0452/22/O/N/22 Question Paper – Accounting Oct/Nov 2022 Paper 22

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Cambridge Accounting (0452) question paper for paper 22, Oct/Nov 2022 — 0452/22/O/N/22, file 0452_w22_qp_22.pdf.

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Cambridge IGCSE™

* 3 0 0 1 7 7 4 2 8 1 *

ACCOUNTING

0452/22

Paper 2 Structured Written Paper

October/November 2022
1 hour 45 minutes

You must answer on the question paper.
No additional materials are needed.
INSTRUCTIONS
●
Answer all questions.
●
Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
●
Write your name, centre number and candidate number in the boxes at the top of the page.
●
Write your answer to each question in the space provided.
●
Do not use an erasable pen or correction fluid.
●
Do not write on any bar codes.
●
You may use a calculator.
●
International accounting terms and formats should be used as appropriate.
●
You should show your workings.

INFORMATION
●
The total mark for this paper is 100.
●
The number of marks for each question or part question is shown in brackets [ ].
●
Where you are asked to complete a layout, you may not need all the lines for your answer.

This document has 20 pages. Any blank pages are indicated.
DC (LK) 303182/1
© UCLES 2022

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2
1

BC a sole trader prepared the following trial balance from his accounts on 31 August 2022.

Purchases
Revenue
Sales returns
Inventory 1 September 2021
Capital
Bank
Non-current assets at cost
Premises
Machinery
Provision for depreciation of non-current assets
Machinery
Commission receivable
Trade receivables
Trade payables
Discount allowed
Discount received
Insurance
Repairs
Salaries
Rates
Carriage inwards

Dr
$
120 000
3 600
11 100

Cr
$
231 500
111 900
4 100

98 000
52 000

19 200
600
9 600
12 400
53 900
6 000
400
386 800

28 400
2 200
7 300
1 400

386 800

Additional information
1

The closing inventory at 31 August 2022 was valued at $12 000.

Commission received of $800 was owing at 31 August 2022.

The balance shown for salaries covers the 11 months to 31 July 2022. Salaries for August
2022 are due and unpaid. There have been no salary increases over the previous 12 months
and an equal amount is paid each month.

At 31 August 2022 rates were prepaid by $300.

The insurance included $700 covering a private insurance premium for BC.

The repairs included $4000 that related to a new attachment for machinery.

Machinery is to be depreciated at the rate of 20% per annum by the reducing balance method.
A full year’s depreciation is charged regardless of the date of any purchases. There were no
disposals during the year. Premises are not depreciated.

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REQUIRED
(a) Prepare the income statement of BC for the year ended 31 August 2022
BC
Income Statement for the year ended 31 August 2022
$

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(b) Calculate the working capital at 31 August 2022.

[3]

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BC has been making future plans for the business and he needs to purchase $6000 of machinery
immediately. There are two options to finance the purchase.
Option 1

On credit with the full amount of $6000 payable in 60 days

Option 2

Obtain a $6000 8% loan repayable in 5 years

REQUIRED
(c) Advise BC on which option he should use. Justify your answer.

[5]
[Total: 20]

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2

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MC is a trader who maintains a full set of accounting records and prepares control accounts at the
end of each month.
REQUIRED
(a) Complete the table to name the book of prime entry which MC would use to obtain information
when preparing control accounts.
Item

Book of prime entry

Discount received from credit suppliers
Purchases returns
Contra entries
Interest charged by credit suppliers
[4]
(b) Explain how a contra entry is treated in the ledger accounts.

[2]
MC has provided the following information for the month of July 2022.
On 1 July 2022
Purchases ledger control account credit balance b/d
Purchases ledger control account debit balance b/d
Totals for the month
Credit purchases
Credit purchases returns
Cash purchases
Cheques paid to credit suppliers
Discount received
Cash paid to credit suppliers
Interest charges by credit suppliers
Contra sales ledger

$
21 400
130
259 600
9 800
240
228 200
12 900
500
150
2 260

At 31 July 2022 the purchases ledger control account had a credit balance c/d of $180.

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7
REQUIRED

(c) Prepare the purchases ledger control account for the month of July 2022. Balance the account
and bring down the balances on 1 August 2022.
MC
Purchases ledger control account
Date

Details

Date

Details

[9]

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Currently MC purchases all goods from a local supplier. He has been offered a monthly price
reduction of $2000 if he changes to an annual contract purchasing all goods from a new overseas
supplier.
REQUIRED
(d) Advise MC whether he should change to the new overseas supplier. Justify your answer.

