Accounting (0452) · Oct/Nov 2016 · Mark scheme 22

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Cambridge International Examinations
Cambridge International General Certificate of Secondary Education

ACCOUNTING

0452/22

Paper 2

October/November 2016

MARK SCHEME
Maximum Mark: 120

Published

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 2016 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.

This document consists of 9 printed pages.
© UCLES 2016

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Page 2
1

Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

(a)
Book of prime (original) entry
Cheque refund to credit customer

Cash book

(1)

Bad debts written off

Journal

(1)

Returns by credit customers

Sales returns journal

(1)

Interest charged on customer’s overdue
account

Journal

(1)
[4]

(b) To assist in the location of errors
To provide instant total of trade payables
To prove the arithmetical accuracy of the purchases ledger
To enable a statement of financial position to be prepared quickly
To provide a summary of transactions relating to trade payables
To help reduce fraud
Any 2 reasons (1) each
(c)

[2]

Amira
Purchases ledger control account
Date
2016
Sep 1
30

2016
Oct 1

$

Details
(1)
(1)
(1)
(1)
(1)

93
3705
95
197
494
5222
9806

Balance b/d (1)

68

Balance b/d
Bank
Dis. Received
Returns
Contra
Balance c/d

Date
2016
Sep 1
30

2016
Oct 1

$

Details
(1)
(1)
(1)
(1)

4210
5366
12
150
68

9806

Balance b/d (1)OF

5222

Balance b/d
Purchases
Interest
Cash
Balance c/d

+ (1) dates
[12]
(d) May be able to take advantage of cash discount
Improve the relationship with suppliers
Avoid paying interest
Or other suitable comment
Any 1 advantage (1)

[1]

(e) The business is deprived of the use of the money earlier than necessary
Or other suitable comment
Any 1 disadvantage (1)

[1]
[Total: 20]

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Page 3
2

Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

(a)
Date

Document

Book of prime entry
used by Diana

Book of prime entry
used by Udomo

Oct
8

Invoice $560

Purchases

(1)

Sales

(1)

12

Debit note $115

No entry

(1)

No entry

(1)

16

Credit note $100

Purchases returns (1)

Sales returns

(1)

24

Cheque $720

Cash book

(1)

Cash book

(1)

31

Statement of account $460

No entry

(1)

No entry

(1)
[10]

(b) (i) Debit note 12 October
Diane (1)
To request a reduction in the invoice (1)

[2]

(ii) Credit note 16 October
Udomo (1)
To notify of a reduction of the invoice (1)

[2]

(iii) Statement of account 31 October
Udomo (1)
To notify the customer of the amount owing at the month end (1)

[2]

(c)

Udomo
Diane account
Date
2016
Oct 1
8
2016
Nov 1

Details

$

Balance c/d
Sales
(1)

720
560
___
1280

Balance b/d (1)

460

Date
2016
Oct 16
24
31

$

Details
Returns
Bank
Balance c/d

(1)
(1)

100
720
460
1280

[4]
[Total: 20]

© UCLES 2016

Page 4
3

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Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

(a) Subscriptions
Amount paid by members of a club to use the facilities provided by the club (1)
Accumulated fund
Surpluses which accumulate over the years/equivalent to capital of a business (1)
Receipts and payments account
Account summarising the money received and paid by a club during a financial year (1)
[3]
(b)

Bolton Road Music Club
Shop Income Statement for the year ended 31 August 2016
$
$
Revenue
15 520 (1)
Less Cost of sales
Purchases (12 422 (1) + 1112 (1))
13 534
Less Closing inventory
1 964 (1)
11 570
Shop wages (1850 – 100)
1 750 (1)
Shop insurance (1200 × 10%)
120 (1)
Shop rent & rates (50% × (3300 +300))
1 800 (1)
15 240
Shop profit
280 (1)OF
[8]

(c)

Bolton Road Music Club
Income and Expenditure Account for the year ended 31 August 2016
$
$

Income
Subscriptions (6300 (1) + 200 (1) – 500 (1))
Profit on shop
Expenditure
Insurance (1200 × 90%)
Rent and rates (50% × (3300 + 300))
Repairs to instruments
General expenses
Loan interest (4% × 20 000 (1) × 6 months (1))
Depreciation of instruments (15% × 4800)
Deficit

6 000
280 (1)OF
6 280
1 080 (1)
1 800 (1)
197}
2 293}(1)
400
720 (1)

6 490
210 (1)OF
[11]
[Total: 22]

© UCLES 2016

Page 5
4

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Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

