d 232 (1)
608 608
May 1 Balance b/d 232 (1) O/F [6]
Irene Moyo account
$ $
2011 2011
2 Interest 4 (1) 30 Bad debts 34 (1)
114 114 [3]
Paul Ahmadi account

2010 $ $ $
7 Bank 234 (1) 6 Dr
Discountwww.igcseaccounts.com
6 (1) –
11 Sales 368 (1) 368 Dr
18 Sales returns 136 (1) 232
(2) C/F
(1) O/F [6]
Irene Moyo account

2010 $ $ $
2 Interest 4 (1) 114 Dr
24 Bank 80 (1) 34 Dr
30 Bad debts 34 (1) – [3]
(b) A debit note may be issued by a customer to request a reduction in an invoice (1)
A credit note may be issued by a supplier to reduce an invoice for returns/overcharge etc (1) [2]
(c) (i) purchases journal (1)
(ii) sales returns journal (1) [2]


(d) A statement of account is not a transaction (1)

It is a summary of the account of the customer in the books of the supplier
Or
It is a reminder to the customer of the amount due (1) [2]
(e)
Item Source of information Entry in sales ledger
control account
(ii) bad debts written off journal (1) credit (1)
(iii) cash discount allowed cash book (1) credit (1)
(iv) contra item transferred journal (1) credit (1)

to purchases ledger
[6]
[Total: 21]
2
Sabena Khan
$ $ $
Revenue 58 200 (1)
Less Cost of sales
Opening inventory
Purchases www.igcseaccounts.com
51 400 (1)
7 500 (1)
Less purchases returns 2 300 (1) 49 100

56 600
Less Closing inventory 10 040 (2) C/F 46 560
(1) O/F

(116 – 98) 18 (2)
11 808
Bad debts 50 (1)
Administration expenses 7 960 (1)
(4500 – 3800) 700 (1)
10% × 5400 540 (1) 10 132
[Total: 18]


3 (a) Business entity [1]
(b)
$ $
1 W Lister Current (or Drawings) 420 (1)
Purchases 420 (1)
Goods taken for own use by W Lister (1)
2 Office stationery 32 (1)
T Lister Current 32 (1)
Office stationery paid for by T Lister (1)
W Lister Capital 15 200 (1)
Motor vehicle introduced by W Lister (1)
4 T Lister Current 5 000 (1)
T Lister Capital 5 000 (1)
Transfer from current to capital account (1)
[12]
(c) Lower of cost and net realisable value [1]
(d) To avoid overstating the profit
To avoid overstating the assets
Any two comments (1 each) [2]
(e) $560 (1) × ¾ (1) = $420 (1) Decrease (1)
Or $
Original profit share ¾ × $18 500 13 875 (1)
New profit share ¾ × $17 940 13 455 (1)
Reduction (1) in profit share 420 (1)
Other methods of calculation acceptable [4]
[Total: 20]


4 (a) Consistency [1]
(b) Ensures that profits are not overstated (1)

Ensures that the non-current assets are not overstated (1) [2]
(c) Accruals (Or matching) [1]
(d) Office equipment account
$ $
2010 2010
April 1 Balance b/d 7 500 (1) Dec 31 Disposals 4 000 (1)
Oct 1 Bank 3 500 (1) 2011
______ Mar 31 Balance c/d 7 000 (1)
11 000 11 000
2011
April 1 Balance b/d 7 000 (1) O/F [5]
Provision for depreciation of office equipment account
$ $
2010 2010
Dec 31 Disposals 1 600 (2) April 1 Balance b/d 4 500 (1)
2011 www.igcseaccounts.com 2011
Mar 31 Balance c/d 3 950 (1) Mar 31 Income statement
20% × (7500 – 4000) 700 (1)
Income statement
_____ 20% × 3500 × 6/12 350 (1)
5 550 5 550
2011
April 1 Balance b/d 3 950 (1)
O/F [7]
Office equipment disposal account
$ $
2010 2010
Dec 31 Office equipment 4 000 (1) Dec 31 Prov for Dep 1 600 (1)
O/F O/F
AH Company 2 000 (1)
2011
Mar 31 Income statement 400 (1)
_____ O/F
4 000 4 000 [4]


Office equipment account

2010 $ $ $
April 1 Balance 7 500 (1) 7 500 Dr
Oct 1 Bank 3 500 (1) 11 000 Dr
Dec 31 Disposals 4 000 (1) 7 000 Dr
(2) C/F
(1) O/F [5]
Depreciation of office equipment account
2010 $ $ $
Dec 31 Disposals 1 600 (2) 2 900 Cr
2011
Mar 31 Income statement
20% × (7500 – 4000) 700 (1)
20% × 3500 v 6/12 350 (1) 3 950 Cr
(2) C/F
(1) O/F [7]

2010 $ $ $
Dec 31 Office equipment 4 000 (1)O/F 4 000 Dr
Prov for Dep 1 600 (1)O/F 2 400 Dr
AH Company 2 000 (1) 400 Dr
2011
Mar 31 Income statement 400 (1)O/F [4]
[Total: 20]


5 (a) Osama Mousa

Statement of Affairs at 31 March 2011
$ $ $
Non-current Assets Cost Depreciation Book
to date value
Equipment 17 000 (1) 4 250 (1) 12 750 (1)

Motor vehicle 10 000 2 500 (1) 7 500 (1)
27 000 6 750 20 250
Current Assets
Petty cash 100 (1)
5 800
Current Liabilities
Net current assets 2 100 (1)O/F
22 350
Long term Liabilities
Loan from Hi-Finance 1 250 (1)
21 100
Financed by
Capital
Balance 21 100
www.igcseaccounts.com(2) C/F
(1) O/F


(b) Calculation of profit or loss for the year ended 31 March 2011
$ $
Capital at 31 March 2011 21 100 (1) O/F
Drawings 8 000 (1)
29 100
Less Capital at 1 April 2010 22 000 (1)
Capital account
$ $
2011 2010
Mar 31 Drawings 8 000 (1) April 1 Balance b/d 22 000 (1)
Balance c/d 21 100 (1) 2011
Mar 31 Bank 5 000 (1)
Profit for year 2 100 (2)
_____ _____ O/F
29 100 29 100
2011
April 1 Balance b/d 21 100
Three column running balance account acceptable [6]
www.igcseaccounts.com [Total: 20]
6 (a) Percentage of gross profit to sales

Gross profit = 585 000 – (31 600 + 390 000 – 32 100) = 195 500 (1)
195500  100
Gross profit percentage =  (1) × = 33.42% (1)
585000  1
Percentage of net profit to sales

Net profit = 195 500 (O/F) – (51 300 + 45 200) = 99 000 (1) O/F
99000  100
Net profit percentage =  (1) OF × = 16.92% (1) O/F
585000  1

Cost of goods sold = 31 600 + 390 000 – 32 100 = 389 500
31600 + 32100
Average stock = = 31 850
2
389500 (1)
31850 (1)


(b) (i) Salma Ali is –

Not buying goods as cheaply
Not passing increased costs on to customers
Selling goods at a lower margin
Allowing customers a higher rate of trade discount

Any one reason (2)
(ii) Salma Ali has –

Lower expenses
Better control of expenses
Different types of expenses (fixed/variable)
Higher amount of other income

Any one reason (2)
(iii) Salma Ali has –

Higher stock levels

(c) Should compare with a business of approximately the same size
Should compare with business selling same type of goods
Should compare with a business with approximately the same amount of capital
The accounts may be for one year only which will not show trends and may not be a typical
year
There may be differences which affect profitability and the items on a balance sheet
The financial statements do not show non-monetary items
comparison

[Total: 21]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Paul Ahmadi account
$ $
2011 2011
___ 30 Balance c/d 232 (1)
608 608
May 1 Balance b/d 232 (1) O/F [6]
Irene Moyo account
$ $
2011 2011
2 Interest 4 (1) 30 Bad debts 34 (1)
114 114 [3]
Paul Ahmadi account

2010 $ $ $
7 Bank 234 (1) 6 Dr
Discountwww.igcseaccounts.com
6 (1) –
11 Sales 368 (1) 368 Dr
18 Sales returns 136 (1) 232
(2) C/F
(1) O/F [6]
Irene Moyo account

2010 $ $ $
2 Interest 4 (1) 114 Dr
24 Bank 80 (1) 34 Dr
30 Bad debts 34 (1) – [3]
(b) A debit note may be issued by a customer to request a reduction in an invoice (1)
A credit note may be issued by a supplier to reduce an invoice for returns/overcharge etc (1) [2]
(c) (i) purchases journal (1)
(ii) sales returns journal (1) [2]


(d) A statement of account is not a transaction (1)

It is a summary of the account of the customer in the books of the supplier
Or
It is a reminder to the customer of the amount due (1) [2]
(e)
Item Source of information Entry in sales ledger
control account
(ii) bad debts written off journal (1) credit (1)
(iii) cash discount allowed cash book (1) credit (1)
(iv) contra item transferred journal (1) credit (1)

to purchases ledger
[6]
[Total: 21]
2
Sabena Khan
$ $ $
Revenue 58 200 (1)
Less Cost of sales
Opening inventory
Purchases www.igcseaccounts.com
51 400 (1)
7 500 (1)
Less purchases returns 2 300 (1) 49 100

56 600
Less Closing inventory 10 040 (2) C/F 46 560
(1) O/F

(116 – 98) 18 (2)
11 808
Bad debts 50 (1)
(4500 – 3800) 700 (1)
10% × 5400 540 (1) 10 132
[Total: 18]


3 (a) Business entity [1]
(b)
$ $
1 W Lister Current (or Drawings) 420 (1)
Purchases 420 (1)
Goods taken for own use by W Lister (1)
2 Office stationery 32 (1)
T Lister Current 32 (1)
Office stationery paid for by T Lister (1)
W Lister Capital 15 200 (1)
Motor vehicle introduced by W Lister (1)
4 T Lister Current 5 000 (1)
T Lister Capital 5 000 (1)
Transfer from current to capital account (1)
[12]
(c) Lower of cost and net realisable value [1]
(d) To avoid overstating the profit
To avoid overstating the assets
Any two comments (1 each) [2]
(e) $560 (1) × ¾ (1) = $420 (1) Decrease (1)
Or $
Original profit share ¾ × $18 500 13 875 (1)
New profit share ¾ × $17 940 13 455 (1)
Reduction (1) in profit share 420 (1)
Other methods of calculation acceptable [4]
[Total: 20]


4 (a) Consistency [1]
(b) Ensures that profits are not overstated (1)

Ensures that the non-current assets are not overstated (1) [2]
(c) Accruals (Or matching) [1]
(d) Office equipment account
$ $
2010 2010
April 1 Balance b/d 7 500 (1) Dec 31 Disposals 4 000 (1)
Oct 1 Bank 3 500 (1) 2011
______ Mar 31 Balance c/d 7 000 (1)
11 000 11 000
2011
April 1 Balance b/d 7 000 (1) O/F [5]
Provision for depreciation of office equipment account
$ $
2010 2010
Dec 31 Disposals 1 600 (2) April 1 Balance b/d 4 500 (1)
Mar 31 Balance c/d 3 950 (1) Mar 31 Income statement
20% × (7500 – 4000) 700 (1)
Income statement
_____ 20% × 3500 × 6/12 350 (1)
5 550 5 550
2011
April 1 Balance b/d 3 950 (1)
O/F [7]
$ $
2010 2010
Dec 31 Office equipment 4 000 (1) Dec 31 Prov for Dep 1 600 (1)
O/F O/F
AH Company 2 000 (1)
2011
Mar 31 Income statement 400 (1)
_____ O/F
4 000 4 000 [4]


Office equipment account

2010 $ $ $
April 1 Balance 7 500 (1) 7 500 Dr
Oct 1 Bank 3 500 (1) 11 000 Dr
Dec 31 Disposals 4 000 (1) 7 000 Dr
(2) C/F
(1) O/F [5]
Depreciation of office equipment account
2010 $ $ $
Dec 31 Disposals 1 600 (2) 2 900 Cr
2011
Mar 31 Income statement
20% × (7500 – 4000) 700 (1)
20% × 3500 v 6/12 350 (1) 3 950 Cr
(2) C/F
(1) O/F [7]

2010 $ $ $
Dec 31 Office equipment 4 000 (1)O/F 4 000 Dr
Prov for Dep 1 600 (1)O/F 2 400 Dr
AH Company 2 000 (1) 400 Dr
2011
Mar 31 Income statement 400 (1)O/F [4]
[Total: 20]


5 (a) Osama Mousa

Statement of Affairs at 31 March 2011
$ $ $
Non-current Assets Cost Depreciation Book
to date value
Equipment 17 000 (1) 4 250 (1) 12 750 (1)

Motor vehicle 10 000 2 500 (1) 7 500 (1)
27 000 6 750 20 250
Current Assets
Petty cash 100 (1)
5 800
Current Liabilities
22 350
Long term Liabilities
Loan from Hi-Finance 1 250 (1)
21 100
Financed by
Capital
Balance 21 100
www.igcseaccounts.com(2) C/F
(1) O/F


(b) Calculation of profit or loss for the year ended 31 March 2011
$ $
Capital at 31 March 2011 21 100 (1) O/F
Drawings 8 000 (1)
29 100
Less Capital at 1 April 2010 22 000 (1)
Capital account
$ $
2011 2010
Mar 31 Drawings 8 000 (1) April 1 Balance b/d 22 000 (1)
Balance c/d 21 100 (1) 2011
Mar 31 Bank 5 000 (1)
Profit for year 2 100 (2)
_____ _____ O/F
29 100 29 100
2011
April 1 Balance b/d 21 100
6 (a) Percentage of gross profit to sales

Gross profit = 585 000 – (31 600 + 390 000 – 32 100) = 195 500 (1)
195500  100
Gross profit percentage =  (1) × = 33.42% (1)
585000  1
Percentage of net profit to sales

Net profit = 195 500 (O/F) – (51 300 + 45 200) = 99 000 (1) O/F
99000  100
Net profit percentage =  (1) OF × = 16.92% (1) O/F
585000  1

Cost of goods sold = 31 600 + 390 000 – 32 100 = 389 500
31600 + 32100
Average stock = = 31 850
2
389500 (1)
31850 (1)


(b) (i) Salma Ali is –

Not buying goods as cheaply
Not passing increased costs on to customers
Selling goods at a lower margin
Allowing customers a higher rate of trade discount

Any one reason (2)
(ii) Salma Ali has –

Lower expenses
Better control of expenses
Different types of expenses (fixed/variable)
Higher amount of other income

Any one reason (2)
(iii) Salma Ali has –

Higher stock levels

(c) Should compare with a business of approximately the same size
Should compare with business selling same type of goods
Should compare with a business with approximately the same amount of capital
The accounts may be for one year only which will not show trends and may not be a typical
year
There may be differences which affect profitability and the items on a balance sheet
The financial statements do not show non-monetary items
comparison

[Total: 21]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) C [1]
(b) D [1]
(c) D [1]
(d) A [1]
(e) B [1]
(f) B [1]
(g) D [1]
(h) C [1]
(i) A [1]
(j) A [1]
[Total: 10]
2 (a) Invoice [1]
(c)
Asset Liability
Inventory (1)
Trade payables (1)

[3]


(f) (300 × $10.30) (1) = $3090 – 4% = $3090 – $123.60 = $2966.40 (1) [2]

Any 2 (1) each [2]
(i) (200 × $100) (1) = $20 000 × 3% × ½ = $300 (1) [2]
(j) Payments $2100

1750
[3]
[Total: 20]



(b) Hans Lee

Dr Cr
$ $
Revenue 110 000
Purchases 65 000
Inventory (1 May 2011) 11 500 (1)
Machinery 7 400
Expenses 31 600
Capital 11 500 }
Drawings 7 600 }(1)

126 500 126 500 (1)
[7]
(c) Hans Lee

Journal
Debit Credit
$ $

Suspense 1 600 (1)
2 Suspense 300 (1)

John Tan 300 (1)
3 Drawings 200 (1)

Suspense 200 (1)
[6]


(d)
Error 1 (1)
Error 2 (1)
Error 3 (1)
[3]
[Total: 19]
(c) Refer to next page


2012 $ 2012 $

2012 $

2012 $
Cleaning account
2012 $
[5]
(e) $24 (1) O/F from (c) [1]
[Total: 22]


$ $ $ $ $ $
103 (1) Bank
4 (1) 12 Stationery 36 36 (1)
17 Fuel 38 38 (1)
29 Cleaning 70 70 (1)
180 60 38 12 70
30 Balance c/d 24
204 May 1 204

Balance b/d
Bank/Cash
24 (1)
176 (1)
O/F

Dates (1) [12]



Sharing of risks
Any 2 (1) each [2]

Any 2 (1) each [2]

Journal
Debit Credit
$ $
Bank 6000 (1)

Inventory
Capital Hassan
4000
4000
(1)
(1)
Rent 600 (1)

[8]

$ $ $
Hassan 120 (1) 300
5500
Hassan 3300 (2)(1) OF 5500
[8]


(e) Raoul
Current account
2012 $ 2012 $
Salary 3000 (1)
5380 5380
[4]

Any 1 (2) [2]
[Total: 26]

(36 000 + 60 000) – (63 000 + 17 000) = 96 000 – 80 000 (1)
= $16 000 (1) OF [3]

96 000 : 80 000 (1) = 1.2 : 1 (1) OF [3]
60 000 : 80 000 (1) = 0.75 : 1 (1) OF [3]



Any 2 (2) each [4]



Are long term loans
Any 2 (2) each [4]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) A [1]
(b) C [1]
(c) B [1]
(d) B [1]
(e) A [1]
(f) D [1]
(g) D [1]
(h) C [1]
(i) C [1]
(j) B [1]
[Total: 10]
2 (a) Purchases (ledger)/Trade Payables / Creditors [1]
(b) Cost and net realisable value [1]
(c)
Income Expense
[3]
(d) (i) When a transaction is entered using the correct amount and on the correct side (1), but
in the wrong class of account. (1)
Example – Motor Vehicles debited to the account of Motor Expenses
Any suitable example of an error of principle (2)
(ii) Compensating errors occur when two or more errors cancel each other out (2)
Example – sales account undercast and wages account undercast
Any suitable example of a compensating error (2) [8]


(e) 4% × $28 000 = $1120 [1]
(f) (i) $120 – $87.60 = $32.40 (1)
(ii) $87.60 (1) [2]
(g) Payments $715

475
[3]
(h) (6000 × $1.50) or $9000 (1) × 3% × ½ = $135 (1) [2]
[Total: 21]
3 (a) Mitchell April 8

Amanda paid $120 in cash to Mitchell (1)
Julian April 9
Amanda received a cheque, $194, from Julian (1)
Julian was allowed $6 cash discount for prompt payment (1)
Sylvia April 14
Amanda received a cheque, $180 from Sylvia (1)
Sylvia April 21
The cheque, $180, previously received from Sylvia was dishonoured by the bank (1)
Equipment April 26
Amanda purchased equipment, $2000, by cheque (1)
Sales April 28
Amanda sold good for cash $1300 (1) [7]
(b) This is a contra entry. (1)

Office cash was paid into the bank (1) [2]
(c) (i) The cash balance represents the cash in hand (1)
The bank balance represents a bank overdraft (1) [2]
(ii) Cash balance – current asset (1)

Bank balance – current liability (1) [2]
(iii) It is not possible to take out more cash than is available [2]


(d) Amanda
Mitchell account
$ $
2012
Julian account
$ $
2012
Discount 6 (1)
Sylvia account
$ $
2012 2012
April 21 Bank (dis.chq 180 (1) April 14 Bank 180 (1)
Equipment account
$ $
2012
Sales account
$ $
2012

$ $
2012
+ (1) for dates [9]
[Total: 24]
4 (a) (i) Expenses are overstated (1)

Profit for the year is understated (1) [2]
(ii) Non-current assets are understated (1)

Owner’s capital (Profit )is understated (1) [2]


(b)
Capital Revenue
Purchase of computer (1)
Purchase of laser printer (1)
Replacement of hard disc in computer (1)

[3]
(c) (i) ($4800 + $750) (1) O/F based on answer to (b) – $600 (1) = $4950
$4950
= $1650 (1) O/F [4]
3 years (1)
(ii) ($4800 + $750) O/F based on answer to (b) – $1650 (1) O/F
= $3900 (1) O/F [2]
(d)
Non-current Non-current Current asset
tangible asset intangible asset
Office building (1)
Motor vehicle
(1)
Goodwill (1)

[4]
[Total: 17]


5 (a) Rachel Smith

$ $ $
Revenue 63 100 (1)
Less Cost of sales
40 600
44 750
Less Closing inventory 3 750 (1) 41 000 (1) OF
Less Carriage outwards 540

Bad debts 190 (1)
Property tax (6000 – 1200) 4 800 (2)
Wages (7100 + 180) 7 280 (2)
Depreciation – Equipment 1 920 (1) 16 500
[16]
22 100 O/F} 100

(b) (i)
63 100 } www.igcseaccounts.com
(1) ×
1
= 35.02% (1) O/F [2]
(ii) Increase selling prices

Reduce cost of purchases
5 600 O/F} 100

(c) (i) (1) × = 8.87% (1) O/F [2]
63 100 } 1
(ii) Reduce expenses

Increase gross profit
[Total: 24]
6 (a) The business will continue to operate for an indefinite period of time (1) and there is no
intention to close down or significantly reduce the size of the business. (1) [2]
(b) (i) Current assets : Current liabilities [1]
(ii) 11 400 : 13 800 (1) = 0.83 : 1 (1) [2]


(iii) Unsatisfied (1)

The business cannot meet the immediate liabilities from the immediate assets (2) [3]
(c)
Capital (1)
Current assets (1)
Current liabilities (1)

[4]
(d) To assess whether the interest can be paid when due

To assess whether the loan can be repaid when due
To assess whether there is security for the loan
(e) There are not enough non-current assets for security of the loan
There is not enough profit to cover the loan interest
The business would not be able to re-pay the loan on time

Drawings for the year exceed the profit for the year
[4]
(f) Introduce additional capital

Admit a partner/form a limited company
Mortgage
Loans from other sources
Any 2 (2) each [4]
[Total: 24]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) C [1]
(b) D [1]
(c) D [1]
(d) A [1]
(e) B [1]
(f) B [1]
(g) D [1]
(h) C [1]
(i) A [1]
(j) A [1]
[Total: 10]
2 (a) Invoice [1]
(c)
Asset Liability
Inventory (1)
Trade payables (1)

[3]


(f) (300 × $10.30) (1) = $3090 – 4% = $3090 – $123.60 = $2966.40 (1) [2]

Any 2 (1) each [2]
(i) (200 × $100) (1) = $20 000 × 3% × ½ = $300 (1) [2]
(j) Payments $2100

1750
[3]
[Total: 20]



(b) Hans Lee

Dr Cr
$ $
Revenue 110 000
Purchases 65 000
Inventory (1 May 2011) 11 500 (1)
Machinery 7 400
Expenses 31 600
Capital 11 500 }
Drawings 7 600 }(1)

126 500 126 500 (1)
[7]
(c) Hans Lee

Journal
Debit Credit
$ $

Suspense 1 600 (1)
2 Suspense 300 (1)

John Tan 300 (1)
3 Drawings 200 (1)

Suspense 200 (1)
[6]


(d)
Error 1 (1)
Error 2 (1)
Error 3 (1)
[3]
[Total: 19]
(c) Refer to next page


2012 $ 2012 $

2012 $

2012 $
Cleaning account
2012 $
[5]
(e) $24 (1) O/F from (c) [1]
[Total: 22]


$ $ $ $ $ $
103 (1) Bank
4 (1) 12 Stationery 36 36 (1)
17 Fuel 38 38 (1)
29 Cleaning 70 70 (1)
180 60 38 12 70
30 Balance c/d 24
204 May 1 204

Balance b/d
Bank/Cash
24 (1)
176 (1)
O/F

Dates (1) [12]



Sharing of risks
Any 2 (1) each [2]

Any 2 (1) each [2]

Journal
Debit Credit
$ $
Bank 6000 (1)

Inventory
Capital Hassan
4000
4000
(1)
(1)
Rent 600 (1)

[8]

$ $ $
Hassan 120 (1) 300
5500
Hassan 3300 (2)(1) OF 5500
[8]


(e) Raoul
Current account
2012 $ 2012 $
Salary 3000 (1)
5380 5380
[4]

Any 1 (2) [2]
[Total: 26]

(36 000 + 60 000) – (63 000 + 17 000) = 96 000 – 80 000 (1)
= $16 000 (1) OF [3]

96 000 : 80 000 (1) = 1.2 : 1 (1) OF [3]
60 000 : 80 000 (1) = 0.75 : 1 (1) OF [3]



Any 2 (2) each [4]



Are long term loans
Any 2 (2) each [4]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.


(b) Stewart Hanson

Cash Book
allowed received
2012 $ $ $ 2012 $ $ $
30 Cash c (1) 2020 13 Drawings (1) 250
20 Sue West (dis.
cheque) (1) 115
30 Bank c (1) 2020
2012 2070 3962 12 2070 3962

Feb 1 Balances b/d
50 1404
(1)OF (1)OF
+ (1) dates [10]


bank account. [2]
expense. [2]
(e) Journal
Debit Credit
$ $
Bad debts 115 (1)

Sue West 115 (1)
[3]
(f)
Bank
(1) Bad debts recovered (1)
OR

[2]

[Total: 25]



(c) Fatima Ayub

2012 $ 2012 $
both
balances
10 973 10 973
2012
+ (1) dates [12]

[Total: 20]


3 (a) Mark Mutanda

$ $
Rent received (2 600 – 200) 2 400 (2)
(154 – 136) 18 (2)
84 518
Less Insurance (5 630 – 2 320) 3 310 (2)
Rates 5 200 (1)
Loan interest (900 + 300) 1 200 (2)
Office expenses (17 177 – 214) 16 963 (2)
(1 900 + 600 (1) – 2 100 (1)) 400
(10% × 5250) 525 (1) 63 798
(b) Mark Mutanda

Capital account
2012 $ 2011 $
(drawings) 214 (1) 2012
www.igcseaccounts.com 220 720

Balance c/d 204 506
220 720
2012
+ (1) dates [6]
20 720 (1)OF 100

(c) × = 9.42% (1)OF [3]
200 000 + 20 000 (1) 1

Any 1 point (2) [2]


was formed. [2]

$ $
17 800

$ $ $
Non-current assets
81 600 (1)
Current assets
Petty cash 200 (1)
10 500 (1)OF
Current liabilities
Bank overdraft (1 400 + 150) 1 550 (1)
85 650
75 650
Financed by
Accumulated fund
75 650
[12]
[Total: 24]



(d)


[4]
(e) Cost of sales = 80% × 87 000 = 69 600 (1)
Average inventory =
6 000 + 7 400
= 6700 (1)
2
69 600
6 700

More sales activity

Any 1 point (1) [1]



(i) (i) Employee

Any 1 point (1) [1]
(ii) Bank manager

Any 1 point (1) [1]
[Total: 20]



0452 ACCOUNTING
examination.
syllabuses.


1 (a)
Dalia Said
Purchases journal
Date Details $ $
2012
March 2 Essam Wholesalers 1950 (1)
8 Ramy El Din 680

____
31 Transfer to Purchases a/c 2494 (1)
[3]
Date Details $ $
2012
March 14 Ramy El Din 120
__
31 Transfer to Purchases 96 (1)
returns a/c
[2]
(b) Dalia Said

Essam Wholesalers account
2012 $ 2012 $
Mar 21 Bank 1911 (1) Mar 2 Purchases 1950 (1)
Discount 39 (1) ____ (1)
1950 (1) 1950 (1)
[3]
Ramy El Din account

2012 $ 2012 $
Mar 14 Returns 96 (1) Mar 8 Purchases 544 (1)
28 Bank 300 (1)
31 Balance c/d 148 (1) ___ (1)
544 (1) 544 (1)
2012
Apl 1 Balance b/d 148 (1)O/F
[4]


(c) Purchases ledger/Creditors ledger [1]
2600 365
(d) × (1) = 28.41 = 29 days (1) [2]
33 400 1
(e) Money can be used for other things within the business
May avoid bank charges/bank interest
Any 1 point (1) [1]
(f) Loss of cash discounts

Creditors may refuse further supplies
Creditors may insist on cash purchases in future
Damage to good relationship with suppliers
May be charged interest
Any 1 point (1) [1]

[Total: 20]


2 (a) Simon Nyemba

Commission received account
2011 $ 2011 $
Feb 1 Balance b/d 280 (1) Feb 5 Bank 280} (1)
2012 Aug 3 Bank 312} (1)
Jan 31 Income 2012
Statement 608 (2) Jan 31 Balance c/d 296 (1)
O/F
888 (1) 888 (1)
2012
+ (1) dates [6]
(b) Simon Nyemba

Property tax account
2011 $ 2012 $
Feb 1 Balance b/d 520} (1) Jan 31 Income
Apl 24 Bank 1620} (1) statement 3220 (2)O/F
Oct 4 Bank 1620} (1) Balance c/d 540 (1)
3760 (1) 3760 (1)
2012
Feb 1 Balance b/d 540} (1)
+ (1) dates [6]
(c) Accruals (matching) [1]
(ii) Current assets (1) [2]
(e) Journal
Debit Credit
$ $

Total discount allowed transferred to the
income statement (1)
[3]
Continued/


(f) Simon Nyemba

2012 $ 2011 $
Jan 31 Income Feb 1 Balance b/d 460 (1)
Statement 31 (2)
O/F
Balance c/d 429 (1) ___ (1)
460 (1) 460 (1)
2012
+ (1) dates [5]
(g) Prudence
OR
Accruals (matching) [1]
[Total: 24]
3 (a) Herman Wagner

$ $
Cost of materials consumed (1)
Opening inventory of raw materials 14 300 (2)
Purchases of raw material 168 900 (2)
Carriage on purchaseswww.igcseaccounts.com 2 600 (2)
185 800 (2)
Less Closing inventory of raw materials 16 400 (2) 169 400 (1)
Factory overheads
Indirect wages (43 600 – 10 000) 33 600 (2)
General expenses (24 450 – (¼ × 6200)) 22 900 (2)
Depreciation – Factory machinery
(20% × (98 000 – 35 280)) 12 544 (2)
Loose tools
(950 + 45 – 890) 105 (2) 69 149 (2)
432 249 (1) O/F
438 769 (2)

[16]


(b) (i) Inventory of raw materials

Goods remaining at the year-end which were originally purchased for converting into
finished articles (1)
Example – wood, nails, screws, handles or other suitable example (1) [2]
(ii) Inventory of work in progress

Furniture which is partly made at the year end (1)
Example – partly made table/ wardrobe/chair/other suitable example (1) [2]
(iii) Inventory of finished goods

Completed furniture which is awaiting sale (1)
Example – finished table/wardrobe/chair/other suitable example (1) [2]
(c) This is an application of the principle of materiality.

It is not practical to keep detailed records of loose tools.
(d)
(170 200 - 144 000 ) (1) × 100 = 17.47% [3]
(130 000 + 20 000 ) (1) 1
(e) Unsatisfied (1)
The ratio is lower than the previous year. (1)
The capital is not being employed as efficiently as in the previous year. (1)
Accept answer based on the answer to (d) [3]
[Total: 31]


4 (a) Creekside Ltd

$ $ $
to date value
Premises 120 000 (1) 120 000 (1)
Fixtures and fittings 32 000 (1) 6 400 (1) 25 600 (1)
242 000 (1) 21 900 (1) 220 100 (1) O/F
Current assets
Cash 200 (1)
45 800 (1)
Current liabilities
Bank overdraft 5 340 (1) 32 300 (1)
233 600 (1)
203 600 (1)

Retained profits (6 500 (1) + 7 100 (1)) 13 600 (1)
203 600 (1)
[15]
(b) (i) $1600 [1]
(ii) Effect Profit for the year is reduced (1)

Reason Debenture interest is an expense (1 [2]
(c) (i) $2000 [1]
(ii) Reduction in profit (or dividend) available for ordinary shareholders

Any 1 point (2) [2]


(d) The new shares rank equally with the existing ordinary shares with regard to dividend.
The new shares rank equally with the existing ordinary shares with regard to repayment in a
winding up.
The percentage of ownership of the existing ordinary shareholders is diluted.
Any 1 point (2) [2]
[Total: 23]
5 (a) Bethany Searle

Journal
Debit Credit
$ $
2 Suspense 340 (1)

Rent received 340 (1)
3 Purchases returns 24 (1)

Stationery 24 (1)
4 - – (1)
Suspense 100 (1)
5 Sales 1000 (1)

Suspense 1000 (1)
[8]


(b) Bethany Searle

Statement of corrected profit for the years ended 31 March 2012
$
Effect on profit
Increase Decrease
$ $
Error 1 96 (2)
2 340 (2)
3 No effect (2)
4 No effect (2)
5 ___ (2) 1 000 (2)

436 (2) 1 000 (2) 564 (2)
[9]
(c) (19 540 + 100) : (21 570 + 2 880)

= 19 640 : 24 450 (1) = 0.80 : 1 (1) [2]
(d) Shows whether the immediate liabilities can be paid from liquid assets
Shows whether the business relies on the sale of inventory to pay the immediate liabilities
(e) The quick ratio does not include inventory. (1)

Either
Inventory is not regarded as a liquid asset (1)
Or
Inventory is two stages away from being a liquid asset. (1) [2]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.


(b) Stewart Hanson

Cash Book
allowed received
2012 $ $ $ 2012 $ $ $
30 Cash c (1) 2020 13 Drawings (1) 250
20 Sue West (dis.
cheque) (1) 115
30 Bank c (1) 2020
2012 2070 3962 12 2070 3962

Feb 1 Balances b/d
50 1404
(1)OF (1)OF
+ (1) dates [10]


bank account. [2]
expense. [2]
(e) Journal
Debit Credit
$ $
Bad debts 115 (1)

Sue West 115 (1)
[3]
(f)
Bank
(1) Bad debts recovered (1)
OR

[2]

[Total: 25]



(c) Fatima Ayub

2012 $ 2012 $
both
balances
10 973 10 973
2012
+ (1) dates [12]

[Total: 20]


3 (a) Mark Mutanda

$ $
Rent received (2 600 – 200) 2 400 (2)
(154 – 136) 18 (2)
84 518
Less Insurance (5 630 – 2 320) 3 310 (2)
Rates 5 200 (1)
Loan interest (900 + 300) 1 200 (2)
Office expenses (17 177 – 214) 16 963 (2)
(1 900 + 600 (1) – 2 100 (1)) 400
(10% × 5250) 525 (1) 63 798
(b) Mark Mutanda

Capital account
2012 $ 2011 $
(drawings) 214 (1) 2012
www.igcseaccounts.com 220 720

Balance c/d 204 506
220 720
2012
+ (1) dates [6]
20 720 (1)OF 100

(c) × = 9.42% (1)OF [3]
200 000 + 20 000 (1) 1

Any 1 point (2) [2]


was formed. [2]

$ $
17 800

$ $ $
Non-current assets
81 600 (1)
Current assets
Petty cash 200 (1)
10 500 (1)OF
Current liabilities
Bank overdraft (1 400 + 150) 1 550 (1)
85 650
75 650
Financed by
Accumulated fund
75 650
[12]
[Total: 24]



(d)


[4]
(e) Cost of sales = 80% × 87 000 = 69 600 (1)
Average inventory =
6 000 + 7 400
= 6700 (1)
2
69 600
6 700

More sales activity

Any 1 point (1) [1]



(i) (i) Employee

Any 1 point (1) [1]
(ii) Bank manager

Any 1 point (1) [1]
[Total: 20]

IGCSE Accounting November 2003 – 2012
Mark Schemes
Old Syllabus
2003 -2009
November 2003 Paper 1 Page 3
November 2004 Paper3 Page 38

IGCSE Accounting November 2003 – 2012
Mark Schemes
New Syllabus
2010-2011
November 2010 Paper 1(1) Page 145
November 2010 Paper 2(3)
November 2011 Paper 1(1)
Page 185
Page 194

























MARK SCHEME for the November 2004 question paper
0452 ACCOUNTING
Examination.
CIE is publishing the mark schemes for the November 2004 question papers for most IGCSE and
GCE Advanced Level syllabuses.

Grade thresholds taken for Syllabus 0452 (Accounting) in the November 2004 examination.
Minimum Minimum mark required for grade

mark
A C E F
available
Component
40 N/A 24 18 15
1
The threshold (minimum mark) for G is set as many marks below F threshold as the E

NOVEMBER 2004
IGCSE
MARK SCHEME
MAXIMUM MARK: 40
ACCOUNTING


IGCSE – NOVEMBER 2004 0452 1
Question Question
Key Key
Number Number
1 A 21 D
2 C 22 B
3 B 23 A
4 C 24 A
5 C 25 C
6 A 26 B
7 A 27 D
8 C 28 B
9 A 29 B
10 C 30 A
11 D 31 B
12 A 32 A
13 C 33 C
14 A 34 C
15 A 35 C
16 C 36 B
17
18
B
D
37
38
D
B
19 D 39 C
20 C 40 A


0452 ACCOUNTING
demonstrated.


mark
A C E F
available
Component 2 90 77 64 50 43

NOVEMBER 2004
IGCSE
MARK SCHEME
MAXIMUM MARK: 90
ACCOUNTING
Paper 2


Question Part Mark
1 (a) Opening entries, purchases/sale of fixed asset on credit, correction of

errors, writing off bad debt, year end adjustments, items which cannot be
entered in other books of prime entry, or acceptable alternative. 1
(b) P/L Account (accept Trading and Profit and Loss Account) 1
(c) At lower of cost of net realisable value 1
(d)(i) $1 000
–2½% 0 25 (1)
Amount paid 0 975 (1) OF 2
(ii) Cash discount (accept discount allowed (NOT received), early
settlement) 1
(e) Trial balance NOT T/B 1
(f) Appropriation Account 1
(g) Two errors, being incorrect entries of equal amounts (1) which cancel
each other out (1). Marks may be given for suitable example. 2
(h) 1. Plant and machinery, premises, motor vehicles, office equipment
(NOT agricultural machines)
2. Wages, raw materials, electricity, office or general expenses, or
acceptable alternatives in both cases 2 × 1 each 2
12
2 (a)(i) $6000
(1)
(ii) Stock (1)
(iii) $71 000 (1)
(iv) Inwards (1)
(v) $14 000 (1)
(vi) Received (1) (accept income)
(vii) $7000 (1) 7
(b)(i) $30 000
× 100 = 30% (2) 28.3% (1) 34.0% (1) 36.0% (1)
100 000
(1) OF 2
(ii) $12 000

× 100 = 12% (2) 11.3% (1)
100 000
(1) OF 2
(c) 1. No effect Must refer to % (1)

2. Reduction in expenses would increase Gross profit/net profit
NP: sales percentage only – no marks (1) 2
13


Question Part Mark
3 (a) Machinery account

2001 $
1 Oct JD Engineering 20 000 (1) No aliens e.g. depreciation
Creditors (not Purchases, Bank)
Provision for Depreciation of Machinery account

2002 $ 2002 $
30 Sep Balance c/d 6000 30 Sep P/L A/c 6000 (1) OF
2003
30 Sep Balance c/d 10 200 1 Oct Balanced b/d 6000 (1) OF
2003
30 Sep P/L A/c 4200 (2) OF
10 200 10 200
2004
30 Sep Balance c/d 13 140 1 Oct Balance b/d 10 200 (1) OF
2004
30 Sep P/L A/c 2940 (2) OF
13 140 13 140 (1) OF
Reversal – no marks. P/L on Dr. side – no marks.

Incorrect date(s) – 1.
(Running balance format also acceptable) 9

(b) Extract from Balance Sheet as at 30 September 2004
Fixed Assets Cost Depreciation Net book

to date value
$ $ $ $
Machinery 20 000 (1) 13 140 (1) OF 6860 (1) OF 3
(c)(i) $20 000 – 2000 (1) = 18 000 $3000 without workings = 2 marks
$18 000
= $3000 × 3 (1) = $9000
6 (1) 3
(ii) ONE from:

Machinery’s value may not fall heavily in 1 mark for basic
earlier years statement
Maintenance costs may not rise disproportionately
over time +1 mark for
Straight line easier to calulate, same amount each suitable
year development
Difficulty in choosing reducing balance rate or
acceptable alternative =2 2
17

Jonah
Cash Book
Date Discount Cash Bank Date Discount Cash Bank
2004 $ $ $ 2004 $ $ $
July 1 Balances b/d 600 2500 July 7 Cash * 200 (1)
3 H Syde 10 (1) 490 (1)OF 10 J Teime 15 (1) 385 (1)OF
7 Bank * 200 (1) 12 Wages 400 (1)
14 B Sharp 20 (1) 780 (1) 17 P Mulder 25 (1) 975 (1)OF
20 Cash Sales 350 (1) 24 Wages 250 (1)
banked
Electricity 600 (1)
21 M Yaveli 630 (1) 29 M Yaveli ** 630 (2)
(dishonoured
cheque)
30 (1)OF 800 4750 40 (1)OF 800 4750
August 1 Balances b/d www.igcseaccounts.com

150 (1)OF 1960 (1)OF 21
* Accept: office, Transfer, Contra

** Yaveli – 2 marks for date, name and amount
1 mark if name missing but words “dishonoured cheque” shown
Notes:
Award discount mark if correct amount on correct date
Award amount (OF) mark if correct date, name and amount shown
Balance marks – (a) no aliens in account

– (b) no CR cash balance
– (c) balances must be arithmetically correct
Any figure shown in DR and CR column – no marks


Question Part Mark
4 (b) Discounts allowed account

2004 $
July 31 Total for July 30 (2)
Creditors
Cash book
Discounts received account

2004 $
July 31 Total for July 40 (2)
Debtors
Cash book
NOT individual discount entries 4

25
5 (a) 1/10/03 30/9/04
$ $
Fixtures and fittings 12 000 (1) 14 000 (1)
Motor vehicle - 3 000 (1)
Stock 3 000 (1) 11 000 (1)
Debtors 5 500 (1) 1 000 (1)
Bank
1 500 (1)
22 000 29 000
- .
Less Creditors 5 000 (1) 4 000 (1)

Bank overdraft - . 5 000 2 000 (1) 6 000
Capital 17 000 (1) 23 000 (1)
13
Accept any clean layout but not just figures added and subtracted
without narrative.
(b) $
Capital at 30/9/04 23 000 (1)
Less Capital at 1/10/03 17 000 (1)
6 000
Add Drawings 8 000 (1)
14 000
Less Capital inttroduced (vehicle) 3 000 (2)
Depreication 1 000 (1) 4 000
Net profit for year 10 000 (2) (1) OF
Award marks of correct sense (+/-), description and amount. 8


Question Part Mark
(c) ONE from:

Purchase of more fixtures
Increase in stocks
Decrease in creditors 2 or 0
Cash flow problems
(Possibly) increased drawings
or acceptable alternative 2
23


0452 ACCOUNTING
demonstrated.


mark
A C E F
available
Component 3 100 69 51 N/A N/A

NOVEMBER 2004
IGCSE
MARK SCHEME
MAXIMUM MARK: 100
ACCOUNTING
Paper 3


Question 1
(a) Reason for using a purchases journal:

• fewer transactions recorded in the purchases account
• bookkeeping can be spread between several people
• can be analysed into products/areas etc.
• to identify credit purchases (can be useful for comparison purposes)
• provides information for the purchases ledger control account.

