Accounting (0452) · Oct/Nov 2017 · Mark scheme 23

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Cambridge Assessment International Education
Cambridge International General Certificate of Secondary Education

ACCOUNTING

0452/23

Paper 2

October/November 2017

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.
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This document consists of 9 printed pages.
© UCLES 2017

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0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

1(a)

Marks

Brian account

15

$

$

2017
1 000 July 31

2016
Aug 1 Balance b/d

Cash
Bad debts

720 (1)
280 (1)
1 000

1 000

Bad debts account
$
2017
July 31 Income
990
280 (1)
Statement
1 270

2017
July 31 Total to date
Brian

$
1 270 (1)OF
1 270

Bad debts recovered account
$
$
2017
2017
July 31 Income
July 31 Bank
Statement* 118 (1)
(AL Stores)
118 (1)
118
118
* Alternately accept transfer to bad debts account and net transfer from bad
debts to income statement
Rent account
$
2017
July 31 Total paid

$
2017
July 31 Balance c/d
Drawings
Income Statement

5 200
5 200

2017
Aug 1 Balance b/d

400
1 200 (1)
3 600 (1)OF
5 200

400 (1)
Drawings account
$

2017
July 31 Total to date
Rent

9 650
1 200 (1)OF
10 850

$
2017
July 31 Capital 10 850 (1)OF
10 850

Commission receivable account
$
2017
2017
July 31 Income
July 31 Total to date
Statement 1 040 (1)
Balance c/d
1 040
2017
Aug 1 Balance b/d

© UCLES 2017

150 (1)

Page 2 of 9

$
890
150
1 040

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

1(a)

Provision for depreciation of office fixtures account
$
$
2017
2016
July 31 Balance c/d 15 435 Aug 1 Balance b/d
11 100
2017
July 31 Income
4 335 (1)
Statement
15 435
15 435
2017
Aug 1 Balance b/d
15 435 (1)OF

1(b)

An estimate (1) of the amount which a business will lose/be unable to collect
in a financial year because of bad debts (1)

2

1(c)

Percentage of the total amount owing by credit customers
Estimating which individual credit customers will not pay their accounts
Considering the length of time the debts have been outstanding
Estimate, based on experience, of amount lost each year from bad debts
Any 1 point (1)

1

1(d)

debit

credit

Income statement (1)

Provision for doubtful debts (1)

2

1(e)

The profit for the year is not overstated (1)
The trade receivables (current assets) are not overstated/shown at more
realistic value (1)

2

1(f)

The sales for which a business is unlikely to be paid (1) are regarded as
an expense of the year in which those sales are made (1)

2

1(g)

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

© UCLES 2017

Page 3 of 9

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

2(a)

debit
opening balance owed by credit customers

9(1)

credit sales

9(1)

credit

no entry

cash sales

9(1)

provision for doubtful debts

9(1)

bad debts written off

9(1)

cash discount allowed to credit customers

9(1)

trade discount allowed to credit customers

9(1)

contra between sales and purchases ledger

9(1)

cash received from credit customers

9(1)

2(b)

9

book of prime (original) entry
returns to credit suppliers

purchases returns journal (1)

discount received

cash book

(1)

interest charged by credit supplier

journal

(1)

contra entry to sales ledger control
account

journal

(1)

4

2(c)(i)

An entry which appears on the debit side of the purchases ledger control
account and the credit of the sales ledger control account (1)

1

2(c)(ii)

It is made when a sales ledger account is set off against a purchases ledger
account of the same person/business (1)

1

Overpayment of the amount owing
Failure to deduct cash discount due
Goods returned after account settled
Payment made in advance
Any 2 reasons (1) each

2

2(e)(i)

Trade receivables 365
×
} whole formula (1)
Credit sales
1

1

2(e)(ii)

20 520 365
×
} whole formula (1)
186 700
1
= 40.11 = 41 days (1)

2

Offer cash discount for prompt payment
Charge interest on overdue accounts
Improve credit control/send invoices or statements promptly
Refuse further supplies until outstanding balance paid
Invoice discounting and debt factoring
Any 2 points (1) each

2

2(d)

2(f)

© UCLES 2017

Page 4 of 9

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

2(g)

Trade payables 365
×
} whole formula (1)
Credit purchases
1

1

2(h)

Will not be pleased
May refuse further supplies
May charge interest
May issue stern reminders/threaten legal action
Or other suitable comment
Any 2 comments (1) each

2

Question

Answer

3(a)

Marks
$

Subscriptions received
Add Subscriptions outstanding at year end
Less Subscriptions prepaid at year end
Subscriptions outstanding at start of year
Subscriptions for the year

180 (1)
600 (1)

$
12 540 (1)
240 (1)
12 780

5

780
12 000 (1)

Accept alternative presentation
3(b)

© UCLES 2017

AS Sports Club
Income and Expenditure Account for the year ended 30 September 2017
$
$
$
Income
Subscriptions
12 000 (1)OF
Profit on shop – revenue
3 510
– less purchases
2 410
1 100 (1)
13 100
Expenditure
Rates and insurance
(1500 (1) + 60 (1))
1 560
Open day – expenses
5 250
less receipts
4 180 1 070 (1)
Rent
1 800 }(1)
General expenses
2 640 }
350 (1)
Loan interest (5% × 7 000)
Depreciation of Equipment
6 000 (1)
13 420
((22 000 + 8 000) × 20%)
Deficit
320 (1)OF

