Accounting (0452) · Oct/Nov 2015 · Examiner report

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(h)

The key was B. The only reason any club would prepare a trading account is because it operates
some sort of trading activity for the club. Thus the only answer could be that it operates a café.

In line with the comment in the key messages, some candidates left some answers blank.
Question 2
The performance for this question was mixed. Some parts were well done, whilst others, particularly the
identification of the correct double entry in (e) caused difficulty.
(a)

The main issue here is that a book of prime entry, as the name suggests is the first place in which
transactions are recorded. Very few candidates made this comment.

(b)

Most candidates correctly identified at least one book of prime entry. Many more candidates could
have added ‘journal’ or ‘day book’. A number of candidates also wrongly referred to the sales or
purchase ledger as being day books.

(c)

This was generally quite well done with most earning a score of at least three out of the four
available. The item where candidates struggled was the unpaid commission receivable. As this
relates to unpaid income then for the business concerned this must be an asset, not an expense.

(d)

Most candidates were able to identify the correct financial statements.

(e)

This type of question is common for the paper. It is a test of the candidate’s knowledge of double
entry for a series of transactions. The answer should always be both the correct name of the
account in which the entry is made and the amount. The major point is always the correct name of
the account. The most common issues were to state inventory and imprest rather than purchases
and petty cash for the debit of items four and six. For the credit entries, bank rather than loan, or
even bank loan for item one and cash rather than bank for item six were the most common issues.
Entries were also reversed in a number of cases.

(f)

Most candidates made a good attempt at calculating the correct bank balance.

Question 3
(a)

Most candidates were able to identify at least two different types of inventory a manufacturing
business will hold. Some candidates incorrectly stated that the opening inventory and the closing
inventory were of the same class, say raw materials.

(b)

The answers here were mixed. It should have been a statement about the lower of cost and net
realisable value. However, some candidates only made half the statement, saying either cost or net
realisable value but not both.

(c)

This question was a test of double entry knowledge and, again candidates were unsure. Most
candidates correctly stated the debit to drawings. However, a significant number stated ‘inventory’
rather than purchases, or the name of the business owner for the credit entry.

(d)

Very few candidates stated the correct principle of business entity. The most common incorrect
answer was duality.

(e)

Statements offered by candidates were too vague about the reason for preparing a bank
reconciliation statement. ‘To check for errors’ was quite a common answer, but not identifying what
was checked (cash book with bank statement), or what errors were identified.

(f)

A number of candidates stated it was the transactions at the bank, but they needed to tie this back
to the business or business owner.

(g)

Most candidates correctly identified an item in the cash book and not on the bank statement being
an unpresented cheque. Less well done was an item on the bank statement not in the cash book.
Often candidates reversed the items in each.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
Question 4
This question focused on the provision for doubtful debts. It is an area which can cause issues and,
unfortunately, the answers reflected this. Overall, the responses could have been improved upon.
(a)

A significant number of candidates incorrectly stated that the provision is an amount of money set
aside. Other common incorrect answers were statements such as ‘customers who will not pay’, or
‘debts which are bad’.

(b)

This question required the preparation of a provision for bad debts account. Items were often
reversed and the bad debt to be written off was included as were the total trade receivables. The
provision was calculated on the full amount of trade receivables without deducting the bad debt. It
is felt that more work on this topic will yield benefits for candidates.

(c)

Most answers were generic statements, with candidates stating ‘an expense’ which was not in
relation to the account they had prepared. The answer should have linked back to the attempt
made by the candidate in (b). There was also a need for the candidate to state that it is shown after
the gross profit.

(d)

Most candidates could name the two accounting principles applied in respect of maintaining a
provision for doubtful debts.

(e)

The answer was looking for specific items in the statement of financial position, such as profit or
trade receivables. Common incorrect answers were working capital and net assets.

Question 5
This question concerned the preparation of control accounts for trade receivables and payables and the
completion of an income statement from the data. The key messages section at the start of this report
highlights the need for a thorough knowledge of double entry.
(a)

Candidates had to calculate the opening capital from the balances provided. This was well
attempted and most offered the correct answer. The main hurdle faced by candidates was
including the bank balance as a liability rather than an asset.

(b)

Candidates had to prepare the trade receivables and payables accounts from the data. Candidates
needed to bring in the opening balances on the account from the data in part (a). Receipts from
customers and payments to suppliers were often on the wrong side of the appropriate account and
mislabelled. As regards the latter point bank or cash was required, not amounts received from
customers or paid to suppliers. Indeed, the amounts received and paid were carried down as the
closing balance. Often the sales and purchases figures were not included or inserted on the wrong
side of the account. With the trade payables account in particular there was a number of alien
items included such as the rent payment and purchase of new equipment. The closing balance too
was often not entered.

(c)

Candidates had to prepare the income statement from their answer to part (b) and other data.
There were some very good attempts. With this type of question candidates need to be aware that
the later section of questions often relies on data calculated in an earlier part. The common issues
with this question included, in the trading section the amounts received from customers and paid to
suppliers were treated as the sales and purchases figure. The purchase of the new equipment was
often incorrectly included.
Candidates also needed to pay careful attention to the expenses section with regard to the
adjustments in respect of rent and, in particular, the addition of the rent prepaid in part (a).
Depreciation was often omitted or calculated incorrectly and drawings included as an expense.

