Contents
June 2010
November 2010
June 2011
November 2011
June 2012
November 2012
June 2013
November 2013
June 2014
November 2014
June 2015
November 2015
June 2016
November 2016
June 2017
November 2017
June 2018
1
17
36
51
68
85
102
114
137
156
176
197
217
236
254
272
291
November 2018
311
June 2019
331
November 2019
353
Specimen 2020
374
June 2020
384
Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
*8343525273*
ACCOUNTING
0452/11
May/June 2015
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 21 printed pages and 3 blank pages.
IB15 06_0452_11/FP
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Choose the
one you consider correct and place a tick () in the box to indicate the correct answer.
1
(a) What is the purpose of accounting?
A
to ensure the cash book balance agrees with the bank statement
B
to know how long trade receivables take to pay
C
to prepare the financial statements of the business
D
to write up all the ledger accounts
[1]
(b) Where is discount received shown?
A
credit side of the purchases ledger control account
B
debit side of the purchases ledger control account
C
credit side of the sales ledger control account
D
debit side of the sales ledger control account
[1]
(c) Pedro spent $8410 buying a new vehicle. The invoice showed
Vehicle
Number plates
Insurance for 24 months
$
8000
50
360
How much was the capital expenditure?
A
$8050
B
$8180
C
$8230
D
$8360
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3
(d) Safir bought a machine for $10 000 and depreciated it at the rate of 30% per annum on the
reducing (diminishing) balance basis.
What was the net book value at the end of year 2?
A
$4000
B
$4900
C
$5100
D
$6000
[1]
(e) Albert maintains a provision for doubtful debts account. Where is the closing balance on the
account included in the financial statements?
A
as an expense in the income statement
B
as a revenue in the income statement
C
in the current assets section of the statement of financial position
D
in the current liabilities section of the statement of financial position
[1]
(f) Why is inventory valued at net realisable value when this is lower than cost?
A
to calculate the rate of inventory turnover
B
to ensure the balancing of the statement of financial position
C
to prevent profit being recorded before it is earned
D
to recognise losses as soon as they are incurred
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4
(g) Abdul started a business by transferring his own vehicle to the business at a valuation of
$9000 and introducing a sum of cash.
In the first year of trading profit was $2000. At the end of the first year the balance on his
capital account was $51 000.
How much cash did Abdul introduce?
A
$40 000
B
$44 000
C
$58 000
D
$62 000
[1]
(h) A manufacturing business provided the following information.
Opening inventory of finished goods
Closing inventory of finished goods
Cost of production for the year
Purchases of finished goods for the year
$
17 000
12 000
100 000
70 000
What was the cost of sales for the year?
A
$75 000
B
$105 000
C
$170 000
D
$175 000
[1]
(i) Agnes and Brian operate in similar businesses. They provide the following information.
Trade receivables collection period
Agnes
31 days
Brian
40 days
Which statement is true?
A
Agnes receives money from customers sooner than Brian.
B
Agnes pays her suppliers sooner than Brian.
C
Brian receives money from customers sooner than Agnes.
D
Brian pays his suppliers sooner than Agnes.
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(j) When is accounting information relevant?
A
when it can be compared with information for other periods
B
when it can be understood by the users of the accounts
C
when it changes business decisions
D
when it is free from error and bias
[1]
[Total: 10]
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2
(a) Complete the following table. Indicate with a tick () whether each item is an asset or a
liability. The first item has been completed as an example.
Asset
Liability
Office equipment
Prepaid rent
Accrued wages
Bank loan
Inventory of goods for resale
Inventory of stationery for office use
Amount due to creditor
[6]
(b) Complete the following sentences using the word ‘debit’ or ‘credit’.
An asset account has a
balance.
A liability account has a
balance.
An expense account has a
balance.
An income account has a
balance.
[4]
(c) Give one example of an expense account.
[1]
(d) Name the financial statement in which expenses are recorded.
[1]
(e) Complete the following table. Enter the word ‘true’ or ‘false’ against each statement.
The first has been completed as an example.
Every transaction has a two fold aspect
True
Costs must be matched against related income
Revenue can be recorded before it is earned
Staff expertise can be recorded in the financial statements
[3]
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7
Lamoudi has an accounting year end of 31 December.
On 1 April 2013 he paid $1200, by cheque, for a year’s insurance starting on that date.
On 1 April 2014 he paid $1440, by cheque, for insurance for twelve months to 31 March 2015.
REQUIRED
(f) Prepare Lamoudi’s insurance account for the year ended 31 December 2014. Balance the
account and bring down the balance on 1 January 2015.
Lamoudi
Insurance account
Date
Details
$
Date
Details
$
….….
……………..…..……….
…..….
………
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[5]
(g) State one reason why a trader might prepare a trial balance.
[1]
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Ebenon, a sole trader, extracted the following balances from his books of account on
31 December 2014.
Motor vehicles
Provision for depreciation of motor vehicles
Sales
Purchases
Rent
Wages and salaries
Sundry expenses
Drawings
Trade payables
Trade receivables
Bank overdraft
Cash
Purchase returns
Inventory
Capital
© UCLES 2015
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$
38 000
10 000
190 000
103 000
4 000
41 000
6 800
23 000
5 000
7 000
1 500
100
600
12 000
?
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REQUIRED
(h) Prepare Ebenon’s trial balance at 31 December 2014.
Ebenon
Trial Balance at 31 December 2014
Debit
$
Credit
$
Motor vehicles
Provision for depreciation of motor vehicles
Sales
Purchases
Rent
Wages and salaries
Sundry expenses
Drawings
Trade payables
Trade receivables
Bank overdraft
Cash
Purchase returns
Inventory
Capital
[8]
(i) Give the date to which the inventory in the trial balance relates.
[1]
[Total: 30]
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3
(a) Name two books of prime (original) entry which a trader may keep. In each case name a
source document for that book. An example has been provided.
Book of prime (original) entry
Cash book
Source document
Cheque counterfoil
[4]
(b) State one reason why a trader might use books of prime (original) entry.
[1]
(c) Name the two accounts which are posted with the totals from a three column cash book.
1
2
[2]
Abdoulaye received a cheque from Pierre which was subsequently dishonoured.
REQUIRED
(d) State what is meant by a dishonoured cheque.
[1]
(e) State how Abdoulaye recorded the dishonouring of the cheque.
Account debited
Account credited
[2]
(f) Name the statement prepared by Abdoulaye to ensure that his bank account is free from
error.
[1]
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Abdoulaye has a bank overdraft.
REQUIRED
(g) Explain what is meant by a bank overdraft.
[2]
(h) Complete the following table using a tick () to indicate whether Abdoulaye’s cash book and
his bank statement have a debit or a credit balance.
Debit balance
Credit balance
Cash book
Bank statement
[2]
Abdoulaye withdrew $200 from the bank for personal use.
REQUIRED
(i) State how this is recorded in the books of account.
Account debited
Account credited
[2]
[Total: 17]
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4
At 1 February 2014, Green Meadow Limited had the following shares and debentures.
250 000 ordinary shares of $0.50 each
100 000 8% preference shares of $1 each
$50 000 6% debentures (2019)
The following balances were extracted from the books on 31 January 2015.
Retained earnings
Plant and equipment (at book value)
Motor vehicles (at book value)
Trade payables
Trade receivables
Inventory
Bank
Long term bank loan (5%)
(taken out in 2013)
$
65 000
184 000
87 000
43 000
57 000
63 000
2 000 debit
10 000
REQUIRED
(a) Prepare the statement of financial position at 31 January 2015.
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Green Meadow Limited
Statement of Financial Position at 31 January 2015
$
………………………………………………………………………..
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[10]
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Following additional information is available:
1
2
3
Retained earnings at 1 February 2014 were $51 500.
The interim ordinary dividend paid during the year was $0.04 per share.
The preference dividend was paid on time.
REQUIRED
(b) Calculate the profit for the year ended 31 January 2015.
[4]
(c) Calculate the profit from operations (profit before interest) for the year ended
31 January 2015.
[4]
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(d) Calculate the return on capital employed (ROCE).
[4]
(e) State one reason why the directors would wish to know the ROCE.
[1]
(f) State why the directors chose to issue debentures rather than issue more ordinary shares.
[1]
[Total: 24]
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5
Antoinette provided the following information.
Revenue for the year ended 30 November 2014
Inventory at 1 December 2013
Inventory at 30 November 2014
Gross profit margin
Net profit margin
$1000
$60
$40
40%
15%
REQUIRED
(a) Calculate the following for the year ended 30 November 2014.
Gross profit
Cost of sales
Purchases
Profit for the year
Expenses
[7]
Antoinette’s brother, Louis, has a business selling similar type of goods.
His gross profit margin is 40% and his net profit margin is 20%.
REQUIRED
(b) State one reason for the difference in the ratios.
[1]
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(c) Calculate Antoinette’s inventory turnover in days. Round up your answer to the next
whole day.
[4]
(d) Suggest two reasons why Louis’ inventory turnover is faster than Antoinette’s.
1
2
[2]
(e) State two advantages to Antoinette of going into partnership with Louis.
1
2
[2]
[Total: 16]
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6
The Healthy Ways Sports Club provided the following information.
Subscriptions in advance
Subscriptions in arrears
Trade payables for café supplies
Inventory of café supplies
Sports equipment at valuation
Accrued wages for sports club staff
At 31 December 2013
$
100
350
590
600
18 700
-
At 31 December 2014
$
50
500
820
800
20 100
300
Receipts and payments during the year ended 31 December 2014
$
Receipts
Subscriptions received
19 100
Café receipts
4 900
Payments
Café supplies
New sports equipment
Staff wages – café
– sports club
Rent and insurance – sports club
Sundry expenses – sports club
3 710
4 600
1 800
7 200
4 800
1 850
REQUIRED
(a) Prepare the subscriptions account for the year ended 31 December 2014. Balance the
account and bring down the balances on 1 January 2015.
Healthy Ways Sports Club
Subscriptions account
Date
Details
$
Date
Details
$
….….
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……..
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……..
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……..
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[6]
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(b) Prepare the total trade payables account for the year ended 31 December 2014 to determine
the café purchases.
Healthy Ways Sports Club
Total trade payables account
Date
Details
$
Date
Details
$
….….
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……..
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………..…..…………
……..
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……..
……..
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……..
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…..….
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……………....………
……...
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[4]
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(c) Prepare the café income statement for the year ended 31 December 2014.
Healthy Ways Sports Club
Café Income Statement for the year ended 31 December 2014
$
$
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[6]
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(d) Prepare the income and expenditure account for the year ended 31 December 2014.
Healthy Ways Sports Club
Income and Expenditure Account for the year ended 31 December 2014
$
$
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[7]
[Total: 23]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
*8375935637*
ACCOUNTING
0452/11
October/November 2015
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 20 printed pages.
IB15 11_0452_11/2RP
© UCLES 2015
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Choose the
one you consider correct and place a tick () in the box to indicate the correct answer.
1
(a) Which business document would be sent by a customer to a supplier?
A
credit note
B
debit note
C
invoice
D
statement of account
[1]
(b) An insurance account shows an amount paid for the year of $2000 and a prepayment at the
end of the year of $400.
Which entry appears in the insurance account to record the transfer to the income
statement?
A
credit entry of $1600
B
credit entry of $2400
C
debit entry of $1600
D
debit entry of $2400
[1]
(c) Where would a dishonoured cheque from a customer be recorded in the books of the
supplier?
A
credit side of the purchases ledger control account
B
credit side of the sales ledger control account
C
debit side of the purchases ledger control account
D
debit side of the sales ledger control account
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3
(d) Jamal treats purchases of loose tools as capital expenditure.
On 1 July 2014 his loose tools were valued at $7100.
On 1 September 2014 he bought new tools costing $1200.
On 30 June 2015 he valued loose tools at $6000.
Which amount for loose tools appeared in his income statement for the year ended
30 June 2015?
A
$100
B
$1100
C
$1200
D
$2300
[1]
(e) The following account appeared in Andrew’s ledger.
2015
30 April
Bank
$
4000
Andrew
Advertising account
2014
1 May
Balance b/d
2015
30 April
Income statement
Balance c/d
4000
2015
1 May
Balance b/d
$
500
2800
700
4000
700
Which statement is correct?
A
Andrew earned $2800 from advertising during the year.
B
Andrew had prepaid $700 for advertising on 1 May 2015.
C
Andrew owed $700 for advertising on 1 May 2015.
D
Andrew paid $2800 for advertising during the year.
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4
(f) Why does a partnership prepare an appropriation account?
A
to allocate profit for the year to each partner
B
to calculate interest on partners’ loans
C
to ensure that drawings are accounted for
D
to record dividends paid and proposed
[1]
(g) During the accounting year a limited company had the following transactions.
ordinary share dividend paid
interest paid on short term bank loan
interest paid on debentures (repayable in 2019)
interest received on bank deposit
$
25 000
3 000
12 000
5 000
Which amount appeared in the expenses in the income statement?
A
$10 000
B
$12 000
C
$15 000
D
$35 000
[1]
(h) Why does a sports club prepare the trading account section of an income statement?
A
it has paid staff as well as voluntary workers
B
it operates a café
C
to calculate subscriptions for the year
D
to value the closing inventory
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5
(i) The rent of a manufacturing business is split 60% factory, 10% offices and 30% showrooms.
Business rent is $40 000 a year and salesmen’s salaries are $12 000 a year.
How much appears in the manufacturing account for these costs?
A
$24 000
B
$31 200
C
$36 000
D
$46 800
[1]
(j) Financial statements must be free from error and bias.
Which accounting policy is being applied?
A
comparability
B
relevance
C
reliability
D
understandability
[1]
[Total: 10]
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6
2
(a) State what is meant by a book of prime (original) entry.
[1]
(b) Name two of the books of prime (original) entry which a business may maintain.
1
2
[2]
(c) Complete the following table using a tick () to indicate whether each item is an asset, a
liability or an expense. The first has been completed as an example.
asset
fixtures and fittings
liability
expense
insurance
bank overdraft
cash
trade payable
wages
accrued electricity
increase in provision for doubtful debts
unpaid commission receivable
[4]
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(d) Name the financial statement in which the following are recorded.
(i) assets
[1]
(ii) expenses.
[1]
Neel started a business on 1 June. The following transactions took place in June.
1
Opened a business bank account with $8000 of his own money.
2
Received a bank loan, $2000.
3
Bought a delivery van, $5200, from A1 Motors on credit.
4
Bought inventory, $3700, paying by cheque.
5
Paid shop rent, $1000, by standing order.
6
Withdrew cash, $100, to start up an imprest system.
REQUIRED
(e) Complete the following table showing how these transactions were recorded. The first has
been completed as an example.
Debit entry
Credit entry
$
1
Bank account
8000
$
Capital account
8000
2
3
4
5
6
[10]
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8
(f) Calculate the balance on Neel’s bank account after these transactions.
[3]
[Total: 22]
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9
3
(a) Name three types of inventory which might be held by a manufacturing business.
1
2
3
[3]
(b) State how inventory should be valued.
[1]
(c) State how Asrul, a retailer, records goods taken for his personal use.
Account debited
Account credited
[2]
(d) Name the accounting principle which Asrul is applying.
[1]
(e) State one reason why Asrul prepares a bank reconciliation statement.
[1]
(f) State what is meant by a bank statement.
[1]
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(g) Give one example of each of the following.
1
An item in the cash book not in the bank statement
2
An item in the bank statement not in the cash book.
[2]
[Total: 11]
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11
4
(a) Explain what is meant by the term provision for doubtful debts.
[2]
On 1 May 2014 Samuel’s provision for doubtful debts account showed a balance of $450. On
30 April 2015 his trade receivables amounted to $9750. This included a debt of $250 which had
gone bad and should be written off. Samuel provides for doubtful debts at a rate of 4%.
REQUIRED
(b) Prepare Samuel’s provision for doubtful debts account. Bring down the balance on
1 May 2015.
Samuel
Provision for doubtful debts account
Date
Details
$
Date
Details
$
….….
……………..…..……….
…..….
………
………....……………
…..…..
……..
……………....………
…..….
….…..
………..…..…………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
……...
…..….
………..……..………
…..….
….….
……………….………
…..….
…..….
………..……..………
…..….
[5]
(c) State where the entry for doubtful debts will appear in the income statement.
[1]
(d) Name the two accounting principles Samuel is applying by maintaining a provision for
doubtful debts account.
1
2
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(e) Name the two items in the statement of financial position which might be overstated if
Samuel did not maintain a provision for doubtful debts account.
1
2
[2]
[Total: 12]
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13
5
Nzita is a sole trader. His statement of financial position at 31 January 2014 included the
following balances.
Trade receivables
Trade payables
Inventory
Equipment at cost
Provision for depreciation of equipment
Prepaid rent
Bank
$
700
400
1 100
15 700
4 100
250
2 100 debit
REQUIRED
(a) Calculate Nzita’s capital at 31 January 2014.
[6]
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A summary of Nzita’s bank statements showed the following for the year ended 31 January 2015.
Receipts from customers
Payments to suppliers
Wages
Rent
Purchase of new equipment
Sundry expenses
Drawings
$
28 900
12 600
5 200
3 100
1 100
2 650
6 600
Further information is as follows.
1
Nzita depreciates his non-current assets at the rate of 10% per annum on the straight line
basis. A full year’s depreciation is provided in the year of purchase.
2
No non-current assets were disposed of during the year.
3
Proper books of account were not kept during the year but Nzita provided the following
information at 31 January 2015.
$
900
650
1400
150
Trade receivables
Trade payables
Inventory
Prepaid rent
4
All sales and purchases were made on credit.
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15
REQUIRED
(b) Prepare the following accounts for the year ended 31 January 2015 to determine the sales
and purchases for the year.
Nzita
Total trade receivables account
Date
Details
$
Date
Details
$
….….
……………..…..……….
…..….
………
………....……………
…..…..
……..
