0452/23/M/J/25 Question Paper – Accounting May/June 2025 Paper 23

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Cambridge Accounting (0452) question paper for paper 23, May/June 2025 — 0452/23/M/J/25, file 0452_s25_qp_23.pdf.

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ACCOUNTING

0452/23

Paper 2 Structured Written Paper

May/June 2025
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 (KS) 356326
© UCLES 2025

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2
,

Anika started in business on 1 March 2024, but she did not start to keep full book-keeping records
until 1 March 2025.
Anika’s assets and liabilities at 1 March 2025 were:
$
90 000
14 500
3 625

Premises
Motor vehicle
Inventory
Trade receivables:
Kofi
Davia
Petty cash
Bank overdraft
Trade payables:
Ado
Sam

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3 000
2 140
86
1 080

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1 925
210

REQUIRED
(a) Prepare the opening journal entry at 1 March 2025. A narrative is required.

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Details

[4]

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0452/23/M/J/25

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Date

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Anika
Journal

3
,

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Question 1 continues on page 4.

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0452/23/M/J/25

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Anika decided to maintain a petty cash book using the imprest system. The imprest amount is
$150. On 1 March 2025, Anika drew the amount required for petty cash from the bank account.
During March 2025, Anika made the following payments from petty cash.
March

Paid for petrol, $30

Paid for computer paper, $12

Paid Sam, $48, on account

Paid for postage, $6

Paid for car cleaning, $8

REQUIRED
(b) Prepare Anika’s petty cash book on page 5 for the month of March 2025.

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0452/23/M/J/25

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Balance the petty cash book, bring down the balance on 1 April 2025 and restore the imprest.

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4
,

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Date
2025

Details

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Anika
Petty Cash Book
Total
paid
$

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Motor
expenses
$

Office
expenses
$

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Ledger
accounts
$

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0452/23/M/J/25

[11]

Total
received
$

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6
,

On 21 March 2025, Anika purchased goods on credit from Sam, list price $120, subject to a trade
discount of 5%. On 25 March 2025, Anika returned half of these goods.
REQUIRED
(c) Prepare the account for Sam in the books of Anika for March 2025. Balance the account and
bring down the balance at 1 April 2025.

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Details

Date

Details

[5]

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0452/23/M/J/25

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[Total: 20]

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Date

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Anika
Sam account

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7
,

Mo is a farmer. He prepares his financial statements to 31 December each year. He delivers his
farm produce to his customers in his delivery vehicle.
Mo charges depreciation on vehicles at 20% per annum using the reducing balance method.
He charges a full year’s depreciation in the year of purchase and no depreciation in the year of
disposal.
On 31 March 2024, he sold his delivery vehicle for $2900 and received payment by cheque. He
had purchased this delivery vehicle in June 2021 for $10 000.
REQUIRED
(a) Calculate the accumulated depreciation on the delivery vehicle which Mo sold on
31 March 2024.

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[3]
(b) Prepare the disposal account for the sale of the delivery vehicle on 31 March 2024.
Mo
Disposal of vehicles account
Date

Details

Date

Details

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0452/23/M/J/25

[4]
[Turn over

Mo purchased a new delivery vehicle on 1 April 2024. The purchase price is made up as follows:
Cost of vehicle
Petrol
Insurance (6 months)
Number (licence) plates

$
12 500
60
475
215

Total

13 250

REQUIRED
(c) Calculate the amount which Mo will record in his delivery vehicle account for this transaction
on 1 April 2024.

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8
,

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Mo is considering opening a shop to sell his farm produce. He hopes that customers will come to
his farm and buy from the shop so that he will not need to deliver to them. He will use an existing
farm building as his shop.
REQUIRED
(d) Advise Mo whether or not he should open the shop. Justify your answer by providing
advantages and disadvantages of opening the shop.

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[2]

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[5]
© UCLES 2025

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0452/23/M/J/25

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9
,

Mo owns his farmland and rents out one of his fields to a neighbouring farmer, Barry, for $80
a month. Barry pays Mo by bank transfer.
On 1 January 2024, Barry owed Mo two months’ rent. During the year ended 31 December 2024,
Barry paid the following amounts to Mo for rent:
$
320
720

1 March
1 September
REQUIRED

(e) Prepare Mo’s rental income account for the year ended 31 December 2024. Total the account
and bring down the balance at 1 January 2025.
Mo
Rental income account
Date

Details

Date

Details

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[4]
Mo has noticed that his gross margin and profit margin are higher than those of Barry.
REQUIRED
(f)

State one reason why:
(i)

[1]
(ii)

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Mo’s gross margin is higher than Barry’s

Mo’s expenses are lower than Barry’s.

[1]
[Total: 20]

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0452/23/M/J/25

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10
Nabil prepared a trial balance at 30 April 2025. The total of the debit side was $95 428, and the
total of the credit side was $95 156. Nabil placed the difference in a suspense account.
Nabil later discovered the errors shown in the table in part (a).
REQUIRED

Entries required to correct the error
Error

Debit
Account

Credit
$
425

Account
Purchases

A payment for wages, $425, had
been debited to the purchases
account.

