igcse accounting 2003 – 2012 mark schemes table of ... · karl cash book date discount cash bank...

IGCSE Accounting 2003 – 2012

Mark Schemes

Table of Contents (1)

Old Syllabus2003 -2009

June 2003 Paper 1 Page 3


June 2003 Paper 3 1



June 2004 Paper3 Page 31
















Prepared by D. El-Hoss

All Questions Copyright of Cambridge International Examinations

www.igcseaccounts.com

IGCSE Accounting 2003 – 2011

Mark Schemes

Table of Contents (2)

New Syllabus2010-2011

June 2010 Paper 1(1) Page 137

June 2010 Paper 1 (2) Page 144







June 2011 Paper 1(3) 00


June 2011 Paper2(2) Page 218











June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 40

SYLLABUS/COMPONENT: 0452/01

ACCOUNTINGPaper 1 (Multiple Choice)




Mark Scheme Syllabus Paper

IGCSE EXAMINATIONS – JUNE 2003 0452 1

© University of Cambridge Local Examinations Syndicate 2003

QuestionNumber

KeyQuestionNumber

Key

1 D 21 A

2 D 22 C

3 A 23 C

4 B 24 C

5 A 25 D

6 A 26 C

7 B 27 C

8 C 28 B

9 D 29 B

10 C 30 B

11 A 31 B

12 B 32 D

13 C 33 B

14 A 34 B

15 A 35 D

16 B 36 A

17 A 37 B

18 B 38 A

19 B 39 B

20 D 40 B

TOTAL 40




June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 90


ACCOUNTINGPaper 2 (Structured Questions)







QuestionNumber

Mark Scheme DetailsPartMark

1

1

1

3

3

2

4

1

1

1

1

19

1 (a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

Trade creditors, accrued expense(s), bank overdraftOr acceptable alternative

N.P. is undervalued/understated

One from: Correction of errorsOpening entriesPurchase/sale of fixed assetOther transfers/adjustments

1. P/L Appropriation (1)

2. P/L (1)

3. P/L Appropriation (1)

1. Revenue2. Capital3. Capital

Asset (1) or expense (1)

Cost 1/1/01 20000- Depn. 31/12/01 (30%) 6000 (1) C/F

N.B.V. 31/12/01 14000 (1)

- Depn. 31/12/02 (30%) 4200 (1) O/Fs

N.B.V. 31/12/02 9800 (1)

Current liabilities

Imprest system

Error of commission

Advantage of business due to its:- reputation- well-established clientele Or other acceptable- location reason for paying- good staff relations/reliable workforce premium price- goodwill







QuestionNumber


14

1

15

2 (a)

(b)

Danbi WyskeTrial Balance as at 30 April 2003

Dr Cr $ $

Stock 1 May 2002 4000 (1)

Sales 80000 (1)

Purchases 62000 (1)

Debtors 10000 (1)

Creditors 9000 (1)

Electricity 3000 (1)

General expenses 7000 (1)

Cash at bank 5000 (1)

Drawings 8000 (1)

Equipment at cost 45000 (1)

Provision for depreciation ofequipment 16000 (1)

Rent and insurance paid 6000 (1)

Capital 45000 (2) -1 O/F

150000 150000

Suspense Account

2 (a) An own figure mark for the Capital figure should only be awarded if a credit balanceis shown.







QuestionNumber


6

2

3

4

15

3 (a)

(b)

(c)

(d)

(i) $12000 (1)

(ii) Purchase returns (accept ‘returns’) (1)

(iii) Closing stock (accept ‘Stock at 31 March 2003’) (1)

(iv) $5000 (1)

(v) received (1)

(vi) £15000 (1)

$30000 x 100 (1) = 15% (1) C/F

200000

Capital employed: $200000+ 50000 250000

$30000 x 100 (1) = 12% (2) O/F 1

250000 (1)

N.P. as percentage of capital employed:- measures overall profitability of the business in relation to resources

used- indicates adequacy of return on owner’s investment- enables comparisons to be made, e.g. against other investments,

earlier years, similar firms- assists decision-making, e.g. in production, cost of borrowing or other

acceptable points

For each reason given: 2 marks




4 (

a)

K

arl

C

ash

Bo

ok

Da

teD

isc

ou

nt

Ca

sh

Ba

nk

Da

teD

isc

ou

nt

Ca

sh

Ba

nk

$$

$$

$$

20

03

1

Ba

lan

ce

s b

/d

20

0 2

50

02

00

3

6C

ash

30

0 (1)

Ap

ril

4

M F

yn

ne

10

(1)

1

90

(1)

Ap

ril

8

S G

ha

lli1

5 (1)

60

0 (1)

6

Ba

nk

30

0 (1)

10

Wa

ge

s 2

50

(1)

14

J B

ildt

40

(1)

14

60

(1)

17

Ca

sh

40

0 (1)

17

Ba

nk

40

0 (1)

21

T D

akty

l3

0 (1)

80

0 (1)

28

Sa

les (

ca

sh

)

80

0 (1)

25

Wa

ge

s 3

50

(1)

30

Ca

sh

5

00

(1)

30

Ba

nk

50

0 (1)

Ba

lan

ce

s c/d

6

00

25

50

50

(1)

17

00

46

50

45

(1)

17

00

46

50

Ma

y

1B

ala

nce

s b

/d

60

0 (1)

25

50

(1)

C/Fs

(b

) N

om

ina

l L

ed

ge

rD

isco

un

t A

llow

ed

Acco

un

t

20

03

$A

pril

30

To

tal fo

r A

pril (o

r sim

ilar

acce

pta

ble

wo

rdin

g) (1)

50

(1)

Dis

co

un

t R

ece

ive

d A

cco

un

t

20

03

$A

pril

30

To

tal fo

r A

pril (o

r sim

ilar

acce

pta

ble

wo

rdin

g) (1)

45

(1)

21

4 25

Page 4 Mark Scheme Syllabus Paper









QuestionNumber


4

10

2

16

5 (a)

(b)

(c)

Carrie OkieBalance Sheet as at 1 April 2002

$ $Fixed assets 50000 (1)

Current assets 20000 (1)

Less Current liabilities 15000 (1) 500055000

Capital 55000 (1)

(Horizontal format also acceptable)

Balance Sheet as at 31 March 2003$ $

Fixed assets 75000 (1)

Less Depreciation (20%) 15000 (1) 60000 (1)

Current assets 30000 (1)

Less Current liabilities 20000 (1) 1000070000

Capital 1/4/02 55000 (1) O/F

Add Net profit 25000 (2) 1 O/F

80000Less Drawings 10000 (1)

70000 (1) O/F

(Horizontal layout also acceptable)

$ $ $ Fixed assets 75000 (1) Capital 1/4/02 55000 (1) O/F

Less Depreciation 15000 (1) 60000 (1) Add Net profit 25000 (2) 1 O/F

80000Current assets 30000 (1) Less Drawings 10000 (1)

70000 (1)

Current liabilities 20000 (1)

90000 90000(10)

Prudence is observed by:

- not overstating profits, as depreciation is charged in P/L a/c 1 mark per acceptable- allowing for foreseeable loss point x 2

asset values shown in B/S)




June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 100


ACCOUNTINGPaper 3 (Structured Questions – Extended)







1 (a) Work can be shared between several people.Easier for reference as same type of accounts are kept together.Easier to introduce checking procedures.

Or other suitable point [2]

(b) The names of any two suitable accounts – either real or nominalaccounts – which would appear in the general ledger. (1) each

[2]

(c)Purchases Ledger Control account

$ $2003 2003Apl 30 Purchases Apl 1 Balances b/d 1960

returns 135 (1) 30 Purchases 4190 (1)

Bank 3830 (1)

Discount received 180 (1)

Balances c/d 2005 6150 6150

2003May 1 Balances b/d 2005 (1) O/F

Dates (1) [6]

Sales Ledger Control account

$ $2003 2003Apl 1 Purchases 1750 Apl 1 Balances b/d 100 30 Sales 5150 (1) 30 Sales returns 270 (1)

Bank (refund) 100 (1) Bank 4990 (1)

Discount allowed 110 (1)

Bad debts 74 (1)

Balances c/d 14567000 7000

2003May 1 Balances b/d 1456 (1) O/F

Dates (1) [8]

[Total 18]







(c) Alternative presentation –

Purchases Ledger Control account

Dr Cr Balance $ $ $

2003Apl 1 Balances 1960 1960 Cr

30 Purchases 4190 (1) 6150 CrPurchases returns 135 (1) 6015 CrBank 3830 (1) 2185 CrDiscount received 180 (1) 2005 Cr (1) O/F

Dates (1) [6]

Sales Ledger Control account

Dr Cr Balance $ $ $

2003Apl 1 Balances 1750 100 1650 Dr

30 Sales 5150 (1) 6800 Dr Sales returns 270 (1) 6530 DrBank 4990 (1) 1540 Dr Discount allowed 110 (1) 1430 Dr Bank (refund) 100 (1) 1530 Dr Bad debts 74 (1) 1456 Dr (1) O/F

Dates (1) [8]

[Total 18]







2 (a)

Amir SadiqTrading and Profit and Loss Account for the year ended 31 March 2003

$ $ $Sales 92100 (1)

Less Sales returns 1200 (1) 90900Less Cost of Sales -

Opening stock 9900 (1)

Purchases 68500 (1)

Less goods for own use 300 (1) 68200Carriage inwards 700 (1)

78800Less Closing stock 10200 (1) 68600 (1)

Gross Profit 22300 (1) O/F

Discount received 250 (1)

Reduction in provision for doubtful debts 50 (1) 300 22600

Motor vehicle expenses 1240

(1)

General expenses 2030Wages 11940 + 1080 13020 (1)

Insurance 1470 - 210 1260 (1)

Depreciation -Motor vehicles 20% x 4750 950 (1)

Fixtures and equipment 3400 - 2800 600 (1) 19100Net Profit 3500 (1) O/F

[17]

Horizontal presentation acceptable.







(b) Cost of goods sold = 68600 O/F = 6.83 times (1) O/F

Average stock 10050[2]

(c) (i) Accounts are prepared on the basis that the business will continue tooperate for an indefinite period of time.

[2]

(ii) Lower of cost and net realisable value.[1]

[Total 22]







3 (a)Mary

Bank Reconciliation Statement as at 31 January 2003

Balance as per cash book (1780) (1)

Plus cheque not yet presented – David 270 (1)

(1510)Less amount not yet credited 800 (1)

Balance as per bank statement (2310) (1)

[4]

(b) (i)

$ $Current AssetsStock 6600Debtors 5400Insurance prepaid 120Cash 240 12360

Current LiabilitiesCreditors 4620Rent received in advance 160Bank overdraft 1780General expenses accrued 700 7260

Working capital 5100 (1) O/F

Any 2 correct items (1)[5]

(ii) 1. Current ratio

12360 O/F : 7260 O/F (1) = 1.70: 1 (1) O/F

[2]

2. Quick ratio

(12360 O/F - 6600) : 1260 O/F (1) = 0.79: 1 (1) O/F

[2]







(c) (i) May have problems paying debts as they fall dueMay not be able to take advantage of cash discountsCannot make the most of opportunities as they occurDifficulties in obtaining further supplies

Or other suitable pointsAny two suitable points – (2) each

[4]

(ii) Injection of more capitalLong-term loansSale of surplus fixed assetsReduce drawings

Or other suitable pointsAny two suitable points – (2) each

[4]

[Total 21]







4 (a) April 1 SalesSuzi sold goods, $10100, on credit to John Karunda.

(2)

April 30 BankJohn paid $1000 to Suzi by cheque.

(2)

May 6 Bank (dishonoured cheque)John's cheque was dishonoured by the bank. The amount wasdebited to John's account to show he still owes this amount.

(2)

December 1 CashJohn paid $850 in cash to Suzi.

(2)

January 3 Bad debtsSuzi wrote off the amount owed by John as a bad debt.

(2)

[10]

(b) Provision for doubtful debts account

$ $2003 2002Jan 31 Balance c/d 800 (2) Feb 1 Balance b/d 900 (1)

Profit and Loss 100 (1) O/F

900 900

2003Feb 1 Balance b/d 800 (1) O/F

Dates (1) [6]







Alternative presentation –

Provision for doubtful debts account

2002Feb 1 Balance

2003Jan 31 Profit and Loss

Dr$

100 (1) O/F

Cr$

900

Balance$

900 Cr (1)

800 Cr (3) C/F

(1) O/F

Dates (1) [6]

(c) Obtain references from new credit customersFix a credit limit for each customerIssue invoices and statements promptlyFollow up overdue accounts promptly Supply goods on a cash basis onlyRefuse further supplies until outstanding account is paid

Or other suitable pointsAny 4 suitable points – (1) each

[4]

[Total 20]







5 (a)

Cobbydale Sports ClubIncome and Expenditure Account for the year ended 30 April 2003

$ $IncomeSubscriptions (6800 + 300) 7100 (1)

Open day - Ticket sales 3250 Less expenses 1950 1300 (2)

8400ExpenditureGeneral expenses 1430 (1)

Insurance 670 Rent of premises (2420 + 220) 2640 (1)

Depreciation - Equipment 550 (1) 5290 Surplus for the year 3110 (1) O/F

[7]Horizontal presentation acceptable.

(b) (i) EitherLoan from memberThis is not regarded as income for the year as it represents a long-term liability.OrPurchase of equipmentThis is not regarded as revenue expenditure as it is the purchase of afixed asset.OrClosing bank balance

This is neither income nor expenditure for the year as it representsthe amount of money in the bank on 30 April.

[2]

(ii) EitherSubscriptions owing Or Rent owingIn each case the item represents an amount relating to the current yearwhich has not actually been received/paid. The matching principle must beapplied so that the amount relates to the current period of time.OrDepreciation of equipmentThis is a non-monetary expense but must be taken into account incalculating the surplus/deficit for the period so that the matching principle isapplied.OrSurplus for the year

This is the difference between the income and expenditure and is the ‘profit’for the year and does not represent money paid/received.

[2]







(c)Cobbydale Sports Club

Balance Sheet as at 30 April 2003

$ $ $ Fixed Assets Cost Depreciation to Book value

dateEquipment 3500 (1) 550 (1) O/F 2950 (1) O/F

Current AssetsSubscriptions due 300 (1)

Bank 1080 (1)

1380Current LiabilitiesAccrual – Rent 220 (1) 1160

4110Accumulated FundSurplus for the year 3110 (1) O/F

Long-Term LiabilitiesLoan* 1000 (1)

4110

* Alternatively, allow as current liability as question does not specify date of repayment.[8]

Horizontal presentation acceptable.

[Total 19]




Grade thresholds taken for Syllabus 0452 (Accounting) in the June 2003 examination.

minimum mark required for grade:maximummark

availableA C E F

Component 1 40 - 24 18 15

Component 2 90 78 63 46 34

Component 3 100 73 49 - -

The threshold (minimum mark) for B is set halfway between those for Grades A and C.The threshold (minimum mark) for D is set halfway between those for Grades C and E.The threshold (minimum mark) for G is set as many marks below the F threshold as the Ethreshold is above it.Grade A* does not exist at the level of an individual component.




UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

International General Certificate of Secondary Education

MARK SCHEME for the June 2004 question papers

0452 ACCOUNTING

0452/01 Paper 1 (Multiple Choice), maximum mark 40

0452/02 Paper 2 (Structured Questions), maximum mark 90

0452/03 Paper 3 (Structured Questions – Extended), maximum mark 100

These mark schemes are published as an aid to teachers and students, to indicate the requirements of the examination. They show the basis on which Examiners were initially instructed to award marks. They do not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. Any substantial changes to the mark scheme that arose from these discussions will be recorded in the published Report on the Examination. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the Report on the

Examination.

• CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the June 2004 question papers for most IGCSE and GCE Advanced Level syllabuses.




Grade thresholds taken for Syllabus 0452 (Accounting) in the June 2004 examination.

minimum mark required for grade: maximum mark

available A C E F

Component 1 40 - 24 18 15

Component 2 90 80 66 46 32

Component 3 100 72 48 - -

The threshold (minimum mark) for B is set halfway between those for Grades A and C. The threshold (minimum mark) for D is set halfway between those for Grades C and E. The threshold (minimum mark) for G is set as many marks below the F threshold as the E threshold is above it. Grade A* does not exist at the level of an individual component.




