0452/13/O/N/15 Question Paper – Accounting Oct/Nov 2015 Paper 13

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Cambridge Accounting (0452) question paper for paper 13, Oct/Nov 2015 — 0452/13/O/N/15, file 0452_w15_qp_13.pdf.

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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education

*5285040115*

0452/13

ACCOUNTING
Paper 1

October/November 2015
1 hour 45 minutes

Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
You may use a calculator.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

This document consists of 22 printed pages and 2 blank pages.
IB15 11_0452_13/5RP
© UCLES 2015

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2
There are 10 parts to Question 1.

For each of the parts (a) to (j) there are four possible answers A, B, C and D. Choose the one
you consider correct and place a tick (3) in the box to indicate the correct answer.
1

(a) Which statement describes the purpose of a trial balance?
A

It checks the arithmetical accuracy of the double entry.

It ensures the ledger accounts contain no errors.

It indicates areas where errors have arisen.

It prevents errors from occurring.

[1]

(b) A statement of financial position showed the following.
$
Non-current assets

190 000

Non-current liabilities

27 000

Current assets

56 000

Current liabilities

71 000

What was the owner’s capital?
A

$90 000

$148 000

$178 000

$232 000

[1]

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(c) A receipt of $800 from Jamal, a credit customer, was recorded as a receipt of $880 in the
account of James.
Which entries are needed to correct this error?
Account(s) debited
A
B
C
D

Jamal
Suspense
Jamal
James
Suspense
James

Account(s) credited

800 James
80
880 James
Suspense
800 Jamal
80
880 Jamal
Suspense

$
880
800
80
880
800
80

[1]

(d) What is true about a bank reconciliation statement?
A

It forms part of the double entry system.

It is a statement prepared by the bank.

It is prepared to look for errors in the cash book and the bank
statement.

It reconciles the opening and closing cash book balances.

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[1]

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(e) Jane maintains a provision for doubtful debts at 5% of her trade receivables. The following
account appeared in her ledger.

2015
30 June

Jane
Provision for doubtful debts account
$
2014
Income statement
50
1 July Balance b/d
Balance c/d
550
600
2015
1 July Balance b/d

$
600
600
550

Which statement is correct?
A

Bad debts recovered during the year amounted to $50.

Bad debts written off during the year amounted to $50.

Total trade receivables decreased during the year.

Total trade receivables increased during the year.

[1]

(f) An item of inventory has an original cost of $18 and a replacement cost of $13. The costs of
packing and delivery when the item is sold will amount to $3. It is expected to be sold for
$20.
At which value should it be included in the financial statements?
A

$13

$16

$17

$18

[1]

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(g) On 1 January 2014 Lionel had a debit balance on his current account of $2000. During the
year the following were recorded in his current account.
$
Interest on capital

12 500

Interest on drawings

840

Share of residual profit

18 000

Drawings

25 600

What was the balance on Lionel’s current account on 1 January 2015?
A

$2060 credit

$3740 credit

$6060 credit

$7740 credit

[1]

(h) Which statement about debentures is correct?
A

They carry a fixed rate of dividend.

They carry a fixed rate of interest.

They carry a variable rate of dividend.

They carry a variable rate of interest.

[1]

(i) The activities of the Wilhelm Archery club include the running of an equipment shop.
On 1 January the accumulated fund of the club amounted to $16 200 and on 31 December
$18 000.
What does this increase mean?
A

The non-current assets increased by $1800.

There was a surplus for the year of $1800.

There was a trading profit from the shop of $1800.

The subscriptions received amounted to $1800.

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[1]

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(j) A manufacturing business provided the following information about its first year of trading.
$
Purchases of raw materials

128 000

Closing inventory of raw materials

13 000

Purchases of finished goods

65 000

Closing inventory of finished goods

29 000

Factory direct wages

77 000

Supervisor’s salary

21 000

Depreciation of machinery

19 000

What was the prime cost?
A

$38 000

$74 000

$152 000

$192 000

[1]
[Total: 10]

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7
2

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(a) State the purpose of each of the following business documents.
debit note

credit note

statement of account
[3]
(b) State one reason why a trader’s ledger might be divided into different sections.

[1]
(c) Complete the following table, naming the ledger in which each account appears.
The first one has been completed as an example.
Account

Ledger

Delivery van

Nominal/general

Sales
Susan, a credit customer
Carriage inwards
Drawings
Adam, a credit supplier
[5]
(d) Name the section of a statement of financial position in which inventory is recorded.
[1]
(e) State how Ivy would record the purchase of goods for resale on credit from Alice.
Account debited

Account credited

[2]
© UCLES 2015

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(f) Indicate with a tick (9) in which account cash discount is recorded in the books of both Ivy
and Alice.
Discount allowed

Discount received

in the books of Ivy
in the books of Alice
[2]
(g) Name the business document issued by Alice on which the cash discount is recorded.
[1]
[Total: 15]

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9
3

(a) Give two examples of items which might appear as non-current assets in the statement of
financial position of a manufacturing business.
1
2

[2]

(b) Explain how a non-current asset differs from a current asset.