……………....………
…..….
….…..
………..…..…………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
……...
…..….
………..……..………
…..….
Nzita
Total trade payables account
Date
Details
$
Date
Details
$
….….
……………..…..……….
…..….
………
………....……………
…..…..
……..
……………....………
…..….
….…..
………..…..…………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
……...
…..….
………..……..………
…..….
[8]
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(c) Prepare Nzita’s income statement for the year ended 31 January 2015.
Nzita
Income Statement for the year ended 31 January 2015
$
$
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
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…………………………………………………………
……………..
……………..
…………………………………………………………
……………..
……………..
[9]
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17
(d) Prepare an extract from Nzita’s statement of financial position at 31 January 2015 showing
the capital section.
Nzita
Statement of Financial Position (extract) at 31 January 2015
[4]
(e) Calculate, to two decimal places, Nzita’s gross profit margin for the year.
[2]
(f) Suggest two reasons why Nzita’s gross profit margin was lower than in the previous year.
1
2
[2]
[Total: 31]
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6
(a) Complete the following sentences using the words
capital
current
non-current
overstated
revenue
understated
……………………. expenditure relates to the purchase of an asset which will last for more
than 12 months.
……………………. expenditure relates to the day-to-day running costs of the business or the
purchase of a ……………………. asset.
A capital receipt arises when a ……………………. asset is sold.
If an item of capital expenditure is wrongly recorded as revenue expenditure profit will be
…………………….
If an item of revenue expenditure is wrongly recorded as capital expenditure profit will
be…………………….
[6]
Leroy prepared a trial balance on 30 September 2015 which failed to balance. He opened a
suspense account. He then discovered the following errors.
1
Discount allowed, $30, had been posted to the credit side of the discount received account.
2
Receipt of cash, $85, from Yolanda, a credit customer, had been credited to the account of
Joanie.
3
The total of the sales returns journal, $110, had been posted as $100.
4
An invoice totalling $1000 for computer equipment and supplies had included a charge of
$150 for stationery. The total amount had been posted to the office equipment account.
REQUIRED
(b) State which two of these errors did not affect the balancing of the trial balance and in each
case name the type of error which had occurred.
Error
Name
Error
Name
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19
(c) Prepare journal entries to correct all four errors. Narratives are required.
Error
number
Details
Debit
$
Credit
$
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
………………………………………….
………………
………………
………….
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………………
………….
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………….
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………….
………………………………………….
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………….
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………….
………………………………………….
………………
………………
[13]
Question 6(d) is on the next page.
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20
(d) Prepare the suspense account, showing the original difference on the trial balance.
Leroy
Suspense account
Date
Details
2015
Sept 30 ……………..…..……….
$
Date
Details
$
…..….
2015
Sept 30
………....……………
…..…..
……..
……………....………
…..….
….…..
………..…..…………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
…..….
…..….
………..……..………
…..….
….….
……………....………
……...
…..….
………..……..………
…..….
[3]
Leroy had a draft profit for the year of $5170 before the errors were corrected.
REQUIRED
(e) Complete the following table to calculate the correct profit for the year. Where an error has
no effect on profit, place a tick () in the No Effect column.
No Effect
Increase
$
Decrease
$
Draft profit
$
5170
Error 1
Error 2
Error 3
Error 4
______
______
______
______
Corrected profit
______
______
[8]
[Total: 34]
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cie.org.uk after the live examination series.
Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 2 0 2 1 1 9 4 6 5 0 *
0452/11
ACCOUNTING
Paper 1
May/June 2016
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 19 printed pages and 1 blank page.
DC (CW) 114563/4
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Choose the one
you consider correct and place a tick (✓) in the box to indicate the correct answer.
1
(a) An amount received from Alice, a credit customer, was credited to the account of Alison in
error.
Which error was made?
A
commission
B
compensating
C
original entry
D
principle
[1]
(b) Maneck had a draft profit of $10 500. He then discovered that the total of the discount allowed
column of the cash book, $200, had been entered on the credit side of the discount received
account.
What was the profit once this error had been corrected?
A
$10 100
B
$10 300
C
$10 700
D
$10 900
[1]
(c) How do discount received and sales ledger contras appear in a purchases ledger control
account?
discount received
contras
A
as a credit
as a credit
B
as a credit
as a debit
C
as a debit
as a credit
D
as a debit
as a debit
[1]
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3
(d) Which statement is true about capital expenditure?
A
It consists of the purchase of goods for resale.
B
It includes the costs of operating a non-current asset.
C
It involves the buying of an asset to be used in the business for more
than a year.
D
It should be written off during the year in which the expenditure arises.
[1]
(e) Nusswan’s rates are $100 a month. He pays six months’ rates in advance, on 1 January and
1 July each year. He also receives six months’ rent of $150 a month in advance on the same
dates.
Which amounts appear in the statement of financial position on 31 January?
in current assets
in current liabilities
A
$100
$150
B
$500
$750
C
$750
$500
D
$1250
nil
[1]
(f)
A trader has an increasing level of trade receivables and maintains the same rate of provision
for doubtful debts over the years. One year he forgets to update his provision for doubtful
debts account.
Which effect does this have on his financial statements?
profit for the year
current assets
A
overstated
overstated
B
overstated
understated
C
understated
overstated
D
understated
understated
[1]
(g) What is meant by the term net realisable value?
A
selling price
B
selling price less costs of completion
C
selling price less costs of completion less selling expenses
D
selling price less selling expenses
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4
(h) FD Paints Limited started trading on 1 January 2015. The company provided the following
information for the year ended 31 December 2015.
Profit for the year
Dividend paid
Dividend proposed
Transfer to general reserve
$
80 000
4 200
10 400
5 000
What were the retained earnings at 31 December 2015?
A
$60 400
B
$70 800
C
$75 800
D
$89 200
[1]
(i)
A club records its equipment at valuation.
How does it calculate its depreciation?
A
value at start of year – equipment purchased – value at end of year
B
value at start of year – equipment purchased + value at end of year
C
value at start of year + equipment purchased – value at end of year
D
value at start of year + equipment purchased + value at end of year
[1]
(j)
Which statements are true about the current ratio?
1
2
3
4
It can be higher than the quick ratio.
It can be lower than the quick ratio.
It differs from the quick ratio because of bank overdraft.
It differs from the quick ratio because of inventories of goods.
A
1 and 3
B
1 and 4
C
2 and 3
D
2 and 4
[1]
[Total: 10]
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5
2
(a) Complete the following sentence using the words ‘plus’ and ‘minus’.
capital at start of year .............. profit for the year .............. capital introduced ..............
drawings = capital at end of year
[1]
Lewis had the following transactions.
1
2
Bought goods, $1000, on credit from Pamela.
Bought delivery van, $17 000, from AM Motors, paying $12 000 by cheque with the
balance to be paid after six months.
Paid wages, $250, by cheque.
Sold goods, cost $600, for $960 on credit to Ali.
Withdrew $110 cash from the business bank account to increase cash in hand.
3
4
5
REQUIRED
(b) Complete the following table showing how each of these transactions was recorded in Lewis’s
books of account. The first has been completed as an example.
Account(s) debited
1
Purchases
$
1000
Account(s) credited
Pamela
$
1000
2
3
4
5
[9]
(c) Identify the transaction which decreased Lewis’s capital.
Transaction number .......................
[1]
(d) Identify the transaction which increased Lewis’s capital. State the amount by which it was
increased.
Transaction number .......................
Amount ..........................................
[2]
(e) Identify the transaction which would be classified as a contra.
Transaction number .......................
(f)
[1]
State how capital employed is calculated.
...............................................................................................................................................[1]
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(g) Name the book of prime (original) entry used when a trader brings cash into the business as
capital introduced.
...............................................................................................................................................[1]
(h) Name the book of prime (original) entry used when a trader transfers his private vehicle to the
business.
...............................................................................................................................................[1]
(i)
Complete the following table. Indicate with a tick (✓) whether each item is an asset, a liability,
an expense or an income.
asset
liability
expense
income
premises
accrued wages
decrease in provision for doubtful debts
bank loan
depreciation charge
carriage outwards
[3]
[Total: 20]
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7
3
(a) Complete the following table by writing ‘True’ or ‘False’ against each comment about a
statement of account.
It contains details of the quantity and price of goods supplied.
It shows the value of trade discount given.
It shows the balance owing at the start of the period.
It is sent to remind the customer of the amount owed.
[4]
Dilip is a trader. He sells goods to James, a credit customer.
REQUIRED
(b) Complete the following table indicating with a tick (✓) who would issue each document.
Dilip
James
invoice
credit note
debit note
[3]
(c) Name the book of prime (original) entry where each trader would record a credit note.
Dilip ...........................................................................................................................................
James ...................................................................................................................................[2]
(d) State when each of the following documents is usually sent.
Invoice ......................................................................................................................................
Credit note ................................................................................................................................
Statement of account ............................................................................................................[3]
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On 1 March 2016 James owed Dilip $300. During March the following transactions took place.
March 3
6
13
James paid, by cheque, the balance owing less 3% cash discount.
James bought on credit goods, list price $620, after taking 20% trade discount.
James returned goods, list price $180.
REQUIRED
(e) Prepare James’s account in the books of Dilip for the month of March 2016. Balance the
account and bring down the balance on 1 April 2016.
Dilip
James account
Date
Details
.............
......................................
.............
$
Date
Details
$
.............
.............
......................................
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
[7]
(f)
State where James’s account would be included in Dilip’s statement of financial position.
Name the item and the section.
Item ...........................................................................................................................................
Section ..................................................................................................................................[2]
(g) State why James was entitled to cash discount.
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 22]
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9
4
(a) Complete the following table. Fill in the gaps so that the name of each accounting principle or
policy is paired with an explanation. The first has been completed as an example.
Name of accounting
principle or policy
Duality
Explanation
Every transaction has a two-fold aspect.
Profits should not be overstated.
......................................
......................................
Financial statements only include items which can be
expressed in monetary terms.
Going concern
...........................................................................................
...........................................................................................
...........................................................................................
...........................................................................................
Business entity
...........................................................................................
...........................................................................................
...........................................................................................
...........................................................................................
Accounting information should be free from error and bias.
......................................
Consistency
...........................................................................................
...........................................................................................
...........................................................................................
...........................................................................................
[6]
(b) State two reasons why two business owners might find it difficult to compare their financial
statements.
1 ................................................................................................................................................
2 ............................................................................................................................................[2]
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10
(c) Complete the following table giving one reason why each of the users of financial statements
might be interested in them.
User
Reason
Bank manager
...........................................................................................
...........................................................................................
Credit supplier
...........................................................................................
...........................................................................................
Investor
...........................................................................................
...........................................................................................
[3]
(d) State how prime cost is calculated in a manufacturing business.
...................................................................................................................................................
...............................................................................................................................................[2]
(e) Complete the following table, indicating with a tick (✓) where each item appears in the
financial statements of a manufacturing business.
manufacturing
account
income
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
[4]
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(f)
State what is meant by the term work in progress.
...................................................................................................................................................
...............................................................................................................................................[1]
(g) State one reason why work in progress is more likely to appear in the financial statements of
a boat builder than those of a business making bread rolls.
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 19]
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12
5
Rohinton started trading on 1 January 2016. His cash book (bank columns only) for the first month
of trading was as follows.
Rohinton
Cash book (bank columns only)
2016
$
Jan 1 Capital
10 000
10 Cash sales
2016
Jan 1 Rent (3 months)
1 600
18 Freddie
180
28 Ling
195
$
3 000
7 Fixtures and fittings
4 000
8 Amitav
605
21 Arun
402
29 Charles
780
31 Balance c/d
3 188
11 975
Feb 1 Balance b/d
11 975
3 188
His bank statement for the same period was as follows.
Date
Details
2016
Debit
Credit
Balance
$
$
$
Jan 1 Opening deposit
10 000
1 Standing order (12 months’ insurance)
5 Cheque 0002
10 000 Cr
720
9 280 Cr
4 000
5 280 Cr
10 Deposit
1 600
6 880 Cr
11 Cheque 0001
3 000
3 880 Cr
12 Cheque 0003
605
3 275 Cr
20 Deposit
180
3 455 Cr
REQUIRED
(a) Update the cash book and bring down the amended balance.
Rohinton
Cash book (bank columns only)
2016
$
2016
$
...........
..........................
.............
...........
...............................
.............
...........
..........................
.............
...........
...............................
.............
...........
..........................
.............
...........
...............................
.............
...........
..........................
.............
...........
...............................
.............
...........
..........................
.............
...........
...............................
.............
...........
..........................
.............
...........
...............................
.............
[3]
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13
(b) Prepare the bank reconciliation statement at 31 January 2016.
Rohinton
Bank reconciliation statement at 31 January 2016
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[7]
Question 5(c) is on the next page.
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14
Further information is as follows.
1
On 31 January
Cash in hand
Amount owing by credit customer
Amount owing to credit supplier
Inventory
Rent prepaid
Insurance prepaid
$
710
70
550
1211
?
?
2
Depreciation at the rate of 15% per annum on the straight line basis is provided monthly.
REQUIRED
(c) Prepare a statement of affairs showing the net assets and the capital of the business on
31 January 2016.
Rohinton
Statement of Affairs at 31 January 2016
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
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...................................................................................................................................................
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(d) Calculate Rohinton’s profit for the month of January 2016. Use the capital you calculated in
part (c).
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
[Total: 23]
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6
David and Harold are in partnership. The partnership agreement states that David is to receive an
annual salary of $12 000 and that profits and losses are to be shared in the ratio 2:1.
The following balances were extracted from the partnership books on 31 March 2016.
Capital accounts – David
– Harold
Current accounts – David
– Harold
Fixtures and fittings at cost
Provision for depreciation of fixtures and fittings
Inventory at 1 April 2015
Trade receivables
Trade payables
Bank
Sales (Revenue)
Purchases
Rent
Other operating expenses
Wages
Drawings – David
– Harold
$
80 000
25 000
8 100 debit
6 200 credit
37 200
11 160
36 000
7 000
6 140
12 100 debit
142 000
83 100
12 000
11 800
16 500
32 000
14 700
Additional information
1
Other operating expenses included $500 for insurance which was paid in advance at
31 March 2016.
2
Inventory on 31 March 2016 amounted to $26 800.
3
Fixtures and fittings are depreciated at the rate of 10% per annum on the straight line basis.
A full year’s depreciation is provided in the year of purchase. The current year’s depreciation
has not yet been provided.
4
All the fixtures and fittings were purchased when the partnership was formed.
REQUIRED
(a) Calculate how many years’ depreciation had been charged.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
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(b) Prepare the income statement for the year ended 31 March 2016.
David and Harold
Income Statement for the year ended 31 March 2016
$
$
...........................................................................
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(c) Prepare the appropriation account for the year ended 31 March 2016.
David and Harold
Appropriation Account for the year ended 31 March 2016
$
$
...........................................................................
......................... .........................
...........................................................................
......................... .........................
...........................................................................
......................... .........................
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......................... .........................
[3]
(d) Calculate David’s total income entitlement from the business for the year.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
(e) State why it might be useful if the partnership agreement contained a provision for interest on
drawings.
...................................................................................................................................................
...............................................................................................................................................[1]
(f)
Calculate the percentage of gross profit to revenue for the year ended 31 March 2016.
...................................................................................................................................................
...............................................................................................................................................[2]
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David and Harold were surprised to see that inventory had fallen during the year. In previous years
the percentage of gross profit to revenue had been 45% and they believed that this had been
maintained.
REQUIRED
(g) Calculate the value of inventory at 31 March 2016 with which the percentage of gross profit to
revenue would have been constant.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[5]
(h) Suggest one reason for the lower inventory value.
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 26]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 7 1 4 4 2 9 4 9 5 2 *
0452/11
ACCOUNTING
Paper 1
October/November 2016
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 19 printed pages and 1 blank page.
DC (NH) 114525/4
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Choose the one
you consider correct and place a tick (✓) in the box to indicate the correct answer.
1
(a) Amber sells goods on credit to Bashir.
Which statement is correct about a credit note?
A
It is sent by Amber when Bashir buys goods.
B
It is sent by Amber when Bashir returns goods.
C
It is sent by Bashir when he buys goods.
D
It is sent by Bashir when he returns goods.
[1]
(b) Antony decided to write off $300 owed by Mariam. He debited Mariam’s account and credited
the provision for doubtful debts account, both with $300.
Which entries are needed to correct the error?
Debit entry
Credit entry
A
Bad debts
$300
Mariam
$300
B
Bad debts
Provision for doubtful debts
$300
$300
Mariam
$600
C
Provision for doubtful debts
$300
Bad debts
$300
D
Provision for doubtful debts
$600
Bad debts
Mariam
$300
$300
[1]
(c) Jack’s bank statement showed a credit balance of $600 on 30 June. It contained bank
charges, $20, which did not appear in the cash book. Cheques, $150, issued by Jack did not
appear on the bank statement.
Which value for bank appeared in Jack’s statement of financial position on 30 June?
A
$450 current asset
B
$580 current asset
C
$620 current liability
D
$750 current liability
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(d) A sales ledger control account showed the following entries.
opening balance
closing balance
sales
receipts
$
100
180
2000
1750
What is the missing entry?
A
discount allowed $170
B
discount allowed $330
C
discount received $170
D
discount received $330
[1]
(e) During 2015 John made a payment of $1200 for insurance for the 12 months to
30 September 2016.
Which amount appeared in John’s statement of financial position at 30 June 2016?
(f)
A
$300 current asset
B
$300 current liability
C
$900 current asset
D
$900 current liability
[1]
A retailer has an item of inventory which cost $60 and which is on sale at $50.
How does the retailer value this item in his statement of financial position?
A
at cost price, to allow for losses as early as possible
B
at cost price, to avoid recognising profit before it is earned
C
at selling price, to allow for losses as early as possible
D
at selling price, to avoid recognising profit before it is earned
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4
(g) A statement of financial position showed non-current assets, current assets, current liabilities
and non-current liabilities.