June 2004

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 40


ACCOUNTING Paper 1 (Multiple Choice)





ACCOUNTING – JUNE 2004 0452 1

© University of Cambridge International Examinations 2004

Question Number

Key Question Number

Key

1 B 21 A

2 B 22 B

3 B 23 B

4 A 24 D

5 C 25 B

6 B 26 A

7 A 27 B

8 B 28 C

9 C 29 A

10 A 30 A

11 B 31 A

12 A 32 A

13 B 33 C

14 B 34 A

15 B 35 A

16 D 36 D

17 A 37 A

18 B 38 C

19 B 39 D

20 B 40 D

TOTAL 40




June 2004

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 90


ACCOUNTING Paper 2 (Structured Questions)







Question Number

Part Mark

1 (a) Machinery, equipment, premises, motor vehicles, or acceptable alternatives

1

(b) (i) Invoice 1 (ii) Purchases Journal/Purchases Day Book/Purchases Book/Purchases 1 (iii) Sales Ledger/Sales 1 (c) (i) $

Cost 46000

- scrap value )1(80005

40000)1(6000==

2

(ii) OF

)1%(20100

)1(40000

8000=× 2

(d) Use of incorrect figure in first place, with double entry carried out

correctly for wrong amount. (Suitable example acceptable.) 1

(e) Customer is in same type of trade; for bulk purchases, or acceptable

alternative. Accept: To enable customer to make profit. 1

(f) Suspense account. 1 (g) ROCE (or N.P. as %age of capital employed); GP: sales; NP: sales.

Gross profit margin, Net profit margin. 1

(h) $ Paid in year 18000 + Balance at 31/3/04 4000 (1) 22000 - Balance at 1/4/03 3000 (1) P/L charge 19000 (1) 3 15

Question Number

Part Mark

2 (a) (i) $25000 (1) (ii) Assets (1) (iii) $3000 (1) (iv) Creditors (1) (v) Capital (1) (vi) $20000 (1) (vii) Drawings (1) 7 (b) (i)

)1(1:2)1(20000

40000$ = 2

(ii) )1(1:8.0)1(

)1(20000

2400040000$ =

−

Must be shown as ratio n:1

3

12







Question Number

Part Mark

3 (a) (i) Purchases account

$ 30 April 2004 Purchases for month 50000 (1) Total/Purchases Journal Purchases Day Book/Creditors

Purchases returns account $ 30 April 2004 Returns for month 6000 (1) (accept as above)

Sales account $ 30 April 2004 Sales for month 85000 (1) (accept as above)

Sales returns account $ 30 April 2004 Returns for month 8000 (1) (accept as above) 4 Marks are for details and correct amount in correct column. (Horizontal format also acceptable)

Lose 1 mark for any wrong or missing date

(ii) Nominal (General) Ledger 1 (b) 1. Carriage inwards is added to cost of Purchases/Cost of Goods sold (1) in

the Trading A/c/Trading and Profit and Loss A/c (1)

2. Carriage outwards is shown as an expense (1) in the P/L A/c/Trading and Profit and Loss A/c (1)

4

(c) (i) Error of principle 1 (ii) Effect on: 1. P/L Account Purchases/Cost of Goods sold are overstated (1), so Gross profit/Net

Profit/Profit is understated (1)

2. Balance Sheet Office equipment/fixed assets is understated (1) Capital/Net profit/profit is understated (1) 4 (iii) DR CR $ $ Office equipment (machinery) 10000 (1) Purchases 10000 (1) 2 16







Question Number

Part Mark

4 (a) (i) Debtors $ $ Balances at 1/4/03 8000 (1) Add Sales for year 90000 (1) 98000 Less Cash received 83000 (1) Discount allowed 5000 (1) 88000 Balances at 31/3/04 10000 (1) (ii) Creditors Balances at 1/4/03 6000 (1) Add Purchases for year 77000 (1) 83000 Less Cash paid 74000 (1) Discount received 3000 (1) 77000 Balances at 31/3/04 6000 (1) 10 (b) Trading Account for the year ended 31 March, 2004 (1) (1) $ $ Sales (90000 + 10000) 100000 Less Cost of goods sold Stock 1/4/03 14000 (1) Add Purchases 77000 (1) 91000 Less Stock 31/3/04 16000 (1) 75000 (1) Needs words

"Cost of Goods

Sold"

Gross Profit 25000 (1)OF 7 (Horizontal format also acceptable) (1) OF = 5 times (1) OF

(c) (i)

15000

75000

(2) (ii) Any

one of: Profitability aspect Stock replacement Comparisons Identifying causes of fluctuationsRemedial/corrective action

Basic statement = 1 Suitable development = 1 Max. mark 2 2

23







Question Number

Part Mark

5 (a) (i) Wood and Coe

Profit and Loss account for the year ended 30 April 2004 $ $ Gross profit 58000 Add Discount received 1000 (1) 59000 Less Discount allowed 2000 (1) General expenses (4500 (1) + 500 (1)) 5000 Rent (13000 (1) – 3000 (1)) 10000 Depreciation (20% x $40000) 8000 (2) Wages and salaries (14500 (1) + 1500 (1)) 16000 41000 Net profit c/d 18000 (1)OF 11 (Horizontal format also acceptable) (ii) Appropriation Account for the year ended 30 April 2004 $ $ $ Net profit b/d 18000 Less Interest on capital: Wood (10% x $70000) 7000 (2) Coe (10% x $20000) 2000 (2) 9000 Salary – Coe 15000 (1) 24000 (no mark if shown in P/L A/c) (6000) Shares of loss: Wood

32 4000 (2)OF

Coe 3

1 2000 (2)OF 6000

- 9 (Horizontal format also acceptable) (b) Interest on drawings discourages large or early cash withdrawals (2)

Thus could improve cash/working capital position (2) Also produces additional residual income/profits for division between partners (2) Any 2 from 3, maximum 4.

4

24




June 2004

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 100


ACCOUNTING Paper 3 (Structured Questions – Extended)







Question 1 (a) Insurance account

2003 $ April 1 Balance 60 (1) July 1 Bank 264 (1)

324 2004

April 1 Balance b/d 66 (1) O/F

2004 $ Mar 31 Profit & Loss 258 (1)O/F Balance c/d 66 (1) 324

+ (1) Dates [6] Alternative presentation Insurance account

2003 April 1 Balance July 1 Bank 2004 Mar 31 Profit & Loss

Debit $ 60 (1) 264 (1)

Credit $ 258 (1) O/F

Balance $ 60 Dr 324 Dr 66 Dr (2)C/F (1)O/F

+ (1) Dates [6] (b) (i) A narrative is a brief explanation of why the entry is being made. [1] (ii) A narrative is necessary because of the great variety of transactions

which are recorded in the journal, so the reason for each entry can be understood in the future.

[2]







(c)

Journal

1. 2. 3.

Drawings Purchases Goods taken for own use (1)

Motor vehicles Motor expenses PJ Motors Purchase of new motor on credit and repairs to old motor (1) Stationery Purchases Correction of error, stationery debited to purchases account (1)

Debit $

60 (1) 15 000 (1) 600 (1) 20 (1)

Credit $ 60 (1) 15 600 (1) 20 (1)

[10] [Total 19] Question 2 (a)

Playground Company

Manufacturing Account for the year ended 31 December 2003

$ $ Cost of raw material Purchases 48 500 (1) Less Closing stock of raw material 2 700 (1) 45 800 Direct factory wages (26900 + 650) 27 550 (1) Prime Cost (1) 73 350 (1) Factory indirect wages 18 400 Factory general expenses 4 930 Factory fuel and power (4700 + 150) 4 850 (1) Depreciation – Factory machinery 1 450 (1) 29 630 102 980 (1) O/F Less Closing stock of work in progress 1 920 (1) Cost of Production(1) 101 060 (1) O/F [12] Horizontal format acceptable

(1)







(b)

Playground Company

Trading Account for the year ended 31 December 2003

$ $ Sales 151 400 (1) Less Cost of sales Cost of Production 101 060 (1) O/F Less Closing stock of finished goods 4 910 (1) 96 150 (1) O/F Gross Profit 55 250 (1) O/F [5] Horizontal format acceptable (c) Reasons why departmental final accounts are required - More meaningful than a single set of results Identifies the profit of each department Enables trading results to be analysed Enables overall profitability to be increased Poor performance of a department can be identified and investigated Or other suitable points Any 2 points (1) each [2] [Total 19] Question 3 (a) When suspense account is required –

When a trial balance fails to balance [1] (b) The second error requires a correcting entry in the suspense account (1) This is required because this error affects the balancing of the trial balance (2) [3]







(c)

Mary Manake

Balance Sheet as at 30 April 2004

$ $ $ Fixed Assets At cost (40000 – 5000) 35 000 (1) Less Depreciation (8000 – 500) 7 500 (1) 27 500 Current Assets Stock 8 500 Debtors 6 100 Prepayments 30 (1) 14 630 (1)O/F Current Liabilities Creditors 5 200 Bank overdraft (2010 + 70) 2 080 (1) 7 280 (1)O/F Working Capital 7 350 (1)O/F 34 850 Capital Balance at 1 May 2003 34 000 Net Profit (8440 + 30 – 70 + 150 – 400) 8 150 (1) (1) (1) (2) 42 150 Drawings 7 300 34 850 (1)O/F Presentation (1) Horizontal presentation acceptable [14] [Total 18] Question 4 (a) Reason for providing a provision for doubtful debts – Ensures that the profits are not overstated (prudence) Ensures that the debtors are shown in the Balance Sheet at a more realistic amount (prudence) Application of the matching principle as the amount of sales unlikely to be paid for are treated as an expense of that particular year Or other suitable reason. Any one reason (2) marks [2]







(b) (i) Ahmed account

[3] (ii)

Bad debts account

[2] (iii)

Bad debts recovered account

2004 $ Mar 31 Profit & Loss* 50(1) 50

2003 $ Sept 1 Cash** 50(1) 50

*Alternatively transfer to Bad debts account, in which case the transfer from Bad debts account to Profit & Loss Account will be $30 on the debit side of Bad debts account

** Alternatively allow “Zaki”, as may be using method where the amount is credited to customer’s account and then debited and transferred to bad debts recovered account [2]

(iv) Provision for doubtful debts account

2004 $ Mar 31 Profit & Loss 50(2) Balance c/d 200(1) 250

2003 $ April 1 Balance b/d 250(1) ___ 250 2004 April 1 Balance b/d 200(1) O/F

[5]

[12]

2003 $ May 1 Sales 100(1) __ 100

2003 $ July 31 Bank 80(1) 2004 Jan 31 Bad debts 20(1) 100

2004 $ Jan 31 Ahmed 20(1) 20

2004 $ Mar 31 Profit & Loss 20(1) 20







(b) Alternative presentation

(i) Ahmed account

2003 May 1 Sales July 31 Bank 2004 Jan 31 Bad debts

Debit $ 100(1)

Credit $ 80(1) 20(1)

Balance $ 100 Dr 20 Dr 0

[3]

(ii) Bad debts account

2004 Jan 31 Ahmed Mar 31 Profit & Loss

Debit $

20(1)

Credit $

20(1)

Balance $

20 Dr 0

[2]

(iii) Bad debts recovered account

2003 Sept 1 Cash** 2004 Mar 31 Profit & Loss*

Debit $ 50(1)

Credit $ 50(1)

Balance $ 50 Cr 0

*Alternatively transfer to Bad Debts account, in which case the transfer from Bad debts account to Profit & Loss Account will be $30 on the debit side of Bad debts account

** Alternatively allow “Zaki”, as may be using method where the amount is credited to customer’s account and then debited and transferred to bad debts recovered account

[2]

(iv) Provision for doubtful debts account

2003 April 1 Balance 2004 Mar 31 Profit & Loss

Debit $ 50(2)

Credit $ 250(1)

Balance $ 250 Cr 200 Cr (2) C/F (1) O/F

[5]

[12]







(c) (i) Write Zanetti’s account off as a bad debt (1) Amount now outstanding for over 1 year with little hope of recovery (1) Or other acceptable explanation (ii) No entries in accounting records are necessary (1) Account is still likely to be paid, there is no evidence yet that it will not be paid by Lim (1) Or other acceptable explanation (iii) Create a provision for doubtful debts of $280 (1)

Must ensure that he does not overstate his net profit for the year (1) Or other acceptable explanation [6] [Total 20]

Question 5 (a) (i) Margin – when the gross profit is expressed as a percentage of the selling price [2] (ii) Mark-up – when the gross profit is expressed as a percentage of the cost price [2]

(b) (i) [6]

Year ended 31 January 2004

Gross profit as a percentage of sales 25200 x 100 = 28% (1) 90000 1 Net profit as a percentage of sales 10800 x 100 = 12% (1) 90000 1 Collection period for debtors 6300 x 365 = 35 days (1) 66000(1) 1 (34.84 days) Payment period for creditors 5700 x 365 = 40 days (1) 52000(1) 1







(b) (ii) All responses to be based on own figure calculations in (b) (i) Gross profit as a percentage of sales – Purchasing goods more cheaply Reducing trade discounts to customers Increasing selling prices Net profit as a percentage of sales- Increase in gross profit percentage Reduction in expenses Differences in types of expenses (fixed/variable) Collection period for debtors – Less efficient credit control Allowing longer credit to maintain sales Not allowing cash discounts to debtors Payment period for creditors – Shortage of liquid funds Knock-on effect of debtors taking longer to pay Suppliers not allowing cash discounts

In each case other suitable points acceptable

In each case – any 2 points (1) each [8] (c) Interested parties – Zaraki (Proprietor) - Assessment of past performance Planning for the future Identifying areas where corrective action is required Manager (if any) – Assessment of past performance Planning for the future Identifying areas where corrective action is required Bank manager – Assessment of prospects of any requested loan/overdraft being repaid when due Assessment of prospects of any interest on loan/overdraft being paid when due Assessment of the security available to cover any loan/overdraft Lenders – Assessment of prospects of any requested loan being repaid when due Assessment of prospects of interest on loan being paid when due Assessment of the security available to cover the loan

Creditors for goods – Assessment of the liquidity position Identifying how long the business normally takes to pay creditors Identifying future trading prospects of the business

In each case other suitable reasons acceptable

Three parties to be identified – (1) each giving a total of (3) One reason required in each case – (1) giving a total of (3) [6]

[Total 24]






MARK SCHEME for the June 2005 question paper

0452 ACCOUNTING

0452/01 Paper 1 (Multiple Choice), maximum raw mark 40

Mark schemes must be read in conjunction with the question papers and the Report on the

Examination.

• CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the June 2005 question papers for most IGCSE and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses’.




Grade thresholds for Syllabus 0452 (Accounting) in the June 2005 examination.

Minimum mark required for grade

Minimum mark

available A C E F

Component 1 40 N/A 22 17 14

The threshold (minimum mark) for B is set halfway between those for Grades A and C. The threshold (minimum mark) for D is set halfway between those for Grades C and E. The threshold (minimum mark) for G is set as many marks below F threshold as the E threshold is above it. Grade A* does not exist at the level of an individual component.




JUNE 2005

IGCSE

MARK SCHEME

MAXIMUM MARK: 40


ACCOUNTING Paper 1 (Multiple Choice)





IGCSE – JUNE 2005 0452 1


Question Number

Key Question Number

Key

1 B 21 D

2 C 22 D

3 A 23 A

4 A 24 A

5 A 25 C

6 C 26 B

7 D 27 A

8 A 28 B

9 B 29 A

10 C 30 D

11 D 31 B

12 D 32 C

13 A 33 C

14 C 34 D

15 C 35 B

16 A 36 A

17 A 37 B

18 D 38 C

19 B 39 B

20 A 40 D







0452 ACCOUNTING

0452/02 Paper 2, maximum raw mark 90

This mark scheme is published as an aid to teachers and students, to indicate the requirements of the examination. It shows the basis on which Examiners were initially instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. Any substantial changes to the mark scheme that arose from these discussions will be recorded in the published Report on the Examination. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the Report on the

Examination.

• CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the June 2005 question papers for most IGCSE and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.





Minimum mark required for grade: Maximum mark

available A C E F

Component 2 90 73 58 39 30





June 2005

IGCSE

MARK SCHEME

MAXIMUM MARK: 90


ACCOUNTING Paper 2





IGCSE – JUNE 2005 0452 2


Question number

Question (including any source details) Part mark

1 (a)

(b) (c) (d) (e) (f) (g) (h)

Cash book, Sales journal, Purchases journal, Sales returns journal, Purchases returns journal, Journal, Petty cash book (any two). An expense incurred in the accounting period but unpaid at the end of the period. Current liabilities. Suspense account. Profit and Loss Account. Error of original entry. Business will continue trading for the foreseeable future. (i) $1,800

(ii) $1,800

(iii) $8,400

(iv) Dr Cr $ $ Profit and Loss Account (accept Depreciation account)

1 800 (1)OF

Provision for depreciation

1 800 (1)OF

[2]

[1]

[1]

[1]

[1]

[1]

[1]

[1]

[1]

[1]

[2]

[Total: 13]





IGCSE – JUNE 2005 0452 2


Question number


2 (a) (b)

Bonnie Clyde Balance Sheet at 31 March 2005

$ $

Fixed Assets Machinery at cost 20 000 (1) Provision for depreciation 12 000 (1) Net book value 8 000 (1) Current Assets Stock 3 000 (1) Debtors 1 000 (1) Bank 500 (1) 4 500 Current Liabilities Creditors 700 (1) Working capital 3 800 11 800 Long term Liability Bank loan (accept if under capital) 2 800 (1) 9 000 Capital Balance at 1 April 2004 6 000 (1) Profit for the year 7 500 (1) 13 500 less drawings 4 500 (1)

9 000 (1) for matching

totals

[Horizontal format acceptable] (i) Current assets less current liabilities (1) Capital needed for day to day running of business (1) (ii) Working capital

$4 500 (1OF) less $700 (1)OF = $3 800 (1)

[12]

[4]

[Total: 16]





IGCSE – JUNE 2005 0452 2


Question number


3 (a) (b)

(c)

Zafira Cash Book

Dr Cr $ $

Balance b/d 620 (1) Bank charges 15 (1) Bank interest 20 (1) Insurance (D/debit) 40 (1) Aisha 130 (1) Dishonoured cheque, (credit transfer) Yanni (either) 65 (1)

Balance c/d 770

650

770 Balance b/d 650 (1)OF [Running balance acceptable] Bank reconciliation statement at 30 April 2005 Balance on updated cash book (from (a) above)

650 (1)OF

Adjustments: add: unpresented cheque 250

900 (1)

less: amount not yet credited 310 (1) Balance on bank statement 590 (2) [Amounts must have narrative] (1)OF

Incorrect entry in cash book Transposition of figures in cash book Addition error on cash book page Item on bank statement omitted from cash book - or similar explanations [Any two - 2 marks each]

[Repeating part (b) = 0]

[7]

[5]

[4]

[Total: 16]





IGCSE – JUNE 2005 0452 2


Question number


4 (a) (b)

Redd - Purchases Ledger

Block account 2005 $ 2005 $ 8 March Purchases

returns 100 (1) 5 March Purchases 320 (1)

30 March Bank 220 (1) 29 March Purchases 270 (1) 31 March Balance c/d 270 (1) 590 590 1 April Balance

b/d 270

(1)OF

Quayle account 2005 $ 2005 $ 31 March Bank

Discount 485 15 500

(1) (1)

17 March Purchases 500 500

(1)

+ (1) for all dates

[need not show year] [Running balance acceptable]

Rent account

2004

2 April Bank 900 (1) 2 July Bank 700 (1) 31 July Bank 200 30 Sept Bank 900 2005 (1) 2005 4 Jan Bank 900 31 March P/L Account 3 600 (1) 29 March Bank 800 (1) Balance c/d 800 (1) 4 400 4 400 1 April Balance b/d 800 (1)OF [Must have narrative]

[Running balance acceptable] + (1) for all dates

[10]

[8]





IGCSE – JUNE 2005 0452 2


Question number


(c) 5 (a) (b)

(i) Costs should be offset against revenues from the same accounting period. (2) Accept example.

(ii) The rent paid in advance on 29 March 2005 relates to the

following accounting year and is therefore subtracted from the amount charged to Profit and Loss Account for the year ended 31 March 2005. (2)

$ Total bank deposits 15 270 Less: cash sales 2 680 (1)

12 590 less: Debtors at 1 April 2004 3 140 (1)

9 450 add: Debtors at 31 March 2005 4 080 (1) Credit sales for year 13 530 (1) [Amounts need narrative]

William Trading and Profit and Loss Account

for the year ended 31 March 2005

$ $ Sales -credit 13 530 (1)OF -cash 2 680 (1) 16 210 Stock at 1 April 2004 1 780 (1) Purchases 9 560 (1) Carriage inwards 280 (1) 11 620 Stock at 31 March 2005 1 920 (1) Cost of goods sold 9 700 (1) Gross profit 6 510 (1)OF Rent 600 Electricity 360 Motor expenses 800 (2) * Insurance 580 Wages 1 370

3 710 Net profit 2 800 (1)OF

* 5 items = 2 marks 1 error = 1 mark 2 errors = 0 marks Error = wrong figure, alien or omission

[4]

[Total: 22]

[4]

[11]





IGCSE – JUNE 2005 0452 2


Question number


(c) (d)

Gross profit/Sales x 100 6 510 (1)OF/16 210 (1)OF x 100 = 40.16% (1)OF (i) Gross profit increased (1) by $90(1) (ii) Revised gross profit percentage: 6 600 (1)OF/16 300 (1)OF x 100 = 40.49% (1)OF

[3]

[2]

[3]

[Total: 23]







0452 ACCOUNTING


This mark scheme is published as an aid to teachers and students, to indicate the requirements of the examination. It shows the basis on which Examiners were initially instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. Any substantial changes to the mark scheme that arose from these discussions will be recorded in the published Report on the Examination. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the Report on the

Examination. • CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the June 2005 question papers for most IGCSE and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses’.





Minimum mark required for grade: Maximum mark

available A C E F

Component 3 100 71 44 N/A N/A





JUNE 2005

IGCSE

MARK SCHEME

MAXIMUM MARK: 100


ACCOUNTING Paper 3





IGCSE – JUNE 2005 0452 3


Question 1 (a) Current Accounts

James Susan James Susan

$ $ $ $

2004 2004

May 1 Balance b/d 400 May 1 Balance b/d 2 000

2005 2005

Apl 30 Drawings 6 000 10 000(1) Apl 30 Interest on capital 1 050 600(1)

Interest on drawings 300 500(1) Partner’s salary 7 000(1)

Balance c/d 3 350(1) Share of profit 4 250 4 250(1)

Balance c/d 1 400(1)

6 700 13 850 6 700 13 850

2005 2005

May 1 Balance b/d 1 400 May 1 Balance b/d 3 350

(1)O/F (1)O/F

The marks for interest on capital, profit shares, drawings, and interest on drawings are for both

figures Alternatively allow two separate “T” accounts [9] Alternative presentation

James Current Account Debit Credit Balance $ $ $ 2004 May 1 Balance 400 400 Dr 2005 Apl 30 Drawings 6 000 6 400 Dr Interest on drawings 300 6 700 Dr Interest on capital 1 050 5 650 Dr Share of profit 4 250 1 400 Dr (2)C/F (1)O/F

Susan Current Account

Debit Credit Balance $ $ $ 2004 May 1 Balance 2 000 2 000 Cr 2005 Apl 30 Drawings 10 000 8 000 Dr Interest on drawings 500 8 500 Dr Interest on capital 600 7 900 Dr Partner’s salary 7 000 (1) 900 Dr Share of profit 4 250 3 350 Cr (2)C/F (1)O/F

Drawings (1) for both figures Interest on drawings (1) for both figures Interest on capital (1) for both figures Profit shares (1) for both figures [9]





IGCSE – JUNE 2005 0452 3


(b) Capital Accounts James Susan Anna James Susan Anna $ $ $ $ $ $ 2005 2005 May 1 Goodwill 8 000 (1) 2 000 (1) 2 000 (1) May 1 Balance b/d 35 000 (1) 20 000 (1) Balance c/d 33 000 (1) 24 000 (1) 24 000 (1) Bank 26 000 (1) Goodwill 6 000 (1) 6 000 (1) 41 000 26 000 26 000 41 000 26 000 26 000 2005 May 2 Balance b/d 33 000 24 000 24 000 (1)O/F (1)O/F (1)O/F

Alternatively allow three separate “T” accounts [14] Total [23]

Alternative presentation

James Capital Account Debit Credit Balance $ $ $ 2005 May 1 Balance 35 000 (1) 35 000 Cr Goodwill 6 000 (1) 41 000 Cr Goodwill 8 000 (1) 33 000 Cr (2)C/F (1)O/F

Susan Capital Account

Debit Credit Balance $ $ $ 2005 May 1 Balance 20 000 (1) 20 000 Cr Goodwill 6 000 (1) 26 000 Cr Goodwill 2 000 (1) 24 000 Cr (2)C/F (1)O/F

Anna Capital Account

Debit Credit Balance $ $ $ 2005 May 1 Bank 26 000 (1) 26 000 Cr Goodwill 2 000 (1) 24 000 Cr (2)C/F (1)O/F

[14] Total [23]





IGCSE – JUNE 2005 0452 3


Question 2 (a) To ensure no transactions are forgotten/overlooked (not relying on human memory) To enable profit to be calculated To enable the financial position of the business to be ascertained Or other suitable point Any 2 items (1) each [2] (b) The accounting records of a business are maintained from the viewpoint of the business. The business and the owner of the business are regarded as being separate entities.

The personal transactions of the owner of the business are not recorded in the accounting records of the business. Any 2 items (1) each [2]

(c) Jane Joda Trading Account for the year ended 31 March 2005

$ $ $ Sales - Credit 10 900 (1)O/F Cash 6 600 (1) 17 500 Less Cost of sales Opening stock 9 500 (1) Purchases 22 000 (1) 31 500 Less Closing stock 17 500 (1) 14 000 (1)

Gross Profit 3 500 (2)C/F

(1)O/F Horizontal format acceptable [8] (d) (i) Comparison with the results of other businesses (1) of a similar size/type (1) [2] (ii) Improve profitability Increase sales (in total or of certain products) Review stock levels Direct investment into new areas Or other suitable point Any one point required – (1) for basic point (1) for suitable development [2] (iii) Any two of the following – Information must be - capable of being independently verified free from bias free from significant errors

prepared with suitable caution being applied to any judgements and estimates which are necessary Any two items (2) each [4]

Total [20]





IGCSE – JUNE 2005 0452 3


Question 3 (a) (i) 1 Current ratio $22 000 : $14 500 (1) = 1.52 : 1 (1) 2 Quick ratio ($22 000 – 12 000) : $14 500 (1) = 0.69 : 1 (1) [4] (ii) Quick ratio [1]

Stock is not regarded as a liquid asset – a buyer has to be found and then the money

collected. Some stock may prove to be unsaleable. The quick ratio shows whether the business would have any surplus liquid funds if all the current liabilities were paid immediately from the liquid assets. Any one reason (2) marks [2]

(b) Return on capital employed (using closing capital figure)

1

100

$52500

$4950× (1) = 9.43% (1) [2]

(c) (i) Collection period for debtors

1

365

$69300

$9500× (1) = 50.04 days (51 days) (1) [2]

(ii) 1 Not satisfied – if (c)(i) is more than 30 days

Or – satisfied if (c)(i) is less than 30 days [1] 2 Debtors are allowed 30 days credit but on average are taking 51 days

Or suitable explanation based on O/F answer to (c)(i). [1] (d) (i) Payment period for creditors

1

365

$47600

$6300× (1) = 48.31 days (49 days) (1) [2]

(ii) Advantage of paying creditors before due date –

May be able to take advantage of cash discounts Improves the relationship with suppliers Or other suitable comment One advantage required (1) [1]

(iii) Disadvantage of paying creditors before due date – The business is deprived of the use of the money earlier than necessary Or other suitable comment One disadvantage required (1) [1]

Total [17]





IGCSE – JUNE 2005 0452 3


Question 4

(a) (i) The Income and Expenditure Account is equivalent to a Profit and Loss Account of a trading organisation. (1) It is used to calculate the annual surplus or deficit. (1) Or other suitable points [2]

(ii) The accumulated fund is equivalent to the capital of a trading organisation, the difference between the assets and the liabilities. (1) The annual surpluses (less any deficits) accumulate within a non-trading organisation to form the accumulated fund. (1) [2]

(b) Siltones Music Society Receipts and Payments Account for the year ended 31 March 2005 2004 $ 2005 $

Apl 1 Balance 2 210 (1) Mar 31 Concert expenses 1 250 (1)

2005 Rent 1 820 (1)

Mar 31 Subscriptions 5 800 (1) General expenses 215 (1)

Concert receipts 1 900 (1) Insurance 325 (1)

Proceeds of sale of instruments 700 (1) Purchase of new instruments 3 350 (1)

Balance c/d 3 650

10 610 10 610

2005

Apl 1 Balance b/d 3 650 (1)O/F

[10]

(c) Siltones Music Society Subscriptions account 2004 $ 2005 $ Apl 1 Balance b/d 1000 (1) Mar 31 Bank 5800 (1) 2005 Mar 31 Balance c/d 800 (1) Income and Expenditure (1) 4000 (1) 5800 5800 2005 Apl 1 Balance b/d 800 (1)

Dates (1) [7]


Siltones Music Society Subscriptions account Debit Credit Balance $ $ $ 2004 Apl 1 Balance 1000 (1) 1000 Dr 2005 Mar 31 Bank 5800 (1) 4800 Cr Income and Expenditure (1) 4000 (1) 800 Cr (2) Dates (1)

[7]

Total [21]





IGCSE – JUNE 2005 0452 3


Question 5 (a) To make the totals of the trial balance agree (1) and so that draft final accounts may be

prepared. (1) [2]

(b) Ahmed Shafiq Journal Debit Credit $ $ 1. Suspense account 390 (1) Commission received account 390 (1) 2. Mutua account 400 (1) Mutola account 400 (1) Suspense account 800 (1) 3. Stationery account 20 (1) Purchases account 20 (1) 4. Discount allowed account 15 (1) Limo 15 (1) 5. Sales returns account 420 (1) Purchases returns account 240 (1) Suspense account 660 (1)

[12]

(c) Ahmed Shafik Statement of corrected net profit for the year ended 31 January 2005 $ Net profit before corrections

Effect on net profit 16 000

+ – $ $ Error 1 390 2 No effect (1) 3 No effect (1) 4 15 (1) 5 660 (1) 390 675 285

Corrected net profit 15 715 (1) O/F

[5] Total [19]






MARK SCHEME for the May/June 2006 question paper

0452 ACCOUNTING

0452/01 Paper 1 – Multiple Choice, maximum raw mark 40


Examination. The minimum marks in these components needed for various grades were previously published with these mark schemes, but are now instead included in the Report on the Examination for this session.

• CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the May/June 2006 question papers for most IGCSE and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.





