Accounting (0452) · May/June 2016 · Mark scheme 21

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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education

ACCOUNTING

0452/21
May/June 2016

Paper 2
MARK SCHEME
Maximum Mark: 120

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.
Cambridge will not enter into discussions about these mark schemes.
Cambridge is publishing the mark schemes for the May/June 2016 series for most Cambridge IGCSE®,
Cambridge International A and AS Level components and some Cambridge O Level components.

® IGCSE is the registered trademark of Cambridge International Examinations.

This document consists of 11 printed pages.
© UCLES 2016

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Page 2
1

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a)
Katie
Stationery account
Date
Details
2015
May 1 Balance b/d
12 Cash
Nov 30 A1 Stationers

$

(1)
(1)

2016
May 1 Balance b/d

(1)

Date
Details
2015
182
Dec 6 A1 Stationers
95 2016
217
Apl 30 Income Statement
___
Balance c/d
494

$
(1)

53

(1)OF

245
196
494

196

A1 Stationers account
Date
Details
2015
July 9 Bank
Dec 6 Stationery
2016
Apl 30 Balance c/d

$

Date
Details
2015
114
May 1 Balance b/d
53
Nov 30 Stationery

(1)
(1)

$
114
217

(1)

164
331

___
331
2016
May 1 Balance b/d

(1)OF

164

Commission receivable account
Date
Details
2015
May 1 Balance b/d
2016
Apl 30 Income Statement
2016
May 1 Balance b/d

$

(1)OF

(1)

Date
Details
2015
1680
Jun 16 Bank
Sep 10 Bank
2016
3300
Apl 30 Balance c/d
4980

$
(1)
(1)

1680
1710
1590
4980

1590

+ (1) dates

[14]

(b) General/nominal ledger (1)

[1]

(c) Current assets (1)
It is an amount owing to Katie, payable in the next 12 months (1)

[2]
[Total: 17]

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Page 3
2

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a) (i) Cost is the purchase price of the goods plus any additional costs incurred in bringing the
inventory to its present condition and position (1)
(ii) Net realisable value is the estimated receipts from the sale of the inventory less any
costs of completing or selling the goods (1)
[2]
(b) Inventory should always be valued at the lower of cost and net realisable value
This is an application of the principle of prudence
Over-valuing the inventory causes the profit for the year to be overstated
Over-valuing the inventory causes the current assets to be overstated
Any 2 points (1) each

[2]

(c)
overstated

understated

(1)

cost of sales

(1)

profit for the year

[2]

(d) (i) Either

Or

(ii) Either

Or

cost of goods sold }
(1) whole formula
average inventory }
average inventory }
× 365 whole formula
cost of goods sold }

[1]

49 900 }
(1) whole formula = 6.65 times (1)
7500 }
7500
× 365 (1) whole formula = 54.86 days = 55 days (1)
49 900

[2]

(e) Unsatisfied (1)
Or OF based on answer to (d) (ii)
Not selling goods as quickly as previously (1)
OR OF based on answer to (d) (ii)
(f) Reduce inventory levels
Increase sales activity
Only replace inventory when necessary
Any one point (1)

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[2]

[1]

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Page 4

Mark Scheme
Cambridge IGCSE – May/June 2016

(g) (i) Cash represents the cash the trader possesses (1)
Bank represents an overdraft/what the trader owes the bank (1)

Syllabus
0452

Paper
21
[2]

(ii) Not enough money in the account
Cheque unsigned
Amount in words and figures disagree
Cheque undated/out of date
Takes account into unauthorised overdraft
Or other acceptable reason
Any two reasons (1) each

[2]

(iii) Received (1)

[1]

(iv)

15
100
×
= 2.50% (1)
(585 + 15)
1

[1]

(v) This is a contra entry (1)
Money was transferred from the cash into the bank (1)

[2]

(vi) Debited (1)

[1]

(vii) Cash balance $2 debit (1)
Bank balance $638 debit (1)

[2]
[Total: 23]

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Page 5
3

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a)
Hillcrest Athletics Club
Café Income Statement for the year ended 30 April 2016
$
Revenue
Less Cost of sales
Opening inventory
Purchases (7998 (1) + 1137 (1) – 1292 (1))
Less Closing inventory
Profit on café

$
10 430 (1)

790 (1)
7 843
8 633
850 (1)

7 783
2 647 (1) OF
[7]

(b)
Subscriptions received
Add Opening prepayment
Add Closing accrual
Less Opening accrual
Subscriptions for the year

$
16 910
1 045
17 955
285
18 240
760
17 480

(1)
(1)
(1)
(1)
(1) OF

Alternative presentation acceptable

[5]

(c)
Hillcrest Athletics Club
Income and Expenditure Account for the year ended 30 April 2016
$
Income

Expenditure

Deficit

Subscriptions
Café profit
Profit on sale of equipment
(1059 – 956)
Rent, rates & insurance
(4860 (1) + 155 (1) – 180 (1))
General expenses
Depreciation – equipment

