Accounting (0452) · Feb/March 2024 · Examiner report

Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/12
Multiple Choice

Question
Number

Key

Question
Number

Key

Question
Number

Key

1

A

13

A

25

B

2

C

14

C

26

A

3

A

15

D

27

B

4

C

16

B

28

C

5

A

17

C

29

B

6

C

18

B

30

C

7

D

19

B

31

D

8

D

20

B

32

C

9

D

21

A

33

A

10

B

22

D

34

D

11

C

23

C

35

C

12

A

24

D

General comments
Candidates should be familiar with all topics on the syllabus and possess a thorough knowledge of
accounting. Candidates should be prepared to answer questions which involve calculations and those which
do not.
To have a clear understanding of what is required, it is important for candidates to read through each item
(question) very carefully before selecting an option on the answer sheet.
Many candidates possessed a good understanding of double-entry bookkeeping and were able to select the
correct key to many items on the paper.
Comments on specific questions
Question 2
Candidates were required to use a list of assets and liabilities to calculate the owner’s capital. The correct
answer was C. Most candidates answered correctly.

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Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers
Question 4
This question asked about the purpose of a cheque counterfoil. The correct answer was C. Although there
were many correct responses, some candidates incorrectly thought that a cheque counterfoil is proof of
payment.
Question 6
Candidates were required to calculate the amount which would be paid for goods once the appropriate
discount had been deducted. Most candidates found this to be a straightforward calculation. The correct
answer was C.
Question 8
This question covered correction of errors. Candidates were required to select the double entry to correct a
stated error. The correct answer was D. Although there were many correct responses, some candidates
found this question challenging.
Question 10
Candidates were asked to select the item which would be recorded when updating the cash book. The
correct answer was B. Some candidates incorrectly thought that the bank statement balance would be
recorded when updating the cash book.
Question 11
This question required candidates to calculate the bank statement balance. The correct answer was C. Most
candidates correctly identified that the bank statement balance was $2241 but some candidates incorrectly
identified this as a debit balance.
Question 12
This question covered the topic of the sales ledger control account. Candidates were required to identify that
preparing a sales ledger control account does not involve checking each entry in the trade receivables’
accounts in the sales ledger. The correct answer was A.
Question 13
This question required candidates to calculate the corrected balance on a sales ledger control account. The
$2000 contra entry should have been credited to the sales ledger control account but was debited. So, the
corrected balance is $10 000 – $2000 – $2000 = $6000. The correct answer was A.
Question 19
Candidates were required to identify which two errors would cause gross profit to be overstated by $600 and
profit for the year to be understated by $250. The correct answer was B. Although there were many correct
responses, some candidates found this question challenging.
Question 20
This question required candidates to identify which business was not a service business. Most candidates
found this question straightforward and selected the correct option. The correct answer was B.
Question 21
This question covered the topic of depreciation. Candidates were required to identify the reason for using the
reducing balance method for charging depreciation on a particular non-current asset. The correct answer
was A. The reducing balance method is typically used where most of the value of a non-current asset is used
up in the earlier years of its life or where the non-current asset becomes out of date quickly due to
technological change.

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Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers
Question 22
Candidates were required to identify the correct statement about the statement of financial position. The
correct answer was D. Most candidates found this question straightforward and selected the correct option.
Question 23
This question covered the taking of goods from the business by the owner. The required entry is to debit the
drawings account and credit the purchases account. If this entry has not been made than purchases will be
overstated and therefore profit will be understated. As profit will be understated and drawings will also be
understated, there will be no overall effect on capital. The correct answer is C. Many candidates found this
question challenging.
Question 24
Candidates were required to identify the advantages of forming a partnership. The correct answer was D.
Most candidates found this question straightforward and answered correctly.
Question 28
This question required a calculation of the amount of subscriptions to be included in a particular income and
expenditure account. The correct amount is (9750 + 1250 + 1500 = ) $12 500 so the correct answer is C. A
significant number of candidates deducted the amount of $1100 from this figure, arriving at an incorrect
answer of $11 400.
Question 31
This question required a calculation which some candidates found challenging. The formula required was:
opening capital + profit – drawings = closing capital. The profit figure of $14 500 is arrived by adding closing
capital to drawings, and deducting opening capital, i.e., $58 000 + $3500 - $47 000 = $14 500. The correct
answer is D.