(d)

The capital section of the statement of financial position was required. There were some good
attempts with most remembering to bring in the capital calculated in part (a). Candidates need to
ensure that they label the relevant item.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(e)

Most candidates correctly took their gross profit and revenue figures from part (c) and calculated a
gross margin. Candidates need to remember to include percentage signs in their answers.

(f)

Candidates had to identify the possible causes for a lower gross margin for the business this year
compared to last year. It is because either the selling price has decreased or the purchase cost of
goods sold has increased. It is the unit selling and purchase prices which are the important factors.

Question 6
This question was mainly concerned with journal entries to correct errors, preparation of a suspense account
and the effect on draft profit for the year of correcting errors. This type of question requires a thorough
knowledge of double entry. The main issue was candidates incorrectly identifying which errors require an
adjustment through a suspense account.
(a)

Candidates had to complete several sentences by the inclusion of the correct word from a given
list. Generally this was well done with many earning full marks. The most common mistake was
with the final two sentences which were often identified the wrong way round.

(b)

From a given list candidates had to identify which errors did not affect the trial balance and name
the type of error. The results were mixed. Some achieved full marks. The most common mistake
was to identify the wrong error or wrongly name the correct one. This is one question where
candidates need to take as much time as possible reading each statement and identifying what
exactly has happened. Where a debit and credit of equal amount has been posted, even to the
wrong account(s), then the trial balance is not affected.

(c)

Candidates had to complete a series of journal entries to correct the errors made, and narratives
were also required.
For the first entry, most candidates did not recognise that the error had been to post two credits
and no debit. Thus an adjustment through a suspense account was required, which only a few
candidates identified.
Almost all made the correct entry for the second error.
A high number of candidates correctly adjusted for the third error. The main incorrect answer was
to label the debit entry as sales returns journal. It is the account which is adjusted not the book of
prime entry.
The fourth entry could have been improved upon. Virtually all candidates included either the full
amount of the invoice or added or deducted the stationery figure to it. The only amount which
needed to be adjusted was the $150 and then not through a suspense account.
In terms of narratives the answers varied from fully correct to being very limited. Many candidates
stated what had been done rather than what was being corrected.

(d)

The preparation of the suspense account was marked on the basis of what the candidate had
identified in part (c). The most common error was to include the item on the wrong side of the
account to that identified in the journal entry. A number of candidates also balanced the account
and brought down the closing balance. With a suspense account the journal entries usually close
the account, other than in this case where identification of the opening amount was asked for.

(e)

This question required candidates to identify the impact on the draft profit of correcting the error by
completing a table. There were some good attempts. A number of candidates simply ticked a box
rather than including an amount. The dollar sign below ‘increase’ and ‘decrease’ indicated that an
amount was required. However, the most common omission was candidates not calculating the
total correctly at the bottom of the table. Often the total of the increase and decrease were added
together rather than netted off. When the result was a net decrease this was often added to the
draft profit and vice versa.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/12
Paper 12

Key Messages
The paper was generally well attempted. There are certain areas where tutors and candidates could benefit
with further work and revision for future examinations, notably:
•

•
•
•
•
•
•

Sound knowledge of double entry bookkeeping, with specific reference on this paper to:
–
provision for doubtful debts account
–
trade payables and trade receivables accounts
–
suspense account.
Knowledge of which items are included in the Statement of Financial Position and which are included in
the Income Statement.
Always attempt a multiple choice answer.
Knowledge of how to complete journal entries to correct errors in the ledger.
Knowing which errors will affect the trial balance, thus preventing it from balancing, and thereby
requiring the use of a suspense account to correct them.
Impact on the reported profit for the year of the correction of errors.
The importance of using correct labels.

General Comments
Overall, the paper was well attempted by a number of the candidates. Indeed, there were some excellent
scripts. The main causes for some candidates not performing at a higher level relate to the key messages
identified above and will be commented on below.
Comments on Specific Questions
Question 1
As always, question 1 on the paper comprised ten multiple choice questions. Generally these were quite
well answered. However, four items merit more detailed comments.
(b)

The payment made for insurance during the year was $2000. Of this amount, $400 related to the
next accounting period. This meant the charge for the current year was $1600 and would have
been credited in the account as the transfer to the income statement. The answer, therefore, was
key A.

(c)

The question related to a dishonoured cheque. As it was from a customer then it will have been
recorded in the sales ledger control account. The entry for the cheque would have been a credit in
the bank and therefore a debit in the control account (key D).

(e)

For this question an account was shown. From the statements given Andrew hadn’t earned $2800
as advertising is an expense. Neither had he paid $2800 as the bank figure was $4000. This left B
or C as the key. The answer was B as the balance brought down to the debit identifies a
prepayment.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(h)

The key was B. The only reason any club would prepare a trading account is because it operates
some sort of trading activity for the club. Thus the only answer could be that it operates a café.

In line with the comment in the key messages, some candidates left some answers blank.
Question 2
The performance for this question was mixed. Some parts were well done, whilst others, particularly the
identification of the correct double entry in (e) caused difficulty.
(a)

The main issue here is that a book of prime entry, as the name suggests is the first place in which
transactions are recorded. Very few candidates made this comment.

(b)

Most candidates correctly identified at least one book of prime entry. Many more candidates could
have added ‘journal’ or ‘day book’. A number of candidates also wrongly referred to the sales or
purchase ledger as being day books.

