Accounting (0452) · Feb/March 2020 · Question paper 12
Cambridge Accounting (0452) question paper for paper 12, Feb/March 2020 — 0452/12/F/M/20, file 0452_m20_qp_12.pdf.
Text of this paper
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Cambridge IGCSE™
ACCOUNTING
0452/12
Paper 1 Multiple Choice
February/March 2020
1 hour 15 minutes
You must answer on the multiple choice answer sheet.
*4741387681*
You will need: Multiple choice answer sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)
INSTRUCTIONS
• There are thirty-five questions on this paper. Answer all questions.
• For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
• Follow the instructions on the multiple choice answer sheet.
• Write in soft pencil.
• Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
• Do not use correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 35.
• Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
• Any rough working should be done on this question paper.
This document has 12 pages. Blank pages are indicated.
IB20 03_0452_12/2RP
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1
2
Which task would be carried out by a book-keeper but not an accountant?
A
comparing one year’s results with those of previous years
B
interpreting the accounting records
C
preparing financial statements
D
recording transactions in the ledgers and cash book
A business provided the following information on 1 February 2019.
$
non-current assets
75 000
current assets
40 000
current liabilities
25 000
The business made a profit of $10 000 for the year ended 31 January 2020.
The owner did not make any drawings during the year.
What was the capital on 31 January 2020?
A
3
$35 000
B
$50 000
C
$70 000
D
$100 000
Dilip is a manufacturer. He purchased a machine on credit from Sachin.
How did Dilip record this?
account to
be debited
account to
be credited
A
machinery
Sachin
B
purchases
Sachin
C
Sachin
machinery
D
Sachin
purchases
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3
4
Mui owns a household appliance store. He took home a washing machine for his personal use.
Mui recorded this transaction as follows.
account debited
account credited
drawings
sales
Did Mui make the correct entries to record this transaction?
5
debit entry
credit entry
A
no
no
B
no
yes
C
yes
no
D
yes
yes
The following account appeared in the books of Abdul.
Hanif account
2020
Jan 18
31
$
2020
returns
100
Jan 1
bank
392
4
discount
balance c / d
$
balance b / d
400
purchases
250
8
150
650
650
Which statement is correct?
6
A
On 1 January Abdul owed Hanif $400.
B
On 4 January Hanif purchased goods, $250, from Abdul.
C
On 31 January Abdul allowed Hanif $8 trade discount.
D
On 31 January Hanif owed Abdul $150.
Which business document contains details of purchases, returns and payments occurring during
a trading period?
A
credit note
B
debit note
C
invoice
D
statement of account
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Rashida sells goods on credit and allows her customers a trade discount.
Which statements are correct?
A
8
1
A debit entry is made in the customer’s account in the sales ledger for the net value
of the goods sold.
2
The date of sale, name of the customer, cost price and trade discount are entered in
the sales journal.
3
The trade discount is debited to the customer’s account and credited to the discount
allowed account.
1 and 2
B
1 and 3
C
2 only
D
2 and 3
The totals of a trial balance agreed but it was found that the purchase of office equipment had
been debited to office expenses account.
Which type of error has been made?
9
A
commission
B
compensating
C
original entry
D
principle
On 31 January, Somraj’s bank statement showed a credit balance of $740. Comparing the bank
statement with the cash book he found the following.
$
bank charges not recorded in the cash book
cheque paid but not presented to the bank
30
150
Somraj updated his cash book as required.
What was the updated cash book balance on 31 January?
A
$590
B
$620
C
$860
D
$890
10 When Mark started a car repair business, he purchased premises and equipment.
Two years later he spent $5000 on building an extension, $600 on new equipment and $750 on
repainting the original premises.
By how much will the non-current assets increase because of these transactions?
A
$5000
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B
$5600
C
$5750
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D
$6350
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11 A farmer sold a piece of land at market value.
How should the proceeds of this sale be treated?
A
as a capital receipt
B
as a revenue receipt
C
as capital expenditure
D
as revenue expenditure
12 Why should a trader provide for the depreciation of a non-current asset?
A
1
to match the cost against the revenue of the years which benefit from the use of the
asset
2
to provide a cash fund to enable the asset to be replaced at the end of its useful life
3
to recognise that most non-current assets lose value with the passage of time
4
to spread the cost of the asset over its expected working life to avoid overstating
profit
1 and 2 only
B
1, 3 and 4
C
2 and 3 only
D
2, 3 and 4
13 Equipment costing $20 000 was purchased on 1 January 2019. It has a useful working life of
5 years and a residual value of $3000. Depreciation using the straight-line method was included
in the income statement for the year ended 31 December 2019.
It was then found that the reducing balance method at 30% per annum should have been used.
What was the effect on the profit for the year ended 31 December 2019 of this error?
A
$2000 overstated
B
$2000 understated
C
$2600 overstated
D
$2600 understated
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14 A business provided the following information about two expenses.
1 January 2019
$
amount paid during
year ended
31 December 2019
$
31 December 2019
$
electricity
240 accrued
1500
360 accrued
insurance
180 prepaid
1200
220 prepaid
Which amounts will be charged to the income statement for the year ended 31 December 2019?
electricity
$
insurance
$
A
900
800
B
1380
1240
C
1620
1160
D
2100
1600
15 Anjum rents part of her premises to Ajay for $6120 per annum. At the beginning of the year Ajay
had paid two months rent in advance. At the end of the year Ajay had paid three months rent in
advance.
How much rent was received from Ajay during the year?
A
$3570
B
$5610
C
$6630
D
$8670
16 A business maintains a provision for doubtful debts of 5% of trade receivables. The balance on
the provision for doubtful debts account on 31 December 2018 was $2700.
