0452/21/M/J/24 Question Paper – Accounting May/June 2024 Paper 21

All subjects

Download Open PDF

Cambridge Accounting (0452) question paper for paper 21, May/June 2024 — 0452/21/M/J/24, file 0452_s24_qp_21.pdf.

Loading the paper…

Text of this paper

Cambridge IGCSE™

* 9 0 6 9 7 2 2 1 0 1 *

ACCOUNTING

0452/21

Paper 2 Structured Written Paper

May/June 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 (DE) 326199/2
© UCLES 2024

[Turn over

2
1

Addo is a trader who only sells on credit.
His trade receivables at 1 April 2024 were as follows:
$
Nuru

920

Mahia

1145

Ava

1378

Rachel

215
3658

During April 2024, the following transactions took place:
April

Sold goods to Ava, list price $150, less 6% trade discount

Received telephone transfer from Ava, $689

Sold goods to Nuru, $165

Received cheque, $627, from Mahia, in full settlement of an invoice for $660

Received $760 from Nuru by electronic transfer. Nuru had deducted 5% cash
discount

Nuru returned goods $30

Sold goods to Mahia, list price $480, trade discount 5%, cash discount 5% if invoice
paid within 30 days

Rachel has become bankrupt and Addo decides to write off the amount owing from
her, as irrecoverable

REQUIRED
(a) Prepare the sales journal for April 2024.
Total the sales journal and indicate the ledger account to which the total would be posted.
Addo
Sales journal
Date

Details

[3]

0452/21/M/J/24

3
(b) Prepare the journal entry to write off the amount owing by Rachel. A narrative is required.
Addo
Journal
Date

Details

[3]

the total amount of money which Addo received from trade receivables during April 2024.

[1]

(ii)

the total amount of cash discount which Addo allowed in April 2024.

[2]

0452/21/M/J/24

[Turn over

4
(d) Prepare Addo’s sales ledger control account for April 2024.
Addo
Sales ledger control account
Date

Details

Date

Details

[6]

Addo is considering changing his credit terms. He would introduce more credit checks on new
customers and would increase cash discount to 7½% for payment within 30 days.
REQUIRED
(e) Advise Addo whether or not he should make these changes to his credit terms. Justify your
answer by providing two advantages and two disadvantages of changing his credit terms.

[5]
[Total: 20]
© UCLES 2024

0452/21/M/J/24

5
BLANK PAGE

0452/21/M/J/24

[Turn over

6
2

Paul is a trader. He maintains a three-column cash book. Paul has prepared draft financial
statements for the year ended 31 March 2024.
Paul later discovered the following five errors in his accounting records for the year ended
31 March 2024.
1

A purchase invoice, $140, had been debited to the account for office equipment.

Cash discount received, $18, had been recorded in the bank payments column of the cash
book.

Carriage inwards, $82, had been credited to the carriage outwards account.

A payment for insurance, $375, had been debited to the bank account and credited to the
insurance account.

The bank receipts column of the cash book for February 2024 had been undercast by $90.

0452/21/M/J/24

7
REQUIRED
(a) Prepare the journal entries required to correct these five errors. Narratives are not required.
Paul
Journal
Error
number

Details

Debit
$

Credit
$

[11]

0452/21/M/J/24

[Turn over

8
(b) Calculate the corrected bank balance at 31 March 2024.
$
Original cash at bank balance per draft financial statements

3290

Bank balance after correcting errors
[4]
(c) Calculate the corrected profit for the year ended 31 March 2024.
$
Original profit for the year per draft financial statements

9268

Profit for the year after correcting errors
[5]
[Total: 20]

0452/21/M/J/24

9
BLANK PAGE

0452/21/M/J/24

[Turn over

10
3

Zahra and Panya are the shareholders and directors of Q Limited. The company directors of
Q Limited have provided the following trial balance.
Q Limited
Trial Balance at 31 January 2024
Debit

Credit

Revenue

78 000

Purchases

38 200

Rent and insurance

10 600

Directors’ salaries

19 000

General expenses

3 420

Advertising

5 400

Dividends paid

2 500

Fittings at cost

18 000

Provision for depreciation of fittings

5 400

Inventory at 1 February 2023

2 950

Cash at bank

915

Trade payables

2 288

Ordinary share capital

13 000

Retained earnings

2 297
100 985

100 985

Additional information
1

Inventory at 31 January 2024 was valued at $4720.

Depreciation on fittings is to be charged at 10% per annum using the straight-line method.

Payment for advertising, $75, is outstanding at 31 January 2024.

No dividends were outstanding at 31 January 2024.

0452/21/M/J/24

11
REQUIRED
(a) Prepare the income statement for Q Limited for the year ended 31 January 2024.
Q Limited
Income statement for the year ended 31 January 2024
$

[6]

0452/21/M/J/24

[Turn over

12
(b) Calculate the retained earnings at 31 January 2024.