(c)

This was generally quite well done with most earning a score of at least three out of the four
available. The item where candidates struggled was the unpaid commission receivable. As this
relates to unpaid income then for the business concerned this must be an asset, not an expense.

(d)

Most candidates were able to identify the correct financial statements.

(e)

This type of question is common for the paper. It is a test of the candidate’s knowledge of double
entry for a series of transactions. The answer should always be both the correct name of the
account in which the entry is made and the amount. The major point is always the correct name of
the account. The most common issues were to state inventory and imprest rather than purchases
and petty cash for the debit of items four and six. For the credit entries, bank rather than loan, or
even bank loan for item one and cash rather than bank for item six were the most common issues.
Entries were also reversed in a number of cases.

(f)

Most candidates made a good attempt at calculating the correct bank balance.

Question 3
(a)

Most candidates were able to identify at least two different types of inventory a manufacturing
business will hold. Some candidates incorrectly stated that the opening inventory and the closing
inventory were of the same class, say raw materials.

(b)

The answers here were mixed. It should have been a statement about the lower of cost and net
realisable value. However, some candidates only made half the statement, saying either cost or net
realisable value but not both.

(c)

This question was a test of double entry knowledge and, again candidates were unsure. Most
candidates correctly stated the debit to drawings. However, a significant number stated ‘inventory’
rather than purchases, or the name of the business owner for the credit entry.

(d)

Very few candidates stated the correct principle of business entity. The most common incorrect
answer was duality.

(e)

Statements offered by candidates were too vague about the reason for preparing a bank
reconciliation statement. ‘To check for errors’ was quite a common answer, but not identifying what
was checked (cash book with bank statement), or what errors were identified.

(f)

A number of candidates stated it was the transactions at the bank, but they needed to tie this back
to the business or business owner.

(g)

Most candidates correctly identified an item in the cash book and not on the bank statement being
an unpresented cheque. Less well done was an item on the bank statement not in the cash book.
Often candidates reversed the items in each.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
Question 4
This question focused on the provision for doubtful debts. It is an area which can cause issues and,
unfortunately, the answers reflected this. Overall, the responses could have been improved upon.
(a)

A significant number of candidates incorrectly stated that the provision is an amount of money set
aside. Other common incorrect answers were statements such as ‘customers who will not pay’, or
‘debts which are bad’.

(b)

This question required the preparation of a provision for bad debts account. Items were often
reversed and the bad debt to be written off was included as were the total trade receivables. The
provision was calculated on the full amount of trade receivables without deducting the bad debt. It
is felt that more work on this topic will yield benefits for candidates.

(c)

Most answers were generic statements, with candidates stating ‘an expense’ which was not in
relation to the account they had prepared. The answer should have linked back to the attempt
made by the candidate in (b). There was also a need for the candidate to state that it is shown after
the gross profit.

(d)

Most candidates could name the two accounting principles applied in respect of maintaining a
provision for doubtful debts.

(e)

The answer was looking for specific items in the statement of financial position, such as profit or
trade receivables. Common incorrect answers were working capital and net assets.

Question 5
This question concerned the preparation of control accounts for trade receivables and payables and the
completion of an income statement from the data. The key messages section at the start of this report
highlights the need for a thorough knowledge of double entry.
(a)

Candidates had to calculate the opening capital from the balances provided. This was well
attempted and most offered the correct answer. The main hurdle faced by candidates was
including the bank balance as a liability rather than an asset.

(b)

Candidates had to prepare the trade receivables and payables accounts from the data. Candidates
needed to bring in the opening balances on the account from the data in part (a). Receipts from
customers and payments to suppliers were often on the wrong side of the appropriate account and
mislabelled. As regards the latter point bank or cash was required, not amounts received from
customers or paid to suppliers. Indeed, the amounts received and paid were carried down as the
closing balance. Often the sales and purchases figures were not included or inserted on the wrong
side of the account. With the trade payables account in particular there was a number of alien
items included such as the rent payment and purchase of new equipment. The closing balance too
was often not entered.

(c)

Candidates had to prepare the income statement from their answer to part (b) and other data.
There were some very good attempts. With this type of question candidates need to be aware that
the later section of questions often relies on data calculated in an earlier part. The common issues
with this question included, in the trading section the amounts received from customers and paid to
suppliers were treated as the sales and purchases figure. The purchase of the new equipment was
often incorrectly included.
Candidates also needed to pay careful attention to the expenses section with regard to the
adjustments in respect of rent and, in particular, the addition of the rent prepaid in part (a).
Depreciation was often omitted or calculated incorrectly and drawings included as an expense.

(d)

The capital section of the statement of financial position was required. There were some good
attempts with most remembering to bring in the capital calculated in part (a). Candidates need to
ensure that they label the relevant item.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(e)

Most candidates correctly took their gross profit and revenue figures from part (c) and calculated a
gross margin. Candidates need to remember to include percentage signs in their answers.

(f)

Candidates had to identify the possible causes for a lower gross margin for the business this year
compared to last year. It is because either the selling price has decreased or the purchase cost of
goods sold has increased. It is the unit selling and purchase prices which are the important factors.