Any 1 point (1)
[1]
(b)(i) Mendez account

2004 $ 2004 $
Aug 10 Purchases returns 160(1) Aug 4 Purchases 280(1)
16 Bank 117(1)
Discount received 3(1) ___
280 280
[4]
Perez account
2004
Aug 24 Bank www.igcseaccounts.com
$ 2004
50(1) Aug 19 Purchases
$
115(1)
31 Balance c/d 65(1) ___
115 115
Sept 1 Balance b/d 65(1)O/F
[4]
+ (1) Dates
[9]
(b)(i) Alternative presentation
Mendez account
2004 $ $ $
Aug 4 Purchases 280(1) 280 Cr
10 Purchases returns 160(1) 120 Cr
16 Bank 117(1) 3 Cr
Discount received 3(1) 0
[4]
Perez account
2004 $ $ $
Aug 19 Purchases 115(1) 115 Cr
24 Bank 50(1) 65 Cr(2) C/F
(1) O/F
[4]
+ (1) Dates
[9]


(b)(ii) Purchases account

2004 $
Aug 31 Total from
purchases journal 395(1)
Cash 200(1)
[2]

2004 $
Aug 31 Total from
returns journal 160(1)
[1]
[3]
Purchases account
2004 $ $ $
Aug 31 Total from
purchases journal 395(1) 395 Dr
Cash 200(1) 595 Dr
[2]
2004 $ $ $
Aug 31 Total from
returns journal 160(1) 160 Cr
[1]
[3]
(c) Wakou Capital account

2004 $ 2003 $
Sept 30 Drawings 9 100(1) Oct 1 Balance b/d 32 000(1)
Net Loss 1 300(1) 2004
Balance c/d 26 100 Jan 1 Motor vehicles 4 500(1)
36 500 36 500
2004
Oct 1 Balance b/d 26 100(1)O/F
+ (1) Dates
[6]


Wakou Capital account

2003 $ $ $
Oct 1 Balance 32 000(1) 32 000 Cr
2004
Jan 1 Motor vehicles 4 500(1) 36 500 Cr
Sept 30 Drawings 9 100(1) 27 400 Cr
Net Loss 1 300(1) 26 100 Cr(1)O/F
+ (1) Dates
[6]
Total [19]
Question 2
(a) $ $
Current Assets –
Stock 11 000
Debtors 6 100
Prepaid expenses 200
Bank 1 000
Cash 100 18 400
Current Liabilities –
Creditors
Accrued expenses
7 250
150
Short term loan 5 000 12 400
Working capital 6 000(1)O/F

[5]
(b) 1 Current ratio:
18 400 O/F : 12 400 O/F (1) = 1.48:1 (1)O/F
2 Quick ratio:
7 400 O/F : 12 400 O/F (1) = 0.60:1 (1)O/F

[4]
(c) Ways to improve working capital:

• injection of more capital
• more long-term loans
• sale of surplus fixed assets
• reduction of drawing.


(d) Reasons why should not compare with other business:

• different type of business (sole trader/partnership)
• different type of trade (manufacturing/foodstore)
• one run by managers, one run by owner
• one in its first year of trading, one in its fifth year
• different type of sales (cash/credit)
• different types of expenses (rent/cost of maintaining premises)
• different type of fixed assets (machinery/premises, fixtures).
Total [21]
Question 3
(a) Sales Ledger Control account

2004 $ 2004 $
Sept 1 Balance b/d 5 688(1) Sept 1 Balance b/d 194(1)
30 Sales 7 650(1) 30 Sales returns 356(1)
Bank (dis. chq) 280(1) Bank 5 430(1)
Discount allowed 264(1)
______
13 618
Bad debts
Balance c/d
250(1)
7 124
Oct 1 Balance b/d 7 124(1)O/F 13 618
+ (1) Dates
[10]

2004 $ $ $
Sept 1 Balances 5 688(1) 194(1) 5 494 Dr
30 Sales 7 650(1) 13 144 Dr
Sales returns 356(1) 12 788 Dr
Bank 5 430(1) 7 358 Dr
Bank (dis. chq) 280(1) 7 638 Dr
Discount allowed 264(1) 7 374 Dr
Bad debts 250(1) 7 124 Dr(1)O/F
+ (1) Dates
[10]


(b) Item appearing in list but not in control account:

Cash sales:
The double entry is sales account and cash book. They do not appear in a debtor’s
account and so do not appear in the sales ledger control account.
Provision for bad debts:

This is the balance on the provision account at the start of the month to cover any future
bad debts. It does not appear in a debtor’s account and so does not appear in the sales
ledger control account.
Any 1 item (1) for identifying the item

(2) for a suitable explanation [3]
(c) Total of debtors’ balances:

$7 124 O/F – $280 = $6 844 O/F [1]
(d) Source of information for items in the purchases ledger control account:
(i) purchases journal (1)
(ii) cash book (1)
(iii) cash book (1)
[3]
(e) Advantages of control accounts:

• provides instant totals of debtors and creditors
• prove the arithmetical accuracy of the ledgers they control
• enable the Balance Sheet to be prepared quickly
• may be used to identify ledgers in which there are errors when a trial balance does
not agree
• provides a summary of the transactions relating to debtors/creditors for the period
• provides an internal check on the appropriate ledgers – may reduce fraud
Total [19]
Question 4
(a) All Stars Sports Club

Snack Bar Trading Account for the year ended 31 July 2004
$ $
Sales 10 900(1)
Less Cost of Sales
Purchases (7 850 + 850) 8 700(2)
Less Closing Stock 1 200(1)
7 500
Snack bar staff wages 2 100(1) 9 600
Profit on snack bar 1 300(1)O/F

[6]


(b) All Stars Sports Club

Income and Expenditure Account for the year ended 31 July 2004:
$ $
Income
Subscriptions (14 600 + 500 – 100) 15 000(3)
Profit on snack bar 1 300(1)O/F
Barbecue – Ticket sales 1 400
Less expenses 750 650(2)
16 950
Expenditure
General staff wages 2 430 (1)
Rent (2 160 – 80) 2 080 (1)
Insurance 1 660}
Repairs and maintenance 1 840}(1)
General expenses (1 220 + 60) 1 280 (1)
Depreciation of equipment 900 (1) 10 190
Surplus for the year 6 760(1)O/F

[12]
(c) Ways to raise funds:

• increase subscriptions
• fundraising activities
• obtain long-term loans
• loan/mortgage www.igcseaccounts.com
Total [20]


Question 5
(a) Ruth and Lucy Lebengo

Balance Sheet as at 30 September 2004
$ $ $
Fixed Assets Cost Depreciation Net Book
to Date Value
Premises 35 000 35 000
Motor vehicles 15 000 1 500 13 500
Office equipment 3 000 300 2 700(1)
53 000 1 800 51 200(1)
Current Assets
Stock 9 300
Debtors 5 900
Less provision for doubtful debts 200(1) 5 700
Cash 100(1)
15 100(1)
Current Liabilities
Creditors 7 400
Bank overdraft 5 300(1) 12 700(1)
Working capital 2 400(1)O/F
53 600
Ruth Lucy Total

Capital accounts
Current accounts
www.igcseaccounts.com30 000 20 000 50 000(1)
Share of profit 8 000(1) 4 000(1)

Less Drawings 4 000(1) 4 400(1)
4 000 (400) 3 600(1)O/F
53 600

[14]
(b)(i)
Account(s) to be debited $ Account(s) to be credited $
Goodwill 9 000(1) Ruth Capital 6 000(1)

Lucy Capital 3 000(1)
[3]
(ii)
Account(s) to be debited $ Account(s) to be credited $
Ruth Capital 4 500(1) Goodwill 9 000(1)

Lucy Capital 2 250(1)
Paul Capital 2 250(1)
[4]
[7]
Total [21]



0452 ACCOUNTING
Examination.
syllabuses’. www.igcseaccounts.com


Question Question
Key Key
Number Number
1 B 21 D
2 A 22 D
3 B 23 C
4 D 24 B
5 C 25 B
6 A 26 A
7 C 27 B
8 D 28 A
9 C 29 B
10 A 30 A
11 C 31 C
12 B 32 D
13 B 33 D
14 D 34 D
15 C 35 A
16 C 36 B
17
18
C
A
38
37 C
B
19 D 39 B
20 C 40 B


ACCOUNTING
0452/02 Paper 2
maximum raw mark 90
This mark scheme is published as an aid to teachers and students, to indicate the requirements
of the examination. It shows the basis on which Examiners were initially instructed to award
marks. It does not indicate the details of the discussions that took place at an Examiners’
meeting before marking began. Any substantial changes to the mark scheme that arose from
these discussions will be recorded in the published Report on the Examination.
demonstrated.
Examination.
The minimum marks in these components needed for various grades were previously published
with these mark schemes, but are now instead included in the Report on the Examination for
this session.
• CIE will not enter into discussion or correspondence in connection with these mark
schemes.
CIE is publishing the mark schemes for the November 2005 question papers for most IGCSE
and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level
syllabuses.


IGCSE – November 2005 0452 02

Number mark
1 (a) Cash book [1]
(b) A reduction in price allowed for bulk purchases or to a regular

customer [1]
(c) Current liabilities [1]
(d) Imprest system [1]
(e) The net amount for which the stock may be sold [1]
(f) (i) Trading Account [1]
(ii) Profit and Loss Account [1]
(g)
Capital Revenue
Expenditure Expenditure
Purchase of motor van. √ (1)
www.igcseaccounts.com √ (1)
New tyres for motor van.
Painting business name on motor √ (1)

van.
Cost of oil for motor van engine. √ (1)
[4]
(h) Gross profit ($45 000) less expenses ($30 000) = net profit ($15 000)
ROCE = 15 000 (1) ⁄ 150 000 (1) = 10% (1). [3]
(i) “Current” (1) assets less “Current” (1) liabilities. [2]
[Total 16]



Number mark
2 (a) (i) 3 000 [1]
(ii) $100.00 [1]
(iii) $1 300.00 [1]
(iv) Cash discount [1]
(b) (i) $75.00 [1]
(ii) $2 425.00 [1]
(iii) Nil [1]
(iv) $1 300.00 [1]
(c) General Supply Company Account
Date
$ Date $
2005 2005
5 September Bank 2 425 (1)OF 1 September Balance b/d 2 500 (1)
Discount 75 (1)OF 25 September Purchases 1 300
(1)OF
30 September Balance c/d 1 300
3 800 3 800
30 October Bank 1 300 (1)OF 1 October Balance b/d 1 300

(1)OF
1 300 1 300
Running balance acceptable. [6]
[Total 14]



Number mark
3 (a) Smith
Year ended 30 June 2005
$ $
Sales 102 000 (1)

Purchases (75,600 + 4,000) 79 600 (2)
88 700
less: closing stock 7 100 (1)
Cost of sales (1) 81 600 (1)
Advertising 400 (1)

Provision for depreciation
of fixed assets 700 (1)
General expenses
390 )
Insurance 420 )(1)
Lighting and heating 600 )
Motor expenses (860 + 350) 1 210 (1)
Office expenses 280 )
Rent 720 )(1)
Postage and stationery 180 )
Wages and salaries 5 250 (1)
10 150
(Horizontal presentation acceptable) [16]
(b) (i) Gross profit percentage = gross profit/sales

= 20 400 / 102 000 x 100 (1)OF
= 20.00% (1)
(ii) Net profit percentage = net profit/sales

= 10 250 / 102 000 x 100 (1)OF
= 10.05% (1)



Number mark
(c) Jones may charge higher prices for his goods, possibly because
they are in high demand
Jones can buy his goods more cheaply, take advantage of

trade discount
Other similar points up to 2 marks each [4]
[Total 24]
4 (a) To charge the cost of the capital expenditure to profits earned

over the useful life of the asset [2]
(or similar acceptable answer)
(b)
Year ended Straight line Reducing balance
30 September method method
$ $
2005 3 600 (1) 8 000 (1)
2006 3 600 6 400 (1)OF

(1)
2007 3 600 5 120 (1)OF
[5]



Number mark
(c)
Date $ Date $
2005 2005
30 September Balance c/d 8 000 30 September Profit and 8 000
loss account (1)OF
8 000 8 000
1 October Balance b/d 8 000
(1)OF
2006 2006
loss account (1)OF
14 400 14 400
(1)OF
2007 2007
loss account (1)OF
19 520 19 520
www.igcseaccounts.com (1)OF
+ (1) for all dates correct.
[7]
[Total 14]



Number mark
5 (a) Anvil
Balance Sheet at 31 August 2005
Fixed assets Cost Depreciation Net Book

Value
$ $ $
Motor cars 22 000 (1) 5 400 (1) 16 600 (1)
67 000 17 400 49 600
Current assets
Stock 16 000 (1)
Debtors 52 000 (1)
Prepayments 1 800 (1)
Bank and cash 22 400 (1)
92 200
less: Current liabilities

Accruals 3 300 (1)
Creditors 32 000 (1)
35 300
Net current assets (working capital) 56 900
106 500
Long term liability – Bank loan 15 000 (1)
91 500
Capital
Balance at 1 September 2004 91 000 (1)
Net profit 30 500 (1)
121 500
less: drawings 30 000 (1)
91 500
[16]



Number mark
(b) (i) Bank + Debtors + Prepayments + Stock
Accruals + Creditors
22 400 + 52 000 + 1 800 + 16 000 = 92 200 (1)
3 300 + 32 000 = 35 300 (1)
Current ratio = 2.61:1 (1)OF [3]
(ii) As above without stock
76 200 (1)/35 300 (1)
Quick ratio = 2.16:1 (1)OF [3]
[Total 22]


ACOUNTING
0452/03 Paper 3
maximum raw mark 100
began. Any substantial changes to the mark scheme that arose from these discussions will be recorded
in the published Report on the Examination.
All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’
scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated.
Mark schemes must be read in conjunction with the question papers and the Report on the Examination.
CIE is publishing the mark schemes for the November 2005 question papers for most IGCSE and GCE


Question 1
(a)
Maria van Zyl
Wages Account
2005 $ 2004 $
July 31 Total paid/Bank 61 300 (1) August 1 Balance b/d 200
Balance c/d 180 (1) 2005
July 31 Profit and Loss 61 280 (1)
61 480 61 480
2005
August 1 Balance b/d 180 (1)
+ Dates (1) [6]
Maria van Zyl

Wages Account
$ $ $
2004
August 1 Balance 200 (1) 200 Cr
2005
July 31
Total paid/Bank
61 300 (1)
Profit and Loss 61 280 (1)
61 100 Dr
180 Cr (2) C/F
+ Dates (1) [6]
(b) Matching (1)

Prudence (1)
[2]
(c)
Maria van Zyl
Provision for Doubtful Debts Account
2005 $ 2004 $
July 31 Balance c/d 900 (2) August 1 Balance b/d 990 (2)
Profit and Loss 90 (1) O/F
990 990
2005
July 1 Balance b/d 900 (1) O/F
+Dates (1) [7]


Maria van Zyl

Provision for Doubtful Debts Account
2004 $ $ $
August 1 Balance 990 (1) 990 Cr
2005
July 31 Profit and Loss 90 (1) 900 Cr (3) C/F
(1) O/F
+Dates (1) [7]
(d) Any two of the following:

Look at debtors’ accounts and estimate which ones will not be paid.
Estimate on the basis of past experience what percentage of the debtors will prove to be
bad.
Make use of an ageing schedule.
(e) 2 Net profit – Overstated. (1)

– Omission of a loss in the Profit and Loss Account means profit
overstated. (1)
3 Current assets – Overstated. (1)
– Debtors are shown at a higher value than will actually be
received. (1)
[4]
Total [21]
Question 2
(a) Any two of the following:

More meaningful than a single set of results.
Identifies the profit of each department.
Enables trading results to be analysed.
Enables overall profitability to be increased.
Poor performance of a department can be identified and investigated.
Or other suitable points.
(b) On floor space occupied by each department.

On proportion of total sales made by each department.
Or other acceptable method.
Any two methods (1) each [2]


(c)
Abdul El Said
Departmental Trading and Profit and Loss Account for the Year Ended 30 September
2005
Department A Department B
$ $ $ $
Sales 250 000 375 000 (1)
Less Returns inwards 1 000 (1)
249 000
Less Cost of sales
Purchases 167 200 320 200 (1)
Carriage inwards 1 800 ______ (1)
195 000 328 800
165 000 318 800 (1)
Gross Profit 84 000 56 200 (1)
Less Staff salaries 27 600 19 100 (1)
General expenses 20 400 48 000 20 400 39 500 (1)
Net Profit 36 000 16 700 (1)
(d) www.igcseaccounts.com
1 Rate of stock turnover – Department A
$165 000 O/F (1) = 5.89 times (1) O/F

$28 000
2 Rate of stock turnover – Department B
$318 800 O/F (1) = 34.28 times (1) O/F

$9 300
[4]
(e) Any two of the following:
Type of goods sold.
Staff efficiency.
Location of the department.
Or other suitable answer.
Total [21]


Question 3
(a)
Rebecca Tan
$ $ $
Fixed Assets
Equipment at cost 13 900
Less depreciation 1 200 12 700 (2)
Less depreciation 1 500 6 000 (2)
18 700
Current Assets
Stock 7 250 (1)
Debtors 5 200 (1)
Less provision for doubtful debts 104 (1) 5 096
Prepayments 122 (1)
12 468
Current Liabilities
Creditors 4 800 (1)
Accruals 146 (1)
Bank overdraft 250 (1) 5 196
Working capital 7 272
25 972
Capital 25 972
(2) C/F
(1) O/F
(b)
Rebecca Tan
Calculation of Net Profit (net loss) for the Year Ended 30 June 2005
$ $
Closing Capital 25 972 (1) O/F
Add Drawings – Cash 3 150 (1)
Goods 1 250 (1) 4 400
30 372
25 372
Net Loss 1 628 (2) O/F
[7]


Rebecca Tan
Capital Account
2005 $ 2004 $
June 30 Drawings - cash 3 150 (1) July 1 Balance 27 000 (1)
- goods
Balance c/d 1 250 (1) 2 Bank 5 000 (1)
Net Loss 25 972 (1)
O/F
* 1 628 (2)
O/F
32 000 32 000
2005
[7]
Total [20]
Question 4
(a) Profitability of the business Owner

Potential partner
Market value of fixed assets Loan creditor
www.igcseaccounts.com Bank manager
Liquidity position of the business Trade creditor

Owner
Or other suitable answers provided that the people do not appear more than twice.
Any correct answer (1) each [6]
(b) Understandability. (1)

Comparability. (1)
Relevance. (1)
[3]


(c) August 4 Fischer has been charged carriage costs by Zwink. (1)
Debit – Carriage inwards account. (1)
12 Fischer has returned goods to Zwink. (1)

Credit – Purchases returns (returns outward) account. (1)
16 Fischer has paid $400 to Zwink by cheque. (1)

Credit – Bank account. (1)
28 Fischer has transferred $250 to Zwink’s account in the sales ledger. (1)
Credit – E Zwink account in sales ledger. (1)
Significance of the $300 – this is the amount Fischer owes Zwink. (1)
[9]
Total [18]
Question 5
(a)
Ebor and Olicana
Error Effect of correcting the error:
on the gross profit on the net profit
2. - $15 (1) No effect (1)
3. + $30 (1) No effect (1)
4. No effect (1) -$200 (1)

+$50 (1)
[7]


(b)
Ebor and Olicana
Journal
Debit Credit
$ $
1. Olicana current (Or drawings) 400 (1)
Purchases 400 (1)
Goods taken by partner for own
use (1)
2. Office equipment 900 (1)

Ebor capital 900 (1)
Computer introduced into
business by partner (1)
3. Ebor current 5000 (1)

Ebor capital 5000 (1)
Transfer from current account
to capital account (1)
[9]
(c)
Any two of the following:
Reflect what has happened in the past – significant events may have taken place since the
end of the financial year.
Transactions are recorded at their actual cost – inflation may affect these figures.
Accounts only include information that can be expressed in monetary terms – and so
many factors will not appear in the accounting statements.
The accounts provided are for one year only – accounts for previous years would allow
meaningful ratios to be prepared.
Or other relevant points.
Any one point (1) mark for statement and (1) for development.
Any two points up to (2) each [4]
Total [20]


MARK SCHEME for the October/November 2006 question paper
0452 ACCOUNTING
examination. It shows the basis on which Examiners were instructed to award marks. It does not
demonstrated.
examination.
The grade thresholds for various grades are published in the report on the examination for most
IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses.
CIE is publishing the mark schemes for the October/November 2006 question papers for most IGCSE,
syllabuses.


IGCSE - OCT/NOV 2006 0452 01
Question Question
Key Key
Number Number
1 D 21 B
2 C 22 B
3 B 23 C
4 A 24 D
5 C 25 D
6 B 26 D
7 B 27 B
8 D 28 A
9 A 29 B
10 D 30 A
11 B 31 B
12 A 32 B
13 A 33 C
14 C 34 D
15 C 35 C
16 C 36 D
17
18
C
D
37
38
B
B
19 A 39 D
20 D 40 B
© UCLES 2006


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.


IGCSE - OCT/NOV 2006 0452 2
1 (a) [Sales] invoice. Purchase Invoice [1]
(b) Land, buildings, plant, machinery, equipment, fixtures, vehicles etc (any two). [2]
Goodwill
(c) Profit & Loss account. Not Trading [1]

Trading & Profit and Loss Account
P&L
(d) A supplier of goods or services to a business who has not been paid. [1]
Supplier & is owed for 1 mark
(e) Error of commission. [1]
(f) (i) Straight line Revaluation [1]

(ii) Reducing balance Diminishing Balance [1]
(g) Current liabilities. [2]
(h) Cost of goods sold/average stock = stock turnover.
45 000 (1) / 7 500 (1) = 6 (times)(1)(of)

6 = but not 6 : 1 max of 1 mark if in days
61 days or 2 months without ×365 or ×12 [3]
(i) Gross profit margin = gross profit (1) / sales. (1) [2]
Net Sales
Turnover
www.igcseaccounts.com Revenue
[Total 15]
© UCLES 2006


2 (a)
Sales
31 March Trading a/c 365 (1)(of) 4 March Vanni 110 (1)

7 March Cash 55 (1)
Balance c/d = 0 10 March Saska 200 (1)
P&L= ___ ___
365 365
Date / Narrative
and number for each mark
Sales Returns
15 March Vanni 30 (1) 31 March Trading a/c 30 (1)(of)
Balance c/d = 0
P&L=
Vanni
4 March Sales 110 (1) 15 March Returns inwards =

31 March Returns =
Sales Returns 30 (1)
___ Balance c/d 80
110 110
Saska
10 March Sales 200 (1) 31 March Cash 190 (1)

___ 31 March Discount alld 10 (1)
200 200
Discount allowed
31 March Total 10 (1) 31 March P/L account 10 (1)(of)

Cash Book
Saska
Cash book
March Discount Cash March Discount Cash

Sales =
Cash =
7 Cash sales 55(1)
31 Saska 10 190(1) 31 Balance c/d 245
245 245
[15]
© UCLES 2006


(b)
Tanit
Trading and Profit and Loss Account (extract)
(i) (1)(of)
Sales 365
(ii) (1)(of)
Less: sales returns 30
________
Net sales (iii) (1)(of)

335
Expenses
Discount allowed (iv) (1)(of)

10
[4]
www.igcseaccounts.com Total [19]
© UCLES 2006


3 (a) (i) Realisation, prudence, matching (any one) (2)

Accruals
(ii) Prudence, consistency (any one) (2)
[4]
(b)
Morgan
Balance sheet at 31 August 2006

depreciation
$ $ $
Fixed assets
Machinery 7 000 1 400 5 600
Office equipment 2 500 1 000 1 500
9 500 (1) 2 400 (1) 7 100 (1)
for for
both both
Current assets entries entries
Stock 3 900 (1)
Debtors 3 500)
Prepayments 600) (1)
Cash 200) for all - Description
8 200 three needed
Less current liabilities entries
Creditors
Accrued expenses www.igcseaccounts.com
1 800)
300)
Bank (overdrawn) 2 200 (1)
4 300
Net current (1)
assets/working capital 3 900 (1)(of)
Total assets 11 000 narrative
needed
Long term liability 5 000 (1)
Loan repayable 2011 - not in Current 6 000
Assets or in
Financed by calculation of
Capital at 1 September Capital
2005 9 000 (1)
Add Profit for the year 18 000 (1)
27 000
Less drawings 21 000 (1)
6 000 (1)(of)
to agree balances (no aliens)
[13]
© UCLES 2006


(c) Overdraft may be reduced by collecting debtors, reducing stock, delaying payment of
creditors, delaying drawings, increasing capital (any one). [2]
Sell fixed assets
Long Term Loan
Reduce expenditure
(d)
(i) Bank overdraft (1)
(ii) Loan account (1)
(iii) Working capital (1)
(iv) Profit for the year (1)
(v) Capital (1)
[5]
Total [24]
© UCLES 2006


4 (a) Matching income OR expenditure (1) to the period to which it relates. (1) (2)
Accrual, prepayments, depreciation (any example). (2)
[4]
(b)
Kalim
Insurance account
2005
1 Oct Balance b/d 300 (1)
Bal c/d
2006 2006
1 Jan Bank 1 320 (2) 30 Sept Profit & Loss
account 1 290 (2)(of) - only given if on
correct side.
_____ 30 Sept Balance c/d 330 (2)

1 620 1 620 If any alien then
(1) of.
[7]
Date, Narrative and Number for each mark.
Total [11]
© UCLES 2006


5 (a)
Smith and Travers
Profit and Loss Appropriation Account
Year ended 30 September 2006
$ $
Net profit 89 000 (1)
Interest on drawings
Smith 4% × $35 000 1 400 (2)
} must be added
Travers 4% × $15 000 600 (2)
91 000
Interest on capital
Smith 5% × $30 000 1 500 (1)
} must be deducted
Travers 5% × $40 000 2 000 (1)
3 500
Salary – Smith (1) 15 000 (1) - must be deducted
Share of profit
Smith 2/5(1) × $72 500 29 000 (1)of
Travers 3/5(1) × $72 500 43 500 (1)of
72 500
91 000 (1)(of) - if no aliens
appear
for allocating total profit
[14]
Smith
Current account calculation, year ended 30 September 2006
Balance at 1 October 2005 2 300 (1)
Add: Interest on capital 1 500 (1)of

Salary 15 000 (1)
Share of net profit 29 000 (1)of
47 800
Less: Interest on drawings 1 400 (1)of
Drawings 35 000 (1)
36 400
Balance at 30 September 2006 11 400(2) or 0(of) but no aliens
or omissions
[8]
Total [22]
© UCLES 2006


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.


Question 1
Salem Ahmed
Trading and Profit and Loss Account for the year ended 31 July 2006
$ $ $
Sales 89 500 (1)
Less Cost of Sales –
Less goods for own use 1 260 (1) 64 440
74 700
Less Closing stock 8 400 (1)O/F 66 300 (1)O/F
Gross Profit 22 100 (2)
22 880
doubtful debts (180 – 130) 50 (1)
Depreciation –
Equipment 405 (1)
Fixtures (7800 – 7250) 550 (1) 23 030
Net loss 150 (1)O/F
[Total 18]
© UCLES 2006


Question 2
(a)
Journal
Debit Credit
$ $
1 Suspense 750 (1)

Purchases 750 (1)
2 Sabina Khan 250 (1)

Robina Khan 250 (1)
3 Suspense 300 (1)

Bad debts 150 (1)
Bad debts recovered 150 (1)*
[7]
(b)
Suspense account
$ $
Purchases 750 (1) Difference on trial balance 1450 (1)
Bad debts 150 (1)
Bad debts recovered 150 (1)*
1450 1450
Balance b/d 400
+ (1) for either bringing down closing O/F balance OR totalling each side to indicate
that the account is now closed (based on O/F entries).
Suspense account
Debit Credit Credit
$ $ $
Difference on trial balance 1450 (1) 1450 Cr.
Purchases 750 (1) 700 Cr.
Bad debts 150 (1) 550 Cr.
Bad debts recovered 150 (1)* 400 Cr.
+ (1) for either showing O/F closing balance in balance column, or showing account is
closed by having zero as final balance.
[5]
* Alternatively allow a total of $300 to bad debts account for (2) marks: the question is
unclear in which financial year the debt was recovered.
Continued/
© UCLES 2006


Question 2 Continued
(c) Answer to be based on answer to (b) –
If (b) shows a closing balance –

No (1)
If all the errors has been discovered the suspense account would be closed (1)
If (b) shows the account is closed –

Yes (1)
It is likely that the errors have been discovered as the suspense account is closed (1)
[2]
(d) Advantages of preparing a sales ledger control account (apart from helping locate
errors when a trial balance does not balance) –
Provides instant total of debtors

Proves the arithmetical accuracy of sales ledger
Enables the Balance Sheet to be prepared quickly
Provides a summary of the transactions relating to debtors for the period
Provides an internal check on the sales ledger – may reduce fraud
(e) A contra entry is where a transfer is made from an account of a person/business in

the sales ledger to an account of the same person/business in the purchases ledger.
This may occur when a person/business is both a customer and a supplier.
[2]
(f)
Item Entry in sales ledger control account
(ii) Bad debts credit (1)
(iii) Provision for doubtful debts no entry (1)
(iv) Interest charged on overdue account debit (1)
[3]
[Total 22]
© UCLES 2006


Question 3
(a)
Trading business Non-trading organisation
(ii) Net loss Deficit (Or Excess of expenditure

over income) (1)
(iii) Capital Accumulated fund (1)
(iv) Profit and Loss Account Income and Expenditure Account (1)
[3]
(b) (i)
2005
Aug 1 Balance $750
Explanation This represents the amount of subscriptions still outstanding
from members for the financial year ended 31 July 2005
(1)
Double entry Credit subscriptions account for the year ended 31 July 2005 (1)
2006
July 31 Bank $5850
Explanation This is the total amount of subscriptions received from
members during the financial year ended 31 July 2006
(1)
Double entry Debit bank account (1)
2006
July 31 Income and Expenditure Account
Explanation This is the total subscriptions which relate to the financial year
ended 31 July 2006
(1)
Double entry Credit Income and Expenditure Account (1)
(ii) The significance of the $900 shown at the end of the account
This represents the amount paid by members during the financial year
ended 31 July 2006 but which relates to the following financial year. (1)
It will appear as a current liability in the Balance Sheet as at 31 July 2006. (1)
[8]
Continued/
© UCLES 2006


(c)
El Nil Sailing Club

2005 $ 2006 $
Aug 1 Balance b/d 6 300 (1) July 31 Purchase of boat 13 000 (1)
2006 Repairs to boat 90 (1)
July 31 Proceeds of sale Insurance 750 (1)
of boat 280 (1) General expenses 560 (1)
Competition Cost of competition
entrance fees 690 (1) prizes 420 (1)
Subscriptions 5 850 (1) __ ___
Balance c/d 1 700 14 820
14 820
2006
Aug 1 Balance b/d 1 700 (1)O/F
[10]
[Total 21]
© UCLES 2006


Question 4
(a) (i) Matching OR Prudence [1]
(ii) Matching
To ensure that the loss in value of fixed assets is spread over the period in which
they are earning revenue.
OR
Prudence
To ensure that the profit is not overstated and the value of the fixed assets is not
overstated.
[2]
(b) (i)
2004 $ 2005 $
Oct 1 P. Drury - Sept 30 Balance c/d 36 000
KUA 468 20 000 (1)
VWU 503 16 000 (1) ______
36 000 36 000
2005 2006
Oct 1 Balance b/d 36 000 Apr 1 Disposals 16 000 (1)
______ (VWU 503)
36 000 Sept 30 Balance c/d 20 000
36 000
2006
Oct 1 www.igcseaccounts.com
Balanceb/d
20 000
(1)
[4]
Continued/
© UCLES 2006


(b) (ii)
2005 $ 2005 $
Sept 30 Balance c/d 9 000 Sept 30 Profit & Loss
KUA 468 5 000
_____ VWU 503 4 000 9 000 (2)
9 000 9 000
2006 2005
Apr 1 Disposals 4 000 (2) Oct 1 Balance b/d 9 000 (1)
(VWU 503) O/F
______ Sept 30 Profit & Loss 5 000 (1)
14 000 14 000
2006
Oct 1 Balance b/d 10 000 (1)
O/F
[7]
(iii)
Disposal of motor vehicles account
2006 $ 2006 $
Apr 1 Motor vehicles 16 000 (1) Apr 1 Prov. for Dep. 4 000 (1)
O/F O/F
Sept 30 Profit & Loss 500 (1) Remuera Traders 12 500 (1)
O/F
______ ______
16 500 16 500
[4]
+ (1) for dates
© UCLES 2006


(b) (i)
2004 $ $ $
Oct 1 P. Drury –
KUA 468 20 000 (1) 20 000 Dr.
VWU 503 16 000 (1) 36 000 Dr.
2006
Apr 1 Disposals
(VWU 503) 16 000 (1) 20 000 Dr.(1)
[4]
(ii)
2005 $ $ $
Sept 30 Profit & Loss
KUA 468 5 000
VWU 503 4 000 9 000 (2) 9 000 Cr.(1) O/F
2006
Apr 1 Disposals
(VWU 503) 4 000 (2) 5 000 Cr.
Sept 30 Profit & Loss 5 000 (1) 10 000 Cr.(1) O/F
(iii)
Disposal of motor vehicles account
2006 $ $ $
Apr 1 Motor vehicles 16 000 (1) 16 000 Dr.
O/F
Prov. for Dep. 4 000 (1)O/F 12 000 Dr.
Remuera Traders 12 500 (1) 500 Cr.
Sept 30 Profit & Loss 000 (1) 0
O/F
[4]
+(1) for dates
Continued/
© UCLES 2006


(c) Entries in Profit and Loss Account for the year ended 30 September 2006
$
Depreciation of motor vehicles 5 000 debit (1) O/F
Profit on disposal of motor vehicle 500 credit (1) O/F
[2]
[Total 20]
© UCLES 2006


Question 5
(a)
(i) Current ratio 9100 : 7000 1.30 : 1 (1)
(ii) Quick ratio 5200 : 7000 0.74 : 1 (1)

5 200 x 365
(iii) Collection period for debtors 41 days (1)
47 000 (1) 1
4 200 x 365
(iv) Payment period for creditors 40 days (1)
39 000 (1) 1
[6]
(b) All responses to be based on own figure calculations in (a)
Current ratio
Increase in current liabilities greater than the increase in current assets
Increase in bank overdraft
Increase in creditors
Decrease in stock
Decrease in debtors
Quick ratio
Greater proportion of current assets in form of stock
Increase in bank overdraft
Increase in creditors
Decrease in debtors
In each case any 1 correct point (1) [2]
Continued/
© UCLES 2006


(c) All responses to be based on own figure calculations in (a)
Collection period for debtors

Less efficient credit control
Allowing longer credit to encourage sales
Not allowing cash discounts
Payment period for creditors

Shortage of liquid funds
Knock-on effect of debtors taking longer to pay
Suppliers not allowing cash discounts
In each case other suitable points accepted

In each case – any 2 points (1) each [4]
(d) Problems of inter-firm comparison –
Should compare with a business in same trade

Should compare with a business of the same type (sole trader/partnership etc)
The accounts may be for 1 year only which will not show trends and may not be a
typical year
The financial year may end on different dates and the period of time covered may be
different
There may be differences which affect profitability and the items on the Balance
Sheet
The accounts do not show non-monetary items, but these are important in the
success of a business
It is not always possible to obtain all the information about a business in order to
make a true comparison
Any 3 correct points (2) each [6]
[Total 18]
© UCLES 2006


0452 ACCOUNTING
examination.
syllabuses.


Question Question
Key Key
Number Number
1 A 21 D
2 C 22 D
3 C 23 A
4 B 24 B
5 B 25 D
6 C 26 D
7 B 27 C
8 D 28 C
9 A 29 A
10 A 30 D
11 B 31 B
12 B 32 C
13 A 33 C
14 A 34 C
15 B 35 A
16 B 36 B
17
18
B
C
37
38
A
B
19 D 39 D
20 C 40 B
© UCLES 2007


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.


1 (a) Money measurement [1]
(b) Stock, debtors, prepayments, cash, bank (any two) [2]
(c) Capital [1]
(d) Trading (and profit and loss) account [1]

(not just profit and loss account)
(e) Omission, commission, principle, compensating, original entry, complete reversal (any two)
[2]
(f) A debt which the debtor is unable or does not intend to pay [1]
(g)
Capital Revenue
Rent paid for use of workshop (1)
Purchase of machine for workshop (1)
Purchase of materials for use in machine (1)
(1)
Repairs to roof of workshop
[4]
(h) Current assets ($11 800)(1) – Stock ($6 200)(1)/Creditors ($3 200)(1)
= 1.75:1 (1)OF (accept 1.75 but not %, times etc. or any negative figures)
or Debtors ($4 000)(1) + Bank ($1 600)(1)/Creditors ($3 200)(1)

= 1.75:1 (1)OF [4]
[Total: 16]
© UCLES 2007


2 (a) The balance on Abdullah’s cash book at 1 September 2007 is not the same as the balance
on the bank statement at that date because there was an unpresented cheque (1) (070) for
$900 (2) [3]
Note: answer must relate to the question, and not be general
(b)
Abdullah
2007 $ 2007 $
September September
1 Balance b/d 12 300 (1) 8 Tarvik 1 900 (1)
(accept Bal, b/d, balance)
2 Homer 3 600 (1) 20 Electricity 800 (1)
(name and amount for each entry)
14 Parma 4 600 (1) 24 Insurance 240 (1)
28 Rent 1 000 (1)
30 Bank charges 75 (1)
30 Balance c/d 16 485 (1)
20 500 20 500
1 Oct Balance b/d 16 485 (1)OF

(+1 for dates)(allow 1 wrong date) [11]
(c)
Abdullah
Bank reconciliation statement at 30 September 2007
$
Balance at bank on 30 September 17 485 (1) (correct figure only)
Less: unpresented cheque (073) 1 000 (1)
Balance per cash book at 30 September 16 485 (2)

(1)OF [4]
Note – accept answers beginning with cash book balance.
[Total: 18]
© UCLES 2007


3 (a) (i) Net book value (accept NBV, written down value, WDV) (1)
(ii) $300 (1)
(iii) $8 600 (1)
(iv) Net current assets or Working capital (1)
(v) $14 100 (1)
(vi) (Net) Profit (not Gross profit) (1)
(vii) $5 600 (based on (viii)) (1)OF
(viii) $14 100 (must agree with (v)) (1)OF [8]
(b) (i) current ratio
= Stock + debtors + cash/bank/Creditors

= 5 200 + 8 600 + 1 100 = 14 900 (2)/3 800 (1)
= 3.92:1 (1)OF [4]
(ii) return on opening capital employed
= Net profit/opening capital employed × 100

= 6 700 (1)/13 000 (1) = 51.54% (2)OF [4]
(c) Different type of business
Different products
Capital/labour intensive business
Business with higher net profit
Business with lower capital
– other reasonable answers (2 each) [4]
[Total: 20]
© UCLES 2007


4 (a) Customer’s name, address, date, total sales, sales returns, invoice numbers, amount due,
discount, net total, cash/cheques received, terms of business, due date (any four, (1) each)
[4]
(b) Sasha (not Invoice) (1)

1 August 2007 (1)
170 (1)
$0.85 (1)
$144.50 (1) [5]
(c)
Zak
Cash book (Dr.)
Detail Discount Bank

2007 $ $
12 August (1) Sasha (1) 3.61 (1)OF 140.89 (1)OF [4]
(d) [250 × $0.85] = $212.50 (1) × 5% (1) = $10.62 (1)OF (but only if 5% used) [3]
(e) $212.50 (1)OF – $10.62 (1)OF = $201.88 (1)OF [3]
(f) $201.88 (1)OF × 2.5% (1) = $5.05 (1)OF [3]
[Total: 22]
© UCLES 2007


5 (a)
Hedda and Marie
Journal
Bank Dr 3 400 (1)

(accept two separate entries of 2 400 and 1 000 for (1) mark)
Hedda – capital 1 800 (1)
Marie – capital 600 (1)
(if no names only (1) for capital of 2 400 or 1 800 + 600)
Mish – loan 1 000 (1)
Shop Fittings Dr 850 (1)

Cash register Dr 400 (1)
Purchases/Stock Dr 1 600 (1)
Bank 2 850 (1) [8]
6 250 6 250
(b) (i) $1 000 (1) × 1% (1) = $10 (1)OF [3]
(ii) [$590 – $10] = $580 (1)OF × ¾ (1) = $435 (1)OF [3]
[Total: 14]
© UCLES 2007


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.


