Accounting (0452) · May/June 2005 · Question paper 2

Centre Number

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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
International General Certificate of Secondary Education
ACCOUNTING

0452/02

Paper 2
May/June 2005
1 hour 30 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen in the spaces provided on the Question Paper.
You may use a soft pencil for rough working.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Answer all questions.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.

For Examiner’s Use
1
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details. If any details are incorrect or
missing, please fill in your correct details
in the space given at the top of this page.
Stick your personal label here, if
provided.

2
3
4
5
Total

This document consists of 13 printed pages and 3 blank pages.
SP (NH) S83636/4
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1

(a) Name two books of prime (original) entry.
(i)
(ii)
[2]
(b) Explain what is meant by an accrued expense.

[1]
(c) In which section of the Balance Sheet will a bank overdraft be shown?
[1]
(d) To which account would the unexplained difference on a trial balance be transferred?
[1]
(e) In which final account will the cost of repairs to motor vehicles be shown?
[1]
(f)

A sales invoice is entered in the sales returns journal by mistake. Name the type of error
which has been made.
[1]

(g) State what is meant by going concern.

[1]
(h) Ahmed draws up his accounts to 31 March each year. He bought a machine on
1 April 2004 for $12 000. Depreciation is to be charged at 15% per annum on a straight
line basis.
(i)

Calculate the depreciation charge in his accounts for the year ended
31 March 2005.

[1]

(ii)

Calculate the depreciation charge in his accounts for the year ended
31 March 2006.

[1]

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0452/02 M/J/05

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(iii)

For
Examiner’s
Use

Calculate the net book value of the machine at 31 March 2006.

[1]

(iv)

Show the journal entry to enter the depreciation for the year ended 31 March 2005
in Ahmed’s accounts. A narrative is not required.
Dr
$

Cr
$

[2]
[Total: 13]

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0452/02 M/J/05

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2

Bonnie Clyde makes parts for cars and her financial year ends on 31 March. After preparing
her Trading and Profit and Loss Account for the year ended 31 March 2005 her trial balance
shows the following items.
$
Bank
Bank loan repayable 2008
Creditors
Debtors
Machinery
Provision for depreciation on machinery
Stock
Drawings
Capital account at 1 April 2004
Profit for the year

500 Dr
2 800
700
1 000
20 000
12 000
3 000
4 500
6 000
7 500

REQUIRED
(a) Prepare Bonnie’s Balance Sheet at 31 March 2005.
Bonnie Clyde
Balance Sheet at 31 March 2005.

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0452/02 M/J/05

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For
Examiner’s
Use

[12]
(b) (i)

Define working capital.
[1]

(ii)

From your answer to (a) above, calculate Bonnie’s working capital at
31 March 2005.

[3]
[Total: 16]

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3

The balance shown in the bank column in Zafira’s cash book at 30 April 2005 was $620 Dr.
She compares her cash book with the bank statement at 30 April. She finds the following
items were included on the bank statement but are not yet in the cash book.

Bank charges
Direct debit paid for insurance
Bank interest received
Bank (credit) transfer from customer, Aisha
Dishonoured cheque, Yanni

$
15
40
20
130
65

REQUIRED
(a) Write up the cash book at 30 April 2005 and bring down the updated balance.
Zafira
Cash Book (bank columns)

[7]

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For
Examiner’s
Use

At 30 April 2005 Zafira discovers the following:
1

she has recorded a receipt in her cash book of $310 but has not yet deposited the
money at the bank

2

she has written a cheque for $250 and entered it in the cash book but it has not yet
been paid by the bank.

REQUIRED
(b) Prepare the bank reconciliation statement at 30 April 2005.
Zafira
Bank reconciliation statement at 30 April 2005

[5]
Zafira’s bank statement shows a balance which is different from the bank reconciliation
statement.
REQUIRED
(c) Suggest two possible errors which may have caused this difference.
(i)

(ii)

[4]
[Total: 16]

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4

Redd keeps full accounting records and makes up his final accounts to 31 March each year.
The following are extracts from his accounting records for March 2005.
Purchases Journal
5 March
17 March
29 March

$
320
500
270

Block
Quale
Block

Purchases Returns Journal
8 March

$
100

Block
Cash Book (Cr)
Discount
Received
$

30 March
31 March

Block
Quale

15

Bank
$
220
485

REQUIRED
(a) Write up the accounts of Block and Quayle in Redd’s purchases ledger for the month of
March 2005, showing any balances carried and brought down.
Redd – Purchases Ledger
Block account

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For
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Quayle account

[10]
Redd pays rent on his business premises. The amount payable is $900 quarterly in advance.
He made payments by cheque as follows in the year ended 31 March 2005.
2004
2 April
2 July
31 July
30 September

$
900
700
200
900

2005
4 January
29 March

900
800

REQUIRED
(b) Show the entries in Redd’s rent account for the year ended 31 March 2005 and the
amount transferred to the Profit and Loss Account for the year.
Redd – Rent account

[8]
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(c) (i)

For
Examiner’s
Use

Explain what is meant by matching.

[2]

(ii)

Describe how matching has been applied in Redd’s rent account prepared in (b)
above.

[2]
[Total: 22]

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Question 5 is on the following page.

0452/02 M/J/05

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5

A summary of William’s cash book for the year ended 31 March 2005 shows the following.
William – Cash Book (bank columns)
Date

$

1 April
2004

Balance
b/d

Year ended
31 March
2005

Cash and
credit
deposits
from
customers

Total
1 April
2005

Date

$

730
15 270

Year ended
31 March
2005

Payments to
suppliers,
expenses
and
drawings

31 March
2005

Balance
c/d

16 000

Balance
b/d

Total

1 250

You are given the following additional information:
$
3 140
4 080

Debtors at 1 April 2004
Debtors at 31 March 2005
Cash sales all deposited at the bank
(already included in the deposits
for the year shown above)

2 680

Stock at 1 April 2004
Stock at 31 March 2005

1 780
1 920

An analysis of cheque payments shows the following:
$
9 560
280
600
360
800
580
1 370
1 200

Purchases from suppliers
Carriage inwards
Rent
Electricity
Motor expenses
Insurance
Wages paid to staff
Drawings (William)

14 750

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0452/02 M/J/05

14 750

1 250
16 000

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For
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REQUIRED
(a) Calculate William’s total credit sales for the year. Show your workings.

[4]
(b) Prepare William’s Trading and Profit and Loss Account for the year ended
31 March 2005.
William
Trading and Profit and Loss Account
for the year ended 31 March 2005

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For
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[11]
(c) Calculate William’s gross profit percentage for the year, to two decimal places.

[3]
William has forgotten to deposit $90 cash sales at the bank on 31 March 2005. He wishes to
adjust his accounts for this amount by adding $90 to sales.
REQUIRED
(d) (i)

What would be the effect on his gross profit?

[2]

(ii)

Calculate William’s revised gross profit percentage to two decimal places. Show
your workings.

[3]
[Total: 23]

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0452/02 M/J/05

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0452/02 M/J/05