What equals owner’s capital?
A
current assets – current liabilities
B
non-current assets
C
total assets – current liabilities
D
total assets – total liabilities
[1]
(h) Which statement is true about dividends paid on ordinary shares?
(i)
A
They appear in the appropriation account and are paid to partners.
B
They appear in the income statement and are paid to partners.
C
They appear in the statement of changes in equity and are paid
to members of a company.
D
They appear in the statement of financial position and are paid
to members of a company.
[1]
A club has 200 members paying an annual subscription of $50. It provided the following
information.
$
9800
1120
850
8280
subscriptions received
new equipment purchased
depreciation of equipment
other running costs
What was the surplus for the year?
A
$400
B
$600
C
$670
D
$870
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(j)
Elzevir had been in business for only four months when a fire destroyed all of his inventory. In
that period his sales were $1200. He paid $820 to suppliers and a supplier’s invoice for $70
was unpaid. His cost of sales was $800.
What was the cost of the inventory which was destroyed?
A
$50
B
$90
C
$310
D
$380
[1]
[Total: 10]
Question 2 is on the next page.
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2
(a) Name the accounting principle which assumes that a business will continue to operate
indefinitely.
...............................................................................................................................................[1]
(b) State one reason why a book-keeper prepares a trial balance.
...................................................................................................................................................
...............................................................................................................................................[1]
(c) Name the account which is opened when a trial balance does not agree.
...............................................................................................................................................[1]
(d) Complete the following table and indicate with a tick (✓) whether each item would appear on
the debit side or the credit side of a trial balance.
Debit side
Credit side
Capital
Cash
Drawings
Rent paid
Sales returns
Bank overdraft
Machinery
Discount received
Provision for depreciation
Bad debts
[5]
(e) State one reason why a trader’s ledger might be divided into different sections.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[1]
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7
(f)
Complete the following table, naming the ledger in which each account appears. The first one
has been completed as an example.
Account
Insurance
Ledger
Nominal/general
Sales
Discount allowed
Philip, a credit customer
Purchases
Amit, a credit supplier
[5]
(g) State one reason why each type of discount may be given.
(i)
Trade discount
...........................................................................................................................................
.......................................................................................................................................[1]
(ii)
Cash discount
...........................................................................................................................................
.......................................................................................................................................[1]
(h) Name the type of discount which is recorded in the books of account.
...............................................................................................................................................[1]
Karen is a retailer of car parts. She took goods for her own use. She also transferred her computer
to the business.
REQUIRED
(i)
State how these transactions were recorded in Karen’s books of account of the business.
debit entry
credit entry
Goods taken
Computer transferred
[4]
(j)
Name the accounting principle Karen applied in recording these transactions.
...............................................................................................................................................[1]
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(k) Name two interested parties who might wish to look at Karen’s business financial statements.
In each case give a reason why they might be interested.
Interested party
Reason
1
2
[4]
(l)
State the meaning of the accounting objective of relevance.
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 27]
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3
(a) State what is meant by an asset.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) State the difference between a non-current asset and a current asset.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(c) State what is meant by a liability.
...................................................................................................................................................
...............................................................................................................................................[1]
(d) State the difference between a non-current liability and a current liability.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
Malorie is in business as a baker.
REQUIRED
(e) (i)
Suggest one item Malorie would include in her non-current assets.
.......................................................................................................................................[1]
(ii)
Suggest one item Malorie might include in her inventory.
.......................................................................................................................................[1]
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Malorie provided the following information.
Bank
Trade receivables
Trade payables
Inventory
30 June 2015
$
400
850
750
550
Current ratio
debit
30 June 2016
$
1300
1400
700
?
?
credit
1.2 : 1
REQUIRED
(f)
Calculate:
(i)
Malorie’s current ratio at 30 June 2015 (to one decimal place)
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[3]
(ii)
Malorie’s inventory at 30 June 2016
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[3]
(g) Suggest two possible reasons for the change in Malorie’s bank balance.
1 ................................................................................................................................................
2 ............................................................................................................................................[2]
[Total: 16]
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4
Grindle is a trader. He provided the following information for his business.
1
Fixtures and fittings at cost were:
1 January 2015
31 December 2015
$
17 200
17 600
2
On 1 March 2015 new fixtures and fittings, cost $3600, were bought on credit from Bill.
3
On 1 August 2015 some fixtures and fittings, which were bought in 2014, were sold.
REQUIRED
(a) Prepare the fixtures and fittings account for the year ended 31 December 2015. Show the
transfer to the disposal account. Bring down the balance on 1 January 2016.
Grindle
Fixtures and fittings account
Date
Details
$
Date
Details
$
..........
......................................
..........
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[6]
Grindle also provided the following information.
Fixtures and fittings are depreciated at the rate of 10% per annum on the straight line (equal
instalment) basis. A full year’s depreciation is charged in the year of purchase and none in the
year of disposal.
REQUIRED
(b) Calculate the depreciation charge for the year ended 31 December 2015.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
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(c) Prepare the provision for depreciation of fixtures and fittings account for the year ended
31 December 2015. Bring down the balance on 1 January 2016.
Grindle
Provision for depreciation of fixtures and fittings account
Date
Details
$
Date
2015
Details
$
..........
......................................
..........
Jan 1
Balance b/d
5800
..........
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[4]
(d) State whether the purchase of the fixtures and fittings was capital expenditure or revenue
expenditure.
...............................................................................................................................................[1]
(e) State the effect this purchase had on Grindle’s capital.
...............................................................................................................................................[1]
(f)
Complete the following table by placing a tick (✓) in the correct box to indicate the effect of
depreciation charge on Grindle’s capital.
Increase
Decrease
[1]
[Total: 15]
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5
(a) State what is meant by a direct cost.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) Give two examples of a direct cost of a clothing manufacturer.
Example 1 .................................................................................................................................
Example 2 .............................................................................................................................[2]
(c) Give one example of an indirect production cost.
...............................................................................................................................................[1]
Mistry Clothing provided the following information for the year ended 30 June 2016.
Revenue
Prime cost
Factory overheads
Selling and distribution expenses
Administration expenses
Purchases of finished goods
Opening inventory of finished goods
Closing inventory of finished goods
Increase in work in progress
Finished goods taken by the owner for personal use
$
203 220
89 000
21 600
20 760
31 760
36 200
8 800
19 700
100
320
REQUIRED
(d) (i)
Calculate the cost of production for the year ended 30 June 2016.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[3]
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(ii)
Prepare Mistry Clothing’s income statement for the year ended 30 June 2016.
Mistry Clothing
Income Statement for the year ended 30 June 2016
$
$
.............................................................................
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...................
...................
[9]
(e) State one reason why Mistry Clothing purchases finished goods.
...................................................................................................................................................
...............................................................................................................................................[1]
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(f)
Calculate, to two decimal places, the rate of inventory turnover (in times) for the year.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
(g) Suggest two reasons why inventory turnover has fallen from the previous year.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
[Total: 22]
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6
Amina and Doreen formed a partnership on 1 January 2016, buying and selling calculators. On
that date they each paid $5000 into the business bank account.
Amina also brought in a delivery vehicle valued at $8100 to the partnership and Doreen brought in
fixtures and fittings valued at $4800.
The partnership agreement stated that profits and losses would be shared in the ratio 2:1.
Depreciation was to be provided on a monthly basis, at the rate of 20% per annum for the delivery
vehicle and 10% per annum for the fixtures and fittings.
In the first month of trading they had the following transactions.
Jan 1
Paid 3 months’ rent totalling $2700, by cheque
2
Bought 1000 calculators for $4 each from Bertie on credit
6
Sold 800 calculators for cash for $10 each, keeping $100 in hand and banking the
remaining cash
13
Sold 50 calculators for $10 each to Charlie on credit
20
Paid Bertie by cheque, deducting 3% discount for prompt payment
31
Paid wages for the month, $800, by credit transfer
REQUIRED
(a) Prepare the cash book (bank columns only) for the month of January 2016. Bring down the
balance on 1 February 2016.
Amina and Doreen
Cash book (bank columns)
Date
Details
$
Date
Details
$
..........
......................................
..........
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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......................................
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(b) (i)
Calculate the gross profit for the month ended 31 January 2016.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[4]
(ii)
Calculate the profit for the month of January 2016.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[7]
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19
(c) Prepare the statement of financial position of the partnership at 31 January 2016. Show the
partners’ capital and current accounts.
Amina and Doreen
Statement of Financial Position at 31 January 2016
$
$
$
.............................................................................
...................
...................
...................
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...................
...................
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...................
...................
...................
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...................
...................
...................
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...................
...................
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...................
...................
...................
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...................
...................
...................
.............................................................................
...................
...................
...................
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...................
...................
...................
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...................
...................
...................
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...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
.............................................................................
...................
...................
...................
[13]
[Total: 30]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 1 2 2 7 4 7 0 3 9 3 *
0452/11
ACCOUNTING
May/June 2017
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 19 printed pages and 1 blank page.
DC (RCL (KM)) 133686/4
© UCLES 2017
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers, A, B, C and D. Choose the one
you consider correct and place a tick (✓) in the box to indicate the correct answer.
1
(a) The total of the discount received column of the cash book, $80, was posted in error to the
credit side of the discount allowed account.
Which entries correct this error?
debit account(s)
$
credit account(s)
$
A
discount allowed
80
discount received
80
B
discount allowed
suspense
80
80
discount received
160
C
discount allowed
160
discount received
suspense
80
80
D
discount received
80
discount allowed
80
[1]
(b) Which account or statement provides a summary of transactions involving trade receivables?
A
bank reconciliation statement
B
provision for doubtful debts account
C
sales ledger control account
D
statement of financial position
[1]
(c) Why does a trader compare his cash book with his bank statement?
to check for errors in the cash
book
to ensure the cash book is
up to date
A
no
no
B
no
yes
C
yes
no
D
yes
yes
[1]
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3
(d) Asma bought a motor vehicle for $10 000. She depreciated it at the rate of 10% per annum on
cost, calculated monthly.
After 18 months she sold the motor vehicle for $9200.
What was the profit on disposal?
A
$200
B
$650
C
$700
D
$1200
[1]
(e) At the start of the year Basil had paid $4500 rent in advance. During the year he paid rent,
$12 000. At the year end he owed $1500.
What was Basil’s annual expense for rent?
(f)
A
$9 000
B
$12 000
C
$15 000
D
$18 000
[1]
A and B were in partnership. Their current accounts for the year were as follows.
drawings
balance c/d
A
$
7 500
11 700
B
$
2 500
17 500
19 200
20 000
balance b/d
interest on capital
share of profit
balance b/d
A
$
10 200
2 000
7 000
19 200
11 700
B
$
12 000
1 000
7 000
20 000
17 500
What was the profit for the year?
A
$7 000
B
$14 000
C
$17 000
D
$27 000
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4
(g) Who benefits from a company’s limited liability?
A
its credit customers
B
its credit suppliers
C
its debenture holders
D
its shareholders
[1]
(h) The work in progress of a manufacturing business increased during the year.
Which effect does this have?
on cost of production
on gross profit
A
decrease
increase
B
decrease
no effect
C
increase
decrease
D
increase
no effect
[1]
(i)
(j)
What is meant by mark-up?
A
gross profit measured as a percentage of cost of sales
B
gross profit measured as a percentage of revenue
C
profit for the year measured as a percentage of expenses
D
profit for the year measured as a percentage of revenue
[1]
Why would a bank manager look at a trader’s financial statements?
A
to calculate how fast trade payables were being paid
B
to check if the trader would be able to repay a loan
C
to find out if customers will receive continuous supplies
D
to know if inventory levels are too high
[1]
[Total: 10]
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2
(a) State the accounting equation.
...............................................................................................................................................[1]
(b) State what is meant by the following terms.
Asset ..........................................................................................................................................
...................................................................................................................................................
Liability .......................................................................................................................................
...................................................................................................................................................
Inventory ....................................................................................................................................
...............................................................................................................................................[3]
(c) Name the accounting principle applied when using the double entry system of book-keeping.
...............................................................................................................................................[1]
(d) State the double entry needed to record each of the following in the books of Taha, a trader.
debit account
credit account
Taha receives a cheque
from Michael, a credit
customer
Taha writes off a debt
owed by Zoe
[4]
(e) Name the division of Taha’s ledger in which Michael’s account appears.
...............................................................................................................................................[1]
(f)
Complete the following table, indicating with a tick (✓) if each statement about an increase
in a provision for doubtful debts is true or false. The first one has been completed as an
example.
true
it will increase the total of the non-current assets
false
✓
it will increase the total of current assets
it will decrease cash and bank
it will require a credit entry in the provision for
doubtful debts account
it will have no effect on profit for the year
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6
Andy sells furniture on credit. Fred is a credit customer.
REQUIRED
(g) Complete the following invoice.
Andy
Factory Street
Toptown
Invoice no 1001
Fred
Shop Road
Toptown
22 May 2017
Quantity
Details
20
Standard chair
10
Luxury chair
Unit price
Amount
$
$50
……….
……….
……….
1750
10% trade discount
……….
……….
[5]
(h) State which value from the invoice is recorded in Fred’s account.
$……..…
(i)
[1]
Name the document Andy issues if Fred returns any chairs.
...............................................................................................................................................[1]
(j)
State the difference between Andy’s business and a service business.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
[Total: 23]
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3
Zameer has a financial year end of 28 February.
He extracted the following ledger balances from his books of account on 21 February 2017.
$
67 210 debit
6 600 debit
Purchases
Rent payable
REQUIRED
(a) State why the purchases account has a debit balance.
...............................................................................................................................................[1]
Zameer’s purchases journal for the week ended 28 February 2017 was as follows:
Zameer
Purchases Journal
Date
Name
$
Feb 22
25
27
Qasim
Farid
Qasim
500
270
190
960
Zameer’s cash book recorded a payment, $1800, made on 25 February by credit transfer. This
payment was for rent for the three months ending 30 April 2017.
REQUIRED
(b) Name the type of book of which the cash book and the purchases journal are examples.
...............................................................................................................................................[1]
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(c) Prepare the following ledger accounts in the books of Zameer. Balance the accounts and
where necessary show any balance brought down on 1 March 2017.
Zameer
Purchases account
Date
Details
.............
......................................
.............
$
Date
Details
$
.............
.............
......................................
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
Rent payable account
Date
Details
.............
......................................
.............
$
Date
Details
$
.............
.............
......................................
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
.............
......................................
.............
[8]
(d) State whether Zameer’s payments were capital expenditure or revenue expenditure.
Purchases……………….
Rent………………………
(e) (i)
[2]
Give one example of a revenue receipt.
...................................................................................................................................................
(ii)
Give one example of a capital receipt.
...............................................................................................................................................[2]
[Total: 14]
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4
Elil is a trader dealing in clocks.
REQUIRED
(a) State how inventory should be valued in the financial statements.
...............................................................................................................................................[1]
Elil buys clocks for $24 each. The following information is available about Elil’s business:
1
Elil had inventory of 100 clocks on 1 January 2016.
2
During the year he bought 2000 clocks.
3
During the year he sold 50 clocks at a promotional price of $40 each. All other sales were
made at a selling price of $60 each.
4
He had inventory of 180 clocks on 31 December 2016.
5
All sales were made on a credit basis.
REQUIRED
(b) Calculate the value of Elil’s sales for the year ended 31 December 2016.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
(c) Calculate Elil’s gross profit for the year ended 31 December 2016.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[5]
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Elil provided the following additional information.
1
Trade receivables were $7900 on 1 January 2016.
2
During the year bad debts, $200, were written off.
3
Trade receivables were $9100 on 31 December 2016.
REQUIRED
(d) Calculate the amount Elil received from his trade receivables during the year ended
31 December 2016.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[5]
(e) State two reasons why the amount you calculated in (d) was not included in the income
statement.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
Elil is considering making future payments to suppliers earlier in order to receive discount.
REQUIRED
(f)
Name the type of discount Elil would receive.
...............................................................................................................................................[1]
(g) Complete the table below indicating with a tick (✓) the effect of the receipt of the discount on
each item.
increase
decrease
no effect
gross profit
profit for the year
working capital
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5
JW Limited extracted the following balances from its books of account on 30 April 2017, after the
gross profit had been calculated.
$
Gross profit
63 000
Distribution costs
24 000
Administrative expenses
16 000
Interim dividend paid
6 000
Debenture interest
3 000
Ordinary shares of $1 each
100 000
General reserve
50 000
Retained earnings
?
Equipment at cost
260 000
Provision for depreciation of
equipment
65 000
Inventory
33 000
Trade receivables
14 000
Bank
6 800 credit
Trade payables
17 500
10% Debentures (repayable 2025)
30 000
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REQUIRED
(a) Prepare the trial balance at 30 April 2017. Insert a value for retained earnings.
JW Limited
Trial Balance at 30 April 2017
Debit
Credit
$
$
Gross profit
..........................................
..........................................
Distribution costs
..........................................
..........................................
Administrative expenses
..........................................
..........................................
Interim dividend paid
..........................................
..........................................
Debenture interest
..........................................
..........................................
Ordinary shares of $1 each
..........................................
..........................................
General reserve
..........................................
..........................................
Retained earnings
..........................................
..........................................
Equipment at cost
..........................................
..........................................
Provision for depreciation of
equipment
..........................................
..........................................
Inventory
..........................................
..........................................
Trade receivables
..........................................
..........................................
Bank
..........................................
..........................................
Trade payables
..........................................
..........................................
10% Debentures (repayable
2025)
..........................................
..........................................
_____________________
_____________________
..........................................
_____________________
..........................................
_____________________
[9]
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(b) Calculate the profit for the year. The depreciation charge for the year was $13 000.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
The directors of the company transferred $10 000 to general reserve on 30 April 2017.
REQUIRED
(c) Prepare the statement of changes in equity for the year ended 30 April 2017.
