0452/22/F/M/21 Question Paper – Accounting Feb/March 2021 Paper 22

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Cambridge Accounting (0452) question paper for paper 22, Feb/March 2021 — 0452/22/F/M/21, file 0452_m21_qp_22.pdf.

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Cambridge IGCSE™

* 2 1 8 5 9 7 1 3 4 1 *

ACCOUNTING

0452/22

Paper 2 Structured Written Paper

February/March 2021
1 hour 45 minutes

You must answer on the question paper.
No additional materials are needed.
INSTRUCTIONS
●
Answer all questions.
●
Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
●
Write your name, centre number and candidate number in the boxes at the top of the page.
●
Write your answer to each question in the space provided.
●
Do not use an erasable pen or correction fluid.
●
Do not write on any bar codes.
●
You may use a calculator.
●
International accounting terms and formats should be used as appropriate.
●
You should show your workings.

INFORMATION
●
The total mark for this paper is 100.
●
The number of marks for each question or part question is shown in brackets [ ].
●
Where you are asked to complete a layout, you may not need all the lines for your answer.

This document has 20 pages. Any blank pages are indicated.
DC (PQ) 200799/4
© UCLES 2021

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1

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Shilpa is a trader. The following transactions took place in January 2021.
January

Paid rent, $450, by direct debit

Bought goods on credit from Dilip, list price $120, subject to a trade discount of
25%

Sold goods on credit to Kabir, list price $200, subject to a trade discount of 20%

Sold surplus office fittings for $110 which was paid by credit transfer

Returned goods to Dilip, list price $20. These goods had been purchased on
3 January

Paid $50 to Dilip in cash

Cash sales, $85, were immediately paid into the bank

Paid office expenses, $30, by credit transfer

Sold goods on credit to Pari, $150

Kabir paid by cheque for the goods he purchased on 6 January, after deducting
cash discount of 7½%

Pari paid $141, by cheque, in full settlement of the purchases made on 20 January

Sold goods on credit to Yash, $62, offering him a discount of 5% if he paid within
21 days

REQUIRED
(a) Prepare Shilpa’s sales journal for January 2021.
Total the journal and indicate the ledger account to which the total would be posted.
Shilpa
Sales journal
Date

Details

[4]

(b) Complete Shilpa’s cash book on the page opposite.
Balance the cash book and bring down the balances on 1 February 2021.
© UCLES 2021

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Balance b/d

Details

Jan 1

2021

Date

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200

814

Bank

Cash

Discount
allowed
$

2021

Date

Shilpa
Cash Book

Details

Discount
received
$

Cash

[11]

Bank

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(c) Prepare the ledger account of Dilip for January 2021. Balance the account and bring down
the balance on 1 February 2021.
There was no balance on Dilip’s account on 1 January 2021.
Shilpa
Dilip account
Date

Details

Date

Details

[4]

(d) Complete the table by placing a tick (3) to indicate which document Dilip would send to
Shilpa for the return of goods on 10 January.
Debit note
Credit note
[1]
[Total: 20]

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Zamir is in business providing legal services. Zamir provided the following balances from his
books of account at 31 December 2020.
Fee income
Rent and rates
Salaries
Stationery and advertising
Electricity
Bank charges
Office equipment – cost
Office equipment – provision for depreciation
Proceeds of disposal of office equipment
Bank overdraft
Trade receivables
Capital
Drawings

$
151 750
26 000
55 000
6 450
8 000
4 100
60 000
22 500
1 000
7 900
15 600
57 000
65 000

Additional information
1

The annual rent is $16 000. On 31 December 2020 rent was paid to cover the period from
1 January to 31 March 2021.
There was no accrual or prepayment of rent at 1 January 2020.

Rates of $6000 were paid during the year to 31 December 2020. This payment covered the
period 1 January 2020 to 31 October 2020 only. From 1 November 2020 annual rates were
$7560.

Depreciation is to be charged on office equipment at 15% per annum using the straight-line
method. No depreciation is charged in the year of disposal.

In February 2020 office equipment was sold for $1000. This equipment had been purchased
for $1800 on 1 January 2018. The sales proceeds have been debited to the bank account
and credited to the proceeds of disposal of office equipment account. No other entries have
been made in respect of the disposal.

One of Zamir’s clients has become bankrupt. The client owed $1885. Zamir does not expect
to recover this amount.

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REQUIRED
(a) Prepare Zamir’s income statement for the year ended 31 December 2020.
Zamir
Income Statement for the year ended 31 December 2020
$

[10]

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(b) Prepare the assets section of Zamir’s statement of financial position at 31 December 2020.
Zamir
Statement of Financial Position (assets section) at 31 December 2020
$

[3]

[2]

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Zamir employs Sharif, who is another lawyer. Sharif also keeps the books of account for the
business. Zamir would like to ensure that Sharif does not leave to start work for a rival legal
business.
REQUIRED
(d) Advise Zamir whether he should offer Sharif an increase in salary or invite him to become a
partner in the business. Justify your answer with two advantages of each course of action.

