Accounting (0452) · Oct/Nov 2015 · Mark scheme 23

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CAMBRIDGE INTERNATIONAL EXAMINATIONS
Cambridge International General Certificate of Secondary Education

MARK SCHEME for the October/November 2015 series

0452 ACCOUNTING
0452/23

Paper 2, 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 2015 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 2015

Syllabus
0452

Paper
23

(a) (i) Lack of funds
No signature
Amount in words and figures differ
No date
Or other suitable reason
Any 1 reason (1)

[1]

(ii) This is a contra entry (1)
Cash has been withdrawn from the bank for business use (1)

[2]

(iii) Money received from sales: some retained in cash and some paid into the bank (1)

[1]

(iv)

100
13
=
= 2½% (1)
1
(507 + 13 )

[1]

(v) Debited (1) to the discount allowed account (1)

[2]

(vi) 944 – 667 = 277 (1)

[1]

(b)
Paul Chew
Bank Reconciliation Statement at 30 September 2015
$
$
Balance shown on bank statement
(43) (1)
Add Amounts not credited
560 (1)
Cheque not yet credited – Yeung & Co
267 (1)
827
784
Less Cheque not yet presented – K Tan
Balance shown in cash book

507 (1)
277 (1) OF

Alternative form of presentation acceptable

© Cambridge International Examinations 2015

[5]

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Page 3

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(c)

Paul Chew sold goods on
credit to Kim Chan
Kim Chan notified Paul
Chew of an overcharge
Paul Chew notified Kim
Chan that he agreed the
overcharge
Paul Chew sent Kim Chan
a summary of the month’s
transactions

Document

Paul Chew’s
book of
prime
(original)
entry

Kim Chan’s
book of
prime
(original)
entry

Invoice (1)

Sales
Journal (1)

Purchases
Journal (1)

Debit note (1)

No entry (1)

No entry (1)

Credit note (1)

Statement of account (1)

Sales
Returns
Journal (1)

No entry (1)

Purchases
Returns
Journal (1)

No entry (1)

[12]
[Total: 25]

© Cambridge International Examinations 2015

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Page 4
2

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(a)

2014
Sept 1
2015
Aug 31

Income statement

2015
Sept 1

Balance b/d

Balance b/d

Ishmael Makumbo
Rent receivable account
$
2014
2 100 (1)
Sept 2
2015
8 400 (1)
Jan 3
May 4
Aug 31
10 500

$
Bank

4 200 (1)

Bank
Bank
Balance c/d

2 100 }(1)
2 100 }
2 100
10 500

2 100 (1)OF

+ (1) for dates
Three column running balance presentation acceptable

[6]

(b) Current assets (1)
It is an amount owing to Ishmael Makumbo (1)

[2]

(c)

2014
Sept 7
2015
Feb 1
Aug 31

Bank
Cash
Balance c/d

Ishmael Makumbo
Motor expenses account
$
2014
274 (1)
Sept 1 Balance b/d
2015
96 (1)
Aug 31 Income statement
113
483
2015
Sept 1 Balance b/d

+ (1) for dates
Three column running balance presentation acceptable

© Cambridge International Examinations 2015

$
274 (1)
209 (1)
483
113 (1)

[6]

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Page 5

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(d)
Ishmael Makumbo
Journal
Debit
$

Credit
$

Drawings
Purchases
Goods taken for own use

300

(1)
300 (1)
(1)

Drawings
Telephone expenses
Personal telephone expenses
transferred to drawings account

108

(1)
108 (1)

One composite journal entry acceptable

(1)
[6]
[Total: 20]

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Page 6
3

Mark Scheme
Cambridge IGCSE – October/November 2015

(a) Error

1 – Error of omission
2 – Error of principle
3 – Error of reversal

Syllabus
0452

Paper
23

(1)
(1)
(1)

[3]

(b)
Sally Rickard
Corrected Trial Balance at 31 October 2015
Debit
$
Revenue
Purchases
Wages
Motor expenses (1600 + 430)
General expenses (7250 + 150)
Premises at cost
Equipment and fixtures at cost
Motor vehicle at cost (13930 – 430)
Provision for depreciation of equipment and fixtures
Provision for depreciation of motor vehicles
Trade receivables (26 800 – 520)
Provision for doubtful debts
Trade payables
Cash
(350 – 150)
Bank overdraft (4810 – 520)
Loan from AB Loans
Drawings
Capital
Inventory 1 November 2014

99 300
27 000
2 030
7 400
80 000
10 000
13 500

Credit
$
160 400 (1)
(1)
(1)
(1)
(1)
1 050
5 750

7 100

(1)
670
8 150 (1)
(1)
4 290 (1)
10 000
(1)
95 000 (1)OF
(1)

285 310

285 310 (1)OF

26 280
200
12 500

[13]

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Page 7

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(c)
Effect on profit
Increase
An amount owing by a credit
customer should have been
written off

Decrease

(1)

Accounting
principle
Prudence OR
Accruals /
matching
(1)

The general expenses includes
rates which were prepaid until
31 December 2015.

