Accounting (0452) · Oct/Nov 2014 · Mark scheme 13

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CAMBRIDGE INTERNATIONAL EXAMINATIONS
Cambridge International General Certificate of Secondary Education

MARK SCHEME for the October/November 2014 series

0452 ACCOUNTING
0452/13

Paper 1, maximum raw mark 120

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 October/November 2014 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.

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Page 2
1

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(a) B
(b) C
(c) C
(d) C
(e) C
(f) B
(g) B
(h) B
(i) A
(j) A

(1) mark each
[Total: 10]

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Page 3
2

Mark Scheme
Cambridge IGCSE – October/November 2014

(a) 1
2
3

Syllabus
0452

Invoice (1)
Debit note (1)
Statement of account (1)

Paper
13

[3]

(b) (i) Debit (1)
(ii) Cash discount (1)
(iii) For prompt payment (1)

[3]

(c)
Debit entry

Credit entry
$

$

1

Hal account

300

Sales account

300

2

Cash account

300 (1)

Hal account

300 (1)

3

Bank account

250 (1)

Cash account

250 (1)

4

Drawings account

400 (1)

Bank account

400 (1)

5

Bank account

600 (1)

Mabel account

600 (1)
[8]

(d) Transaction 3 (1)

[1]

(e) 620 (1) – 10 (1) = 610 (2)
OR
660 (1) – 100 (1) + 50 (1) = 610 (1)

[4]

(f) Current assets (1)

[1]

(g) Inventory
Trade receivables
Other receivables
Cash
Answer to be consistent with answer to (f)
Any 1 item (1)

[1]
[Total: 21]

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Page 4
3

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(a) A prepayment is an amount paid in advance for a service which has not yet been received
(1)
An accrual is an amount owed for a service which has been received but not yet paid for (1)
[2]
(b)
Insurance Account
$
2013
July 1 Balance b/d
Aug 2 Bank/Cash

$

180 (1)
2 340 (1)

2014
June 30 Income
Statement
Balance c/d

2 520
2014
July 1 Balance b/d

2 325 (1)OF
195
2 520

195 (1)CF

+ (1) dates

[5]

(c) (i) Profit and loss/expenses (1)
(ii) Accruals/matching (1)

[1]
[1]

(d) (i) Service business (1)

[1]

(ii) Sales/revenue/sales returns
Inventory (opening and closing)
Purchases/purchases returns
Carriage
Cost of sales
Goods for own use
Gross profit
Any 2 items (1) each

[2]

(e) (i) Prudence (1)

[1]

(ii) At the lower (1) of cost and net realisable value (1)

[2]

(f)
Scrap value 10 × $2
Less selling expenses
Net realisable value

$
20 (1)
7 (1)
13 (1)CF
[3]

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Page 5

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(g) (i) It is a record of what has happened in the past.
There is a gap between the year end and the preparation of the statements.
Items are recorded at cost so may not be realistic/difficult to judge effect of inflation.
May not know what policies the business is using so problems of comparison.
Only information which can be expressed in monetary terms in recorded – other
important factors are not recorded.
Different definitions can make comparisons difficult.
Or other reasonable comment
Any 1 comment (2)

[2]

(ii)
Income statement
Debit

Credit

Statement of financial
position
Assets

Liabilities

Bank overdraft
Depreciation charge for
the year

(1)

(1)

Prepaid rent
Discount received

(1)

Commission received

(1)
[4]
[Total: 24]

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Page 6
4

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(a)
Error

Affects balancing of trial balance

Does not affect balancing of trial
balance

1

(1)

2
3

(1)

4

(1)

(1)

5

[4]
(b)
Statement of corrected profit
Draft profit for the year
Error 1
Error 2
Error 3
Error 4
Error 5
Corrected profit for the year

$ .
26 800.
160.
1 000.
250.
No effect.
(600)
27 610.