JW Limited
Statement of Changes in Equity for the year ended 30 April 2017
Details
Share
capital
$
General
reserve
$
Retained
earnings
$
Total
On 1 May 2016
................
................
................
................
.......................................
................
................
................
................
.......................................
................
................
................
................
.......................................
................
................
................
................
On 30 April 2017
................
................
................
................
$
[8]
(d) Calculate to two decimal places the return on capital employed (ROCE) for the year ended
30 April 2017. (Use closing capital employed.)
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
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(e) Suggest two reasons why JW Limited’s return on capital employed (ROCE) is lower than the
industry average.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
(f)
Suggest three ways in which JW Limited could increase its return on capital employed
(ROCE).
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...................................................................................................................................................
3 .................................................................................................................................................
...............................................................................................................................................[3]
[Total: 30]
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6
Hi-Jump is a sports club which also runs a shop for the use of members only. It provided the
following information.
Hi-Jump
Subscriptions account
Date
2016
Jan 1
Dec 31
Details
$
Date
Balance b/d
Income and expenditure
account
Balance c/d
1160
52 905
2016
Jan 1
Dec 31
395
Details
Balance b/d
Bank
Bad debts
Balance c/d
54 460
2017
Jan 1
Balance b/d
980
$
280
52 950
250
980
54 460
2017
Jan 1
Balance b/d
395
REQUIRED
(a) State what the balance of $395 on 1 January 2017 represents.
...............................................................................................................................................[1]
The receipts and payments account of the club was as follows:
Hi-Jump
Receipts and Payments Account for the year ended 31 December 2016
$
Balance b/d
Subscriptions received
Shop sales
6 100
52 950
13 610
72 660
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$
Shop purchases
Rent
Club expenses
New club equipment
Balance c/d
15 240
12 000
34 200
5 100
6 120
72 660
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The following additional information was also available.
1
Shop inventory
Club equipment at valuation
at 1 January 2016
$
440
17 100
at 31 December 2016
$
710
19 900
2
10% of the rent is allocated to the shop.
3
All shop sales and all shop purchases are made on a cash basis.
REQUIRED
(b) Complete the following table to show the values of the current assets and current liabilities
which would appear in the statement of financial position of the club on 31 December 2016.
Current assets
$
…………………………………………
.............................
…………………………………………
.............................
…………………………………………
.............................
…………………………………………
.............................
Current liabilities
$
…………………………………………
.............................
…………………………………………
.............................
…………………………………………
.............................
…………………………………………
.............................
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18
(c) Calculate the loss made by the shop in the year ended 31 December 2016.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
(d) Prepare the club’s income and expenditure account for the year ended 31 December 2016.
Hi-Jump
Income and Expenditure Account for the year ended 31 December 2016
$
$
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
...........................................................................
........................
........................
[9]
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(e) Suggest two reasons why the managing committee continues to run the shop despite it
making a loss.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
(f)
Explain how the financial statements of the club would be affected if the managing committee
decided not to charge the shop with its share of the rent.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
[Total: 22]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 4 8 9 8 1 9 9 4 1 5 *
0452/11
ACCOUNTING
October/November 2017
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 19 printed pages and 1 blank page.
DC (SC) 153408
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers, A, B, C and D. Choose the one
you consider correct and place a tick (3) in the box to indicate the correct answer.
1
(a) Which statement describes a purpose of accounting?
A
to check the arithmetical accuracy of the double entry
B
to ensure that all transactions are recorded
C
to know the balances on individual customers’ and suppliers’ accounts
D
to provide a calculation of profit
[1]
(b) A credit customer buys goods with a list price of $1000. Trade discount is 30% and cash
discount is 10%.
Which amount is entered in the customer’s account to record the sale?
A
$600
B
$630
C
$700
D
$900
[1]
(c) Where is discount allowed recorded?
A
on the credit side of the purchases ledger control account
B
on the credit side of the sales ledger control account
C
on the debit side of the purchases ledger control account
D
on the debit side of the sales ledger control account
[1]
(d) Ann’s statement of financial position includes the following:
1
an amount paid by Ann for a service which has not yet been received
2
an amount received by Ann for a service which Ann has not yet provided
3
the value of a service received by Ann for which payment has not yet been made
Which item(s) are included in ‘other payables’?
A
1 and 2
B
1 only
C
2 and 3
D
3 only
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(e) Hiro wishes to increase his provision for doubtful debts at the end of the year.
How does he record this increase?
debit entry
credit entry
A
bad debts
provision for doubtful debts
B
provision for doubtful debts
bad debts
C
income statement
provision for doubtful debts
D
provision for doubtful debts
income statement
[1]
(f)
Thang bought goods costing $20 each. At the end of the year Thang valued inventory of
unsold goods at the selling price of $30 each.
What is the effect of this valuation?
A
profit is overstated
B
profit is understated
C
purchases are overstated
D
purchases are understated
[1]
(g) The directors of a limited company increased the general reserve.
Which item decreased?
A
balance at bank
B
ordinary share capital
C
preference share capital
D
retained earnings
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4
(h) A trader provided the following information at the end of the first year of trading.
$
5000
500
1400
800
revenue
profit for the year
expenses
closing inventory
What were the purchases for the year?
(i)
A
$2300
B
$3900
C
$4900
D
$6700
[1]
A trader had a percentage of gross profit to revenue (gross profit margin) of 30%.
His purchases for the year were $3400 and his inventory increased by $400.
What was his revenue for the year (to the nearest dollar)?
(j)
A
$3900
B
$4286
C
$4940
D
$5429
[1]
When is financial information considered to be relevant?
A
when it affects business decisions
B
when it can be compared with other periods
C
when it can be understood by the users
D
when it is free from error and bias
[1]
[Total: 10]
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5
2
(a) State the meaning of owner’s equity.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) Name the accounting principle applied in each of the following situations.
Principle
A trader withdraws goods for his own use and
records this in the drawings account.
A book-keeper writes off debts which will not be
paid to the business.
An accountant does not include staff morale as
an asset in the statement of financial position.
A business uses the double entry system of
book-keeping to record transactions.
[4]
(c) Name the ledger in which the purchases account is found.
...............................................................................................................................................[1]
(d) Name the type of organisation which would prepare a statement of changes in equity.
...............................................................................................................................................[1]
(e) Complete the following sentence.
Items which a business owns or which are owed to the business are known as
.................................................. .
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6
Jake manufactures CD players. He has a credit customer, Rashida. They have exchanged an
invoice, a debit note, a credit note and a statement of account.
REQUIRED
(f)
Complete the following table for the documents exchanged between Jake and Rashida. The
first item has been completed as an example.
document
invoice
reason for issue
name of person issuing document
to record goods sold on
credit
Jake
debit note
credit note
statement of account
[6]
(g) Complete the following table by writing True or False against each statement.
True or False
Work in progress may appear in Jake’s manufacturing account.
Prime cost appears in Jake’s income statement.
Jake’s business is a service business.
[3]
[Total: 17]
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3
The bank columns of Kang-Dae’s cash book had a debit balance brought down of $1310 on
1 June 2017. The bank statement at the same date showed a credit balance of $790.
When Kang-Dae compared the cash book with the bank statement he found the following.
Items on the bank statement not in the cash book
bank charges, $60
credit transfer, $540, from Nigel, a credit customer
standing order for rent payable, $1000
direct debit paid to electricity company, $400
Items in the cash book not on the bank statement
cheque to Hachiro, a supplier, $700
cash paid in, $620
Kang-Dae also discovered that a payment, $320, for insurance had been entered in the cash book
twice in error.
REQUIRED
(a) State what is meant by a ‘bank statement’.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) Update the bank columns of Kang-Dae’s cash book on 1 June 2017. Balance the cash book
and bring down the balance.
Kang-Dae
Cash book (bank columns only)
Date
Details
$
Date
Details
$
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
............
............
......................................
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[7]
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(c) Prepare the bank reconciliation statement at 1 June 2017.
Kang-Dae
Bank reconciliation statement at 1 June 2017
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[6]
(d) State two differences between a bank overdraft and a bank loan.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(e) Name the section of the statement of financial position where a 5-year bank loan would
appear.
...............................................................................................................................................[1]
[Total: 17]
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4
Bayani depreciates his fixtures and fittings using the straight line (equal instalment) method of
depreciation. He provides a full year’s depreciation in the year of purchase and none in the year of
disposal. He provided the following information.
fixtures and fittings
accumulated
depreciation
$
$
42 600
12 780
42 600
17 040
cost
at 31 December 2013
at 31 December 2014
There were no additions or disposals during the year ended 31 December 2014.
REQUIRED
(a) Calculate the rate of depreciation Bayani is applying.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
Additional information
On 1 May 2015 Bayani bought new fixtures and fittings, cost $12 000, paying by cheque.
On 1 August 2016 he sold old fixtures and fittings, which had cost $10 000 and on which four
years’ depreciation had been provided. The purchaser paid Bayani in cash.
REQUIRED
(b) Name the books of prime (original) entry used on 1 May 2015 and 1 August 2016.
1 May 2015
...................................................................................................................................................
1 August 2016
...................................................................................................................................................
...............................................................................................................................................[3]
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(c) Complete the following table by inserting the amounts to be shown in the financial statements.
Show your workings in the spaces provided.
workings
$
fixtures and fittings at cost on
31 December 2015
fixtures and fittings at cost on
31 December 2016
depreciation charge for the year
ended 31 December 2015
accumulated depreciation at
31 December 2015
depreciation charge for the year
ended 31 December 2016
accumulated depreciation at
31 December 2016
[12]
(d) State the double entry needed to record the depreciation charge for the year ended
31 December 2015.
debit entry
credit entry
[2]
(e) State the double entry needed to eliminate the accumulated depreciation on the fixtures and
fittings sold on 1 August 2016.
debit entry
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(f)
Name one method of depreciation, other than the straight line (equal instalment) method,
and explain how it is calculated.
Name of method .......................................................................................................................
Method of calculation ................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
Additional information
Bayani also bought a motor vehicle. The costs relating to the purchase were as follows:
cost of vehicle
number plates
fuel
insurance of vehicle
$
17 200
120
80
450
REQUIRED
(g) Complete the following table, indicating with a tick (3) whether each item is a capital
expenditure or a revenue expenditure.
capital expenditure
revenue expenditure
cost of vehicle
number plates
fuel
insurance of vehicle
[4]
(h) Give one example of a capital receipt.
...............................................................................................................................................[1]
[Total: 30]
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5
Satish has a financial year end of 30 June. On 30 June 2017 he prepared the following trial
balance.
Satish
Trial Balance at 30 June 2017
Revenue
Purchases
Fixtures and fittings
Provision for depreciation
on fixtures and fittings
Trade receivables
Trade payables
Inventory at 1 July 2016
Rent
Wages
Other operating expenses
Drawings
Capital
Bank
Debit
$
33 200
12 000
3 100
4 450
6 000
2 800
4 180
10 900
76 630
Credit
$
53 030
3 000
1 900
14 200
600
72 730
Additional information
1
Satish calculated a draft gross profit for the year ended 30 June 2017 of $20 000. This
calculation used a valuation of closing inventory of $4620.
2
Depreciation for the year, $1500, had yet to be provided.
The books of account contained errors and the totals of the trial balance did not agree. Satish
therefore opened a suspense account, and then discovered the following errors.
1
A sale on credit, $400, had been completely omitted from the books.
2
Closing inventory included $550 for inventory which had been damaged and now had no
value, but this had not been written off.
3
The purchases journal for June had been undercast by $100.
4
Capital introduced of $2000 had been correctly entered in the cash book but debited in the
drawings account.
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REQUIRED
(a) Prepare the suspense account, showing the opening balance and the entries correcting the
errors.
Satish
Suspense account
Date
Details
$
Date
Details
$
............
......................................
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[4]
(b) (i)
Complete the following statement to calculate the correct gross profit for the year. Where
an error has no effect on gross profit, place a tick (3) in the No Effect column.
Satish
Statement of correction of gross profit for the year ended 30 June 2017
No Effect
Increase
Decrease
$
$
Draft gross profit
$
20 000
Error 1
Error 2
Error 3
Error 4
Corrected gross profit
[8]
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(ii)
Calculate the profit for the year ended 30 June 2017.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[5]
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(c) Prepare Satish’s statement of financial position at 30 June 2017.
Satish
Statement of financial position at 30 June 2017
$
$
$
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[10]
[Total: 27]
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6
Amina and Samara are in partnership. Their partnership agreement states that interest on capital
is paid at the rate of 10% per annum and that profits and losses are shared in the ratio of 3:2
respectively.
The following information is available.
$
At 1 July 2016
Capital accounts
Amina
Samara
Current accounts
Amina
Samara
50 000
20 000
4 000 credit
3 000 credit
For the year ended 30 June 2017
Profit for the year
17 500
Drawings
Amina
8 000
Samara
12 000
On 1 January 2017 Amina introduced additional capital of $10 000 into the partnership in the form
of cash.
REQUIRED
(a) State what is meant by a ‘partnership’.
...................................................................................................................................................
...............................................................................................................................................[1]
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(b) Prepare the appropriation account for the year ended 30 June 2017.
Amina and Samara
Appropriation Account for the year ended 30 June 2017
$
$
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[4]
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(c) Prepare the following ledger accounts for the year ended 30 June 2017. Balance the accounts
and bring down the balances on 1 July 2017.
Amina and Samara
Capital accounts
Date
Details
Amina
$
Samara
$
Date
Details
Amina
$
Samara
$
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[3]
Current accounts
Date
Details
Amina
$
Samara
$
Date
Details
Amina
$
Samara
$
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[5]
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(d) Explain how the financial statements would have been affected if Amina had made a loan to
the partnership instead of introducing additional capital.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
Amina is not happy that Samara’s drawings are greater than hers. Samara says she is entitled
to take out of the business more drawings than Amina because she does a greater share of the
work.
REQUIRED
(e) Explain two reasons why Amina is not happy that Samara’s drawings are greater than hers.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
[Total: 19]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 1 6 2 6 0 3 4 7 9 8 *
0452/11
ACCOUNTING
May/June 2018
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 22 printed pages and 2 blank pages.
DC (RCL (DF)) 148225/3
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers, A, B, C and D. Choose the one
you consider correct and place a tick (✓) in the box to indicate the correct answer.
1
(a) For which accounts does the cash book act as a ledger account?
A
bank
cash
discount
allowed
discount
received
✓
✓
✓
✓
✓
✓
✓
✓
✓
B
C
D
✓
✓
[1]
(b) Which statement about the division of the ledger is not correct?
A
Checking procedures can be introduced.
B
Fewer entries are needed in the sales and purchases accounts.
C
It is easier for reference and for locating accounts.
D
Work can be shared between two or more book-keepers.
[1]
(c) Which account may appear as a credit balance in a trial balance?
A
carriage outwards
B
discount received
C
drawings
D
inventory
[1]
(d) Insurance prepaid, $120, was treated as an accrual in the income statement.
Which effect did this have on the profit for the year?
A
overstated $120
B
overstated $240
C
understated $120
D
understated $240
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(e) Goods, $250, sold on credit to Ahmed were credited to Aktar’s account.
What is the correcting journal entry?
debit
$
(f)
A
Ahmed
Aktar
Suspense
250
250
B
Ahmed
Suspense
Aktar
250
250
C
Aktar
Ahmed
Suspense
500
D
Suspense
Ahmed
Aktar
500
credit
$
500
500
250
250
250
250
[1]
Hassan sells two products, X and Y. He provided the following information on 31 December
2017.
product
number of units
cost per unit
$
net realisable
value per unit
$
X
520
2.00
2.20
Y
390
3.00
2.80
50 units of product Y were damaged and will have to be destroyed.
What was the total value of Hassan’s inventory?
A
$1992
B
$2132
C
$2164
D
$2314
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(g) What would not be included in a statement of changes in equity?
A
ordinary share dividend paid which relates to the previous year
B
ordinary share dividend proposed which relates to the current year
C
profit for the year
D
transfer to general reserve
[1]
(h) Beth and Carla are in partnership, sharing profits and losses 3:2. They provided the following
information at 31 January 2018.
Profit for the year
Interest on capital: Beth
Carla
Salary: Beth
$
4 000
3 000
$
42 000
7 000
10 000
What was the total amount credited to Beth’s current account on 31 January 2018?
(i)
A
$15 000
B
$25 200
C
$29 000
D
$39 200
[1]
Some members of a sports club had not paid their annual subscriptions at the end of the
financial year.
Where will these unpaid subscriptions be shown in the financial statements?
receipts and
payments account
income and
expenditure account
statement of
financial position
A
✓
✓
✓
B
✓
C
✓
D
✓
✓
✓
✓
[1]
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(j)
On 1 April 2017 trade receivables owed $4250 and on 31 March 2018 they owed $3940.
During the year $46 750 was received from trade receivables and they returned goods, $1130.
What were the credit sales for the year?
A
$46 440
B
$47 060
C
$47 570
D
$48 190
[1]
[Total: 10]
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2
(a) Complete the following table indicating with a tick (✓) the section of a statement of financial
position in which each item would appear.
non-current
assets
current
assets
non-current
liabilities
current
liabilities
trade payables
5-year loan
inventory
loose tools
bank overdraft
rent receivable accrued
(b) (i)
[3]
State one advantage of being a partner rather than a sole trader.
.......................................................................................................................................[1]
(ii)
State one disadvantage of being a partner rather than a sole trader.
.......................................................................................................................................[1]
(c) Name three interested parties (other than the business owner) who may wish to look at the
financial statements of a business. For each interested party state a reason for their interest.
interested party
reason for their interest
[6]
(d) State two causes of depreciation.
1 .................................................................................................................................................
2 .............................................................................................................................................[2]
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(e) Complete the following table by writing either True or False against each statement about
depreciation.
True or False
The depreciation is calculated on the cost price
less residual value when the straight line (equal
instalment) method is used.
