0452/22/F/M/22 Question Paper – Accounting Feb/March 2022 Paper 22

All subjects

Download Open PDF

Cambridge Accounting (0452) question paper for paper 22, Feb/March 2022 — 0452/22/F/M/22, file 0452_m22_qp_22.pdf.

Loading the paper…

Text of this paper

www.dynamicpapers.com

Cambridge IGCSE™

* 7 4 6 4 4 0 5 0 0 3 *

ACCOUNTING

0452/22

Paper 2 Structured Written Paper

February/March 2022
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 (CJ) 303841/3
© UCLES 2022

[Turn over

2
1

www.dynamicpapers.com

Nazmeen started in business as a hairdresser on 1 January 2022. She purchases her hairdressing
supplies on credit and uses the imprest system for her petty cash.
Nazmeen’s assets and liabilities at 1 January 2022 were as follows:
$
11 000
2 300
200
2 500

Motor vehicle
Balance at bank
Petty cash
Bank loan
REQUIRED
(a) (i)

Prepare the general journal entry to record the opening assets and liabilities at
1 January 2022. A narrative is required.
Nazmeen
General journal
Date

Details

[4]

(ii)

State one other use of the general journal.
[1]

Nazmeen makes all payments of less than $100 by petty cash. The imprest amount, which is
$200, is restored on the first day of each month from the bank account.
Nazmeen provided the following information for January 2022.
January 3 Paid for petrol, $35.
8 Paid for magazines for the reception area, $14.
17 Paid $60 to GL Limited, a trade payable.
26 Paid for vehicle cleaning, $9.
29 Paid $38 to Alim, a trade payable.
REQUIRED
(b) (i)
© UCLES 2022

Complete Nazmeen’s petty cash book on the following page.
Balance the petty cash book, bring down the balance on 1 February 2022 and restore
the imprest.
0452/22/F/M/22

Details

2022

Date

Total
received
$

Nazmeen
Petty Cash Book

0452/22/F/M/22

Total
paid
$

Motor
expenses

Sundry
expenses
$

[10]

Ledger
accounts
$

www.dynamicpapers.com

[Turn over

www.dynamicpapers.com

4
(ii)

State one advantage of using the imprest system for petty cash.
[1]

Nazmeen receives business documents from her credit suppliers.
REQUIRED
(c) Complete the table below by placing a tick (3) to indicate which document(s) each item
appears on. The first one is completed for you.
Invoice
A credit purchase

Credit note

Statement
of account
3

The balance owing by Nazmeen to a
supplier at the end of the month
A purchases return
Trade discount deducted from list price
Payment made to a credit supplier
[4]
[Total: 20]

0452/22/F/M/22

www.dynamicpapers.com

BLANK PAGE

0452/22/F/M/22

[Turn over

www.dynamicpapers.com

6
2

Ravi is a trader. He provided the following information.
2021
1 February Sales ledger control account debit balance
Sales ledger control account credit balance
2022
31 January Totals for the year:
Credit sales
Cash sales
Bank transfers received from credit customers
Cash received from credit customers
Returns from credit customers
Irrecoverable debts written off
Contra entries
Discount allowed
Discount received
Interest charged on overdue sales ledger accounts
Sales ledger control account debit balance
Sales ledger control account credit balance

$
12 510
1 245
134 000
4 625
96 250
12 890
4 000
9 100
1 677
4 643
2 119
1 104
?
nil

REQUIRED
(a) Prepare Ravi’s sales ledger control account for the year ended 31 January 2022.
Balance the account and bring down the balance on 1 February 2022.
Ravi
Sales ledger control account
Date

Details

Date

Details

[10]

0452/22/F/M/22

www.dynamicpapers.com

(b) State the accounting principle which is being applied when irrecoverable debts are written off.
[1]
(c) Explain why the following interested parties want to know the level of Ravi’s trade receivables.
(i)

Bank manager

[2]

(ii)

Trade payables

[2]

Ravi sends out statements of account to credit customers and charges interest on overdue
accounts. He is concerned about the loss caused to his business by irrecoverable debts. He is
considering employing a part-time credit controller to contact credit customers by telephone and
to start legal action on overdue accounts if necessary. The credit controller would be paid $6800
per annum.
REQUIRED
(d) Advise Ravi whether or not he should employ the credit controller. Justify your answer.

[5]
[Total: 20]

0452/22/F/M/22

[Turn over

8
3

www.dynamicpapers.com

Pari owns a clothing factory. Her year end is 31 December.
At 31 December 2021, her ledger account balances included the following.
$

Inventory at 1 January 2021
Raw materials

6 100

Work in progress

9 420

Finished goods

11 350

Revenue

230 020

Purchases of raw materials

84 200

Wages
Factory operatives

33 000

Factory supervisor

26 000

Office and sales staff

45 000

Rates and insurance

14 000

General factory expenses

11 500

Factory equipment – at cost

100 000

Factory equipment – provision for depreciation

36 000

Additional information
1.

Inventory at 31 December 2021
Raw materials

6 840

Work in progress

9 885

Finished goods

12 630

Rates and insurance are to be apportioned equally between the factory and the office.

At 31 December 2021, general factory expenses of $500 were unpaid.

Factory equipment is depreciated at 20% per annum using the reducing balance method.