[3]
(c) Prepare the statement of financial position for Q Limited at 31 January 2024.
Q Limited
Statement of financial position at 31 January 2024
$

[6]

0452/21/M/J/24

13
Zahra and Panya would like to expand the company and increase sales. In order to do this they
are considering increasing the amount spent on advertising by 100%.
(d) Advise Zahra and Panya whether or not they should go ahead with the 100% increase in the
amount spent on advertising. Justify your answer by providing two points in favour and two
points against this increase.

[5]
[Total: 20]

0452/21/M/J/24

[Turn over

14
4

Ahmed owns a trading business. He prepares his financial statements to 31 December each year.
Ahmed had some unused office space and he decided to use some of this to store inventory and
to rent the rest to Bilal.
On 1 January 2023 Bilal started renting the office space from Ahmed. The annual rental charge is
$4800. During 2023 Bilal paid the following amounts of rent into Ahmed’s bank account.
1 April
30 September

$
3600
2400

REQUIRED
(a) Prepare Ahmed’s rent receivable account for the year ended 31 December 2023.
Balance the account and bring down the balance at 1 January 2024.
Ahmed
Rent receivable account
Date

Details

Date

Details

[3]

Ahmed sold old office equipment for $1350 on 3 January 2023, on credit to Rahat. The equipment
had been purchased for $3200 on 1 January 2021. Ahmed charges depreciation at 25% per annum
using the reducing balance method. He does not charge depreciation in the year of disposal.
REQUIRED
(b) Prepare the disposal of office equipment account.
Ahmed
Disposal of office equipment account
Date

Details

Date

Details

[5]

0452/21/M/J/24

15
(c) Complete the table by placing a tick (✓) to indicate whether each amount of spending on the
new inventory storage space is capital expenditure or revenue expenditure.
$
Painting the walls of the storage area

Capital
expenditure

Revenue
expenditure

600

Shelving for the storage area

2115

Installation of the shelving

460

Light fittings for storage area

620

Light bulbs for storage area

105
[3]

Ahmed’s ledger accounts at 31 December 2023 include the following balances.
$
Inventory at 1 January 2023

9000

Receivables

6180

Cash

175

Payables
Bank overdraft

5500
640

Ahmed’s inventory at 31 December 2023 was valued at $12 130. His purchases for the year ended
31 December 2023 were $97 000.
REQUIRED
(d) Complete the following table.
ratio

working

answer
(to 2 decimal places)

Rate of inventory
turnover (times)

Current ratio

Liquid (acid test) ratio

0452/21/M/J/24

[Turn over

16
Ahmed’s rate of inventory turnover for 2023 was lower than for 2022.
REQUIRED
(e) Suggest two problems which may be caused by Ahmed’s lower rate of inventory turnover.
1

[2]
[Total: 20]

0452/21/M/J/24

17
BLANK PAGE

0452/21/M/J/24

[Turn over

18
5

Stella started in business as a retailer on 1 April 2023. She sells one type of good only. She has
not kept a full set of accounting records but has provided the following information.
1

Half of Stella’s purchases were on cash terms and half on credit terms. During the year ended
31 March 2024, Stella paid $34 250 to credit suppliers. On 31 March 2024, she owed $2960
to credit suppliers.

Unlike her competitors, Stella made all of her sales for cash. Stella’s mark-up was 32%.

The following amounts were paid for expenses during the year to 31 March 2024.
$
Rent and insurance

6750

Wages

8300

Other expenses

1815

At 31 March 2024, $300 was unpaid for wages and $500 was paid in advance for rent.

Insurance is $2400 per annum. On 1 April 2023, Stella paid $3000 for insurance for the
following 15 months.

Other expenses included $120 paid for vases and flowers. One third of these were for Stella’s
own home. Stella treats business costs of under $150 as revenue expenditure.

Inventory was valued at $6420 at 31 March 2024.

REQUIRED
(a) Calculate total purchases for the year ended 31 March 2024.

[3]

0452/21/M/J/24

19
(b) Prepare Stella’s income statement for the year ended 31 March 2024.
Stella
Income Statement for the year ended 31 March 2024
$

[8]

Stella’s sales revenue was the same each month for the year to 31 March 2024. She is now
considering selling on credit terms as well as for cash.
REQUIRED
(c) Advise Stella whether or not to start selling on credit terms. Justify your answer by providing
points for and against starting selling on credit.

[5]
0452/21/M/J/24
[Turn over

20
(d) State:
(i)

the accounting principle which Stella is following when she treats payments for small
items which may last longer than one year, as revenue expenditure.

[1]

(ii)

one advantage of following the principle in 5(d)(i).

[1]

(e) State two advantages of maintaining a full set of double entry accounting records.

[2]
[Total: 20]

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

0452/21/M/J/24

Accounting (0452) · May/June 2024 · Question paper 21

Popular subjects

Exam info

Help