1 (a) The petty cashier starts each period with the same amount of money (1) (the imprest).
At the end of the period the chief cashier will make up the cash remaining so that it is equal
to the imprest amount (1) [2]
(b)
John Paihia – Petty Cash Book
Total Date Details Total Postages Travelling Cleaning Ledger

Received Paid & expenses accounts
stationery
$ 2007 $ $ $ $ $
48 (1) Sept 1 Balance b/d
252 (1) Cash/Bank
11 Paul Ahipara 95 95 (1)
19 Cleaner 24 24 (1)
23 Travelling expenses 9 9 (1)
6 (1) 29 Refund on stationery ___ __ __ __ __
215 (1) 87 9 24 95
306 306
91 (1)O/F Oct 1 Balance b/d
209 (1)O/F Cash/Bank
Dates www.igcseaccounts.com
(1)
4 O/F totals of analysis columns (1)
2 Matching O/F totals of Total Columns (1) [14]
(c) At the end of each period (1) the totals of the analysis columns for expenses (1) are debited
to the appropriate expense account (1)
The individual items in the ledger accounts column are debited to the appropriate creditors’
accounts (1) [4]
[Total: 20]
© UCLES 2007


2 (a) If stock is not valued at the lower figure then both the net profit and the current assets may
be overstated (2)
Or
It is the application of the principle of prudence (2) [2]
(b)
Red Barn Manufacturing
Manufacturing Account for the year ended 31 August 2007
$ $
Cost of raw material
Opening stock of raw material 43 500 (1)
Purchases 576 000 (1) 619 500
Less Closing stock of raw material 37 000 (1)
582 500
Prime cost 1 056 100 (1)
Factory indirect wages 197 600}
Factory general expenses 335 500} (1)
Depreciation factory machinery 32 000 (1) 565 100
1 621 200 (1)O/F
1 642 600
(c)
Red Barn Manufacturing
Trading Account for the year ended 31 August 2007
$ $
Sales 2 249 400 (1)
Less Cost of sales
Opening stock of finished goods 142 100 (1)
1 768 900
Less Closing stock of finished goods 163 500 (1) 1 605 400
Gross Profit 644 000 (1)O/F
1 605 400 O/F

(d) Rate of stock turnover = 10.51 times (1)O/F [2]
(142 100 + 163 500) ÷ 2
(e) Reduce stock levels (1)

Generate more sales activity (1) [2]
[Total: 22]
© UCLES 2007


3 (a)
Al Shuhada Music Club
Income and Expenditure Account for the year ended 30 September 2007
$ $
Income
Subscriptions (9550 + 350 (1) – 150 (1)) 9 750
Concert – Ticket sales 3 000
Less Expenses 2 730 270 (1)
10 020
Expenditure
Property tax (3130 – 400 (1) – 240 (1)) 2 490
Insurance 1 780}
General expenses 5 820} (1)
Depreciation – musical instruments
(9800 + 750 – 8700) 1 850 (1) 12 150
Deficit for the year 2 130 (1)O/F
(b) Either
Opening bank balance (1)
This is neither income nor expenditure for the year as it represents the bank overdraft on
1 October 2006. (1)
Or
Purchase of new instruments (1)
This is not regarded as revenue expenditure as it is the purchase of a fixed asset. (1) [2]
© UCLES 2007


(c)
Al Shuhada Music Club
$ $
Fixed Assets
Musical instruments at valuation 8 700
40 700 (1)
Current Assets
Property tax prepaid 240 (1)
Current Liabilities
Bank overdraft (15830 – 12550 (1)
+ bank charges 210 (1)) 3 490
(3 250)
37 450
Accumulated Fund
(32000 + 9800 + 150 – 350 – 1620 – 400)
Any 2 correct items (1) to max of (3)
Less Deficit for the year 2 130 (1)O/F
37 450
[8]
[Total: 19]
© UCLES 2007


4 (a) Ann and Fay lose a degree of control

Ann and Fay will have to share any future profits with Kim
The risk of conflict of opinion is increased
May involve extra costs (accommodation/staff support etc.)
Any 1 point (1) [1]
(b) (i) To avoid disagreements/misunderstandings later [2]
(ii) Interest on capital [1]
(iii) Partner’s salary [1]
(c) (i)
Goodwill account
2007 $ 2007 $
Oct 1 Ann Capital 10 200 (1) Oct 1 Ann Capital 8 500 (1)
Fay Capital 6 800 (1) Fay Capital 5 100 (1)
_____ Kim Capital 3 400 (1)
17 000 17 000
[5]
Goodwill account
2007 $ $ $
Oct 1 Ann Capital 10 200 (1) 10 200 Dr
Fay Capital 6 800 (1) 17 000 Dr
Ann Capital 8 500 (1) 8 500 Dr
Fay Capital 5 100 (1) 3 400 Dr
Kim Capital 3 400 (1) 0
[5]
© UCLES 2007


(c) (ii)
Capital accounts
Ann Fay Kim Ann Fay Kim

2007 $ $ $ 2007 $ $ $
Oct 1 Goodwill 8500 5100 3400 Oct 1 Balances b/d 30000 15000
(1)O/F (1)O/F (1)O/F (1) (1)
Balances c/d 31700 16700 7600 Goodwill 10200 6800
(1)O/F (1)O/F
Bank 10000
(1)
Office Eqp. 1000
(1)
40200 21800 11000 40200 21800 11000

Oct 2 Balances b/d 31700 16700 7600
(1)O/F (1)O/F (1)O/F
[Total: 22]
(c) (ii) Alternative presentation
Ann Capital account

2007 www.igcseaccounts.com $
$ $
Oct 1 Balance 30 000 (1) 30 000 Cr
Goodwill 10 200 (1)O/F 40 200 Cr
Goodwill 8 500 (1)O/F 31 700 Cr (1)O/F
Fay Capital account

2007 $ $ $
Oct 1 Balance 15 000 (1) 15 000 Cr
Goodwill 6 800 (1)O/F 21 800 Cr
Goodwill 5 100 (1)O/F 16 700 Cr (1)O/F
Kim Capital account

2007 $ $ $
Oct 1 Bank 10 000 (1) 10 000 Cr
Office Eqp. 1 000 (1) 11 000 Cr
Goodwill 3 400 (1)O/F 7 600 Cr (1)O/F
[12]
[Total: 22]
© UCLES 2007


5 (a) (i) Gross profit = 72 000 – (5200 + 54 400 – 4900) = 17 300 (1)
17 300 100
Gross profit as % of sales × = 24.03% (1)O/F [2]
72 000 1
(ii) Look for cheaper supplies

Increase selling prices
Change proportions of different types of goods sold
(b) (i) Net profit = 17 300 (O/F) – (15% x 72 000) = 6500 (1)
6 500 100
Net profit as % of sales (O/F) × = 9.03% (1)O/F [2]
72 000 1
(ii) Increase gross profit e.g. increase profit margin, increase selling prices etc.
Increase sales
Reduce expenses e.g. reduce staffing levels, reduce advertising etc.
Increase other income e.g. rent out part of premises, earn more discount
(c) (i) Comparability [1]
(ii) Information provided in financial statements must be reliable (1)

Either
It must be capable of being depended upon as a faithful representation of the
underlying transactions and events it represents (1)
Or
It must be capable of being independently verified (1)
Or
It must be free from bias (1)
Or
It must be free from significant errors (1)
Or
It must be prepared with suitable caution being applied to any judgements and
estimates (1) [2]
© UCLES 2007


(d) Bank manager

Assessment of prospects of any requested loan/overdraft repaid when due
Lenders
Assessment of prospects of any requested loan when due
Assessment of prospects of any interest on loan being paid when due
Assessment of the security available to cover any loan
Creditor for goods

Identifying how long the business takes to pay creditors
Identifying future prospects of the business
Identifying what credit limit is reasonable
Managers (if any)

Basis of future planning
Control the activities of the business
Or other suitable interested persons e.g. trades unions/employees/

government bodies/take-over-bidders/competitors etc
Three parties to be identified – (1) each giving a total of (3)

One acceptable reason required in each case – (1) giving a total of (3) [6]
[Total: 17]
© UCLES 2007


0452 ACCOUNTING
examination.
syllabuses.


Question Question
Key Key
Number Number
1 C 21 D
2 A 22 B
3 C 23 D
4 C 24 C
5 A 25 D
6 B 26 C
7 B 27 D
8 D 28 A
9 C 29 D
10 B 30 B
11 A 31 A
12 A 32 A
13 B 33 A
14 B 34 B
15 B 35 D
16 D 36 B
17 B 37 D
C 38 C
19 C 39 C
20 A 40 A
© UCLES 2008


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.


GENERAL NOTES FOR ASSISTANT EXAMINERS
MARKING GUIDELINES
• Award marks only in accordance with the mark scheme. If a script contains an answer which
is not anticipated please refer to Principal Examiner before awarding any marks.
calculation so that totals or the results of the calculation are wrong but are correct on his own
carried down”.
• Where a day book or ledger account is to be prepared, each mark is usually for the date,
narrative and amount together but if the candidate has correctly prepared the account but not
shown some or all of the dates he may earn some marks according to the mark scheme.
• Where an answer is to be shown as a ratio, it may be shown as xx:1 or 1:xx. An answer of

just the correct figure xx may be accepted but not if any other description such as %, times,
days etc is shown and not if shown as negative when it should be positive.
• Where workings are shown separately and the correct answer is clearly arrived at but a
mistake is then made in transferring the answer to the question paper the marks may be
awarded if the candidate has demonstrated he has correctly answered the question. This also
covers the final answer being shown e.g. as a ratio but the workings clearly show the correct
answer to be a percentage.
• Where a calculation is stated to be shown to two decimal places, an answer rounded up or

down may be accepted (e.g. 2.85 or 2.86 if the true answer is 2.853) but not an answer shown
to only the nearest whole number or one decimal place (e.g. 2.8 or 3).
answer (e.g. $35.60) many candidates will show $35.6 as their calculators will suppress the
final 0. Although wrong this may be accepted.
• Ledger accounts may be accepted in either two sided or the running balance format and the
mark scheme will show how marks should be allocated.
© UCLES 2008


1 (a) Sales journal, sales day book, sales book, sales

sales returns journal, day book or book, sales returns
purchases journal, purchases day book, purchases book, purchases
purchases returns journal, day book or book, purchase returns
cash book
petty cash book
journal (but not ledger)(any two) (2)
(b)
Asset Liability
(i) Motor car (1)
(ii) Accrued expenses payable (1)
(iii) Debtors (1)

(3)
(c) Going concern (1)
(d) (i) sales (1)
(ii) Bill’s account/debtor (1)

(e) Trading [and Profit and Loss] account (1)
(must have word “Trading”, with or without “profit and loss)
(f) Error of complete reversal (1)

No other error accepted – the word “reversal” must be used
(g) [Profit and loss] appropriation account (1)

(must have word “appropriation”)
(h) (i) Current ratio = current assets/current liabilities

($49 000 + $24 000 + $3 500) = $76 500 (1) : 1
=
$21 000 (1)
= 3.6:1 (1)OF (3)
Mark for ratio is on own figures in formula
(ii) Quick ratio = current assets (less stock)/current liabilities
($49 000 + $3 500) = $52 500 (1) : 1

=
$21 000 (1)
= 2.5 : 1 (1)OF (3)
Mark for ratio is on own figures in formula
[Total: 17]
© UCLES 2008


2 (a) Ombeya
Sales Journal
Date Details Reference Amount

September $
4 Hales Orchestra INV 23 1 200 (1)
15 Sing Song Band INV 24 450 (1)
28 Town School INV 25 700 (1)
Total 2 350
Note: the mark for each entry is for the date and month (year not required), narrative and
correct amount. Award the mark even if the reference is not shown.
Ombeya
Date Details Reference Amount

September $
17 Hales Orchestra RT 7 300 (1)
Total 300
Award the mark as above [4]
© UCLES 2008


(b) Sales account

30 Sept Trading a/c 2 350 (1OF) 30 Sept Total sales 2 350 (1)
(accept “sales” or “sales journal” etc),
debtors
Award mark for date, narrative and amount for each of these accounts. Accept “Profit and
loss account” or any variation or short form, but not “Balance carried down” or any variation.
If candidate writes out each entry with name and amount on credit side then award one mark
in all.

30 Sept Total returns 300 (1) 30 Sept Trading a/c 300 (1OF)
(accept “(sales) returns” or “(sales) returns journal” etc)
If candidate gives “Hales Orchestra” and amount on debit side award the mark
Hales Orchestra account

4 Sept Sales 1 200 (1) 17 Sept Sales returns 300 (1)
(not “Hales Orchestra”) (accept “returns”)
Sing Song band account
15 Sept Sales 450 (1)
(not “Sing Song band”)
Town School account

28 Sept Sales 700 (1)
(not “Town School”)
[8]
© UCLES 2008


(c)
Date Dr Cr
10 October Bad debts (1) 450 (1)
Sing Song band (1) 450 (1)
Write off of bad debt from Sing Song band (1)
Award mark for account name even if date is wrong or missing but only award mark for
amount if Dr entry is with Bad debt account name and Cr entry is with Sing Song Band
account (or other incorrect) name. If Dr entry is shown with other incorrect name do not
award mark. [5]
(d) Prudence (not matching) (2) [2]
[Total: 19]
© UCLES 2008


3 (a) Business entity or ownership (2) [2]
(b) Suspense account (1) [1]
(c)
Stella Maris
Trial Balance at 31 October 2008
Debit Credit
$ $
Capital 10 000 (1)

Shelving & equipment 5 000 (1)
Rent payable 6 000 (1)
Sales 34 900 (1)
Stock at 1 May 2008 0 (1)
Bank 7 400 (2)

_____ _____
44 900 (OF) 44 900 (OF)(1)
(to agree)
Award mark for correct account name, amount and correct side of trial balance. Stock
should have date shown or be “Opening stock”.
If candidate has value for stock or any other date then no mark.
If no entry for stock then award the stock mark.
No mark for any suspense account shown for unexplained balance.
Award totals mark only if shown and Dr and Cr sides agree. [10]
© UCLES 2008


(d) Stella Maris

Profit and Loss Account
for the six months ended 31 October 2008
$ $
Sales 34 900 (1)
Stock at 1 May 2008 nil
24 000
Stock at 31 October 2008 5 300 (1)
Cost of sales 18 700 (1)

[5]
Expenses
Rent 6 000 (1)

8 500 (2)

[4]
If candidate has value for opening stock then do not award cost of sales mark.
Award marks for correct amount only, except for gross and net profit amounts which can be
own figures if incorrect amounts are shown in the account but the profit figures are
arithmetically correct. Allow OF marks whether gross or net amounts are shown as profit or
loss.
[Total: 22]
© UCLES 2008


4 (a)
Electra’s restaurant Zorba’s restaurant
(i) 16 800 / 112 000 = 15.0 % (2) 20 000 / 80 000 = 25.0 % (2)
(ii) 11 200 / 112 000 = 10.0 % (2)OF 12 000 / 80 000 = 15.0 % (2)OF
(iii) 95 200 / 2 250 = 42.3 times (2) 60 000 / 6 600 = 9.1 times (2)
(accept 42 times) (accept 9 times)
Award 2 or nil for each calculation: if candidate has shown workings, and has made an error
in calculating gross profit, then award no marks for (i), but you may award 2 OF marks for
correct calculations in (ii) based on incorrect (i).
[12]
Electra’s restaurant Zorba’s restaurant
Sales 112 000 80 000

Cost of sales 95 200 60 000
Gross profit 16 800 20 000
Gross profit www.igcseaccounts.com

16 800 20 000
Expenses 5 600 8 000
Net profit 11 200 12 000
Cost of sales 95 200 60 000
Average stock (2 000 + 2 500) / 2 = 2 250 (7 000 + 6 200) / 2 = 6 600
(b) (i) Electra has lower prices per meal, Zorba charges more per meal
Electra pays more for purchases, Zorba buys more cheaply
(any suitable comment) (2)
(ii) Electra turns over stock almost once a week, may sell fast food.
Zorba turns over stock more slowly, may have more varied menu, better quality meals,
better storage facilities
(any suitable comment) (2)
[4]
[Total 16]
© UCLES 2008


5 (a) To measure the use of a fixed asset over the period of its useful life (2)
(not to calculate its net book value or to find a profit or loss on sale) [2]
(b) Prudence or matching (1) [1]
(c) (i) (9 000 – 600) = 8 400 (1) / 4 (1) = 2 100 (1)OF [3]
(ii) 2 100 (1)OF [1]
Award OF marks if the calculations are correct but the amounts used are incorrect e.g. the
expected scrap value has been omitted giving depreciation of $2 250. Award the marks if
depreciation is calculated and shown but ignore any calculations of net book value in this
part.
(d) Provision for depreciation account
2008 2008
30 June Balance c/d 2 100 30 June P & L a/c (1) 2 100 (1)OF
2 100 2 100
1 July Balance b/d (1) 2 100 (1)OF
2009 2009
30 June Balance c/d 4 200 30 June P & L a/c (1) 2 100 (1)OF
4 200 4 200
1 July Balance b/d (1) 4 200 (1)OF
Accept OF entries in account if figures used are from calculations in (c).

Award mark for date and description only if both are correct in each case.
Date and year must be correct for the mark for description. [8]
(e) $4 800 (1)OF [1]
Accept OF if calculated correctly from figures in (c)
[Total: 16]
© UCLES 2008


0452 ACCOUNTING
demonstrated.
examination.
syllabuses.



Easier for reference as same type of accounts are kept together
Any 1 point (1) [1]
(b) (i) nominal (general) ledger (1)
(ii) nominal (general) ledger (1)
(iii) sales (debtors) ledger (1) [3]
(c)
Paihia Traders account
2008 $ 2008 $
Aug 12 Purchases returns 60 (1) Aug 1 Balance 950
18 Bank 931 (1) 3 Purchases 270 (1)
31 Balance c/d 210 (1)
O/F ___
1220 1220
2008
O/F
Awanui Wholesalers account
2008 $ 2008 $
Aug 29 Bank 645 (1) Aug 1 Balance 630
___ 22 Interest payable 15 (1)
645 645
+ (1) dates [9]
© UCLES 2008


Paihia Traders account

2008 $ $ $
Aug 1 Balance 950 950 Cr
3 Purchases 270 (1) 1220 Cr
12 Purchases returns 60 (1) 1160 Cr
18 Bank 931 (1) 229 Cr
Discount received 19 (1) 210 Cr (2) O/F
Awanui Wholesalers account

2008 $ $ $
Aug 1 Balance 630 630 Cr
22 Interest 15 (1) 645 Cr
29 Bank 645 (1) 0
+ (1) Dates [9]
(d) Payment period for creditors
$10 500 × 365 (1) = 38.71 days = 39 days (1)
$99 000 1 [2]
(e) 1 Not satisfied – if (d) is more than 1 month

Or Satisfied – if (d) is less than 1 month (1)
2 Paul is allowed 1 month’s credit but is taking 39 days

Or suitable explanation based on O/F answer to (d) (1) [2]
(f) Advantage
May be able to take advantage of cash discounts

(g) Disadvantage

[Total: 19]
© UCLES 2008


2 (a) (i) Capital expenditure is money spent on acquiring, improving and installing fixed assets. (1)
Revenue expenditure is money spend on running a business on a day-to-day basis. (1) [2]
(ii) Capital receipts are amounts received from the sale of fixed assets (1)
Revenue receipts are sales and other items of income which are recorded in the trading
and profit and loss account. (1) [2]
(b)
Michael Ong
Statement of corrected net profit for the year ended 30 June 2008
$ $
Net profit 15 000
Add Purchase of motor vehicle (CD 357) 8 000 (1)
Commission received 500 (1) 8 500
23 500
Less Sale of motor vehicle (AB 246) 2 000 (1)
Purchases of stationery 200 (1) 2 200
Corrected net profit 21 300 (1)
Alternative formats acceptable [5]
(c) To balance the trial balance

To allow draft final accounts to be prepared
Any one point (1) www.igcseaccounts.com [1]
(d)
account(s) to be debited $ account(s) to be credited $
2 Suspense 400 (1) Disposal of equipment 400 (1)
3 Suspense 200 (1) Purchases 200 (1)
4 W Lee 50 (1) Bad debts 50 (1)

Bank/Cash/Cash book 50 (1) Bad debts recovered 50 (1)
[8]
[Total: 18]
3 (a) (i) $
Cheques received from customers 58 114 (1)
Amounts owing on 30 September 2008 4 800 (1)
65 000
Less Amounts owing on 1 October 2007 5 000 (1)
Credit sales 60 000 (1) O/F [6]
© UCLES 2008


(ii) $
Cheques paid to suppliers 45 930 (1)
Discounts received 470 (1)
Amounts owing on 30 September 2008 5 200 (1)
51 600
Less Amounts owing on 1 October 2007 4 500 (1)
Credit purchases 47 100 (1) O/F [5]
(i) Total debtors account
2007 $ 2008 $
2008 Discount allowed 1 186 (1)
Sept 30 Sales * 60 000 (1) Bad debts 900 (1)
_____ O/F Balance c/d 4 800 (1)
65 000 65 000
2008
(ii) Total creditors account
2008 $ 2007 $
Sept 30 Bank 45 930 (1) Oct 1 Balance b/d 4 500 (1)
Discount 2008
received 470 (1) Sept 30 Purchases *47 100 (1)
Balance c/d 5 200 (1) O/F
51 600 51 600
2008
(b) Mark-up is when the gross profit is measured as a percentage of the cost price of the goods (1)
Margin is when the gross profit is measured as a percentage of the selling price of the goods (1)
[2]
© UCLES 2008


(c) Suzan Hamouda

Trading Account for the year ended 30 September 2008
$ $ $
Sales 60 000 (1) O/F
Less Cost of sales
Purchases 47 100 (1) O/F
Less goods for own use 200 (1) 46 900
54 700
Less closing stock 4 700 (2) C/F
(1) O/F
50 000
[8]
[Total: 21]
4 (a) (i) B Ngwenya

Explanation cheque previously received from B Ngwenya was returned as
dishonoured by the bank (1)
Double entry debit B Ngwenya account (1)
Sales
Explanation receipts from sales, some paid into bank and some retained in cash (1)
Double entry credit Sales account (1)
(ii) $120 was transferred from the cash to the bank (2)
Or These are contra entries (1)
(iii) Discount received (1)
6 × 100 = 2.5% (1)

6 + 234 1
(iv) Balance of $70 This is the cash remaining in the business (1)
Balance of $1515 This is the amount owing to the bank (overdraft) (1)
(v) Total of column on debit side – debited to discount allowed account (1)
Total of column on credit side – credited to discount received account (1) [12]
(b) Working capital

(200 + 5020 + 4710) – (3620 + 3280) (1)
= 9930 – 6900
= 3030 (1) [2]
© UCLES 2008


(c) Injection of capital

Long term loans
Sale of surplus fixed assets
Reduction in drawings

(d) May have problems paying debts as they fall due

Cannot make the most of opportunities as they occur
Difficulties in obtaining further supplies

(e) Return on capital employed

6465 × 100 = 15.73% [1]
41100 1
(f) (i) Unsatisfied – if (e) is less than 19.50% (1)

Or
Satisfied – if (e) is more than 19.50% (1)
(ii) The return on capital employed has reduced so the capital is not being employed as
effectively (1)
Or suitable explanation based on O/F answer to (e) [2]
[Total: 21]
© UCLES 2008


5 (a) Salim and Rita Jaffer

$ $ $
Fixed assets
Equipment at book value
(13 000 – 1500) 11 500 (1)
106 500 (1) O/F
Current assets
Stock 8 200
Debtors 6 600
Less provision for
doubtful debts 330 6 270 (1)
Prepaid expenses 430 (1)
14 900 (1) O/F
Current liabilities
Creditors 6 800
Accrued expenses 620 (1)
Bank 2 900 (1) 10 320 (1) O/F
Working capital 4 580 (1) O/F
111 080
Salim Rita Total

Capital accounts 40 000 60 000 100 000 (1)
Current accounts
Opening balance 3 400 6 100 (1)
Share of profit www.igcseaccounts.com
7 750 7 750 (1)
11 150 13 850
Less drawings 7 700 6 220 (1)
3 450 7 630 11 080 (1)
111 080

Calculation of current account balances outside balance sheet acceptable. [14]
(b)
Capital accounts
Salim Rita Salim Rita

2008 $ $ 2008 $ $
Aug 31 Balance c/d 64 000 64 000 Aug 1 Balances (1) 40 000 60 000
Current a/c (1) 4 000
31 Bank (1) 24 000
64 000 64 000 64 000 64 000
2008
Sept 1 Balance b/d (1) 64 000 64 000
O/F
+ (1) dates [5]
Alternatively allow 2 separate “T” accounts
© UCLES 2008


Salim Capital account

2008 $ $ $
Aug 1 Balance 40 000 40 000 Cr
31 Bank 24 000 64 000 Cr
Rita Capital account

2008 $ $ $
Aug 1 Balance 60 000 60 000 Cr
31 Current a/c 4 000 64 000 Cr
Opening balances (1) for both figures

Salim amount introduced (1)
Rita current account transfer (1)
Closing balances (1) O/F for both figures
+ (1) dates [5]
(c) Advantage of maintaining separate current accounts
Easier to see profit retained by each partner
Easier to calculate interest on capital (if allowed)

[Total: 21]
© UCLES 2008



0452 ACCOUNTING
examination.
syllabuses.


Question Question
Key Key
Number Number
1 A 21 D
2 B 22 D
3 A 23 B
4 D 24 A
5 A 25 D
6 C 26 C
7 A 27 B
8 A 28 C
9 C 29 B
10 C 30 C
11 B 31 A
12 C 32 B
13 B 33 D
14 D 34 B
15 A 35 C
16 D 36 B
17 D 37 A
C 38 B
19 D 39 C
20 D 40 D
© UCLES 2009



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Trading account (accept manufacturing account)

Profit and loss account (accept income and expenditure account)
Profit and loss appropriation account
Balance sheet (any two, one mark each)
(Accept abbreviations if the meaning is clear) [2]
(b)
Income Expense
(i) Discount received √ (1)
(ii) Carriage outwards √ (1)
(iii) Bank charges √ (1)
[3]
(c) Standing orders, credit transfers

Direct debits
Bank charges
Dishonoured cheque (or similar acceptable item)
(Not unpresented cheques, uncleared deposits) [1]
(d)
Dr Cr
Bad debts www.igcseaccounts.com
250 (1)
Petrus (or Debtor) 250 (1)
One mark for both items on each line, in either order [2]
(e) (i) Purchases (creditors) (ledger) (1)
(ii) Nominal (general) (ledger) (1) [2]
(f) Saleem – Rent account
2009 2009
1 October Bank 960 (1) 31 October P/L account 320 (1)
31 October Balance c/d 640 (1)

960 (accept prepayment)
1 November Balance b/d 640 (1) OF
(accept prepayment)
Note: mark is for correct narrative and correct or OF amount, not date. [4]
© UCLES 2009


(g) (i) Partnership agreement (accept deed, contract) or

Profit and loss appropriation account
(Not partnership document, statement) [1]
(ii) Capital to be contributed, drawings

Profit sharing ratio
Interest on capital
Interest on drawings
Partners’ salaries (or other acceptable item) [1]
[Total: 16]
2 (a) (i) Invoice (not receipt, cash book or [1]

other books of account)
(ii) Invoice, statement of account [1]
(b) Note: in following accounts, 1 mark for date and narrative, 1 mark for amount.
Sales account
2009
16 October Total sales 550 (2)
(accept 30/31) (accept debtors, sales journal)
If separate entries for Artelis and Brook are shown, award mark only if total 550 is shown.
Artelis account
2009
12 October Sales (journal) 250 (2)
Brook account
2009
14 October Sales (journal) 300 (2)
[6]
(c)
Dr Cr
$ $
Sales (NOT Suspense) 20 (1)
Artelis 20 (1)
Dr Cr
$ $
Chadri 55 (1)
Sales (NOT Suspense) 55 (1)
[4]
© UCLES 2009


(d)
Dr Cr
$ $
Sales* (550 (1) + 55 (1) – 20 (1)) 585* (3)
Artelis (250 – 20) 230 (1)
Brook 300 (1)
Chadri 55 (1)
(No marks for complete reversal) [6]
*award 3 marks for correct figure with or without workings, 1 mark for 550 with or without
workings, for other figures (e.g. 605, 530 or 515) award marks only for correct items if
workings shown.
[Total: 18]
3 (a) (i) Current ratio = 17 700 (1) / 9 400 (1)
= 1.88 (: 1) (1)OF (accept 1.89 but not 1.9 or 1.90)

(do not accept 1 : 1.88) [3]
(ii) Quick ratio = 15 300 (2) / 9 400 (1)

Note: mark for 15,300 is 2 or 0, correct figure only
= 1.63 (: 1) (1)OF
(accept 1.62 but not 1.6 or 1.60)
(do not accept 1 : 1.63) [4]
(iii) Working capital = 17 700 (1) – 9 400 (1)
= 8 300 (1)
Correct figures only
For each of these, award marks for correct answer with or without workings but for other
answers award marks only for correct items if workings shown. [3]
(b)
Working capital
Increase capital √ (2)
Reduce debtors √ (2)
Repay bank loan √ (2)
Reduce drawings √ (2)
Note: 2 marks for each item [8]
[Total: 18]
© UCLES 2009


4 (a)
Tangible fixed Intangible fixed Current
assets assets assests
Goodwill √ (1)
Motor van √ (1)
Warehouse √ (1)
Stock √ (1)
Note: 1 mark for each item [4]
(b) Depreciation on straight line over three years
= (2 100 – 300) (1) / 3 (1)
= 600 (1)OF – for OF mark must be spread over period of years
Same amount for 2010: $600 (1)OF (Not $1200)
Note: award OF mark if same amount is shown for each year [4]
(c) Provision for depreciation

Balance c/d 600 Profit & Loss account 600 (1)OF
(Depreciation account)
600 600
2010 2010
Balance c/d 1200 Profit & Loss account 600 (1)OF
1200 1200
Mark is for correct year, not exact date, narrative and amount.
If date is shown with correct year, award mark. [4]
(d) Cleo
Balance Sheet at 30 September 2010 (extract)

depreciation value
$ $ $
Fixed assets
Plant and equipment 2 100 (1) 1 200 (1)OF 900 (1)OF
(Description and amount for mark)
(Accept photocopier, office equipment, office machines or similar) [3]
© UCLES 2009


(e) The accumulated depreciation to date

The amount of cost used up over the life of the machine
The amount charged to P/L account to date
Any one similar comment – 2 marks

Not net book value, or any comment relating to disposal or profit or loss on sale. [2]
[Total: 17]
5 (a) Fees earned = cash receipts 12 000 (1)

less: opening debtors 2 600 (1)
9 400
add: closing debtors 4 100 (1)
13 500 (2) or (1)OF [5]
Award 2 marks for correct answer with or without workings but for other answers award
marks only for items correctly added or subtracted if workings shown: do not award any total
mark(s) if any alien items are in calculation e.g. commissions figure.
(b) Khalid
Profit and Loss Account for the year ended 31 October 2009
$ $
Fees receivable (accept gross profit etc) 13 500 (1)(OF)
Commissions received 32 000 (1)
45 500
(award 2 marks if just correct total figure 45 500 is shown)
Expenses
Rent 9 600 (1)
Staff wages 8 800 (1)
Office expenses 6 400 (1)
Motor expenses 3 600 (1)
28 400
Net profit (or loss, if loss has been calculated) 17 100 (1)(OF)
Award OF fees mark if the total from (a) is used;

Award the commissions mark if shown whether or not it has been included in the total from (a);
Award the net profit/loss mark only if no alien items in account e.g. drawings. [7]
(c) Khalid – Capital account

Balance b/d 3 000 (1)
Drawings 25 000 (1) Net profit 17 100 (1)OF
Balance c/d 4 900

25 000 25 000
Balance b/d 4 900 (2)OF
Award balance OF mark only if no alien items in account.

Dates not required. Vertical layout acceptable. [5]
© UCLES 2009


(d) Contribute further capital – but not by taking (bank) loan

Obtain capital by taking partner
Reduce drawings
Increase net profit (reduce loss if shown in (b))
(e.g. by increasing fees/commissions, reducing expenses (or any one specific expense) but
only one example, so 2 marks for only any one method of increasing net profit)
Any two (2) each [4]
[Total: 21]
© UCLES 2009



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Abdul Anwar Cash Book
Allowed Received
2009 $ $ $ 2009 $ $ $
May 1 Balance b/d 100 May 1 Balance b/d 490
6 Sales (1) 80 200 18 Mohsin Ali (1) 8 312
13 Sameen Atif (1) 150 24 Sameen Atif

(dishonoured cheque)(1) 150
30 Cash (1) 130 30 Bank (1) 130
31 Balance c/d 472 31 Balance c/d 50
180 952 8 180 952
June 1 Balance b/d (1)OF 50 June 1 Balance b/d (1)OF 472
[8]
© UCLES 2009


(b) Abdul Anwar

Sameen Atif account
2009 $ 2009 $
May 1 Balance b/d 150 (1) May 13 Bank 150 (1)
24 Bank (dishonoured cheque) 150 (1) Oct 31 Balance c/d 150
300 300
Nov 1 Balance b/d 150 (1) OF
Abdul Anwar
Sameen Atif account

2009 $ $ $
May 1 Balance 150 (1) 150 Dr
13 Bank 150 (1) 0
24 Bank (dishonoured cheque) 150 (1) 150 Dr (1) OF [4]
(c) Obtain reference from new credit customers

Refuse further supplies until outstanding account is paid
(d) Abdul Anwar

2009 $ 2008 $
Oct 31 Profit & loss 40 (1) Nov 1 Balance b/d 680
Balance c/d 640 (1)
680 680
2009
Nov 1 Balance b/d 640 (1)OF
Abdul Anwar

2008 $ $ $
Nov 1 Balance 680 680 Cr
2009
Oct 31 Profit & loss 40 (1) 640 Cr (2)C/F
(1)OF [3]
© UCLES 2009


(e) Debtors in balance sheet are not overstated (1)

Net profit is not overstated (1) [2]
[Total: 19]
2 (a) Jane Nowka

Balance Sheet at 30 June 2009
$ $ $
Fixed assets
Equipment at valuation 650 (1)
Motor vehicle at cost 3000 (1)
Less depreciation to date 450 2550 (1)
3200
Current assets
Stock of consumables (100 + 20) 120 (1)
Debtors (90 + 16) 106 (1)
Less provision for doubtful debts 10 96 (1)
Prepaid expenses 15
231
Current liabilities
Creditors (30 – 12) 18 (1)
Bank (2500 – 2720) 220 (1)
Accrued expenses 13 251
Working capital (20) (1)OF
3180
Financed by
Capital
Opening balance
(100 + 800 + 90 + 15 + 2500 – 30) 3475 (3)
Plus net profit 900 (1)
4375
Less drawings 1195 (1)
3180
900 100 (1)

(b) × = 28.30% (1)OF [2]
3180 OF 1
© UCLES 2009


(c) (i) Bank manager

To assess prospects of bank overdraft being repaid when due
To assess prospects of any interest on overdraft being paid when due
To assess the prospects of any requested loan being repaid when due
To assess the security available to cover any loan/overdraft
Any 1 point (1) mark
(ii) Creditor
To assess the liquidity position
To identify how long the business takes to pay creditors
To identify what credit limit is reasonable
To identify future prospects of the business
Any 1 point (1) mark [2]
(d) Must be capable of being independently verified

Must be free from bias
Must be free from significant errors
Must be prepared with suitable caution being applied to any judgements and estimates
[Total: 20]
3 (a) www.igcseaccounts.com
Ruth Tembe
2009 $ 2009 $
July 1 Balance b/d 15 (1) July 1 Balance b/d 3680 (1)
31 Bank 4650 (1) 31 Purchases 4800 (1)
Inter-ledger transfer 105 (1)
8480 8480
+ (1) Dates
Ruth Tembe

2009 $ $ $
July 1 Balances 15 (1) 3680 (1) 3665 Cr
31 Purchases 4800 (1) 8465 Cr
Bank 4650 (1) 3815 Cr
Discount received 90 (1) 3725 Cr
Purchases returns 30 (1) 3695 Cr
Inter-ledger transfer 105 (1) 3590 Cr (1)OF
+ (1) Dates [9]
© UCLES 2009


3 500 OF 365 (1)

(b) × = 22.59 = 23 days (1)OF [2]
58 000 1
(c) Refusal of further supplies

Loss of cash discount
Good relationship with suppliers may be damaged
Suppliers may insist on cash purchases only
Or other acceptable points
(d) 2008
Sept 30 Bank $1490
Explanation This is the total amount paid by cheque for business rates (1)
Double entry Credit bank account (1)
July 31 Profit & loss $1200

Explanation This is the business rates relating to the year ended
31 July 2009 (1)
Double entry Debit profit & loss account (1) [4]
(e) (i) This is the amount paid in advance for business rates for the following financial year (2)
(ii) Current asset (1) [3]
[Total: 20]
4 (a) (i) Terry, Candy and Paul Wang

Goodwill account
2009 $ 2009 $
Aug 1 Terry capital 18 000 (1) Aug 1 Terry capital 15 000 (1)
Candy capital 12 000 (1) Candy capital 10 000 (1)
Paul capital 5 000 (1)
30 000 30 000
Terry, Candy and Paul Wang
Goodwill account

2009 $ $ $
Aug 1 Terry capital 18 000 (1) 18 000 Dr
Cindy capital 12 000 (1) 30 000 Dr
Terry capital 15 000 (1) 15 000 Dr
Cindy capital 10 000 (1) 5 000 Dr
Paul capital 5 000 (1) 0 [5]
© UCLES 2009


(ii) Capital accounts
Terry Candy Paul Terry Candy Paul

2009 $ $ $ 2009 $ $ $
Aug 1 Goodwill * 15000 10000 5000 Aug 1 Balances b/d 60000 40000
(1)OF (1)OF (1)OF (1) (1)
Balances c/d 63000 42000 15000 Goodwill* 18000 12000
(1)OF (1)OF
Bank 16000
(1)
Motor vehicle 4000
(1)
78000 52000 20000 78000 52000 20000

Aug 2 Balances b/d 63000 42000 15000
(1)OF (1)OF (1)OF
* Allow (2) if a net figure of $3000 (or O/F) is credited to Terry Wang a/c
Allow (2) if a net figure of $2000 (or O/F) is credited to Candy Wang a/c
Terry Wang capital account

$ $ $
Aug 1 Balance 60 000 (1) 60 000 Cr
Goodwill* 18 000 (1)OF 78 000 Cr
Goodwill* 15 000 (1)OF 63 000 Cr (1)OF
* Allow (2) if a net figure of $3000 (or O/F) is credited
Candy Wang capital account

2009 $ $ $
Aug 1 Balance 40 000 (1) 40 000 Cr
Goodwill 12 000 (1)OF 52 000 Cr
Goodwill 10 000 (1)OF 42 000 Cr (1)OF
* Allow (2) if a net figure of $2000 (or OF) is credited
Paul Wang capital account

2009 $ $ $
Aug 1 Bank 16 000 (1) 16 000 Cr
Motor vehicle 4 000 (1) 20 000 Cr
Goodwill 5 000 (1)OF 15 000 Cr (1)OF [12]
(b) The new partner will benefit from the goodwill built up by the existing partners (1) who must
be compensated for this (1). [2]
© UCLES 2009


(c) Terry, Candy and Paul Wang

Balance Sheet extract at 2 August 2009
Terry Candy Paul Total

Wang Wang Wang
$ $ $ $
Capital accounts 63 000 42 000 15 000 120 000 (1)
O/F O/F O/F O/F
Current accounts (5 050) 4 950 - (100) (1)
57 950 46 950 15 000 119 900 (1)
O/F [3]
[Total: 22]
5 (a) Raminder Singh

Departmental Trading and Profit and Loss Account for the year ended 31 October 2009
Department A Department B
$ $ $ $
Sales 150 000 60 000 (1)
Less Cost of sales
Purchases 85 000 48 000 (1)
93 400 51 900
(1)
84 300 47 800
Gross profit 65 700 12 200 (1)OF
Less Business rates 4 000 2 000 (1)
Staff salaries 6 500 6 500 (1)
General expenses 2 250 2 250 (1)
Depreciation – fittings 2 000 800 (1)
14 750 11 550
Net profit 50 950 650 (1)OF
(b) Department B
Percentage of gross profit to sales
12 200 OF 100 (1)
× = 20.33% (1)OF
60 000 1
Rate of stock turnover

47 800 OF (1)
= 11.95 times (1)OF [4]
3 900 + 4 100 ÷ 2
© UCLES 2009


(c) Different type of goods

Different rates of trade discount from suppliers
Not passing on increased costs to customers
Allowing customers higher trade discount for bulk buying
Holding seasonal “sales”
Selling at cut prices
(d) Reduce stock levels

[Total: 19]
© UCLES 2009



0452 ACCOUNTING
examination.
syllabuses.


1 (a) D [1]
(b) B [1]
(c) B [1]
(d) A [1]
(e) C [1]
(f) D [1]
(g) D [1]
(h) C [1]
(i) B [1]
(j) A www.igcseaccounts.com [1]
[Total: 10]
2 (a) [Sales] invoice ) but only 1 mark for “invoice”

[Purchase] invoice )
Credit note
Debit note
Cheque, receipt
Petty cash voucher
NOT: statement, bank statement, cash book, journals, day books

any two, 1 mark each [2]
(b)
Income Expense
Interest charged to customers

(1)
on overdue accounts

[3]
© UCLES 2010


(c)
Debit Credit
(1)
(d) Reliability / reliable [1]
(e) Commission [1]
(f) A shareholder’s liability for a company’s debts is limited to the amount they have paid for
their shares. [2]
Accept: shareholder’s assets are not available to pay company debts/losses
(g) 50 dresses bought, 30 sold, 20 remaining

Cost $13.00, carriage inwards $1.00 each, total $14.00
Net realisable value $13.50
Value in balance sheet 20 (1) × $13.50 (1) = $270 (1) [3]

Correct figures only, not OF total
(h) (i) $150.00 – $80.50 = $69.50 (2)
(ii) $80.50 (2)

(i) Rate of stock turnover = Cost of goods sold / Average stock

= 45 000 (1) / (6000 + 9000) (1) / 2 (1)
= 6 times (1)OF [4]
Or: = Average stock / Cost of goods sold × 365
= ( (6000 + 9000) (1) / 2 (1) ) / 45 000 (1) × 365
= 60.83 days (1)OF [4]
Accept 61 or 60 days
Note: calculation mark may be awarded if “times” or “days” not stated but not if any other
description shown e.g. %
[Total: 21]
3 (a) Items on bank statement not shown in cash book

(accept individual items, bank charges, bank interest, etc.)
Items in cash book not on bank statement
(accept individual items, cheques not yet presented, etc.)
Errors in cash book or made by bank (accept only one type of error)
Dishonoured cheques
any two, 2 marks each [4]
© UCLES 2010


(b) Ottoman – Cash Book (bank columns)
Date Detail Dr Date Detail Cr

$ $
Sept 30 Balance b/d 850.00 (1) Sept 30 Bank charges 60.00 (1)
30 Rent 800.00 (2) 30 Balance c/d 1890.00 (2)
13 [Cash] sales 300.00 (2) (no aliens,
(not to correct 1950.00…. may award if 1950.00…..
error) account
reversed)
(Marks are for detail and amount, not date) Balance mark only for reversed cash book. [8]
(c) Ottoman
Either:
Balance on updated cash book [at 30 September 2010] 1890.00 (2)OF

(accept updated balance, balance b/d if agrees with (b)) (must agree with (b) above)
Add: cheques issued not yet paid (unpresented cheques) 250.00 (2)
Less: cheque paid in not yet credited by bank (480.00) (2)
(accept reasonable description)
(marks are for description, amount and correct + or – )
Balance on bank statement [at 30 September 2010] 1660.00 (1)

