Accounting (0452) · May/June 2018 · Mark scheme 22

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Cambridge Assessment International Education
Cambridge International General Certificate of Secondary Education

ACCOUNTING

0452/22

Paper 2

May/June 2018

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 International will not enter into discussions about these mark schemes.
Cambridge International is publishing the mark schemes for the May/June 2018 series for most
Cambridge IGCSE™, Cambridge International A and AS Level and Cambridge Pre-U components, and
some Cambridge O Level components.

IGCSE™ is a registered trademark.

This document consists of 11 printed pages.
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0452/22

Cambridge IGCSE – Mark Scheme
May/June 2018
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Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
•
•
•

the specific content of the mark scheme or the generic level descriptors for the question
the specific skills defined in the mark scheme or in the generic level descriptors for the question
the standard of response required by a candidate as exemplified by the standardisation scripts.

GENERIC MARKING PRINCIPLE 2:
Marks awarded are always whole marks (not half marks, or other fractions).
GENERIC MARKING PRINCIPLE 3:
Marks must be awarded positively:
•
•
•
•
•

marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate
marks are awarded when candidates clearly demonstrate what they know and can do
marks are not deducted for errors
marks are not deducted for omissions
answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.

GENERIC MARKING PRINCIPLE 4:
Rules must be applied consistently e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.
GENERIC MARKING PRINCIPLE 5:
Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
GENERIC MARKING PRINCIPLE 6:
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.

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Page 2 of 11

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0452/22

Question

Answer

Marks

1(a)(i)

Statement of account

1

1(a)(ii)

$335

1

1(a)(iii)

14
× 100 = 2%
(686 + 14)

1

1(a)(iv)

Cash discount

1

1(b)

debit entry in ledger
account of W Jones

credit entry in ledger
account of W Jones

no entry would be
made

1

9(1)
1(c)

document issued

Invoice (1)
1(d)

name of person
issuing
document
J Smith (1)

entries made by W Jones
account debited

account credited

Purchases (1)

J Smith (1)

book of prime (original) entry used
by J Smith

sales returns journal (1)

book of prime (original) entry used
by W Jones

purchases returns journal (1)

4

2

1(e)(i)

A bad debt is an amount owing to a business which will not be paid by the credit
customer

1

1(e)(ii)

A bad debt recovered is when a credit customer pays some, or all of a debt previously
written off as a bad debt

1

1(f)

Reduce credit sales/sell on a cash basis
Obtain references from new credit customers
Fix a credit limit for each customer
Introduce/improve credit control
Issue invoices and monthly statements promptly
Refuse further supplies until outstanding balance is paid
Give cash discount/discount for prompt payment
Charge interest on overdue account
Any 2 points (1) each
Accept other valid points

2

1(g)

The profit for the year is not overstated (1)
The trade receivables (current assets) are not overstated (1)
Accept other valid points

2

1(h)

The sales for which a business is unlikely to be paid (1) are regarded as an
expense of the year in which those sales are made (1)

2

1(i)

460
100
×
= 2 12 %
18 400
1

1

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0452/22

Question

Answer

1(j)

J Smith
Provision for doubtful debts account
Date
Details
2018
Apl 30 Income
statement (1)OF
Balance c/d (1)

$

Date
Details
2017
20 May 1 Balance b/d

Marks
5

$
(1)

440
460

460
460

2018
May 1 Balance b/d (1)OF

440

+ (1) dates

Question
2(a)

Answer
Capital expenditure
Money spend on acquiring, improving and installing non-current assets (1)
Example
Purchase of any non-current asset, legal costs for purchase of premises,
cost of installation of non-current asset, cost of carriage on delivery of non-current
asset, etc.
Any suitable example (1)
Capital receipt
Amounts received which do not form part of the day-to-day trading activities (1)
Example
Receipt of loan, additional capital, proceeds of sale of non-current asset at book value,
etc.
Any suitable example (1)
Revenue expenditure
Money spent on the running of a business on a day-to-day basis (1)
Example
Any expense such as wages, rent, insurance, etc.
Any suitable example (1)
Revenue receipt
Amounts received in the day-to-day trading activities and other items of income (1)
Example
Sales, commission received, interest received, rent received, etc.
Any suitable example (1)