(a) Bad debts
Amounts owing to a business which will not be paid by credit customers (1)
Bad debts recovered
When a credit customer pays some, or all, of the amount owed after the amount was
previously written off (1)
Provision for doubtful debts
An estimate of the amount a business will lose in a financial year because of bad debts (1)
[3]
(b) Prudence (1)
Accruals/matching (1)

[2]

(c) Reduce credit sales/sell on a cash basis
Obtain references from new credit customers
Fix a credit limit for each customer
Improve credit control
Issue invoices and monthly statements promptly
Refuse further supplies until outstanding balance is paid
Allow cash discount for prompt payment
Charge interest on overdue accounts
Any 2 points (1) each

[2]

(d)

Nawaz
Journal
Debit
$
250

Bad debts
Uzma

Credit
$
250

(1)
(1)

2314

(1)
(1)

138

(1)
(1)

2314

Income statement
Bad debts
Income statement
Provision for doubtful debts

138

[6]
(e)

Nawaz
Extract from Statement of Financial Position at 31 August 2016
Current assets
$
$
Trade receivables (79650 – 250)
79 400
Less Provision for doubtful debts
1 588 (1)OF
77 812 (1)OF
[2]
[Total: 15]

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Page 6
5

(a)

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Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

Sandton Limited
Statement of Changes in Equity for the year ended 30 September 2016
Details

Share
capital
$

General
reserve
$

Retained
earnings
$

150 000

14 000

31 000

195 000

Profit for the year

14 750

14 750

(1)

Dividend paid

(4 500)

(4 500)

(1)

On 1 October 2015

Transfer to general reserve
On 30 September 2016

150 000

5 000

(5 000)

19 000

36 250

Total
$

(1)
205 250

(1)
[4]

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Page 7

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Mark Scheme
Cambridge IGCSE – October/November 2016

(b)
Assets

Syllabus
0452

Paper
22

Sandton Limited
Statement of Financial Position at 30 September 2016
$
$
$

Non-current assets
Premises
Fixtures and equipment
Motor vehicles

Cost

Accumulated
depreciation

135 200
37 600
54 000
226 800

Current assets
Inventory
Trade receivables
Less Provision for doubtful debts
Other receivables

7 520
10 800
18 320

Book
value
135 200
30 080 (1)
43 200 (1)
208 480 (1)
12 613

10 840
271

Total assets

10 569 (1)
472
23 654 (1)
232 134

Equity and liabilities
Equity and reserves
Ordinary share capital
General reserve (14 000 (1) + 5000 (1))
Retained earnings (31 000 (1) + 5250 (1))
Non-current liabilities
3% Debentures (repayable 2020)

150 000 (1)
19 000
36 250
205 250 (1)
15 000 (1)

Current liabilities
Trade payables
Other payables
Bank overdraft

7 460
130
4 294 (1)
11 884 (1)

Total liabilities

232 134
[14]

© UCLES 2016

Page 8

(c) (i)

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Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

10 840 365
(1) whole formula = 25.94 days = 26 days (1)OF
×
152 500
1

[2]
(ii)

7460 365
(1) whole formula = 28.66 days = 29 days (1)OF
×
95 000
1

[2]
(iii) Trade receivables pay before the due date and trade payables are paid
before the due date
Liquidity is affected favourably
May have to allow cash discount and may receive cash discount
Or suitable comments based on OF answers to (i) and (ii)
Any 2 comments (1) each

[2]
[Total: 24]

6

(a) (i) 30% × $285 000 = $85 500 (1)

[1]

(ii) $285 000 + $85 500 OF = $370 500 (1)OF
(iii)

85 500 OF 100 }
×
(1)whole formula = 23.08% (1)OF
370 500 OF 1 }

(iv)

36 000
100 }
×
(1) whole formula = 9.72% (1)OF
370 500 OF 1 }

[1]
[2]

[2]
(b) Higher mark up
Lower cost price of goods
Higher selling price of goods
Lower rate of trade discount allowed to customers
Higher rate of trade discount received from suppliers
Different mix of goods
Or other suitable reason
Any 2 reasons (1) each

[2]

(c) Different type of expenses
Higher amount of expenses
Lower amount of other income
Or other suitable reason
Any 2 reasons (1) each

[2]

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Page 9
(d)

Mark Scheme
Cambridge IGCSE – October/November 2016

Syllabus
0452

Paper
22

Daniel
Statement of corrected profit for the year ended 31 July 2016
$
Draft profit for the year before corrections
41 000
Increase
in profit
$
Error 1
Error 2
Error 3
Error 4
Error 5

Decrease
in profit
$
110

90 (2)

450 (2)

125 (2)

34 (2)
___
484

___
325

Corrected profit for the year
For each error – (1) for figure and (1) for position

159
41 159(1)OF
[9]
[Total: 19]

© UCLES 2016