The percentage rate of depreciation decreases each
year when the reducing (diminishing) balance method is
used.
The provision for depreciation of a non-current asset
is deducted from the cost price in the statement of
financial position.
A provision for depreciation is a means of providing a
fund to purchase a replacement non-current asset.
[4]
(f)
Name one accounting objective.
...............................................................................................................................................[1]
(g) Name the accounting principle described by each of the following statements.
Accounting Principle
The same accounting treatment is applied to similar
items at all times.
Accounting assumes that a business will continue to
operate indefinitely.
Transactions are expressed in monetary terms.
Revenue is recognised as earned when ownership of
goods passes to the customer.
[4]
[Total: 22]
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3
Amira owns an advertising agency. Her financial year ends on 30 April.
On 1 April 2018 she decided to use a petty cash book with a monthly imprest of $80 which would
be restored on the first day of each month.
REQUIRED
(a) State one reason for using a petty cash book.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) State one advantage of the imprest system of petty cash.
...................................................................................................................................................
...............................................................................................................................................[1]
On 1 April 2018 Amira put $80 cash in the petty cash box.
Her transactions for the month of April 2018 were as follows.
April 4
Bought stamps
$
3
7
Purchased printing paper
8
11
Purchased ink cartridges
12
19
Paid window cleaner
10
22
Paid KK Limited, a trade payable
35
29
Purchased flowers for reception desk
7
REQUIRED
(c) Enter these transactions in Amira’s petty cash book on the page opposite.
Balance the petty cash book and bring down the balance on 1 May 2018.
[10]
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2018
April 1
Date
80
Total
received
$
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Cash
Details
$
$
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Postage
Total paid
..................
Amira
Petty Cash Book
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Computer
supplies
$
..................
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General
expenses
$
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Ledger
accounts
$
9
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10
(d) Complete the following table to show the double entry to restore the petty cash imprest on
1 May 2018.
debit
$
credit
$
[3]
(e) Show the entry which would be made in the computer supplies account in April 2018. It is not
necessary to close or balance the account.
Amira
Computer supplies account
Date
Details
$
Date
Details
$
..........
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[1]
Amira balanced her cash book on 30 April 2018. The bank column showed that she had $17 620
in the bank.
On the same date the bank statement showed a different balance.
REQUIRED
(f)
State two reasons for preparing a bank reconciliation statement.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
A comparison of the cash book and the bank statement revealed the following.
1
Items appearing only on the bank statement
Bank charges
Dishonoured cheque, Jabir
Business rates paid by direct debit
2
28
153
95
Items appearing only in the cash book
Cheque received from Shadya
Cheque paid to Abasi
3
$
Debit side of cash book was undercast
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REQUIRED
(g) Update the cash book of Amira.
Bring down the updated balance on 1 May 2018.
Amira
Cash Book (bank columns only)
Date
Details
$
Date
Details
$
17 620
.............
................................
.............
2018
April 30
Balance b/d
............
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[5]
(h) Prepare a bank reconciliation statement for Amira at 30 April 2018 to determine the balance
shown on the bank statement.
Amira
Bank Reconciliation Statement at 30 April 2018
$
.....................................................................................................................
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[4]
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12
(i)
State the bank balance which would appear in the statement of financial position on
30 April 2018. Name the section in which it would appear.
Amount of bank balance $ .............................................
Section of statement of financial position ..............................................................................[2]
(j)
Suggest two possible reasons why the cheque from Jabir was dishonoured.
1 .................................................................................................................................................
2 .............................................................................................................................................[2]
[Total: 31]
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4
Harry is a trader in farm machinery. He maintains a full set of accounting records. His financial
year ends on 31 March.
Harry made the following entries in his purchases journal and purchases returns journal in
March 2018.
Harry
Purchases Journal
2018
March 15
24
31
AX Limited
Goods
Less Trade discount
$
$
3250
650
2600
FM Limited
Goods
Less Trade discount
1820
273
1547
Total for month
4147
Purchases Returns Journal
2018
March 17
28
31
AX Limited
Goods
Less Trade discount
$
$
450
90
360
FM Limited
Goods
Less Trade discount
200
30
170
Total for month
530
Harry made the following payments by cheque.
2018
March 4
30
AX Limited, $2425, in full settlement of the amount due on that date.
FM Limited to settle the amount due on that date. No cash discount was received.
REQUIRED
(a) Enter the transactions for March in the following ledger accounts.
Close the accounts on 31 March 2018 by balancing or by making a transfer to the income
statement.
Some entries have already been made in the accounts during the year.
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Harry
AX Limited account
Date
Details
$
Date
Details
............
................................
.............
2018
Mar 1
............
................................
.............
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................................
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Details
$
Balance b/d
$
2500
FM Limited account
Date
Details
$
Date
............
................................
.............
2018
Mar 1
............
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Balance b/d
750
Purchases account
Date
Details
$
Date
Details
$
43 000
............
................................
.............
2018
Feb 28
Total to date
............
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................................
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Purchases returns account
Date
Details
$
Date
Details
$
............
................................
.............
2018
Feb 28
Total to date
............
................................
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5020
[12]
(b) (i)
Suggest one reason why AX Limited allowed Harry trade discount on his purchases on
15 March 2018.
...........................................................................................................................................
.......................................................................................................................................[1]
(ii)
Calculate the percentage of trade discount AX Limited allowed Harry on his purchases
on 15 March 2018.
...........................................................................................................................................
.......................................................................................................................................[1]
(c) Name the following documents:
(i)
the document issued by AX Limited on 15 March 2018
.......................................................................................................................................[1]
(ii)
the document issued by Harry on 17 March 2018
.......................................................................................................................................[1]
(iii)
the document which AX Limited may issue on 31 March 2018
.......................................................................................................................................[1]
[Total: 17]
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18
5
Addae opened a factory making children’s clothes on 1 February 2017.
He provided the following information at the end of his first year of trading.
Purchases of raw materials
Direct factory wages
Indirect factory wages
General factory expenses
Carriage inwards
Factory heat and light
Factory insurance
Inventory at 31 January 2018: raw materials
work in progress
finished goods
$
48 400
38 800
27 140
3 150
1 950
1 110
1 860
5 150
7 260
5 500
Factory machinery, $75 000, was purchased on 1 February 2017 and is to be depreciated by
20% per annum.
REQUIRED
(a) Define and give one example of each of the following types of inventory in Addae’s business.
(i)
Raw materials
Definition ............................................................................................................................
...........................................................................................................................................
Example .........................................................................................................................[2]
(ii)
Work in progress
Definition ............................................................................................................................
...........................................................................................................................................
Example .........................................................................................................................[2]
(iii)
Finished goods
Definition ............................................................................................................................
...........................................................................................................................................
Example .........................................................................................................................[2]
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(b) Prepare the manufacturing account for the year ended 31 January 2018.
Addae
Manufacturing Account for the year ended 31 January 2018
$
$
..........................................................................................
........................
........................
..........................................................................................
........................
........................
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........................
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........................
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[10]
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The cost of production was higher than Addae expected.
REQUIRED
(c) Suggest two ways in which the cost of production could be reduced apart from purchasing
lower quality materials.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
After the preparation of the manufacturing account, Addae provided the following additional
information.
Revenue
Cost of sales
Administration and selling expenses
$
179 250
119 500
34 750
REQUIRED
(d) Calculate the percentage of gross profit to revenue (gross profit margin).
The calculation should be to two decimal places.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(e) Calculate the percentage of profit for the year to revenue (net profit margin).
The calculation should be to two decimal places.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(f)
Suggest two ways in which the percentage of profit for the year to revenue could be improved.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
[Total: 24]
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6
Mai is a trader. At the end of her financial year on 31 March 2018 she opened a suspense account
with a debit balance of $650.
REQUIRED
(a) State two reasons why it was necessary for Mai to open a suspense account.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
Mai discovered that some errors had been made in her accounting records.
REQUIRED
(b) Complete the following table to show the entries required to correct each error.
The first one has been completed as an example.
entries required to correct the error
error
debit
account
1
motor expenses, $150,
debited to motor vehicles
account
2
carriage inwards, $120,
debited to carriage
outwards account
3
sales journal overcast by
$1000
4
wages, $460, debited to
wages account as $640
motor expenses
credit
$
150
account
motor vehicles
$
150
[6]
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(c) State whether all the errors in Mai’s books have been discovered.
Give a reason for your answer.
Have all the errors been discovered? ........................................................................................
Reason
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Complete the statement to show the effect on the profit for the year of correcting errors 1–4.
Where the error does not affect the profit write “no effect”.
Mai
Statement of corrected profit for the year ended 31 March 2018
$
4150
Profit for the year before corrections
Increase
in profit
$
Decrease
in profit
$
Error 1
....................
....................
Error 2
....................
....................
Error 3
....................
....................
Error 4
....................
....................
Corrected profit for the year
[6]
[Total: 16]
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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
* 3 7 3 3 9 3 1 1 9 5 *
0452/11
ACCOUNTING
October/November 2018
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 20 printed pages.
DC (SLM) 170897
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers, A, B, C and D. Choose the one
you consider correct and place a tick () in the box to indicate the correct answer.
1
(a) Which task would an accountant perform?
A
drawing up a trial balance
B
entering transactions in the ledger
C
preparing financial statements
D
writing up the cash book
[1]
(b) Amina returned goods to Nadia.
Which document did Amina issue?
A
credit note
B
debit note
C
invoice
D
statement of account
[1]
(c) Arissa purchased a motor vehicle costing $23 000 on 1 August 2016. She decided to
depreciate the motor vehicle using the straight line (equal instalment) method at 20% per
annum.
Depreciation on the motor vehicle of $4600 was charged to the income statement for the year
ended 31 July 2017.
How much was charged to the income statement for the year ended 31 July 2018 for
depreciation on the motor vehicle?
A
$3680
B
$4600
C
$8280
D
$9200
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(d) A trader provided the following information on 1 October 2018.
Non-current assets
Inventory
Bank overdraft
Trade receivables
Trade payables
Loan repayable 30 September 2020
$
121 000
35 000
9 000
29 000
25 000
70 000
How much was the capital employed?
A
$30 000
B
$81 000
C
$151 000
D
$185 000
[1]
(e) Which is an intangible asset?
(f)
A
goodwill
B
inventory
C
office fixtures
D
trade receivables
[1]
Mahendra designs computer systems. He provided the following information.
Fees prepaid by clients at the start of the year
Fees received from clients during the year
Fees owing by clients at the end of the year
$
2 120
42 150
2 840
How much would be entered for fees in the income statement?
A
$37 190
B
$41 430
C
$42 870
D
$47 110
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(g) Amy and John are in partnership. Amy is entitled to an annual partnership salary of $9000.
Profits and losses are shared 2:1. The profit for the year ended 31 August 2018 was $14 700.
On 1 September 2017 Amy’s current account had a debit balance of $2100.
What was the credit balance on Amy’s current account on 1 September 2018?
A
$10 700
B
$14 900
C
$16 700
D
$20 900
[1]
(h) A sports club purchased sports equipment.
Where will this be entered in the financial statements at the year end?
receipts and payments
account
income and
expenditure account
statement of financial
position
A



B


C
D




[1]
(i)
How is cost of production calculated?
A
direct material + direct labour
B
direct material + direct labour + factory overheads
C
direct material + direct labour + factory overheads + increase in work
in progress
D
direct material + direct labour + factory overheads – increase in work
in progress
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(j)
A business provided the following information.
year 1
year 2
percentage of gross profit to revenue
30%
25%
percentage of profit for the year to revenue
12%
8%
The revenue was the same in both years.
Which statements are correct?
1 Cost of sales was higher in year 2.
2 Cost of sales was lower in year 2.
3 Expenses were higher in year 2.
4 Expenses were lower in year 2.
A
1 and 3
B
1 and 4
C
2 and 3
D
2 and 4
[1]
[Total: 10]
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2
(a) State the meaning of the term ‘owner’s equity’.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) Complete the following table stating the double entry necessary to record each transaction in
the ledger of Evie, who sells computers and computer accessories.
transaction
account to be
debited
account to be
credited
obtained loan from bank
purchased office fixtures by cheque
sold computer for cash
took printer for personal use
[8]
(c) State one reason why a trial balance is prepared.
...................................................................................................................................................
.............................................................................................................................................. [1]
(d) Complete the following table, indicating with a tick () where each account would appear in a
trial balance.
debit
column
credit
column
capital
drawings
provision for depreciation
carriage inwards
carriage outwards
rent received
stationery
sales returns
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(e) Give one example of each of the following errors which will not be revealed by a trial balance.
Error of commission ..................................................................................................................
...................................................................................................................................................
Error of omission ......................................................................................................................
...................................................................................................................................................
Compensating error ..................................................................................................................
.............................................................................................................................................. [3]
(f)
Complete the following sentences.
Money spent on purchasing or improving non-current assets is known as ..............................
…………………………………………………
Money spent on the day-to-day running of a business is known as ………………………………
…………………………………………………
[2]
(g) Complete the following table by placing a tick () to indicate where each item will appear in
the financial statements of Anwar, who owns a food store.
Income Statement
Statement of
Financial Position
purchase of motor vehicle
charge for delivering motor vehicle
insurance for motor vehicle
fuel for motor vehicle
[4]
[Total: 23]
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3
Lefika is a trader. He maintains a three column cash book.
Lefika had the following transactions in August 2018.
August 5
8
Received a cheque from Tabia, $441, in settlement of her account less 2% cash
discount
Paid Tebago’s account of $280 by cheque after deducting a cash discount of 2½%
16
Received a cheque from Nyack, $282, in full settlement of his debt of $290
28
Cash sales, $243, of which $153 was paid directly into the bank
30
Received $250 cash from the disposal of a non-current asset
31
Lefika took cash, $200, for personal use
31
Paid all the cash into the bank except $20
REQUIRED
(a) Complete Lefika’s cash book on the page opposite.
Balance the cash book and bring down the balances on 1 September 2018.
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b/d
Balance
Details
2018
Aug 1
Date
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…………
…………
Discount
allowed
$
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
30
Cash
$
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
Bank
$
………
………
………
………
………
………
………
………
………
………
………
2018
Aug 1
Date
Lefika
Cash Book
b/d
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
……………………………
Balance
Details
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
Discount
received
$
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
Cash
$
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
…………
1253
Bank
$
9
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On 31 August Lefika’s bank statement showed a bank overdraft of $812. He compared the cash
book with the bank statement and found that the bank had not recorded the transactions entered
in the bank columns of the cash book on the following dates.
August 8
16
28
31
REQUIRED
(b) Prepare a bank reconciliation statement at 31 August 2018.
Lefika
Bank Reconciliation Statement at 31 August 2018
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [6]
Lefika’s ledger is divided into a sales ledger, a purchases ledger and a nominal (general) ledger.
REQUIRED
(c) State one advantage of dividing the ledger into these three sections.
...................................................................................................................................................
.............................................................................................................................................. [1]
(d) Name the ledger in which each of the following accounts would appear.
(i)
Nyack (a credit customer) account ........................................ ledger
(ii) Purchases account ............................................................... ledger
(iii) Discount received account .................................................... ledger
(iv) Tebago (a credit supplier) account ........................................ ledger
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[Total: 23]
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4
Ava operates a secretarial agency. Her financial year ends on 31 July.
She provided the following information on 31 July 2018.
1
A cheque for $194 was received from Wilma, a credit customer, whose account had been
written off in 2016.
2
Gary, a credit customer, paid one third of the amount he owed in cash. The balance is
regarded as irrecoverable and should be written off.
3
The provision for doubtful debts should be increased by $150.
4
The discount allowed for July 2018 of $144 should be transferred to the discount allowed
account.
5
The office equipment cost $16 000 and is being depreciated using the straight line (equal
instalment) method at 20% per annum. No office equipment had been bought or sold during
the year.
REQUIRED
(a) Record this information in the following accounts in Ava’s ledger at 31 July 2018.
Close the accounts by balancing or by making a transfer to an appropriate account.
Some entries have already been made in the accounts during the year.
Ava
Bad debts recovered account
Date
Details
$
Date
Details
$
………
……………………
……….
………
……………………
…………
………
……………………
……….
………
……………………
…………
………
……………………
……….
………
……………………
…………
Date
Details
$
……….
……………………
…………
Bad debts account
Date
2018
July 1
Details
Total to date
$
218
………
……………………
………. ……….
……………………
…………
………
……………………
………. ……….
……………………
…………
………
……………………
………. ……….
……………………
…………
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Gary account
Date
2018
July 1
Details
$
Date
Details
$
270
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
Balance
b/d
Provision for doubtful debts account
Date
Details
$
Date
2017
……… ……………………… ……… Aug 1
Details
Balance
b/d
$
310
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
Discount allowed account
Date
2018
July 1
Details
$
Date
Details
$
1495
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
……… ……………………… ………
………
……………………
…………
Total to date
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Provision for depreciation of office equipment account
Date
Details
$
Date
2017
Aug 1
Details
Balance
$
b/d
9600
……….
…………………….. ………..
……….
…………………….. ……….. ………
……………………
…………
……….
…………………….. ……….. ………
……………………
…………
……….
…………………….. ……….. ………
……………………
…………
……….
…………………….. ……….. ………
……………………
…………
[14]
(b) Name two accounting principles Ava is applying by maintaining a provision for doubtful debts.
1 ................................................................................................................................................
2 ........................................................................................................................................... [2]
Ava allows her trade receivables a credit period of 30 days. She provided the following information.
Trade receivables collection period
At 31 July 2017
32 days
At 31 July 2018
28 days
REQUIRED
(c) Comment on Ava’s collection period for trade receivables.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
Ava is proposing to ask clients to pay cash instead of offering credit terms.
(d) Suggest two effects of this proposal.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 20]
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5
Khalid is a furniture wholesaler. His financial year ends on 30 September.
All purchases and sales are made on credit terms.