(1)
(1)
(1)
(1)
(2)
(1)OF
[7]

(c) Error of commission (1)

[1]
[Total: 12]

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Page 7
5

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(a)
$
1 200
240
960
192

Cost
Depreciation year 1
Depreciation year 2
Total depreciation

$
240 (1)
192 (1)
432 (1)
[3]

(b)
2013
Jan
1
Aug 1

Balance b/d
Bank/cash

2014
Jan
1

Balance b/d

2013
June 1
Disposal
Dec 31 Balance c/d

Fixtures and fittings account
$
2013
31 200 (1)
June 1 Disposal
2 500 (1)
Dec
31 Balance c/d
33 700

$
1 200 (1)
32 500
33 700

32 500 (1)OF
Provision for depreciation Account
$
2013
432 (1)OF Jan
1 Balance b/d
13 916
Dec
31 Income Statement
14 348
2014
Jan
1 Balance b/d

$
9 702 (1)
4 646 ***
14 348
13 916 (1)OF

***Calculation of depreciation for the year
Cost of asset – Opening balance
Less disposal
Plus addition
Depreciation – Opening balance
Less disposal

$
31 200
1 200 (1)
30 000
2 500 (1)
9 702
432 OF

$

32 500

9 270 (1)OF
23 230

20% × 23 230 OF = 4646 (1)OF
Disposal account
$
2013
2013
June 1 Fixtures and Fittings 1 200 (1) June 1
Dec

Prov for Depreciation
Bank/Cash
31 Income Statement

1 200

$
432 (1)OF
600 (1)
168 (1)OF
1 200
[15]

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Page 8

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(c)
Ajith
Extract from Income Statement for the year ended 31 December 2013
$
Expenses
Loss on disposal of fixtures and
168 (1)OF
fittings
Depreciation – fixtures and fittings

4 646 (1)OF

Ajith
Extract from Statement of Financial Position at 31 December 2013
$
Non-current assets
Fixtures and fittings at cost
32 500 (1)OF
Depreciation to date
13 916 (1)OF
18 584
[4]
[Total: 22]

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Page 9
6

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

Paper
13

(a) To obtain limited liability
To obtain extra capital
Any 1 reason (1)

[1]

(b) Preference share capital

[1]

(c) For reinvestment in the business
To plough back profits
To set aside profit for dividends in the future
If there is not enough actual cash available to pay a dividend
Any 2 reasons (1) each

[2]

(d)
ABC Limited
Profit for the year before interest
Less debenture interest
Profit for the year

$
15 000
1 500 (1)
13 500 (1)

XYZ Limited
Profit for the year before interest
Less debenture interest
Profit for the year after interest

$
15 000
8 000 (1)
7 000 (1)
[4]

(e)
ABC Limited
Appropriation Account for the year ended 31 December 2013
$
$
Profit for the year
13 500 (1)OF
Less Ordinary share dividend
7 800 (2)
(260 000 shares × $0.03)
12 800
Transfer to general reserve
5 000 (1)
Profit retained in the year
700
Retained profit b/f
29 300 (1)
Retained profit c/f
30 000 (1)OF
XYZ Limited
Appropriation Account for the year ended 31 December 2013
$
$
Profit for the year
7 000
Less Ordinary share dividend
3 100
(62 000 shares × $0.05)
Profit retained in the year
3 900
Retained profit b/f
14 100
Retained profit c/f
18 000

(1)OF
(2)
(1)
(1)OF
[11]

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Page 10

Mark Scheme
Cambridge IGCSE – October/November 2014

Syllabus
0452

(f) ABC has more equity
XYZ Limited has more long term loans/debentures/debt
ABC’s dividend paid is less expensive than XYZ’s loan interest paid
ABC paid a higher total dividend than XYZ
XYZ paid a higher total loan interest than ABC
ABC made a transfer to general reserve
Any 2 comments (1) each

Paper
13

[2]

(g)
ABC Limited
Statement of Financial Position at 31 December 2013
$
Non-current assets
100 000 (1)
Net current assets
80 000 (1)
180 000
Non-current liabilities
10% Debentures
15 000 (1)
165 000
Capital and reserves
Ordinary share of $0.50 each
General reserve
Retained profit

130 000 (1)
5 000 (1)
30 000 (1)OF
165 000
[6]

(h) Shares in ABC had a return of 6% (1) but shares in XYZ had a return of 5% (1)
ABC had a lower amount of loan capital (1) so less risky (1)

[4]
[Total: 31]

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