$
17 480 (1) OF
2 647 (1) OF
103 (1)
20 230

4 835
14 794
2 445

22 074
1 844 (1) OF
[9]
[Total: 21]

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Page 6

4

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a) $19 360 – (4% × 80 000 (1)) = $16 160 (1)

(b) (i)

(ii)

[2]

8000
100
×
= 4% (1)
200 000
1

[1]

(6250 + 5000) (1) 100
×
= 4.5% (1)OF
(200 000 + 50 000) (1) 1

[3]

(c)
Nyeko Limited
Statement of Changes in Equity for the year ended 29 February 2016
Ordinary
share capital

On 1 March 2015
Share issue

General
reserve

Retained
earnings

$

$

$

200 000

34 000

8 000

50 000

Total
$
242 000 (1)
50 000 (1)

Profit for the year

16 160

16 160 (1)OF

Dividend paid (for year
ended 28 February 2015)

(8 000)

(8 000) (1)

Dividend paid (for year
ended 29 February 2016)

(6 250)

(6 250) (1)

(6 000)

(1)

Transfer to general
reserve

6 000

On 29 February 2016

250 000
OF

40 000
OF

3 910
OF

293 910 (1)
OF
[7]

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Page 7

(d) (i)

Mark Scheme
Cambridge IGCSE – May/June 2016
16 160
100
(1) OF whole formula = 8.97% (1)OF
OF ×
180 200
1

(ii) Increase gross profit
Reduce expenses
Increase other income
Any 2 points (1) each

(e) (i)

16 160
100
(1) OF whole formula = 6.68% (1)OF
OF ×
242 000
1

(ii) Increase profit for the year
Increase efficiency
Use resources more efficiently
Or other suitable point
Any 2 points (1) each
(f) Reduction in profit available for ordinary shareholders
Prior claim on the profits of the company
Prior claim on the assets of the company in the event of a winding-up
Or other suitable comment
Any 2 points (1) each

Syllabus
0452

Paper
21
[2]

[2]

[2]

[2]

[2]
[Total: 23]

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Page 8
5

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a)
Samar
Provision for doubtful debts account
Date
2016
Apl 30 Income statement
Balance c/d

$

(1)

Date
Details
2015
38
May 1 Balance b/d (1)
436
474
2016
May 1 Balance b/d (1)OF

$
474
___
474
436

+ (1) dates
[4]
(b)
Samar
Extract from Statement of Financial Position at 30 April 2016
Current assets
Trade receivables
Less Provision for doubtful debts

$
17 440
436 (1)OF

$
17 004 (1)OF
[2]

(c) A bad debt is an amount owing to a business which will not be paid by a credit customer (1)
A provision for doubtful debts is an estimate of the amount which a business will lose in the
financial year because of bad debts (1)
[2]
(d) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables (current assets) are not overstated (1)

[2]

(e) Accruals/matching (1)

[1]

(f) Reduce credit sales/sell on a cash basis
Obtain references from new credit customers
Fix a credit limit for each customer
Improve credit control
Issue invoices and monthly statements promptly
Refuse further supplies until outstanding balance is paid
Invoice discounting/debt factoring
Any 2 points (1) each

[2]

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Page 9

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(g)
Samar
Journal
Debit
$
Bank
Bad debts recovered
Recovery of debt previously written off
Alternative presentation
M Khan
Bad debts recovered
Bank
M Khan
Recovery of debt previously written off

Credit
$

49
49

49
49
49

(1)
(1)
(1)
}(1)
}
}(1)

49
(1)
[3]
[Total: 16]

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Page 10
6

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(a)
Wasim
Suspense account
Date
Details
2016
Mar 31 Difference on trial balance (1)
Balance c/d

$

Date
Details
2016
495
Mar 31 Purchases
190
Petty cash
Discount Alld
Discount Recd
___
Stationery
685
2016
Apl 1 Balance b/d

$
(1)
(1)
(1)
(1)
(1)

18
100
250
250
67
685

(1)OF

190
[7]

(b)
Wasim
Journal
Error
number
2

4

5

Debit
$
DDE Limited
DEC Limited
Correction of error – DDE Limited
wrongly credited

150

Motor repairs
Motor vehicles
Correction of error – repairs
wrongly debited

283

Fixtures
Office Supplies Company
Correction of reversal of entries

4400

Credit
$
150

283

4400

Any TWO of the above journal entries (1) debit entry
(1) credit entry
(1) narrative
[6]
(c) Error of commission (1)

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Page 11

Mark Scheme
Cambridge IGCSE – May/June 2016

Syllabus
0452

Paper
21

(d)
error number
1

affects profit for the year

does not affect the profit
for the year

2

(1)

3

(1)

4

(1)

(1)

5
6

(1)

7

(1)
[6]
[Total: 20]

© Cambridge International Examinations 2016