[2]
(c) Give one example of a capital receipt.
[1]
(d) Complete the following table using a tick (9) to indicate if each item is capital or revenue
expenditure.
Capital
expenditure

Revenue
expenditure

Purchase of inventory
Purchase of stationery
Legal fees on purchase of land
Construction costs of factory
[4]
(e) Name the account which is opened when a non-current asset is sold.
[1]
(f) Name the accounting principle applied when the same rate of depreciation is maintained
each year.
[1]
(g) State one limitation of financial statements.

[1]
[Total: 12]
© UCLES 2015

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10
4

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Esme provided the following information.
$
At 1 January 2014
Trade payables
Trade receivables

7 000
9 500

For the year ended 31 December 2014
Sales (all credit)
Sales returns
Purchases (all credit)
Purchases returns
Receipts from credit customers
Payments to credit suppliers
Refund to credit customer
Discount allowed
Discount received
Bad debt written off

95 100
1 050
63 600
1 950
92 750
59 000
450
2 100
850
300

Additional information at 31 December 2014
1

Esme owed $100 to a supplier who also owed $180 to Esme. It was agreed to record this as
a setoff in the control accounts.

Esme owed $50 to a credit customer who had overpaid.

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11
REQUIRED

(a) Prepare the sales ledger control account and the purchases ledger control account for the
year. Balance the accounts and bring down the balances on 1 January 2015.
Esme
Sales ledger control account
Date

Details

Date

Details

………

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Purchases ledger control account
Date

Details

Date

Details

………

[18]

(b) State one reason why Esme maintains a sales ledger control account.

[1]
(c) State why the discount allowed was given.

[1]
[Total: 20]

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Question 5 is on the next page.

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14
5

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Elliott started a business selling machinery on 1 May 2015. He opened a business bank account
with $12 000 of his own money and transferred his own vehicle to be retained and used in the
business at a valuation of $1800.
He provided the following summary of the transactions in the first month of trading.
Paid $3000 by standing order for three months’ rent.
Bought 6 machines at $300 each and 8 machines at $400 each, paying by credit transfer.
Sold 5 of the cheaper machines for $450 each in cash.
Sold 6 of the more expensive machines for $700 each receiving the funds by cheque.
Withdrew $3600 from the bank as drawings.
Paid sundry expenses, $150, in cash.
Paid cash, $2000, into the bank.
Used, but did not pay for, electricity, $80.
REQUIRED
(a) Prepare Elliott’s cash book for May 2015. Balance the cash book and bring down the
balances on 1 June 2015. The cash book is on the opposite page.
[11]

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$
$

Date
Bank
Cash
Date

Details

Elliott
Cash book

Details

Cash

Bank

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(b) Calculate the following for May 2015.
Cost of sales

Expenses

Profit for the month

[9]

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(c) Prepare Elliott’s statement of financial position at the end of the first month of trading.
Elliott
Statement of Financial Position at 31 May 2015
$

[9]

(d) Suggest one reason, based on your answer to (c), why Elliott might face financial difficulties
in the future.

[1]
[Total: 30]

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19
6

On 1 January 2014 General Stores Limited had fixtures and fittings which had cost $31 500.
On 1 March 2014 it paid by cheque for new fixtures and fittings, $17 400, and sold old fixtures
and fittings with an original cost of $6000. There was no profit or loss on this disposal.
General Stores Limited provides for depreciation on fixtures and fittings at a rate of 30%
per annum on the straight-line basis.
It provides a full year’s depreciation in the year of purchase and none in the year of disposal.
REQUIRED
(a) Prepare the fixtures and fittings account for the year ended 31 December 2014. Balance the
account and bring down the balance on 1 January 2015.
General Stores Limited
Fixtures and fittings account
Date

Details

Date

Details

………

[5]

(b) Calculate the depreciation charge for the year ended 31 December 2014.

[2]

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The company provided the following additional information for the year ended
31 December 2014.
$
227 000
129 000
15 900
12 060
24 000
6 220
10 000
15 000
5 000

Revenue
Purchases
Sales assistants’ wages
Office salaries
Rent
Other operating expenses
Dividend paid
Interest paid
Transfer to general reserve
Inventory values were as follows.
1 January 2014
31 December 2014

$
41 200
44 520

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REQUIRED
(c) Prepare the income statement for the year ended 31 December 2014.
General Stores Limited
Income Statement for the year ended 31 December 2014
$

[10]

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22
(d) Complete the following
31 December 2014.

statement

changes

equity

for

the

year

ended

General Stores Limited
Statement of Changes in Equity for the year ended 31 December 2014
Details

On 1 January 2014
Profit for the year
Dividend paid
Transfer to general reserve
On 31 December 2014

Share
capital
$

General
reserve
$

Retained
earnings
$

Total

100 000

20 000

4 810

124 810

[5]
(e) Calculate to two decimal places the net profit margin.

[2]
(f) Explain why the ratio for General Stores Limited is lower than that of the neighbouring shop.

[6]

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(g) Suggest three ways in which General Stores Limited might improve its net profit margin.
1

3
[3]
[Total: 33]

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

0452/13/O/N/15

Accounting (0452) · Oct/Nov 2015 · Question paper 13

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