Question 6
This question was mainly concerned with journal entries to correct errors, preparation of a suspense account
and the effect on draft profit for the year of correcting errors. This type of question requires a thorough
knowledge of double entry. The main issue was candidates incorrectly identifying which errors require an
adjustment through a suspense account.
(a)

Candidates had to complete several sentences by the inclusion of the correct word from a given
list. Generally this was well done with many earning full marks. The most common mistake was
with the final two sentences which were often identified the wrong way round.

(b)

From a given list candidates had to identify which errors did not affect the trial balance and name
the type of error. The results were mixed. Some achieved full marks. The most common mistake
was to identify the wrong error or wrongly name the correct one. This is one question where
candidates need to take as much time as possible reading each statement and identifying what
exactly has happened. Where a debit and credit of equal amount has been posted, even to the
wrong account(s), then the trial balance is not affected.

(c)

Candidates had to complete a series of journal entries to correct the errors made, and narratives
were also required.
For the first entry, most candidates did not recognise that the error had been to post two credits
and no debit. Thus an adjustment through a suspense account was required, which only a few
candidates identified.
Almost all made the correct entry for the second error.
A high number of candidates correctly adjusted for the third error. The main incorrect answer was
to label the debit entry as sales returns journal. It is the account which is adjusted not the book of
prime entry.
The fourth entry could have been improved upon. Virtually all candidates included either the full
amount of the invoice or added or deducted the stationery figure to it. The only amount which
needed to be adjusted was the $150 and then not through a suspense account.
In terms of narratives the answers varied from fully correct to being very limited. Many candidates
stated what had been done rather than what was being corrected.

(d)

The preparation of the suspense account was marked on the basis of what the candidate had
identified in part (c). The most common error was to include the item on the wrong side of the
account to that identified in the journal entry. A number of candidates also balanced the account
and brought down the closing balance. With a suspense account the journal entries usually close
the account, other than in this case where identification of the opening amount was asked for.

(e)

This question required candidates to identify the impact on the draft profit of correcting the error by
completing a table. There were some good attempts. A number of candidates simply ticked a box
rather than including an amount. The dollar sign below ‘increase’ and ‘decrease’ indicated that an
amount was required. However, the most common omission was candidates not calculating the
total correctly at the bottom of the table. Often the total of the increase and decrease were added
together rather than netted off. When the result was a net decrease this was often added to the
draft profit and vice versa.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/13
Paper 13

Key Messages
In general candidates presented well laid out, legible answers. Candidates should note that where a question
asks for an account to be provided, they should show debit and credit sides of the account along with dates,
details and amounts, plus carry down the balance.
Candidates should pay particular attention to details and instructions given in the question.
Comments on Specific Questions
Question 1
Generally a, b, d, g, h and j were answered well. Parts c and f warrant more detailed comments.
(c)

This question dealt with a correction of an error. The most common mistake was to choose the
option which was the reversal of the correct answer. In other words, candidates chose A rather
than D.

(f)

In answering this, a popular choice was to opt for the original cost of $18. Thus, some candidates
did not realise that the correct answer was the net realisable value.

A number of candidates offered no answer to several of the questions.
Question 2
(a)

A number of candidates offered good answers here. Some candidates, however, appeared to see
the word statement and offered an answer related to a bank statement rather than a statement of
account. Candidates should be reminded to read the question carefully.

(b)

The most common correct responses were division of work and keeping similar accounts together.

(c)

This was well answered with many candidates earning full marks. The most common incorrect
answer was that a sales account was in the sales ledger rather than in the nominal / general
ledger.

(d)

There were many correct answers to this part of the question although a few candidates chose a
section from a section of the income statement.

(e)

Although there were a few reversed entries many provided correct answers.

(f)

Many provided correct answers with just a few candidates who offered reversed entries.

(g)

Candidates need to be made aware that the correct answer here was statement of account. Very
few candidates provided the correct answer. A variety of incorrect answers were provided, the most
common being invoice and credit note.

Question 3
(a)

Whilst the majority of candidates successfully identified two non-current assets a small number
provided answers relating to current assets.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(b)

In answering this question, the most successful candidates focussed on the time element rather
than any other comparison.

(c)

Whilst there were many correct answers a number of candidates either offered no answer or wrote
about the purchase of a non-current asset.

(d)

A great many candidates earned full marks here although a number of candidates thought that
stationery was capital expenditure.

(e)

A majority of candidates answered this correctly, although a number thought one opened a sales
account for the sale of a non-current asset.

(f)

In general those who successfully answered (e) offered the correct answer of consistency.

(g)

This was not as well answered as (f) although stronger candidates focused their answers on nonfinancial aspects and only dealing with the past.

Question 4
(a)

This question required candidates to prepare a sales ledger and a purchase ledger control account.
Candidates could have performed to a higher level here by:
- Using the correct labels (candidates should note that the correct label for the trade payables
and trade receivables was balance b/d and receipts from credit customers was bank)
- Placing items in the correct ledger (for example, it is not correct to have the discount received
in the sales ledger control account)
- Non-reversal of entries
- Bringing balances down.
In addition, candidates had issues with the setoff in the sales ledger. A number offered $80 or $180
rather than the correct figure of $100.

(b)

Many candidates earned a mark here.

(c)

Many candidates correctly identified why a discount allowed was given although a number offered
“to encourage bulk buying”.