(must be correct figure)
[7]
Or:

Less: cheques issued not yet paid (unpresented cheques) (250.00) (2)
Add: cheque paid in [not yet credited by bank] 480.00 (2)


[7]
© UCLES 2010



accept current liabilities if overdrawn on OF
(ii) $1890 (2)OF from (b) above, not (c) if different [4]
[Total: 23]
4 (a) To inform or remind the customer of the amount due

To confirm the settlement terms
To ensure that no errors have been made by customer or supplier
Other relevant comment any one [2]
(b) (i) Sam had taken 2% discount ($8.00) [1]

accept any mention of discount taken, whether entitled or not
(ii) No, not correct amount (1)

Sam did not pay the amount due within the 21 days / time limit allowed to earn any
discount (2) [3]
(c) (i) Amount due $265.00 (1) @ 2% (1) = $5.30 (1) [3]
(ii) Net amount due $265.00 (1) – $5.30 (1) = $259.70 (1) [3]
(d) Sam Sumo account
1 Balance b/d 400.00 (1) 19 [Sales][returns in][Cr note 29] 16.50 (1)
7 [Sales][invoice][301] 56.50 (1) 28 Bank 392.00 (1)
12 [Sales][invoice][330] 217.00 (1) 30 Balance c/d 265.00 (1)
673.50 (OF if no aliens, may award) if 673.50
account reversed)
Sales account
7 Sam Sumo 56.50 (1)
not invoice or total sales
12 Sam Sumo 217.00 (1)

19 Sam Sumo 16.50 (1)
not total sales
returns
© UCLES 2010


Cash book – bank column

28 Sam Sumo 392.00 (1)
(Marks are for detail, correct amount and correct Dr or Cr) [10]
(d) Pay balance within 21 days / by due date / within terms / on time [2]
(not pay more quickly, prompt payment, etc.)
[Total: 24]
5 (a) To spread the cost of the asset over its useful life [2]
(not to calculate profit or loss on sale etc.)
(not causes of depreciation, but accept depletion, wear and tear, obsolescence and usage
over time as reasons for need to depreciate.)
(b) (i) $3200 (1) – $700 (1) = $2500 / 5 (1) = $500 (1)OF
(Note: if answer then goes on to give NBV, do not award calculation mark, so max 3)
(ii) Same amount – $500 (2) [OF only if agrees with (b) (i)]
(if answer then goes on to give NBV, no marks) [6]
(c)
Martina

Depreciation value
$ $ $
Equipment (machine) (1) 3 200 (1) 1 000 (1) 2 200 (1)OF [4]
(no mark if other asset classes included) (accept OF from (b))
If answer laid out as two years separately, award only 1 mark for asset narrative and 1 mark
for correct or OF final NBV
(d) Disposal of machinery account
October $ October $
15 Machinery/equipment 3 200 (1) 15 [Provision for] Depreciation 1 000 (1)OF
(accept cost, not price, (OF from (c))
balance) 15 Bank/cash (not cash book) 400 (1)
(not scrap/disposal)
15 Income statement 1 800 (2)OF
(accept profit/loss acc, loss)
3 200 3 200
[5]
© UCLES 2010


(e) Straight line [method] (1)

over three years (33⅓%) (1),
to fully depreciate over that period (1), or [3]
Reducing balance [method] (1) (not reducing method)

at rate >75% (1)
to fully depreciate over three years (1) [3]
Revaluation [method] (1) only
[Total: 20]
6 (a) Ricardo – Statement of affairs at 1 November 2009

$ $
Non-current (fixed) assets 12 000 (1)
Less: current liabilities 26 000 (1)
84 000
Capital (1) 96 000 (2)OF [6]
(mark for caption and amount, marks for capital amount if no aliens)
(award marks for acceptable layouts)
(b) Ricardo – Statement of affairs at 31 October 2010

$ $
Current assets (95 500 (1) – 1 500 (1)) 94 000
(Provision for doubtful debts may be shown elsewhere)
70 000
Capital (1) 84 000 (1)OF [6]
(c) Ricardo – capital account
2010 $ 2009 $
Oct 31 Drawings 90 000 (1) Nov 1 Balance b/fwd 96 000 (1)OF
31 Balance c/d 84 000 (1)OF (OF mark only if amount
from (a))
2010
Jan 1 Bank[new][capital][cash] 50 000 (1)
(not Ricardo)
Oct 31 Net profit [or OF loss] 28 000 (1)OF
(no aliens for OF mark)
174 000 174 000
+(1) for all correct dates
[6]
Mark is for detail and amount. If account reversed, award P/L OF mark only.
© UCLES 2010


(d)
Current assets (1)
Long term liabilities (1)
Revenue (sales) (1)
Working capital (1)

[4]
[Total: 22]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 (a) D [1]
(b) B [1]
(c) B [1]
(d) A [1]
(e) C [1]
(f) D [1]
(g) D [1]
(h) C [1]
(i) B [1]
(j) A www.igcseaccounts.com [1]
[Total: 10]
2 (a) [Sales] invoice ) but only 1 mark for “invoice”

[Purchase] invoice )
Credit note
Debit note
Cheque, receipt
Petty cash voucher
NOT: statement, bank statement, cash book, journals, day books

any two, 1 mark each [2]
(b)
Income Expense
Interest charged to customers

(1)
on overdue accounts

[3]
© UCLES 2010


(c)
Debit Credit
(1)
(d) Reliability / reliable [1]
(e) Commission [1]
(f) A shareholder’s liability for a company’s debts is limited to the amount they have paid for
their shares. [2]
Accept: shareholder’s assets are not available to pay company debts/losses
(g) 50 dresses bought, 30 sold, 20 remaining

Cost $13.00, carriage inwards $1.00 each, total $14.00
Net realisable value $13.50
Value in balance sheet 20 (1) × $13.50 (1) = $270 (1) [3]

Correct figures only, not OF total
(h) (i) $150.00 – $80.50 = $69.50 (2)
(ii) $80.50 (2)

(i) Rate of stock turnover = Cost of goods sold / Average stock

= 45 000 (1) / (6000 + 9000) (1) / 2 (1)
= 6 times (1)OF [4]
Or: = Average stock / Cost of goods sold × 365
= ( (6000 + 9000) (1) / 2 (1) ) / 45 000 (1) × 365
= 60.83 days (1)OF [4]
Accept 61 or 60 days
Note: calculation mark may be awarded if “times” or “days” not stated but not if any other
description shown e.g. %
[Total: 21]
3 (a) Items on bank statement not shown in cash book

(accept individual items, bank charges, bank interest, etc.)
Items in cash book not on bank statement
(accept individual items, cheques not yet presented, etc.)
Errors in cash book or made by bank (accept only one type of error)
Dishonoured cheques
any two, 2 marks each [4]
© UCLES 2010


(b) Ottoman – Cash Book (bank columns)
Date Detail Dr Date Detail Cr

$ $
Sept 30 Balance b/d 850.00 (1) Sept 30 Bank charges 60.00 (1)
30 Rent 800.00 (2) 30 Balance c/d 1890.00 (2)
13 [Cash] sales 300.00 (2) (no aliens,
(not to correct 1950.00…. may award if 1950.00…..
error) account
reversed)
(Marks are for detail and amount, not date) Balance mark only for reversed cash book. [8]
(c) Ottoman
Either:

Add: cheques issued not yet paid (unpresented cheques) 250.00 (2)
Less: cheque paid in not yet credited by bank (480.00) (2)

[7]
Or:

Less: cheques issued not yet paid (unpresented cheques) (250.00) (2)
Add: cheque paid in [not yet credited by bank] 480.00 (2)


[7]
© UCLES 2010



accept current liabilities if overdrawn on OF
(ii) $1890 (2)OF from (b) above, not (c) if different [4]
[Total: 23]
4 (a) To inform or remind the customer of the amount due

To confirm the settlement terms
To ensure that no errors have been made by customer or supplier
Other relevant comment any one [2]
(b) (i) Sam had taken 2% discount ($8.00) [1]

accept any mention of discount taken, whether entitled or not
(ii) No, not correct amount (1)

Sam did not pay the amount due within the 21 days / time limit allowed to earn any
discount (2) [3]
(c) (i) Amount due $265.00 (1) @ 2% (1) = $5.30 (1) [3]
(ii) Net amount due $265.00 (1) – $5.30 (1) = $259.70 (1) [3]
(d) Sam Sumo account
1 Balance b/d 400.00 (1) 19 [Sales][returns in][Cr note 29] 16.50 (1)
7 [Sales][invoice][301] 56.50 (1) 28 Bank 392.00 (1)
12 [Sales][invoice][330] 217.00 (1) 30 Balance c/d 265.00 (1)
673.50 (OF if no aliens, may award) if 673.50
account reversed)
Sales account
7 Sam Sumo 56.50 (1)
12 Sam Sumo 217.00 (1)

19 Sam Sumo 16.50 (1)
not total sales
returns
© UCLES 2010


Cash book – bank column

28 Sam Sumo 392.00 (1)
(Marks are for detail, correct amount and correct Dr or Cr) [10]
(d) Pay balance within 21 days / by due date / within terms / on time [2]
(not pay more quickly, prompt payment, etc.)
[Total: 24]
5 (a) To spread the cost of the asset over its useful life [2]
(not to calculate profit or loss on sale etc.)
(not causes of depreciation, but accept depletion, wear and tear, obsolescence and usage
over time as reasons for need to depreciate.)
(b) (i) $3200 (1) – $700 (1) = $2500 / 5 (1) = $500 (1)OF
(Note: if answer then goes on to give NBV, do not award calculation mark, so max 3)
(ii) Same amount – $500 (2) [OF only if agrees with (b) (i)]
(if answer then goes on to give NBV, no marks) [6]
(c)
Martina

Depreciation value
$ $ $
Equipment (machine) (1) 3 200 (1) 1 000 (1) 2 200 (1)OF [4]
(no mark if other asset classes included) (accept OF from (b))
If answer laid out as two years separately, award only 1 mark for asset narrative and 1 mark
for correct or OF final NBV
(d) Disposal of machinery account
October $ October $
15 Machinery/equipment 3 200 (1) 15 [Provision for] Depreciation 1 000 (1)OF
(accept cost, not price, (OF from (c))
balance) 15 Bank/cash (not cash book) 400 (1)
(not scrap/disposal)
15 Income statement 1 800 (2)OF
(accept profit/loss acc, loss)
3 200 3 200
[5]
© UCLES 2010


(e) Straight line [method] (1)

over three years (33⅓%) (1),
to fully depreciate over that period (1), or [3]
Reducing balance [method] (1) (not reducing method)

at rate >75% (1)
to fully depreciate over three years (1) [3]
Revaluation [method] (1) only
[Total: 20]
6 (a) Ricardo – Statement of affairs at 1 November 2009

$ $
84 000
Capital (1) 96 000 (2)OF [6]
(b) Ricardo – Statement of affairs at 31 October 2010

$ $
Current assets (95 500 (1) – 1 500 (1)) 94 000
(Provision for doubtful debts may be shown elsewhere)
70 000
Capital (1) 84 000 (1)OF [6]
(c) Ricardo – capital account
2010 $ 2009 $
Oct 31 Drawings 90 000 (1) Nov 1 Balance b/fwd 96 000 (1)OF
31 Balance c/d 84 000 (1)OF (OF mark only if amount
from (a))
2010
Jan 1 Bank[new][capital][cash] 50 000 (1)
(not Ricardo)
Oct 31 Net profit [or OF loss] 28 000 (1)OF
(no aliens for OF mark)
174 000 174 000
+(1) for all correct dates
[6]
Mark is for detail and amount. If account reversed, award P/L OF mark only.
© UCLES 2010


(d)
Current assets (1)
Long term liabilities (1)
Revenue (sales) (1)
Working capital (1)

[4]
[Total: 22]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 (a) A [1]
(b) C [1]
(c) B [1]
(d) B [1]
(e) A [1]
(f) C [1]
(g) D [1]
(h) D [1]
(i) C [1]
(j) D [1]
2 (a) (Sales) invoice [1]
(b)
Purchase of shop (1)
Repairs to shop windows (1)
Purchase of new lock for shop door (1)
[3]
(c) Balance sheet [1]
(d) The business is expected to continue (1) for the foreseeable future (1) [2]
(f) 5000 shares (1) × $0.25 (1) = $1250 [2]
© UCLES 2010


(g) Premium for year = $600

Period 1 July – 30 September is 3 months
Expense = $600 (1) / 4 (1) = $150 (1)OF [3]
(h) Current assets – current liabilities

$15 000 + 14 500 (1) + 16 000 (1) – 18 200 (1) = $27 300 (1) [4]
(i) Collection period = trade receivables / credit sales × 365 days

= $13 800 (1) / $126 000 (1)
= 39.97 = 40 OF (1) days (1)
OF if Cash + Credit sales [4]
[Total: 21]
3 (a) Summa account
October October
8 Purchase returns 100 (1) 5 Purchases 320 (1)
30 Bank (not Cash) 220 (1) 29 Purchases 270 (1)
31 Balance c/d OF 270 (1)
590 350
November
1 Balance b/d 270 OF (1)
+ (1) for all correct dates [7]
Carter account
October October
31 Bank (not Cash) 485 (1) 17 Purchases 500 (1)
31 Discount 15 (2)
500 500
+ (1) for all correct dates [5]
(b) (i) 200 units (1) × $2.80 (1) = 560.00 [2]
(ii) 100 units (1) × $3.20 (1) = 320.00

130 units (1) × $3.10 (1) = 403.00
120 units (1) × $2.90 (1) = 348.00
1071.00 [6]
(c) 130 units (1) × $3.00 (NRV) (2) = 390.00

120 units (1) × $2.90 (cost) (1) = 348.00
250 738.00
Allow 2 if 250 × $3.00 [5]
[Total: 25]
© UCLES 2010


4 (a) A trial balance is a list of balances (1) on the accounts in the books / ledgers / records (1) at
a particular date (1) used to check the accuracy of accounts. Allow “check accuracy” if
linked with “list of balances”. [Max 3]
(b) Gorman Limited

Income statement (trading and profit and loss account)
$ $
Inventory (stock) at 1 October 2009 13 900 (1)

84 800
Less: inventory (stock) at 30 Sept 2010 14 300 (1)
Cost of goods sold 70 500
Gross profit 21 500 OF (1)
Rent 2 600 } (1)

Electricity 850 }
Property tax (1500-300) 1 200 } (1)
Wages and salaries 5 750 } (1)
Repairs and maintenance 1 100 } (1)
Administrative expenses 4 000 }
Depreciation 1 700 } (1)
Bank charges www.igcseaccounts.com
(1) 120 }
17 320
Profit for the year (net profit) 4 180 OF (1) [13]
(c) (i) Prudence, consistency, lower of cost and net realizable value (any one) (2)
(ii) Accruals, matching (any one) (2) [4]
(d) (Rate of inventory (stock) turnover = cost of goods sold / average stock
= 70 500 (1) / (13 900 + 14 300) (1) / 2 (1)
= 5 (1) times (1) [5]
(e) Collect receivables, reduce inventory, delay payment of payables, sell Fixed Assets
(any one). [2]
[Total: 27]
© UCLES 2010


5 (a) (i) Cash discount (1), 3% (1) × $300 (1) = $9.00 [3]
(or 3/97 × 291)
(ii) Trade discount (1), 5% (1) × $2000 (1) = $100.00 [3]

(or 5/95 × 1900)
(b) Sohara Cash Book

September 2010
$ $ $ $ $ $
Balance
1 700 3000
b/down (1)
6 Juno (1) 9 OF (1) *291 (1) 8 Apollo (1) 1900 (1)
9 Minos (1) 85 (1) 10 Wages (1) 350 (1)
10 Sales (1) 1850 (1)
* OF if $300 – OF Discount [12]
(c) (i) $300 (1) – $270 (1) = $30 [2]
(ii) Lost or missing voucher

Lost or stolen cash
Error brought forward or in counting cash
Amount not recorded (any one) [2]
(iii) $300 (1) – $20 (1) = $280 [2]
[Total: 24]
© UCLES 2010


6 (a) Norman – Journal
$ $
Office Furniture 1 500 (1)

Bank 2 300 (1)
Cash 200 (1)
Capital – Norman (1) 16 000 (2)
3 000 (1)
Bank
Loan – Peter 3 000 (1)
[8]
(b) (i) Straight line (fixed instalment) method (1)
(ii) Reducing (diminishing) balance method (1)
Other methods e.g. revaluation method may be accepted.
(c) Straight line method would be preferred (1) as furniture has an expected useful life and no
scrap value (1) and cost would be fully written off consistently / evenly over the useful life (1). [3]
[Total: 13]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 Robbie McDonald
Income Statement (Trading and Profit and Loss Account) for the year ended
30 September 2010
$ $ $
Less Cost of sales
Opening inventory (stock) 19 500 (1)
193 600
Less Closing inventory (stock) 20 800 (2)C/F
(1)O/F
172 800 (1)O/F

(372 – 352) 20 (2)
43 380
Less Wages 28 200 (1)
Property tax and insurance
(8900 (1) – 600 (1)) 8 300
Bank interest 1 550 (1)
Depreciation Motor vehicles
(20% × 4800) 960 (1)
Equipment www.igcseaccounts.com
(3000 – 2340) 660 (1) 44 080
Loss for the year (Net loss) 700 (1)O/F
[Total: 20]
2 (a) Assist in the location of errors

Provide instant totals of trade receivables (debtors) and trade payables (creditors)
Proves the arithmetical accuracy of the sales/purchases ledgers
Enable a balance sheet to be prepared quickly
Provide a summary of the transactions relating to trade receivables (debtors) and trade
payables (creditors)
© UCLES 2010


(b) Suzie Chow

$ $
2010 2010
Sept 1 Balance 21 976 (1) Sept 1 Balance 54 (1)
30 Sales 22 800 (1) 30 Bank 21 860 (1)
Bank (Dis. Chq) 610 (1) Discount allowed 488 (1)
Bad debts 100 (1)
Contra entry 78 (1)
______ Balance c/d 22 415 (1)
45 386 45 386
2010
Oct 1 Balance b/d 22 415 (1)O/F [11]

2010 $ $ $
Sept 1 Balances 21 976 (1) 54 (1) 21 922 Dr
30 Sales 22 800 (1) 44 722 Dr
Bank (Dis. Chq.) 610 (1) 45 332 Dr
Bank 21 860 (1) 23 472 Dr
Discount allowed 488 (1) 22 984 Dr
Sales returns 391 (1) 22 593 Dr
Bad debts 100 (1) 22 493 Dr
Contra entry 78 (1) 22 415 Dr
(2) C/F
(1) O/F [11]
(c) A contra entry is when an account in the sales ledger is set against an account in the
purchases ledger. (1) Such an entry is made when a supplier is also a customer of the
business and has an account in both ledgers. (1) [2]
(d) The sales ledger control account acts as a check on the sales ledger. If there is an error in
the sales ledger it will not be revealed by a control account prepared from the individual
accounts in that ledger. [2]
22 415 O/F} 365

(e) × = 29.75 days = 30 days (1)O/F [2]
275 000 } (1) 1
(f) Offer cash discount for early payment


[Total: 22]
© UCLES 2010


3 (a) (i) Nominal (general) ledger (1)
(ii) Purchases ledger (1)
(b) Karnail Singh

Rent account
$ $
2010 2009
July 31 Total paid 1430 (1) Aug 1 Balance b/d 260 (1)
Balance c/d 420 (1) 2010
July 31 Income Statement (1)
(Profit & Loss) 1590 (1)
1850 1850
2010
Aug 1 Balance b/d 420 (1)O/F
[6]
Karnail Singh
Rent account
2009 $ $ $
July 31 Total paid 1430 (1) 1170 Dr
July 31 Income statement (1)
(Profit & Loss) 1590 (1) 420 Cr
(2)C/F
(1)O/F [6]
(c) The accruals (matching) principle states that revenue of the accounting period must be
The rent relating to the financial year ended 31 July 2010 is transferred to the income
statement (profit and loss account). (1) The rent paid during the year relating to the previous
year is not included but the rent owing at the end of the year is included. (1) [3]
© UCLES 2010


(d) Bank manager

Lenders
Creditor for goods

Manager (if any)

Or other suitable interested persons e.g. employees, government bodies, competitors,

take-over bidders etc
TWO business people to be identified (1) each
ONE acceptable reason required in each case (1) each [4]
(e) (i) Non-financial aspects

This means that there are many important factors which influence the performance of a
business which will not appear in the financial statements (final accounts) e.g. quality of
management, goodwill, skill of workforce etc. (1)
(ii) Historical cost

Transactions are always recorded at the actual cost. (1)
This means that it can be difficult to compare transactions which have taken place at
different times because of the effect of inflation. (1) [4]
[Total: 20]
4 (a) Authorised share capital is the maximum amount of share capital a company is allowed to
issue. (2)
Paid-up share capital is the total amount of capital a company has received from its
© UCLES 2010


(b) (i) 4% × 25 000 shares of $1 each (1) = $1000 (1)
(ii) 3% × $15 000 (1) = $450 (1)
(iii) 5% × 60 000 shares of $0.50 (1) = $1500 (1) [6]
(c)
Income Statement Appropriation Balance

Profit & Loss Account Account Sheet
Debenture interest payable No entry (2)
Ordinary share dividend No entry (2)

payable
[4]
(d) $
Ordinary share capital 30 000
Preference share capital 25 000
Debentures 15 000
70 000 (1) [1]
(e)
11 840 × www.igcseaccounts.com
100 (1)
= 16.91% (1)O/F [2]
70 000 (O/F) 1
(f) If the return on capital employed increases it indicates that the company is employing its
resources more efficiently. (2) [2]
[Total: 19]
5 (a) To compensate for the fact that she does more work than Samuel.
Or
To recognise the work that she does in the partnership. [2]
© UCLES 2010


(b) Samuel and Martha Mavuso

$ $ $
Non-current (fixed) assets at cost 105 950
Less Provision for depreciation 9 350
96 600 (1)
Current assets 23 562
Less Current liabilities 18 400
Working capital (net current assets) 5 162 (1)
101 762
Financed by
Samuel Martha Total
Mavuso Mavuso
Capital accounts 60 000 40 000 (1) 100 000
Current accounts
Opening balance (1 091) 223 (1)
Interest on capital 2 400 1 600 (1)
Share of profit 4 122 2 748 (1)
5 431 4 571
Less Drawings 3 100 4 900 (1)
Interest on drawings 93 147 (1)
3 193 5 047
2 238 (476) (1)O/Fs
1 762
101 762 (1)O/F

Calculation of current account balances outside balance sheet acceptable if presented
in the form of ledger accounts [10]
(c) 23 562 : 18 400 (1) = 1.28 : 1 (1) [2]
(d) Injection of capital

Long term loan
Sale of surplus non-current (fixed) assets
(e) Does not include inventory (stock) in the calculation. (1)

Either
Inventory (stock) is not regarded as a liquid asset – a buyer has to be found and then the
money collected. Some goods may prove to be unsaleable. (1)
Or
[Total: 18]
© UCLES 2010


6 (a) Gross profit = 247 600 – 163 100 = 84 500 (1)
84 500 100
× = 34.13% (1) [2]
247 000 1
(b) Increase in selling prices

Obtaining cheaper supplies
Reduction the rate of trade discount allowed to customers
Increase in the rate of trade discount received from suppliers
Passing on increased costs to customers
Different product mix
(c) Waseem Shah

Suspense account
$ $
2010 2010
July 31 Bank 1520 (1) July 31 Difference on
trial balance 1240 (1)
Rent 90 (1)
Balance c/d 190 (1)
1520 1520
Aug 1 Balance b/d 190 (1)O/F [5]
Waseem Shah
Suspense account
2010 $ $ $
July 31 Difference on trial balance 1240 (1) 1240 Cr
Rent 90 (1) 1330 Cr
Bank 1520 (1) 190 Dr
(2)C/F
(1)O/F [5]
(d) Either
Error Number 2 (1)
Explanation This is an error of commission (1) and does not affect the balancing of the trial
balance (1)
Or
Error Number 3 (1)
Explanation This is an error of principle (1) and does not affect the balancing of the trial
balance (1) [3]
© UCLES 2010


(e) Waseem Shah

$
Increase Decrease
in profit in profit
$ $
Error 1 90
2 No effect (2)
3 1 150 (2)
4 No effect (2)
1 240 1 240
Corrected profit for the year 31 760 (1)O/F [7]
[Total: 21]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 Robbie McDonald
Income Statement (Trading and Profit and Loss Account) for the year ended
30 September 2010
$ $ $
Less Cost of sales
Opening inventory (stock) 19 500 (1)
193 600
Less Closing inventory (stock) 20 800 (2)C/F
(1)O/F
172 800 (1)O/F

(372 – 352) 20 (2)
43 380
Less Wages 28 200 (1)
Property tax and insurance
(8900 (1) – 600 (1)) 8 300
Bank interest 1 550 (1)
Depreciation Motor vehicles
(20% × 4800) 960 (1)
Equipment www.igcseaccounts.com
(3000 – 2340) 660 (1) 44 080
Loss for the year (Net loss) 700 (1)O/F
[Total: 20]

Provide instant totals of trade receivables (debtors) and trade payables (creditors)
Provide a summary of the transactions relating to trade receivables (debtors) and trade
payables (creditors)
© UCLES 2010


(b) Suzie Chow

$ $
2010 2010
Sept 1 Balance 21 976 (1) Sept 1 Balance 54 (1)
30 Sales 22 800 (1) 30 Bank 21 860 (1)
Bank (Dis. Chq) 610 (1) Discount allowed 488 (1)
Bad debts 100 (1)
Contra entry 78 (1)
______ Balance c/d 22 415 (1)
45 386 45 386
2010
Oct 1 Balance b/d 22 415 (1)O/F [11]

2010 $ $ $
Sept 1 Balances 21 976 (1) 54 (1) 21 922 Dr
30 Sales 22 800 (1) 44 722 Dr
Bank (Dis. Chq.) 610 (1) 45 332 Dr
Bank 21 860 (1) 23 472 Dr
Discount allowed 488 (1) 22 984 Dr
Sales returns 391 (1) 22 593 Dr
Bad debts 100 (1) 22 493 Dr
(2) C/F
(1) O/F [11]
(c) A contra entry is when an account in the sales ledger is set against an account in the
purchases ledger. (1) Such an entry is made when a supplier is also a customer of the
business and has an account in both ledgers. (1) [2]
(d) The sales ledger control account acts as a check on the sales ledger. If there is an error in
the sales ledger it will not be revealed by a control account prepared from the individual
accounts in that ledger. [2]
22 415 O/F} 365

(e) × = 29.75 days = 30 days (1)O/F [2]
275 000 } (1) 1
(f) Offer cash discount for early payment


[Total: 22]
© UCLES 2010


3 (a) (i) Nominal (general) ledger (1)
(ii) Purchases ledger (1)
(b) Karnail Singh

Rent account
$ $
2010 2009
July 31 Total paid 1430 (1) Aug 1 Balance b/d 260 (1)
Balance c/d 420 (1) 2010
July 31 Income Statement (1)
(Profit & Loss) 1590 (1)
1850 1850
2010
Aug 1 Balance b/d 420 (1)O/F
[6]
Karnail Singh
Rent account
2009 $ $ $
July 31 Total paid 1430 (1) 1170 Dr
July 31 Income statement (1)
(Profit & Loss) 1590 (1) 420 Cr
(2)C/F
(1)O/F [6]
(c) The accruals (matching) principle states that revenue of the accounting period must be
The rent relating to the financial year ended 31 July 2010 is transferred to the income
statement (profit and loss account). (1) The rent paid during the year relating to the previous
year is not included but the rent owing at the end of the year is included. (1) [3]
© UCLES 2010


(d) Bank manager

Lenders
Creditor for goods

Manager (if any)

Or other suitable interested persons e.g. employees, government bodies, competitors,

take-over bidders etc
TWO business people to be identified (1) each
ONE acceptable reason required in each case (1) each [4]
(e) (i) Non-financial aspects

This means that there are many important factors which influence the performance of a
business which will not appear in the financial statements (final accounts) e.g. quality of
management, goodwill, skill of workforce etc. (1)
(ii) Historical cost

Transactions are always recorded at the actual cost. (1)
This means that it can be difficult to compare transactions which have taken place at
different times because of the effect of inflation. (1) [4]
[Total: 20]
4 (a) Authorised share capital is the maximum amount of share capital a company is allowed to
issue. (2)
Paid-up share capital is the total amount of capital a company has received from its
© UCLES 2010


(b) (i) 4% × 25 000 shares of $1 each (1) = $1000 (1)
(ii) 3% × $15 000 (1) = $450 (1)
(iii) 5% × 60 000 shares of $0.50 (1) = $1500 (1) [6]
(c)
Income Statement Appropriation Balance

Profit & Loss Account Account Sheet
Debenture interest payable No entry (2)
Ordinary share dividend No entry (2)

payable
[4]
(d) $
Ordinary share capital 30 000
Preference share capital 25 000
Debentures 15 000
70 000 (1) [1]
(e)
11 840 × www.igcseaccounts.com
100 (1)
= 16.91% (1)O/F [2]
70 000 (O/F) 1
(f) If the return on capital employed increases it indicates that the company is employing its
resources more efficiently. (2) [2]
[Total: 19]
5 (a) To compensate for the fact that she does more work than Samuel.
Or
To recognise the work that she does in the partnership. [2]
© UCLES 2010


(b) Samuel and Martha Mavuso

$ $ $
96 600 (1)
Current assets 23 562
Less Current liabilities 18 400
Working capital (net current assets) 5 162 (1)
101 762
Financed by
Samuel Martha Total
Mavuso Mavuso
Capital accounts 60 000 40 000 (1) 100 000
Current accounts
Opening balance (1 091) 223 (1)
Interest on capital 2 400 1 600 (1)
Share of profit 4 122 2 748 (1)
5 431 4 571
Less Drawings 3 100 4 900 (1)
Interest on drawings 93 147 (1)
3 193 5 047
2 238 (476) (1)O/Fs
1 762
101 762 (1)O/F

Calculation of current account balances outside balance sheet acceptable if presented
in the form of ledger accounts [10]
(c) 23 562 : 18 400 (1) = 1.28 : 1 (1) [2]
(d) Injection of capital

Long term loan
Sale of surplus non-current (fixed) assets
(e) Does not include inventory (stock) in the calculation. (1)

Either
Inventory (stock) is not regarded as a liquid asset – a buyer has to be found and then the
money collected. Some goods may prove to be unsaleable. (1)
Or
[Total: 18]
© UCLES 2010


6 (a) Gross profit = 247 600 – 163 100 = 84 500 (1)
84 500 100
× = 34.13% (1) [2]
247 000 1
(b) Increase in selling prices

Obtaining cheaper supplies
Reduction the rate of trade discount allowed to customers
Increase in the rate of trade discount received from suppliers
Different product mix
(c) Waseem Shah

Suspense account
$ $
2010 2010
July 31 Bank 1520 (1) July 31 Difference on
trial balance 1240 (1)
Rent 90 (1)
Balance c/d 190 (1)
1520 1520
Aug 1 Balance b/d 190 (1)O/F [5]
Waseem Shah
Suspense account
2010 $ $ $
July 31 Difference on trial balance 1240 (1) 1240 Cr
Rent 90 (1) 1330 Cr
Bank 1520 (1) 190 Dr
(2)C/F
(1)O/F [5]
(d) Either
Error Number 2 (1)
Explanation This is an error of commission (1) and does not affect the balancing of the trial
balance (1)
Or
Error Number 3 (1)
Explanation This is an error of principle (1) and does not affect the balancing of the trial
balance (1) [3]
© UCLES 2010


(e) Waseem Shah

$
Increase Decrease
in profit in profit
$ $
Error 1 90
2 No effect (2)
3 1 150 (2)
4 No effect (2)
1 240 1 240
Corrected profit for the year 31 760 (1)O/F [7]
[Total: 21]
© UCLES 2010



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Silston Ltd

$ $ $
Less Depreciation to date 26 100
147 900 (1)
Current Assets
Inventory (stock) 13 350 } (1)
Cash 210 }
Trade receivables (debtors) 11 200
24 536
Current Liabilities
Trade payables (creditors) 6 500 } (1)
Other payables – proposed
dividends (1600 (1) + 3600 (1)) 5 200 14 436
Net current assets (working capital) 10 100 (1)

158 000
3% Debentures of $100 each 20000 (1)
138 000

General reserve (4000 (1) + 3000 (1)) 7 000
Profit and loss account (retained profits) 11 000 (1)
138 000
(b) Preference shares Ordinary shares

Receive a fixed rate of dividend Dividends may vary
Do not usually carry voting rights Usually carry voting rights
Dividend is paid before ordinary Dividend is paid after preference
share dividend share dividend
Capital is returned before ordinary Are the last to be repaid in a
share capital in a winding up winding up
Any 2 differences (2) each [4]
(c) Debentures are long-term loans

Debentures holders are not members of the company
Debentures receive a fixed rate of interest
Debenture holders are repaid before shareholders in a winding-up
[Total: 21]
© UCLES 2010


2 (a) Bank 2 January 2010

Explanation Lynda Chomba has invested additional capital and the money has been
paid into the business bank account (2)
Double entry debit bank column in cash book (1)
Purchases 30 September 2010

Explanation Lynda Chomba has taken goods from the business for her own use (2)
Double entry credit purchases account (1)
Loss for the year

(net loss) The expenses of the business exceeded the gross profit so the business
has made a loss (2)
Double entry credit income statement (profit and loss account) (1) [9]
(b) The balance represents the amount of Lynda Chomba’s capital at the end of the financial
year/at the start of the new financial year. (1)
This is the amount the business owes Lynda Chomba at that date. (1) [2]
(c) (i) The business entity principle makes a distinction between the financial transactions of a
business and those of its owner(s). (2)
Or
The business is treated as being completely separate from the owner(s) of the business.
(2) [2]
(ii) Either
The owner’s capital is shown as a credit balance representing an amount owed by the
business
Or
The goods withdrawn for personal use are debited to the account reducing the amount
the business owes the owner
Or
The loss for the year is debited to the account reducing the amount the business owes
the owner
(d) Duality [1]
(e) Money measurement [1]
(f) Work can be shared amongst several people

© UCLES 2010


(g) (i) Purchases returns journal (1)
(ii) Journal (1)
(iii) Cash book (1) [3]
9 260 365
(h) (1) × (1) = 69.69 days = 70 days (1)
48 500 1
[3]
(i) The business may not have enough liquid funds with which to pay the creditors
until money is received from the debtors.
Or
If the debtors pay within the set time the business may be able to pay its creditors within the
set time without any significant impact on the bank balance.
Or
If the debtors fail to pay within the set time it may be necessary to obtain short-term funds in
order to pay the creditors.
Any 1 point (2) [2]
[Total: 26]
3 (a) www.igcseaccounts.com
Mokolodi Athletics Club
Shop Income Statement (Trading Account) for the year ended 31 July 2010
$ $
Revenue (Sales)
7500 (1)
Less
Cost of sales
Purchases (2950 (1) + 550 (1)) 3 500
Less Closing inventory (stock) 650 (1)
2 850
Shop assistant’s wages (1470 (1) + 90 (1)) 1 560
Shop rent (20% x 5200) 1 040 (1) 5 450
Profit for the year 2 050 (1)O/F
© UCLES 2010


(b) Mokolodi Athletics Club

$ $
Income
Subscriptions (7950 (1) + 750 (1) – 200 (1)) 8 500
Profit for the year on shop 2 050 (1)O/F
Open day – ticket sales 840 (1)
Less expenses 690 (1) 150
10 700
Expenditure
Rent (80% x 5200) 4 160 (1)
Insurance 1 700 (1)
General expenses (1990 (1) – 140 (1)) 1 850
Repairs and maintenance 1 070 (1)
Groundsman’s wages 2 500 (1)
Depreciation of sports equipment (6100 – 5400) 700 (1) 11 980
(c) R & P A/c shows total money paid and received

I & E A/c adjusts figures for accruals and prepayments
I & E A/c includes non-monetary items such as depreciation
I & E A/c includes only revenue items
Any 1 acceptable explanation (2) [2]
[Total: 24]
4 (a) Depreciation is an estimate of the loss in value of a non-current (fixed) asset over its
expected working life.
Or other acceptable definition [1]
(b) Physical deterioration

Economic reasons
Passage of time
Depletion
Any 2 causes (1) each [2]
© UCLES 2010


(c) (i) Prudence

Or
Accruals (Matching) [1]
(ii) Prudence – To ensure that the profit is not overstated (1) and that the value of the non-
current (fixed) assets is not overstated. (1)
Or
Accruals (Matching) – To ensure that the loss in value of non-current (fixed) assets is
spread over the period in which they are earning revenue. (2) [2]
(d) Ameena Saber

Equipment account
$ $
2008 2009
Sept 1 Bashir Supplies 12 200 (1) Aug 31 Balance c/d 12 200
12 200 12 200
2009 2010
Sept 1 Balance b/d 12 200 Aug 31 Balance c/d 21 500
2010
May 1 Bank 9 300 (1)
21 500 21 500
2010
Sept 1 Balance b/d 21 500 (1) [3]
$ $
2009 2009
Aug 31 Balance c/d 1 830 Aug 31 Income statement
_____ (Profit & loss) 1 830 (1)
1 830 1 830
2010 2009
Aug 31 Balance c/d 4 125 Sept 1 Balance b/d 1 830 (1)O/F
2010
Aug 31 Income statement
(Profit & loss)
1 830 (1)
465 (1) 2 295
4 125 4 125
2010
Sept 1 Balance b/d 4 125 (1)O/F [5]
© UCLES 2010


Ameena Saber
Equipment account

2008 $ $ $
Sept 1 Bashir Supplies 12 200 (1) 12 200 Dr
2010
May 1 Bank 9 300 (1) 21 500 Dr (1) [3]

2009 $ $ $
Aug 31 Income statement (Profit
and loss) 1 830 (1) 1 830 Cr
2010 (1)O/F
Aug 31 Income statement (Profit
and loss) 1 830 (1)
465 (1) 2 295 4 125 Cr
(1)O/F
[5]
(e) Ameena Saber

Journal
Debit Credit
$ $
Disposal of equipment 3 050 (1)
Equipment 3 050 (1)
Transfer of cost of equipment sold to
disposal account (1)
Provision for depreciation of equipment 915 (1)

Disposal of equipment 915 (1)
Transfer of depreciation on equipment
sold to disposal account (1)
Bank 900 (1)

Disposal of equipment 900 (1)
Cheque received on sale of equipment (1)
[9]
[Total: 23]
© UCLES 2010


5 (a) (i) Sales = cost of sales + gross profit =

340 000 + 85 000 = 425 000 (1)
85 000 100
Gross profit as % of sales = × (1) = 20.00% (1)O/F
425 000 1
[3]
(ii) Profit for the year (net profit) = gross profit – expenses =
85 000 – 49 000 = 36 000 (1)
Profit for the year (net profit) as % of sales =
36 000 100
× (1) = 8.47% (1) O/F
425 000 O/F 1
[3]
(iii) Return on capital employed (ROCE)

36 000 (O/F) x 100 (1) = 10.91% (1)O/F
330 000 1
[2]
(b) (i) Percentage of gross profit to sales

This measures the success in selling goods
The ratio shows the gross profit earned per $100 of sales
The ratio can be compared with previous years
The ratio can be compared against other businesses
Mark Ukata has spent 80% (O/F) of the sales income on the cost of goods
Or other relevant explanation
(ii) Percentage of profit for the year (net profit) to sales

This measures the overall success of the business
The ratio shows the net profit earned per $100 of sales
The ratio indicates how well the business controls its expenses
Mark Ukata has spent 11.53% (O/F) of the sales income on expenses
(iii) Return on capital employed (ROCE)

The ratio shows the profit earned per $100 employed in the business
The ratio measures the profitability of the investment in the business
The ratio shows how efficiently the capital is being employed
© UCLES 2010


(c) Cost is the actual purchase price plus any additional costs incurred in bringing the inventory
(stock) to its present condition and position. (1)
Net realisable value is the estimated receipts from the sale of the inventory (stock), less any
costs of completing or selling the goods. (1) [2]
(d) Inventory (stock) should always be valued at the lowest of cost and net realisable value. (1)
This is an application of the principle of prudence. (1)
Over-valuing inventory (stock) causes both the profit for the year and the current assets to
be incorrect. (1)
(e)
Cost of sales (1)
Gross profit (1)
Profit for the year

(1)
(Net profit)
(f) Reduce (inventory) stock levels

Only replace inventory (stock) when needed
[Total: 26]
© UCLES 2010



0452 ACCOUNTING
examination.
Cambridge is publishing the mark schemes for the October/November 2011 question papers for most
IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level
syllabuses.