Wages

425

Discount allowed, $19, had been
credited to the discount allowed
account.

The total of the sales journal for
April 2025 was undercast by $100.

A bank payment for purchases,
$170, had not been recorded in
the books of account.

Bank charges, $15, had been
recorded as $105.

A bank payment for insurance,
$210, was debited to the bank
account. No other entries were
made.

[11]

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0452/23/M/J/25

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(a) Complete the following table to show the entries required to correct each error. The first one
has been completed as an example.

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11
,

(b) Prepare the suspense account at 30 April 2025.
Nabil
Suspense account
Date

Details

Date

Details

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[4]
Nabil’s cash at bank balance before the errors were discovered was $935.
REQUIRED
(c) Calculate Nabil’s bank balance at 30 April 2025 after the errors in the table in part (a) have
been corrected.

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[4]
(d) State one use of a bank statement.

[1]
[Total: 20]
© UCLES 2025

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0452/23/M/J/25

[Turn over

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12
4

H Limited prepares its financial statements to 30 April each year.
During the year ended 30 April 2025, the following took place:
1

The company made a profit for the year of $26 700 after charging debenture interest.

A transfer of $5000 was made to the general reserve.

A dividend of $5340 was paid. No other dividends are payable for the year.
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REQUIRED
(a) Prepare the statement of changes in equity for H Limited for the year ended 30 April 2025.
H Limited
Statement of Changes in Equity for the year ended 30 April 2025
Ordinary
share
capital
$

General
reserve

Retained
earnings

Total

120 000

20 000

33 635

173 635

On 30 April 2025

Details

On 1 May 2024

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Fixtures and equipment at book value
Motor vehicles at book value
Inventory
Trade payables
Trade receivables
Provision for doubtful debts
Bank overdraft
5% Debentures (repayable 2029)

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$
155 000
16 875
28 120
26 815
33 000
990
5 195
5 000

0452/23/M/J/25

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H Limited provided the following ledger account balances at 30 April 2025.

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[4]

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13
,

REQUIRED
(b) Prepare the statement of financial position for H Limited at 30 April 2025.
H Limited
Statement of Financial Position at 30 April 2025
$

[7]

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0452/23/M/J/25

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14
,

[1]

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[3]
The directors of H Limited would like to expand the business. They are considering issuing
debentures for $60 000 to fund an expansion. These debentures would carry interest of 3%.
REQUIRED
(e) Advise the directors whether or not they should issue the debentures to fund an expansion.
Justify your answer by providing two points for and two points against issuing the debentures
to fund an expansion.

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(d) Calculate the return on capital employed for the year ended 30 April 2025. State your answer
to two decimal places.

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0452/23/M/J/25

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15
,

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* 0000800000015 *

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Question 5 starts on page 16.

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0452/23/M/J/25

[Turn over

Grace owns a factory which makes shoes. She buys handbags from a supplier and sells the
shoes and handbags.
Grace prepares her financial statements to 31 March each year. At 31 March 2025, her ledger
account balances included the following:
Inventory at 1 April 2024
Raw materials
Work in progress
Finished goods (shoes)
Purchases of raw materials
Carriage inwards of raw materials
Wages:
Factory operatives
Factory supervisor
Office staff
Rent and insurance
Factory power
Factory equipment – at cost
Factory equipment – provision for depreciation

$
5 345
13 820
27 540
72 870
1 220
29 175
24 000
26 170
12 000
14 120
180 000
64 800

Additional information
Inventory at 31 March 2025:
Raw materials
Work in progress
Finished goods (shoes)

$
7 100
14 390
27 985

Rent and insurance is to be apportioned 65% to the factory and 35% to the office.

At 31 March 2025, Grace owed $1315 for factory power and $2000 for the factory supervisor’s
wages.

Factory equipment is depreciated at 20% per annum using the reducing balance method.

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0452/23/M/J/25

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16
,

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17
,

REQUIRED
(a) Prepare Grace’s manufacturing account for the year ended 31 March 2025.
Grace
Manufacturing Account for the year ended 31 March 2025
$

[10]

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0452/23/M/J/25

[Turn over

18
,

Grace buys handbags for $14 each and sells them for $27 each. Grace counted her inventory of
handbags on 31 March 2025 and found that:

•
•
•

She had a total of 255 handbags.
15 handbags needed to be cleaned before sale. Grace needed to pay a total of $21 to have
them cleaned. She expected to sell them for $25 each.
3 handbags had become damaged. Grace could not repair these handbags and decided to
sell them for $13 each.

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(b) Calculate the valuation of Grace’s inventory of handbags at 31 March 2025.

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REQUIRED

[4]
(c) State how Grace is applying the historic cost accounting principle when she prepares her
financial statements.

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0452/23/M/J/25

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[1]

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19
,

Grace is considering producing the handbags in her factory instead of buying them in.
REQUIRED
(d) Advise Grace whether or not she should start producing handbags in her factory. Justify your
answer with points for and against Grace producing handbags in her factory.

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[5]
[Total: 20]

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0452/23/M/J/25

20
,

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
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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
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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
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0452/23/M/J/25

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Accounting (0452) · May/June 2025 · Question paper 23

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