Question 5
In answering this question candidates needed to pay particular attention to the opening statements that
Owen started a business selling machinery on the 1st May 2015 and opened a business bank account with
$12 000 of his own money.
(a)

It was very important to read the question carefully and those that did recognised that:
- The opening debit entry was capital $12 000 in the bank column
- The machinery purchased and sold were part of the business trading activities and thus the
correct entries were purchases and sales
- The accrual item was a non-cash item
- The whole of the 3 months’ rent were to be shown in the cash book.
Weaker candidates did not recognise some or all of the above and, in addition, some reversed the
cash and bank entries or did not bring down their balances.

(b)

Most candidates answered this question reasonably well. To perform to a higher level, candidates
needed to:
- Adjust the purchases figure by a correct closing inventory to arrive at the cost of sales
- Adjust the rent to reflect one month in calculating the expenses
- Recognise that the answer was sales from cash book – their answer for expense (from above)
to arrive at the profit for the month.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(c)

Whilst there were many excellent answers a number of candidates either left this question blank or
incorrectly provided an income statement rather than a statement of financial position. To perform
to a higher level, candidates needed to recognise the following:
- That the machines were part of the trading activities and thus were not non-current assets
- That the cash and bank entries were to be found in the cash book and not to use the $2000
paid into the bank
- That balance of the rent was to be shown as other receivable in the current assets
- That the capital figure was $13 800

(d)

Most candidates either left this blank or provided an incorrect answer.

Question 6
(a)

A number of candidates earned full marks here. There were common issues for some candidates,
which included using the narrative fixtures and fittings for balance or bank entries, including
incorrect items, reversing entries and not bringing a balance down.

(b)

Many candidates earned full marks here.

(c)

Generally well answered, although a number of candidates could have improved upon their
response by using correct labels, including their depreciation calculated in (b), and including
dividends.

(d)

Although this topic has occurred before a number of candidates seemed unprepared for it and left
the table blank. Others tried to fill every space on the table. Candidates who were clearly familiar
with this topic scored high marks here.

(e)

A number of candidates left this question blank. To earn the marks here candidates needed to refer
to (c) and divide their profit by the sales figure of $227 000 and show an answer to two decimal
places, which many did.

(f)

A number of candidates misunderstood this question and provided a comparison based on liquidity
rather than the net profit margin. Most candidates who answered this question earned three or
more marks. Candidates needed to identify more points and then go on to further develop the
points they gave.

(g)

Most candidates earned two or three marks here.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/21
Paper 21

Key Messages
All the questions on this structured examination paper were compulsory. The paper covered a wide range of
syllabus topics.
Where appropriate, candidates are advised to provide supporting calculations. This ensures that at least
some of the available marks may be earned even though the final answer may be incorrect.
It is important to read thorough each question carefully before attempting an answer. This will ensure that an
important piece of information is not overlooked and that instructions are followed precisely.
The spaces provided on the question paper for candidates’ answers should be adequate. Sometimes it may
be necessary for a candidates to cross out part or all of the answer and provide another answer elsewhere
on the question paper. It is important that candidates indicate that this has been done. A note “Please refer
to Page ..” or “Continued on Page ..” would ensure that this additional work is not overlooked when the script
is being marked.
Candidates are reminded that inappropriate abbreviations should not be used. Abbreviations such as “bbd”
or “b/d” for “balance brought down” in ledger accounts are not acceptable. In financial statements
abbreviations such as “TR” for “trade receivables” and “PDD” for “provision for doubtful debts” are not
acceptable.
It is expected that candidates will be familiar with International Accounting Terminology and not use “old”
terminology such as “stock”, “creditors”, “net profit” etc.
General Comments
It is important that candidates have a thorough knowledge of all the topics on the syllabus.
Comments on Specific Questions
Question 1
(a)

Candidates were required to prepare a three column cash book. Many candidates performed well
on this question. The first two transactions caused a few challenges. The wording in the details
column should indicate the name of the account where the double entry would be made. It is not
enough to write “dishonoured cheque” or “fuel”. All the transactions should have been correctly
dated.

(b)

A partly completed statement of account was provided and candidates were asked to calculate the
balance due at the end of the month and to name the trader who owed that balance. This was
generally well done.

(c)

A table had to be completed to name the document and the book of prime (original) entry which the
seller would use for three given transactions. Some candidates listed ledger accounts rather than
books of prime (original) entry and a few referred to purchases and purchases returns rather than
sales and sales returns.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(d)

Using the information in the question, candidates were required to prepare the account of a credit
customer. Some candidates reversed the account. Once again, the name of the account where the
double entry would be made should have been shown in the details columns, so words like “goods”
and “payment” were not acceptable.

Question 2
(a)

An income statement of a service business had to be prepared. There were some very good
answers. Some candidates did not seem to be familiar with this type of business and tried to
include figures for sales, cost of sales and gross profit. The introduction of these extraneous items
also resulted in an incorrect profit for the year.
The calculation of the rates and insurance for the year caused a few problem. An amount of $3900
had been paid of which $300 was for the following financial year. After that adjustment, one quarter
of the amount had to be deducted as this related to the owner’s living accommodation. The
expense for the year for the business was $2700.
The depreciation of the motor vehicles was $1600. This represented 20% of the opening book
value of the motor vehicles. The office equipment was to be depreciated using the revaluation
method. This was $3800 which represented the difference between the closing value of the
equipment and the total of the opening valuation plus the additional equipment purchased.
A few candidates calculated the provision for doubtful debts at 1% of the total fees received instead
of 1% of the amount owing from clients.

