Accounting (0452) · Feb/March 2024 · Question paper 22

Cambridge IGCSE™

* 7 2 8 8 8 5 5 3 9 7 *

ACCOUNTING

0452/22

Paper 2 Structured Written Paper

February/March 2024
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) 326044/3
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1

Gurjit is a trader. During January 2024, the following transactions took place.
January 4
7

Cash sales, $640, were paid directly into the bank account
Paid Sandy $551 by credit transfer, having deducted 5% cash discount

13

Paid cash, $120, for wages

19

Received payment by cheque, $415, from Uma

21

Paid Viraj $194 by telephone transfer, in full settlement of an invoice for $200

25

Withdrew cash from the bank, $100, for business use

REQUIRED
(a) Prepare Gurjit’s cash book on the page opposite.
Balance the cash book and bring down the balances at 1 February 2024.

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Balance b/d

Details

Jan 1

2024

Date

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Discount
allowed
$

1490

$

$

175

Bank

Cash

2024

Date

Gurjit
Cash Book

Details

Discount
received
$

$

Cash

[10]

$

Bank

3

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4
(b) Complete the following table by placing a tick (3) in the correct column to indicate whether
each item would be used to update the cash book or would appear in the bank reconciliation
statement.
Updating cash
book

Bank reconciliation
statement

Bank error
Cheque from Uma dishonoured
Bank charges
[3]
Gurjit is considering paying amounts of less than $20 via petty cash. He would pay all larger
amounts by bank transfer or card payment. He would also require his customers to pay all amounts
due by bank transfer or card payment. Gurjit would stop issuing and receiving cheques.
REQUIRED
(c) Advise Gurjit whether or not he should make the above changes. Justify your answer by
providing points for and against making these changes.

[5]

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(d) State the meaning of the following terms.
(i)

Bank overdraft

[1]

(ii)

Bank charges

[1]
[Total: 20]

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2

Samir buys and sells on credit. He has provided the following information.
2023
1 January

$
10 115

Total trade receivables

31 December Totals for the year:
Cash sales
Credit sales
Returns from credit customers
Bank transfers received from credit customers
Cash received from credit customers
Interest charged on overdue sales ledger accounts
Contra entries
Discount allowed to credit customers

136 900
124 670
5 234
98 620
11 470
139
1 833
3 125

In addition, one of Samir’s trade receivables, Ria, has become bankrupt and Samir will not receive
the $178 which she owes to him. Samir thinks he will receive most of the other amounts due to
him from his trade receivables.
REQUIRED
(a) (i)

Prepare the journal entry to write off the amount owed by Ria. A narrative is required.
Samir
Journal
Date

Details

Debit
$

Credit
$

[3]

(ii)

State two reasons why Samir should use a provision for doubtful debts account.

[2]

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(b) Prepare Samir’s sales ledger control account for the year ended 31 December 2023.
Balance the account and bring down the balance at 1 January 2024.
Samir
Sales ledger control account
Date

Details

$

Date

Details

$

[9]

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Samir is concerned about his ability to pay his trade payables. He is considering whether to stop
allowing cash discount to his credit customers so that he will have more cash coming in and can
pay his trade payables more easily.
REQUIRED
(c) (i)

Advise Samir whether or not to stop allowing cash discount. Justify your answer
by providing advantages and disadvantages of stopping cash discount to his credit
customers.

[5]

(ii)

Suggest one other action which Samir could take to ensure that he has sufficient cash to
pay his trade payables.

[1]
[Total: 20]

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BLANK PAGE

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3

The Sporting Excellence Club provides sports facilities for its members. It also runs a shop where
members can buy sportswear.
The club’s assets and liabilities included the following.
31 December 2022

31 December 2023

$

$

Subscriptions received in advance

610

570

Subscriptions received in arrears

480

465

Insurance paid in advance

240

250

Shop inventory

2 500

2 750

Trade payables for shop supplies

2 140

2 470

The following totals have been taken from the club’s receipts and payments account for the year
ended 31 December 2023.
Receipts

$

Subscriptions received

11 950

Shop sales

31 890

Payments
Trade payables for shop supplies

23 290

Shop wages

3 268

Club rent and insurance

7 390

Other club expenses

1 122

REQUIRED
(a) Prepare the subscriptions account for the year ended 31 December 2023. Balance the
account and bring down the balances at 1 January 2024.