© UCLES 2018

Page 4 of 11

Marks
8

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0452/22

Question

Answer

2(b)
error

effect on profit for the
year
overstated

2(c)

Marks

understated overstated understated

error 1

9

9

error 2

9(1)

9(1)

error 3

9(1)

error 4

9(1)

6

effect on closing capital
no effect

9(1)
9(1)
2

It is a book of prime (original) entry because it is written up from business
documents (1)
It is part of the double entry system as it acts as ledger accounts for cash and
bank (1)

2(d)

3

entry required in cash book
item

debit
$

credit
$

cash book error

100

dishonoured cheque

140

(1)

15

(1)

400

(1)

charges
rates (direct debit)
2(e)

entry in bank reconciliation statement
item

added to bank
statement balance

CD Limited

9(1)

sales

9(1)
9(1)

FF Limited
Bank error (standing order)

© UCLES 2018

deducted from bank
statement balance

9(1)

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0452/22

Question

Answer

Marks

3(a)

Reducing (diminishing) balance method
Revaluation method
Any one (1)

1

3(b)

Principle of materiality – not practical/too many items/too difficult/too costly to
depreciate each item separately
Do not depreciate by an equal amount each year
May be certain amount of loss of tools each year
Or other suitable reason
Any 2 reasons (1) each

2

3(c)

Calculation of depreciation for the year ended 31 December 2016
depreciation on office depreciation on office
total
machine A
machine B

2

3(d)

© UCLES 2018

calculation

calculation

20% × 15 000

20% × 18 000 × 3/12

answer $3 000 (1)

answer $900 (1)

$3 900

Calculation of depreciation for the year ended 31 December 2017
depreciation on
depreciation on
depreciation on
total
office machine A
office machine B
office machine C
calculation

calculation

calculation

20% × 15 000 ×
6/12

20% × 18 000

20% × 20 000 ×
6/12

answer $1 500(1)

answer $3 600 (1)

answer $2 000(1)

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$7 100

3

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0452/22

Question

Answer

3(e)

Jamil
Office machinery account
Date
Details
2016
Jan
1 Balance A b/d
Oct
1 Bank B
(1)
2017
Jan

1 Balance b/d
(1)OF
1 XY Limited C (1)

2018
Jan
1 Balance b/d
(1)OF

11

$

Date
Details
2016
15 000 Dec 31 Balance c/d
18 000
33 000
2017
33 000 July
1 Disposal A
Dec

July

Marks

$
33 000
33 000
(1)

31 Balance c/d

20 000
53 000

15 000
38 000
53 000

38 000

Provision for depreciation of office machinery account
Date
Details
2016
Dec 31 Balance c/d

2017
July

1 Disposal A (1) OF

Dec

31 Balance c/d

$

Date
Details
2016
9 900 Jan
1 Balance A b/d
Dec 31 Income
statement (1)OF
9 900
2017
10 500 Jan
1 Balance b/d
(1)OF
6 500 Dec 31 Income
statement (1)OF
17 000

$
6 000
3 900
9 900
9 900
7 100
17 000

2018
Jan

1 Balance b/d
(1)OF

6 500

+ (1) dates
3(f)
Cost
Depreciation to date (6000 + 3000 + 1500)
Book value
Proceeds of sale
Profit (1) OF on disposal

© UCLES 2018

Page 7 of 11

$
15 000 (1)
10 500 (1) OF
4 500
6 000
1 500 (1) OF

4

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0452/22

Question

Answer

4(a)

AB Limited
Statement of Changes in Equity for the year ended 31 March 2018
Ordinary
share
capital
$
On 1 April 2017

Marks

General
reserve

Retained
earnings

Total

$

$

$

200 000

14 000

6 000

220 000

35 000 (1)

35 000

Final dividend paid
(for year ended 31
March 2017)

(10 000) (1)

(10 000)

Interim dividend paid
(for year ended 31
March 2018)