(b)

Candidates had to prepare a capital account. A significant number of candidates reversed the
account. Most correctly inserted the opening balance, the profit from the income statement
prepared in Part (a) and the cash drawings. Many overlooked the rates and insurance which
related to living accommodation.

(c)

An explanation of the accruals (matching) principle was required. A number of candidates
incorrectly discussed matching the profit against the expenses rather than matching the revenue
against the expenses of the same financial period. One example of how this was applied in the
income statement was required. It was not regarded as adequate to simply state “prepaid
insurance”, “commission outstanding” or “fees outstanding”: it was necessary to state how the item
was treated in the income statement in order to apply the accruals (matching) principle.

(d)

An explanation of the business entity principle was required. Most candidates correctly explained
how the business is treated as being separate from the owner.

Question 3
(a)

Most candidates correctly suggested two causes of depreciation.

(b)

An explanation of the straight line method of depreciation was required. Using this method the
depreciation is calculated on the cost price (less scrap value where applicable) and the same
amount is written off each year.

(c)

An explanation of the reducing (diminishing) balance method of depreciation was required. Using
this method the same percentage is written off each year, but it is calculated on the net book value
of the non-current asset.

(d)

The principle of accruals (matching) was usually correctly identified.

(e)

Using information provided, candidates were required to prepare a machinery account and a
provision for depreciation of machinery account. Well-prepared candidates were able to answer
well. It is important to remember that only the cost of assets purchased, or disposed of, are
recorded in the asset account. Depreciation and proceeds of sale are not entered in the asset
account. The provision for depreciation account should show the annual transfer to the income
statement and the transfer to the disposal account of the total depreciation on the asset sold. The
cost of the assets purchased and the proceeds of sale are not entered in the provision for
depreciation account. Both accounts should have been balanced at the end of each financial year.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(f)

Candidates were required to calculate the profit or loss on disposal of a machine. As only a
calculation was required, candidates were free to use any format. They should have shown the
proceeds of sale and the deprecation on that asset being deducted from the cost price to give a
loss of $1100. Frequently extraneous items were included such as an additional year’s depreciation
on the asset sold or the balance carried down on the provision account.

Question 4
(a)

Candidates were provided with an incorrect statement of financial position of a partnership together
with additional notes. A corrected statement had to be prepared. A good knowledge of the financial
statements of partnership businesses was required to answer this question well.
It is important to display the assets and liabilities in the correct sections and to sub-total those
sections. A number of candidates included the provision for doubtful debts as a current liability
instead of deducting it from the trade receivables. The bank charges should have been deducted
from the bank balance.
In a statement of financial position of a partnership it is necessary to show each partner’s capital
account and each partner’s current account separately. It is incorrect to simply show total capital,
total profit, total drawings. Candidates were given the choice of either showing the details of the
current accounts within the statements or as separate calculations in the space provided. The
balance of each partner’s capital account should have been shown in a column headed with their
name and then the total capital shown in the third column. Displaying the current accounts within
the statement requires a column for each partner showing the opening balance, adding the profit
share and deducting the drawings and then showing the closing balance. The total balance on the
current accounts should then appear in the third column to add to the total capital to show the total
funds provided by partners.

(b)

Candidates were required to state two items (in addition to profit-sharing ratio) which may appear in
a partnership agreement. Many correctly suggested interest on capital, interest on drawings,
partners’ salaries etc.

(c)

Two ways in which a partnership could obtain long term funds had to be stated. Common correct
answers included obtaining loans and investing additional capital. A significant number incorrectly
suggested issuing shares and debentures. These are applicable to limited companies but not to
partnership businesses.

(d)

A table had to be completed to indicate the effect of four transactions on the working capital of a
business. Delaying paying credit suppliers and paying cash into bank will not affect the working
capital. Selling surplus equipment increases the current assets and so increases working capital.
Writing off a bad debt reduces current assets and so reduces the working capital.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
Question 5
(a)

Using information provided, candidates were required to prepare an extract from a statement of
financial position showing the equity and reserves. Reading the question carefully should have
shown that this was a straightforward question as there were only three items to list – share capital,
general reserve and retained earnings. Many candidates incorrectly attempted to prepare either an
appropriation account or a statement of changes in equity.

(b)

Candidates were required to calculate the current ratio, quick ratio and the return on capital
employed (ROCE). Many candidates calculated the first two ratios correctly and gave answers to
two decimal places. The third ratio proved to be a little more challenging.

(c)

A comment on the change in the current ratio was required. Most comments were limited to a basic
statement that the ratio had decreased. Candidates could also have explained that in 2015 the
current assets only just covered the current liabilities and that the ratio had fallen to below the
generally-accepted “benchmark”.

(d)

One reason for the change in the quick ratio was required. The most common correct response
was that the inventory had increased.

(e)

Two ways to improve the return on capital employed (ROCE) were required. The return will
improve if the profit increases. Many candidates discussed increasing sales, giving discounts and
so on. These will not necessarily result in an increase in the profit. The other way to increase the
return is to reduce the capital employed, for example repaying long term loans. A number of
candidates incorrectly related the question to a sole trader and discussed increasing drawings.

(f)

Using information provided, candidates were required to calculate the collection period for trade
receivables. A significant number of candidates incorrectly rounded the answer of 68.9 days to 70
days instead of 69 days.
Most candidates correctly explained that the trade receivables were taking longer than the period of
credit allowed and went on to explain the possible effect of this on the liquidity of the company.