0452/22/F/M/22

www.dynamicpapers.com

REQUIRED
(a) Prepare Pari’s manufacturing account for the year ended 31 December 2021.
Pari
Manufacturing Account for the year ended 31 December 2021
$

[9]

0452/22/F/M/22

[Turn over

www.dynamicpapers.com

(b) Prepare Pari’s income statement (trading section) for the year ended 31 December 2021.
Pari
Income Statement (trading section) for the year ended 31 December 2021
$

[4]

answer

[2]

0452/22/F/M/22

www.dynamicpapers.com

Pari is disappointed in her cost of production and gross profit. She is considering buying in her
products instead of producing them in her factory.
REQUIRED
(d) Advise Pari whether or not she should start to buy in her products. Justify your answer.

[5]
[Total: 20]

0452/22/F/M/22

[Turn over

12
4

www.dynamicpapers.com

Demis is a trader. His financial year ends on 31 December.
He prepared the following trial balance which contains errors.
Demis
Trial balance at 31 December 2021
Debit
$

Credit
$

Sales

90 052

Purchases

52 420

Purchases

52 420

Rates and insurance

11 500

General expenses

1 092

Property

92 500

Fixtures at cost

34 000

Provision for depreciation of fixtures

21 760

Trade receivables

7 410

Trade payables

4 665

Inventory

9 600

Cash at bank

8 095

Capital at 1 January 2021

109 940

Drawings

11 320

Suspense

60 770
283 772

283 772

Additional information
1.

There was $80 in the petty cash box at 31 December 2021.

The value of inventory on 31 December 2021 was included in the trial balance.
The inventory valuation had increased by 20% since 31 December 2020.

0452/22/F/M/22

www.dynamicpapers.com

REQUIRED
(a) Prepare a corrected trial balance at 31 December 2021.
Demis
Corrected Trial Balance at 31 December 2021
Debit
$

Credit
$

Sales

Purchases

Rates and insurance

General expenses

Property

Fixtures at cost

Provision for depreciation of fixtures

Trade receivables

Trade payables

Inventory

Cash at bank

Capital at 1 January 2021

Drawings

[6]

0452/22/F/M/22

[Turn over

www.dynamicpapers.com

Demis has received a bank statement which shows that there were unpresented cheques of $437
at 31 December 2021. There were no outstanding lodgements.
REQUIRED
(b) Calculate the bank balance shown on the bank statement at 31 December 2021. Indicate
whether this balance is a debit or a credit balance.

[2]
Demis later discovered the following errors.
1

Drawings of goods for own use, $317, had been omitted from the books of account.

Purchases returns, $93, had been credited to the sales account.

A payment for property insurance, $500, had been debited to the property account.

A credit purchase, $315, from Erin, had been recorded as $135.

A credit sale, $191, to Harvinder, had been debited to the sales account and credited to
Harvinder’s account.

0452/22/F/M/22

www.dynamicpapers.com

15
REQUIRED

(c) Complete the following table to show the entries required to correct each error.
Entries required to correct the error
Error

Debit

Credit

Account

Drawings of goods for own use,
$317, had been omitted from the
books of account.

Purchases returns, $93, had been
credited to the sales account.

3. A payment for property insurance,
$500, had been debited to the
property account.

4. A credit purchase, $315, from
Erin, had been recorded as $135.

5. A credit sale, $191, to Harvinder,
had been debited to the
sales account and credited to
Harvinder’s account.

[10]
(d) Identify the following error types from the table above.
(i)

error 2
[1]

(ii)

error 4
[1]
[Total: 20]

0452/22/F/M/22

[Turn over

www.dynamicpapers.com

16
5

Priti and Paisley are in partnership renting out properties. Paisley manages the office and
maintains the bookkeeping records for the partnership.
The partnership agreement provides for
Interest on drawings
5% per annum
Interest on capital
4% per annum
Salary to Paisley
$6000 per annum
Residual profits and losses to be shared 75% to Priti and 25% to Paisley.
The partners provided the following list of balances.
Capital accounts at 1 February 2021
Priti
Paisley
Current accounts at 1 February 2021
Priti
Paisley
Drawings for the year ended 31 January 2022
Priti
Paisley

$
100 000
20 000
7 932 credit
2 350 credit
15 000
13 000

The profit for the year ended 31 January 2022 was $33 100.

0452/22/F/M/22

www.dynamicpapers.com

REQUIRED
(a) Prepare the appropriation account for Priti and Paisley for the year ended 31 January 2022.
Priti and Paisley
Appropriation Account for the year ended 31 January 2022
$

[6]

0452/22/F/M/22

[Turn over

www.dynamicpapers.com

(b) Prepare Paisley’s current account for the year ended 31 January 2022. Balance the account
and bring down the balance on 1 February 2022.
Paisley
Current account
Date

Details

Date

Details

[6]

(c) Suggest three reasons why Paisley may not be satisfied with his overall share of the profit for
the year to 31 January 2022.
1

3
[3]

0452/22/F/M/22

www.dynamicpapers.com

Priti and Paisley are planning to purchase more properties to rent out. They are considering
forming a limited company as they believe this would make it easier for them to raise the finance
for the purchase of the properties.
REQUIRED
(d) Advise Priti and Paisley whether or not they should form a limited company.
Justify your answer with two advantages and two disadvantages.

[5]
[Total: 20]

0452/22/F/M/22

www.dynamicpapers.com

BLANK PAGE

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 Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

0452/22/F/M/22

Accounting (0452) · Feb/March 2022 · Question paper 22

Popular subjects

Exam info

Help