[5]
[Total: 20]

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9
3

MG has been in business for a number of years as a furniture manufacturer. On 31 August 2022
the bank column of his cash book showed the business had $25 600 in the bank account. The
bank statement on this date showed a credit balance of $24 815.
The following transactions were included only in the cash book.
$
680
910

Cheque paid to JW
Cheque received from TH

In addition, an error had been identified. A standing order for rates of $205 had incorrectly been
recorded in the cash book as $255.
The following transactions were included only on the bank statement.
$
420
110
75

Dishonoured cheque received from RJ
Insurance paid by direct debit
Bank charges
REQUIRED

(a) Update the cash book of MG. Bring down the updated balance on 1 September 2022.
MG
Cash book (bank columns only)
Date

Details

Date

Details

[5]

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(b) Prepare a bank reconciliation statement at 31 August 2022.
MG
Bank reconciliation statement at 31 August 2022

[4]
(c) State two reasons why a business would prepare a bank reconciliation statement.
1

[2]
(d) State two possible reasons why the cheque from RJ was dishonoured.
1

[2]
(e) Explain the differences between a direct debit and a standing order.

[2]

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(f)

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A potential new customer has asked MG for a 5% discount on any orders placed. Advise MG
on whether to accept or decline these terms. Justify your answer.

[5]
[Total: 20]

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12
4

PG a trader sells electrical components. She has provided the following information for the year
ended 31 July 2022.
Sales journal for the year ended 31 July 2022
Sales returns journal for the year ended 31 July 2022
Trade receivables at 1 August 2021
Provision for doubtful debts at 1 August 2021

$
360 000
13 300
28 500
1 140

Cash book extract of totals for the year ended 31 July 2022

Trade receivables

Discount
Allowed
$
6 500

Sales

Cash

Bank

$
335 100

Bank

Trade receivables
(dishonoured cheques)

$
4 000

17 000

Additional information
1

$900 of trade receivables were written off as irrecoverable debts on 31 July 2022. There were
no other irrecoverable debts during the year.

The provision for doubtful debts is to be set at 4% of trade receivables at 31 July 2022.

REQUIRED
(a) Prepare the following ledger accounts for the year ended 31 July 2022. Where appropriate
show the balance brought down on 1 August 2022.
PG
Sales account
Date

Details

Date

Details

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Sales returns account
Date

Details

Date

Details

Trade receivables account
Date

Details

Date

Details

Irrecoverable debts account
Date

Details

Date

Details

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Provision for doubtful debts account
Date

Details

Date

Details

[13]

(b) Prepare a relevant extract from PG’s statement of financial position at 31 July 2022.
PG
Extract from statement of financial position at 31 July 2022

[2]
(c) List three ways in which PG could reduce the possibility of irrecoverable debts.

[3]
(d) State two factors PG should consider when setting the provision for doubtful debts.

[2]
[Total: 20]

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5

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Sian and Tom are in partnership sharing profits and losses in proportion to capital invested. The
partnership agreement states the following:
1

interest on capital is allowed at 6% per annum

Sian is allowed a salary of $20 000 per annum

interest on drawings is charged at 3% per annum, charged for each proportion of the year

The profit for the year before appropriation for the year ended 31 March 2022 was $59 190.
Drawings made during the year were:

1 April 2021
1 October 2021

Sian
$
8 000
6 000

Tom
$
10 000
12 000

The capital account balances on 1 April 2021 were:
Sian
Tom

$
150 000
100 000

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REQUIRED
(a) Prepare the profit and loss appropriation account for Sian and Tom for the year ended
31 March 2022.
Sian and Tom
Profit and loss appropriation account for the year ended 31 March 2022
$

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17
The current account balances on 1 April 2021 were:
Sian
Tom

$
3 000 credit
7 000 debit

REQUIRED
(b) Prepare the extract from the statement of financial position of Sian and Tom that shows the
capital accounts and the full details of their current accounts at 31 March 2022.
Sian and Tom
Statement of financial position (extract) at 31 March 2022
$

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[2]
Sian and Tom prepare their financial statements on a going concern basis.
(d) Explain the accounting principle of going concern.

[2]
[Total: 20]

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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
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

0452/22/O/N/22

Accounting (0452) · Oct/Nov 2022 · Question paper 22

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