(g)

Using the information provided, candidates were required to comment on the payment period for
trade payables. Most candidates explained that the company was paying the credit suppliers after
the period of credit allowed. Many went on to explain the consequences of this.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/22
Paper 22

Key Messages
All the questions on this structured examination paper were compulsory. The paper covered a wide range of
syllabus topics.
Where appropriate, candidates are advised to provide supporting calculations. This ensures that at least
some of the available marks may be earned even though the final answer may be incorrect.
It is important to read thorough each question carefully before attempting an answer. This will ensure that an
important piece of information is not overlooked and that instructions are followed precisely.
The spaces provided on the question paper for candidates’ answers should be adequate. Sometimes it may
be necessary for a candidates to cross out part or all of the answer and provide another answer elsewhere
on the question paper. It is important that candidates indicate that this has been done. A note “Please refer
to Page ..” or “Continued on Page ..” would ensure that this additional work is not overlooked when the script
is being marked.
Candidates are reminded that inappropriate abbreviations should not be used. Abbreviations such as “bbd”
or “b/d” for “balance brought down” in ledger accounts are not acceptable. In financial statements
abbreviations such as “TR” for “trade receivables” and “PDD” for “provision for doubtful debts” are not
acceptable.
It is expected that candidates will be familiar with International Accounting Terminology and not use “old”
terminology such as “stock”, “creditors”, “net profit” etc.
General Comments
It is important that candidates have a thorough knowledge of all the topics on the syllabus.
Comments on Specific Questions
Question 1
(a)

Candidates were required to prepare a three column cash book. Many candidates performed well
on this question. The first two transactions caused a few challenges. The wording in the details
column should indicate the name of the account where the double entry would be made. It is not
enough to write “dishonoured cheque” or “fuel”. All the transactions should have been correctly
dated.

(b)

A partly completed statement of account was provided and candidates were asked to calculate the
balance due at the end of the month and to name the trader who owed that balance. This was
generally well done.

(c)

A table had to be completed to name the document and the book of prime (original) entry which the
seller would use for three given transactions. Some candidates listed ledger accounts rather than
books of prime (original) entry and a few referred to purchases and purchases returns rather than
sales and sales returns.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(d)

Using the information in the question, candidates were required to prepare the account of a credit
customer. Some candidates reversed the account. Once again, the name of the account where the
double entry would be made should have been shown in the details columns, so words like “goods”
and “payment” were not acceptable.

Question 2
(a)

An income statement of a service business had to be prepared. There were some very good
answers. Some candidates did not seem to be familiar with this type of business and tried to
include figures for sales, cost of sales and gross profit. The introduction of these extraneous items
also resulted in an incorrect profit for the year.
The calculation of the rates and insurance for the year caused a few problem. An amount of $3900
had been paid of which $300 was for the following financial year. After that adjustment, one quarter
of the amount had to be deducted as this related to the owner’s living accommodation. The
expense for the year for the business was $2700.
The depreciation of the motor vehicles was $1600. This represented 20% of the opening book
value of the motor vehicles. The office equipment was to be depreciated using the revaluation
method. This was $3800 which represented the difference between the closing value of the
equipment and the total of the opening valuation plus the additional equipment purchased.
A few candidates calculated the provision for doubtful debts at 1% of the total fees received instead
of 1% of the amount owing from clients.

(b)

Candidates had to prepare a capital account. A significant number of candidates reversed the
account. Most correctly inserted the opening balance, the profit from the income statement
prepared in Part (a) and the cash drawings. Many overlooked the rates and insurance which
related to living accommodation.

(c)

An explanation of the accruals (matching) principle was required. A number of candidates
incorrectly discussed matching the profit against the expenses rather than matching the revenue
against the expenses of the same financial period. One example of how this was applied in the
income statement was required. It was not regarded as adequate to simply state “prepaid
insurance”, “commission outstanding” or “fees outstanding”: it was necessary to state how the item
was treated in the income statement in order to apply the accruals (matching) principle.

(d)

An explanation of the business entity principle was required. Most candidates correctly explained
how the business is treated as being separate from the owner.

Question 3
(a)

Most candidates correctly suggested two causes of depreciation.

(b)

An explanation of the straight line method of depreciation was required. Using this method the
depreciation is calculated on the cost price (less scrap value where applicable) and the same
amount is written off each year.

(c)

An explanation of the reducing (diminishing) balance method of depreciation was required. Using
this method the same percentage is written off each year, but it is calculated on the net book value
of the non-current asset.

(d)

The principle of accruals (matching) was usually correctly identified.

(e)

Using information provided, candidates were required to prepare a machinery account and a
provision for depreciation of machinery account. Well-prepared candidates were able to answer
well. It is important to remember that only the cost of assets purchased, or disposed of, are
recorded in the asset account. Depreciation and proceeds of sale are not entered in the asset
account. The provision for depreciation account should show the annual transfer to the income
statement and the transfer to the disposal account of the total depreciation on the asset sold. The
cost of the assets purchased and the proceeds of sale are not entered in the provision for
depreciation account. Both accounts should have been balanced at the end of each financial year.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
(f)

Candidates were required to calculate the profit or loss on disposal of a machine. As only a
calculation was required, candidates were free to use any format. They should have shown the
proceeds of sale and the deprecation on that asset being deducted from the cost price to give a
loss of $1100. Frequently extraneous items were included such as an additional year’s depreciation
on the asset sold or the balance carried down on the provision account.