1 Key
(a) C [1]
(b) D [1]
(c) B [1]
(d) D [1]
(e) B [1]
(f) A [1]
(g) B [1]
(h) A [1]
(i) B [1]
(j) C [1]
[Total 10]
2 (a) Inventory (stock), trade receivables (debtors), other receivable (prepayment), bank, cash.
(b) Assets = capital (equity) + liabilities

(or any variation of the correct equation) [1]
(c)
Capital Revenue
Repairs to workshop windows (1)
Installation of alarm system (1)
Storage shelves for tools (1)

[3]


(d) (i) Sales (debtors, receivables) [ledger] [1]
(ii) Nominal (general) [ledger] [1]
(e) (i) Error of addition in trial balance or ledger account,

single entry,
entering item on wrong side
entering transaction twice on same side of ledger,
entering different credit and debit amounts.
(Any one description, or an actual example of one of these) [1]
(ii) Original entry [1]
(f) Percentage of net profit to revenue = (125 000 – 85 000 – 15 000) / 125 000
= 25 000 (1) / 125 000 (1)
= 20.00 % (1)OF [3]
(g) Balance per bank statement = balance per cash book + unpresented cheques
= 2 400 (1) + 860 (1)
= 3 260 (1) (Actual figure only) [3]
(h) Share capital = ordinary shares 120 000 × 0.25 = 30 000 (2)
+ preference shares 10 000 × 1.00 = 10 000 (2)
www.igcseaccounts.com = 40 000 [4]
[Total: 20]


3 (a) Moloch
Cash book
Allowed Received
$ $ $ $ $ $
October October
1 Balance b/d 650 3 200 (1) 5 Purchases 2 880 (1)
(not Andrews)
3 Justin 10 (1) 390 (1) 7 Wages 630 (1)
6 Munira 150 (1)
7 [Cash] sales 3 650 (1)
7 Balance c/d 790 3 740
Totals 10 4 300 3 740 Totals 4 300 3 740
[8]
Notes: Total reversal – no marks
Award 1 mark for both correct opening balances
Narrative and correct amount for mark
No marks for balances carried down or totals
+ 1 mark for correct dates (but disregard any date where no mark allocated to that entry)


(b) Revenue (sales) account

October
4 Hercules 800 (1)
7 Cash (not sales) 3 650 (1)
accept cash book
Purchases account
October
5 Cash [book] 2 880 (1)OF
(not Andrews)
Discount received account

October
7 Total [for week] 10 (1)OF
allow cash book
not Justin
Hercules account
October
4 Sales www.igcseaccounts.com
800 (1)
Justin account
October
3 Bank 390 (1)OF} accept
3 Discount 10 (1)OF} cash
book
Munira account
October
6 Bank 150 (1)OF
accept cash book [9]
Note: Allow own figures from part (a) where errors have been made in calculating discounts
Correct narrative and figure for each mark
+ 1 mark for correct dates
No mark for any reversal
(c) Total sales $4 450 (2) [2]
(d) A provision for doubtful debts is [an estimate of] the amount which a business may lose
because of bad debts. [2]


(e) Trade receivables $8 200 @ 5% = $410 (2) [2]
(f) By comparing (1) the amount of actual bad debts (1) with the provision made. (1) [3]
(or equivalent wording to convey correct meaning)
[Total: 26]
4 (a) Henrietta
Trial Balance at 30 September 2011
$ $
Revenue 124 100 (1)
Cash 1 100 (1)
Equipment 19 000 (1)
Capital (equity) 25 000 (1)
Drawings 15 600 (1)
153 700 153 700
OF mark for suspense account if trial balance balances [10]

Must be in trial balance format – no marks for e.g. balance sheet layout
Dr Cr
Suspense 2 200 (1)
Drawings 400 (1)
Suspense 400 (1)
Wages 650 (1)
Cash [book] 650 (1)
Narrative, correct amount and on correct side for mark [6]
(c) Henrietta
Suspense account
Difference on t/b 1 800 (1)OF from 4(a)
(accept Balance)
Sales 2 200 (1) Drawings 400 (1)OF from 4(b)
2 200 2 200 [3]
[Total 19]


5 (a) A non-current asset is an asset held for the long term for use by a business (1) and is not for
resale.(1) (Accept comments about allowing a business to earn revenue)
(Do not accept just fixed asset) [2]
(b) Depreciation
(i) Year 1 (3 600 – 450) (1) / 3 (1) = 1 050 (1)OF
(ii) Year 2 1 050 (1)OF from (i)
(iii) Year 3 1 050 (1)OF from (i)
Only award component marks (max 2) in (i) if candidate gives NBV as their answer [5]
(c) Queresh
Income statement for the year ended 30 September 2011
$ $
Less returns 800 (1)
71 700
Cost of sales
Raw materials (purchases) 48 800 (1)
54 800
Inventory at 30 September 2011 7 600 (1)
Gross profit www.igcseaccounts.com 47 200

24 500 (1)OF
Other operating income (6 500 (1) – 1 300 (1)) 5 200
(accept rent receivable, award 1 mark for 7 800
with or without workings) 29 700
Expenses
Distribution expenses 2 580 (1)
Administrative expenses (8 225 (1) + 375 (1)) 8 600
(award 1 mark for 7 850 with or without workings)
Depreciation (accept OF from year 1 only) 1 050 (1)OF
Finance costs 1 380 (1)
15 210
(Do not award marks for rent receivable if shown as an expense, but you may award an OF
mark for the profit for the year if arithmetically correct even if rent is included as an expense.)
[15]
(d) Depreciation should be included as a charge to the income statement so that the cost of the
non-current asset is spread over the life of the asset or he is following the matching principle
(1) and the profit is not overstated (accept accurate or realistic) or he is following the
prudence principle (1). [2]
(e) Increase revenue, increase prices, reduce cost of sales, reduce (control) expenses.
(any one) [2]
[Total 26]


6 (a)
Vasco’s garage Xavier’s garage
Workings: Workings:
124 000 – 114 700 = 9 300 (1) 80 000 – 60 000 = 20 000 (1)
9 300 / 124 000 (1) = 20 000 / 80 000 (1) =
Answer: 7.5 % (1)OF Answer: 25.0 % (1)OF

[6]
(b)
Workings: Workings:
9 300 – 5 600 = 3 700 (1)OF 20 000 – 12 000 = 8 000 (1)OF
3 700 / 20 000 (1) = 8 000 / 60 000 (1) =

[6]
Answer must be expressed as a percentage with or without % sign
– answers expressed as decimals e.g. 0.2 (0.185) are not acceptable.
(c)

[4]
(d) Yes (1)
Reasons:
1 Selling car parts and opening a workshop would increase Vasco’s profits (1)
2 The percentage of gross profit to sales would increase as the profitability of selling parts
is higher than selling fuel (1) [3]
(Not possible to award marks for comments about return on capital as not known)
[Total 19]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) C [1]
(b) D [1]
(c) B [1]
(d) D [1]
(e) B [1]
(f) A [1]
(g) B [1]
(h) A [1]
(i) B [1]
(j) C [1]
[Total 10]
2 (a) Inventory (stock), trade receivables (debtors), other receivable (prepayment), bank, cash.
(b) Assets = capital (equity) + liabilities

(or any variation of the correct equation) [1]
(c)
Capital Revenue
Repairs to workshop windows (1)
Installation of alarm system (1)
Storage shelves for tools (1)

[3]


(d) (i) Sales (debtors, receivables) [ledger] [1]
(ii) Nominal (general) [ledger] [1]
(e) (i) Error of addition in trial balance or ledger account,

single entry,
entering item on wrong side
entering transaction twice on same side of ledger,
entering different credit and debit amounts.
(Any one description, or an actual example of one of these) [1]
(ii) Original entry [1]
(f) Percentage of net profit to revenue = (125 000 – 85 000 – 15 000) / 125 000
= 25 000 (1) / 125 000 (1)
= 20.00 % (1)OF [3]
(g) Balance per bank statement = balance per cash book + unpresented cheques
= 2 400 (1) + 860 (1)
= 3 260 (1) (Actual figure only) [3]
(h) Share capital = ordinary shares 120 000 × 0.25 = 30 000 (2)
+ preference shares 10 000 × 1.00 = 10 000 (2)
www.igcseaccounts.com = 40 000 [4]
[Total: 20]


3 (a) Moloch
Cash book
Allowed Received
$ $ $ $ $ $
October October
1 Balance b/d 650 3 200 (1) 5 Purchases 2 880 (1)
(not Andrews)
3 Justin 10 (1) 390 (1) 7 Wages 630 (1)
6 Munira 150 (1)
7 [Cash] sales 3 650 (1)
7 Balance c/d 790 3 740
Totals 10 4 300 3 740 Totals 4 300 3 740
[8]
Notes: Total reversal – no marks
Award 1 mark for both correct opening balances
Narrative and correct amount for mark
No marks for balances carried down or totals
+ 1 mark for correct dates (but disregard any date where no mark allocated to that entry)


(b) Revenue (sales) account

October
4 Hercules 800 (1)
7 Cash (not sales) 3 650 (1)
accept cash book
Purchases account
October
5 Cash [book] 2 880 (1)OF
(not Andrews)

October
7 Total [for week] 10 (1)OF
allow cash book
not Justin
Hercules account
October
4 Sales www.igcseaccounts.com
800 (1)
Justin account
October
3 Bank 390 (1)OF} accept
3 Discount 10 (1)OF} cash
book
Munira account
October
6 Bank 150 (1)OF
accept cash book [9]
Note: Allow own figures from part (a) where errors have been made in calculating discounts
Correct narrative and figure for each mark
+ 1 mark for correct dates
No mark for any reversal
(c) Total sales $4 450 (2) [2]
(d) A provision for doubtful debts is [an estimate of] the amount which a business may lose
because of bad debts. [2]


(e) Trade receivables $8 200 @ 5% = $410 (2) [2]
(f) By comparing (1) the amount of actual bad debts (1) with the provision made. (1) [3]
(or equivalent wording to convey correct meaning)
[Total: 26]
4 (a) Henrietta
Trial Balance at 30 September 2011
$ $
Revenue 124 100 (1)
Cash 1 100 (1)
Equipment 19 000 (1)
Capital (equity) 25 000 (1)
Drawings 15 600 (1)
153 700 153 700
OF mark for suspense account if trial balance balances [10]

Must be in trial balance format – no marks for e.g. balance sheet layout
Dr Cr
Suspense 2 200 (1)
Drawings 400 (1)
Suspense 400 (1)
Wages 650 (1)
Cash [book] 650 (1)
Narrative, correct amount and on correct side for mark [6]
(c) Henrietta
Suspense account
Difference on t/b 1 800 (1)OF from 4(a)
(accept Balance)
Sales 2 200 (1) Drawings 400 (1)OF from 4(b)
2 200 2 200 [3]
[Total 19]


5 (a) A non-current asset is an asset held for the long term for use by a business (1) and is not for
resale.(1) (Accept comments about allowing a business to earn revenue)
(Do not accept just fixed asset) [2]
(b) Depreciation
(i) Year 1 (3 600 – 450) (1) / 3 (1) = 1 050 (1)OF
(ii) Year 2 1 050 (1)OF from (i)
(iii) Year 3 1 050 (1)OF from (i)
Only award component marks (max 2) in (i) if candidate gives NBV as their answer [5]
(c) Queresh
Income statement for the year ended 30 September 2011
$ $
Less returns 800 (1)
71 700
Cost of sales
Raw materials (purchases) 48 800 (1)
54 800
Inventory at 30 September 2011 7 600 (1)
Gross profit www.igcseaccounts.com 47 200

24 500 (1)OF
Other operating income (6 500 (1) – 1 300 (1)) 5 200
(accept rent receivable, award 1 mark for 7 800
with or without workings) 29 700
Expenses
Distribution expenses 2 580 (1)
Administrative expenses (8 225 (1) + 375 (1)) 8 600
(award 1 mark for 7 850 with or without workings)
Depreciation (accept OF from year 1 only) 1 050 (1)OF
Finance costs 1 380 (1)
15 210
(Do not award marks for rent receivable if shown as an expense, but you may award an OF
mark for the profit for the year if arithmetically correct even if rent is included as an expense.)
[15]
(d) Depreciation should be included as a charge to the income statement so that the cost of the
non-current asset is spread over the life of the asset or he is following the matching principle
(1) and the profit is not overstated (accept accurate or realistic) or he is following the
prudence principle (1). [2]
(e) Increase revenue, increase prices, reduce cost of sales, reduce (control) expenses.
(any one) [2]
[Total 26]


6 (a)
Workings: Workings:
124 000 – 114 700 = 9 300 (1) 80 000 – 60 000 = 20 000 (1)
9 300 / 124 000 (1) = 20 000 / 80 000 (1) =

[6]
(b)
Workings: Workings:
9 300 – 5 600 = 3 700 (1)OF 20 000 – 12 000 = 8 000 (1)OF
3 700 / 20 000 (1) = 8 000 / 60 000 (1) =

[6]
Answer must be expressed as a percentage with or without % sign
– answers expressed as decimals e.g. 0.2 (0.185) are not acceptable.
(c)

[4]
(d) Yes (1)
Reasons:
1 Selling car parts and opening a workshop would increase Vasco’s profits (1)
2 The percentage of gross profit to sales would increase as the profitability of selling parts
is higher than selling fuel (1) [3]
(Not possible to award marks for comments about return on capital as not known)
[Total 19]



0452 ACCOUNTING
examination.
syllabuses.


1 Key
(a) A [1]
(b) A [1]
(c) D [1]
(d) C [1]
(e) B [1]
(f) D [1]
(g) B [1]
(h) C [1]
(i) D [1]
(j) C [1]
[Total 10]
2 (a) Income statement, trading account, profit and loss account, balance sheet [income and
expenditure account, manufacturing account, appropriation account]. Statement of Affairs
(b) (i) A service business provides services, not goods. (1)
(ii) Any acceptable example, e.g. travel agent, professionals, insurance. (1) [2]
(c)
Asset Liability
Trade payables (1)
Goodwill (1)
Bank overdraft (1)

[3]


(d) To apply the matching principle (to spread the cost of the non-current asset over the years of
use); to apply the prudence principle (to avoid overstating non-current assets; to avoid
overstating the profit, more realistic value).
(Any two, 1 mark each) [2]
(e) Owner, manager, customer, supplier, bank, investor, government, employee, accountant. [1]
(f) Business will continue indefinitely (for the foreseeable future). [1]
(g) Cost (1) and net realisable value (1) Not NRV [2]
(h) Mark-up of 25% = gross margin of 20%

Gross profit = 20% × $36 000 = $7 200 (2)
Cost of sales = $36 000 (1) – $7 200 = $28 800 (1) OF (allow $27 000 OF)
Alternative presentation:
Cost of sales = $36 000 (1) × 100/125 (2) = $28 800 (1) OF [4]
(i) Quarterly interest: $120 000 @ 5% = $6 000 (1) / 4 (1) = $1 500 (1) [3]
[Total: 20]
3 (a) Purchases journal ((day) book) [1]
(b) (i) $0.45 (1)
(ii) 75 (1)
(iii) $1 622.50 (1)
(iv) 4 (1)
(v) Trade (1)
(vi) $64.90 (1)
(vii) Cash (1) [7]
(c) Payment period = trade payables / credit purchases

= 8 000 (1) / (73 400 – 800) (1) × 365 (1) days
= 41 days (1) OF whole figure only [4]


(d) Rate of inventory turnover = cost of sales / average inventory

= (7 600 + 72 600 – 9 000) (2) / 8 300 (1)
= 8.58 times (1) OF
Alternative presentation:
= (8 300 (1) / 71 200 (2)) × 365
= 42 or 43 days (1) OF [4]
(e) (i) Reduce the level of trade accounts payable.
Payment period for creditors (2)
Rate of inventory turnover (2)

[4]
(ii) Reduce the average amount of inventory.
Payment period for creditors (2)
Rate of inventory turnover (2)
[Total: 24]
4 (a) To show how the profit for the year is shared between the partners [2]
(b) Adrian and Christopher

Appropriation Account for the year ended 31 August 2011
$ $
Interest on drawings Adrian 1 200 (2)
Christopher Nil
94 200
Interest on capital Adrian 1 600 (2)
Christopher 2 000 (2)
Salary Christopher 18 000 (1)
21 600
72 600 (2) OF
Profit share Adrian 5/8 45 375 (2) OF
Christopher 3/8 27 225 (2) OF
72 600 [14]


(c) (i) Adrian

Current account
Balance b/down 3 400 (1)

Interest on drawings 1 200 (1) OF Interest on capital 1 600 (1) OF
Drawings 32 000 (1) Share of profits 45 375 (1) OF
Balance c/down 17 175 OF
50 375 50 375
Balance b/down 17 175 (1) OF [6]
(ii) Christopher
Current account
Balance b/down 9 000 (1)

Drawings 12 000 (1) Interest on capital 2 000 (1) OF
Balance c/down 44 225 Salary 18 000 (1)
56 225 Share of profits 27 225 (1) OF
56 225
Balance b/down 44 225 (1) OF [6]
[Total: 28]
5 (a) Disposal (of non-current assets account) (disposal of office furniture account). [2]
(b) (Error of) principle. www.igcseaccounts.com [2]
(c)
Dr Cr
$ $
Sales 850 (2)
Disposal of office furniture 850 (2)
Narrative and Amount needed for marks [4]


(d) Office furniture account
2008 2011
October 1 Bank 1 800 April 1 Disposal 1 800 (1)
Provision for depreciation of office furniture account
2011 2010
April 1 Disposal 1 152 (1) October 1 Balance b/d 1 152 (1)
Disposal of office furniture account
2011 2011
April 1 Office furniture 1 800 (1) April 1 Provision 1 152 (1)
for depreciation
Sept 30 Income statement 202 (1) April 1 Norse Ltd 850 (1)
2 002 2 002
Plus 1 Date ( check change in years 2008/2011) [8]
(e) (i) The profit on sale of the office furniture, or the difference between the NBV and the sale
proceeds. (either correct) [2]
(ii) Select a different rate of depreciation on the reducing balance method, or select a
different method of providing for depreciation. (either correct) [2]
[Total: 20]


6 (a) Lo Shung Limited

$ $
Non-current assets
Equipment at cost 18 500 (1)
Net book value 8 700
Current assets
Inventory 4 500 (1)
Bank and cash 1 000 (1)
14 200
Current Liabilities
6 700
16 200
Long term liabilities
3% debentures repayable 2020 6 000 (1)
Total assets 10 200
Share capital 5 000 (1)

Retained profits (4 000 (1) +1 200 (1)) 5 200
10 200
(b)
Profitability Liquidity
Percentage of profit for the

(1)
year (net profit) to sales
Current ratio (1)

[3]
(c) Return on opening capital employed = 4 000 (1) / (6 200 (1) + 6 000 (1)) × 100
= 32.79 % (1) OF must be %
Must be two decimal places [4]
[Total: 18]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Cash Book (bank columns only)
$ $
2011 2011
Sept 1 Rent received 200 (1) Sept 1 Balance b/d 1052 (1)
Balance c/d 791 (1) C/F
1 091 1 091
Sept 1 Balance b/d 791 (1) O/F [7]
(b) Bank Reconciliation Statement at 31 August 2011
$ $
Balance shown on bank statement (1) (1 047) (1)
Add Amounts not credited – sales 490 (1)
Bank error (1) 50 (1) 540
(507)
Less Cheques not yet presented –
Omega Supply Co 284 (1)
Balance shown in cash book (1) (791) (1) O/F

$ $
Add Cheques not yet presented –
(507)
Less Amounts not credited – sales 490 (1)
Bank error (1) 50 (1) 540
Balance shown on bank statement (1) (1047) (1) [8]
1 790 } (1) 365

(c) × = 42.15 days = 43 days (1) [2]
15 500 } 1
(d) Unsatisfied if O/F in (c) over 30 days (1)

Or
Satisfied if O/F in (c) is 30 days or below (1)
(e) May be able to take advantage of cash discounts



(f) The business is deprived of the use of the money earlier than necessary
(g) At the end of the period the chief cashier will make up the cash remaining so that it is equal
(h)
Debit
Name of account
or credit
(i) Total of sundry expenses column Debit Sundry expenses account
(ii) Cash received to restore the imprest Credit (1) Cash account (cash book) (1)
Cash received from employee for

(iii) cost of personal telephone calls Credit (1) Telephone expenses account (1)
[4]
[Total: 29]


2 (a) Oasis Trading Co Ltd

$ $ $
Non-current Assets at cost 230 000
161 000 (1)
Current Assets
Petty cash 100 }
54 632
Current Liabilities
dividends (2 000 (1) + 6 000 (1)) 8 000 34 892

180 740
160 740

Ordinary shares of $0.50 each
General reserve (9 000 (1) + 3 000 (1))
100 000 (1)
12 000
Retained profits (4 000 (1) + 4 740 (1)) 8 740
160 740
(b) $70 000

($20 000 preference shares + $50 000 ordinary shares) [2]
(c) (i) Debentures

Long term loans
Mortgage
Any one comment (1) [1]
(ii) Payment of fixed annual interest for duration of loan

Creation of a further liability for the company
(d) (i) Included (1)

Is an appropriation of the profit for the year (1) [2]
(ii) Not included (1)

Is not a liability (1)
OR it will have been paid during the year (1) [2]
[Total: 22]


3 (a)
$ $

Office expenses (repairs to equipment) 30 (1)
Computek 390 (1)
Purchase of new computer and repairs to (1)
old computer
[4]
(b) A double entry has been made for the transaction.
Or suitable explanation [2]
(c)
$ $
Drawings 400 (1)

Purchases 400 (1)
Goods taken at cost price for personal use (1)
[3]
(d) Goods for personal use have been removed from those for re-sale. This will reduce the
amount owed by the business to the owner.
Or other suitable explanation [2]
(e)
$ $

[3]
(f) Creating a provision for doubtful debts ensures that the profit is not overstated (1)
the trade receivables are not overstated in the balance sheet (1)


(g) Obtain references from new credit customers

(h)
(i) Total expenses for the year (1)
(ii) Profit for the year (1)
(iii) Closing credit balance on capital account (1)
(iv) Amount owing by trade receivables (1)

[4]
[Total: 22]
4 (a) Deira Road Sailing Club

Shop Income Statement for the year ended 30 September 2011
$ $
Receipts from sales 5 492 (1)
Less Cost of sales
Purchases (3 150 (1) + 340 (1)) 3 490
3 760
Less Closing inventory 310 (1)
3 450
Shop assistant’s wages 480 (1)
Shop rent (25% × 2 600) 650 (1) 4 580
Profit for the year 912 (1)O/F


(b) Deira Road Sailing Club

$ $
Income
Subscriptions (3 060 (1) – 450 (1) – 360(1)) 2 250
Profit for the year on the shop 912 (1)O/F
Sailing competition – Entrance fees 586 (1)
3 456
Expenditure
Wages sailing tutor 940 (1)
Rent (75% × 2 600) 1 950 (1)
Insurance (800 (1) + 190 (1) – 200 (1)) 790
(20% × (4 400 + 1 500)) 1 180 (2) 5 116
[Total: 24]
5 (a) Less risk of errors

Less risk of fraud
Easier to refer to previous transactions
Financial position can be ascertained
Easier to prepare financial statements
Easier to make business decisions
Easier to calculate accounting ratios
(b) (i) Calculation of credit sales

$
Discounts allowed 205 (1)
Amounts owing on 31 July 2011 8 020 (1)
16 400
Less Amounts owing on 1 August 2010 7 450 (1)
Credit sales 8 950 (1)O/F [6]
(ii) Calculation of credit purchases

$
9 550
Credit purchases 5 160 (1)O/F [5]
Alternative calculations on next page


(b) Alternative presentations
(i) Credit sales

$ $
2010 2011
Aug 1 Balance b/d 7 450 (1) July 31 Bank 7 995 (1)
2011 Discounts allowed 205 (1)
July 31 Sales * 8 950 (1)O/F Bad debts 180 (1)
16 400 16 400
2011
Aug 1 Balance b/d 8 020
(ii) Credit purchases

$ $
2011 2010
July 31 Bank 3 920 (1) Aug 1 Balance b/d 4 390 (1)
Discounts received 80 (1) 2011
Balance c/d 5 550 (1) July 31 Purchases * 5 160 (1)O/F
9 550 9 550
2011
(c) To apply the prudence principle (1)

To avoid overstating the assets (1)
To avoid overstating the profit for the year (1)


(d)
$ $
(i) net profit for the year
ended 31 July 2010 250 – – –
(ii) capital employed at (1)

31 July 2010 250 (1)
(iii) gross profit for the year

ended 31 July 2011 (1) 250 (1)
(iv) current assets at

31 July 2011 (2)
[6]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Cash Book (bank columns only)
$ $
2011 2011
Sept 1 Rent received 200 (1) Sept 1 Balance b/d 1052 (1)
Balance c/d 791 (1) C/F
1 091 1 091
Sept 1 Balance b/d 791 (1) O/F [7]
(b) Bank Reconciliation Statement at 31 August 2011
$ $
Balance shown on bank statement (1) (1 047) (1)
Add Amounts not credited – sales 490 (1)
Bank error (1) 50 (1) 540
(507)
Less Cheques not yet presented –

$ $
Add Cheques not yet presented –
(507)
Less Amounts not credited – sales 490 (1)
Bank error (1) 50 (1) 540
Balance shown on bank statement (1) (1047) (1) [8]
1 790 } (1) 365

(c) × = 42.15 days = 43 days (1) [2]
15 500 } 1
(d) Unsatisfied if O/F in (c) over 30 days (1)

Or
Satisfied if O/F in (c) is 30 days or below (1)
(e) May be able to take advantage of cash discounts



(f) The business is deprived of the use of the money earlier than necessary
(g) At the end of the period the chief cashier will make up the cash remaining so that it is equal
(h)
Debit
Name of account
or credit
(i) Total of sundry expenses column Debit Sundry expenses account
(ii) Cash received to restore the imprest Credit (1) Cash account (cash book) (1)
Cash received from employee for

(iii) cost of personal telephone calls Credit (1) Telephone expenses account (1)
[4]
[Total: 29]


2 (a) Oasis Trading Co Ltd

$ $ $
Non-current Assets at cost 230 000
161 000 (1)
Current Assets
Petty cash 100 }
54 632
Current Liabilities
dividends (2 000 (1) + 6 000 (1)) 8 000 34 892

180 740
160 740

Ordinary shares of $0.50 each
General reserve (9 000 (1) + 3 000 (1))
100 000 (1)
12 000
Retained profits (4 000 (1) + 4 740 (1)) 8 740
160 740
(b) $70 000

($20 000 preference shares + $50 000 ordinary shares) [2]
(c) (i) Debentures

Long term loans
Mortgage
(ii) Payment of fixed annual interest for duration of loan

Creation of a further liability for the company
(d) (i) Included (1)

Is an appropriation of the profit for the year (1) [2]
(ii) Not included (1)

Is not a liability (1)
OR it will have been paid during the year (1) [2]
[Total: 22]


3 (a)
$ $

Office expenses (repairs to equipment) 30 (1)
Computek 390 (1)
Purchase of new computer and repairs to (1)
old computer
[4]
(b) A double entry has been made for the transaction.
Or suitable explanation [2]
(c)
$ $
Drawings 400 (1)

Purchases 400 (1)
Goods taken at cost price for personal use (1)
[3]
(d) Goods for personal use have been removed from those for re-sale. This will reduce the
amount owed by the business to the owner.
(e)
$ $

[3]
(f) Creating a provision for doubtful debts ensures that the profit is not overstated (1)
the trade receivables are not overstated in the balance sheet (1)


(g) Obtain references from new credit customers

(h)
(i) Total expenses for the year (1)
(ii) Profit for the year (1)
(iii) Closing credit balance on capital account (1)
(iv) Amount owing by trade receivables (1)

[4]
[Total: 22]
4 (a) Deira Road Sailing Club

Shop Income Statement for the year ended 30 September 2011
$ $
Receipts from sales 5 492 (1)
Less Cost of sales
Purchases (3 150 (1) + 340 (1)) 3 490
3 760
Less Closing inventory 310 (1)
3 450
Shop assistant’s wages 480 (1)
Shop rent (25% × 2 600) 650 (1) 4 580
Profit for the year 912 (1)O/F


(b) Deira Road Sailing Club

$ $
Income
Subscriptions (3 060 (1) – 450 (1) – 360(1)) 2 250
Profit for the year on the shop 912 (1)O/F
Sailing competition – Entrance fees 586 (1)
3 456
Expenditure
Wages sailing tutor 940 (1)
Rent (75% × 2 600) 1 950 (1)
Insurance (800 (1) + 190 (1) – 200 (1)) 790
(20% × (4 400 + 1 500)) 1 180 (2) 5 116
[Total: 24]
5 (a) Less risk of errors

Less risk of fraud
Easier to refer to previous transactions
Financial position can be ascertained
Easier to prepare financial statements
Easier to make business decisions
Easier to calculate accounting ratios
(b) (i) Calculation of credit sales

$
Discounts allowed 205 (1)
16 400
Credit sales 8 950 (1)O/F [6]
(ii) Calculation of credit purchases

$
9 550
Credit purchases 5 160 (1)O/F [5]
Alternative calculations on next page


(b) Alternative presentations
(i) Credit sales

$ $
2010 2011
Aug 1 Balance b/d 7 450 (1) July 31 Bank 7 995 (1)
2011 Discounts allowed 205 (1)
July 31 Sales * 8 950 (1)O/F Bad debts 180 (1)
16 400 16 400
2011
(ii) Credit purchases

$ $
2011 2010
July 31 Bank 3 920 (1) Aug 1 Balance b/d 4 390 (1)
Discounts received 80 (1) 2011
Balance c/d 5 550 (1) July 31 Purchases * 5 160 (1)O/F
9 550 9 550
2011
(c) To apply the prudence principle (1)

To avoid overstating the assets (1)
To avoid overstating the profit for the year (1)


(d)
$ $
(i) net profit for the year
ended 31 July 2010 250 – – –
(ii) capital employed at (1)

31 July 2010 250 (1)
(iii) gross profit for the year

ended 31 July 2011 (1) 250 (1)
(iv) current assets at

31 July 2011 (2)
[6]
[Total: 23]



0452 ACCOUNTING
examination.
syllabuses.


1 (a) Mai Wang Cash Book
Allowed Received
2011 $ $ $ 2011 $ $ $
July 1 Balance b/d 250 July 1 Balance b/d 4 500
2 Sales (1) 42 300 15 Drawings (1) 500
9 Mark Fu (1) 3 147 23 Sally Tan (1) 12 468
30 Cash (1) 192 29 Mulyani Ltd (dishonoured

cheque) (1) 330
30 Bank (1) 192
31 Balance c/d 100
3 292 5 798 12 292 5 798
2011 2011
Aug 1 Balance b/d (1)O/F 100 Aug 1 Balance b/d (1)O/F 5 159
+ (1) dates [10]


(b) $5 159 (1)O/F

Liability (1)O/F [2]
(c) (i) A statement prepared by the trader (1) to explain why the balance on the bank column in
the cash book differs from the balance on the bank statement (1) [2]
(ii) Cheques received by the trader and recorded in the cash book but which have not yet
been recorded as being received by the bank [2]
(iii) Cheques paid by the trader and recorded in the cash book but which have not yet been
recorded as being paid by the bank [2]
[Total: 18]
2 (a) $
Profit for the year before preference share dividend 174 000
Less Preference share dividend 4 000 (2)
Profit for the year after preference share dividend 170 000 (1) [3]
(b) Kapiti Ltd

$ $
Profit for the year 170 000 (1)O/F
Less Transfer to general reserve
25 000 (1)
Dividends paid – Ordinary 20 000 (2)
Dividends proposed – Ordinary 40 000 (2) 85 000
Profit retained in the year 85 000 (1)
Retained profit carried forward 175 000 (1)O/F
(c) (i) general reserve $113 000 (1)
(ii) retained profit $175 000 (1)O/F [2]
(d) Interim ordinary share dividend will not appear in the balance sheet (1)
This has already been paid (1) and so is no longer a liability (1) [3]
(e) The liability of the member (shareholders) of a company for the debts of the company is
limited to the amount they agree to pay the company for their shares [2]


(f) (i) Preference shareholders receive a fixed rate of dividend

Preference share dividend is payable before ordinary share dividend
Preference shareholders are repaid before ordinary shareholders in the event of the
company being wound up
Preference shareholders are not usually entitled to vote at shareholders’ meetings
(ii) $20 000 [1]
(iii) $1 000 [1]
(iv) Reduction in profit available for ordinary shareholders

[Total: 27]

Provide instant totals of trade receivables and trade payables
Provide a summary of the transactions relating to trade receivables and trade payables
(b) Overpayment of amount due by a debtor

Cash discount not deducted by debtor before payment made
Goods returned by debtor after payment of amount due
Payment made in advance by debtor
Any 1 point (1) [1]


(c) Ajit Singh

$ $
2011 2011
Oct 1 Balance b/d 15 940 Oct 31 Bank 15 252 (1)
31 Sales 14 820 (1) Discounts allowed 355 (1)
Interest on overdue Sales returns 1 280 (1)
account 10 (1) Bad debts 105 (1)
Balance c/d 100 (1) Contra entry 485 (1)
30 870 30 870
2011 2011
Nov 1 Balance b/d 13 393 (1) Nov 1 Balance b/d 100 (1)O/F
+(1) for dates [12]
Ajit Singh

$ $ $
2011
Oct 1 Balance 15 940 15 940 Dr
31 Sales 14 820 (1) 30 760 Dr
Interest on overdue account 10 (1) 30 770 Dr
Bank www.igcseaccounts.com
15 252 (1) 15 518 Dr
Discounts allowed 355 (1) 15 163 Dr
Sales returns 1 280 (1) 13 883 Dr
Bad debts 105 (1) 13 778 Dr
Balances 13 393 (1) 100 (1) 13 293 Dr (2)O/F
13 393 O/F} 365

(d) × = 29.47 days = 30 days (1)O/F [2]
165 900 } (1) 1
(e) Satisfied if O/F in (d) 30 days or below (1)

He is receiving the amount due within period of credit allowed (2)
Or
Unsatisfied if O/F in (d) above 30 days (1)
He is not receiving the amount due within period of credit allowed (2) [3]


(f) Can use the money to pay the trade payables

Can use the money within the business
May reduce a bank overdraft
May reduce the need for a bank overdraft
Reduces the risk of bad debts
Any 1 point (1) [1]
[Total: 21]
4 (a) Ahmed El Din

Manufacturing Account for the year ended 30 September 2011
$ $
Cost of raw materials
220 600

201 200 (1)
Direct factory wages
(199 500 (1) + 2 750 (1) – 2 300 (1)) 199 950
Factory indirect wages 42 600 (1)
Factory general expenses
(122 400 (1) – 250 (1)) 122 150
(132 500 + 5 900 (1) – 124 000 (1)) 14 400 179 150
580 300 (1)O/F
Add Opening work in progress 9 200
Less Closing work in progress 10 400 (1 200) (1)


(b) Ahmed El Din

$ $ $
Revenue 858 000 (1)
Less Cost of sales
Opening inventory finished goods 29 300 (1)
Less Goods for own use 900 (1) 578 200
607 500
Gross profit 281 700 (1)O/F
(c) Either The profit should not be overstated

Or All possible losses should be provided for (1)
Example Either Inventories were valued at the lowest figure

Or Depreciation of the factory machinery was included (1) [2]
(d) Revenue of the accounting period must be matched against the costs of the same period (1)
Example Either Direct wages due at year end were added

Or
Or
Direct wages due at start of year were deducted
General expenses prepaid at year end were deducted
Or Loss in value of machinery was included in overheads (1) [2]
(e) The business is treated as being separate from the owner of the business (1)
Example Goods taken by owner were deducted (1) [2]
[Total: 26]
5 (a) Selling goods at higher prices

Reducing the rate of trade discount
Buying goods at cheaper prices
(b) Increase in the gross profit percentage

Reduction in expenses
Increase in other income


(c) (i) Year ended 31 July 2010

21% – 10% = 11% (1)
(ii) Year ended 31 July 2011

25% – 11% = 14% (1) [2]
(d) Percentage of expenses has increased (1)

The efficiency of the business in controlling expenses has decreased (2)
Or other suitable answer based on O/F answers to (c) [3]
(e) (4 500 + 3 800 + 50 + 1 000):5 600

= 9 350:5 600 (1)
= 1.67:1 (1) [2]
(f) (3 800 + 50 + 1 000):5 600

= 4 850:5 600 (1)
= 0.87:1 (1) [2]
(g) Unsatisfied (1)
The ratio has decreased. It is now below 1:1

She cannot pay her immediate liabilities from her liquid assets
She is relying on the sale of stock to be able to pay her immediate liabilities
Accept alternative answers based on O/F answer to (f) [3]
(h) To be able to meet debts when they fall due

To ensure that there is not difficulty in obtaining further supplies
Any 1 point (2) [2]
(i) (ii) Effect Working capital decreases by $20 (1)

Explanation Current assets decrease by $20 as petty cash decreases. There is no
change in the current liabilities. (1)
(iii) Effect Working capital increases by $10 (1)

Explanation The current assets decrease by $240 and the current liabilities decrease
by $250. (1)
(iv) Effect Working capital decreases by $40 (1)

Explanation The current assets decrease by $40 as the inventory decreases by $270
and the cash increases by $230. There is no change in the current
liabilities. (1) [6]


(j) (i) Bank manager

Prospects of any requested loan/overdraft being repaid when due
Prospects of any interest on loan/overdraft being paid when due
Security available to cover any loan/overdraft
(ii) Employee
Ability of business to continue operating
Prospects for jobs and wages
(iii) Supplier of goods on credit

Assessment of liquidity position
Identifying how long it takes the business to pay creditors
Establishing a credit limit
(iv) Potential purchaser of the business

Profitability of the business
Value of the assets of the business
Or other suitable reason in each case
Any 1 acceptable reason for each person [4]
[Total: 28]


0452 ACCOUNTING
components.


1 Key
(a) C [1]
(b) B [1]
(c) B [1]
(d) C [1]
(e) A [1]
(f) C [1]
(g) D [1]
(h) D [1]
(i) B [1]
(j) A [1]
[Total 10]


(any two) [2]
(c) $14.00 [1]
(d) Consistency [1]
(f) $28.00 [1]
[2]
(iii) 3% x 48000 = $1 440 (1)

$1440 – $1350 = $90 (1) [2]
[Total 16]



$ $
1 Balance b/d 2 400 14 Wages 250 (1)
3 Lashki 640 (1) 21 Yovell 370 (1)
16 Yovell 370 (1) 28 Wages 280 (1)
30 Sales 3 560 (1) 29 Bruton 1 980 (1)
6 970 6 970

(1) OF
[8]


(b) Sales account

September $
4 Sharon 420 (1)
27 Bank 3 650 (1)
Purchases account
September $
9 Bruton 1 980 (1)
Wages account
September $
14 Bank 250 }
28 Bank 250 } (1)
Lashki account
September $
3 Bank` 640 (1)
September
$
Sharon account
4 Sales 420 (1)
Yovell account
21 Bank (dis chq) 370 (1) 16 Bank 370 (1)
Bruton account
29 Bank 1 980 (1) 9 Purchases 1 980 (1)


$
6 070

[4]
[Total: 27]


4 (a)
Dr Cr
$ $
Capital 2 600 (1)
Motor Vehicle 4 400
Purchases 12 400
Revenue 30 800 (1)
Motor expenses 860
Drawings 8 640
36 600 36 600 (2) CF

(b)
Mbane
$ $
Cost of sales
16 900
13 600
17 200 (1) OF
Gross profit
Expenses 600 (1)

1 460
[8]


(d)

(1)
[4]
(ii) 8500 : 3200 (1) = 2.7 : 1 (1) OF [2]
[Total: 25]
$ 6 400 – $ 800
4 years
2010 = $ 1 400 (1) OF
2011 = $ 1 400 (1) OF if same figure [3]
(c)
Agricola
2012 $ 2012 $
Bank/Cash 2 600 (1)
(Profit/Loss)
1 mark for date




(e) Agricola
Journal
Debit Credit
$ $
Machinery 30 (1)
in asset account
[6]
[Total: 22]
6 (a) (i)

revenue (sales)
Accept 35 Accept 55


(b) (i)

revenue (sales)
[4]




(c) (i)

employed
[4]


[Total: 20]


0452 ACCOUNTING
components.


1 Key
(a) C [1]
(b) B [1]
(c) B [1]
(d) C [1]
(e) A [1]
(f) C [1]
(g) D [1]
(h) D [1]
(i) B [1]
(j) A [1]
[Total 10]


(any two) [2]
(c) $14.00 [1]
(d) Consistency [1]
(f) $28.00 [1]
[2]
(iii) 3% x 48000 = $1 440 (1)

$1440 – $1350 = $90 (1) [2]
[Total 16]



$ $
1 Balance b/d 2 400 14 Wages 250 (1)
3 Lashki 640 (1) 21 Yovell 370 (1)
16 Yovell 370 (1) 28 Wages 280 (1)
30 Sales 3 560 (1) 29 Bruton 1 980 (1)
6 970 6 970

(1) OF
[8]


(b) Sales account

September $
4 Sharon 420 (1)
27 Bank 3 650 (1)
Purchases account
September $
9 Bruton 1 980 (1)
Wages account
September $
14 Bank 250 }
28 Bank 250 } (1)
Lashki account
September $
3 Bank` 640 (1)
September
$
Sharon account
4 Sales 420 (1)
Yovell account
21 Bank (dis chq) 370 (1) 16 Bank 370 (1)
Bruton account
29 Bank 1 980 (1) 9 Purchases 1 980 (1)


$
6 070

[4]
[Total: 27]


4 (a)
Dr Cr
$ $
Capital 2 600 (1)
Motor Vehicle 4 400
Purchases 12 400
Revenue 30 800 (1)
Motor expenses 860
Drawings 8 640
36 600 36 600 (2) CF

(b)
Mbane
$ $
Cost of sales
16 900
13 600
17 200 (1) OF
Gross profit
Expenses 600 (1)

1 460
[8]


(d)

(1)
[4]
(ii) 8500 : 3200 (1) = 2.7 : 1 (1) OF [2]
[Total: 25]
$ 6 400 – $ 800
4 years
2010 = $ 1 400 (1) OF
2011 = $ 1 400 (1) OF if same figure [3]
(c)
Agricola
2012 $ 2012 $
Bank/Cash 2 600 (1)
(Profit/Loss)
1 mark for date




(e) Agricola
Journal
Debit Credit
$ $
Machinery 30 (1)
in asset account
[6]
[Total: 22]
6 (a) (i)

revenue (sales)
Accept 35 Accept 55


(b) (i)

revenue (sales)
[4]




(c) (i)

employed
[4]


[Total: 20]


0452 ACCOUNTING
components.


1 Key
(a) D [1]
(b) C [1]
(c) B [1]
(d) B [1]
(e) A [1]
(f) A [1]
(g) C [1]
(h) C [1]
(i) B [1]
(j) A [1]
[Total: 10]
2 (a) Cash book, petty cash book, sales journal, sales returns journal, purchases journal,
purchases returns journal, (day books), journal [any two, 1 mark each] [2]
(b)
Income Expense
Debenture interest (1)
Factory overheads (1)
Commissions earned (1)

[3]
(c) To see the liquidity position of the business (1) and if his account will be paid (1). [2]
(d) Error (of addition, account on incorrect side, transposition, balance missing), single sided
entry, entry made twice. [any two,2 marks each] [4]


(e)
Increase Reduce Have no effect
Bank charges (1)
Credit Transfer (1)
Dishonoured cheque (1)

[3]
(f) Goodwill, brands, (other acceptable item) [any one] [1]
(g) (i) Error of original entry [1]
(ii)
Dr Cr
$ $
Malik (1) 180 }(1)
Purchases (1) 180 }

[3]
(h) Lindie – provision for doubtful debts
Provision at 1 November 2011 3% × 28 000 = 840 (1)
Provision at 31 October 2012 3% × 32 000 = 960 (1)
Increase = 120 (1)
[or 3% × (32 000 – 28 000) = 120] (3) [3]
[Total: 22]


3 (a) Prince

Depreciation value
Non-current assets $ $ $
Equipment 3 500 600 2 900 )
Motor vehicle 4 500 1 000 3 500 ) (1)
8 00 1 600 6 400
Current assets
Inventory 3 300 (1)
Bank 500 (1)
6 800
Current Liabilities
3 600
9 600
Total assets 6 800
Financed by: Capital 6 800 (1) [9]
(b) (i) Current ratio = current assets / current liabilities [1]
(ii) (3300 + 3000 + 500) / (2700 + 900) (1) for workings

= 1.89 : 1 (1)OF [2]
(iii) No (1);
Answer is less than 2:1 which is the usual benchmark (1), unable to pay all liabilities (1)
[3]
(c) (i) Quick ratio = (current assets – inventory) / current liabilities [1]
(ii) (3000 + 500) / 3600 (1) for workings

= 0.97 : 1 (1)OF [2]
(iii) No (1);
Answer is less than 1:1 which is the usual benchmark (1) , unable to pay all liabilities (1)
[3]
(d) Send statement, other reminders, offer cash discount, charge interest on late accounts,
refuse further supplies until paid (and similar comments).
[Any one, 2 marks] [2]
(e) Delaying payment of trade payables, increasing cash/credit sales, reducing credit period for
trade receivables, sell fixed assets, introduce extra capital, take out long term loan, reduce
drawings, introduce more capital, sell shares. [Any one, 2 marks] [2]
[Total: 25]


4 (a) Inventory means the goods held for resale by a business at any time. [1]
(b) Mirror type Units in stock Cost or net realisable Total value
value per unit
$ $
Wall mirror 15 55 825 (1)
Table mirror 50 15 750 (1)
Hand mirror 36 20 720 (2)
2295 [4]
(c) Mlongo
$ $
Returns inwards 215 (1)
7 785
Cost of sales
Purchases 4 650 (1)
Carriage Inwards 50 (1)
6 000
Inventory at 31 October 2012 2 295 (1)OF
3 705
Gross profit 4 080
Expenses www.igcseaccounts.com
Other operating expenses (680 + 120) 800 (1)
Rent (780 – 260) 520 (1)
1 420
(d) (i) Rate of inventory turnover = cost of sales / average inventory [1]
(ii) Rate of inventory turnover 2.1 (1) times (1) [2]
(e) Rate of inventory turnover will increase (1) as inventory is being replaced quicker (1) [2]
(f) Luxury goods, large scale manufacture (ships, airplanes) [Any one] [1]
[Total: 20]


5 (a) The costs and expenses of an accounting period must be matched against the revenue (of
the same period). [2]
(b) Joolia
Water account
2012 2012
10 July Bank 58.50) 1 July Balance b/d 58.50 (1)
12 August Bank 75.00)
14 Sept Bank 45.80) (1) 30 Sept Income statement 183.10 (1)
30 Sept Balance c/d 62.30
241.60 241.60
1 October Balance b/d 62.30 (1)

+ (1) for all dates correct [5]
(c) Profit will be too high as accrued wages have not been included in expenses for the period.
[1]
(d) Purchases (Ledger) [1]
(e) 7 September Bank

Explanation: Amount paid to HiClass Foods Ltd for purchases (on credit/amounts due) (1)
Double Entry: Credit Bank Account (1)
7 September Discount
Explanation: Amount claimed as discount for prompt payment (1)
Double Entry: Credit Discount Received Account (1)
12 September Purchases
Explanation: Amount bought on credit from HiClass Foods Ltd (1)
Double Entry: Debit Purchases Account (1)
15 September Purchase Returns

Explanation: Goods returned to HiClass Foods Ltd as unsuitable/not required (1)
Double Entry: Credit Purchase Returns Account / Returns Outwards (1)
30 September Balance c/d

Explanation: Amount owing to HiClass Foods Ltd at end of month (1)
Double Entry: Credit HiClass Foods Ltd ( October account ) (1) [10]
[Total 19]


6 (a) Ordinary share capital: 100 000 shares @ $1.50 = 150 000 (1)
Preference share capital: 120 000 shares @ $1.00 = 120 000 (1)
Total share capital 270 000 (1) [3]
(b) (i) The total amount the company has requested from shareholders. [2]
(ii) That part of the called up capital for which cash has been received. [2]
(c) • Ordinary share dividends vary according to amount of profit made (1) Preference Shares
are usually a fixed rate (1)
• If business is wound up Preference shareholders are repaid before Ordinary shares (2).
• Ordinary shares carry voting rights (1), Preference shares usually have no (or less)
voting rights (1) [Any two, two marks each) [4]
(d) • Ordinary shares are capital (1), Debentures are a long term loans (1)
• Debentures are paid interest (1), Ordinary shares receive dividends (1)
• If company is wound up debentures are repaid before Ordinary shares (2)
Debenture holders carry no voting rights (1), Ordinary shares carry voting rights (1)
[Any two, 2 marks each] [4]
(e) To distribute profit to the shareholders, reward shareholders for investment, to encourage
investment. [Any one, 2 marks] [2]
(f) Ordinary shares $1 800 (2)
Preference shares $360 (3) (Allow 2 marks for $720) [5]
(g) Limited liability if business becomes bankrupt

Partners have to work in the business where shareholders may only invest
(Any other suitable comment 2 marks ) [2]
[Total 24]


0452 ACCOUNTING
components.


1 (a) Zabeel
$ $
52 200
52 680
Factory overheads
Loose tools (980 + 130 – 820) 290 (1) 49 290
145 820 (1) O/F
[14]
(b) Zabeel
www.igcseaccounts.com $ $
Revenue 183 400 (1)
Less Cost of sales
144 820
[6]
(ii) Prudence [1]
[Total: 24]


2 (a) Nancy Tanwin

2012 $ 2011 $
(1)O/F Jan 1 Bank 1296} (1)
2808 2808
2012
+ (1) Dates [6]

(c) Nancy Tanwin

2011 $ 2011 $
2012 } (1) 2012
(1)O/F
1274 1274
2012
+ (1) Dates [6]
(d)
Overstate
Understated
[1]


(e) Nancy Tanwin

$
Increase Decrease
in profit in profit
$ $
Error 1 20
Error 2 1100 (2)
Error 4 310 (2)
Error 5 260 (2)
____ ___
1360 330 1030
[9]
[Total: 24]
lenders.