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The Sporting Excellence Club
Subscriptions account
Date

Details

$

Date

Details

$

[6]

(b) Prepare the rent and insurance account for the year ended 31 December 2023. Balance the
account and bring down the balance at 1 January 2024.
The Sporting Excellence Club
Rent and insurance account
Date

Details

$

Date

Details

$

[4]

(c) Calculate the shop purchases for the year ended 31 December 2023.

[3]

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(d) Prepare the income statement for the shop for the year ended 31 December 2023
The Sporting Excellence Club
Shop income statement for the year ended 31 December 2023
$

$

[5]

(e) State the meaning of the following terms.
(i)

accumulated fund

[1]

(ii)

income and expenditure account

[1]
[Total: 20]

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4

Sara is a trader. She has prepared her income statement for the year ended 31 December 2023.
This shows a profit for the year of $20 180. She has closed the ledger accounts for income and
expenses and has transferred the closing inventory to the income statement.
The following balances remain in Sara’s ledger at 31 December 2023.
$
Premises (cost)

100 000

Fixtures and fittings (cost)

40 000

Accumulated depreciation on fixtures and fittings

15 000

Inventory (at 31 December 2023)

6 275

Trade receivables

8 540

Provision for doubtful debts

427

Trade payables

5 125

Bank overdraft

4 900

Cash

350

Long-term loan

12 000

Wages (accrued)

1 000

Capital (at 1 January 2023)

115 793

Drawings

19 260

REQUIRED
(a) Prepare the inventory account for the year ended 31 December 2023. Balance the account
and bring down the balance at 1 January 2024.

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Sara
Inventory account
Date
2023
Jan 1

Details
Balance b/d

$

Date

Details

$

5 811

[4]

(b) Prepare the capital account for the year ended 31 December 2023. Balance the account and
bring down the balance at 1 January 2024.
Sara
Capital account
Date

Details

$

Date

Details

$

[3]

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(c) Prepare the statement of financial position at 31 December 2023.
Sara
Statement of financial position at 31 December 2023
$

$

$

[7]

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Sara is considering purchasing a delivery vehicle. She thinks that her sales would increase if she
was able to deliver goods to her customers. She would charge a small amount to her customers to
cover the cost of delivery.
REQUIRED
(d) Advise Sara whether or not she should purchase the delivery vehicle. Justify your answer by
providing two advantages and two disadvantages of purchasing the delivery vehicle.

[5]
(e) State the meaning of the term revenue receipts.

[1]
[Total: 20]

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5

Sunita has prepared a trial balance at 31 December 2023 and a draft income statement for the
year ended 31 December 2023.
Sunita later discovered the following errors.
1

The total of the sales returns journal for November 2023, $3524, had been credited to the
purchases account.

2

The purchases journal for July 2023 had been undercast by $90.

3

The total of the sales journal for May 2023, $19 415, had not been posted to the sales account.

4

A payment received from P. Mattel, $129, had been debited to the account for M. Patel.

5

Capital introduced by Sunita, $5000, had been debited to the bank account but no other entry
had been made.

6

A rent payment, $500, had been posted to the rent expense account as $50.

REQUIRED
(a) Prepare the journal entry to correct error 1 only. A narrative is required.
Sunita
Journal
Error
number

Details

Debit
$

Credit
$

1

[4]

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(b) Prepare the suspense account. Include the balancing figure as the original difference on the
trial balance.
Sunita
Suspense account
Date

Details

$

Date

Details

$

[7]

(c) Calculate the corrected profit figures in the tables below:
(i)
$
Original gross profit per draft financial statements

66 223

Gross profit for the year after correcting errors
[4]

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(ii)
$
Original profit for the year per draft financial statements

28 750

Profit for the year after correcting errors
[3]
Sunita’s gross margin is 40%.
REQUIRED
(d) Calculate Sunita’s sales revenue for the year ended 31 December 2023.

[2]
[Total: 20]

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