Question 4
(a)

Candidates were provided with an incorrect statement of financial position of a partnership together
with additional notes. A corrected statement had to be prepared. A good knowledge of the financial
statements of partnership businesses was required to answer this question well.
It is important to display the assets and liabilities in the correct sections and to sub-total those
sections. A number of candidates included the provision for doubtful debts as a current liability
instead of deducting it from the trade receivables. The bank charges should have been deducted
from the bank balance.
In a statement of financial position of a partnership it is necessary to show each partner’s capital
account and each partner’s current account separately. It is incorrect to simply show total capital,
total profit, total drawings. Candidates were given the choice of either showing the details of the
current accounts within the statements or as separate calculations in the space provided. The
balance of each partner’s capital account should have been shown in a column headed with their
name and then the total capital shown in the third column. Displaying the current accounts within
the statement requires a column for each partner showing the opening balance, adding the profit
share and deducting the drawings and then showing the closing balance. The total balance on the
current accounts should then appear in the third column to add to the total capital to show the total
funds provided by partners.

(b)

Candidates were required to state two items (in addition to profit-sharing ratio) which may appear in
a partnership agreement. Many correctly suggested interest on capital, interest on drawings,
partners’ salaries etc.

(c)

Two ways in which a partnership could obtain long term funds had to be stated. Common correct
answers included obtaining loans and investing additional capital. A significant number incorrectly
suggested issuing shares and debentures. These are applicable to limited companies but not to
partnership businesses.

(d)

A table had to be completed to indicate the effect of four transactions on the working capital of a
business. Delaying paying credit suppliers and paying cash into bank will not affect the working
capital. Selling surplus equipment increases the current assets and so increases working capital.
Writing off a bad debt reduces current assets and so reduces the working capital.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers
Question 5
(a)

Using information provided, candidates were required to prepare an extract from a statement of
financial position showing the equity and reserves. Reading the question carefully should have
shown that this was a straightforward question as there were only three items to list – share capital,
general reserve and retained earnings. Many candidates incorrectly attempted to prepare either an
appropriation account or a statement of changes in equity.

(b)

Candidates were required to calculate the current ratio, quick ratio and the return on capital
employed (ROCE). Many candidates calculated the first two ratios correctly and gave answers to
two decimal places. The third ratio proved to be a little more challenging.

(c)

A comment on the change in the current ratio was required. Most comments were limited to a basic
statement that the ratio had decreased. Candidates could also have explained that in 2015 the
current assets only just covered the current liabilities and that the ratio had fallen to below the
generally-accepted “benchmark”.

(d)

One reason for the change in the quick ratio was required. The most common correct response
was that the inventory had increased.

(e)

Two ways to improve the return on capital employed (ROCE) were required. The return will
improve if the profit increases. Many candidates discussed increasing sales, giving discounts and
so on. These will not necessarily result in an increase in the profit. The other way to increase the
return is to reduce the capital employed, for example repaying long term loans. A number of
candidates incorrectly related the question to a sole trader and discussed increasing drawings.

(f)

Using information provided, candidates were required to calculate the collection period for trade
receivables. A significant number of candidates incorrectly rounded the answer of 68.9 days to 70
days instead of 69 days.
Most candidates correctly explained that the trade receivables were taking longer than the period of
credit allowed and went on to explain the possible effect of this on the liquidity of the company.

(g)

Using the information provided, candidates were required to comment on the payment period for
trade payables. Most candidates explained that the company was paying the credit suppliers after
the period of credit allowed. Many went on to explain the consequences of this.

© 2015

Cambridge International General Certificate of Secondary Education
0452 Accounting November 2015
Principal Examiner Report for Teachers

ACCOUNTING
Paper 0452/23
Paper 23

Key Messages
Candidates should read through each question very carefully before attempting an answer. Answers should
follow the specific requirements of the question.
Many candidates provided supporting calculations where appropriate. This ensured that they were able to
earn at least some of the available marks, even though the final answer was incorrect.
Candidates are reminded that inappropriate abbreviations should not be used. Abbreviations such as ‘bbd’
for ‘balance brought down’ and ‘Inv’ for ‘Inventory’, are not acceptable. Where a question asks for a formula
to be stated, the formula should be stated in full and abbreviations should not be used. Similarly, the names
of business documents, e.g. statement of account, and the names of accounting principles, e.g. business
entity, should be stated in full.
It is expected that candidates will be familiar with International Accounting Terminology and not use ‘old’
terminology such as ‘stock’, ‘creditors’, etc.
General Comments
The five questions on this paper were compulsory and covered a variety of topics on the syllabus.
Comments on Specific Questions
Question 1
(a) (i)

One reason why a cheque had been dishonoured was required. Most candidates were able to state
one acceptable reason.

(ii)

Candidates were required to explain an entry in the cash book of a trader. Many correctly stated
that this represented cash withdrawn from the bank for business use. Better candidates also stated
that the entry was a contra entry. A significant number of candidates incorrectly stated that cash
had been paid into the bank account.

(iii)

Candidates were required to explain an entry in a cash book, for money received from sales. There
were many correct answers. Howev