(c) White Rose Ltd

$ $
proposed (1) 7 000 (1) 22 250
[9]
(d) White Rose Ltd

$
General reserve (18 500 + 10 000) 28 500 (2)
(1) O/F
[5]
(e) White Rose Ltd

$
[2]
[Total: 22]



Any 1 point (1) [1]
(b) Ruth Van Zyl

2012 $ 2012 $
Balance c/d 11 150 ______
21 520 21 520
2012 2012
O/F (1)O/F
+(1) Dates [11]

May reduce fraud



[4]
(e) Ruth Van Zyl

Journal
Debit Credit
$ $
Wilhelm 15 (1)
Ansie (purchases ledger account)
Ansie (sales ledger account)
500
500
(1)
(1)

account
[6]
[Total: 24]



2011 $ 2012 $
2012 Discount 1 640 (1)
______ Balance c/d 6 290 (1)
65 550 65 550

$
Bad debts 1 260 (1)
65 550
[6]
(b) 25 x 60 600 OF = 12 120 (2) O/F [2]

125 1
(d) 48 480 O/F = 8.08 times (2) C/F

6 000 (1) O/F [2]

(f) (5800 + 6290 + 100) : (6150 + 1240)

= 12 190 (1) C/F : 7390 (1) C/F
= 1.649 : 1
= 1.65 : 1 (1) C/F
[3]


(g) (6290 + 100) : (6150 + 1240)

= 6390 (1) C/F : 7390 (1) C/F
= 0.864 : 1
= 0.86 : 1 (1) C/F [3]
Either
collected. (1)
Or
[2]

Reduce drawings
Any 1 point (2) [2]
[Total: 26]


0452 ACCOUNTING
components.


1 (a) Zabeel
$ $
52 200
52 680
Factory overheads
Loose tools (980 + 130 – 820) 290 (1) 49 290
145 820 (1) O/F
[14]
(b) Zabeel
www.igcseaccounts.com $ $
Revenue 183 400 (1)
Less Cost of sales
144 820
[6]
(ii) Prudence [1]
[Total: 24]


2 (a) Nancy Tanwin

2012 $ 2011 $
(1)O/F Jan 1 Bank 1296} (1)
2808 2808
2012
+ (1) Dates [6]

(c) Nancy Tanwin

2011 $ 2011 $
2012 } (1) 2012
(1)O/F
1274 1274
2012
+ (1) Dates [6]
(d)
Overstate
Understated
[1]


(e) Nancy Tanwin

$
Increase Decrease
in profit in profit
$ $
Error 1 20
Error 2 1100 (2)
Error 4 310 (2)
Error 5 260 (2)
____ ___
1360 330 1030
[9]
[Total: 24]
lenders.


(c) White Rose Ltd

$ $
proposed (1) 7 000 (1) 22 250
[9]
(d) White Rose Ltd

$
General reserve (18 500 + 10 000) 28 500 (2)
(1) O/F
[5]
(e) White Rose Ltd

$
[2]
[Total: 22]



Any 1 point (1) [1]
(b) Ruth Van Zyl

2012 $ 2012 $
Balance c/d 11 150 ______
21 520 21 520
2012 2012
O/F (1)O/F
+(1) Dates [11]

May reduce fraud



[4]
(e) Ruth Van Zyl

Journal
Debit Credit
$ $
Wilhelm 15 (1)
Ansie (purchases ledger account)
Ansie (sales ledger account)
500
500
(1)
(1)

account
[6]
[Total: 24]



2011 $ 2012 $
2012 Discount 1 640 (1)
______ Balance c/d 6 290 (1)
65 550 65 550

$
Bad debts 1 260 (1)
65 550
[6]
(b) 25 x 60 600 OF = 12 120 (2) O/F [2]

125 1
(d) 48 480 O/F = 8.08 times (2) C/F

6 000 (1) O/F [2]

(f) (5800 + 6290 + 100) : (6150 + 1240)

= 12 190 (1) C/F : 7390 (1) C/F
= 1.649 : 1
= 1.65 : 1 (1) C/F
[3]


(g) (6290 + 100) : (6150 + 1240)

= 6390 (1) C/F : 7390 (1) C/F
= 0.864 : 1
= 0.86 : 1 (1) C/F [3]
Either
collected. (1)
Or
[2]

Reduce drawings
Any 1 point (2) [2]
[Total: 26]


0452 ACCOUNTING
components.


1 (a)
Nadia Dhari
$ $ $
to date value
Fixtures & fittings 7 000 2 520 (1) 4 480 (1)
Motor vehicles 12 000 7 200 (1) 4 800 (1)
19 000 9 720 9 280
Current assets
Inventory 2 800 (1)
Trade receivables (3500 (1) – 70 (1)) 3 430
Bank 4 120 (1)
10 570
Current liabilities
Other payables 350 (1) 3 450
16 400
Loan 3 000 (1)
13 400
Financed by
Capital
Balance www.igcseaccounts.com
13 400 (1) O/F
13 400
[13]


$
Closing capital 13 400 (1) O/F
Drawings – cash 2 800 (1)
goods 350 (1)
16 550
8 350
Nadia Dhari
Capital Account
2012 $ 2011 $
June 30 Cash 2 800 (1) July 1 Balance b/d 8 200 (1)
Purchases 350 (1) Dec 1 Bank 5 000 (1)
Balance c/d 13 400 (1) 2012
O/F June 30 Profit 3 350 (2) O/F
16 550 16 550
2012
3430 365
(c) × = 43.32 = 44 days (2) [2]
28900 1
(d) Unsatisfied (1)

Or satisfied if answer to (c) is 30 or below [1]
(e) The business may not have enough liquid funds with which to pay the credit suppliers until
money is received from credit customers.
Or
If the credit customers pay within the set time the business may be able to pay the credit
suppliers within the set time without any significant impact on the bank balance.
Or
If the credit customers fail to pay within the set time it may be necessary to obtain short-term
funds in order to pay the credit suppliers.
Any 1 point (2) [2]
[Total: 25]


2 (a) (i)
Sajeev Kumar
Fixtures account
2010 $ 2011 $
Aug 1 Bank 2 600 (1) July 31 Balance c/d 2 600
2011 2012
Aug 1 Balance b/d 2 600 July 31 Balance c/d 4 040
Dec 1 A1 Supplies 1 440 (1)
2012 4 040 4 040
Aug 1 1 Balance b/d 4 040 (1)
[3]
(ii)
Provision for depreciation of fixtures account
2011 $ 2011 $
July 31 Balance c/d 650 July 31 Income statement 650 (1)
2012 –––– 2011
July 31 Balance c/d 1 540 Aug 1 Balance b/d 650 (1) OF
2012
July 31 Income statement 650 (1)
240 (1) 890
1 540 1 540
2012
Aug 1 Balance b/d 1 540 (1) OF
[5]
(b)
account to be account to be
debited credited
Transferring the accumulated Provision for Disposal of fixtures

depreciation on the fixtures from the depreciation of
ledger fixtures (1) (1)
Transferring the original cost of the Disposal of fixtures Fixtures

fixtures from the ledger (1) (1)
Recording the proceeds of sale of the Cash Disposal of fixtures

fixtures (1) (1)
[6]


(c)
Money spent on purchasing, improving Money spent on running the business
or extending non-current assets on a day-to-day basis
Money spent on items which increase Money spent on the costs of running the
the profit-earning ability of the business business
Money spent of items which will be Money spend on items which only
used in the business over several years benefit the business for one financial
year
Are recorded in the statement of Are recorded in the income statement

financial position
Explanation of any one difference (2) [2]
(d) (i) Profit for the year ended 31 July 2012

Reason An expense has been omitted from the income statement (1)
(i) Capital employed at 31 July 2012
Reason The non-current assets include $300 which is an expense (1)
Or
The total capital is overstated because the profit for the year was overstated (1)
[4]
(e) (i) Selling goods at higher prices

Reduction in cost of sales
(ii) More expenses

Reduction in other income
Change in type of expenses
Expenses not controlled as well as previously
(iii) Decreased (1)

The percentage of expense to sales (revenue) has increased (1) [2]
[Total: 26]


3 (a)
Daisy Matumo
$ $
Fees (35 120 (1) + 520 (1)) 35 640
Rent received (2 750 (1) – 150 (1)) 2 600
38 240
Less Wages (18 750 (1) + 450 (1) – 300(1)) 18 900
Office expenses 11 265
Loss on disposal
((3 450 – 3 025) (1) – 200 (1)) 225
Depreciation – equipment 150 (2) 30 540
3 7 700 (1) O/F
(20% × 3 000 × )
12
[12]
(b)
Daisy Matumo
Capital account
2012 $ 2011 $
Oct 31 Drawings 6 200 (1) Nov 1 Balance b/d 60 000 (1)
Balance c/d 61 500 2012
Oct 31 Profit 7 700 (1) O/F
67 700 67 700
Balance
2012
Nov 1 b/d 61 500 (1) O/F
[4]
(c) 7 700 × 100 = 12.52% (2) C/F

100 1 (1) O/F [2]
(d) Error 2 Effect Increase (1)

Reason The capital employed decreases because of the drawings.
Error 3 Effect No effect (1)

Reason There is no change in the capital employed.
[4]
[Total: 22]


4 (a)
Parnell Sport Club
2011 $ 2012 $
Aug 1 Balance b/d 3 200 (1) July 31 Equipment 9 530 (1)
2012 Rent 2 400 (1)
July 31 Sale of equipment 320 (1) General expenses 2 760 (1)
Subscriptions Insurance 1 800 (1)
2011 180 (1) Suppliers 2 840 (1)
2012 12 000 (1)
Cash sales 3 450 (1)
Balance c/d 180
19 330 19 330
2012
Aug 1 Balance b/d 180 (1) O/F
[11]
(b) Current liability [1]
(c) Subscriptions are amounts paid by members of a club or society to use the facilities provided
by the club [1]
(d) This is a non-current asset and the income and expenditure account only contains revenue
expenditure.
(1) for basic statement + (1) for development [2]
(e) Part of the payment for insurance is for the next financial year. (1)
Either
The income and expenditure account includes only expenses for that year
This is an application of the matching/accruals principle (1) [2]
(f) Calculation of purchases for the year

$
Payments to suppliers 2 840 (1)
Amount owing 31 July 2012 670 (1)
3 510
Less Amounts owing 1 August 2011 750 (1)
Purchases for the year 2 760 (1)
2012 $ 2011 $
July 31 Bank 2 840 (1) Aug 1 Balance b/d 750 (1)
Balance c/d 670 (1) 2012 2 760 (1)
3 510 July 31 Purchases * 3 510
[4]


(g) $
Shop sales 3 450
Shop purchases 2 760 O/F
Profit 690 (1) O/F
[1]
(h) 690 × 100 = 25% (2) C/F

2 760 1 (1) O/F [2]
[Total: 24]
5 (a)
Tun and Min
Journal
Debit Credit
$ $

Tun Capital 7000 (1)
Motor vehicle introduced by Tun (1)
Min Capital (1)

3000
Min Current
3000 (1)
Debit balance on Min’s current account (1)
transferred to his capital account
[6]
(b)
Tun and Min
Balance Sheet extract at 30 September 2012
$ $ $
Tun Min Total
Capital account 47 000 (1) 47 000 (1) 94 000
Current account (1 180) (1) 230 (1) (950)
45 820 47 230 93 050 (1) [5]
(c) This represents the amount owing by Tun to the business [2]
(d) To compensate for an unequal workload

Or In recognition of work done in the business [2]
(e) To discourage the partners from making excessive drawings [2]


(f) Interest on capital 1 880 × 100 = 4% (2) [2]

47 000 1
(g) Should compare with a business in the same trade

Should compare with a business of the same type (partnership)
The accounts may be for one year only which will not show trends
The accounts may be for one year only which may not be a typical year
Any two acceptable points (2) each [4]
[Total: 23]

Cambridge Assessment International Education
ACCOUNTING 0452/11
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge International will not enter into discussions about these mark schemes.
Cambridge International is publishing the mark schemes for the October/November 2017 series for most
components.

0452/11 Cambridge IGCSE – Mark Scheme October/November
PUBLISHED 2017
1(a) D 1
1(b) C 1
1(c) B 1
1(d) C 1
1(e) C 1
1(f) A 1
1(g) D 1
1(h) B 1
1(i) B 1
1(j) A 1

PUBLISHED 2017
2(a) The amount owed by the business to the owner. 1

The funds put into the business/contributed by the owner (plus profits net of drawings).
2(b) Principle 4
A trader withdraws goods for his own use and records this in the drawings Business entity (1)
account.
A book-keeper writes off debts which will not be paid to the business. Prudence/accruals (matching) (1)
An accountant does not include staff morale as an asset in the statement of Money measurement (1)
financial position.
A business uses the double entry system of book-keeping to record transactions. Duality (1)
2(c) Nominal (general) ledger 1
2(d) (Limited) company 1
2(e) Items which a business owns or which are owed to the business are known as ASSETS. 1
2(f) document reason for issue name of person issuing document 6
invoice to record goods sold on credit Jake

debit note to ask for reduction in invoice (1) Rashida (1)
credit note to accept request for reduction in invoice (1) Jake (1)
statement of account to summarise transactions for the month (1) Jake (1)

PUBLISHED 2017
2(g) True or 3
False
Work in progress may appear in Jake’s manufacturing True (1)
account.
Prime cost appears in Jake’s income statement. False (1)
Jake’s business is a service business. False (1)

PUBLISHED 2017
3(a) A bank statement is a copy of the customer’s account as it appears in the books of the bank. 1
3(b) Kang-Dae 7
2017 $ 2017 $
June 1 Balance b/d 1 310 (1) June 1 Bank charges 60 (1)
Nigel 540 (1) Rent 1 000 (1)
Insurance 320 (1) Electricity 400 (1)
(error)
Balance c/d 710
2 170 2 170
June 1 Balance b/d 710 (1)OF
3(c) Kang-Dae 6
Bank reconciliation statement at 1 June 2017
$
Balance per cash book (1) 710 (1)OF
1 410
Less uncredited deposit 620 (1)
Balance per bank statement (1) 790 (1)
OR
Kang-Dae
$

Add uncredited deposit 620 (1)
1 410
Less unpresented cheque 700 (1)

PUBLISHED 2017
3(d) A loan is of fixed amount but an overdraft is of varying amount. 2

A loan is for a fixed term but an overdraft may be paid back at any time.
A loan may require security but an overdraft may be unsecured.
A loan may have a fixed rate of interest but an overdraft will have a variable rate.
Any two for (1) each
3(e) Non-current liabilities 1
4(a) (17 040 − 12780) (1) 3

× 100 = 10% (1)OF
42 600 (1)
4(b) 1 May 2015: 3

Cash book (1)
1 August 2016:
1 Nominal (general) journal (1)
2 Cash book (1)

PUBLISHED 2017
4(c) workings $ 12
fixtures and fittings at cost on 31 December 2015 42 600 + 12 000 54 600

(1)
fixtures and fittings at cost on 31 December 2016 54 600 (OF) – 10 000 44 600
(1)OF
depreciation charge for the year ended 31 December 2015 (54 600 (OF) × 10%) (1)OF 5 460
(1)OF
accumulated depreciation at 31 December 2015 17 040 + 5 460 (1)OF 22 500
(1)OF
(1)OF
accumulated depreciation at 31 December 2016 22 500 (1)OF + 4 460 (1)OF – 4 000 (1) 22 960
(1)OF
4(d) debit entry credit entry 2
income statement (1) provision for depreciation of fixtures and fittings account (1)
4(e) debit entry credit entry 2
provision for depreciation of fixtures and fittings account (1) disposal account (1)
4(f) Reducing (diminishing) balance method (1) 3

Annual percentage rate (1) is applied to the net book value (1) of the asset.
OR
Revaluation method (1)
The difference between the opening and closing valuations is taken (1) and adjusted for any purchases or disposals (1)

PUBLISHED 2017
4(g) capital expenditure revenue expenditure 4
cost of vehicle 9 (1)

number plates 9 (1)
fuel 9 (1)
insurance of vehicle 9 (1)
4(h) Capital introduced 1

Receipt of loan
Proceeds of sale of non-current asset

PUBLISHED 2017
5(a) Satish 4
Suspense account
2017 $ 2017 $
Jun 30 Drawings 2 000 (1) Jun 30 Balance b/d 3 900 (1)
Capital 2 000 (1) Purchases 100 (1)
4 000 4 000
5(b)(i) Satish 8
Statement of correction of gross profit for the year ended 30 June 2017
No Effect Increase Decrease

$ $ $
Draft gross profit 20 000
Error 1 400 (2)
Error 2 550 (2)
Error 3 100 (2)
Error 4 9 (1)
400 650 (250)

Corrected gross profit 19 750
(1)OF
*(2 marks) = (1) for right column, and second mark for correct amount
5(b)(ii) $ $ 5
Corrected gross profit 19 750 (1)OF
Rent 6 000
Wages 2 800
Other operating expenses 4 180 (2)*
*2 marks for all three components, 1 mark for two components

PUBLISHED 2017
5(c) Satish 10
$ $ $
Non-current assets Cost Accumulated Net book
depreciation value
Fixtures and fittings 12 000 (1) 4 500 (1) 7 500
Current assets
Inventory (4 620 – 550) 4 070 (1)
Trade receivables (3 100 + 400) 3 500 (1)
7 570
Total assets 15 070
Capital at 1 July 2016 14 200 (1)

Profit 5 270 (1)OF
21 470
Drawings 8 900 (1)
Capital at 30 June 2017 12 570
Current liabilities
Bank 600 (1)
15 070
Accept alternative presentation

PUBLISHED 2017
6(a) A business in which two or more people work together as owners. 1
6(b) Amina and Samara 4

Appropriation Account for the year ended 30 June 2017
$ $
Interest on capital – Amina 5 500 (1)
– Samara 2 000 (1)
7 500
10 000
Share of profit – Amina 6 000 (1)OF
– Samara 4 000 (1)OF
10 000

PUBLISHED 2017
6(c) Amina and Samara 3

Capital accounts
Date Details Amina Samara Date Details Amina Samara

$ $ $ $
2017 Jun 30 Balance c/d 60 000 20 000 2016 Jul 1 Balance b/d 50 000 20 000 (1)
2017 Jan 1 (1)
Cash 10 000
60 000 20 000 60 000 20 000
2017 Jul 1 Balance b/d 60 000 20 000 (1)
OF
Current accounts 5

$ $ $ $
2017 Jun 30 Drawings 8 000 12 000 (1) 2016 Jul 1 Balance b/d 4 000 3 000 (1)
Balance c/d 7 500 2017 Jun 30 Interest on capital 5 500 2 000 (1of)
Share of profit 6 000 4 000 (1of)
Balance c/d 3 000
15 500 12 000 15 500 12 000
Jul 1 Balance b/d 3 000 Jul 1 Balance b/d 7 500 (1of)
Where appropriate mark is for both entries
6(d) Profit for the year would be lower by the amount of the loan interest. (1) 2
Interest on capital would be lower by the interest on the additional capital. (1)
Shares of profit might be higher or lower depending on rate of loan interest. (1)
Max 2

PUBLISHED 2017
6(e) Samara has a debit balance on her current account (1) which means that she owes funds to the business. (1) 4
Samara’s drawings are greater than her total allocation of profit, (1) which means she is reducing the capital of the
business. (1)
The partnership agreement could be amended (1) to introduce a partner’s salary/interest on drawings/change in the profit
sharing ratio. (1)
Amina has had to introduce additional capital (1) in order to run the day to day business/cover what Samara has taken as
drawings. (1)
One mark for basic point, plus one for development to max 4

ACCOUNTING 0452/12
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED 2017
1(a) C 1
1(b) D 1
1(c) A 1
1(d) A 1
1(e) A 1
1(f) B 1
1(g) A 1
1(h) C 1
1(i) D 1
1(j) B 1
2(a) duality (1) 1
2(b) True or False 5
Carriage inwards appears on the debit side of a trial balance. True (1)
Inventory is included in current assets. True (1)
A suspense account represents the difference between the False (1)
cash book balance and the balance on the bank statement.
A sole trader enjoys limited liability. False (1)
The sales account appears in the nominal/general ledger. True (1)
2(c) An adjustment for a prepayment reduces expenses and increases profit. (1) 1
2(d) To monitor progress 1

To prepare financial statements
For decision making
Any one reason for (1) mark
2(e) term organisation 5
prime cost manufacturing business

accumulated fund club/society (1)
dividend limited company (1)
interest on capital partnership (1)
work in progress manufacturing business (1)
drawings sole trader (1) OR partnership (1)

PUBLISHED 2017
2(f) In the income statement (1) as an addition to gross profit / as an item of income/credit (1) 2
2(g) An income statement deals with revenues and costs, (1) whilst a statement of financial 2
position deals with assets and liabilities. (1)
OR
An income statement covers a period of time, (1) whilst a statement of financial position is
for a specified date. (1)
2(h) Trade payable 1

Club member
Committee member
Bank
Accept other valid answers
2(i) Historic cost 1

Difficulties of definition
Non-financial aspects
3(a) To reduce the number of entries in the ledger 1

To allow book-keeping duties to be shared
As an aid for posting to the ledger
To summarise accounting information
To help in the preparation of control accounts
To group together similar types of transactions
To make it easier to check for errors
Accept other valid answers.

3(b) Cash book (1) 1
3(c) Date Source document Issued by 4
May 2 invoice (1) Asnee (1)

May 4 credit note (1) Asnee (1)

PUBLISHED 2017
3(d) Jason 6
Purchases account
2017 $ 2017 $
May 1 Balance b/d 19 620 (1) May Income 21 725 (1)OF
31 statement
31 Total for month 2 105 (1)
21 725 21 725

2017 $ 2017 $
May 31 Income 1010 (1)OF May Balance b/d 850 (1)
statement 1
31 Total for month 160 (1)
1010 1 010
3(e) Asnee account 7

2017 $ 2017 $
May 4 Purchases returns 105 (1) May 1 Balance b/d 480 (1)
6 Bank 468 (1) 2 Purchases 400 }
6 Discount received 12 (1) 19 Purchases 190 {(1)
31 Balance c/d 485
1 070 1 070
Jun 1 Balance b/d 485 (1)OF
+1 for dates
3(f) A list of account balances (1) at a specific date. (1) 2
3(g) Any two of: 4

Omission (1) transaction totally omitted from the books. (1)
Commission (1) transaction posted to wrong account of right class. (1)
Principle (1) transaction posted to account of wrong class. (1)
Original entry (1) transaction incorrectly recorded in book of prime entry. (1)
Reversal (1) debit entry posted on credit side and vice versa. (1)
Compensating (1) errors cancel one another out. (1)
3(h) By comparing control account totals to the totals of balances of the sales and purchases 2
ledgers, (1) Jason might be able to locate the error. (1)

PUBLISHED 2017
4(a) FTA Industries 8

2015 $ 2015 $
Dec 31 Income Jan 1 Balance b/d 2 163 (1)
statement 787 (1)OF
2 163 2 163
2016 2016
Dec 31 Balance c/d 1 638 (1) Dec 31 Income
statement 262 (1)OF
1 638 1 638
2017
+1 for dates Jan 1 Balance b/d 1 638 (1)OF
4(b) Increase (1) OF of $787 (1)OF 2
4(c) Account debited Account credited 2
Bad debts (1) Eddie (1)
4(d) General journal (1) 1
4(e) FTA Industries 3

Income Statement (extract) for the year ended 31 December 2016
$
Expenses (1)
Bad debts 1 400 (1)
doubtful debts 262 (1)OF
4(f) Accruals/matching (1) 2

Prudence (1)
5(a) $ $ 6
Receipts
Share issue (opening balance) 500 000 (1)
790 000
Payments
Non-current assets (400+20+35) 455 000 (1)
Wages and other expenses 80 000 728 000 (1)
62 000 (1)OF

PUBLISHED 2017
5(b) HS Limited 12
$ $
Revenue 290 (1) + 20 (1) 310 000
Purchases 193 (1) + 25 (1) 218 000
Inventory at 31 December 2016 21 000 (1)
Wages and other expenses 80(1)–10(1) 70 000
Depreciation – buildings 2 000 (1)
– vehicles 5 000 (1)
– fixtures and fittings 3 500 (1)
80 500
5(c) HS Limited 9
Statement of Financial Position at 31 December 2016
Non-current assets
Cost Acc dep NBV
$ $ $
Premises 400 000 2 000 398 000 (1)OF
Vehicle 20 000 5 000 15 000 (1)OF
Fixtures and fittings 35 000 3 500 31 500 (1)OF
455 000 10 500 444 500
Current assets
Bank 62 000 (1)OF
113 000
Equity
1 000 000 ordinary shares of $0.50 500 000 (1)
532 500
Current liabilities
Accept alternative format
5(d) In statement of changes in equity (1) 1

PUBLISHED 2017
5(e) Percentage of gross profit to revenue: 2
Lower selling prices

Undercutting competitors
Use of promotional pricing/trade discount to enter market
Higher purchase prices
Lack of trade discount on purchases
Percentage of profit to revenue:
Better control of expenses (1)
6(a) Current assets minus current liabilities (1) 1
6(b) 5600 : 4400 (1) = 1.27 : 1 (1)OF 2
6(c) Quick ratio/acid test/liquid ratio 1

Trade payables payment period
(Rate of) inventory turnover
6(d) He may not be able to meet liabilities as they fall due. 4

He may not be able to pay day to day running expenses.
He may not be able to take advantage of discounts.
He has a lot of cash tied up in inventory.
Inventory makes up more than half of his current assets.
His trade payables are greater than his trade receivables.
He has a bank overdraft.
Each basic statement (1) plus development (1) to max 4
6(e) 6
working capital owner’s capital
1 introduced $2000 capital in the increase $2000 increase $2000
form of cash
2 received a long term loan, $500 increase $500 (1) no effect (1)
3 bought inventory, $400, on credit no effect (1) no effect (1)
4 sold goods costing $100 for $180 increase $80 (1) increase $80 (1)
cash
6(f) 1 – capital intro (1), or 2 – loan (1) 1
6(g) To know the return earned on total funds used in the business. (1) 1
Or to compare with other businesses. (1)

ACCOUNTING 0452/13
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED 2017
1(a) D 1
1(b) C 1
1(c) B 1
1(d) C 1
1(e) C 1
1(f) A 1
1(g) D 1
1(h) B 1
1(i) B 1
1(j) A 1

PUBLISHED 2017
2(a) The amount owed by the business to the owner. 1

The funds put into the business/contributed by the owner (plus profits net of drawings).
2(b) Principle 4
A trader withdraws goods for his own use and records this in the drawings Business entity (1)
account.
A book-keeper writes off debts which will not be paid to the business. Prudence/accruals (matching) (1)
An accountant does not include staff morale as an asset in the statement of Money measurement (1)
financial position.
A business uses the double entry system of book-keeping to record transactions. Duality (1)
2(c) Nominal (general) ledger 1
2(d) (Limited) company 1
2(e) Items which a business owns or which are owed to the business are known as ASSETS. 1
2(f) document reason for issue name of person issuing document 6
invoice to record goods sold on credit Jake

debit note to ask for reduction in invoice (1) Rashida (1)
credit note to accept request for reduction in invoice (1) Jake (1)
statement of account to summarise transactions for the month (1) Jake (1)

PUBLISHED 2017
2(g) True or 3
False
Work in progress may appear in Jake’s manufacturing True (1)
account.
Prime cost appears in Jake’s income statement. False (1)
Jake’s business is a service business. False (1)

PUBLISHED 2017
3(a) A bank statement is a copy of the customer’s account as it appears in the books of the bank. 1
3(b) Kang-Dae 7
2017 $ 2017 $
June 1 Balance b/d 1 310 (1) June 1 Bank charges 60 (1)
Nigel 540 (1) Rent 1 000 (1)
Insurance 320 (1) Electricity 400 (1)
(error)
Balance c/d 710
2 170 2 170
June 1 Balance b/d 710 (1)OF
3(c) Kang-Dae 6
$
1 410
Less uncredited deposit 620 (1)
OR
Kang-Dae
$

Add uncredited deposit 620 (1)
1 410
Less unpresented cheque 700 (1)

PUBLISHED 2017
3(d) A loan is of fixed amount but an overdraft is of varying amount. 2

A loan is for a fixed term but an overdraft may be paid back at any time.
A loan may require security but an overdraft may be unsecured.
A loan may have a fixed rate of interest but an overdraft will have a variable rate.
Any two for (1) each
3(e) Non-current liabilities 1
4(a) (17 040 − 12780) (1) 3

× 100 = 10% (1)OF
42 600 (1)
4(b) 1 May 2015: 3

Cash book (1)
1 August 2016:
1 Nominal (general) journal (1)
2 Cash book (1)

PUBLISHED 2017
4(c) workings $ 12
fixtures and fittings at cost on 31 December 2015 42 600 + 12 000 54 600

(1)
fixtures and fittings at cost on 31 December 2016 54 600 (OF) – 10 000 44 600
(1)OF
(1)OF
accumulated depreciation at 31 December 2015 17 040 + 5 460 (1)OF 22 500
(1)OF
(1)OF
accumulated depreciation at 31 December 2016 22 500 (1)OF + 4 460 (1)OF – 4 000 (1) 22 960
(1)OF
4(d) debit entry credit entry 2
income statement (1) provision for depreciation of fixtures and fittings account (1)
4(e) debit entry credit entry 2
provision for depreciation of fixtures and fittings account (1) disposal account (1)
4(f) Reducing (diminishing) balance method (1) 3

Annual percentage rate (1) is applied to the net book value (1) of the asset.
OR
Revaluation method (1)
The difference between the opening and closing valuations is taken (1) and adjusted for any purchases or disposals (1)

PUBLISHED 2017
4(g) capital expenditure revenue expenditure 4
cost of vehicle 9 (1)

number plates 9 (1)
fuel 9 (1)
insurance of vehicle 9 (1)
4(h) Capital introduced 1

Receipt of loan
Proceeds of sale of non-current asset

PUBLISHED 2017
5(a) Satish 4
Suspense account
2017 $ 2017 $
Jun 30 Drawings 2 000 (1) Jun 30 Balance b/d 3 900 (1)
Capital 2 000 (1) Purchases 100 (1)
4 000 4 000
5(b)(i) Satish 8
Statement of correction of gross profit for the year ended 30 June 2017

$ $ $
Draft gross profit 20 000
Error 1 400 (2)
Error 2 550 (2)
Error 3 100 (2)
Error 4 9 (1)
400 650 (250)

Corrected gross profit 19 750
(1)OF
*(2 marks) = (1) for right column, and second mark for correct amount
5(b)(ii) $ $ 5
Corrected gross profit 19 750 (1)OF
Rent 6 000
Wages 2 800
Other operating expenses 4 180 (2)*
*2 marks for all three components, 1 mark for two components

PUBLISHED 2017
5(c) Satish 10
$ $ $
Non-current assets Cost Accumulated Net book
depreciation value
Fixtures and fittings 12 000 (1) 4 500 (1) 7 500
Current assets
Inventory (4 620 – 550) 4 070 (1)
Trade receivables (3 100 + 400) 3 500 (1)
7 570
Total assets 15 070
Capital at 1 July 2016 14 200 (1)

Profit 5 270 (1)OF
21 470
Drawings 8 900 (1)
Capital at 30 June 2017 12 570
Current liabilities
Bank 600 (1)
15 070

PUBLISHED 2017
6(a) A business in which two or more people work together as owners. 1
6(b) Amina and Samara 4

Appropriation Account for the year ended 30 June 2017
$ $
Interest on capital – Amina 5 500 (1)
– Samara 2 000 (1)
7 500
10 000
Share of profit – Amina 6 000 (1)OF
– Samara 4 000 (1)OF
10 000

PUBLISHED 2017
6(c) Amina and Samara 3

Capital accounts

$ $ $ $
2017 Jun 30 Balance c/d 60 000 20 000 2016 Jul 1 Balance b/d 50 000 20 000 (1)
2017 Jan 1 (1)
Cash 10 000
60 000 20 000 60 000 20 000
2017 Jul 1 Balance b/d 60 000 20 000 (1)
OF
Current accounts 5

$ $ $ $
2017 Jun 30 Drawings 8 000 12 000 (1) 2016 Jul 1 Balance b/d 4 000 3 000 (1)
Balance c/d 7 500 2017 Jun 30 Interest on capital 5 500 2 000 (1of)
Share of profit 6 000 4 000 (1of)
Balance c/d 3 000
15 500 12 000 15 500 12 000
Jul 1 Balance b/d 3 000 Jul 1 Balance b/d 7 500 (1of)
Where appropriate mark is for both entries
6(d) Profit for the year would be lower by the amount of the loan interest. (1) 2
Interest on capital would be lower by the interest on the additional capital. (1)
Shares of profit might be higher or lower depending on rate of loan interest. (1)
Max 2

PUBLISHED 2017
6(e) Samara has a debit balance on her current account (1) which means that she owes funds to the business. (1) 4
Samara’s drawings are greater than her total allocation of profit, (1) which means she is reducing the capital of the
business. (1)
The partnership agreement could be amended (1) to introduce a partner’s salary/interest on drawings/change in the profit
sharing ratio. (1)
Amina has had to introduce additional capital (1) in order to run the day to day business/cover what Samara has taken as
drawings. (1)
One mark for basic point, plus one for development to max 4

ACCOUNTING 0452/21
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED 2017
1(a) Brian account 15

$ $
2016 2017
Aug 1 Balance b/d 1 000 July 31 Cash 720 (1)
Bad debts 280 (1)
1 000 1 000
Bad debts account

$ $
2017 2017
July 31 Total to date 990 July 31 Income
Brian 280 (1) Statement 1 270 (1)OF
1 270 1 270

$ $
2017 2017
July 31 Income July 31 Bank
Statement* 118 (1) (AL Stores) 118 (1)
118 118
* Alternately accept transfer to bad debts account and net transfer from bad
debts to income statement
Rent account
$ $
2017 2017
July 31 Total paid 5 200 July 31 Balance c/d 400
Drawings 1 200 (1)
Income Statement 3 600 (1)OF
5 200 5 200
2017
Aug 1 Balance b/d 400 (1)
Drawings account
$ $
2017 2017
July 31 Total to date 9 650 July 31 Capital 10 850 (1)OF
Rent 1 200 (1)OF
10 850 10 850

$ $
2017 2017
July 31 Income July 31 Total to date 890
Statement 1 040 (1) Balance c/d 150
1 040 1 040
2017

PUBLISHED 2017
1(a) Provision for depreciation of office fixtures account

$ $
2017 2016
July 31 Balance c/d 15 435 Aug 1 Balance b/d 11 100
2017
July 31 Income 4 335 (1)
Statement
15 435 15 435
2017
Aug 1 Balance b/d 15 435 (1)OF
1(b) An estimate (1) of the amount which a business will lose/be unable to collect 2
in a financial year because of bad debts (1)
1(c) Percentage of the total amount owing by credit customers 1

Estimating which individual credit customers will not pay their accounts
Considering the length of time the debts have been outstanding
Estimate, based on experience, of amount lost each year from bad debts
Any 1 point (1)
1(d) debit credit 2
Income statement (1) Provision for doubtful debts (1)
1(e) The profit for the year is not overstated (1) 2

The trade receivables (current assets) are not overstated/shown at more
realistic value (1)
1(f) The sales for which a business is unlikely to be paid (1) are regarded as 2
an expense of the year in which those sales are made (1)
1(g) Reduce credit sales/sell on a cash basis 2


PUBLISHED 2017
2(a) 9
opening balance owed by credit customers 9(1)
credit sales 9(1)
cash sales 9(1)
provision for doubtful debts 9(1)
bad debts written off 9(1)
cash discount allowed to credit customers 9(1)
trade discount allowed to credit customers 9(1)
contra between sales and purchases ledger 9(1)
cash received from credit customers 9(1)
2(b) book of prime (original) entry 4
returns to credit suppliers purchases returns journal (1)

discount received cash book (1)
interest charged by credit supplier journal (1)
contra entry to sales ledger control journal (1)
account
2(c)(i) An entry which appears on the debit side of the purchases ledger control 1
account and the credit of the sales ledger control account (1)
2(c)(ii) It is made when a sales ledger account is set off against a purchases ledger 1
account of the same person/business (1)
2(d) Overpayment of the amount owing 2

2(e)(i) Trade receivables 365 1

× } whole formula (1)
Credit sales 1
2(e)(ii) 20 520 365 2

186 700 1
= 40.11 = 41 days (1)
2(f) Offer cash discount for prompt payment 2


PUBLISHED 2017
2(g) Trade payables 365 1

Credit purchases 1
2(h) Will not be pleased 2

May refuse further supplies
May charge interest
May issue stern reminders/threaten legal action
3(a) 5
$ $
Add Subscriptions outstanding at year end 240 (1)
12 780
Less Subscriptions prepaid at year end 180 (1)
Subscriptions outstanding at start of year 600 (1) 780
Subscriptions for the year 12 000 (1)
3(b) AS Sports Club 9