[5]
[Total: 20]

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Rachel prepared her trial balance at 31 January. The total of the debit side was more than the total
of the credit side. Rachel entered the difference in a suspense account.
(a) Explain how the use of a suspense account allows a draft statement of financial position to be
prepared.

[2]
Rachel later discovered the following errors.
1

A repair to the premises, $220, had been debited to the premises account.

The purchase of a motor vehicle, $3400, on credit from Neil’s Wheels, had not been recorded
in the accounting records.

Both the sales journal and the purchases journal had been overcast by $100.

Returns inwards, $19, had not been recorded in the returns inwards account.

Bank interest received, $25, had been debited to the bank charges account. The entry in the
bank account had been correctly made.

REQUIRED
(b) Prepare the journal entries to correct errors 1–5. Narratives are not required.

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Rachel
Journal
Error
number

Details

Debit
$

Credit
$

[11]

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a compensating error

(ii)

[1]

an error of omission

[1]

(d) Complete the table to indicate the effect of each error on gross profit and on profit for the
year. The first one has been completed as an example.
Gross Profit

Error
number

No effect

Understated
$

Profit for the year
Overstated
$

No effect

Understated
$

Overstated
$
220

2
3
4
5
[4]
(e) State why a balance may remain on the suspense account after errors 1–5 have been
corrected.

[1]
[Total: 20]

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Chaaya provided the following information.
$

For the year to 31 December 2020
Credit sales
Credit purchases
Gross profit

114 400
63 110
51 480

At 31 December 2020
Inventory
Trade receivables
Trade payables
Bank overdraft

2 850
15 400
7 430
6 190

REQUIRED
(a) Complete the following table.
ratio

working

answer

gross margin

trade receivables
turnover days
(round up to next whole day)
current ratio
(correct to two decimal places)

[6]
Chaaya is comparing her ratios with those of Sara, her main competitor. Based on Sara’s most
recent financial statements, her trade receivables turnover is 28 days.

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REQUIRED
(b) (i)

Compare Chaaya’s trade receivables turnover with Sara’s trade receivables turnover.

[3]

(ii)

State two problems with the inter-firm comparison in 4(b)(i).
1

[2]

Chaaya is considering stopping selling on credit and instead selling on a cash only basis. Chaaya
would offer a trade discount of 12% to regular customers in order to maintain a good relationship
with customers.
REQUIRED
(c) Advise Chaaya whether she should start to make cash sales only and offer the trade discount.
Justify your answer by providing two advantages and two disadvantages.

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(d) (i)

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State two reasons why Chaaya’s employees would be interested in her financial
statements.
1

[2]

(ii)

State two types of users of Chaaya’s financial statements, other than Chaaya and her
employees.
1
2
[2]
[Total: 20]

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Maira opened a shop on 1 January 2020.
She provided the following trading information.
Gross margin: 40%
Purchase price: $70 per unit
Carriage inwards: $2 per unit
Inventory: 130 units at 31 December 2020
REQUIRED
(a) Calculate the cost of Maira’s inventory at 31 December 2020.

[2]
Maira has not kept a full set of accounting records, but provided the following information.
1

All sales were made on cash terms. The sales for the first year were:
for the first two months: $10 800 each month
for the next eight months: $12 000 each month
for the last two months: $16 200 each month

During the year Maira purchased 1400 units. Carriage was paid on these units.

Maira took goods from the business during the year ended 31 December 2020. No record
was kept of these drawings.

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REQUIRED
(b) Prepare Maira’s income statement (trading section) for the year ended 31 December 2020.
Maira
Income Statement (trading section) for the year ended 31 December 2020
$

[8]

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Maira has been too busy to keep a full set of accounting records. However, she is now considering
using double-entry book-keeping for her business.
(c) Advise Maira on whether or not she should start to keep a full set of accounting records.
Justify your answer with two advantages and two disadvantages.

[5]
(d) Place a tick (3) in the correct column to indicate to Maira the book of prime entry in which
each of the following should be recorded.
Cash book

Purchases journal

Purchases
returns journal

Discount received from a
supplier for prompt payment
Credit note received from a
supplier
Direct debit paid to a
supplier
[3]
(e) Complete the table by placing a tick (3) in the correct column to indicate to Maira the
accounting objective which is described in each statement.
Comparability

Relevance

Reliability

Maira’s financial statements should be
free from significant errors.
Maira’s financial statements should be
provided in time for her to use them
when making decisions about her shop.
[2]
[Total: 20]
© UCLES 2021

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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.

0452/22/F/M/21

Accounting (0452) · Feb/March 2021 · Question paper 22

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