IGCSE – May/June 2006 0452 01


Question

Number

Key

Question

Number

Key

1 C 21 C

2 D 22 C

3 A 23 D

4 B 24 B

5 C 25 A

6 B 26 B

7 C 27 C

8 B 28 A

9 C 29 D

10 C 30 C

11 B 31 B

12 C 32 D

13 B 33 C

14 A 34 B

15 D 35 A

16 A 36 D

17 B 37 D

18 B 38 A

19 D 39 C

20 C 40 C







0452 ACCOUNTING











Question Number

Question (including any source details) Part Mark

1 (a) Cash book [1] (b) Matching [1] (c) Fixed assets [1] (d) A transaction completely omitted from the books e.g. cash sales not recorded

[1]

(e) Income Expense Discount received � (1) Carriage outwards � (1) Interest on bank deposit � (1) Bad debt written off � (1) [4]

(f) Interest on capital, partners salaries, interest on drawings (any two) [2] (g) Current assets less current liabilities [2] (h) (i) $200 less $65 = $135 [1] (ii) Missing voucher or $10 lost/pilfered from cash box [2] (i) (i) Current assets less stock/current liabilities [2] (ii) Shows whether the business has sufficient liquid assets to meet its

current liabilities [2]

Total marks [19]







Question Number


2 (a) Loretti Journal $ $

Office furniture 1 500 (1) Stock 12 000 (1) Bank 5 300 (2) Cash 200 (1) Loan – Hassan 3 000 (1) Capital – Loretti 16 000 (2) 19 000 19 000

[8] See next page for 2 (b)







Question Number


3 (a) Hilota – Trial balance at 31 March 2006 $ $

Fixed assets 22 000 (1) Provision for depreciation 9 300 (1) Stock at 1 April 2005 3 200 (1) Balance at bank 1 550 (1) Sales 56 500 (1) Sales returns 500 (1) Purchases 34 200 (1) Carriage outwards 950 (1) Rent 4 000 Wages 7 200 (1) General expenses 2 600 Capital 20 000 (1) Drawings 9 600 (1) Totals 85 800 85 800 (1) to agree

total

[12] (b) Hilota Trading account for the year ended 31 March 2006 $ $

Sales 56 500 (1) less sales returns 500 (1) 56 000 Opening stock 3 200 (1) Purchases 34 200 (1) 37 400 less closing stock 3 800 (1) Cost of goods sold 33 600 (1) Gross profit 22 400 (1) OF

[7] (c) Gross profit percentage = Gross profit/net sales = 22 400 (1)(OF)/56 000 (1) x 100 = 40.00% (1) [3] (d) If no sales returns, use gross sales: Gross profit percentage = 22 900 (1)(OF)/56 500 (1) x 100 = 40.43% (1) [3] Total marks [25]







Question Number


4 (a) Stock is valued at the lower (1) of cost (1) and net realisable value (1) [3] (b) Rudi- stock valuation $ $

Part A005: 250 (1) units @ $1.30 per unit (1) 325.00 (1) Part B017: 600 (1) units @ $1.80 per unit (2) 1 080.00 (1) Part C060: 150 (1) units @ $2.50 per unit (1) 375.00 (1) add: carriage inwards 3 x $25 = 75.00 (1) 450.00 Total value of stock 1 855.00 (1)

[12] (c) Prudence [2] Total marks [17] 5 (a) Rajit Summary Balance Sheet at 31 December 2005 Cost Provision for

depreciation Net book value

$ $ $ Fixed assets 62 500 (1) 12 500 (1) 50 000 (1) Current assets 47 000 (1) less current liabilities 19 000 (1) Net current assets/working capital 28 000 (1) 78 000 Financed by Capital at 1 January 2005 74 000 (1) Add Profit for the year 13 000 (1) 87 000 less drawings 9 000 (1) 78 000 (1) to agree

balance

[10] (b) Return on capital employed = profit/opening capital = 13 000 (1)/74 000 (1) = 17.57% (1) [3] Total marks [13]







0452 ACCOUNTING











1 (a) Tarek Wahid Cash Book

Date

Details

Discount Allowed

Cash

Bank Date Details Discount Received

Cash Bank

$ $ $ $ $ $ 2006 2006 April 1 Balances b/d 125 6 750 April 5 Asmaa El Zein (dishonoured cheque) (1) 230

10 Mohammed Riyas (1) 12 468 16 Motor vehicle (1) 9 900

29 Sales (1) 2 150 Motor expenses (1) 80

30 Cash (1) 2 175 24 Salma Abbas (1) 14 546 Balance c/d 1 363 30 Bank (1) 2 175 Balance c/d 100 12 2 275 10 756 14 2 275 10 756 May 1 Balance b/d (1) O/F 100 May 1 Balance b/d (1) O/F 1 363

+ (1) Totalling discount columns

[11]







(b) The bank statement is a copy of the account of the business as it appears in the books of the bank. This is from the viewpoint of the bank – the business depositing money is a creditor of the bank.

The bank account in the cash book is prepared from the viewpoint of the business – the bank is a debtor of the business which has deposited the money. [2]

(c) Tarek Wahid

Calculation of bank statement balance at 30 April 2006

$ Balance as per cash book (1363) (1) O/F Plus cheque not yet presented – Salma Abbas 546 (1)

(817) Less amount not yet credited 2175 (1) O/F Balance as per bank statement (2992) (1) O/F

Alternative presentation acceptable [4]

(d) $1363 (1) O/F Liability (1) O/F [2]

[Total 19] 2 (a)

Susan Sawka Purchases Ledger Control account

2006 $ 2006 $ Mar 1 Balance b/d 120 (1) Mar 1 Balance b/d 9 500 (1)

31 Purchases returns 135 (1) 31 Purchases 7 420 (1) Bank 8 780 (1) Discount received 20 (1) Contra item 380 (1) Balance c/d 7 485 (1) O/F 16 920 16 920 April 1 Balance b/d 7 485 (1) O/F

+ (1) for dates [10] Alternative presentation

Susan Sawka Purchases Ledger Control account

Debit Credit Balance

2006 $ $ $ Mar 1 Balances 120 (1) 9 500 (1) 9 380 Cr

31 Purchases 7 420 (1) 16 800 Cr Purchases returns 135 (1) 16 665 Cr Bank 8 780 (1) 7 885 Cr Discount received 20 (1) 7 865 Cr Contra item 380 (1) 7 485 Cr (2) O/F

+ (1) for dates [10]







(b) Reasons for a debit balance Overpayment of amount due Cash discount not deducted before payment made Returned goods after payment of amount due Payment made to creditor in advance Or other suitable point Any 2 points (1) each [2] (c) A purchases ledger control account acts as a check on the purchases ledger. If there is an

error in the purchases ledger it will not be revealed by a control account prepared from the individual accounts in that ledger. [2]

(d) Payment period for creditors 7 485 O/F from (a) x 365 = 30.56 days = 31 days (1) O/F 89 400 (1) 1 [2] (e) 1 Not satisfied – if (d) is more than 14 days (1) Or – satisfied – if (d) is less than 14 days 2 Susan is allowed 14 days credit but is taking an average of 31 days (1) Or suitable explanation based on O/F answer to (d) [2] [Total 18] 3 (a)

Safat Judo Club Income and Expenditure Account for the year ended 31 January 2006

$ $

Income Subscriptions (10 650 – 250 (1) – 400 (1)) 10 000 Competition – entrance fees 800 less cost of prizes 210 590 (2) 10 590 Expenditure General expenses 2 645} Travelling expenses 830}

(1)

Rent (2 600 – 50 (1) – 100 (1)) 2 450 Loss on sale of motor vehicle (2 000 – 1 750) 250 (1) Depreciation – motor vehicle (10 000 – 8 500) 1 500 (1) 7 675 Surplus for the year 2 915 (1) O/F

Horizontal presentation acceptable [10]







(b) Safat Judo Club

Balance Sheet at 31 January 2006

$ $ Fixed Assets Motor vehicle at valuation 8 500 (1) Current Assets Rent prepaid 100 (1) Bank (3 150 + 13 200 - 16 285) 65 (2) 165 Current Liabilities Subscriptions prepaid 400 (1) (235) 8 265 Accumulated Fund Opening balance (3 150 + 2 000 + 250 – 50) 5 350 (2) Surplus for the year 2 915 (1) O/F 8 265

Horizontal presentation acceptable [8] (c) Reasons why bank balance does not equal surplus/deficit – R & P A/c shows total money paid and received I & E A/c adjusts figures for accruals and prepayments I & E A/c includes non-monetary items such as depreciation I & E A/c includes only revenue items Or other relevant points Any 2 acceptable points (1) each [2] [Total 20]







4 (a) John Chan

Sales Ledger

Wan Tan account

2006 $ 2006 $ April 1 Balance b/d 880 April 17 Bank 858 (1)

11 Sales 320 (1) Discount 22 (1) 30 Balance c/d 320 (1) 1 200 1 200

2006 May 1 Balance b/d 320 (1) O/F

Carol Lee account

2006 $ 2006 $ April 1 Balance b/d 270 April 21 Returns 72 (1)

6 Sales 168 (1) 28 Cash 300 (1) 29 Bad Debts 66 (1) 438 438

+ (1) for dates

[10] Alternative presentation

John Chan Sales Ledger

Wan Tan account


2006 $ $ $ April 1 Balance b/d 880 880 Dr

11 Sales 320 (1) 1 200 Dr 17 Bank 858 (1) 342 Dr

Discount 22 (1) 320 Dr (2) O/F







Carol Lee account


2006 $ $ $ April 1 Balance 270 270 Dr

6 Sales 168 (1) 438 Dr 21 Returns 72 (1) 366 Dr 28 Cash 300 (1) 66 Dr 29 Bad debts 66 (1) O/F 0

+ (1) for dates

[10] (b) (i) Matching OR Prudence [1] (ii) Matching To ensure that the amount of sales for the year which are unlikely to be paid are treated

as an expense of that particular year. OR Prudence To ensure that the profit is not overstated and that the asset of debtors in the Balance

Sheet shows a more realistic amount. [2] (c) (i) The $80 transferred to the Profit and Loss Account is the difference between the

provision for doubtful debts at the start of the year and the provision required to carry forward to next year. In this case it is the amount of surplus provision not required. (2)

(ii) This amount will be credited to the Profit and Loss Account. (1) [3] (d) Collection period for debtors – 7 190 x 365 (1) = 31.43 days = 32 days (1) 83 500 1 [2] (e) Ways of improving the collection period for debtors Offer cash discount for prompt payment Charge interest on overdue accounts Improve credit control Refuse further supplies on credit until any outstanding balance is paid Or other relevant points Any 3 acceptable points (1) each [3] [Total 21]







5 (a) David and Janet Szabo

Capital accounts

David Janet David Janet 2006 $ $ 2005 $ $ Jan 1 Current a/c (1) 3 000 Mar 1 Balance b/d (1) 19 000 14 000Feb 28 Balance c/d 16 000 16 000 2006 Feb 1 Cash (1) 2 000 19 000 16 000 19 000 16 000 2006 Mar 1 Balance b/d (1) 16 000 16 000

+ (1) for dates

Alternatively allow 2 separate “T” accounts [5] Alternative presentation

David Capital account

Debit Credit Balance 2005 $ $ $ Mar 1 Balance 19 000 19 000 Cr 2006 Jan 1 Current account 3 000 16 000 Cr

Janet Capital account


2005 $ $ $ Mar 1 Balance 14 000 14 000 Cr 2006 Feb 1 Cash 2 000 16 000 Cr

Opening balances (1) for both figures David current account transfer (1) Janet cash introduced (1) Closing balances (1) for both figures + (1) for dates [5]







(b) David and Janet Szabo

Departmental Trading and Profit and Loss Account for the year ended 28 February 2006

Men’s Clothing Department

Ladies’ Clothing Department

$ $ $ $ Sales 16 000 32 000 (2) Less Cost of sales Opening stock 1 000 2 200 (1) Purchases 12 000 26 700 (1) Carriage inwards 50 150 (1) 13 050 29 050 Less Closing stock 1 500 1 800 (1) 11 550 27 250 (1) Gross Profit 4 450 4 750 (1)O/F Less expenses 1 420 2 840 (2) Net Profit 3 030 1 910 (1)O/F

Horizontal format acceptable [11]

(c) A new partner joining an existing partnership will benefit from the Goodwill built up by the

existing partners, who must be compensated for this. [2] (d) (i) Explanation of – Will have a share in the profits Can take part in decision-making Prospects for the future Or other relevant points Any 2 points (1) each [2] (ii) Explanation of – Will be personally liable for the debts of the firm Will have greater responsibility Will probably have to invest capital Or other relevant points Any 2 points (1) each [2] [Total 22]







0452 ACCOUNTING


Mark schemes must be read in conjunction with the question papers and the report on the examination.

• CIE will not enter into discussions or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the May/June 2007 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.






© UCLES 2007

Question Number

Key Question Number

Key

1 B 21 B

2 D 22 B

3 B 23 D

4 B 24 C

5 A 25 D

6 B 26 A

7 C 27 B

8 C 28 D

9 A 29 C

10 A 30 C

11 D 31 A

12 C 32 C

13 A 33 D

14 C 34 D

15 B 35 A

16 B 36 D

17 C 37 A

18 D 38 B

19 B 39 B

20 B 40 B







0452 ACCOUNTING


This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began.

All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated.








© UCLES 2007

1 (a) Statement (of account) [1] (b) Rent, rates, water, insurance in advance (or similar) Utilities (e.g. gas, electricity, telephone) paid in advance Not prepayments [1] (c) Nominal or general (not personal or private) Not journal [1] (d) List of balances in the general (nominal) ledger at a given date [1] (e) Profit and loss appropriation account [1] (f) Outstanding lodgements, uncredited or unpresented cheques Items found in updating cash book, e.g. direct debits, bank interest, charges, dishonoured cheques, bank or cash book errors [2] (g) error of omission, commission, principle, compensating error, error of original entry, complete reversal (any one) [1] (h) Purchase of shop – capital [1] Broken glass – revenue [1] Cash register – capital [1] Advertisement – revenue [1] (i) Net profit percentage = (GP – expenses)/sales × 100% GP = 32 000 [1], Expenses = 20 000, NP = 12 000 [1]OF Sales = 80 000 [1] – must be shown in calculation Net profit percentage = 15.00% [1]OF (need not show % sign, but no other sign or description allowed) [4] [Total: 16]






© UCLES 2007

2 (a) (i) 5000 [1] (ii) 1 April 2006 (must include year) [1] (iii) 80 000 [1] (iv) Inwards/(accept “in”) [1] (v) 37 000 [1] (vi) 5600 [1] (vii) Net profit (must show “net”) [1] (viii) 27 800 [1]OF only if wrong gross profit [8] (b) Rate of stock turnover = Cost of sales / average stock = 88 000 [1] / (42 000 + 36 000) [1] /2 [1] = 2.26 times [1]OF (accept 2.25 times) Alternative (reciprocal) calculation gives 161 or 162 days [4] (c) (i) Newsagent, petrol station, food store etc. hairdressing salon, clothing shop, but not bank [2] (ii) Furniture, carpets, cars, machines, etc. [2] [Total: 16]






© UCLES 2007

3 (a) Note: Date, narrative and amount required for each mark Complete reversal of account – no marks

Sales

30 April Trading Account 500 [1] 3 April Cash (sales) 500 [1]

(or Profit & Loss A/c) (not “Bank”)

Ahmed

1 April Balance b/d 2 850 [1] 12 April Bank 1 200 [1]

29 April Bank 650 [1]

30 April Balance c/d 1 000

2 850 2 850

1 May Balance b/d 1 000 [1]OF

Rent

1 April Bank 900 [1] 30 April Balance c/d 600

30 April Profit & Loss A/c 300 [1]

900 (not Trading A/c) 900

1 May Balance b/d 600 [1]OF only if Bank entry is correct

Electricity

6 April Bank 120 [1] 30 April Profit and Loss A/c 180 [1]OF

30 April Balance c/d 60 (not Trading A/c)

180 180

1 May Balance b/d 60 [1]

Wages

29 April Cash 700 [1] 30 April Profit and Loss A/c 700 [1]

Drawings

21 April Cash 800 [1] 30 April Capital 800 [1]

(or balance c/d)

[16] (b) Send statement of account Offer cash discount – not trade discount Refuse further business Refer to debt collectors Charge interest Offer future incentives Etc. Any two, 2 marks each [4] [Total: 20]






© UCLES 2007

4 (a) Note – Narrative and correct amount required for each mark Correct dates required for additional marks Complete reversal of account – no marks Account in note or memorandum form – no marks

Provision for depreciation – cooker

2006 31 March Balance c/d 180

2006 31 March Profit and Loss A/c 180 [1] (or Depreciation A/c)

1 April Balance b/d 180 [1]

2007 31 March Balance c/d 360

2007 31 March Profit & Loss A/c 180 [1]

360 360

1 April Balance b/d 360 [1]

+ [1] for dates

Provision for depreciation – motor van

2007 31 March Balance c/d 1 500

2007 31 March Profit & Loss A/c 1 500 [1] (or Depreciation A/c)

1 April Balance b/d 1 500 [1]

+ [1] for dates (b) Net book values: (i) the cooker: $ 840 [1]OF (ii) the motor van $ 4 500 [1]OF based on one year only [2] (c) Paula

Balance Sheet at 31 March 2007 (extract) Cost Provision for Net book depreciation value Fixed assets $ $ $ Machinery (cooker) 1200 [1] 360 [1]OF 840 [1]OF* Motor van 6000 [1] 1500 [1]OF 4500 [1]OF* Totals 7200 1860 5340 * OF marks based on answers in part (a) [6] [Total: 16]






© UCLES 2007

5 (a) To prepare final account To check arithmetical accuracy of books To check accounts balance To locate errors Other acceptable reason [1] (b) Ismail Khan

Trial balance at 30 April 2007 $ $ Sales 125 000 [1] Stock 14 500 [1] Purchases 76 000 [1] Bank (overdraft) 2 300 [1] Machinery 9 000 [1] Debtors 1 700 [1] Creditors 2 800 [1] Expenses 37 500 [1] Capital 15 500 [1] Drawings 8 000 [1] Suspense 1 100 [1]OF* 146 700 146 700 *OF mark awarded if account balances. May be shown

Separately but must be labelled “Suspense” [11] (c)

Dr Cr

Suspense 2 000 [1]

Sales 2 000 [1]

To correct cash sales omitted [1] (error of single entry)

Drawings 400 [1]

Suspense 400 [1]

To correct error in drawings account [1] (error of double entry)

Cash 500 [1]

Suspense 500 [1]

To include cash balance in trial balance [1] (error of single entry)

[9] (d) Nil [1]OF [1] [Total: 22]







0452 ACCOUNTING


This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of

the examination. It shows the basis on which Examiners were instructed to award marks. It does not

indicate the details of the discussions that took place at an Examiners’ meeting before marking began.