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Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/22
Paper 22

Key messages
It is essential to have a thorough understanding of all the topics on the syllabus in order to achieve a good
grade. In addition to recording financial information and preparing financial statements candidates must be
able to apply their knowledge to various scenarios. Working through questions in textbooks should be
supplemented by studying past examination papers.
Candidates are advised to read each question carefully before attempting an answer to ensure that they
understand exactly what each question requires.
The handwriting on most scripts was very clear, but a few candidates submitted scripts which were very
difficult to read. It is important that all words and figures are legible.
A few candidates required additional space in which to complete their answers. Some of these candidates
did not indicate where the additional work could be found. To ensure that such additional work is not
overlooked it is advisable to put a note informing the examiner where this can be located.
General comments
Double-entry book-keeping forms the basis of all the day-today records of a business so it is essential that
candidates have a thorough knowledge of the principles of double entry.
Candidates are reminded of the importance of using correct terminology within accounts and within financial
statements.
The paper included three five mark questions which required candidates to discuss a given scenario, giving
points for and against, and recommending a course of action. It is important that candidates study the
scenario carefully to ensure that they understand what exactly is required. Candidates are advised to plan
their answer carefully before writing it out. This gives them the opportunity to arrange the points in a logical
order and include a clear recommendation.
Comments on specific questions
Question 1
(a)

Candidates were required to prepare the three column cash book of a trader and to balance the
book at the end of the month. There were many very good answers.
Common errors included:

Incorrect details

Incorrect calculation of the two items of discount received

Incorrect entries for the contra item

Bringing down a credit balance on the cash columns.

(b)
(c)

A table had to be completed to indicate whether three items would be used to update the cash
book or would appear in the bank reconciliation statement. Most candidates earned two or three of
the available marks.
This required candidates to discuss the advantages and disadvantages of a trader paying and
receiving all large payments by bank transfer and paying small payments by petty cash. Many

© 2024

Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers
candidates correctly discussed speed and security of using bank transfers and the fact that method
of payment may not be acceptable to some customers/suppliers. A number of candidates
incorrectly concentrated on the advantages of maintaining a petty cash book and the use of the
imprest system. Most candidates provided a clear recommendation but others omitted this
completely.
(d)

Candidates were required to state the meaning of two terms connected with banking. A large
number of candidates earned both the available marks. Some answers were poor and often
paraphrased the question e.g., ‘bank charges are charges made by the bank’ which did not earn a
mark.

Question 2
(a) (i)

A journal entry to write off an irrecoverable debt had to be prepared. Many candidates earned full
marks. Some did not earn the mark for the narrative as it was non-existent or incomplete.

(ii)

Two reasons for maintaining a provision for doubtful debts were required. Many candidates
correctly suggested that it was to apply the principle of prudence. Some then went on to describe
this in more detail instead of suggesting another reason for maintaining the provision. The
application of the matching principle was also correctly suggested by many candidates.

(b)

Using data provided, candidates were required to prepare a sales ledger control account. Many
candidates earned high marks.
Common errors included:

Incorrect details

Omission of the irrecoverable debt

Omission of opening balance

Inclusion of cash sales.

(c) (i)

Candidates were required to advise a trader whether or not to stop allowing cash discount. There
were many good responses. Some candidates focused on one aspect only and so did not give a
balanced answer and could not be awarded a recommendation mark. A number of candidates
simply paraphrased the question without offering further expansion. On occasion unsubstantiated
statements were made. For example ‘the profit will increase’ was not regarded as adequate as no
reason was provided why this may occur.

(ii)

One other way of ensuring the trader was able to pay trade payables was required. Correct
responses included reduce expenses, increase selling prices and obtain a bank overdraft or short
term loan. Some candidates inappropriately suggested more long term measures such as long
term loans and selling non-current assets, or made imprecise suggestions such as ‘get a loan’.

Question 3
(a)

Using data provided candidates were required to prepare a subscriptions account. There were
some very good answers which gained high marks. Other candidates did not seem to be familiar
with this type of account.
Common errors included:

Reversing of opening balances

Reversing of closing balances

Entries for amount received and transfer to income and expenditure account on the wrong
side

Incorrect dates or omission of dates

Making a transfer to income statement rather than income and expenditure account.