Khalid does not maintain a full set of accounting records but was able to provide the following
information.
$
On 1 October 2017
Inventory
Trade receivables
3 100
4 620
During the year ended 30 September 2018
Cheques received from trade receivables
Discount allowed
Bad debts written off
Total purchases
47 970
1 230
115
39 200
On 30 September 2018
Trade receivables
3 305
After the warehouse was closed on 30 September a fire broke out and a quantity of the inventory
was destroyed. The undamaged inventory was valued at $1500.
The profit mark-up is 25%.
REQUIRED
(a) Calculate the sales for the year ended 30 September 2018.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [6]
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(b) Prepare an income statement (trading account section) to calculate the value of the inventory
which was destroyed.
Khalid
Income Statement (Trading Account section) for the year ended 30 September 2018
$
$
$
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
………………………………………………… ……………… ………………
………………
[7]
(c) (i)
Calculate the rate of inventory turnover. The calculation should include the total inventory
before the fire broke out on 30 September 2018.
The calculation should be correct to two decimal places.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(ii) State what is measured by the rate of inventory turnover.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [1]
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16
Khalid decided that in future he would maintain a full set of double entry records and prepare
control accounts at the end of each month.
REQUIRED
(d) Complete the table by using a tick () to show where each of the following items would appear
in Khalid’s purchases ledger control account.
debit
credit
opening balance owed to credit suppliers
credit purchases
cheques paid to credit suppliers
cash discount received
contra between sales and purchases ledgers
[5]
[Total: 21]
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17
6
The financial year of FW Limited ends on 30 September.
The following information is available.
At 1 October 2017
Ordinary share capital of $1 shares
5% Debentures (repayable 2024)
General reserve
Retained earnings
On 30 September 2018
Issue of $1 ordinary shares
Profit for the year
Transfer to general reserve
Payment of ordinary share dividend
$
100 000
140 000
115 000
117 000
$
50 000
28 000
15 000
19 000
REQUIRED
(a) Prepare an extract from the statement of financial position at 30 September 2018 to show the
equity and reserves and non-current liabilities.
FW Limited
Extract from Statement of Financial Position at 30 September 2018
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [7]
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(b) Define each of the following terms.
i(i) Shareholders
...........................................................................................................................................
..................................................................................................................................
...................................................................................................................................... [1]
(ii) Limited liability
...........................................................................................................................................
..................................................................................................................................
...................................................................................................................................... [1]
(c) i(i) State one difference between ordinary shares and preference shares.
ordinary shares
preference shares
………………………………………….
………………………………………….
………………………………………….
………………………………………….
[2]
(ii) State two similarities between preference shares and debentures.
1 ........................................................................................................................................
...........................................................................................................................................
2 ........................................................................................................................................
...................................................................................................................................... [2]
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19
The directors of FW Limited want to raise $60 000 to purchase additional premises.
The directors are considering two proposals:
Proposal 1
Issuing 5% debentures (repayable 2030)
Proposal 2
Issuing ordinary shares
It is anticipated that the ordinary share dividend will be 6% per annum.
REQUIRED
(d) State how each proposal would affect the profit of FW Limited in the next financial year (if at
all). Give a reason for your answer in each case.
Proposal 1
Effect on profit ...........................................................................................................................
Reason .....................................................................................................................................
.............................................................................................................................................. [2]
Proposal 2
Effect on profit ...........................................................................................................................
Reason .....................................................................................................................................
.............................................................................................................................................. [2]
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The following information was available on 30 September 2018.
Inventory
Trade receivables
Trade payables
Cash at bank
Loan repayable on 1 January 2019
$
42 000
34 000
35 000
36 000
30 000
REQUIRED
(e) Calculate the current ratio.
The calculation should be correct to two decimal places.
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(f)
Complete the table by placing a tick () in the correct column to indicate the effect each
would have on the current ratio.
effect on current ratio
increase
decrease
no effect
use the bank balance to repay the loan
purchase non-current assets on credit
sell half the inventory at cost price to cash
customers
pay amount owed to trade payables by
cheque
[4]
[Total: 23]
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International
Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cie.org.uk after
the live examination series.
Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.
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Cambridge Assessment International Education
Cambridge International General Certificate of Secondary Education
* 0 9 5 1 5 2 9 2 3 0 *
0452/11
ACCOUNTING
May/June 2019
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 22 printed pages and 2 blank pages.
DC (ST) 169004/1
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) there are four possible answers, A, B, C and D.
Choose the one you consider correct and place a tick (3) in the box to indicate the correct answer.
1
(a) The employees of a business are highly skilled but this is not recorded in the financial
statements of the business.
Which accounting principle is being applied?
A
going concern
B
money measurement
C
prudence
D
realisation
[1]
(b) Khalid started a business on 1 April 2018 with a capital of $90 000.
He provided the following information on 31 March 2019.
non-current assets
current assets
current liabilities
drawings during the year
$
75 000
32 000
24 000
19 000
What was the profit or loss for the year ended 31 March 2019?
A
$12 000 loss
B
$12 000 profit
C
$26 000 loss
D
$26 000 profit
[1]
(c) How is cost of production calculated?
A
direct materials + direct labour + direct expenses
B
direct materials + direct labour + direct expenses + factory overheads
C
direct materials + direct labour + direct expenses + factory overheads
+ decrease in work in progress
D
direct materials + direct labour + direct expenses + factory overheads
– decrease in work in progress
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3
(d) Lisa returned goods previously purchased from Tara.
How did Tara record this?
account debited
account credited
A
Lisa
purchases returns
B
Lisa
sales returns
C
purchases returns
Lisa
D
sales returns
Lisa
[1]
(e) When preparing his financial statements for the year ended 30 April 2019 Tebogo recorded
his opening inventory of $6400 as $4600 in error.
What was the effect of this error?
effect on gross profit for
the year
overstated
A
understated
3
effect on profit for the
year
overstated
overstated
3
B
3
C
understated
effect on capital at
30 April 2019
3
D
3
understated
3
3
3
3
3
3
3
[1]
(f)
Amrik started a business on 1 January 2017 and purchased a machine costing $18 000.
He decided to depreciate the machine at 20% per annum using the reducing (diminishing)
balance method. No depreciation was to be charged in the year of disposal.
The machine was sold for $13 300 on 1 July 2018.
What was the profit or loss on the sale of the machine?
A
loss $1100
B
loss $4700
C
profit $1780
D
profit $2500
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4
(g) ‘Financial information must be free from errors and bias.’
To which accounting objective does this refer?
A
comparability
B
relevance
C
reliability
D
understandability
[1]
(h) Amelia rented premises to a tenant. At the end of Amelia’s financial year the tenant had paid
2 months’ rent in advance.
Which entries would Amelia make in her ledger?
(i)
A
credit the rent payable account and carry down as a debit balance
B
debit the rent payable account and carry down as a credit balance
C
credit the rent receivable account and carry down as a debit balance
D
debit the rent receivable account and carry down as a credit balance
[1]
John paid Tahir, a credit supplier, $200 by cheque. This was credited to the account of Tarek,
another credit supplier.
Which journal entry corrects this error?
debit
$
A
suspense
Tahir
Tarek
400
B
Tahir
Tarek
200
C
Tahir
Tarek
suspense
200
200
D
Tarek
Tahir
200
credit
$
200
200
200
400
200
[1]
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5
(j)
A business provided the following information.
opening inventory
closing inventory
purchases
revenue
$
36 000
24 000
360 000
480 000
What was the rate of inventory turnover?
A
12.0 times
B
12.4 times
C
15.5 times
D
16.0 times
[1]
[Total: 10]
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2
Olivia is a trader. Sales and purchases are made on both cash and credit terms. Olivia maintains
a full set of accounting records and prepares control accounts at the end of each month.
REQUIRED
(a) Name the book of prime (original) entry which Olivia would use to obtain the following
information when preparing her control accounts.
book of prime (original) entry
returns to credit suppliers
cheques received from credit customers
contra entry
bad debts written off
[4]
(b) Complete the table by placing a tick (3) in the correct column to indicate where each item
would appear in Olivia’s sales ledger control account.
If the item does not appear place a tick (3) in the ‘no entry’ column.
debit
credit
no entry
credit sales
cash sales
cash refund to credit customer
cash discount allowed by credit suppliers
contra entry
trade discount allowed to credit customers
interest charged on credit customer’s overdue account
[7]
(c) State the meaning of the following terms.
(i)
Bad debt
...........................................................................................................................................
..................................................................................................................................... [1]
(ii)
Bad debt recovered
...........................................................................................................................................
..................................................................................................................................... [1]
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7
(iii)
Provision for doubtful debts
...........................................................................................................................................
..................................................................................................................................... [1]
Olivia’s financial year ends on 30 April.
On 30 April 2019 Olivia received $200 in cash from Ben, a credit customer, in final settlement of
the amount he owed. The balance of Ben’s account was written off as irrecoverable.
REQUIRED
(d) Complete the following accounts in Olivia’s ledger for the year ended 30 April 2019. Show
any necessary year-end transfer.
Olivia
Ben account
Date
2019
Jan 2
Details
Sales
$
Date
2019
Details
$
360
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
Bad debts account
Date
2019
Details
$
Date
2019
Details
$
384
.............
.................................
..............
April 30
Total to date
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
.............
.................................
..............
[4]
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Olivia maintains a provision for doubtful debts of 3% of the trade receivables at the end of each
financial year.
On 30 April 2018 the trade receivables amounted to $13 500.
On 30 April 2019 the trade receivables amounted to $12 800 after writing off Ben’s account.
REQUIRED
(e) Prepare the provision for doubtful debts account for the year ended 30 April 2019. Balance
the account and bring down the balance on 1 May 2019.
Olivia
Provision for doubtful debts account
Date
Details
$
Date
Details
$
............
................................
.............
.............
................................
.............
............
................................
.............
.............
................................
.............
............
................................
.............
.............
................................
.............
............
................................
.............
.............
................................
.............
............
................................
.............
.............
................................
.............
[4]
[Total: 22]
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9
3
Kadar is a food wholesaler. He maintains a full set of accounting records and prepares a trial
balance at the end of each financial year.
REQUIRED
(a) State two reasons why a trial balance is prepared.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
[2]
(b) Name three types of error which are not revealed by a trial balance.
Give an example of each.
1
Type of error .............................................
Example ............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
2
Type of error .............................................
Example ............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
3
Type of error .............................................
Example ............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
[6]
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10
Kadar provided the following information at the end of his financial year on 31 March 2019.
Revenue
Purchases
Sales returns
Carriage outwards
Fixtures and fittings (at cost)
Provision for depreciation of fixtures and fittings
Motor vehicle (at cost)
Discount allowed
Discount received
Trade payables
Trade receivables
Operating expenses
Rent payable
Commission receivable
Bank overdraft
Capital
Inventory 1 April 2018
Inventory 31 March 2019
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$
146 000
137 300
1 400
2 970
45 000
18 000
16 850
190
230
14 600
12 900
17 190
5 200
2 000
5 170
65 000
12 000
10 950
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(c) Prepare the trial balance of Kadar at 31 March 2019.
Kadar
Trial Balance at 31 March 2019
Debit
$
Credit
$
Revenue
........................
........................
Purchases
........................
........................
Sales returns
........................
........................
Carriage outwards
........................
........................
Fixtures and fittings (at cost)
........................
........................
Provision for depreciation of fixtures and fittings
........................
........................
Motor vehicle (at cost)
........................
........................
Discount allowed
........................
........................
Discount received
........................
........................
Trade payables
........................
........................
Trade receivables
........................
........................
Operating expenses
........................
........................
Rent payable
........................
........................
Commission receivable
........................
........................
Bank overdraft
........................
........................
Capital
........................
........................
Inventory
........................
........................
…………………………
........................
........................
........................
........................
[9]
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12
Kadar purchased the motor vehicle on 30 March 2019. He entered the total amount paid in the
motor vehicle account. The total paid consisted of the following.
$
16 000
420
350
80
16 850
cost of motor vehicle
1 year’s insurance
delivery charge
fuel
REQUIRED
(d) State whether each cost is capital expenditure or revenue expenditure.
Give a reason for your answers.
The first item has been completed as an example.
cost
type of expenditure
cost of motor vehicle
capital
reason
This is the cost of purchasing a non-current
asset which will be kept for over 12 months
1 year’s insurance
delivery charge
fuel
[6]
[Total: 23]
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4
The YK Club was formed some years ago. In addition to providing sporting facilities for members,
the club also has a shop selling sports clothing.
The following information was available for the year ended 31 January 2019.
On 1 February 2018
Shop inventory
Amount owing for shop supplies
$
896
420
For the year ended 31 January 2019
Payments for shop supplies
4150
On 31 January 2019
Shop inventory
Amount owing for shop supplies
960
470
All goods are marked up by 25%.
REQUIRED
(a) Prepare the shop income statement for the year ended 31 January 2019 showing the revenue
for the year.
YK Club
Shop Income Statement for the year ended 31 January 2019
$
$
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
..........................................................................................
........................
........................
[5]
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(b) Complete the table to indicate how the following items would be recorded in the financial
statements of the YK Club for the year ended 31 January 2019.
Some items may appear in more than one financial statement.
The first one has been completed as an example.
balance at bank on 1 February 2018
$
receipts and
payments
account
$
460
460
insurance paid on 1 February 2018 for
18 months to 31 July 2019
1080
purchase of new sports equipment by
cheque on 31 December 2018
3500
subscriptions received in January 2019
for the year ending 31 January 2020
350
accumulated depreciation of sports
equipment at 31 January 2019
850
cost of sports equipment at
31 January 2019
profit from club shop for the year ended
31 January 2019 (calculated in (a))
bank overdraft on 31 January 2019
income and
expenditure
account
$
statement
of financial
position
$
8500
?
1250
[11]
The treasurer is concerned that the overdraft of the YK Club is increasing each year. He has
recommended that the club should hold fund-raising activities to reduce the club’s bank overdraft.
REQUIRED
(c) Suggest two other ways in which the bank overdraft of the club could be reduced.
1 ................................................................................................................................................
2 ................................................................................................................................................
[2]
[Total: 18]
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PLEASE TURN OVER
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5
Krishna has a secretarial agency. Her financial year ends on 30 April.
She provided the following information for the year ended 30 April 2019.
Fees received from clients
Wages
Operating expenses
Rent and rates
Motor expenses
Commission receivable
Office fixtures and equipment at valuation 1 May 2018
Motor vehicle at cost
Provision for depreciation of motor vehicle
$
35 270
24 300
4 260
7 750
720
1 820
18 900
17 500
6 300
Additional information
1
At 30 April 2019
Clients owed fees totalling $2150.
Commission receivable accrued amounted to $60.
Rent, $1200, was accrued.
Rates prepaid amounted to $550.
2
Krishna lives in an apartment above the business premises. One quarter of the rent and rates
relates to Krishna’s apartment.
3
The office fixtures and equipment were valued at $17 320 on 30 April 2019.
No office fixtures and equipment were purchased or sold during the year.
4
The motor vehicle is to be depreciated at 20% per annum using the reducing (diminishing)
balance method.
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REQUIRED
(a) Prepare Krishna’s income statement for the year ended 30 April 2019.
Krishna
Income Statement for the year ended 30 April 2019
$
$
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
[13]
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18
(b) Complete the following accounts in Krishna’s ledger for the year ended 30 April 2019.
Close the accounts by balancing or by making an appropriate year-end transfer.
Krishna
Drawings account
Date
2019
April 30
Total cash drawings
.............
Details
$
Date
Details
$
9 150
.............
....................................
..............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
Details
$
Capital account
Date
Details
$
.............
....................................
..............
Date
2018
May 1
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
.............
....................................
..............
Balance b/d
38 000
[5]
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19
Krishna is considering purchasing business premises costing $80 000. She could invest a further
$40 000 as capital. The remaining $40 000 would have to come from a 6% bank loan repayable
after 5 years.
REQUIRED
(c) Explain three factors Krishna should consider when making a decision about purchasing
these business premises.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
[6]
[Total: 24]
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6
ML Limited was formed some years ago. The company’s share capital consists entirely of ordinary
shares.
REQUIRED
(a) Complete the table by placing a tick (3) in the correct column to indicate whether each
statement is true or false.
The first one has been completed as an example.
True
The reward given to ordinary shareholders for investing in the
company is known as a dividend.
False
3
The amount of issued shares for which payment has been received
by the company from shareholders is known as paid-up share
capital.
Ordinary shareholders receive a fixed percentage of the profit each
year.
In the event of the company being wound up the ordinary shares
are the last to be repaid.
Ordinary shareholders are personally liable for the debts of the
company.
Any ordinary share dividend paid during the financial year is
entered in the statement of changes of equity irrespective of the
year to which it relates.
[5]
The financial year of ML Limited ends on 31 December. The following information is available.
$
At 1 January 2018
Ordinary share capital
Retained earnings
General reserve
200 000
16 500
8 000
Dividends paid during the year ended 31 December 2018
Final dividend for the year ended 31 December 2017
Interim dividend for the year ended 31 December 2018
Profit for the year ended 31 December 2018
8 000
6 000
28 000
On 31 December 2018 it was decided to make a transfer to general reserve of $3000.
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REQUIRED
(b) Prepare a statement of changes in equity for the year ended 31 December 2018.
ML Limited
Statement of Changes in Equity for the year ended 31 December 2018
Ordinary
share
capital
$
Retained
earnings
General
reserve
Total
$
$
$
On 1 January 2018
....................... ....................... ....................... .......................
Profit for the year
....................... ....................... ....................... .......................
Dividend paid – final
....................... ....................... ....................... .......................
interim
....................... ....................... ....................... .......................
Transfer to general reserve
....................... ....................... ....................... .......................
On 31 December 2018
....................... ....................... ....................... .......................
[6]
(c) Calculate the percentage (%) total ordinary share dividend for the year ended
31 December 2018.
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
The directors of ML Limited want to expand the company and need to raise $100 000. They are
considering issuing either 6% preference shares or 5% debentures.