All Examiners are instructed that alternative correct answers and unexpected approaches in

candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills

demonstrated.

Mark schemes must be read in conjunction with the question papers and the report on the

examination.

• CIE will not enter into discussions or correspondence in connection with these mark schemes.

CIE is publishing the mark schemes for the May/June 2007 question papers for most IGCSE, GCE

Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.






© UCLES 2007

1 (a) Work can be shared between several people

Easier for reference as same type of accounts are kept together

Easier to introduce checking procedures

Or other suitable point

Any 1 point [1] [1]

(b)

Purchases Ledger

Oman El Gamal account

2007

Mar 19 Bank

Discount recd

$

429

11

440

[1]

[1]

2007

Mar 8 Purchases

$

440

440

[1]

Mohammed El Wakil account

2007

Mar 24 Purchase returns

26 Cash

31 Balance c/d

$

128

110

66

304

[1]

[1]

[1]

2007

Mar 21 Purchases

2007

Apr 1 Balance b/d

$

304

304

66

[1]

[1]

O/F

+ [1] Dates

[9]

(b) Alternative presentation

Omar El Gamal account

2007

Mar 8 Purchases

19 Bank

Discount recd

Debit

$

429

11

[1]

[1]

Credit

$

440

[1]

Balance

$

440

11

0

Cr

Cr

Mohammed El Wakil account

2007

Mar 21 Purchases

24 Purchase returns

26 Cash

Debit

$

128

110

[1]

[1]

Credit

$

304

[1]

Balance

$

304

176

66

Cr

Cr

Cr

[2]C/F

[1]O/F

+ [1] Dates

[9]






© UCLES 2007

(c)

Nominal Ledger

Purchases account

2007

Mar 31 Total from

purchases journal

Cash

$

744

990

[1]

[1]

Purchases returns account

2007

Mar 31 Total from

returns journal

$

128

[1]

[3]

(c) Alternative presentation

Purchases account

2007

Mar 31 Total from

purchases journal

Cash

Debit

$

744

990

[1]

[1]

Credit

$

Balance

$

744

1 734

Dr

Dr

Purchases returns account

2007

Mar 31 Total from

returns journal

Debit

$

Credit

$

128

[1]

Balance

$

128

Cr

[3]

(d) Assist in the location of errors

Provide instant totals of debtors/creditors

Proves the arithmetical accuracy of sales/purchases ledgers

Enable the Balance Sheet to be prepared quickly

Provide a summary of the transactions relating to debtors/creditors

Provide an internal check on sales/purchases ledgers – may reduce fraud

Or other relevant points

Any 2 points [1] each [2]

(e)

Item Entry in sales ledger

control account

(ii) Cheques received from debtors credit [1]

(iii) Trade discount allowed to debtors no entry [1]

(iv) Contra item transferred to purchases ledger credit [1]

[3]

[Total: 18]






© UCLES 2007

2 (a) (i) So that the profits for the year are not over-stated [1]

(ii) So that the debtors in the Balance Sheet are shown at a realistic amount [1] [2]

(b) Matching principle [1]

(c) (i)

J.Ukata account

2006

Feb 4 Sales

Mar 1 Sales

$

900

80

980

[1]

2006

Mar 1 Bank

Discount

2007

Jan 31 Bad debts

$

873

27

80

980

[1]

[1]

[1]

(ii)

Bad debts account

2007

Jan 31 J.Ukata

$

80

80

[1]

2007

Jan 31 Profit & Loss

$

80

80

[1] O/F

(iii)


2007

Jan 31 Profit & Loss*

$

35

35

[1]

2006

Dec 31 Cash

$

35

35

[1]

(iv)


2007

Jan 31 Balance c/d

$

200

200

[1]

2006

Feb 1 Balance b/d

2007


2007

Feb 1 Balance b/d

$

150

50

200

200

[1]

[1]

[1]O/F

[12]

* Alternatively, transfer to bad debts account. The transfer from bad debts to profit & loss

would then be $45.






© UCLES 2007

(c) Alternative presentation

(i)

J.Ukata account

2006

Feb 4 Sales

Mar 1 Sales

Bank

Discount

2007

Jan 31 Bad debts

Debit

$

900

80

[1]

Credit

$

873

27

80

[1]

[1]

[1]

Balance

$

900

980

107

80

0

Dr

Dr

Dr

Dr

(ii)

Bad debts account

2007

Jan 31 J.Ukata

Profit & Loss

Debit

$

80

[1]

Credit

$

80

[1]O/F

Balance

$

80

0

Dr

(iii)


2006

Dec 31 Cash

2007

Jan 31 Profit & Loss*

Debit

$

35

[1]

Credit

$

35

[1]

Balance

$

35

0

Cr

(iv)


2006

Feb 1 Balance

2007


Debit

$

Credit

$

150

50

[1]

[1]

Balance

$

150

200

Cr

Cr [2]C/F

[1]O/F

[12]

* Alternatively, transfer to bad debts account. The transfer from bad debts to profit & loss

would then be $45.

(d)

Item Overstated Understated

(ii)

Net profit for the year ended 31

January 2007

$

50

[1]

$

No effect

[1]

(iii)

Total of current assets in Balance

Sheet at 31 January 2007

200 O/F [1]

No effect

[1]

[4]

[Total: 19]






© UCLES 2007

3 (a)

Jamil and Sara Suliman

Trading Account for the year ended 30 April 2007

Sales

Less cost of sales

Opening stock

Purchases

Less Closing stock – Stock remaining

Stock lost

Gross profit

$

4 500

2 500

[1]

[2]

[1]

C/F

O/F

$

5 000

26 000

31 000

7 000

[1]

[1]

$

30 000

24 000

6 000

[1]

(2)


(b) Calculation of net profit –

Gross profit

Less Expenses

Net profit

$

6000

4600

1400

[1]

O/F

O/F

[1]

(c) Calculation of partners’ share of the residual net profit/loss –

Net profit

Interest on capital – Jamil

Sara

Share of loss – Jamil

Sara

$

2000

1000

800

800

[1]

O/F

$

1400

3000

(1600)

(1600)

[1]

[1]

O/F

[3]

(d)

Current accounts

2006

May 1 Balance b/d

2007

Apr 30 Drawings

Share of Loss

2007

May 1 Balances b/d

Jamil

$

200

3100

800

4100

2100

Sara

$

2800

800

3600

2000

[1]

[1]

[1]

O/F

O/F

2006

May 1 Balance b/d

2007

Apr 30 Interest on capital

Balances c/d

Jamil

$

2000

2100

4100

Sara

$

600

1000

2000

3600

[1]

[1]

In all cases the marks are for suitable wording and two figures

Alternatively allow two separate “T” accounts [5]






© UCLES 2007

(d) Alternative presentation

Jamil Current account

2006

May 1 Balance

2007

Apr 30 Drawings

Share of loss

Interest on Capital

Debit

$

200

3100

800

Credit

$

2000

Balance

$

200

3300

4100

2100

Dr

Dr

Dr

Dr

Sara Current account

2006

May 1 Balance

2007

Apr 30 Drawings

Share of loss

Interest on Capital

Debit

$

2800

800

Credit

$

600

1 000

Balance

$

600

2200

3000

2000

Cr

Dr

Dr

Dr

Opening balances [1] for suitable wording and two figures

Drawings [1] for suitable wording and two figures

Share of loss [1] O/Fs for suitable wording and two figures

Interest on capital [1] for suitable wording and two figures

Closing balances [1] O/Fs for two figures

[5]

(e) (i) To enter goodwill on the books

account(s) to be

debited

$ account(s) to be

credited

$

Goodwill

20 000

[1]

Jamil Capital

Sara Capital

10 000

10 000

[1]

[1]

(ii) To write off the goodwill

account(s) to be

debited

$ account(s) to be

credited

$

Jamil Capital

Sara Capital

Fatima Capital

8000

8000

4000

[1]

[1]

[1]

Goodwill

20 000

[1]

[7]

[Total: 24]






© UCLES 2007

4 (a)

Peter Mpho

Balance Sheet at 31 January 2007

Fixed Assets

Premises at cost

Equipment at valuation

Current Assets

Stock

Debtors (19 200 + 150)

Petty cash

Current Liabilities

Creditors

Bank overdraft (300 – 1050)

Accrual

Working Capital

$

29 000

750

200

[1]

[1]

$

17 500

19 350

100

36 950

29 950

[1]

[1]O/F

[1]O/F

$

90 000

47 000

137 000

7 000

144 000

[1]

[1]O/F

Capital

Opening Balance

*Net Profit (13 500 – 200 + 600 – 3000 – 1050 + 150)

[1] [1] [1] [1] [1]

Drawings (10 400 + 600)

145 000

10 000

155 000

11 000

144 000

[1]O/F

[1]


*Calculation of net profit

Original figure

Add goods for own use

carriage outwards

Less wages owing

revaluation of equipment

bank charges

600

150

200

3000

1050

13 500

750

14 250

4 250

10 000

(b) (ii) Reliability [1]

(iii) Comparability [1]

(iv) Understandability [1]

[3]

(c) Financial information is only relevant if it can be used –

To confirm or correct prior expectations about past events

To assist in forming, revising or confirming expectations about the future

As the basis for financial decisions

Explanation of any 1 point [2] [2]

[Total: 19]






© UCLES 2007

5 (a) (i) Current ratio 70 000 : 40 000 = 1.75 : 1 [1]

(ii) Quick ratio (70 000 – 34 000) : 40 000 = 0.90 : 1 [1]

(iii) Collection period for debtors 1

365

000 275

000 29

× [1] = 39 days [1]

(iv) Payment period for creditors 1

365

000 465

000 40

× [1] = 32 days [1] [6]

(b) Does not include stock in the calculation [1]

Either

Stock is not regarded as a liquid asset – a buyer has to be found and then the money

collected. Some stock may prove to be unsaleable. [1]

Or

The quick ratio shows whether the business would have any surplus liquid funds if all the

current liabilities were paid immediately from the liquid assets. [1] [2]

(c) Satisfied if (a) (ii) is higher than the ratio for 2005

Not satisfied if (a) (ii) is lower than the ratio for 2005 [1]

(d) Increase in current liabilities greater than the increase in current assets

Increase in creditors and no significant change in current assets

Decrease in debtors and no significant change in current liabilities

Decrease in bank and no significant change in current liabilities

Decrease in stock and no significant change in current liabilities

Or suitable response based on own figure calculation in (a) (i)

Any 1 acceptable point [2] [2]

(e) (i) Not satisfied if (a) (iii) is more than the ratio for 2005

Satisfied if (a) (iii) is less than the ratio for 2005 [1]

(ii) Debtors are taking 9 days longer to pay than the previous year

Or suitable explanation based on O/F answer to (a) (iii) [2]

(f) Debtors are taking longer to pay so this may have a knock-on effect and

mean that the creditors may have to wait longer for their accounts to be paid.

Or suitable explanation based on O/F answer to (a) (iii) and (a) (iv) [2]

(g) Rate of stock turnover [1]






© UCLES 2007

(h) The accounts may be for 1 year only and not show trends

The accounts may not be for a typical year

The financial year may end at a different point in the trading cycle

The businesses may operate different accounting policies e.g. depreciation

The accounts do not show non-monetary items but these are important in the success of a

business

It is not always possible to obtain all the information about a business in order to make a true

comparison

Or other suitable points

Any 3 correct points [1] each [3]

[Total: 20]







0452 ACCOUNTING









© UCLES 2008

Question Number

Key Question Number

Key

1 C 21 B

2 D 22 B

3 A 23 D

4 A 24 B

5 D 25 A

6 A 26 D

7 B 27 C

8 D 28 C

9 A 29 C

10 C 30 A

11 B 31 D

12 B 32 A

13 C 33 C

14 B 34 A*

15 D 35 C

16 A 36 B

17 D 37 C

18 C 38 B

19 B 39 D

20 C 40 B

* Question cancelled – refer to Examiner Report for details.







0452 ACCOUNTING











© UCLES 2008

Marking Guidelines • Where a candidate makes an arithmetical error or selects the wrong figure in an account or a

calculation so that totals or the results of the calculation are wrong but are correct on his own figures, he will lose the mark for selecting the original figure but may earn an own figure mark for the result, total or calculation.

• Where particular wording is shown on the mark scheme accept any reasonable spelling and abbreviation as long as the meaning is clear.

• For example, for ‘Balance brought down’ accept Balance b/down, Balance b/d, Balance, Bal b/down, Bal b/d, Bal, Brought down, b/down, b/d, B/b/d, B/f, but not Bbd, bd, or any variation of ‘Balance carried down’.

• Where a ledger account is to be prepared, each mark is usually for the date, narrative and amount together but if the candidate has correctly prepared the account but not shown some or all of the dates he may earn some marks according to the mark scheme.

• If a ledger account is completely reversed no marks will be awarded for individual entries but there may be marks available for own figure balances carried and brought down.

• Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx. An answer of just the correct figure xx may be accepted but not if any other description such as %, times, days etc. is shown and not if shown as negative when it should be positive.

• Where a calculation is to be shown to two decimal places, an answer rounded up or down may be accepted (e.g. 2.85 or 2.86 if the true answer is 2.853) but not an answer shown to only the nearest whole number or one decimal place (e.g. 2.8 or 3).

• Where dollars and cents are shown in a question and exact cents are required in a calculated answer (e.g. $35.60) many candidates will show $35.6 as their calculators will suppress the final 0. Although wrong this may be accepted.

• Ledger accounts may be accepted in either two sided or the running balance format and the mark scheme will show how marks should be allocated.

• Where a final account is requested, a list of items will not normally earn any marks.

• If candidates are required to prepare a Balance Sheet, either a two sided or a vertical presentation will be accepted and the mark scheme will show how marks are to be awarded.