$ $ $
Income
Profit on shop – revenue 3 510
– less purchases 2 410 1 100 (1)
13 100
Expenditure
Rates and insurance
(1500 (1) + 60 (1)) 1 560
Open day – expenses 5 250
less receipts 4 180 1 070 (1)
Rent 1 800 }(1)
General expenses 2 640 }
Loan interest (5% × 7 000) 350 (1)
Depreciation of Equipment
((22 000 + 8 000) × 20%) 6 000 (1) 13 420
Deficit 320 (1)OF

PUBLISHED 2017
3(c) AS Sports Club 9

$ $ $
Assets
depreciation value
Equipment 30 000 10 400 (1)OF 19 600 (1)OF
Current assets
Other receivables
(Subscriptions) 240 (1)
Total assets 19 840
Liabilities
Accumulated fund
Less Deficit 320 (1)OF
11 550
Bank loan
(repayable 2020) 7 000 (1)
Current liabilities
Other payables 350 (1)OF
(loan interest)
Bank 760 (1)
1 290
3(d) Loan interest is an expense account/any accrued interest is a current 2

liability (1)
The loan is a non-current liability (1)
Accept other valid points
4(a) (87 500 + 56 200 + 100) : (81 500 + 17 100) 2

= 143 800 : 98 600 (1) whole formula
= 1.46 : 1 (1)
4(b) Current assets only approximately 1½ times the current liabilities 2

Lower than the “benchmark” of 2:1
Do not have a lot of surplus current assets available after paying current
liabilities
Seems to be a little inadequate (depending on the type of business)
Comments to be based on answer to (a)

PUBLISHED 2017
4(c) (56 200 + 100) : (81 500 + 17 100) 2

= 56 300 : 98 600 (1) whole formula
= 0.57 : 1 (1)
4(d) Increased expenditure on inventory 2

Increase in bank overdraft/change from positive bank balance to overdraft
Increase in current liabilities/increase in trade payables
Decrease in cash
4(e) Unable to pay debts when they fall due 2

Unable to take advantage of cash discounts
Unable to take advantage of business opportunities when they arise
4(f) current ratio quick ratio 4
no no
increase decrease effect increase decrease effect
introduce 9 9
$20 000
additional
capital
obtain short- 9(1) 9(1)
term bank loan
of $10 000
sell half the 9(1) 9(1)
inventory at
cost price
4(g) Cost of sales 1

Average inventory
4(h) 765 990 765 990 2

Or
(87 500 + 72000) ÷ 2 87 500 − (15 500 ÷ 2)
765 990
= } (1)
79 750
= 9.60 times (1)
4(i) Higher inventory levels 2


PUBLISHED 2017
5(a) 43 000 3
(500 000 + 11 000 + 14 000 + 75 000
43 000 (1) 100
= ×
600 000 (1) 1
= 7.17% (1)
5(b) 25 000 100 1

×
500 000 1
= 5%
5(c) 15 000 + 30 000 100 3

×
500 000 + 100 000 1
45 000 (1)
=
600 000 (1)
= 7.5% (1)
5(d) 71 000 – (3% × 75 000) (1) 2

= 71 000 – 2250
= 68 750 (1)
5(e) CP Limited 7
capital
$ $ $ $
On 1 October 2016 500 000 11 000 14 000 525 000 (1)
Share issue 100 000 100 000 (1)
Dividend paid (25 000) (25 000) (1)
(for year ended 30
September 2016)
Dividend paid (15 000) (15 000) (1)
(for year ended 30
September 2017)
reserve
On 30 September 600 000 16 000 37 750 653 750 (1)
2017

PUBLISHED 2017
5(f) Long term loans 2

Interest is not dependent on the company's profit
Are often secured on the assets of the company's
Any 2 features (1) each
5(g) Carry a fixed rate of dividend 2

5(h) increase decrease no 5

$ $ effect
effect on current assets 300 000
effect on non-current liabilities 300 000
(1)
effect on profit for the year 9 000
(2)*
effect on profit available for ordinary 9 000
shareholders (1)OF
effect on equity 9(1)

ACCOUNTING 0452/22
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED 2017
1(a)(i) Saffie 9
Petty Cash Book
Total Date Details Total Travel Postage & Ledger

received paid stationery accounts
$ 2017 $ $ $ $
63 Sept 1 Balance b/d
87 Bank (1)
3 Taxi fare (1) 12 12
11 Stationery (1) 64 64
21 Faariqa (1) 29 29
30 Postage (1) 22 22
127 12 86 29
Balance c/d 23
150 150
2017
23 Oct 1 Balance b/d (1)OF
+ (1) dates
+ (1)OF totalling analysis columns
+ (1)OF totalling total columns

PUBLISHED 2017
1(a)(ii) Saffie 10
Cash Book
allowed received
2017 $ $ $ 2017 $ $ $
Sept Balance b/d 120 Sept 3 841
Balance b/d
1 1
Thushari (1) 8 392 (1) 87
Petty cash
26
Sales (1) 40 4 800 7 (1) 461
Repairs
28
15 SL Stores (dis. (1) 210
chq.)
Sopitha (1) 12 468
30
8 40 5192 12 160 5 192

2017
Oct 1 Balances b/d 160 125
(1)OF (1)OF

+ (1) dates

PUBLISHED 2017
1(b) Saffie 6
$ $
Balance shown on bank statement (4 649) (1)
Add Cheque not credited – Thushari 392 (1)OF
Amount not credited – cash sales 4 800 (1)
Bank error 50 (1) 5 242
593
Less Cheque not presented – Sopitha 468 (1)OF

$ $
Add Cheque not presented – Sopitha 468 (1)OF
593
Less Cheque not credited – Thushari 392 (1)OF
Amount not credited – cash sales 4 800 (1)
Bank error 50 (1) 5 242
Balance shown on bank statement (4 649) (1)

PUBLISHED 2017
2(a) Mustafa 13
$ $
Less Purchases returns 1 800 445 600 (1)
448 190
385 990 (1)OF
Direct wages (287 400 (1) + 3 760 (1)) 291 160
Factory overheads
Factory supervisors’ wages 101 150
General expenses (¾ × 13 400) 10 050 (1)
Rates and insurance (⅔ × 12 600) 8 400 (1)
Depreciation
Machinery (20% × 92 000) 18 400 (1)
Loose tools (19 600 – 18 100) 1 500 (1) 139 500
816 650 (1)OF
2(b) $ 4
800 650
Less closing inventory of finished goods 69 700 (1)
Cost of sales 730 950 (1)OF

PUBLISHED 2017
2(c) Loan interest to pay every year. 1

Loan interest to pay irrespective of profits.
Loan to be repaid by given date.

Any 1 point (1)
2(d) Introduce additional capital 2

Take a partner
Convert to a limited company
Mortgage the premises
Borrow from family and friends
See if government grants are available


PUBLISHED 2017
3(a) Zikri 6
$ $
2016 2016
Sept 1 Balance b/d 495 (1) Sept 4 Bank 495 }
2017 (1) OF Dec 3 Bank 515 } (1)
Aug 31 Income statement 1 685 2017
Mar 5 Bank 374 }
Jun 2 Bank 404 } (1)
2 180 2 180
2017
+ (1) Dates
3(b) Zikri 4
Rent account
$ $
2017 2017
Jan 1 Bank 4 800 } Aug 31
July 1 Bank 4 800 } (1) Income statement 6 400 (1)OF
Balance c/d 3 200
9 600 9 600
2017
Sept 1 Balance b/d 3 200 (1)
+ (1) Dates

PUBLISHED 2017
3(c) Balance b/d 1 September 2016: 6

Value of stationery/inventory of stationery at that date. (1)
Credit stationery account for previous financial year. (1)
XY Limited 8 February 2017:

Value of stationery purchased on credit from XY Limited. (1)
Credit XY Limited account. (1)
Drawings 31 July 2017:

Value of stationery taken by owner for personal use. (1)
Debit drawings account. (1)
3(d) $205 1
3(e) Current assets 1
3(f) 10
Effect on gross profit Effect on profit for the year
General expenses omitted from income statement No effect Overstated
Opening inventory over-valued Understated (1) Understated (1)
Wages account over-added No Effect (1) Understated (1)
Sales returns omitted from income statement Overstated (1) Overstated (1)
Carriage inwards included in the expenses in the

Overstated (1) No Effect (1)
income statement
Purchases returns added to the purchases Understated (1) Understated (1)

PUBLISHED 2017
4(a) Rashida 14
$ $ $
Revenue 572 000
Less Returns 1 840 570 160 (1)
Cost of sales
Opening inventory 37 150 *
Purchases 455 900
Less Returns 2 750
453 150 (1)
497 240
Closing inventory 41 160 *(1) both 456 080
Less Wages 74 200
Rates & insurance (2 800 (1) × ¾ (1)) 2 100
*Loan interest (400 (1) + 200 (1)) 600
Bad debts 300 (1)
Depreciation:
Fixtures & fittings (20% × (65 000 – 23 500)) 8 300 (1)
Office equipment (21 000 + 2 800 – 20 600 3 200 (1) 90 690
*Alternative calculation 1 200 (1) ÷ 2 = 600 (1)
4(b) Revenue for the year is matched against the costs of the same period. (1) 2
Example:
Either The loan interest was adjusted for the outstanding amount.
Or The loss in value of non-current assets in the year was included.
Or A provision for doubtful debts was created. (1)

PUBLISHED 2017
4(c) The business is treated as being separate from the owner. (1) 2
Example
Rates and insurance for personal use were excluded. (1)
4(d) Should compare with a business in the same trade. 4

Should compare with a business of approximately the same size.
Should compare with a business of the same type (sole trader).
The financial statements may be for one year, which will not show trends.
The financial statements may be for one year which is not a typical year.
The financial year may end on different dates (when inventories are high/low).
The businesses may apply different accounting policies.
The statements do not show non-monetary factors.
It may not be possible to obtain all the information needed to make comparisons.

PUBLISHED 2017
5(a) Ben 5
Journal
Debit Credit
$ $
Shop fittings 14 300 }
Cash 500 (1)
Bank 32 400 (1)
Loan 15 000 (1)
Capital 47 400 (1)
62 400 62 400
5(b) Ben 6
Journal
Debit Credit
$ $
Office equipment 1 900 (1)
Equip Limited 1 900 (1)
Purchase of office equipment on credit (1)
Drawings 430 (1)

Purchases 430 (1)
5(c) Capital expenditure: 6

Money spent on acquiring, improving and installing non-current assets. (1)
Any suitable example, such as purchase of premises. (1)
Money spent on running the business on a day-to-day basis. (1)
Any suitable example, such as payment of wages. (1)
Revenue receipts:
Amounts received in the day-to-day trading activities from revenue and other items of income. (1)
Any suitable example, such as rent received. (1)

PUBLISHED 2017
5(d) 8
Effect on assets Effect on liabilities Effect on profit
Overstated Understated Overstated Understated Overstated Understated
$ $ $ $ $ $
Error 1 550 – – – 450 –
Error 2 – – – 375 (2) 375 (2) –
Error 3 150 (2) 150 (2)
For each entry – (1) for position and (1) for amount

ACCOUNTING 0452/23
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
components.

PUBLISHED 2017
1(a) Brian account 15

$ $
2016 2017
Aug 1 Balance b/d 1 000 July 31 Cash 720 (1)
Bad debts 280 (1)
1 000 1 000
Bad debts account

$ $
2017 2017
July 31 Total to date 990 July 31 Income
Brian 280 (1) Statement 1 270 (1)OF
1 270 1 270

$ $
2017 2017
July 31 Income July 31 Bank
Statement* 118 (1) (AL Stores) 118 (1)
118 118
* Alternately accept transfer to bad debts account and net transfer from bad
debts to income statement
Rent account
$ $
2017 2017
July 31 Total paid 5 200 July 31 Balance c/d 400
Drawings 1 200 (1)
Income Statement 3 600 (1)OF
5 200 5 200
2017
Drawings account
$ $
2017 2017
July 31 Total to date 9 650 July 31 Capital 10 850 (1)OF
Rent 1 200 (1)OF
10 850 10 850

$ $
2017 2017
July 31 Income July 31 Total to date 890
Statement 1 040 (1) Balance c/d 150
1 040 1 040
2017

PUBLISHED 2017
1(a) Provision for depreciation of office fixtures account

$ $
2017 2016
July 31 Balance c/d 15 435 Aug 1 Balance b/d 11 100
2017
July 31 Income 4 335 (1)
Statement
15 435 15 435
2017
Aug 1 Balance b/d 15 435 (1)OF
1(b) An estimate (1) of the amount which a business will lose/be unable to collect 2
in a financial year because of bad debts (1)
1(c) Percentage of the total amount owing by credit customers 1

Estimating which individual credit customers will not pay their accounts
Considering the length of time the debts have been outstanding
Estimate, based on experience, of amount lost each year from bad debts
Any 1 point (1)
1(d) debit credit 2
Income statement (1) Provision for doubtful debts (1)
1(e) The profit for the year is not overstated (1) 2

The trade receivables (current assets) are not overstated/shown at more
realistic value (1)
1(f) The sales for which a business is unlikely to be paid (1) are regarded as 2
an expense of the year in which those sales are made (1)
1(g) Reduce credit sales/sell on a cash basis 2


PUBLISHED 2017
2(a) 9
opening balance owed by credit customers 9(1)
credit sales 9(1)
cash sales 9(1)
provision for doubtful debts 9(1)
bad debts written off 9(1)
cash discount allowed to credit customers 9(1)
trade discount allowed to credit customers 9(1)
contra between sales and purchases ledger 9(1)
cash received from credit customers 9(1)
2(b) book of prime (original) entry 4
returns to credit suppliers purchases returns journal (1)

discount received cash book (1)
interest charged by credit supplier journal (1)
contra entry to sales ledger control journal (1)
account
2(c)(i) An entry which appears on the debit side of the purchases ledger control 1
account and the credit of the sales ledger control account (1)
2(c)(ii) It is made when a sales ledger account is set off against a purchases ledger 1
account of the same person/business (1)
2(d) Overpayment of the amount owing 2

2(e)(i) Trade receivables 365 1

Credit sales 1
2(e)(ii) 20 520 365 2

186 700 1
= 40.11 = 41 days (1)


PUBLISHED 2017
2(g) Trade payables 365 1

Credit purchases 1
2(h) Will not be pleased 2

May refuse further supplies
May charge interest
May issue stern reminders/threaten legal action
3(a) 5
$ $
Add Subscriptions outstanding at year end 240 (1)
12 780
Less Subscriptions prepaid at year end 180 (1)
Subscriptions outstanding at start of year 600 (1) 780
Subscriptions for the year 12 000 (1)
3(b) AS Sports Club 9

$ $ $
Income
Profit on shop – revenue 3 510
– less purchases 2 410 1 100 (1)
13 100
Expenditure
Rates and insurance
(1500 (1) + 60 (1)) 1 560
Open day – expenses 5 250
less receipts 4 180 1 070 (1)
Rent 1 800 }(1)
General expenses 2 640 }
Loan interest (5% × 7 000) 350 (1)
Depreciation of Equipment
((22 000 + 8 000) × 20%) 6 000 (1) 13 420
Deficit 320 (1)OF

PUBLISHED 2017
3(c) AS Sports Club 9

$ $ $
Assets
depreciation value
Equipment 30 000 10 400 (1)OF 19 600 (1)OF
Current assets
Other receivables
(Subscriptions) 240 (1)
Total assets 19 840
Liabilities
Accumulated fund
Less Deficit 320 (1)OF
11 550
Bank loan
(repayable 2020) 7 000 (1)
Current liabilities
Other payables 350 (1)OF
(loan interest)
Bank 760 (1)
1 290
3(d) Loan interest is an expense account/any accrued interest is a current 2

liability (1)
The loan is a non-current liability (1)
4(a) (87 500 + 56 200 + 100) : (81 500 + 17 100) 2

= 143 800 : 98 600 (1) whole formula
= 1.46 : 1 (1)
4(b) Current assets only approximately 1½ times the current liabilities 2

Lower than the “benchmark” of 2:1
Do not have a lot of surplus current assets available after paying current
liabilities
Seems to be a little inadequate (depending on the type of business)
Comments to be based on answer to (a)

PUBLISHED 2017
4(c) (56 200 + 100) : (81 500 + 17 100) 2

= 56 300 : 98 600 (1) whole formula
= 0.57 : 1 (1)
4(d) Increased expenditure on inventory 2

Increase in bank overdraft/change from positive bank balance to overdraft
Increase in current liabilities/increase in trade payables
Decrease in cash
4(e) Unable to pay debts when they fall due 2

Unable to take advantage of cash discounts
Unable to take advantage of business opportunities when they arise
4(f) current ratio quick ratio 4
no no
increase decrease effect increase decrease effect
introduce 9 9
$20 000
additional
capital
obtain short- 9(1) 9(1)
term bank loan
of $10 000
sell half the 9(1) 9(1)
inventory at
cost price
4(g) Cost of sales 1

Average inventory
4(h) 765 990 765 990 2

Or
(87 500 + 72000) ÷ 2 87 500 − (15 500 ÷ 2)
765 990
= } (1)
79 750
= 9.60 times (1)
4(i) Higher inventory levels 2


PUBLISHED 2017
5(a) 43 000 3
(500 000 + 11 000 + 14 000 + 75 000
43 000 (1) 100
= ×
600 000 (1) 1
= 7.17% (1)
5(b) 25 000 100 1

×
500 000 1
= 5%
5(c) 15 000 + 30 000 100 3

×
500 000 + 100 000 1
45 000 (1)
=
600 000 (1)
= 7.5% (1)
5(d) 71 000 – (3% × 75 000) (1) 2

= 71 000 – 2250
= 68 750 (1)
5(e) CP Limited 7
capital
$ $ $ $
On 1 October 2016 500 000 11 000 14 000 525 000 (1)
Share issue 100 000 100 000 (1)
Dividend paid (25 000) (25 000) (1)
(for year ended 30
September 2016)
Dividend paid (15 000) (15 000) (1)
(for year ended 30
September 2017)
reserve
On 30 September 600 000 16 000 37 750 653 750 (1)
2017

PUBLISHED 2017
5(f) Long term loans 2

Interest is not dependent on the company's profit
Are often secured on the assets of the company's
5(g) Carry a fixed rate of dividend 2

5(h) increase decrease no 5

$ $ effect
effect on current assets 300 000
effect on non-current liabilities 300 000
(1)
effect on profit for the year 9 000
(2)*
effect on profit available for ordinary 9 000
shareholders (1)OF
effect on equity 9(1)

ACCOUNTING 0452/12
Paper 12 March 2018
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge International is publishing the mark schemes for the March 2018 series for most
components.

PUBLISHED
Generic Marking Principles
These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the
specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these
marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
Marks must be awarded positively:
• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the
scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the
question as indicated by the mark scheme. The meaning, however, should be unambiguous.
Rules must be applied consistently e.g. in situations where candidates have not followed instructions or in the application of generic level
descriptors.

PUBLISHED
Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may
be limited according to the quality of the candidate responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or
grade descriptors in mind.

PUBLISHED
1(a) B 1
1(b) A 1
1(c) D 1
1(d) A 1
1(e) C 1
1(f) C 1
1(g) A 1
1(h) D 1
1(i) B 1
1(j) D 1
2(a) document name of person issuing document 4
invoice Kumar
debit note Simran (1)
credit note Kumar (1)
Statement of account Kumar (1)
cheque Simran (1)
2(b) Issued by the customer to request a reduction in an invoice. 1
2(c) Sales returns journal 1

PUBLISHED
2(d) Sales ledger 1
2(e) Trade discount 1
2(f) Recorded on the invoice to the customer or in sales journal 1

No entry made in ledger
2(g)(i) Sales returns account 1
2(g)(ii) Individual debtor accounts 1
2(h) Money measurement (1) 1
An accounting transaction should only be recorded if it can be expressed in terms of money (1) 1
2(i) Capital (1) equals assets minus liabilities (1) 2
2(j) item increase decrease 2
capital introduced 9
drawings 9 (1)
profit for the year 9 (1)

PUBLISHED
3(a) Nikita 6
Electricity expense account
2017 2017
Mar 10 Bank (1) 210 Feb 1 Balance b/d 140
Jun 7 Bank 130 2018
Sep 5 Bank (1) 185 Jan 31 Income
Dec 6 Bank 205 Statement (1) OF 810
2018
Jan 31 Balance c/d (1) 220
950 950
Feb 1 Balance b/d (1) OF 220
(+1 dates)
3(b) The amount owed/not yet paid for electricity used in the financial year ended 31 January 2018 (1) OF 1
3(c) Current liabilities (1) OF 1
3(d) Nikita 6
2017 2017
Feb 1 Balance b/d (1) 1250 May 10 Cash (1) 2700
2018 Oct 14 Bank (1) 2800
Jan 31 Income 2018
Statement (1) OF 5950 Jan 31 Balance c/d 1700
7200 7200
Feb 1 Balance b/d (1) 1700
(+1 dates)
3(e) Current assets 1

PUBLISHED
3(f) Nikita 8
$ $ $
Revenue 127 000 (1)
Less: returns 4 000
123 000
Cost of sales
Inventory at 1 February 2017 * 8 000
Purchases 76 000
Goods for own use 2 000 74 000 (1)
Carriage inwards 1 200
83 200 (1)
Less: Inventory at 31 January 2018* 11 000 72 200 (1)
Gross profit (1) 50 800 (2) CF, (1) OF
* both (1)
3(g) It measures the excess of current assets over current liabilities /measures liquidity. 1
It measures the margin of safety between current assets and current liabilities.
3(h) (6800 + 12 500 +1010) (1)/15 200 = 1.34:1 (1) 2

PUBLISHED
3(i) different accounting policies Max 2

different size of business
different type of business
different locations
different capital structures
different type of goods sold
non-monetary items
other reasonable answer
Any two for (1) mark each
3(j) Introduce additional capital Max 2

Reduce cash drawings
1 mark per suggestion, maximum 2
4(a) Meena 5
2017 2017
Dec 31 Rohan (1) 140 Dec 31 Balance b/d (1) 2450
Balance c/d 2424 Bank interest (1) 20
Anjana (dishonoured
cheque) (1) 94
2564 2018 2564
Jan 1 Balance b/d (1) OF 2424

PUBLISHED
4(b) Meena 6
$ $
Debit balance on bank statement * (2623) (1)
Add:
amounts not yet credited: Cash sales 362 (1)
Bank error 35 (1)
397
Less: cheques not yet presented (198) (1)
Adjusted cash book balance * (1) both labels (2424) (1) OF
$ $
Adjusted cash book balance * (2424) (1) OF
Add:
amounts not yet credited: Cash sales 362 (1)
Bank error 35 (1)
397
Less: cheques not yet presented (198) (1)
Debit balance on bank statement * (2623) (1)
(* 1 mark both labels)
4(c) $2424 (1) OF 2

Current liabilities (1) OF

PUBLISHED
4(d) A cheque which has been returned unpaid by the bank 1
Reason 2
Drawer has insufficient funds in the account
Incomplete details on the cheque (e.g. missing date, signature)
Cheque is out of date/stale
Cheque may be post-dated
Inconsistent details on the cheque (e.g. signature does not match that on file, amount in figures does not agree with amount in
words)
(1 mark for meaning, 1 mark for any valid reason up to 2 max)
4(e) At any time the amount paid out from the float (represented by vouchers/receipts) plus remaining cash (1) must equal the 2
fixed amount of the float (1)
4(f) debit entry $ credit entry $ 3
petty cash (1) 27 bank/cash (1) 27

+ 1 for amount
5(a) To keep a separate record of capital introduced/be able to calculate interest on capital 1
To allow easy comparison of drawings and total profit share/see if partner has overdrawn on profit allocation. 1
5(b) The amount that Sumit owes the partnership. 1
5(c) To discourage partners from taking drawings/to reduce the level of drawings 1

PUBLISHED
5(d) Eli and Sumit 7

Appropriation Account for the year ended 31 October 2017
$ $
Add: interest on drawings Eli 200 (1)
Sumit 260 (1) 460
12 960
Less: interest on capital Eli 4 000 (1)
Sumit 3 400 (1)
7 400
Less: salary Eli 7 500 (1) (14 900)
(1 940)
Share of residual loss Eli 1 164 (1) OF
Sumit 776 (1) OF (1 940)
5(e) Eli and Sumit 10

Extract from Statement of Financial Position at 31 October 2017
$ $ $
Eli Sumit Total
Capital accounts 50 000 45 000 (1) 95 000 (1) OF
Current accounts
Opening balance 4 500 (1 800) (1)
Interest on capital 4 000 3 400 (1) OF
Salary 7 500 – (1)
16 000 1 600
Drawings (5 000) (6 500) (1)
Interest on drawings (200) (260) (1) OF
Share of residual loss (1 164) (776) (1) OF
(6 364) (7 536)
9 636 (5 936) 3 700 (1) OF
98 700 (1) OF

PUBLISHED
6(a) Useful as a basis for preparing financial statements 1
Check arithmetical accuracy of the double entry 1
6(b) Error 3 commission 1
Error 4 omission 1
Error 5 principle 1
6(c) Sanjay 6
Suspense account
2018 2018
Jan 31 Rent receivable (1) 1000 Jan 31 Difference in trial
Purchases returns (1) 190 balance (1) 1110
Sales returns (1) 190 Wages (1) 270
1380 1380
+1 if no extraneous items
6(d) Yes/no (1) OF 2

Errors affecting the trial balance have all been discovered as the suspense account has been cleared (1) OF

PUBLISHED
6(e) Statement of corrected profit for the year ended 31 January 2018 8
$ $ $
Draft profit 24 250
Error 1 270 (1)
Error 2 1000 (1)
Error 3 9 (1)
Error 4 35 (1)
Error 5 700 (1)
Error 6 *380 (2)
1380 1005 375
Corrected profit 24 625
*(1)correct (1) OF
position (1)
correct figure

ACCOUNTING 0452/22
Paper 2 March 2018
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge International is publishing the mark schemes for the March 2018 series for most
components.

PUBLISHED
These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.
• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate
• answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.
Rules must be applied consistently e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.
Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.

PUBLISHED
1(a) Assist in the location of errors 2

Provide an instant total of trade receivables
Prove the arithmetical accuracy of the sales ledger
Enable a statement of financial position to be prepared quickly
Provide a summary of transactions relating to trade receivables
Help reduce fraud
Any 2 advantages (1) each
1(b) Overpayment by a credit customer of the amount owing 2

Credit customer failing to deduct available cash discount
Credit customer returning goods after settling account
Credit customer making payment in advance
1(c) debit credit no entry 9
opening balance owed to credit 9 (1)

suppliers
credit purchases 9(1)
cash purchases 9(1)
cash discount received 9(1)
trade discount received 9(1)
cheques paid to credit suppliers 9(1)
interest charged by credit suppliers 9(1)
returns to credit suppliers 9(1)
contra between sales and purchases 9(1)
ledgers

PUBLISHED
1(d) 6
principle
Kamika uses the double entry system of book-
keeping when recording transactions in her ledgers Duality (1)
Kamika adjusted the charge for insurance in the

income statement for an amount prepaid at the Accruals (matching) (1)
year-end
Kamika adjusts her provision for doubtful debts at
Prudence
the end of each year so it is always 3% of her trade
Or Consistency (1)
receivables
Kamika intends to trade for several years and
values her premises at net book value not expected Going concern (1)
sales value in her statement of financial position
Kamika did not make any entry in her accounting
records when a competitor reduced his prices even Money measurement (1)
though it may affect her sales
Kamika did not make any entry in her accounting
records when a customer asked for goods to be put Realisation (1)
aside for him to collect sometime in the future
1(e) Kamika 9
Fuel2go account

2017 2017
Mar 31 Bank (1) 780 Feb 1 Balance b/d 800
Discount 20 Dec 10 Fuel expenses (1) 3200
received (1)
2018
Jan 31 Balance c/d 3200
4000 4000
2018
Feb 1 Balance b/d 3200
(1)OF

2017 2018
Feb 1 Balance 950 Jan 31 Income 3260
(inventory) b/d statement(1)OF
Jun 4 Bank (1) 210 Balance
Dec 10 Fuel2go (1) 3200 (inventory) c/d 1100
4 360 4360
2018
Feb 1 Balance
(inventory) b/d (1) 1100
+ (1) Dates

PUBLISHED
2(a) Ensures that the profit for the year is not overstated in the income statement (1) 2
Ensures that the non-current assets are not overstated in the statement of financial
position(1)
2(b) Dipak 2
Journal
Debit Credit
$ $
Motor vehicles 50 000 (1)
ZY Motors 50 000 (1)
2(c) $ 2
Cost 40 000
Depreciation to 30 November 2015 14 400
Book value at 30 November 2015 25 600
Depreciation for the year ended 30 November 2016 5 120 (1)
Book value at 30 November 2016 20 480
2(d) $ 2
Cost 50 000
Book value 30 November 2016 40 000
2(e) Dipak 2
Journal
Debit Credit
$ $
Income statement (4096 + 8000) 12 096 (1) OF
Provision for depreciation of 12 096 (1) OF
motor vehicles
2(f) $ 2
Depreciation to 30 November 2015 14 400
Depreciation for the year ended 30 November 2016 5 120 }
Depreciation for the year ended 30 November 2017 4 096 } (1)OF
23 616 (1)OF

PUBLISHED
2(g) Dipak 6
Journal
Debit Credit
$ $
1 Disposal of motor vehicle 40 000 (1)
Motor vehicles 40 000 (1)
Transferring cost of motor vehicle to (1)
disposal account
2 Provision for depreciation of motor 23 616 (1) OF
vehicles
Disposal of motor vehicle 23 616 (1) OF
Transferring the accumulated (1)
depreciation on motor vehicle sold to
the disposal account
3(a) ND Sports Club 7

$ $
Revenue (sales) 9 520
Purchases (5760 (1) + 130 (1)) 5 890
Closing inventory 970
4 920
Wages of assistant (4000 + 160 (1)) 4 160
Rent and insurance (3700 – 1200/12 (1)
x ¼ (1) 900
Depreciation – fixtures and fittings
(20% × 3500) 700 (1) 10 680
Loss for the year 1 160 (1)OF
3(b) ND Sports Club 9

$ $
Subscriptions ((14 850 + 500(1)) – 350 (1))
(Or 300 (1) × 50 (1)) 15 000
Net income from competition 710 (1)
15 710
Loss on café 1 160 (1) OF
Wages of sports coach 6 000 }
General club expenses 540 }(1)
Rent and insurance (3700 – 1200/12 (1)
x ¾(1)) 2 700
Depreciation – sports equipment
(20% × 6200) 1 240 (1) 11 640
Surplus for the year 4 070 (1) OF

PUBLISHED
3(c) Receipts from café sales 2

Café suppliers
Wages of café assistant
Interest-free loan
Sports equipment
Café fixtures and fittings
Any 1 item (1)
Reason: For any of first three items –

It relates to the café and appears in the café income statement (1)
Reason: For any of the last three items –

It is an asset/liability and appears in the statement of financial position (1)
3(d) Depreciation of sports equipment 2

Subscriptions accrued
Loss on café
Surplus/deficit
Any 1 item (1)
Reason –
The depreciation is a non-monetary expense
No money was received in respect of the subscriptions accrued
The loss on the café was calculated in the income statement
The surplus/deficit was calculated in the income and expenditure account
Any 1 suitable reason for the item selected (1)
3(e) The members of the club have not invested any capital/are not owners/are not 2
shareholders (1) so there can be no dividends/profit share which represent a return on
the amount invested (1)
3(f) These would not raise the required amount within the time limit 1
Any suitable reason (1)
3(g) Long-term loan 1

Mortgage
Sponsorship
Grants
Donations
Or other suitable source of long term funds
Any 1 source (1)

PUBLISHED
4(a) Amaira 15
Corrected Statement of Financial Position at 31 January 2018
Assets $ $ $

to date value
Premises 85 000 85 000
Fixtures and fittings 40 000 19 520 20 480 (1)
Motor vehicle 11 000 1 375 (1) 9 625 (1)OF
136 000 20 895 115 105
Current assets
Inventory (18 000 + 2 000) 20 000 (1)
Less Provision for doubtful debts 420 (1) 13 580 (1)OF
(3% × 14 000)
Petty cash 90 (1)
33 670
Capital
Plus Profit for the year (14 735 (1) – 1375 (1)
– 150(1) + (450 – 420) (1)) 13 240 *
113 240
Less Drawings 7 000 (1)
106 240 (1)OF
Current liabilities
Bank overdraft (7 241 + 150) 7 391 (1)
Loan – EasyLoans 20 000 (1)
42 535
Total capital and liabilities 148 775
* Accept calculation outside Statement

PUBLISHED
4(b) Amaira 5
Capital account

2018 2017
Jan 31 Drawings (1) 7 000 Feb 1 Balance b/d (1) 100 000
Balance c/d 106 240 2018
Jan 31 Profit for year
(1)OF 13 240
113 240 113 240
2018
Feb 1 Balance b/d
(1)OF 106 240
+ (1) Dates
4(c) To see if the business is likely to continue operating 2

To assess job security
To assess likelihood of wage increases
4(d) Any points listed in (c) above provided not awarded in that section 2
To compare results with previous years
To compare results with other businesses
To assess past performance
To see where improvements can be made/take remedial action
To compare with budgets and forecasts

PUBLISHED
5(a) ABC Limited 6


capital
$ $ $ $
On 1 January 2017 180 000 25 000 9 500 214 500
Share issue 20 000 .............. .............. 20 000 1
Profit for the year .............. .............. 21 000 21 000 1
Final dividend paid for year 1
ended 31 December 2016 .............. .............. (7 200) (7 200)
Interim dividend for the year 1
ended 31 December 2017 .............. .............. (6 000) (6 000)
Transfer to general reserve .............. 2 000 (2 000) .............. 1
At 31 December 2017 200 000 27 000 15 300 242 300 1
5(b) Increase in gross profit 2

Decrease in expenses/better control of expenses
Increase in other income
Different type of expenses
5(c) 2017 (1) 2

In 2016 the percentage of expenses to revenue was 20%: in 2017 the percentage of
expenses to revenue was 16% (1)s
5(d) effect on percentage of profit for the 4

proposal year to revenue
increase decrease no effect
reduce number of employees to reduce
9 (1)
the wages bill
purchase supplies in bulk to get trade
9 (1)
discount
purchase supplies on a cash basis only 9 (1)
delay payment of rent of premises 9 (1)

PUBLISHED
5(e) The company had to wait longer to receive the money from the trade receivables. 2
Delay in receiving the money may be the reason why company took longer to pay trade
payables.
Company would not qualify for cash discount in 2017.
Company would not have to allow cash discount in 2017.
Company may be charged interest on late payments in 2017.
Company may charge interest on late receipts in 2017.
In both years the company was paying the trade payables before receiving money from
the trade receivables

5(g) Reduce credit sales/sell for cash only 2

Offer cash discount for prompt payment
5(h) Have to wait longer for the money 1

Increased risk of bad debts
Or other suitable disadvantage
Any 1 disadvantage (1)
5(i) Do not have to allow cash discount 1

May charge interest on overdue accounts
Any 1 advantage (1)
5(j) The profit earned for every $100 used in the business 1
5(k) effect on return on capital employed 3

(ROCE)
reduce cost of insuring motor
9 (1)
vehicles
issue more ordinary shares 9 (1)
obtain a short-term interest-free loan
9 (1)
from a director

ACCOUNTING 0452/13
MARK SCHEME
Maximum Mark: 120
Published
Teachers.
Cambridge International is publishing the mark schemes for the May/June 2018 series for most
Cambridge IGCSE™, Cambridge International A and AS Level and Cambridge Pre-U components, and
some Cambridge O Level components.
IGCSE™ is a registered trademark.

PUBLISHED
marking principles.
descriptors.

PUBLISHED

PUBLISHED
1 10
1(a) B 1
1(b) A 1
1(c) A 1
1(d) A 1
1(e) D 1
1(f) C 1
1(g) D 1
1(h) B 1
1(i) C 1
1(j) B 1

PUBLISHED
2(a) Reduces the number of entries in the ledger Max 2

Helps to gather and summarise accounting information e.g. total credit purchases
Helps in the preparation of control accounts
Allows work to be divided between several people/train junior accountants
To see as a list of transactions/reference purposes
Accept other valid points.
Any 2 reasons – 1 mark each
2(b) 1 Cash Book 1
2 Purchases returns journal 1
3 General journal or journa 1
2(c) Account(s) debited $ Account(s) credited $ 10
1 Cash 220 Sales 220

2 Jane 440 (1) Purchases returns 440 (1)
3 Motor vehicles 12 100 (1) Speedy Motors 12 400 (1)
Motor vehicle 300 (1) Can have 2 entries
expenses here which add up to
12 400
4 Bank 392 (1) Tan 400 (1)
2(d) (838) + 220 (1) + 392 (1) = 226 overdrawn/Cr or /(226) (1) 3
2(e)(i) Sales ledger or trade receivables ledger 1

PUBLISHED
2(e)(ii) General or nominal ledger 1
3(a) Kumu 8
Purchase ledger control account

2018 2017
Apr 30 Discount received (1) 330 May 1 Balance b/d (1) 19 800
Bank (2) CF (1) OF 177 862 2018
Contra sales ledger (1) 400 Apr 30 Interest charged (1) 122
Balance c/d (1) 22 200 Credit purchases (1) 180 870
200 792 200 792
May 1 Balance b/d 22 200
3(b) Trade payables 1

× 365
Credit purchases
3(c) 22 200  2
× 365  (1) = 45 days (1)
180 870 

PUBLISHED
3(d) Not satisfied (1) OF 2
The payment period is longer than the standard terms allowed (1) OF
3(e) An unsatisfactory payment period might make it difficult to obtain credit in the future Max 2
Might get a poor credit rating/reputation
Could affect the ability to make purchases from chosen suppliers
If unable to make purchases may not be able to satisfy own customers
May be charged interest for late payment
Can’t take advantage of cash discounts/discount received
May refuse to supply

Max 2, 1 mark per point
3(f) 92 250  2
 x 100 (1) = 45% (1)
205 000 
3(g) ($205 000 + $35 000) (1) – (26 400 + 180 870) (1) = $32 730 (1) OF 3

If answer = $59 130 (2)
Accept alternative calculations
3(h) Cost of sales 1

Average inventory
3(i) 205 000  2

 (1) OF = 6.05 times (1) OF
(32 730 OF + 35 000) ÷ 2 

PUBLISHED
4(a) An accrual is an amount owing (1) for an expense incurred in the current (1) financial period. It will be included in the 6
statement of financial position as a current liability (1).
Accrued income is an amount earned (1) which will be received in the next (1) financial period. It will be included in the
statement of financial position as a current asset (1).
4(b) (4 + 6 + 2) (1) × $20 (1) = $240 (1) 3
4(c) $20 200 – $240 (1) OF = $19 960 (1) OF 2
4(d) Chandra has received income in advance which he has not yet earned 2
It is a liability to Chandra as he owes the learners
Chandra has prepaid income at the year-end
Chandra has received other income
Application of accruals (matching) principle/application of prudence/advance payments must be deducted from actual income

Any 2 comments × 1 mark each

PUBLISHED
4(e) Statement of revised profit for the year ended 31 January 2018 6

$ $ $
Draft profit 8 760
Error 1 100 (1)
Error 2 600 (1)
Error 3 89 (1)
Error 4 9 (1)
189 600 (411)
(2) CF (1) OF
4(f) Business entity (1) 2
Owner’s transactions should be kept separate from those of the business (1)

PUBLISHED
4(g) Chandra is a sole trader, LQ is a limited company 2

Different capital structure
Different size, economies of scale
Chandra is a new business, LQ is established
The financial statements of Chandra will be for only one year, which will not show trends
The financial statements may be for a year which is not typical
The businesses may have different accounting policies/methods
The businesses may have different operating policies
The businesses may have different year ends
The financial statements do not show non-monetary factors

1 mark per point, maximum 2

PUBLISHED
5(a) WB Sports Club 5


2018 2017
Mar 31 Income and expenditure (1) 5 000 Apr 1 Balance b/d (1) 120
2018
Mar 31 Bank/cash (1) 4 740
Balance c/d (1) 140
5 000 5 000
Apr 1 Balance b/d 140
+ 1 dates
5(b) WB Sports Club 10


2017 2018
Apr 1 Balance b/d (1) 960 Mar 31 Rent (1) 2 000
2018 Competition prizes (1) 220
Mar Subscriptions (1) 4 740 General expenses (1) 682
31 Competition entry fees (1) 900 Insurance (1) 430
Donations (1) 350 Sports equipment (1) 2 760
Balance c/d 858
6 950 6 950
Apr 1 Balance b/d (1) OF 858

PUBLISHED
5(c) WB Sports Club 7

$ $
Non-current assets
Current assets
Subscriptions owing 140 (1)
Bank 858 (1) OF 1 498
Total assets 17 258
Accumulated fund
Surplus for the year 1 568 (1) 17 131 (1)
Current liabilities
17 258
5(d) It is the total of all the surpluses (1) made by the club less all the deficits (1) since the start of the club 2

PUBLISHED
6(a) Assets $ $ 7
Equipment (18 000 – 3 600) 14 400 (1)
Motor vehicle 5 500 (1)
Inventory 2 934
(1)
Bank 209 (1)
25 105
Liabilities
(1)
Other payables 98 1 553
Capital at 31 December 2017 23 552 (1) OF
6(b) $ 5
Opening capital 20 300 (1)
Add: Capital introduced 5 500 (1)
25 800
Less: Drawings (2 700) (1)
23 100
Less: closing capital (23 552) (1) OF
Profit for the year 452 (1) OF

2017 2017
Dec 31 Drawings (1) 2 700 Jan 1 Balance b/d (1) 20 300
Balance c/d (1) OF 23 552 Dec 31 Motor vehicle (1) 5 500
Profit of the year (1) OF 452
26 252 26 252

PUBLISHED
6(c) It shows the profit earned for each $100 used in the business 1
Or
It shows how efficiently the capital is being employed
Profit received as a % of capital employed
6(d) Profit (for the year) 100 1

×
Capital employed 1
6(e) 452 OF 100 2

× (1) = 2.23% (1) OF do need %
20 300 1
6(f) Siegfried started charging depreciation on non-current assets 1

Siegfried wrote off more bad debts this year
Increase in other expenses
Accept any valid reason.