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Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers
(b)

A rent and insurance account had to be prepared. Once again, some candidates were able to earn
goods marks but others found it quite difficult.
Common errors included:

Inclusion of extraneous items

Balances on the wrong side of the account

Making a transfer to income statement rather than income and expenditure account

Incorrect details such as ‘paid in advance’ for ‘balance’ and ‘club rent’ for ‘bank’.

(c)

Candidates were required to calculate the purchases of the club’s shop. This could be displayed in
the form of a ledger account or an arithmetic calculation. There were many correct answers. A
number of candidates treated the opening and closing balance of the trade payables incorrectly.
Some included extraneous items such as opening and closing inventories.

(d)

The income statement for the club’s shop had to be prepared. Most candidates appeared to be
familiar with the format of an income statement and many were able to obtain good marks.
Common errors included:

Inclusion of extraneous items

Incorrect description of the shop profit for the year.

(e)

Candidates were required to state the meaning of two terms connected with clubs. A large number
of candidates earned both the available marks. Some answers were poor and often paraphrased
the question e.g., income and expenditure account shows the incomes and the expenditures’ which
did not earn a mark. Many incorrectly referred to the accumulated fund as capital or money
accumulated in the club.

Question 4
(a)

An inventory account had to be prepared. Despite similar questions being asked in the past this
proved challenging for the majority of candidates and there were very few wholly correct
responses. The opening inventory was already shown as a debit balance brought down. This
should have been transferred to the income statement. The closing inventory should have been
transferred from the income statement to the debit of the inventory account. The account should
then have been balanced with a balance being carried down from the credit to the debit to start the
next financial year.

(b)

Most candidates managed to earn at least two of the available marks for preparing the capital
account of a sole trader. A common error was to omit the profit for the year or show incorrect
details for that item.

(c)

Using data provided candidates were required to prepare a statement of financial position of a sole
trader. Most candidates made a reasonable attempt.
Common errors included:

Omission of heading for the columns for the cost, provision for depreciation and book value of
the non-current assets

Omission of headings for the different sections

Omission of sub-totals for the different sections

Lack of detail for the capital section

Items incorrectly classified.

(d)

Candidates were required to advise a trader whether or not she should purchase a delivery van. It
was not uncommon for candidates to copy sections from the scenario without further explanation or
expansion. Some candidates focused on either the advantages or the disadvantages and did not
provide a balanced discussion.

(e)

Many candidates correctly explained that revenue receipts occurred as a result of the day-to-day
trading activities. However some explanations were vague and some even referred to the
document which may be given to acknowledge money received.

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Cambridge International General Certificate of Secondary Education
0452 Accounting March 2024
Principal Examiner Report for Teachers
Question 5
(a)

A journal entry to correct an error was required. Some candidates earned full marks. Some found it
difficult to provide a suitable narrative.

(b)

A suspense account had to be completed and the original difference on the trial balance inserted.
Many candidates produced good answers.
Common errors included:
 Omission of error 3 involving two trade receivables
 Incorrect details, especially for the difference on the trial balance.

(c)

Candidates were required to complete two statements showing the calculation of the correct gross
profit and correct profit for the year. This proved to be quite taxing for many candidates and there
were only a few wholly correct responses.
In the first statement the original gross profit should have been adjusted for the errors 1, 2 and 3
items which affected the trading section of the income statement.
Common errors included:
 Omission of either the sales returns ($3524) or the purchases ($3524)
 Inclusion of extraneous items such as rent and capital
 No indication of whether items were to be added to or deducted from the original gross
profit.
In the second statement the original profit for the year should have been adjusted for errors which
affected the profit and loss section of the income statement. Many correctly made an adjustment
for error 6, although some candidates used an incorrect figure. A few candidates included
extraneous items such as capital.
The most common error was not adjusting the profit for the change in the gross profit. The
difference between the original gross profit and the corrected gross profit should have been
included in the calculation of the correct profit for the year.

(d)

Candidates were required to calculate the sales for the year using the gross margin of 40 per cent
and the corrected gross profit calculated in part (c)(i). Many candidates made the mistake of
multiplying the corrected gross profit by 40 per cent instead of multiplying by 100/40.

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