© UCLES 2008

1 (a) (i) and (ii) to calculate profit or loss, to know what assets and liabilities the business has, to compare with previous years, to compare with other businesses, to calculate accounting ratios, for use by other parties e.g. bank other acceptable but specific answers (1) mark each [2]

(b) (i) stock, debtors, prepayments, cash, bank, etc. – any one [1] (ii) creditors, accrued expenses, bank overdraft, etc. – any one [1] (loan but only if stated repayable within one year) (c) Matching, prudence not consistency [1] (d) Suspense account [1] (e) Current liabilities [1] (f) An amount owed (by a debtor) (1) which he is unable or unwilling to pay (1). [2] Accept words making these points. (g) (i) $100 (must be amount not description of imprest) [1] (ii) $70 [1] (h) (i) Current assets (accept CA) (1) less (accept – or :) current liabilities (accept CL) (1) [2] (ii) A business needs sufficient working capital for

• the day-to-day running of the business • to pay expenses, liabilities, etc. as they fall due (2 marks for either or similar comment – if given as answer to (i) may award 2 marks but only once) [2]

[Total: 15]






© UCLES 2008

2 (a) Emilie

Cash Book, March 2008

Date Details Discount Cash Bank Date Details Discount Cash Bank $ $ $ $ $ $

1 Balance b/down 1700 3000 3 Jules (1) 6 (1) 194 (1) 5 Andre (1) 1200 (1) 6 Michel (1) 85 (1) 7 Wages (1) 330 (1) 7 Sales (1) 1850 (1) (Note: date and correct narrative required for mark, discount, cash and bank marks

may be awarded if either date or narrative (but not both) is missing, no marks for balances brought down, no requirement to balance the account, no totals required.) [11]

(b) Cash sales 1850 (1) Credit sales 200 (1) Total sales 2050 (1)OF [3] Correct figures only, do not accept $194 or $188 for credit sales. Do not award total

mark if any aliens shown. (c)

Emilie Trading Account for the week ended 7 March 2008

$ $ Sales (accept total from (b)) 2050 (1)OF Stock at 1 March 1700 (1) Purchases (correct figure only) 1200 (1) 2900 Stock at 7 March 1650 (1) Cost of goods sold 1250 (1)OF Gross profit 800 (1)OF

[6] [Total: 20]






© UCLES 2008

3 (a) 200 units (1) @ $3.20 (1) = $ 640 (1)OF [3] Accept if just shown as figures, 3 marks for just the correct answer. (b) 100 units @ $3.20 = $ 320 (1) 150 units @ $3.00 = $ 450 (1) 100 units @ £3.00 = $ 300 (1) Total $1 070 (1)OF [4] Do not award total mark if any aliens (c) 300 units (1) @ $3.00 (1) = $ 900 (1)OF [3] Accept if just shown as figures, 3 marks for just the correct answer. (d) Opening stock (units) 200 (1) Purchases (units) 350 (1) 550 Closing stock (units) 300 (1) Sold (units) 250 (1)OF [4] If closing stock is added, award final mark but not stock mark. (e) $ Opening stock (value) 640 (1)OF Purchases (value) 1070 (1)OF 1710 Closing stock (value) 900 (1)OF Cost of goods sold 810 (1)OF [4] Award these marks if correct or if correctly calculated on own figures from (a), (b) and

(c). [Total: 18]






© UCLES 2008

4 (a) Solomon

Trading and Profit and Loss Account Year ended 31 March 2008

$ $ Sales 47 500 (1) Opening stock 1 500 (1) Purchases 28 800 (1) 30 300 Closing stock 1 800 (1) Cost of sales (goods sold) 28 500 (1)OF (words must appear somewhere)(do not award if any aliens) Gross profit (do not award if any other aliens) 19 000 (1)OF Expenses Carriage outwards 720 (1) Electricity 1 800 (1) Motor expenses 1 380 (1) Depreciation 2 400 (1) Rent (6 000 (1) – 1 200*(1)) 4 800 (2) Wages (8 600 (1) + 400*(1)) 9 000 (2) (*if wrongly added or subtracted, no mark, accept if shown as separate items with no total) Total 20 100 Net loss 1 100 (1)OF (accept Net profit if figure shown as negative (–) or in brackets, or is a profit on own figures; do not award if any aliens) [15]

(b)

Solomon Capital account, year ended 31 March 2008

2008 $ 2007 $ 31 March Net loss 1 100 (1)OF 1 April Balance b/d 36 000 (1) 31 March Drawings 24 000 (1) (not Capital) 31 March Balance c/d 10 900 (1)OF _____ 36 000 36 000 2008 1 April Balance b/d 10 900

Narrative and amount (but not date) required for mark. Must be an account, not a list or a sum. [4] (c) [Increase sales, buy more cheaply, increase prices] = increase gross profit, reduce [any

named] expenses = increase net profit (any two, one mark each) [2] (d) Introduce more capital into the business, reduce drawings, [reduce net loss, make or

increase income or net profit] (any two, one mark each) accept ‘take in a partner with capital’ [2]

[Total: 23]






© UCLES 2008

5 (a)

Capital expenditure Revenue expenditure

Purchase of taxi � (1)

Installing meter � (1)

Taxi licence � (1)

Taxi insurance � (1)

Filling taxi with fuel � (1)

Servicing engine � (1)

[6] (b) (i) 18 000 (1) × 30% (1) = 5 400 (1)OF [3] If no calculation shown but correct figure award 3 marks; If e.g. used wrong % but calculation correct award 2 marks. (ii) 12 600 (1)OF × 30% (1) = 3 780 (1)OF [3] If no calculation shown but correct figure award 3 marks; If calculations for more than one year then do not award result mark but may award

starting mark and rate mark; If e.g. used wrong basis or % but calculation correct award up to 2 marks. (c) (12 600 OF – 3 780 OF) (1) = 8 820 OF (1) [2] or (18 000 – 9 180 OF) (1) If no calculation but correct figure then award 2 marks. [Total: 14]







0452 ACCOUNTING











© UCLES 2008

1 (a) Ascertain the true bank balance at a certain date Assist in detecting fraud and embezzlement Identify any “stale” cheques Demonstrate that any differences between the cash book balance and that on the statement

are due to genuine reasons Or other suitable reason Any two reasons (1) each [2] (b) Cash Book (bank columns only)

2008 $ 2008 $ May 1 Balance b/d 2073 (1) May 1 Insurance 360 (1) Lobatse Traders (dishon. chq.) 314 (1) Bank charges 11 (1) Correction of error 90 (1) ____ Balance c/d 1298 2073 2073 May 1 Balance b/d 1298 (1)O/F

[6] (c) Bank Reconciliation Statement at 30 April 2008

$ $ Balance shown on bank statement 1250 (1) Add amounts not yet credited – Cash 500 (1) 1750 Less cheques not yet presented – Ghanzi & Co 390 (1) bank error 62 (2) 452 Balance shown in cash book 1298 (1)O/F

[6] Alternative presentation Bank Reconciliation Statement at 30 April 2008

$ $ Balance shown in cash book 1298 (1)O/F Add cheques not yet presented – Ghanzi & Co 390 (1) bank error 62 (2) 452 1750 Less amounts not yet credited – Cash 500 (1) Balance shown on bank statement 1250 (1)

[6] (d) $1298 (1)O/F Asset (1) [2]






© UCLES 2008

(e) Current ratio (6322 + 5670 + 100 + 1298 O/F) : 7250 (1)O/F = 13390 O/F : 7250 = 1.85 : 1 (1)O/F [2] (f) Does not include stock in the calculation (1) Either Stock is not regarded as a liquid asset – a buyer has to be found and then the money

collected. Some stock may prove to be unsaleable. (1) Or The quick ratio shows whether the business would have any surplus liquid funds if all the

current liabilities were paid immediately from the liquid assets. (1) [2] [Total: 20] 2 (a) Ensures that profits are not overstated (prudence) Ensures that debtors are shown in balance sheet at more realistic amount (prudence) Application of matching principle as the amount of sales unlikely to be paid for are treated as

an expense of that particular year Or other suitable reason Any one reason (1) [1] (b) 2007 February 1 Balance The provision for doubtful debts in existence at that date brought down from the previous

financial year. (2) 2008 January 31 Profit and loss The amount transferred to the profit and loss account representing the surplus provision no

longer required. (2) $600 shown at the end of the account The new provision for doubtful debts carried forward to the next financial year. (2) [6] (c) If debtors delay payment the business may be forced to delay paying its creditors unless

liquid funds are available. If debtors pay within the set time the business may be able to pay its creditors within the set

time without any significant impact on the bank balance. Or other suitable comment Any one reason (2) [2]






© UCLES 2008

(d) Collection period for debtors

1

365

500268

00030×

(1) = 40.78 days = 41 days (1) [2]

(e) Payment period for creditors

1

365

500242

20020×

(1) = 30.40 days = 31 days (1) [2]

(f) May be able to take advantage of cash discounts Improve the relationship with suppliers Or other suitable comment Any two points (1) each [2] (g) Subscriptions account

2007 $ 2008 $ Apl 1 Balance b/d 320 (1) Mar 31 Cash 8720 (1) 2008 Mar 31 Balance c/d 400 (1) Income & Expenditure(1) 8000 (1)O/F ____ 8720 8720 2008 Apl 1 Balance b/d 400 (1)

+ (1) dates [7] Alternative presentation Subscriptions account

Debit Credit Balance 2007 $ $ $ Apl 1 Balance 320 (1) 320 Dr 2008 Mar 31 Cash 8720 (1) 8400 Cr Income & Expenditure (1) 8000 (1)O/F 400 Cr (2)

+ (1) dates [7] [Total: 22]






© UCLES 2008

3 (a) Journal Debit Credit $ $ 1 Stationery 20 (1) Abdul Current 20 (1) 2 Suspense 300 (1) Purchases 300 (1) 3 Suspense 100 (1) Bad Debts 50 (1) Bad Debts Recovered 50 (1) 4 Amina Capital 2200 (1) Amina Current 2200 (1)

[9] (b) Suspense account

2008 $ 2008 $ Apl 30 Purchases 300 (1) Apl 30 Difference on trial Bad debts 50 (1) balance 400 (1) Bad debts recovered 50 (1) ___ 400 400

[4] Alternative presentation Suspense account

Debit Credit Balance $ $ $ 2008 Apl 30 Difference on trial balance 400 (1) 400 Cr Purchases 300 (1) 100 Cr Bad debts 50 (1) 50 Cr Bad debts recovered 50 (1) 0

[4]






© UCLES 2008

(c) Abdul and Amina Mahmoud Statement of corrected net profit for the year ended 30 April 2008

$ Net profit before corrections 12 900 Effect on net profit Increase Decrease $ $ Error 1 20 2 300 (1) 3 100 (1) 4 No effect (1) ___ __ 400 20 380 Corrected net profit 13 280 (1)O/F

[4] (d) Increase gross profit e.g. increase profit margin, increase selling prices etc. Reduce expenses e.g. reduce staffing levels, reduce advertising etc. Increase other income e.g. rent out part of premises, earn more discount Or other acceptable point Any two points (1) each [2] [Total: 19]






© UCLES 2008

4 (a) (i) Stocks are valued at the lower of cost and net realisable value. [1] (ii) Prudence [1] (b) Gideon Yeboah Manufacturing Account for the year ended 31 March 2008

$ $ Cost of raw materials Opening stock of raw materials 21 230 (1) Purchases 255 620 (1) 276 850 Less Closing stock of raw materials 19 410 (1) 257 440 Direct factory wages (194 060 + 4800) (1) 198 860 Prime cost 456 300 (1) Factory general expenses (133 910 – 210) 133 700 (1) Depreciation factory machinery (103 000 + 21 000 – 92 000) 32 000 (1) 165 700 622 000 (1)O/F Add opening work in progress 11 680 (1) 633 680 Less closing work in progress 12 130 (1) Cost of production 621 550 (1)O/F

Horizontal format acceptable [11] (c) Gideon Yeboah Trading Account for the year ended 31 March 2008

$ $ Sales 825 000 (1) Less Cost of sales Opening stock of finished goods 46 900 (1) Cost of production 621 550 (1)O/F Purchases of finished goods 13 200 (1) 681 650 Less Closing stock of finished goods 53 170 (1) 628 480 Gross profit 196 520 (1)O/F

Horizontal format acceptable [6] [Total: 19]






© UCLES 2008

5 (a) Ensures that the loss in value of motor vehicles is spread over the period in which they are earning revenue. [2]

(b) (i) Motor vehicles account

2006 $ 2006 $ Jan 1 Ansari Road Dec 31 Balance c/d 60 000 Motors 60 000 (1) _____ 60 000 60 000 2007 2007 Jan 1 Balance b/d 60 000 Jun 30 Disposals 20 000 (1) _____ Dec 31 Balance c/d 40 000 (1)O/F 60 000 60 000 2008 Jan 1 Balance b/d 40 000 (1)O/F

(ii) Provision for depreciation of motor vehicles account

2006 $ 2006 $ Dec 31 Balance c/d 12 000 Dec 31 Profit & loss 12 000 (1) 12 000 12 000 2007 2007 Jun 30 Disposals 4 000 (2) Jan 1 Balance b/d 12 000 (1)O/F Dec 31 Balance c/d 14 400 (1)O/F Dec 31 Profit & loss 6 400 (2)O/F 18 400 18 400 2008 Jan 1 Balance b/d 14 400 (1)O/F

(iii) Disposal of motor vehicle account

2007 $ 2007 $ Jun 30 Motor vehicles 20 000 (1)O/F Jun 30 Prov. for Dep. 4 000 (1)O/F Dec 31 Profit & loss (1) 1 000 (1)O/F Apollo Traders 17 000 (1) 21 000 21 000

+ (1) dates [18]






© UCLES 2008

Alternative presentation (b) (i) Motor vehicles account

Debit Credit Balance 2006 $ $ $ Jan 1 Ansari Road Motors 60 000 (1) 60 000 Dr 2007 Jun 30 Disposals 20 000 (1) 40 000 Dr(2)O/F


Debit Credit Balance 2006 $ $ $ Dec 31 Profit & loss 12 000 (1) 12 000 Cr(1)O/F 2007 Jun 30 Disposals 4 000 (2) 8 000 Cr Dec 31 Profit & loss 6 400 (2)O/F 14 400 Cr(2)O/F

(iii) Disposal of motor vehicle account

Debit Credit Balance 2007 $ $ $ Jun 30 Motor vehicles 20 000 (1)O/F 20 000 Dr Prov. for Dep. 4 000 (1)O/F 16 000 Dr Apollo Traders 17 000 (1) 1 000 Cr Dec 31 Profit & loss (1) 1 000 (1)O/F 0

+ (1) dates [18] [Total: 20]







for the guidance of teachers

0452 ACCOUNTING







Mark Scheme: Teachers’ version Syllabus Paper


© UCLES 2009

Question Number

Key Question Number

Key

1 B 21 D

2 A 22 D

3 A 23 B

4 C 24 D

5 A 25 D

6 B 26 B

7 C 27 C

8 C 28 A

9 C 29 D

10 B 30 D

11 A 31 A

12 C 32 A

13 D 33 A

14 A 34 B

15 D 35 D

16 C 36 B

17 C 37 C

18 B 38 C

19 D 39 C

20 B 40 D








0452 ACCOUNTING


This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers.