On 31 December 2019 the trade receivables amounted to $50 000.
How will the provision for doubtful debts be recorded on 31 December 2019?
provision for
doubtful debts account
$
income statement
$
A
credit
200
added to gross profit
200
B
credit
200
deducted from gross profit
200
C
debit
200
added to gross profit
200
D
debit
200
deducted from gross profit
200
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17 At the end of the financial year Cindy valued her inventory at cost. This valuation incorrectly
included damaged goods costing $300. Cindy estimated these goods could be sold for $100.
What is the effect of correcting the inventory valuation?
gross profit
profit for the year
current assets
A
decreases by $200
decreases by $200
decrease by $200
B
decreases by $300
decreases by $300
decrease by $300
C
increases by $100
increases by $100
decrease by $100
D
increases by $200
increases by $200
decrease by $200
18 Hassan had the following assets on 31 January 2020.
$
premises
12 000
inventory
500
balance at bank
360
goodwill
3 000
cash
120
There were no liabilities on 31 January 2020.
Which entries will be made in Hassan’s statement of financial position on 31 January 2020?
intangible
assets
$
non-current
assets
$
current
assets
$
capital
$
A
nil
12 000
980
12 980
B
nil
15 000
480
15 480
C
3000
12 000
980
15 980
D
3000
15 000
480
18 480
19 AB Stores had the following transactions.
1
The owner invested a further $20 000 capital.
2
$2000 was paid to trade payables.
3
A long-term loan of $5000 was repaid.
By how much would the working capital increase after these transactions?
A
$13 000
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B
$15 000
C
$20 000
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D
$27 000
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20 The balances in the books of a business included the following.
$
goodwill
10 000
premises
25 000
trade receivables
9 500
trade payables
6 000
inventory
15 000
cash at bank
500 debit
long-term loan
5 000
What was the capital employed?
A
$50 000
B
$54 000
C
$60 000
D
$65 000
21 What is a disadvantage of operating a business as a partnership?
A
Partners may not agree on how to run the business.
B
Partners may not have the same skills.
C
The financial statements must be published.
D
The risks and responsibilities are shared.
22 What does not affect the total equity of a limited company?
A
issue of ordinary shares
B
ordinary share dividend paid
C
profit for the year
D
transfer from retained earnings to general reserve
23 What is called-up share capital?
A
the amount received by the company for issued shares
B
the amount requested from shareholders by the company
C
the value of shares the company could issue
D
the value of shares actually issued by the company
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24 A limited company provided the following information.
$
issued share capital (50 000 ordinary shares of $1 each)
50 000
profit for the year ended 31 December 2019
13 000
transfer to general reserve on 31 December 2019
6 000
interim ordinary share dividend paid during the year
3 000
On 31 December 2019 it was decided to use the remaining profit to pay a final ordinary share
dividend.
What percentage final dividend would the ordinary shareholders receive?
A
8%
B
14%
C
20%
D
26%
25 A cricket club set up a snack bar on 1 January 2019.
The following information is available.
$
for the year ended 31 December 2019
receipts from sales of snacks
3250
cost of purchases of snacks
2500
wages of snack bar assistant
250
at 31 December 2019
cost of snacks unsold
520
What was the profit made by the snack bar?
A
$500
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B
$750
C
$1020
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D
$1270
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26 A social club had the following assets and liabilities.
$
non-current assets
6550
cafe expenses owing
25
subscriptions owing by members
50
balance at bank
500 debit
owing to credit suppliers
300
cafe inventory
500
What was the accumulated fund?
A
$6275
B
$6325
27 A manufacturing business
30 November 2019
C
provided
$7175
the
following
D
$7275
information
for
the
year
ended
$
factory supervisor’s salary
factory power
25 000
5 000
machinery depreciation
11 000
machinery operators’ wages
29 000
raw materials consumed
82 000
What was the total of the direct costs?
A
$111 000
B
$116 000
C
$127 000
D
$152 000
28 What would be included in the statement of financial position of a manufacturing business but not
a wholesale business?
A
cash
B
office equipment
C
trade receivables
D
work in progress
29 The average inventory of a business was $40 000. The rate of inventory turnover was 5 times a
year. Mark-up was 20%.
What was the revenue for the year?
A
$160 000
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B
$200 000
C
$240 000
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D
$250 000
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30 Sumit does not maintain a full set of accounting records.
What does Sumit not need to calculate his credit sales?
A
customer’s dishonoured cheque
B
discounts allowed
C
discounts received
D
returns from credit customers
31 Jake had current liabilities of trade payables and had current assets of inventory, trade
receivables and cash at bank.
Which measure would improve his current ratio?
A
buying additional inventory and paying in cash
B
decreasing drawings
C
revaluing non-current assets
D
selling inventory on credit rather than for cash
32 Flo and Mo are traders selling similar goods at similar prices. They provided the following
information.
Flo
Mo
gross margin
50%
40%
profit margin
10%
8%
Which trader has better control of cost of sales and expenses?
costs of sales
expenses
A
Flo
Flo
B
Flo
Mo
C
Mo
Flo
D
Mo
Mo
33 Which is an application of the materiality principle?
A
always using the straight-line method when depreciating assets
B
buying raw materials on credit rather than paying immediately
C
charging the cost of light bulbs and batteries to operating expenses
D
recording goods sold only when its legal title passes to the buyer
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34 Which accounting principle states that revenue should not be recorded before it is earned?
A
consistency
B
matching
C
money measurement
D
realisation
35 Which accounting objective requires that financial statements are free from bias and errors?
A
comparability
B
relevance
C
reliability
D
understandability
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