Page 5 of 9

9

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

3(c)

Marks

AS Sports Club
Statement of Financial Position at 30 September 2017
$
$
$
Assets
Non-current assets
Equipment

Cost Accumulated
depreciation
30 000
10 400 (1)OF

Current assets
Other receivables
(Subscriptions)

9

Book
value
19 600 (1)OF

240 (1)

Total assets

19 840

Liabilities
Accumulated fund
Opening balance
Less Deficit

11 870 (1)
320 (1)OF
11 550

Non-current liabilities
Bank loan
(repayable 2020)

7 000 (1)

Current liabilities
Other payables
(loan interest)
Subscriptions prepaid
Bank

350 (1)OF
180 (1)
760 (1)
1 290

Total liabilities
3(d)

Question

19 840

Loan interest is an expense account/any accrued interest is a current
liability (1)
The loan is a non-current liability (1)
Accept other valid points

Answer

2

Marks

4(a)

(87 500 + 56 200 + 100) : (81 500 + 17 100)
= 143 800 : 98 600 (1) whole formula
= 1.46 : 1 (1)

2

4(b)

Current assets only approximately 1½ times the current liabilities
Lower than the “benchmark” of 2:1
Can meet the current liabilities from the current assets
Do not have a lot of surplus current assets available after paying current
liabilities
Seems to be a little inadequate (depending on the type of business)
Comments to be based on answer to (a)
Any 2 comments (1) each

2

© UCLES 2017

Page 6 of 9

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

4(c)

(56 200 + 100) : (81 500 + 17 100)
= 56 300 : 98 600 (1) whole formula
= 0.57 : 1 (1)

2

4(d)

Increased expenditure on inventory
Increase in bank overdraft/change from positive bank balance to overdraft
Purchase of non-current assets
Repayment of long-term loan
Increase in current liabilities/increase in trade payables
Decrease in trade receivables
Decrease in cash
Increase in drawings
Any 2 reasons (1) each

2

4(e)

Unable to pay debts when they fall due
Unable to take advantage of cash discounts
Unable to take advantage of business opportunities when they arise
May have difficulty in obtaining further supplies
May not be able to take drawings
Any 2 points (1) each

2

4(f)

current ratio

4

quick ratio

no
no
increase decrease effect increase decrease effect
introduce
$20 000
additional
capital

9

9

obtain shortterm bank loan
of $10 000

9(1)

sell half the
inventory at
cost price

9(1)

9(1)

9(1)

4(g)

Cost of sales
Average inventory

1

4(h)

765 990
765 990
Or
(87 500 + 72000) ÷ 2
87 500 − (15 500 ÷ 2)
765 990
=
} (1)
79 750
= 9.60 times (1)

2

4(i)

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

2

© UCLES 2017

Page 7 of 9

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

5(a)

43 000
(500 000 + 11 000 + 14 000 + 75 000
43 000 (1) 100
×
=
600 000 (1)
1
= 7.17% (1)

3

5(b)

100
25 000
×
1
500 000
= 5%

1

5(c)

15 000 + 30 000
100
×
500 000 + 100 000
1

3

45 000 (1)
600 000 (1)
= 7.5% (1)
=

5(d)

5(e)

71 000 – (3% × 75 000) (1)
= 71 000 – 2250
= 68 750 (1)

2

CP Limited
Statement of Changes in Equity for the year ended 30 September 2017
Ordinary General Retained
Total
share
reserve
earnings
capital
$

On 1 October 2016

500 000

Share issue

100 000

$

11 000

14 000

$
525 000 (1)
100 000 (1)

Profit for the year

68 750

Dividend paid
(for year ended 30
September 2016)

(25 000)

(25 000) (1)

Dividend paid
(for year ended 30
September 2017)

(15 000)

(15 000) (1)

(5 000)

(1)

Transfer to general
reserve

On 30 September
2017

© UCLES 2017

$

5 000
600 000

16 000

Page 8 of 9

37 750

68 750 (1)OF

653 750 (1)

7

0452/23

Cambridge IGCSE – Mark Scheme
PUBLISHED

Question

October/November
www.dynamicpapers.com
2017

Answer

Marks

5(f)

Long term loans
Debenture holders are not members of the company
Do not carry voting rights
Carry a fixed rate of interest
Interest is not dependent on the company's profit
Are often secured on the assets of the company's
Debenture holders are repaid before the shareholders in a winding-up
Any 2 features (1) each

2

5(g)

Carry a fixed rate of dividend
Dividend may not be paid if there is not enough profit
Dividend is paid before ordinary share dividend
Preference shareholders are members of the company
Do not usually carry voting rights
Capital is repaid before ordinary share capital in a winding-up
Are not secured on the assets of the company
Any 2 features (1) each

2

5(h)

increase
$
effect on current assets

300 000

effect on non-current liabilities

300 000
(1)

effect on profit for the year

9 000
(2)*

effect on profit available for ordinary
shareholders

9 000
(1)OF

effect on equity
* (1) position + (1) amount

© UCLES 2017

decrease
$

no
effect

9(1)

Page 9 of 9

5