© UCLES 2009

1 (a) Realisation [1] (not accruals or matching) (b)

Asset Liability

(i) Prepayment √ (1)

(ii) Bank overdraft √ (1)

(iii) Provision for depreciation √ (1)

[3] (c) A cheque issued and entered in the cash book (1) but not yet shown on the bank statement

as paid by the bank (1) [2] (accept “cheques not presented to the bank” for 1 mark) (d) “Net realisable value” (accept NRV) [1] (e) Trading (and Profit and Loss) account [1] (accept Profit & Loss account or Income statement) (f) Current assets (1) less current liabilities (1) not “CA less CL” [2] (g) (i) Land, buildings, plant, equipment, fixtures, motor vehicles (other acceptable fixed asset) [1] (ii) Any suitable revenue expense [1] (h) Gross profit percentage = gross profit/sales × 100% = 22 500 (1) / 75 000 (1) × 100% = 30% (1)OF [3] (need not show % sign but must not have any other term e.g. “times”)

[Total: 15]






© UCLES 2009

2 (a) $ 200.00 – $ 129.00 = $ 71.00 (1) [1] (accept $71 without .00) (b) $ 20.00 + 17.00 + 21.00 +14.50 = $ 72.50 (1) [1] (accept $72.5 without final 0 and throughout) (c) $ 200.00 (1) – $ 72.50 (1)(OF from (b)) = $127.50 [2] (award (2) for $127.50 but must show workings for OF mark) (d) (i) Missing voucher, error or fraud (1) (ii) Missing or stolen cash (1) [2] (e) Always complete (get) a petty cash voucher (1) with an invoice or receipt for expenditure (1) Record all petty cash transactions (1) [2] (do not accept general comments about business records – must relate to petty cash) (f) See next page




Mark Scheme: Teachers’ version Syllabus Paper IGCSE – May/June 2009 0452 02

© UCLES 2009

Date

April

Details Total

$

Date

April

Details Total

$

Postage/ stationery

$

Refrshmnts

$

Flowers

$

Cleaning

$

Other/Loan

$

1 Balance b/d (not “bank” but accept “imprest” or “float”)

129.00(1) or 200.00(1)

(if no bank entry)

5 Postage 20.00 20.00 (1)

1 Bank (not “cash”)

71.00(1) 10 Refreshments 17.00 17.00 (1)

29 Menon/loan (not “cash”)

100.00(1) 13 Menon/loan 100.00 100.00 (1)

17 Flowers 21.00 21.00 (1)

24 Stationery 14.50 14.50 (1)

28 Cleaning 10.00 10.00 (1)

_________ 30 Balance c/d 117.50 _______ _______ _______ _______ _______

300.00 __300.00 34.50 17.00 21.00 10.00 100.00

May 1 Balance b/d

(accept “imprest”)

117.50(1) (OF) to

agree with bal c/d

+ (1) for all dates (Dr and Cr)

1 Bank (not “cash”)

82.50(1) (OF) to

total $200

(for both debits and credits, mark is for narrative detail, correct total and correct extension) [12]

[Total: 20]






© UCLES 2009

3 (a) Purchases journal (day book) (1) (accept “purchases”, “purchases book”, not “account” or “ledger”) (b)

OFFICE SUPPLY COMPANY INVOICE

Tom Charter

3 Mountain Close

Tobermore

15 April 2009

Item Quantity Price per unit Total

$ $

Boxes of staples 20 7.50 (i)

Packets of

envelopes

(ii) 14.00 350.00

500.00

Less (iii) discount @ 3 % (iv)

Net amount (v)

______

Terms: 2 ½ % (vi) discount for settlement within 14 days

[6]

25 (1)

150.00 (1)

15.00 (1) Trade (1)

Cash (1)

485.00 (1)

(correct figures only)






© UCLES 2009

(c) Opening stock 7 600 (1) Purchases 92 100 (1) Less purchases returns (2 300) (1) 97 400 Less closing stock 9 200 (1) Cost of goods sold 88 200 [4] (narrative not required, award if correct numbers are shown) (d) Rate of stock turnover = cost of goods sold / average stock = (88 200 (1)(OF) / (7 600 + 9 200)(1) / 2(1)) times (award 2 marks for 8 400) = 10.5 times (1)(OF) (must be 10.5 – do not award for “10” or “11”) (award 4 marks if 10.5 shown without workings, otherwise only award marks in accordance

with workings shown) (accept 10.5 without “times”, but do not accept with %, ratio or other description. Accept 34,

34.76 or 35 days if reciprocal formula is used) [4] (e) (i) Food, drinks, petrol, etc. (2) (ii) Jewellery, household appliances, cars, furniture etc. (2) [4]

[Total: 19]






© UCLES 2009

4 (a) Rupa Motor expenses account March March 6 Bank (not cash) 120.00 (1) 1 Balance b/d 120.00 (1) (not repairs) (accept accrued/owing/outstanding) 12 Bank (not tyres) 150.00 (1) 31 Balance c/d 80.00 (1) 31 Profit & Loss (not Trading) (accept accrued/owing) Account* 230.00 (1)OF 350.00 350.00 April 1 Balance b/d 80.00 (1) (correct figure only) (+ (1) for all correct dates) [7] (*award OF mark if Cr or Dr and amount closes account) (b) Mopsa Rent account April April 27 Bank (not cash, 500.00 (1) 1 Balance b/d 150.00 (1) not rent, landlord etc) (accept accrued/owing/outstanding) 30 Balance c/d 100.00 (2) 30 Profit & Loss (accept accrued/owing) Account* 450.00 (1)OF 600.00 600.00 May 1 Balance b/d 100.00 (1) (correct figure only) (+ (1) for all correct dates) [7] (*award OF mark if Cr or Dr and amount closes account) (c)

understated √ (2)

overstated

[2]

[Total: 16]






© UCLES 2009

5 (a) Gordon Capital account 2008 1 April Balance b/d 6 400 (1) (accept capital) 2009 2009 31 March Drawings 12 000 (1) 31 March Net profit 12 900 (1) 31 March Balance c/d 7 300 (1)(OF)* 19 300 19 300 1 April Balance b/d 7 300 (*award OF mark if Dr or Cr balance, and no alien figures) (dates not required, narrative and figures only) [4]

(b) Gordon – Balance sheet at 31 March 2009 Cost Provision for Net book depreciation value Fixed assets $ $ $ Plant and equipment 8 000 1 600 6 400 (1) Motor vehicles 4 000 1 000 3 000 (1) (correct narratives) 12 000 2 600 9 400 Current assets Stock 1 900 Debtors 3 400 Bank 700 6 000 (1) (must show narrative and figures) Current liabilities Creditors 2 100 (1) Net current assets (working capital) 3 900 (1) (award 1 mark if horizontal balance sheet and CA and CL are correct) 13 300 Less long term liability Bank loan repayable 2011 6 000 (1) (may be shown under “Financed by”) 7 300 (1)OF (total to agree with total below, must be arithmetically correct) Financed by: Capital 7 300 (1) (or balance from part (a) only) [8]






© UCLES 2009

5 (c) (i) Current assets / Current liabilities 6 000 (1)OF / 2 100 (1)OF = 2.86:1 (1)OF (accept 2.85 but not 2.8, 2.9 or 3, other correct OF calculations on same basis) (ii) Current assets – stock / Current liabilities (6 000 – 1 900) = 4 100 (1)OF / 2 100 (1)OF = 1.95:1 (1)OF (or debtors 3 400 + bank 700 = 4 100 (1)) (do not accept 1.9 or 2, accept other correct OF calculations on same basis) [6] (d)

current ratio

quick ratio √ (2)

[2]

[Total: 20]








0452 ACCOUNTING










© UCLES 2009

1 (a) (i) Tony and Alice Mundondo Motor vehicles account

2007 $ 2008 $ Mar 1 Valley Motors 9 500 (1) Feb 29 Balance c/d 9 500 9 500 9 500 2008 2009 Mar 1 Balance b/d 9 500 Feb 28 Balance c/d 20 300 2008 Jul 1 Bank 10 800 (1) _____ 20 300 20 300 2009 Mar 1 Balance b/d 20 300 (1)


2008 $ 2008 $ Feb 28 Balance c/d 1 900 Feb 29 Profit & loss 1 900 (1) 1 900 1 900 2009 2008 Feb 28 Balance c/d 5 240 Mar 1 Balance b/d 1 900 (1)O/F 2009 Feb 28 Profit & loss 1 900 (1) ____ 1 440 (1) 3 340 5 240 5 240 2009 Mar 1 Balance b/d 5 240 (1)O/F

+ (1) dates [9] (a) Alternative presentation (i) Tony and Alice Mundondo Motor vehicles account

Debit Credit Balance 2007 $ $ $ Mar 1 Valley Motors 9 500 (1) 9 500 Dr 2008 July 1 Bank 10 800 (1) 20 300 Dr (1)


Debit Credit Balance 2008 $ $ $ Feb 29 Profit & loss 1 900 (1) 1 900 Cr (1)O/F 2009 Feb 28 Profit & loss 1 900 (1) 1 440 (1) 3 340 5 240 Cr (1)O/F

+ (1) dates [9]






© UCLES 2009

(b) Tony and Alice Mundondo Extract from Balance Sheet at 28 February 2009

Fixed assets Cost Depreciation to date

Net book value

$ $ $ Motor vehicles 20 300 5 240 15 060 (1)O/F (1)O/F (1)O/F

[3]

(c) transaction account to be debited

account to be credited

(i)

(ii)

(iii)

eliminating original cost of motor vehicle from ledger eliminating accumulated depreciation from ledger recording part exchange allowance made by Valley Motors

disposal of motor vehicle (1) provision for deprecation (1) Valley Motors (1)

motor vehicles (1) disposal of motor vehicle (1) disposal of motor vehicle (1)

[6] (d) (i) Fixed assets are valued at the end of each financial year. (1) This value is compared with the previous valuation (or the cost if it is the first year

of ownership) and the amount by which the asset has fallen in value is the depreciation for the year. (1) [2]

(ii) Hand tools Packing cases Or other suitable example Any 1 example (1) mark [1] [Total: 21]






© UCLES 2009

2 (a) Morag MacDonald Profit and Loss Account for the year ended 31 December 2008

$ $ Fees from clients (75 050 + 9 000) 84 050 (1) Rent received (2 750 – 150) 2 600 (1) Reduction in provision for doubtful debts (250 – 225)

___25

(1)

86 675 Less Property tax 1 800 Repairs and maintenance 2 930

(1)

Wages (45 000 + 2 000) 47 000 (1) Stationery and office supplies (1 790 – 35)

1 755

(1)

Insurance (1 680 – 240) 1 440 (1) Depreciation – Office equipment (50% × (10 800 – 8 100))

1 350

(1)

56 275

Net profit 30 400 (1)O/F Horizontal format acceptable [9] (b) To be able to meet debts when they fall due To be able to take advantage of cash discounts To be able to take advantage of business opportunities as they arise To ensure that there is no difficulty in obtaining further supplies Or other suitable explanation Any 1 point (2) marks [2] (c) Introduce further capital Reduce drawings Sell surplus fixed assets Obtain long term loans Any two points (1) each [2] (d) (ii) Effect Working capital decreases by $40 (1) Explanation Current assets decrease by $50 as net debtors decreases. There is no change in the current liabilities. (1) (iii) Effect Working capital does not change (1) Explanation The current assets do not change as the cash increases and the

debtors decrease by $200. There is no change in the current liabilities. (1)

(iv) Effect Working capital increases by $4 (1) Explanation Current assets decrease by $96 and the current liabilities

decrease by $100. (1) [6] [Total: 19]






© UCLES 2009

3 (a) Mohammed Hanif Sales ledger control account

2009 $ 2009 $ Apl 1 Balance b/d 4100 (1) Apl 1 Balance b/d 72 (1) 30 Sales returns 320 (1) 30 Sales 5300 (1) Bank 3850 (1) Bank (dis.chq.) 65 (1) Discount allowed 150 (1) Inter-ledger

transfer

240 (1)

____ Balance c/d 4833 9465 9465 2009 May 1 Balance b/d 4833 (1)O/F

+ (1) Dates

Alternative presentation Mohammed Hanif Sales ledger control account

Debit Credit Balance 2009 $ $ $ Apl 1 Balances 4100 (1) 72 (1) 4028 Dr 30 Sales 5300 (1) 9328 Dr Bank (dis.chq) 65 (1) 9393 Dr Sales returns 320 (1) 9073 Dr Bank 3850 (1) 5223 Dr Discount allowed 150 (1) 5073 Dr Inter-ledger transfer 240 (1) 4833 Dr (1)O/F

+ (1) Dates [10] (b) Overpayment of amount due by debtor Cash discount not deducted by debtor before payment made Goods returned by debtor after payment of amount due Payment made in advance by debtor Or other suitable point Any 1 reason (1) mark [1]






© UCLES 2009

(c) Item Entry in purchases ledger

control account

(ii)

(iii)

(iv)

Cash purchases Discount received Interest charged by supplier on overdue account

No entry (1) Debit (1) Credit (1)

[3] (d) Financial information is only relevant if it can be used – To correct or confirm prior expectations about past events To assist in forming, revising or confirming expectations about the future As a basis for financial decisions In time to be able to influence decisions Explanation of any 1 point (2) [2] (e) (ii) Money measurement Accounts only record information which can be expressed in monetary terms. (1) This means that many factors which affect the performance of a business will not

appear in the accounting records. (1) [2] (iii) Time factor Accounting statements are a record of what has happened in the past. (1) Either They are not necessarily a guide to future performance (1) Or Significant events can occur between the end of the financial period and the

time when the accounting statements are available. (1) [2] [Total: 20]






© UCLES 2009

4 (a) Lobatse Rugby Club Subscriptions account

2008 $ 2008 $ Apl 1 Balance b/d 50 (1) Apl 1 Balance b/d 100 (1) 2009 2009 Mar 31 Income & Mar 31 Bank 2250 (1) expenditure (1) 2500 (1) Balance c/d _200 2550 2550 2009 Apl 1 Balance b/d 200 (1)

+ (1) Dates

Alternative presentation Lobatse Rugby Club Subscriptions account

Debit Credit Balance 2008 $ $ $ Ap 1 Balances 50 (1) 100 (1) 50 Cr 2009 Mar 31 Bank 2250 (1) 2300 Cr Income & expenditure (1) 2500 (1) 200 Dr (1)

+ (1) Dates [7] (b) Lobatse Rugby Club Income and Expenditure Account for the year ended 31 March 2009

$ $ Income Subscriptions 2500 (1)O/F Sports day – entrance fees 520 less expenses 370 150 (2) Interest received 100 (1) 2750 Expenditure Secretarial expenses 210 Advertising 40

(1)

General expenses (490 – 20) 470 (1) Rent (1530 + 30) 1560 (1) Depreciation – equipment (4400 + 1800) × 10% 620 (1) 2900 Deficit for the year (1) 150 (1)O/F







© UCLES 2009

(c) (i) Either Opening balance or closing balance (1) Opening/closing bank balance is neither income nor expenditure for the year as it

represents the amount of money in the bank on that particular date. (1) Or Transfer to bank deposit account (1) Transferring money from one bank account to another is neither income nor

expenditure. (1) Or Purchase of equipment (1) This is not regarded as revenue expenditure as it is the purchase of a fixed asset.

(1) [2] (ii) Either Subscriptions prepaid on 1 April 2008 (1) This item represents an amount received during the previous financial year which

relates to the current financial year. Application of matching principle. (1) Or Subscriptions owed by member 31 March 2009 (1) This item represents an amount relating to the current financial year which has not

yet been received. Application of matching principle. (1) Or Rent accrued (1) This item represents an amount relating to the current financial year which has not

yet been received. Application of matching principle. (1) Or Depreciation of equipment (1) This is a non-monetary expense but must be taken into account in calculating the

surplus/deficit. Application of matching principle. (1) Or Deficit for the year (1) This is the difference between the income and expenditure and is the “loss” for the

year and does not represent money paid/received. (1) Alternatively accept surplus with a suitable comment if a surplus is shown in

the answer to (b). [2] [Total: 21]






© UCLES 2009

5 (a) Selling goods at lower prices Allowing higher rates of trade discount for bulk buying Not passing on increased costs to customers Buying more expensive goods Or other suitable point Any 2 reasons (1) mark each [2] (b) Reduce expenses e.g. reduce staffing levels, reduce advertising etc. Increase gross profit e.g. increase profit margin, increase selling prices etc. Increase other income e.g. rent out part of premises, earn more discount etc. Or other suitable point Any 1 reason (1) mark [1] (c) (i) 25% – 10% = 15% (1) (ii) 21% – 9% = 12% (1) [2] (d) Percentage of expenses to sales has reduced so the efficiency of the business in

controlling expenses has increased. Or suitable answer based on O/F answers to (c) [2] (e) Payment period for creditors

1

365

000 320

500 44× (1) = 50.76 days = 51 days (1)

Collection period for debtors

1

365

000 400

500 38× (1) = 35.13 days = 36 days (1) [4]

(f) In both years the debtors are paying Kalpna Khan earlier than she is paying the

creditors (though the gap is smaller in the second year). (1) She is able to make use of the money within the business for this period. (1) Or other suitable comments up to (2) marks [2]






© UCLES 2009

(g) Offer cash discount for prompt payment Charge interest on overdue accounts Improve credit control Refuse further supplies on credit until outstanding balance paid Invoice discount and debt factoring Or other relevant points Any 2 points (1) each [2] (h) (i) Non-monetary factors One example – goodwill, quality of management, or other suitable example (1) Such items will not appear on the accounting statements but can influence the

profitability and prospects of a business. (1) (ii) Accounting policies One example – methods of depreciation, methods of stock valuation, or other

suitable example (1) These will affect calculation of the profit and the profitability ratios and the value of

the assets. (1) [4] [Total: 19]








0452 ACCOUNTING










© UCLES 2010

MARKING GUIDELINES

• Award marks only in accordance with the mark scheme. • Where a candidate makes an arithmetical error or selects the wrong figure in an account or a

calculation, so that totals or the results of the calculation are wrong but are correct on his own figures, he will lose the mark for selecting the original figure but may earn an own figure (OF) mark for the result, total or calculation.