REQUIRED
(d) State three features of preference shares.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
[3]
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(e) State three features of debentures.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
[3]
(f)
Complete the table to indicate the effect of raising the funds from an issue of 5% debentures
on 1 January 2019.
Where there is no effect place a tick (3) in the ‘no effect’ column.
The first one has been completed as an example.
increase
$
effect on balance at bank
decrease
$
no effect
100 000
effect on non-current liabilities
effect on working capital
effect on equity at 1 January 2019
effect on annual profits
[4]
[Total: 23]
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Cambridge Assessment International Education
Cambridge International General Certificate of Secondary Education
* 9 3 8 0 7 3 6 1 9 7 *
0452/11
ACCOUNTING
October/November 2019
Paper 1
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 23 printed pages and 1 blank page.
DC (CJ) 188378
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2
There are 10 parts to Question 1.
For each of the parts (a) to (j) below there are four possible answers, A, B, C and D.
Choose the one you consider correct and place a tick (3) in the box to indicate the correct answer.
1
(a) Insurance paid by a business included $400 relating to the owner’s private house.
This amount was not included in the income statement.
Which accounting principle was applied?
A
accruals (matching)
B
business entity
C
duality
D
prudence
[1]
(b) The following account appeared in Jacob’s ledger.
Cindy account
Date
2019
Aug 16
29
31
Details
Returns
Bank
Discount
Balance
c/d
$
110
441
9
280
840
Date
2019
Aug 1
14
Details
Balance
b/d
Purchases
$
450
390
840
Which statement is correct?
A
Cindy paid Jacob $441 by cheque on 29 August.
B
Cindy purchased goods, $390, on credit from Jacob on 14 August.
C
Jacob allowed Cindy $9 cash discount on 29 August.
D
Jacob owed Cindy $450 on 1 August.
[1]
(c) What is not a requirement of the accounting objective of reliability?
A
information must be available in time for decisions to be made
B
information must be free from bias
C
information must be free from errors
D
information must be prepared with suitable caution applied
to any judgement
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(d) On 2 September Tumelo purchased goods on credit, list price $4200, less trade discount of
20% and a cash discount of 2% if the invoice was paid within 30 days.
On 5 September Tumelo returned one-third of the goods to the supplier.
Which amount did Tumelo enter in his purchases returns journal?
A
$1092
B
$1120
C
$1372
D
$1400
[1]
(e) Which statements about debentures are correct?
(f)
1
Debentures carry a fixed rate of interest.
2
Debentures do not carry voting rights.
3
Debenture holders are members of the company.
4
Debenture interest depends on the profit of the company.
A
1 and 2
B
1 and 4
C
2 and 3
D
3 and 4
[1]
The totals of a trial balance did not agree.
Which error caused this?
A
A cheque paid to Hong for $500 had been credited to the account
of Heng.
B
An invoice for goods purchased, $50, was entered in the purchases
journal as $500.
C
Goods sold on credit to Gemma, $500, were debited to the account
of Gina.
D
Rent paid by cheque, $500, was debited to the rent receivable
account.
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4
(g) Sally provided the following information at the end of her financial year.
$
Revenue
44 000
Opening inventory
3 000
Closing inventory
1 000
Purchases
32 000
Expenses
6 000
What was Sally’s percentage of gross profit to revenue (gross profit margin)?
A
9.09%
B
11.76%
C
22.73%
D
29.41%
[1]
(h) A food retailer purchased a computer and debited the cost to the purchases account.
What was the effect on the profit for the year and the non-current assets?
profit for the year
overstated
(i)
A
3
B
3
non-current assets
understated
overstated
understated
3
3
C
3
D
3
3
3
[1]
Hassan’s trial balance did not balance and a suspense account was opened.
It was found that the total of the discount received column in the cash book, $173, had been
debited to the discount allowed account in the ledger.
Which journal entry corrects this error?
details
A
B
C
D
debit
$
discount allowed
discount received
suspense
discount received
suspense
suspense
discount allowed
suspense
discount allowed
discount received
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173
173
173
173
346
credit
$
346
173
173
173
173
[1]
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(j)
Beketele’s financial year ends on 31 December. On 1 January 2015 she purchased a machine
costing $18 000. The machine was depreciated by 15% per annum using the straight line
(equal instalment) method. The machine was sold on 1 January 2019.
What was the book value of the machine on the date of sale?
A
$4500
B
$7200
C
$10 800
D
$13 500
[1]
[Total: 10]
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2
Aisha is a retailer. She buys goods on credit from Kadir, a wholesaler. They exchanged several
documents during September 2019.
The following incomplete document was issued on 18 September 2019.
Credit Note
Kadir
123 West View
Some City
Aisha
14 Straight Row
Anywhere
Quantity
70
18 September 2019
Description
Unit price
$
Suits assorted sizes
Amount
$
(i) ..........
Less 20% Trade discount
4130
(ii) ..........
Reason for issue: Correcting overcharge
on goods supplied on 4 September 2019
(iii) ..........
REQUIRED
(a) Insert the missing figures in (i) – (iii) in the above document.
[3]
(b) Name the person who issued the above document.
.......................................................
[1]
(c) Suggest one reason why a credit note may be issued other than correcting an overcharge.
...................................................................................................................................................
............................................................................................................................................. [1]
(d) State why it was necessary to deduct trade discount on the credit note.
...................................................................................................................................................
............................................................................................................................................. [1]
(e) Name the book of prime (original) entry in which each trader would record the credit note.
book of prime (original) entry
used by Aisha
book of prime (original) entry
used by Kadir
.................................................
.................................................
[2]
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On 1 September 2019 Aisha owed Kadir $3400.
During September 2019 Aisha and Kadir exchanged the following documents (in addition to the
credit note).
September 4 Invoice for goods, $8960
13 Debit note, $3540, claiming overcharge for goods supplied on 4 September
27 Cheque to settle balance outstanding on 1 September less 2% cash discount
30 Statement of account showing a closing balance of $5656
REQUIRED
(f)
Name the book of prime (original) entry in which Aisha would record these documents.
If the document is not recorded in a book of prime (original) entry, write ‘no entry’.
document
book of prime (original) entry used by
Aisha
invoice
………………………………………………..
debit note
……………………………………………….
cheque
…………………………………………………
statement of account
……………………………………………….
[4]
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(g) Prepare the account of Kadir as it would appear in the ledger of Aisha for the month of
September 2019.
Balance the account and bring down the balance on 1 October 2019.
Aisha
Kadir account
Date
Details
$
Date
Details
$
2019
2019
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
[7]
(h) State the name of the ledger in which Aisha would maintain Kadir’s account.
............................................................................................................................................. [1]
[Total: 20]
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3
Timothy is a trader who buys and sells on both cash and credit terms. He maintains a full set of
accounting records and prepares monthly control accounts.
REQUIRED
(a) State two advantages to Timothy of preparing monthly control accounts.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
(b) Name the book of prime (original) entry which Timothy would use to obtain the following
information when preparing his purchases ledger control account.
book of prime (original) entry
purchases returns
contra entry
discount received
interest charged on overdue account
[4]
(c) State the meaning of a contra entry in connection with control accounts.
State why Timothy made a contra entry.
Meaning ....................................................................................................................................
...................................................................................................................................................
Reason .....................................................................................................................................
............................................................................................................................................. [2]
(d) State two reasons why it is possible for Timothy to have a debit balance on his purchases
ledger control account.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
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10
Timothy provided the following information for October 2019.
$
On 1 October
Debit balance on sales ledger control account
Credit balance on sales ledger control account
6530
110
Totals for the month of October
Credit sales
Cash sales
Receipts from credit customers
Discount allowed to credit customers
Discount received from credit suppliers
Returns by credit customers
Bad debts written off
Increase in provision for doubtful debts
Contra entry
Interest charged on a credit customer’s overdue account
7860
3850
5782
118
246
285
260
170
300
15
On 1 November
Debit balance on sales ledger control account
Credit balance on sales ledger control account
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REQUIRED
(e) Select the relevant figures and prepare the sales ledger control account for the month of
October 2019.
Balance the account and bring down the balances on 1 November 2019.
Timothy
Sales ledger control account
Date
Details
2019
Oct 1 Balance b/d
$
6530
Date
2019
Oct 1
Balance b/d
Details
$
110
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. ……......
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. ……......
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
...........
.............................. …..........
...........
..............................
...........
............ .............................. ……......
[9]
[Total: 19]
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4
Abiola started a business on 1 September 2017. On that date she opened a business bank account
with a capital of $40 000 and a loan of $10 000. On the same day she purchased inventory, $6600,
and fixtures and fittings, $11 750, paying by bank transfer.
REQUIRED
(a) Prepare a journal entry, to include all the above information, to open the books of the business
on 1 September 2017.
A narrative is required.
Abiola
General Journal
Date
2017
Details
Debit
$
Credit
$
Sept 1
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
..............
............................................................ .....................
.....................
[5]
(b) State why it is useful to show a narrative as part of a journal entry.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
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The following transactions took place on 1 March 2018.
1
Abiola transferred her private motor vehicle to the business at a valuation of $12 000.
2
Abiola took goods, $450, from the business for personal use.
REQUIRED
(c) Prepare journal entries to record the transactions of 1 March 2018.
Narratives are not required.
Abiola
General Journal
1
2
Date
2018
Details
Debit
$
Credit
$
Mar 1
…………………………………………..
....................
....................
..............
…………………………………………..
....................
....................
..............
…………………………………………..
....................
....................
Mar 1
…………………………………………..
....................
....................
..............
…………………………………………..
....................
....................
..............
………………………………………….
....................
....................
[4]
Abiola rents premises at an annual rent of $6000, payable on the first of each month.
She provided the following information.
2018
September 1
$
Rent payable accrued
500
The following amounts of rent were paid by bank transfer.
2018
September 2
3000
2019
February
August
3000
1500
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REQUIRED
(d) Prepare the rent payable account in the ledger of Abiola for the year ended 31 August 2019.
Balance the account and bring down the balance on 1 September 2019.
Abiola
Rent payable account
Date
Details
$
Date
Details
$
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
[5]
(e) Explain how the accounting principle of accruals (matching) was applied in the preparation of
the rent payable account.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
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16
Abiola receives commission from another trader when Abiola’s customers purchase goods from
his shop.
Abiola provided the following information.
2018
September 1
$
Commission receivable outstanding
350
The following amounts of commission were received by bank transfer.
2018
September 30
350
2019
January
April
July
425
395
470
31
30
31
On 31 August 2019 commission receivable outstanding amounted to $310.
REQUIRED
(f)
Prepare the commission receivable account in the ledger of Abiola for the year ended
31 August 2019.
Balance the account and bring down the balance on 1 September 2019.
Abiola
Commission receivable account
Date
Details
$
Date
Details
$
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
........... ............................... ............. ........... ............................... .............
[5]
[Total: 23]
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5
The KW Sports Club has 50 members. The annual subscription is $85. The financial year ends on
30 September. The treasurer prepares a full set of financial statements at the end of each financial
year.
On 1 October 2018 subscriptions had been prepaid by 14 members.
On 30 September 2019 subscriptions had been prepaid by 10 members and 22 members had not
paid their subscription for the year.
REQUIRED
(a) State the meaning of the word ‘subscriptions’ in connection with clubs and societies.
...................................................................................................................................................
............................................................................................................................................. [1]
(b) Calculate the subscriptions received during the year ended 30 September 2019.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
(c) Discuss the possible effects on the bank account and the income and expenditure account of
KW Sports Club if the annual subscription was increased to $105.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [4]
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(d) State four ways in which an income and expenditure account differs from a receipts and
payments account.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
4 ................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [4]
The income and expenditure account for the year ended 30 September 2019 showed a deficit.
After the preparation of the account it was found that several errors had been made.
REQUIRED
(e) Complete the table by placing a tick (3) in the correct column to indicate the effect of each
error on the deficit for the year.
If the error does not affect the deficit place a tick (3) in the column headed ‘no effect’.
effect of error on the deficit
error
overstated
understated
no effect
the total of the income from a sports
competition was understated
no entry had been made for bank
charges
proceeds of sale of club equipment were
included in the income
no adjustment was made of club shop
wages accrued at the year-end
shop rent was charged to the income
and expenditure account instead of the
shop income statement
[5]
[Total: 19]
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20
6
Amrit runs a secretarial agency. His financial year ends on 31 July. He prepared the following trial
balance on 31 July 2019.
Fees from clients
Premises (at cost)
Office equipment (at cost)
Provision for depreciation of office equipment
Capital
Drawings
5% Loan (repayable 1 February 2020)
Trade receivables
Provision for doubtful debts
Bad debts
Insurance
Wages
Operating expenses
Rent receivable
Bank
$
90 000
16 000
11 500
4 650
80
2 100
38 000
6 500
168 830
$
58 800
3 200
85 000
15 000
100
3 000
3 730
168 830
The following information is available.
1
The insurance covers a period of 14 months to 30 September 2019.
2
At 31 July 2019 wages, $1500, were accrued and one year’s loan interest was outstanding.
3
A debt of $150 should be written off as irrecoverable.
4
The provision for doubtful debts should be maintained at 3% of the remaining trade
receivables.
5
The office equipment is to be depreciated at 20% per annum using the reducing (diminishing)
balance method.
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REQUIRED
(a) Prepare the income statement for the year ended 31 July 2019.
Amrit
Income Statement for the year ended 31 July 2019
$
$
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
.................................................................................
.........................
.........................
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.........................
.........................
.................................................................................
.........................
.........................
[14]
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Amrit is considering several proposals to try to increase his working capital.
REQUIRED
(b) Complete the table by placing a tick (3) in the correct column to indicate how each proposal
would affect Amrit’s working capital.
increase
decrease
no effect
extend the loan for a further 2 years
ask the bank to extend the overdraft facility
purchase new office equipment on credit
[3]
(c) Suggest two possible reasons why Amrit’s return on capital employed (ROCE) was higher on
31 July 2019 than it was on 31 July 2018.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
On 1 August 2019 Amrit decided to admit his sister, Neena, to the business as a partner.
The partnership agreement provided for the following:
interest on capital of 4% per annum
interest on drawings of 3%
Amrit to be entitled to a partnership salary of $6000 per annum
profits and losses to be shared Amrit 60% and Neena 40%.
Amrit made an adjustment to his capital so that it equalled $80 000.
Neena invested $60 000.
It was estimated that the profit for the first year of trading would be $15 500.
It was estimated that the partners’ drawings during the first year of trading would be Amrit $7000
and Neena $5000.
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REQUIRED
(d) State two advantages to Amrit of being a partner rather than a sole trader.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
(e) State two disadvantages to Amrit of being a partner rather than a sole trader.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
(f)
Complete the estimated profit and loss appropriation account for the year ending 31 July 2020.
Amrit and Neena
Estimated Profit and Loss Appropriation Account for the year ending 31 July 2020
$
Estimated profit for the year
Interest on drawings Amrit
$
15 500
....................... .......................
....................... .......................
Neena
....................... .......................
Interest on capital
Amrit
....................... .......................
Neena
....................... .......................
....................... .......................
Partnership salary
Amrit
....................... .......................
....................... .......................
Share of profit/loss
Amrit
....................... .......................
Neena
....................... .......................
[6]
[Total: 29]
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Cambridge IGCSE®
ACCOUNTING0452/01
For examination from 2020
Paper 1 Multiple Choice
1 hour 15 minutes
SPECIMEN PAPER
You must answer on the multiple choice answer sheet.
*0123456789*
You will need:
Multiple choice answer sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)
INSTRUCTIONS
●● There are thirty-five questions on this paper. Answer all questions.
●● For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
●● Follow the instructions on the multiple choice answer sheet.
●● Write in soft pencil.
●● Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
●● Do not use correction fluid.
●● Do not write on any bar codes.
●● You may use a calculator.
INFORMATION
●● The total mark for this paper is 35.
●● Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
●● Any rough working should be done on this question paper.
This document has 10 pages. Blank pages are indicated.
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2
1
2
3
What is the purpose of book-keeping?
A
to interpret the double entry records
B
to prepare financial statements at regular intervals
C
to record all the financial transactions of the business
D
to summarise the financial position of the business
What are assets?
A
items that are bought for long-term use by a business
B
items that are expected to be turned into cash in the near future
C
items that are owned by or owed by a business
D
items that are owned by or owed to a business
Sami returns goods bought on credit from Javed.
How does Javed record this in his books?
account debited
4
account credited
A
purchases returns
Sami
B
sales returns
Sami
C
Sami
purchases returns
D
Sami
sales returns
At the end of the financial year there was a debit balance brought down on the office expenses
account.
In which section of the statement of financial position will this be recorded?
A
capital
B
current assets
C
current liabilities
D
non-current assets
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3
5
The following ledger account appeared in the books of a trader.
Rent account
$
Jan 1
balance b / d
Dec 31
bank
600
$
Dec 31
income statement
7250
6300
350
____
7250
7250
balance c / d
What does the balance on 31 December represent?
6
A
rent payable outstanding
B
rent payable prepaid
C
rent receivable outstanding
D
rent receivable prepaid
Karim issued an invoice, a credit note and a receipt.
What has happened?
7
A
Karim purchased goods and paid the supplier immediately.
B
Karim purchased goods on credit, made returns to the supplier and paid the balance due.
C
Karim sold goods and received immediate payment from the customer.
D
Karim sold goods on credit, received returns from the customer and received the balance
due.
A trader’s purchases on credit for April amounted to $2000. These purchases were subject to a
trade discount of 10% and also a cash discount of 5% for accounts paid within 30 days.
How much was entered in the purchases journal?
A
8
$1700
B
$1800
C
$1900
D
$2000
Which is part of the double entry system?
A
cash book
B
general journal
C
sales journal
D
trial balance
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4
9
What is a trial balance?