(1)

Accruals/
matching

Goods invoiced and despatched
to a customer were not recorded
as the customer did not receive
them until 3 November 2015

(1)

Realisation (1)

(1)

Business
Entity

No record had been made of
goods taken for personal use

(1)

(1)
[8]
[Total: 24]

© Cambridge International Examinations 2015

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Page 8
4

Mark Scheme
Cambridge IGCSE – October/November 2015

(a) (i) Cost of sales
Average inventory

} (1)
}

Syllabus
0452

Paper
23
[1]

(ii) 32 500 } (1) = 5.42 times (1)
6 000 }

[2]

(iii) Higher inventory levels
Lower sales activity
Or other suitable reason
Any 2 reasons (1) each

[2]

(b) (i) Lower of cost and net realisable value (1)

[1]

(ii) Prudence (1)

[1]

(c)
Extract from Statement of Financial Position at 31 July 2015
Sanch
Syed
Mirza
Mirza
Total
$
$
$
Capital account
30 000 (1)
60 000 (1)
90 000
Current account

(3 500) (1)
26 500

2 500
62 500

(1)

(1 000)
89 000 (1)

[5]

(d) (i)

(ii)

Profit for the year (or profit for the year before interest) 100 }(1)
×
Capital employed
1 }

[1]

}(1) 100
9 000
×
= 10.11% (1) OF
1
89 000 OF }

[2]

(iii) Lower profit for the year
Higher capital employed
Any 1 reason (1)

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[1]

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Page 9

Mark Scheme
Cambridge IGCSE – October/November 2015

(e) (i) To compensate him for investing the most capital
To encourage Sanchi to invest more
Or other suitable reason
Any 2 reasons (1) each

Syllabus
0452

Paper
23

[2]

(ii) To penalise Sanchi for making more drawings
To discourage Sanchi from making excessive drawings
Or other suitable reason
Any 1 reasons (1) mark

[1]

(iii) To compensate Sanchi for extra workload
To reward Sanchi for extra skills
Or other suitable reason
Any 1 reasons (1) mark

[1]

(f) (i)

(ii)

trade payable
365 }(1)
×
credit purchases
1 }

[1]

4 000 365 }(1)
×
= 49 days (1)
31 000
1 }

[2]

(iii) Exceeds credit allowed
May find it difficult to obtain further supplies
May damage relationship with suppliers
May not be able to take advantage of cash discount from suppliers
Or other relevant comment
Any 2 comments (1) each
(g) Reduces liquidity
May find it difficult to pay trade payables
May find it difficult to pay running expenses
May lead to bank overdraft
Cannot take advantage of business opportunities when they arise
May not be able to take advantage of cash discount from suppliers
Or other relevant comment
Any 2 comments (1) each

[2]

[2]
[Total: 27]

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Page 10
5

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(a)
Subscription received
Less amount for previous year
Less amount for following year
Add amount prepaid at start
Subscription for the year

$
6 180
360
5 820
270
5 550
450
6 000

(1)
(1)
(1)
(1)
(1)

Alternative forms of presentation acceptable

[5]

(b)
Hills Road Youth Club
Refreshment Income Statement for the year ended 31 October 2015
$
$
Sales of refreshments
3 100 (1)
Cost of sales
Opening inventory
280 (1)
Purchases
2 650 (1)
2 930
Closing inventory
310 (1)
2 620
Profit in refreshments
480 (1)
[5]
(c)
Hills Road Youth Club
Income and Expenditure Account for the year ended 31 October 2015
$
$
Subscriptions
6 000 (1)OF
Profit on refreshments
480 (1)OF
6 480
Repairs to equipment
220
Insurance (1350 (1) – 270 (1))
1 080
Rent of premises (1430 (1) + 130 (1))
1 560
General expenses
2 540
Depreciation of equipment
((6000 + 2000) (1) – 6800 (1))
1 200
6 600
Deficit
120 (1)OF
[9]

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Page 11

Mark Scheme
Cambridge IGCSE – October/November 2015

Syllabus
0452

Paper
23

(d) Income and expenditure account includes non-monetary items
Income and expenditure account has adjustments for accruals and prepayments
Income and expenditure account includes only revenue items
Or other suitable reason
Any 2 reasons (1) each

[2]

(e) The members of the club have not invested any capital (1) so there can be no
dividends/profit share which represent a return on capital invested (1)

[2]

(f) Accumulated fund arises from the surpluses the club has made (1)

[1]
[Total: 24]

© Cambridge International Examinations 2015