• Where particular wording is shown on the mark scheme accept any reasonable spelling and

abbreviation as long as the meaning is clear. For example, for “Balance brought down” accept Balance b/down, Balance b/d, Balance, Bal

b/down, Bal b/d, Bal, Brought down, b/down, b/d, but not Bbd, bd, or any variation of “Balance carried down”.

• Where a ledger account is to be prepared, each mark is usually for the date, narrative and

amount together. If the candidate has correctly prepared the account but not shown some or all of the dates he may earn some marks according to the mark scheme.

• If a ledger account is completely reversed no marks will be awarded for individual entries but

there may be marks available for own figure balances carried and brought down • Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx. An

answer of just the correct figure xx may be accepted but not if any other description such as %, times, days etc is shown and not if shown as negative when it should be positive.

• Where a calculation is to be shown to two decimal places, an answer rounded up or down may

be accepted (e.g. 2.85 or 2.86 if the true answer is 2.853) but not an answer shown to only the nearest whole number or one decimal place (e.g. 2.8 or 3).

• Where dollars and cents are shown in a question and exact cents are required in a calculated

answer (e.g. $35.60) many candidates will show $35.6 as their calculators will suppress the final 0. Although wrong this may be accepted. The $ sign is not required.

• Ledger accounts may be accepted in either two sided or the running balance format and the mark

scheme will show how marks should be allocated. • Where a final account is requested, a list of items will not normally earn any marks. • If candidates are required to prepare a Balance Sheet, either a two sided or a vertical

presentation will be accepted and the mark scheme will show how marks are to be awarded.






© UCLES 2010

1 Question Number

Key Question Number

Key

(a) C (f) D

(b) D (g) B

(c) B (h) C

(d) B (i) A

(e) C (j) D

[Total: 10] 2 (a) Property (Land and buildings)(only one mark) Fixtures and fittings Plant and equipment (machinery)(only one mark) Office equipment Motor vehicles Any two [2] (b)

Debit entry Credit entry

Sales returns account � (1)

[1] (c) Consistency [1] (d) Net book value = Cost (1) less accumulated depreciation (1) [2] (e) Income statement (Trading and profit and loss account) [1] (must include the word “trading”) (f) Accruals (matching), not prudence [1] (g) (i) Percentage of gross profit to sales = (75 000 (1) – 52 500 (1)) / 75 000 (1) × 100% = 30.00% (1)OF [4] (ii) Percentage of net profit to sales = (22 500 (1)OF – 7 500 (1)) / 75 000 (1) × 100% = 20.00% (1)OF [4] (h) Number of shares = $5 000 (1) / $0.50 = 10 000 (1) Total dividend = 10 000 × $0.15 (1) = $1 500 (1)OF [4] (For 5000 (1) × 0.50 × 0.15 (1) = 375, award 2 marks as shown) [Total: 20]






© UCLES 2010

3 (a) Sumaru Cash book, April 2010

April Cash Dr $

Bank Dr $

3 9 12 22 28

Ahar (1)* Cash sales (1)* Bannu (1)* Dooly (1)* Eduardo (1)*

4 000 (1)1 500 (1)

2 000 (1)1 650 (1)

900 (1)

*Mark is for date and name [10] (b)

Name of account Dr $

Cr $

Sales (1) (accept cash sales but not sales ledger)

4000 (1)

[2] (c)

Date Dr Cr

30 April Suspense (1) 360 (1)

Cash book (bank) (1) 360 (1)

To correct balance entered at 1 April 2010 (1)

(Award marks for amount only if correctly shown as Dr or Cr with account name.) [5] (d) Send statement Offer cash discount (not trade discount) Limit credit (no more credit sales) Charge interest on overdue amounts Use debt collection methods (any two, 2 marks each) [4] [Total: 21]






© UCLES 2010

4 (a) (i) Lower (1) of cost (1) and net realisable value (1) [3] (ii) $2 700 (1) [1] (iii) Reduces profit (not overstated or understated) (1) by $300 (1) [2] (b) Timpani Limited Balance Sheet at 31 March 2010 $ $ Non-current (fixed) assets Plant and equipment at cost 20 000 (1) Accumulated depreciation 12 000 (1) Net book value 8 000 (1) Current assets Inventory (stock) 2 700 (1) Trade receivables (debtors) 1 000 (1) Bank 500 (1) 4 200 Current Liabilities Trade payables (creditors) 700 (1) Bank loan (must be shown as current liability) 2 800 (1) 3 500 Net current assets 700 Total assets 8 700 Equity Share capital 5 000 (1) Profit for the year 3 700 (2) 8 700 Note: award marks for acceptable layout, not list of balances. [11] (c)

Successful Not Successful

Reduce dividend � (2)

Reduce depreciation � (2)

Reduce trade payables (creditors) � (2)

[6] (d) (i) Going concern (1) (ii) Expected sale values (2) [3] (accept net realisable value) [Total: 26]






© UCLES 2010

5 (a)

Capital Revenue

Hire charges � (2)

Cash discount received from motor dealer for prompt payment for new car

� (2)

Part exchange value of used car � (2)

[6] (b) (i) Cost $12 000 (1) @ 30% (1) = $3 600 (1)OF [3] (Award only the component marks but not the mark for $3600 if other calculations are

shown, e.g. net book value or for other years.) (ii) Net book value = $8 400 (1)OF [1] (Award this mark if correct by reference to answer to (i).) (c) Disposal of motor vehicles

2010 $ 2010 $ April 1 Motor vehicle* 12 000 (1) 12 000

April 1 Depreciation* 3 600 (1) Bank (Insurance) 5 000 (1) Income statement 3 400 (2)OF (Profit & loss account) 12 000

(Mark is for reasonable narrative and amount, not date.) (*Award 2 marks for “Net book value 8400”, but 0 for “Balance b/down 8400”.) [5] (d) (i) The rate may be too low as large loss arose on scrapping car. An increased rate, up to 60%, would reduce loss. [2] (Award marks for similar comments.) (ii) Straight line method (1) over life of car, or using scrap value (1) or Based on estimated mileage over three years (2) or other reasonable suggestion and explanation. [2] [Total: 19]






© UCLES 2010

6 (a) $ Deposits to bank 15 270 (1) Less: cash sales 2 680 (1) 12 590 Add: receivables at 31/3/10 4 080 (1) 16 670 Less: receivables at 1/4/09 3 140 (1) Credit sales 13 530 (1)OF (Award total figure only if no aliens, e.g. cash book balance b/fwd shown.) [5] (b) Wilma Trading account for the year ended 31 March 2010 $ $ Revenue (sales) – credit 13 530 (1)OF – cash 2 680 (1) 16 210 Inventory (stock) at 1 April 2009 1 780 (1) Purchases 9 560 (1) Carriage inwards 280 (1) 11 620 Inventory (stock) at 31 March 2010 1 920 (1) Cost of goods sold 9 700 (1)OF Gross profit 6 510 (1)OF [8] (c) (i) Rate of inventory (stock) turnover = Cost of goods sold / average inventory (stock) = 9 700 (1)OF / [(1 780 + 1 920)/2 = 1 850 (1)OF] = 5.24 (1)OF times (1) [4] (Note – a calculation mark may be awarded even if the formula is wrong.) (ii) Collection period for trade receivables (debtors) = (Debtors / credit sales) × 365 days = (4 080 (1) / 13 530 (1)OF) × 365 days = 110 (1)OF (accept 111) days (1) [4] (Note – a calculation mark may be awarded even if the formula is wrong.) (d)

Increase Decrease No change Gross profit � (1) Percentage of gross profit to sales � (1) Rate of inventory (stock) turnover � (1)

[3] [Total: 24]








0452 ACCOUNTING










© UCLES 2010

MARKING GUIDELINES

• Award marks only in accordance with the mark scheme. If a script contains an answer which is not anticipated please refer to Principal Examiner before awarding any marks.

• Where a candidate makes an arithmetical error or selects the wrong figure in an account or a



abbreviation as long as the meaning is clear. • For example, for “Balance brought down” accept Balance b/down, Balance b/d, Balance, Bal


• If a candidate gives two alternative answers without crossing one out, mark both answers and

give credit for the better answer. If one is crossed out, mark the other answer. • Where a ledger account is to be prepared, each mark is usually for the date, narrative and

amount together. If the candidate has correctly prepared the account but not shown some or all of the dates, he may earn some marks according to the mark scheme.

• If a ledger account is completely reversed, no marks will be awarded for individual entries but

there may be marks available for own figure balances carried and brought down. • Where an answer is to be shown as a ratio, it should be shown as xx:1 and not as 1:xx.

An answer of just the correct figure xx may be accepted but not if any other description such as %, times, days etc. is shown and not if shown as negative when it should be positive.




answer (e.g. $35.60), many candidates will show $35.6, as their calculators will suppress the final 0. Although wrong this may be accepted. The $ sign is not required.









© UCLES 2010

1 Question Number

Key Question Number

Key

(a) B (f) B

(b) A (g) A

(c) A (h) D

(d) A (i) A

(e) B (j) D

[Total marks: 10] 2 (a) Return on capital employed ( or Return on Net Assets ). Percentage of gross profit to sales or GP margin or GP%. Percentage of net profit to sales or NP margin or NP%. Any two, (1) each [2] (b)

Current asset Current liability

Inventory (stock) � (1)

Trade payables (creditors) � (1)

Other receivables (prepayments) � (1)

[3] (c)

Bank column Cash column

Debit side

Credit side � (1)

If more than one tick then 0 [1] (d) Income statement (trading/profit and loss account) [1] (e) Error of principle [1] (f) Matching or prudence or conservatism [1]






© UCLES 2010

(g) (i) rate of inventory (stock) turnover = cost of goods sold/average stock = ( OS + Purch + CI – CS ) [*1 for + CI; 1 for other figs]

= above) as *(2

(1) 800 4 600)/2 5 000 (4

400 46 600) 5 - 500 2 500 45 000 (4

=+

=++

= 9.66 times (1)OF [4] (ii) Payment period for trade payables = creditors / credit purchases × 365 days = 3 750 (1)/45 500 (1) × 365 days = 30 days (2) (to nearest whole day) [OF for correct formula] [4] (h) Hooper – wages account _____________________________________________________ Bank (Cash) 32 800 (1) Balance b/d 300 (1) (or Accruals) Balance c/d 450 (1) Income statement 32 950 (1) OF (or Accruals) (Profit & Loss account) 33 250 33 250 Balance b/d 450 (1) [5] Narrative and amount for mark No aliens or extraneous items for OF

[Total marks: 22] 3 (a) (i) Arthur $30 000 × 3% (1) = $900 (1) OF [2] (ii) Nancy $40 000 × 3% (1) = $1 200 (1) OF [2] (b) (i) Arthur $35 000 × 4% (1) = $1 400 (1) OF [2] (ii) Nancy $15 000 × 4% (1) = $600 (1) OF [2]






© UCLES 2010

(c) Net profit 89 000 Interest on drawings 2 000 (1)OF 91 000 Less salary 15 000 (1) Interest on capital 2 100 (1)OF 17 100 Residual profit 73 900 Shared 2:3 Arthur:Nancy Arthur 29 560 (2)OF as below Nancy 44 340 (2)OF as below 73 900 2 OF for profit share only if based on Profit (not Capital ) 1 OF for profit share if any aliens (Drawings) [7] (d) Arthur – current account _____________________________________________________ Interest on drawings 1 400 (1)OF Interest on capital 900 (1) OF Drawings 35 000 (1) Salary 15 000 (1) Balance c/d 9 060 (1)OF Residual profit 29 560 (1)OF 45 460 45 460 Balance b/d 9 060 No OF if aliens or extraneous items [6] (e)

Increase � (2)

Reduce

Unchanged

[2] [Total marks: 23] 4 (a) Used to prepare final accounts. Can trace or identify errors. Other sensible comment. One reason [1]






© UCLES 2010

(b) Deali Trial Balance at 31 March 2010 $ $ Revenue (sales) 125 000 (1) Inventory (stock) 14 500 (1) Purchases 76 000 (1) Bank (overdraft) 2 300 (1) Equipment 9 000 (1) Trade receivables (debtors) 1 700 (1) Trade payables (creditors) 2 800 (1) Expenses 37 500 (1) Capital 15 500 (1) Drawings 8 000 (1) Suspense 1 100 (1)OF 146 700 146 700 OF only if arithmetically correct [11] (c) Dr Cr

Suspense (1) 1 100 (1)

Revenue (sales) (1) 1 100 (1)

Sales omitted from the ledger (1) must be related to error

Marks for narrative not dependent upon correct figures. Marks carried with narrative. [5]






© UCLES 2010

(d) Deali Summary Income Statement (Trading and Profit and Loss Account)

for the year ended 31 March 2010 $ $ Revenue (sales) (1) Inventory (stock) at 1 April 2009 (1) Purchases (1) Inventory (stock) at 31 March 2010 (1) Cost of sales (1) OF Gross profit (1) OF Expenses (1) Net profit (1) OF

[8]

[Total marks: 25] 5 (a) (i) A bad debt is an amount owing to the business (1) which the debtor is unable or

unwilling to pay (1). [2] (ii) A provision for doubtful debts is an estimate (not %)(1) of the amount likely to be lost

through bad debts (1). [2] (b)

Dr $

Cr $

Bad debts (income statement) (1) (profit and loss account)

850 (1)

Veeku ) )(1) or Debtors (1)

300 ) )(1)

Wlanda ) )

550 ) )

[4]

126 100

14 500

76 000

90 500

72 500

53 600

37 500

16 100

18 000






© UCLES 2010

(c) Balance on sales ledger 12 600 (1) Less: bad debts written off 850 (1) 11 750 Provision for doubtful debts @ 4% = 470 (1)OF [3] (d)

Dr $

Cr $

Income statement (1) (Profit and Loss account)

470 (1) OF

Provision for doubtful debts(1) 470 (1) OF

[4] (e) Bad debts account ____________________________________________________ Debtors 850 (1) Income statement 850 (1) (Profit and loss) or Veeku 300 Wland 550 [2] Provision for doubtful debts account ____________________________________________________ Balance c/d 470 Income statement 470 (1) OF (Profit and loss) Balance b/d 470 (1) OF [2] (f) Bad debts recovered account ____________________________________________________ Income statement 300 (1) Bank (Cash/Veeku) 300 (1) (Profit and loss) OF [2] [Total marks: 21]






© UCLES 2010

6 (a) Managers, bank or other lender, creditors, customers, suppliers. Employees, Government, competitors, potential investors. Other acceptable comment. Any two, 2 marks each [4] (b)

Capital Revenue

New factory extension � (1)

Repainting old factory � (1)

Architect’s fees for designing extension � (1)

New plant and equipment for extension � (1)

[4] (c) (i) Factory cost 30 000 (1) + Architect’s fees 3 000 (1) Total cost 33 000 Over useful life 20 years 20 (1) = 1 650 (1) OF [4] (ii) Plant and equipment 6 000 – residual value 800 = 5 200 5 200 (1) Over useful life 4 years (1) = 1 300 (1) OF [3] (d) Land has an indefinite expected life. Land does not wear out. Land is not consumed by use. Land increases in value over time. Other acceptable comment (allow NEVER). Any two, 2 each [4]

[Total marks: 19]