1 mark per point, Max 1
6(g) Easier/quicker/used to prepare financial statements/calculate profit Max 3

Helps to check accuracy/arithmetic errors or detect/locate errors
Helps to prevent fraud
Easy reference
Balances are more easily available
More detail available in income statement
Easier to calculate accounting ratios/measure performance
Cheaper accountancy fees
Maintains the principle of duality

1 mark per point , Max 3

ACCOUNTING 0452/21
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

PUBLISHED
marking principles.
descriptors.

PUBLISHED

PUBLISHED

1(b) Lydia 9

2018 2018
Apl 30 Returns (1) 113 Apl 1 Balance b/d (1) 4 215
Discount received (1) 95 30 Purchases (1) 4 855
Contra/SLCA (1) 250 Carriage inwards (1) 210
*Bank (1)OF 4 685 Balance c/d 100
Balance c/d 4 237
9 380 9 380
May 1 Balance b/d (1) 100 May 1 Balance b/d (1) 4 237

PUBLISHED
1(c) Overpayment of amount owing to credit supplier 2

Return of goods to credit supplier after payment made
Cash discount not deducted when payment was made to credit supplier
Payment made to credit supplier in advance
1(d) Ensures that the profit for the year is not overstated by anticipating losses (1) 2
Ensures that the trade receivables are shown at a realistic level in the statement of financial position (1)
1(e)(i) Liquidity 2
If trade receivables take up the offer Lydia will receive the money earlier
This money could then be used within the business
Will receive a lower amount than previously
Any 2 relevant points (1) each
1(e)(ii) Profitability 2
Profit for the year will decrease because of the extra cash discount
This policy may reduce bad debts so may increase profit
Any 2 relevant points (1) each

PUBLISHED
2(a) Nabil 5
Journal
Date Details Debit Credit

2017 $ $
Mar 1 Premises } 200 000
Fixtures and fittings }(1) 22 000
Inventory } 5 500
Bank (1) 7 500
Loan – AB Loans (1) 80 000
Capital (1) 155 000
Assets, liabilities and capital at this date (1) 235 000 235 000

PUBLISHED
2(b) Correction of errors 2

Purchase/sale of non-current assets on credit
Year-end transfers
Transactions not entered in any other book of prime (original) entry
Accept other relevant points.
Any 2 uses (1) each
2(c) Nabil 13
Corrected Trial Balance at 28 February 2018
$ $
Revenue 119 100 }
Capital 155 000
Loan – AB Loans 80 000
Premises 200 000
Trade payables (6 850 – 150) 6 700 (2)*
Bank overdraft (3 950 + 210) 4 160 (1)
Wages (32 300 – 10 000) 22 300
General expenses 25 400 (1)**
Inventory 1 March 2017 5 500 (1)
Drawings 10 000 (1)
Bad debts 140 (1)
Petty cash 100 (1)
365 110 365 110 (1)***
*(1) position + (1) amount

** (1) provided closing inventory not included
*** (1) matching OF totals

PUBLISHED
3(a) Amina account 12

2017 2018
April 1 Balance b/d 160 Mar 1 Bank/cash (1) 120
Bad debts (1) 40
160 160
Bad debts account

2018 2018
Feb 28 Total written off 135
Mar 1 Amina (1)OF 40 Income statement (1)OF 175
175 175

2017 2018
April 1 Balance b/d 4 000 Mar 31 Balance c/d 6 000
2018
Jan 4 Office Traders (1) 2 000
6 000 6 000
2018
April 1 Balance b/d (1) 6 000

PUBLISHED
3(a) Provision for depreciation of fixtures and fitting account

2018 2017
Mar 31 Balance c/d 2 800 April 1 Balance b/d 1 600
2018
Mar 31 Income statement (1) 1 200
2 800 2 800
2018
April 1 Balance b/d (1)OF 2 800

2018 2018
Feb 28 Total to date 3590
Mar 31 Total from cash book (1) 55 Income statement (1) 3645
3645 3645

2018 2018
Mar 31 Income statement (1) 4 198 Feb 28 Total to date 4 130
Mar 31 Total from cash book (1) 68
4 198 4 198

PUBLISHED
3(b) February 1 Motor vehicles 8
Explanation Original cost of the motor vehicle disposed of/sold (1)

Double entry Credit motor vehicles account (1)
February 1 Provision for depreciation of motor vehicles
Explanation Total depreciation written of the motor disposed of/sold up to the

date of sale (1)
Double entry Debit provision for depreciation of motor vehicles account (1)
February 1 M6Vans
Explanation Price M6Vans agreed to pay for the motor vehicle (1)
Double entry Debit M6Vans account (1)
March 31 Income statement
Explanation Loss on disposal of motor vehicle (1)

Double entry Debit income statement (1)

PUBLISHED
4(a) Asim 13
$ $
Fees from clients (28 350 (1) + 2 400 (1)) 30 750
Rent receivable (5 600 – 800) 4 800 (1)
35 550
Wages 19 000 }
General expenses 1 358 }(1)
Motor expenses (970 (1) + 110 (1) × ¾ (1)) 810
Rates & Insurance (2 280 (1) × 12/15 (1)) 1 824
Depreciation
Motor vehicle (20% × (15 000 – 5 400)) 1 920 (1)
Office equipment (6 180 – 5 500) 680 (1) 25 640
4(b) Profit for the year 100 1

× whole formula (1)
Capital employed 1

PUBLISHED
4(c) 9 910 100 2

OF × (1)OF whole formula = 8.26% (1)OF
120 000 1
4(d) Higher profit for the year 2

Lower capital employed
4(e) Financial statements only include information which can be expressed in monetary 2
terms (1)
This means that many important factors which affect the performance of a business
are not included in the financial statements (1)

PUBLISHED
5(a) Ravi 8
Income Statement (Trading Account section) for the year ended
31 March 2018
$ $ $
Revenue (8 750 + 34 450) 43 200 (1)
Cost of sales
Purchases 38 400 }(2)CF
}(1)OF
Less Purchase returns 950 (1) 37 450
40 350
Less Closing inventory 4 350 (1) 36 000 (1)OF
5(b) Cost of sales 1

(1)
Average inventory

PUBLISHED
5(c) Higher inventory levels 2

5(d) Lower of cost and net realisable value (1) 1
5(e) Prudence (1) 1
5(f) Overstated Understated

4
current assets at 31 March 2018 9
cost of sales for the year ended 31 March 2018 9(1)
gross profit for the year ended 31 March 2018 9(1)
cost of sales for the year ending 31 March 2019 9(1)
profit for the year ending 31 March 2019 9(1)
5(g) Increase Decrease No effect 2
Reduce the rate of trade discount allowed to 9(1)

credit customers
Reduce the rate of cash discount allowed to 9(1)
credit customers

PUBLISHED
5(h) Increase in selling price so possibility of greater gross profit (1) 2

Customers may go to cheaper suppliers, so sales and profit may decrease (1)
6(a) Debentures Ordinary shares 4
Receive interest Receive dividends

Receive fixed interest Receive variable dividends
Interest paid irrespective of profit Dividends depend on profit
Do not carry voting rights Carry voting rights
Are lenders/loans/(non-current) Are members of the company/equity/capital
liabilities/creditors
Priority for repayment in winding-up Last to be repaid in winding-up
Any two comparative statements (2) each

PUBLISHED
6(b) Transfers made in the statement of changes of equity from the retained earnings (1) 1
6(c) In situations where there is not enough cash to pay a dividend 2

To retain cash within the business rather than using it for dividends
To use in future when the profits may be low/there may be a loss
Or other acceptable comments
Any 2 acceptable comments (1) each

PUBLISHED
6(d) Income Statement of Statement of No entry 5

statement changes in financial
equity position
1 September 2017
Repayment of long term 9
loan
1 November 2017
Payment of half year 9(1)
interest on debentures
31 December 2017
Payment of interim 9(1)
ordinary share dividend
30 April 2018
Half year interest on 9(1) 9(1)
debentures accrued
30 April 2018
Proposed ordinary share 9(1)
dividend
6(e) Will not dilute their stake in the company 1

Will not dilute their voting power
If expansion profitable, potential for higher dividend as debenture holders receive fixed interest
Or other acceptable comment
Any 1 comment (1)

PUBLISHED
6(f) Annual profit reduced because of debenture interest 1

Reduced profit available for ordinary shareholders
Prior claim on assets in a winding-up
Or other acceptable comment
Any 1 comment (1)
6(g) Current assets : current liabilities(1) 1
6(h) Increase Decrease No effect 5
Sell surplus non-current assets for cash 9

Sell goods on cash terms only 9(1)
Obtain a further long-term loan 9(1)
Buy additional non-current assets on credit
9(1)
rather than paying immediately
Persuade trade receivables to pay half of
their debts immediately in return for 9(1)
3% cash discount
Pay trade payables after 2 months instead
9(1)
of after 1 month

ACCOUNTING 0452/22
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

PUBLISHED
responses seen).

PUBLISHED
1(a)(i) Statement of account 1
1(a)(ii) $335 1
1(a)(iii) 14 1
× 100 = 2%
(686 + 14)
1(a)(iv) Cash discount 1
1(b) 1
debit entry in ledger credit entry in ledger no entry would be
account of W Jones account of W Jones made
9(1)
1(c) 4
document issued name of person entries made by W Jones
issuing
document
Invoice (1) J Smith (1) Purchases (1) J Smith (1)
1(d) 2
book of prime (original) entry used sales returns journal (1)
by J Smith
book of prime (original) entry used purchases returns journal (1)
by W Jones
1(e)(i) A bad debt is an amount owing to a business which will not be paid by the credit 1
customer
1(e)(ii) A bad debt recovered is when a credit customer pays some, or all of a debt previously 1
written off as a bad debt
1(f) Reduce credit sales/sell on a cash basis 2

Introduce/improve credit control
Give cash discount/discount for prompt payment
Charge interest on overdue account
1(g) The profit for the year is not overstated (1) 2

1(h) The sales for which a business is unlikely to be paid (1) are regarded as an 2
expense of the year in which those sales are made (1)
1(i) 460 100 1

× = 2 12 %
18 400 1

PUBLISHED
1(j) J Smith 5

2018 2017
Apl 30 Income 20 May 1 Balance b/d (1) 460
statement (1)OF
Balance c/d (1) 440
460 460
2018
+ (1) dates
2(a) Capital expenditure 8

Money spend on acquiring, improving and installing non-current assets (1)
Example
Purchase of any non-current asset, legal costs for purchase of premises,
cost of installation of non-current asset, cost of carriage on delivery of non-current
asset, etc.
Capital receipt
Amounts received which do not form part of the day-to-day trading activities (1)
Example
Receipt of loan, additional capital, proceeds of sale of non-current asset at book value,
etc.
Revenue expenditure
Money spent on the running of a business on a day-to-day basis (1)
Example
Any expense such as wages, rent, insurance, etc.
Revenue receipt
Amounts received in the day-to-day trading activities and other items of income (1)
Example
Sales, commission received, interest received, rent received, etc.

PUBLISHED
2(b) 6
effect on profit for the effect on closing capital
error year
overstated understated overstated understated no effect
error 1 9 9
error 2 9(1) 9(1)
error 3 9(1) 9(1)
error 4 9(1) 9(1)
2(c) It is a book of prime (original) entry because it is written up from business 2

documents (1)
It is part of the double entry system as it acts as ledger accounts for cash and
bank (1)
2(d) 3
entry required in cash book
item debit credit
$ $
cash book error 100
dishonoured cheque 140 (1)
charges 15 (1)
rates (direct debit) 400 (1)
2(e) entry in bank reconciliation statement 4
item added to bank deducted from bank

statement balance statement balance
CD Limited 9(1)
sales 9(1)
FF Limited 9(1)
Bank error (standing order) 9(1)

PUBLISHED
3(a) Reducing (diminishing) balance method 1

Revaluation method
Any one (1)
3(b) Principle of materiality – not practical/too many items/too difficult/too costly to 2

depreciate each item separately
Do not depreciate by an equal amount each year
May be certain amount of loss of tools each year
3(c) Calculation of depreciation for the year ended 31 December 2016 2

depreciation on office depreciation on office total
machine A machine B
calculation calculation
20% × 15 000 20% × 18 000 × 3/12
answer $3 000 (1) answer $900 (1) $3 900
3(d) Calculation of depreciation for the year ended 31 December 2017 3

depreciation on depreciation on depreciation on total
office machine A office machine B office machine C
calculation calculation calculation
20% × 15 000 × 20% × 18 000 20% × 20 000 ×

6/12 6/12
answer $1 500(1) answer $3 600 (1) answer $2 000(1) $7 100

PUBLISHED
3(e) Jamil 11
Office machinery account

2016 2016
Oct 1 Bank B (1) 18 000
33 000 33 000
2017 2017
Jan 1 Balance b/d 33 000 July 1 Disposal A (1) 15 000
(1)OF
July 1 XY Limited C (1) 20 000 53 000
53 000
2018
(1)OF
Provision for depreciation of office machinery account

2016 2016
Dec 31 Balance c/d 9 900 Jan 1 Balance A b/d 6 000
Dec 31 Income 3 900
statement (1)OF
9 900 9 900
2017 2017
July 1 Disposal A (1) OF 10 500 Jan 1 Balance b/d 9 900
(1)OF
Dec 31 Balance c/d 6 500 Dec 31 Income 7 100
statement (1)OF
17 000 17 000
2018
(1)OF
+ (1) dates
3(f) $ 4
Cost 15 000 (1)
Depreciation to date (6000 + 3000 + 1500) 10 500 (1) OF
Book value 4 500
Proceeds of sale 6 000
Profit (1) OF on disposal 1 500 (1) OF

PUBLISHED
4(a) AB Limited 6

capital
$ $ $ $
On 1 April 2017 200 000 14 000 6 000 220 000
Profit for the year 35 000 (1) 35 000
Final dividend paid
(for year ended 31 .................. .................. (10 000) (1) (10 000)
March 2017)
Interim dividend paid
(for year ended 31 .................. .................. (4 000) (1) (4 000)
March 2018)
Transfer to general
.................. 2 000 (2 000) (1) ..................
reserve
At 31 March 2018 200 000 16 000 25 000 (1) 241 000 (1)

PUBLISHED
4(b) AB Limited 14
$ $ $
to date value
Premises 195 000 195 000
Machinery 98 000 35 280 62 720 (1)
332 500 51 080 281 420 (1)OF
Current assets
Inventory 12 120
Less Provision for doubtful 198 9 702 (1)
debts
Petty cash 200 (1)
22 590

Ordinary shares 200 000 (1)
241 000 (1)OF
4% Debentures
(repayable 1 April 2022) 30 000 (1)
Current liabilities
Other payables 950
Bank 2 040 (1)
Bank loan
(repayable 1 January 2019) 20 000 (1)
33 010 (1)OF
Total equity and liabilities 304 010
4(c) Interest on debentures must be paid irrespective of whether there is a profit (but profit 2
is expected to increase after two years)
Prior claim on the assets of the company in a winding up
Funds have to be available when repayment is due
Prior claim on the profits of the company/less profit available for ordinary share
dividend (this may only be a disadvantage in the first two years)

PUBLISHED
4(d) Dilution of ownership of company 2

New shares rank equally with existing ordinary shares with regard to
dividend(even though profit expected to increase after two years dividend may reduce)
New shares rank equally with existing ordinary shares with regard to repayment in a
winding up
5(a) Aretta 12
Income Statement for the month ended 30 April 2018
$ $
Revenue 15 640 }(2)CF
}(1)OF
Cost of sales
Purchases (15 000 (1) + 810 (1)) 15 810
Less Closing inventory 4 080 11 730 (1)OF
Rent (2400 × 1/6) 400 (1)
Insurance (3600 × 1/12) 300 (1)
Operating expenses 980 }
Wages 1 900 }(1)
Loan interest (5% × 7200 × 1/12) 30 (1)
Depreciation shop fixtures and fittings
(12% x 9500 × 1/12) 95 (1) 3 705
Profit for the month 205 (1)OF
5(b) Current assets – inventory : current liabilities 1
5(c) 5
proposal effect on quick ratio
1 purchase a motor vehicle on
9
credit
2 pay credit suppliers early to
9(1)
receive cash discount
3 obtain a bank overdraft and
9(1)
repay the loan immediately
4 arrange for the loan to be
9(1)
extended to 2 years
5 sell on credit terms rather than
9(1)
on cash terms
6 reduce inventory by selling half
9(1)
at cost price

PUBLISHED
5(d) Proposal number 6 (1) 3
Current Ratio
Total of current assets remains unchanged (1)
OR inventory decreases and cash/bank increases by same amount (1)
Quick (acid test) Ratio
Total of current assets excluding inventory increases (1)
OR Inventory is excluded from the calculation but cash/bank increases (1)
5(e) Should compare with a business of approximately the same size/same capital 4
The length of time the business has been operating
The financial statements may be for a year which is not a typical year
Or other suitable points excluding type of business (given in the question)
Any 2 points (1) basic statement and (1) for development

ACCOUNTING 0452/23
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

PUBLISHED
responses seen).

PUBLISHED
1(a)(i) Statement of account 1
1(a)(ii) $335 1
1(a)(iii) 14 1
× 100 = 2%
(686 + 14)
1(a)(iv) Cash discount 1
1(b) 1
debit entry in ledger credit entry in ledger no entry would be
account of W Jones account of W Jones made
9(1)
1(c) 4
document issued name of person entries made by W Jones
issuing
document
Invoice (1) J Smith (1) Purchases (1) J Smith (1)
1(d) 2
book of prime (original) entry used sales returns journal (1)
by J Smith
book of prime (original) entry used purchases returns journal (1)
by W Jones
1(e)(i) A bad debt is an amount owing to a business which will not be paid by the credit 1
customer
1(e)(ii) A bad debt recovered is when a credit customer pays some, or all of a debt previously 1
written off as a bad debt
1(f) Reduce credit sales/sell on a cash basis 2

Introduce/improve credit control
Give cash discount/discount for prompt payment
Charge interest on overdue account
1(g) The profit for the year is not overstated (1) 2

1(h) The sales for which a business is unlikely to be paid (1) are regarded as an 2
expense of the year in which those sales are made (1)
1(i) 460 100 1

× = 2 12 %
18 400 1

PUBLISHED
1(j) J Smith 5

2018 2017
Apl 30 Income 20 May 1 Balance b/d (1) 460
statement (1)OF
Balance c/d (1) 440
460 460
2018
+ (1) dates
2(a) Capital expenditure 8

Money spend on acquiring, improving and installing non-current assets (1)
Example
Purchase of any non-current asset, legal costs for purchase of premises,
cost of installation of non-current asset, cost of carriage on delivery of non-current
asset, etc.
Capital receipt
Amounts received which do not form part of the day-to-day trading activities (1)
Example
Receipt of loan, additional capital, proceeds of sale of non-current asset at book value,
etc.
Revenue expenditure
Money spent on the running of a business on a day-to-day basis (1)
Example
Any expense such as wages, rent, insurance, etc.
Revenue receipt
Amounts received in the day-to-day trading activities and other items of income (1)
Example
Sales, commission received, interest received, rent received, etc.

PUBLISHED
2(b) 6
effect on profit for the effect on closing capital
error year
overstated understated overstated understated no effect
error 1 9 9
error 2 9(1) 9(1)
error 3 9(1) 9(1)
error 4 9(1) 9(1)
2(c) It is a book of prime (original) entry because it is written up from business 2

documents (1)
It is part of the double entry system as it acts as ledger accounts for cash and
bank (1)
2(d) 3
entry required in cash book
item debit credit
$ $
cash book error 100
dishonoured cheque 140 (1)
charges 15 (1)
rates (direct debit) 400 (1)
2(e) entry in bank reconciliation statement 4
item added to bank deducted from bank

statement balance statement balance
CD Limited 9(1)
sales 9(1)
FF Limited 9(1)
Bank error (standing order) 9(1)

PUBLISHED
3(a) Reducing (diminishing) balance method 1

Revaluation method
Any one (1)
3(b) Principle of materiality – not practical/too many items/too difficult/too costly to 2

depreciate each item separately
Do not depreciate by an equal amount each year
May be certain amount of loss of tools each year
3(c) Calculation of depreciation for the year ended 31 December 2016 2

depreciation on office depreciation on office total
machine A machine B
calculation calculation
20% × 15 000 20% × 18 000 × 3/12
answer $3 000 (1) answer $900 (1) $3 900
3(d) Calculation of depreciation for the year ended 31 December 2017 3

depreciation on depreciation on depreciation on total
office machine A office machine B office machine C
calculation calculation calculation
20% × 15 000 × 20% × 18 000 20% × 20 000 ×

6/12 6/12
answer $1 500(1) answer $3 600 (1) answer $2 000(1) $7 100

PUBLISHED
3(e) Jamil 11
Office machinery account

2016 2016
Oct 1 Bank B (1) 18 000
33 000 33 000
2017 2017
Jan 1 Balance b/d 33 000 July 1 Disposal A (1) 15 000
(1)OF
July 1 XY Limited C (1) 20 000 53 000
53 000
2018
(1)OF
Provision for depreciation of office machinery account

2016 2016
Dec 31 Balance c/d 9 900 Jan 1 Balance A b/d 6 000
Dec 31 Income 3 900
statement (1)OF
9 900 9 900
2017 2017
July 1 Disposal A (1) OF 10 500 Jan 1 Balance b/d 9 900
(1)OF
Dec 31 Balance c/d 6 500 Dec 31 Income 7 100
statement (1)OF
17 000 17 000
2018
(1)OF
+ (1) dates
3(f) $ 4
Cost 15 000 (1)
Depreciation to date (6000 + 3000 + 1500) 10 500 (1) OF
Book value 4 500
Proceeds of sale 6 000
Profit (1) OF on disposal 1 500 (1) OF

PUBLISHED
4(a) AB Limited 6

capital
$ $ $ $
On 1 April 2017 200 000 14 000 6 000 220 000
Profit for the year 35 000 (1) 35 000
Final dividend paid
(for year ended 31 .................. .................. (10 000) (1) (10 000)
March 2017)
Interim dividend paid
(for year ended 31 .................. .................. (4 000) (1) (4 000)
March 2018)
Transfer to general
.................. 2 000 (2 000) (1) ..................
reserve
At 31 March 2018 200 000 16 000 25 000 (1) 241 000 (1)

PUBLISHED
4(b) AB Limited 14
$ $ $
to date value
Premises 195 000 195 000
Machinery 98 000 35 280 62 720 (1)
332 500 51 080 281 420 (1)OF
Current assets
Inventory 12 120
Less Provision for doubtful 198 9 702 (1)
debts
Petty cash 200 (1)
22 590

Ordinary shares 200 000 (1)
241 000 (1)OF
4% Debentures
(repayable 1 April 2022) 30 000 (1)
Current liabilities
Other payables 950
Bank 2 040 (1)
Bank loan
(repayable 1 January 2019) 20 000 (1)
33 010 (1)OF
Total equity and liabilities 304 010
4(c) Interest on debentures must be paid irrespective of whether there is a profit (but profit 2
is expected to increase after two years)
Prior claim on the assets of the company in a winding up
Funds have to be available when repayment is due
Prior claim on the profits of the company/less profit available for ordinary share
dividend (this may only be a disadvantage in the first two years)

PUBLISHED
4(d) Dilution of ownership of company 2

New shares rank equally with existing ordinary shares with regard to
dividend(even though profit expected to increase after two years dividend may reduce)
New shares rank equally with existing ordinary shares with regard to repayment in a
winding up
5(a) Aretta 12
Income Statement for the month ended 30 April 2018
$ $
Revenue 15 640 }(2)CF
}(1)OF
Cost of sales
Purchases (15 000 (1) + 810 (1)) 15 810
Less Closing inventory 4 080 11 730 (1)OF
Rent (2400 × 1/6) 400 (1)
Insurance (3600 × 1/12) 300 (1)
Operating expenses 980 }
Wages 1 900 }(1)
Loan interest (5% × 7200 × 1/12) 30 (1)
Depreciation shop fixtures and fittings
(12% x 9500 × 1/12) 95 (1) 3 705
Profit for the month 205 (1)OF
5(b) Current assets – inventory : current liabilities 1
5(c) 5
proposal effect on quick ratio
1 purchase a motor vehicle on
9
credit
2 pay credit suppliers early to
9(1)
receive cash discount
3 obtain a bank overdraft and
9(1)
repay the loan immediately
4 arrange for the loan to be
9(1)
extended to 2 years
5 sell on credit terms rather than
9(1)
on cash terms
6 reduce inventory by selling half
9(1)
at cost price

PUBLISHED
5(d) Proposal number 6 (1) 3
Current Ratio
Total of current assets remains unchanged (1)
OR inventory decreases and cash/bank increases by same amount (1)
Quick (acid test) Ratio
Total of current assets excluding inventory increases (1)
OR Inventory is excluded from the calculation but cash/bank increases (1)
5(e) Should compare with a business of approximately the same size/same capital 4
The length of time the business has been operating
The financial statements may be for a year which is not a typical year
Or other suitable points excluding type of business (given in the question)
Any 2 points (1) basic statement and (1) for development

ACCOUNTING 0452/11
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

PUBLISHED
marking principles.
descriptors.

PUBLISHED

PUBLISHED
1 10
1(a) D 1
1(b) B 1
1(c) B 1
1(d) D 1
1(e) A 1
1(f) A 1
1(g) B 1
1(h) C 1
1(i) D 1
1(j) C 1

PUBLISHED
2(a) non- non- 3

current current
current current
assets liabilities
assets liabilities
trade payables 9
5 year loan 9
inventory 9
loose tools 9
bank overdraft 9
rent receivable accrued 9
2(b)(i) Share losses 1

Share risks
Additional finance available
Additional skills and experience available
Any 1 advantage (1)
2(b)(ii) Share profits 1

One partner’s actions can bind other partners
Any 1 disadvantage (1)

PUBLISHED
2(c) interested party reason for their interest 6
credit suppliers check on likelihood of being paid

bank/lender check on suitability for overdraft/loan
to check collateral in case of bankruptcy
manager check on efficiency and progress
government for tax calculation/government statistics
employees/trade union check on likelihood of continued employment
customers check on likelihood of supplies being continued
competitor comparison of profitability
potential partner check on profitability and prospects
takeover bidder check on profitability and prospects
potential investor check on profitability and prospects
Not business owner – this is excluded by question

Naming interested party – any 3 (1) each
Appropriate reason for their interest – any 3 (1) each
2(d) Physical deterioration 2

Economic reasons
Passage of time
Obsolescence
Depletion
Any 2 (1) each

PUBLISHED
2(e) True or False 4
When the straight line (equal instalment) method is used the depreciation
True (1)
is calculated on the cost price less residual value.
When the reducing (diminishing) balance method is used the percentage
False (1)
rate of depreciation decreases each year.
The provision for depreciation of a non-current asset is deducted from the
True (1)
cost price in the statement of financial position.
A provision for depreciation is a means of providing a fund to purchase a
False (1)
replacement non-current asset
2(f) Comparability 1
Relevance
Reliability
Understandability
Any 1 objective (1)
2(g) Accounting principle 4
The same accounting treatment is applied to similar items at

consistency (1)
all times.
Accounting assumes that a business will continue to operate going concern (1)
indefinitely.
Transactions are expressed in monetary terms. money measurement (1)
Revenue is recognised as earned when ownership of goods

realisation (1)
passes to the customer.

PUBLISHED
3(a) Reduces the number of entries in the main cash book 1

Any 1 reason (1)
3(b) Control/limit petty cash expenditure 1

Any 1 advantage (1)

PUBLISHED
3(c) Amira 10
Petty Cash Book
Total Total paid Postage Computer General Ledger

received Date Details supplies expenses accounts
$ $ $ $ $ $
2018
80 April 1 Cash
4 Stamps (1) 3 3
7 Printing paper (1) 8 8
11 Ink cartridges (1) 12 12
19 Window cleaner (1) 10 10
22 KK Limited (1) 35 35
29 Flowers (1) 7 7
75 3 20 17 35
5
80 30 Balance c/d 80
5 May 1 Balance b/d (1)

+ (1) Totalling analysis columns
(1) Totalling total columns
(1) Dates
3(d) 3
debit $ credit $
petty cash (book) (1) 75 cash/bank/cash book (1) 75
+ (1) for 2 equal OFs from (c)

PUBLISHED
3(e) Amira 1
Computer supplies account

2018
April 30 Petty cash (1) 20
3(f) Obtain the correct bank balance 2

Identify errors in the bank account
Assist/helps in discovering fraud and embezzlement
Identify amounts not credited
Identify any stale cheques or dishonoured cheques

3(g) Amira 5
Cash Book (bank columns) only

2018 2018
April 30 Balance b/d 17 620 April Bank charges (1) 28
(Cash book) error* (1) 100 30 Jabir(dis.chq) (1) 153

Rates (1) 95
Balance c/d 17 444
17 720 17 720
2018
May 1 Balance b/d (1)OF 17 444

PUBLISHED
3(h) Amira 4
$
Balance shown on bank statement 17 695 (1) OF
Add Cheque not credited – Shadya 824 (1)
18 519
Less Cheque not presented – Abasi 1 075 (1)
Alternative presentation $
Add Cheque not presented – Abasi 1 075 (1)
18 519
Less Cheque not credited – Shadya 824 (1)
Balance shown on bank statement 17 695 (1) OF
3(i) $17 444 (1) OF 2
Current assets (1) OF
3(j) Not enough money in account 2

Cheque unsigned
Amount in words and figures disagree
Takes account into unauthorised overdraft
Any 2 acceptable reasons (1) each

PUBLISHED
4(a) Harry 12
AX Limited account
2018 2018
Mar 4 Bank (1) 2 425 Mar 1 Balance b/d 2 500
Discount (received) (1) 75 15 Purchases (1) 2 600
17 Purchases returns (1) 360
5 100 5 100
2018
Apl 1 Balance b/d (1)OF 2 240
FM Limited account
2018 2018
Mar 28 Purchases returns (1) Mar 1 Balance b/d 750
170 24 Purchases (1) 1 547
30 Bank (1) 2 127
2 297 2 297

PUBLISHED
4(a) Purchases account

2018 2018
Feb 28 Total to date 43 000 Mar 31 Income statement (1) 47 147
Mar 31 Credit purchases for 4 147
month (1)
47 147 47 147

2018 2018
Mar 31 Income statement (1) 5 550 Feb 28 Total to date 5 020
Mar 31 Returns for month (1) 530
5 550 5 550
4(b)(i) Buying in bulk/buying large quantity 1

In the same trade
To enable Harry to make a profit when goods are sold
Loyal / regular customer
Any 1 reason (1)
4(b)(ii) 650 100 1

× = 20% (1)
3250 1
4(c)(i) Sales invoice 1
4(c)(ii) Debit note 1
4(c)(iii) Statement of account 1

PUBLISHED
5(a)(i) Goods remaining (at the year-end) which were purchased for converting into finished goods (1) 2
Example – fabric, thread, buttons, zips, etc. (1)
5(a)(ii) Goods which are partly made (at the end of the year) (1) 2
Example – partly made shirt/blouse/jeans/etc. (1)
5(a)(iii) Completed clothes which are awaiting sale (1) 2

Example – completed shirt/blouse/jeans/etc. (1)
5(b) Addae 10
$ $
Less Closing inventory of raw materials 5 150
45 200 (1)
Factory overheads
Indirect factory wages 27 140 }*
General factory expenses 3 150 }*
Factory heat and light 1 110 }*
Factory insurance 1 860 }*
Depreciation (factory) machinery 15 000 (1) 48 260
132 260 (1)

PUBLISHED
5(c) Buy in bulk to get trade discount/look for cheaper suppliers 2

Reduce wages
Reduce/control factory / general expenses
Reduce factory heat and light
Look for cheaper carriage on raw materials
Reduce rate of depreciation
Any 2 ways (1) each
5(d) (179 250 − 119 500) 100 2

× (1) whole formula = 33.33% (1)
179 250 1
5(e) (59 750 − 34 750) 100 2

× (1) whole formula = 13.95% (1)
179 250 1
5(f) Increase gross profit margin or increase selling price / reduce COS 2
Reduce/control administration and selling expenses not factory expenses
Any 2 ways (1) each

PUBLISHED
6(a) To balance the trial balance 2

Because there are errors on the trial balance
6(b) entries required to correct the error 6
error debit credit

account $ account $
1 motor expenses, $150,
debited to motor vehicles motor expenses 150 motor vehicles 150
account
2 carriage inwards, $120,
debited to carriage carriage inwards 120 (1) carriage outwards 120 (1)
outwards account
3 sales journal overcast by sales
1000 (1) suspense 1000 (1)
$1000 not sales journal
4 wages, $460, debited to
suspense 180 (1) wages 180 (1)
wages account as $640
6(c) All errors have not been discovered (1) 2
The suspense account will not be closed (1)

($650 + $180 on debit and $1000 on credit)
Accept alternative answers depending on entries in (b)

PUBLISHED
6(d) Mai 6
$
Profit for the year before corrections 4150
Increase Decrease
in profit in profit
$ $
Error 1 150 (1)
Error 3 1 000 (1)
Error 4 180 (2)*

180 1 150 970

ACCOUNTING 0452/12
MARK SCHEME
Maximum Mark: 120
Published
Teachers.

PUBLISHED
marking principles.
descriptors.

PUBLISHED

PUBLISHED
1 10
1(a) B 1
1(b) A 1
1(c) A 1
1(d) A 1
1(e) D 1
1(f) C 1
1(g) D 1
1(h) B 1
1(i) C 1
1(j) B 1

PUBLISHED
2(a) Reduces the number of entries in the ledger Max 2

Helps to gather and summarise accounting information e.g. total credit purchases
Helps in the preparation of control accounts
Allows work to be divided between several people/train junior accountants
To see as a list of transactions/reference purposes
Any 2 reasons – 1 mark each
2(b) 1 Cash Book 1
2 Purchases returns journal 1
3 General journal or journa 1
2(c) Account(s) debited $ Account(s) credited $ 10
1 Cash 220 Sales 220

2 Jane 440 (1) Purchases returns 440 (1)
3 Motor vehicles 12 100 (1) Speedy Motors 12 400 (1)
Motor vehicle 300 (1) Can have 2 entries
expenses here which add up to
12 400
4 Bank 392 (1) Tan 400 (1)
2(d) (838) + 220 (1) + 392 (1) = 226 overdrawn/Cr or / (226) (1) 3
2(e)(i) Sales ledger or trade receivables ledger 1

PUBLISHED
2(e)(ii) General or nominal ledger 1
3(a) Kumu 8
Purchase ledger control account

2018 2017
Apr 30 Discount received (1) 330 May 1 Balance b/d (1) 19 800
Bank (2) CF (1) OF 177 862 2018
Contra sales ledger (1) 400 Apr 30 Interest charged (1) 122
Balance c/d (1) 22 200 Credit purchases (1) 180 870
200 792 200 792
May 1 Balance b/d 22 200
3(b) Trade payables 1

× 365
Credit purchases
3(c) 22 200  2
× 365  (1) = 45 days (1)
180 870 

PUBLISHED
3(d) Not satisfied (1) OF 2
The payment period is longer than the standard terms allowed (1) OF
3(e) An unsatisfactory payment period might make it difficult to obtain credit in the future Max 2
Might get a poor credit rating/reputation
Could affect the ability to make purchases from chosen suppliers
If unable to make purchases may not be able to satisfy own customers
May be charged interest for late payment
Can’t take advantage of cash discounts/discount received
May refuse to supply

Max 2, 1 mark per point
3(f) 92 250  2
 x 100 (1) = 45% (1)
205 000 
3(g) ($205 000 + $35 000) (1) – (26 400 + 180 870) (1) = $32 730 (1) OF 3

If answer = $59 130 (2)
3(h) Cost of sales 1

Average inventory
3(i) 205 000  2

 (1) OF = 6.05 times (1) OF
(32 730 OF + 35 000) ÷ 2 

PUBLISHED
4(a) An accrual is an amount owing (1) for an expense incurred in the current (1) financial period. It will be included in the 6
statement of financial position as a current liability (1).
Accrued income is an amount earned (1) which will be received in the next (1) financial period. It will be included in the
statement of financial position as a current asset (1).
4(b) (4 + 6 + 2) (1) × $20 (1) = $240 (1) 3
4(c) $20 200 – $240 (1) OF = $19 960 (1) OF 2
4(d) Chandra has received income in advance which he has not yet earned 2
It is a liability to Chandra as he owes the learners
Chandra has prepaid income at the year-end
Chandra has received other income
Application of accruals (matching) principle/application of prudence/advance payments must be deducted from actual income

Any 2 comments × 1 mark each

PUBLISHED
4(e) Statement of revised profit for the year ended 31 January 2018 6

$ $ $
Draft profit 8 760
Error 1 100 (1)
Error 2 600 (1)
Error 3 89 (1)
Error 4 9 (1)
189 600 (411)
(2) CF (1) OF
4(f) Business entity (1) 2
Owner’s transactions should be kept separate from those of the business (1)

PUBLISHED
4(g) Chandra is a sole trader, LQ is a limited company 2

Different capital structure
Different size, economies of scale
Chandra is a new business, LQ is established
The financial statements of Chandra will be for only one year, which will not show trends
The financial statements may be for a year which is not typical
The businesses may have different accounting policies/methods
The businesses may have different operating policies
The businesses may have different year ends
The financial statements do not show non-monetary factors

1 mark per point, maximum 2

PUBLISHED
5(a) WB Sports Club 5


2018 2017
Mar 31 Income and expenditure (1) 5 000 Apr 1 Balance b/d (1) 120
2018
Mar 31 Bank/cash (1) 4 740
Balance c/d (1) 140
5 000 5 000
Apr 1 Balance b/d 140
+ 1 dates
5(b) WB Sports Club 10


2017 2018
Apr 1 Balance b/d (1) 960 Mar 31 Rent (1) 2 000
2018 Competition prizes (1) 220
Mar Subscriptions (1) 4 740 General expenses (1) 682
31 Competition entry fees (1) 900 Insurance (1) 430
Donations (1) 350 Sports equipment (1) 2 760
Balance c/d 858
6 950 6 950
Apr 1 Balance b/d (1) OF 858

PUBLISHED
5(c) WB Sports Club 7

$ $
Non-current assets
Current assets
Subscriptions owing 140 (1)
Bank 858 (1) OF 1 498
Total assets 17 258
Accumulated fund
Surplus for the year 1 568 (1) 17 131 (1)
Current liabilities
17 258
5(d) It is the total of all the surpluses (1) made by the club less all the deficits (1) since the start of the club 2

PUBLISHED
6(a) Assets $ $ 7
Equipment (18 000 – 3 600) 14 400 (1)
Motor vehicle 5 500 (1)
Inventory 2 934
(1)
Bank 209 (1)
25 105
Liabilities
(1)
Other payables 98 1 553
Capital at 31 December 2017 23 552 (1) OF
6(b) $ 5
Opening capital 20 300 (1)
Add: Capital introduced 5 500 (1)
25 800
Less: Drawings (2 700) (1)
23 100
Less: closing capital (23 552) (1) OF
Profit for the year 452 (1) OF

2017 2017
Dec 31 Drawings (1) 2 700 Jan 1 Balance b/d (1) 20 300
Balance c/d (1) OF 23 552 Dec 31 Motor vehicle (1) 5 500
Profit of the year (1) OF 452
26 252 26 252

PUBLISHED
6(c) It shows the profit earned for each $100 used in the business 1
Or
It shows how efficiently the capital is being employed
Profit received as a % of capital employed
6(d) Profit (for the year) 100 1

×
Capital employed 1
6(e) 452 OF 100 2

× (1) = 2.23% (1) OF do need %
20 300 1
6(f) Siegfried started charging depreciation on non-current assets 1

Siegfried wrote off more bad debts this year
Increase in other expenses
Accept any valid reason.

1 mark per point, Max 1
6(g) Easier/quicker/used to prepare financial statements/calculate profit Max 3

Helps to check accuracy/arithmetic errors or detect/locate errors
Helps to prevent fraud
Easy reference
Balances are more easily available
More detail available in income statement
Easier to calculate accounting ratios/measure performance
Cheaper accountancy fees
Maintains the principle of duality

1 mark per point , Max 3

IGCSE Accounting All Mark Scheme 2002 Summer 2018

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FIND AN ANSWER TO THE QUESTION BY SEARCHING ITS KEYWORD

IGCSE ACCOUNTING 0452

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This document consists of 11 printed pages.

© UCLES 2017 [Turn over

Glossary for Question 1

© UCLES 2017 Page 2 of 11

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2(b) asset liability income expense 4

bank loan 9(1)

2(c) Income statement $1500 (1) 2

2(d) accounts of the same type can be kept together 1

2(e)(i) Sales ledger – accounts of individual credit customers (1) 2

2(e)(ii) any suitable example for (1) mark 1

© UCLES 2017 Page 4 of 11

2(f) cash book 2

2(g) true or false 1

The recording of financial transactions is called accounting false (1)

Question Answer Marks

3(a)(i) in the books of Pich 2

debit account $ credit account $

3(a)(ii) in the books of Roger 2

debit account $ credit account $

3(b) Invoice (1) 2

3(c) debit account $ credit account $ 3

bank 4875 (1) Roger 5000 (1)

© UCLES 2017 Page 5 of 11

3(d)(i) discount received account (1) 1

3(d)(ii) income statement (1) 1

Provision for doubtful debts account

* (64 800–1100) (1) × 0.04 (1) = 2548 (1)OF

+(1) for dates

© UCLES 2017 Page 6 of 11

Question Answer Marks

4(b) 3 and 4 (1) 1

4(e) $2730 (1)OF 2

© UCLES 2017 Page 7 of 11

4(f) insufficient funds in account 1

4(g) preparing of trial balance (1) OR preparing of control account (1) 1

Question Answer Marks

5(a) more capital introduced to business 2

5(b)(ii) Ann owes money to the partnership. (1) 2

© UCLES 2017 Page 8 of 11

5(c) Ann and Bindu 5

5(d) Ann and Bindu 6

5(f) It avoids inventory/current assets/profit being overstated. (1) 1

© UCLES 2017 Page 9 of 11

Question Answer Marks

6(a) factory distribution administrative 4

6(b)(i) Cost of raw materials 112 500 (1)+(5000–7500) (1)=110 000 (1)OF 2

6(b)(ii) Prime cost 110 000 (1)OF +82 000=192 000 (1)OF 2

6(b)(iii) Cost of production 192 000 OF +(41 800+6000) (1)=239 800 (1)OF 2

© UCLES 2017 Page 10 of 11

6(d) It is cheaper to buy than produce (1) OR 1

© UCLES 2017 Page 11 of 11

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This document consists of 13 printed pages.

© UCLES 2017 [Turn over

© UCLES 2017 Page 2 of 13

© UCLES 2017 Page 3 of 13

© UCLES 2017 Page 4 of 13

2(a) Sales invoice (1) 2