A
a list of balances in a business’s books on a certain date
B
a list of the assets, liabilities and capital of a business on a certain date
C
a summary of all a business’s transactions for the year
D
a summary of the financial position of a business at the year end
10 Which error will be revealed by the preparation of a trial balance?
11
A
an amount recorded twice as a debit entry
B
a capital expenditure item treated as revenue expenditure
C
a double entry made using an incorrect amount
D
a transaction completely omitted from the books
Tracey runs a clothing store. She sold a computer with a net book value of $2000 for $1800. Cash
was received but no entries had been made in any accounts.
What is the effect of correcting this error on the statement of financial position?
non-current assets
$
current assets
$
A
decrease 1800
increase 1800
B
decrease 1800
increase 2000
C
decrease 2000
increase 1800
D
decrease 2000
increase 2000
12 The bank statement of a business showed a bank overdraft of $1640 on 1 October 2017.
At that date there were uncredited deposits of $380 and unpresented cheques of $460.
What was the cash book balance on 1 October 2017?
A
$1560 credit
B
$1560 debit
C
$1720 credit
D
$1720 debit
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5
13 What are the sources of information for entries in control accounts?
A
bank statements
B
books of prime entry
C
ledger accounts
D
sales invoices
14 A trader provided the following information.
$
1 March
purchases ledger control account balance
31 March
purchases journal total
4 000
53 000
purchases returns journal total
2 000
cheques paid to suppliers
47 000
discounts received
1 000
What was the purchases ledger control account balance on 31 March?
A
B
$7 000
$9 000
C
D
$11 000
$13 000
15 Ryan bought a computer, cost $800, and some ink cartridges, cost $50, for use in the business.
Both of these amounts were debited to the purchases account.
What was the effect of this error on the income statement for the year?
cost of sales
expenses
$
$
A
overstated800
understated850
B
overstated850
understated50
C
understated800
overstated850
D
understated850
overstated50
16 For which non-current assets is the revaluation method of depreciation most appropriate?
A
loose tools
B
motor vehicles
C
office equipment
D
plant and machinery
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6
17 Amit depreciates his buildings at the rate of 2% per annum using the straight line method.
He bought land for $200 000. It cost $120 000 to build a warehouse on it. After five years he sold
the warehouse for $299 000.
What was the profit or loss on disposal?
A
$9 000 loss
B
$9 000 profit
C
$11 000 loss
D
$11 000 profit
18 Why should accrued expenses be shown in the financial statements of a business?
A
so that the correct total of current assets is shown in the statement of financial position
B
so that the total income of a period is matched against the total costs of that period
C
to show how much customers owe the business
D
to show the amount owed to credit suppliers
19 A trader sold goods to Zahid on credit. Zahid was unable to pay the amount owing and the balance
on his account was written off.
Which entries will the trader make to write off this irrecoverable debt?
account to be debited
account to be credited
A
irrecoverable debts
sales
B
irrecoverable debts
Zahid
C
sales
irrecoverable debts
D
Zahid
irrecoverable debts
20 Sumit maintains a position for doubtful debts at 5% of the trade receivables at the end of each
financial year. On 1 January 2016 the trade receivables amounted to $3500 and the provision for
doubtful debts was $175.
The income statement for the year ended 31 December 2016 was debited with $15 for the
provision of doubtful debts.
How much did the trade receivables owe on 31 December 2016?
A
$3040
B
$3200
C
$3610
D
$3800
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7
21 Which group contains only trading businesses?
A
driving school, motor insurance agency, vehicle repair business
B
driving school, motor insurance agency, petrol station
C
motor parts shop, vehicle repair business, car dealership
D
motor parts shop, petrol station, car dealership
22 Which statement is correct?
A
cost of goods sold – gross profit – sales returns = revenue
B
cost of goods sold – gross profit + sales returns = revenue
C
cost of goods sold + gross profit – sales returns = revenue
D
cost of goods sold + gross profit + sales returns = revenue
23 How is capital employed calculated?
A
current assets – current liabilities
B
non-current assets + current assets
C
owner’s capital + non-current liabilities
D
owner’s capital + total liabilities
24 Which should be entered in the appropriation account of a partnership?
interest on
partners’ capital
A

B

C

interest on
partners’ loans
partners’
drawings


D


25 Meena and Khan are in partnership, sharing profits and losses equally. Interest on capital account
balances is to be allowed at 5%.
The capital account balances at the start of the year were: Meena $10 000; Khan $20 000.
The profit for the year was $28 000.
How much was credited to Meena’s current account at the end of the year?
A
$13 250
B
$13 750
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$14 000
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$14 250
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8
26 Zed Limited provided the following information.
$
issued and paid up share capital
general reserve
retained earnings
10% debentures
200 000
30 000
15 000
20 000
What was the value of equity?
A
$215 000
B
$230 000
C
$245 000
D
$265 000
27 The issued share capital of DX Limited consists of ordinary shares.
The retained earnings were $45 000 on 1 September 2016. These had increased to $75 000 on
31 August 2017. The company earned a profit for the year of $80 000.
What was the total ordinary share dividend for the year?
A
$30 000
B
$35 000
C
$45 000
D
$50 000
28 A club provided the following information for a year.
$
Receipts
Payments
Depreciation charged for the year
Accumulated fund at the year end
21 600
20 000
1 250
15 800
There were no accruals and prepayments and there had been no capital expenditure or capital
receipts.
What was the accumulated fund at the start of the year?
A
$12 950
B
$14 200
C
$15 450
D
$16 150
29 A club provided the following information at the end of its financial year:
rent of premises paid in advance
outstanding subscriptions from members
Where will these items appear in the club’s statement of financial position?
rent paid in advance
outstanding subscriptions
A
current asset
current asset
B
current asset
current liability
C
current liability
current asset
D
current liability
current liability
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9
30 Which is an indirect cost?
A
carriage inwards
B
factory rent
C
production materials
D
production wages
31 A trader provided the following information.
$
1 August 2016
capital
25 000
31 July 2017
assets
75 000
liabilities
36 500
drawings during the year
7 500
What was the profit for the year ended 31 July 2017?
A
$6 000
B
$13 500
C
$17 500
D
$21 000
D
$64 000
32 A business provided the following information.
revenue for year
$189 000
purchases for year
$125 000
gross profit as a percentage of cost of sales
25%
What was the gross profit for the year?
A
$31 250
B
$37 800
C
$47 250
33 Donald’s rate of inventory turnover was 10 times. The inventory on 1 January 2017 was $800 and
the inventory on 31 December 2017 was $1 000.
What were his purchases for the year?
A
$8 800
B
$9 000
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C
$9 200
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$10 800
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10
34 What is the going concern principle?
A
Accounting records are prepared assuming that the business will continue to operate in the
foreseeable future.
B
Income and expense should be accounted for in the same way they were accounted for in
previous periods.
C
Profit should not be anticipated and losses should be written off as soon as they are known.
D
Revenue and costs should be recognised as they are earned or incurred, not when the money
is received or paid.
35 Which accounting objective is being applied when financial information affects business decisions?
A
comparability
B
relevance
C
reliability
D
understandability
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
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Cambridge IGCSE™
ACCOUNTING
0452/11
Paper 1 Multiple Choice
May/June 2020
1 hour 15 minutes
You must answer on the multiple choice answer sheet.
*9287386594*
You will need: Multiple choice answer sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)
INSTRUCTIONS
• There are thirty-five questions on this paper. Answer all questions.
• For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
• Follow the instructions on the multiple choice answer sheet.
• Write in soft pencil.
• Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
• Do not use correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 35.
• Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
• Any rough working should be done on this question paper.
This document has 12 pages. Blank pages are indicated.
IB20 06_0452_11/4RP
© UCLES 2020
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2
1
2
Which statement is correct?
A
Accounting involves measuring profits and losses.
B
Accounting is the recording of financial transactions.
C
Book-keeping involves communicating financial data.
D
Book-keeping requires the use of ratio analysis.
The balances remaining on the books of a business after the preparation of the income statement
included the following.
$
loan from XY Finance
10 000
wages due
620
rent prepaid
240
trade receivables
3 300
trade payables
4 650
motor vehicles
8 000
provision for depreciation of motor vehicles
2 000
What was the total of the liabilities?
A
3
$13 920
B
$14 890
C
$15 270
D
$17 270
On 2 April Nina received a cheque from Zaffar, a credit customer. On 12 April the cheque was
returned unpaid by the bank.
What entry would Nina make on 12 April?
account to be debited
account to be credited
A
irrecoverable debts
bank
B
irrecoverable debts
Zaffar
C
provision for doubtful debts
Zaffar
D
Zaffar
bank
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3
4
Ann is a trader. On 1 April Cindy’s account in Ann’s ledger showed a credit balance of $520. The
following transactions took place during April.
April 2
14
Ann returned goods, $30, to Cindy.
Ann bought goods, $210, from Cindy, and paid in cash.
Which statement about the balance on Cindy’s account in Ann’s ledger on 30 April is correct?
5
A
Ann owes Cindy $490.
B
Ann owes Cindy $700.
C
Cindy owes Ann $490.
D
Cindy owes Ann $700.
Goods bought on credit by Tumelo from Tebogo are returned before they are paid for. Tumelo
keeps a full double entry system.
Where will Tumelo record the return of goods?
6
A
cash book and sales ledger
B
general ledger only
C
general ledger and purchases ledger
D
purchases ledger only
Dave supplies goods to Peter on credit. On 1 April, Peter owed Dave $440. Dave sent or
received the following documents in April.
$
April 7 invoice
360
12 cheque (after deducting $11 cash discount)
429
13 debit note
50
15 credit note
50
What was the closing balance on the statement of account on 30 April?
A
7
$260
B
$310
C
$321
D
$421
What is recorded in the sales journal?
A
all money received from sales
B
all sales transactions
C
cash sales transactions
D
credit sales transactions
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4
8
9
Which statement about a two-column cash book is correct?
A
It is a ledger account for bank transactions only.
B
It is a ledger account for cash transactions only.
C
It is a book of prime entry.
D
It records cash discounts.
Which statements about trade discount are correct?
A
1
It is debited to the supplier’s account.
2
It is only given if the invoice is paid within the period allowed by the supplier.
3
It is shown as a deduction from the price of the goods on an invoice.
4
It is used to encourage bulk buying.
1 and 2
B
1 and 3
C
2 and 4
D
3 and 4
10 Why is a trial balance prepared?
A
to analyse the financial information
B
to assist preparation of financial statements
C
to control the costs of the business
D
to evaluate the performance of the business
11 The income statement of a business showed a loss for the year of $16 000. On checking the
books the following errors were discovered.
1
No adjustment had been made for insurance prepaid, $480.
2
No entry had been made for bank charges, $620.
What was the correct loss for the year?
A
$14 900
B
$15 860
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C
$16 140
D
$17 100
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12 Peter’s bank statement showed a debit balance of $600 on 1 April. The following transactions
took place in April.
$
total cheque deposits
7400
total cheque payments
6200
direct debit for insurance premium
180
credit transfer from customer
450
What was the bank statement balance on 30 April?
A
$870 credit
B
$870 debit
C
$2070 credit
D
$2070 debit
13 A sales ledger control account had a debit balance of $10 000.
It was found that a $2000 contra entry to the purchases ledger control account had been entered
on the wrong side of the sales ledger control account.
What was the correct debit balance on the sales ledger control account?
A
$6000
B
$8000
C
$12 000
D
$14 000
14 A business had a new extension to its workshop premises. It incurred the following expenditure.
$
building cost
65 000
legal fees
1 800
air conditioning system for the original workshop
2 300
air conditioning system for the new workshop extension
1 100
decorating the original workshop
1 400
decorating the new workshop extension
800
What was the total capital expenditure of the business?
A
$67 900
B
$70 200
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$71 000
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$72 400
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15 A non-current asset was depreciated at the end of the first year of ownership using the
straight-line method based on the following information.
cost
$20 000
working life
4 years
residual value
$4000
It was then found that the reducing balance method at 30% per annum should have been used.
What was the effect on the profit for the year of correcting this error?
A
decrease by $2000
B
increase by $2000
C
decrease by $6000
D
increase by $6000
16 A company’s financial year ended on 31 December 2019. On 1 December 2019 it paid rent,
$8000, for the four months ending 31 March 2020.
What was the opening balance on the rent account on 1 January 2020?
A
$2000 credit
B
$2000 debit
C
$6000 credit
D
$6000 debit
17 Alice’s financial year ends on 31 December.
The balances on her books on 1 January 2020 included the following.
$
commission receivable
250 debit
rent receivable
500 credit
What do these balances represent?
commission receivable
rent receivable
A
income outstanding
income outstanding
B
income outstanding
income prepaid
C
income prepaid
income outstanding
D
income prepaid
income prepaid
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18 Joseph sells goods on credit and maintains a provision for doubtful debts. He wants to increase
his provision for doubtful debts by $250.
Which journal entry records an increase in the provision for doubtful debts?
debit
$
A
B
C
D
credit customer
income statement
250
income statement
credit customer
250
income statement
provision for doubtful debts
250
provision for doubtful debts
income statement
250
credit
$
250
250
250
250
19 Which items are deducted from the gross profit when calculating the profit for the year?
A
1
balance on the provision for doubtful debts account
2
carriage paid on goods supplied to customers
3
drawings made by the owner during the year
4
wages paid to employees during the year
1, 2 and 3
B
1 and 4
C
2 and 3 only
D
2 and 4
20 On 31 December 2019 John had net assets of $2000 and capital of $2000.
On 1 January 2020, goods costing $140 were sold on credit for $220.
What was the effect of this transaction on the statement of financial position?
net assets
capital
$
$
A
80 decrease
80 decrease
B
80 increase
80 increase
C
220 decrease
220 decrease
D
220 increase
220 increase
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21 At the end of his financial year, Raminder made an adjustment for rent owed by a tenant.
How did this affect Raminder’s financial statements?
profit for
the year
current assets
A
decrease
decrease
B
decrease
increase
C
increase
decrease
D
increase
increase
22 The owner of a business took goods for his own use but forgot to make an entry in the accounts.
What was the effect of this error?
profit for the year
capital employed
A
overstated
no effect
B
overstated
understated
C
understated
no effect
D
understated
overstated
23 Rajid and Sunil formed a partnership on 1 January 2019 but did not prepare a partnership
agreement.
They provided the following information.
Rajid
capital introduced 1 January 2019
Sunil
$40 000
$20 000
$5 000
$3 500
50%
50%
during the year ended 31 December 2019
drawings
share of work
They decided to draw up a partnership agreement for future years.
Which item would be most beneficial to Rajid in 2020?
A
interest on capital
B
interest on drawings
C
limit on annual drawings
D
partnership salaries
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24 Harry and Jane are in partnership. The following information relates to Harry for the financial
year.
$
salary
8000
drawings
2800
share of profit
4600
The opening credit balance on Harry’s current account was $28 200.
What was the closing balance on his current account?
A
$30 000
B
$38 000
C
$40 800
D
$43 600
25 Which item is shown in the income statement of a company and statement of changes in equity?
A
interest on debentures accrued
B
ordinary share dividend paid
C
profit for the year
D
transfer to general reserve
26 Hassan’s capital decreased by $200 over the year, even though he made a profit of $7000.
Which transactions caused this?
capital introduced
$
drawings
$
A
1000
8200
B
1200
6000
C
2000
8800
D
2200
4600
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27 Ahmed provided the following information.
$
trade receivables at 1 January 2019
15 000
for the year ended 31 December 2019:
credit sales
85 000
cash sales
12 000
cheques received from trade receivables
65 000
irrecoverable debts
2 000
By how much had the trade receivables increased by the end of the financial year?
A
$18 000
B
$30 000
C
$33 000
D
$45 000
28 Gordon provided the following information for the year.
$90 000
revenue
opening inventory
$8 000
closing inventory
$2 000
mark up
50%
Gordon took goods, $7000, for his own use.
What were the purchases?
A
$43 000
B
$47 000
C
$54 000
D
$61 000
29 A trader provided the following information.
$
for the year ended 31 March 2020
revenue
250 000
purchases: cash
125 000
credit
115 000
at March 2020
trade payables
9 765
What was the trade payables turnover?
A
14 days
B
15 days
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C
29 days
D
31 days
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30 On 1 January 2019 current assets totalled $16 000 and the current ratio was 2 : 1.
On 31 December 2019 the current liabilities had increased by 50% and the current ratio was
1.5 : 1.
What was the value of the current assets on 31 December 2019?
A
$16 000
B
$18 000
C
$32 000
D
$36 000
31 A company provided the following information about its liquid (acid test) ratio.
Year 1 1.2 : 1
Year 2 1.4 : 1
Year 3 1.6 : 1
Which would explain the changes in the ratio?
A
Inventory is increasing.
B
Other payables are decreasing.
C
Trade payables are increasing.
D
Trade receivables are decreasing.
32 Which user of accounting statements is interested in past performance and taking remedial action
where necessary?
A
government
B
investors
C
managers
D
suppliers
33 Rashid’s financial year ends on 31 December. He paid rent on 1 February, 1 May, 1 August and
1 November.
An adjustment was made in the income statement for rent prepaid.
Which accounting principle was applied?
A
duality
B
matching
C
money measurement
D
prudence
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34 Which statement describes the going concern principle?
A
Accounting methods must be used consistently from one accounting period to the next.
B
It is assumed that the business will continue to operate for the foreseeable future.
C
Revenue is earned when legal title to goods passes from the seller to the buyer.
D
The business is treated as being completely separate from the owner of the business.
35 Brad purchased a machine for $1000 on 1 January 2019. The machine was expected to last for
four years and have no residual value. On 31 December 2019 the same machine cost $1200 to
purchase.
At which value should the machine be included in the statement of financial position on
31 December 2019?
A
current cost with no depreciation
B
current cost with one year’s depreciation
C
original purchase price with no depreciation
D
original purchase price with one year’s depreciation
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