(4 000) (1)

Transfer to general
reserve

2 000

(2 000) (1)

200 000

16 000

25 000 (1) 241 000 (1)

Profit for the year

At 31 March 2018

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(4 000)

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0452/22

Question

Answer

4(b)

AB Limited
Statement of Financial Position at 31 March 2018
Non-current assets
Premises
Machinery
Office equipment

$
Cost
195 000
98 000
39 500
332 500

Current assets
Inventory
Trade receivables
Less Provision for doubtful
debts
Other receivables
Petty cash

Marks

$
Depreciation
to date
35 280
15 800
51 080

14

$
Book
value
195 000
62 720 (1)
23 700 (1)
281 420 (1)OF
12 120

9 900
198

9 702 (1)
568 (1)
200 (1)
22 590

Total assets

304 010

Capital and liabilities
Capital and reserves
Ordinary shares
General reserve
Retained earnings

200 000
16 000
25 000
241 000

Non-current liabilities
4% Debentures
(repayable 1 April 2022)

30 000 (1)

Current liabilities
Trade payables
Other payables
Bank
Bank loan
(repayable 1 January 2019)

10 020
950
2 040 (1)
20 000 (1)
33 010 (1)OF

Total equity and liabilities
4(c)

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

304 010

Interest on debentures must be paid irrespective of whether there is a profit (but profit
is expected to increase after two years)
Prior claim on the assets of the company in a winding up
Funds have to be available when repayment is due
Prior claim on the profits of the company/less profit available for ordinary share
dividend (this may only be a disadvantage in the first two years)
Or other relevant point
Any 2 points (1) each

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0452/22

Question

Answer

4(d)

Dilution of ownership of company
New shares rank equally with existing ordinary shares with regard to
dividend(even though profit expected to increase after two years dividend may reduce)
New shares rank equally with existing ordinary shares with regard to repayment in a
winding up
Or other relevant point
Any 2 points (1) each

Question

Answer

5(a)
Revenue

15 810
4 080
400
300
980
1 900
30

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

95 (1)

3 705
205 (1)OF
1

proposal

increase

© UCLES 2018

5

effect on quick ratio

1

purchase a motor vehicle on
credit

2

pay credit suppliers early to
receive cash discount

3

obtain a bank overdraft and
repay the loan immediately

4

arrange for the loan to be
extended to 2 years

5

sell on credit terms rather than
on cash terms

6

reduce inventory by selling half
at cost price

Page 10 of 11

12

11 730 (1)OF
3 910 (1)OF

Current assets – inventory : current liabilities

5(c)

2

Marks

Aretta
Income Statement for the month ended 30 April 2018
$
$
15 640 }(2)CF
}(1)OF

Cost of sales
Purchases (15 000 (1) + 810 (1))
Less Closing inventory
Gross profit
Rent (2400 × 1/6)
Insurance (3600 × 1/12)
Operating expenses
Wages
Loan interest (5% × 7200 × 1/12)
Depreciation shop fixtures and fittings
(12% x 9500 × 1/12)
Profit for the month
5(b)

Marks

decrease

no effect

9

9(1)
9(1)
9(1)
9(1)
9(1)

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0452/22

Question
5(d)

Answer

Marks
3

Proposal number 6 (1)
Current Ratio
Total of current assets remains unchanged (1)
OR inventory decreases and cash/bank increases by same amount (1)
Quick (acid test) Ratio
Total of current assets excluding inventory increases (1)
OR Inventory is excluded from the calculation but cash/bank increases (1)

5(e)

Should compare with a business of approximately the same size/same capital
Should compare with a business of the same type (sole trader)
The length of time the business has been operating
The financial year may end at different times of the trading cycle
The financial statements may be for one year which will not show trends
The financial statements may be for a year which is not a typical year
The businesses may operate different accounting policies
The businesses may have different types of expenses
The statements do not show non-monetary factors
It may not be possible to obtain all the information needed to make comparisons
Or other suitable points excluding type of business (given in the question)
Any 2 points (1) basic statement and (1) for development

© UCLES 2018

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