Accounting (0452) · Oct/Nov 2024 · Question paper 12
Cambridge Accounting (0452) question paper for paper 12, Oct/Nov 2024 — 0452/12/O/N/24, file 0452_w24_qp_12.pdf.
Text of this paper
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Cambridge IGCSE™
ACCOUNTING
0452/12
Paper 1 Multiple Choice
October/November 2024
1 hour 15 minutes
You must answer on the multiple choice answer sheet.
*5473140728*
You will need: Multiple choice answer sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)
INSTRUCTIONS
There are thirty-five questions on this paper. Answer all questions.
For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
Follow the instructions on the multiple choice answer sheet.
Write in soft pencil.
Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
Do not use correction fluid.
Do not write on any bar codes.
You may use a calculator.
INFORMATION
The total mark for this paper is 35.
Each correct answer will score one mark.
Any rough working should be done on this question paper.
This document has 16 pages. Any blank pages are indicated.
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2
1
A trader prepares financial statements each year.
What do these help the trader to do?
2
A
calculate the amount owing to credit suppliers
B
calculate the cash drawings
C
check the bank statement balance
D
make decisions about the future
A trader bought new fixtures. He paid half the purchase price in cash and agreed to pay the balance
at a later date.
How does this purchase affect the accounting equation?
3
assets
owner’s equity
liabilities
A
decrease
decrease
no effect
B
decrease
no effect
increase
C
increase
decrease
increase
D
increase
no effect
increase
Which account is not kept in the nominal ledger?
A
capital
B
cash
C
inventory
D
purchases
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3
4
On 15 February Kalou made the following entries in his accounts.
debit
$
bank
credit
228 Droghba
discount allowed
$
240
12
Which transaction was being recorded?
5
A
Droghba paid Kalou by cheque after taking a cash discount.
B
Droghba paid Kalou by cheque after taking a trade discount.
C
Kalou paid Droghba by cheque after taking a cash discount.
D
Kalou paid Droghba by cheque after taking a trade discount.
Ranjit is a credit customer of Balbir. In April the following activities took place.
Balbir sold goods on credit to Ranjit.
Ranjit advised Balbir that some of the goods were damaged.
Balbir advised Ranjit of a reduction in the amount owing.
Which documents were used to record these activities?
6
A
debit note, credit note and receipt
B
invoice, credit note and receipt
C
invoice, credit note and statement of account
D
invoice, debit note and credit note
What is an advantage to a business of maintaining books of prime entry?
A
A trial balance can be extracted directly from books of prime entry.
B
Similar transactions are listed together in date order for reference.
C
There is no need to make double entries in the ledger.
D
Trade receivables and trade payables totals are readily available.
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7
Which items appear on the debit side of a trial balance?
amounts owed from credit customers
2
discount received from credit suppliers
3
drawings made by the owner
4
overdrawn balance at the bank
1 and 2
A
8
1
B
1 and 3
C
2 and 4
D
3 and 4
A trader had prepared her year-end financial statements. She later discovered that an adjustment
to reduce the provision for doubtful debts by $100 had not been made.
How did this error affect the trader’s statement of financial position?
current assets
capital
$
9
$
A
overstated
100
overstated
100
B
overstated
100
understated
100
C
understated
100
overstated
100
D
understated
100
understated
100
A trader’s draft income statement showed a profit for the year of $24 500.
The following errors were later discovered.
1
No adjustment had been made for accrued income of $8000.
2
Carriage inwards of $250 had been recorded as carriage outwards.
3
An increase in provision for doubtful debts of $120 had been treated as an addition
to the gross profit for the year.
What was the corrected profit for the year?
A
$32 010
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B
$32 260
C
$32 380
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D
$32 740
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10 The bank statement of a business had a credit balance of $2690 on 31 October. At that date cheques
issued which had not been presented totalled $850.
What was the bank balance in the cash book on 31 October?
11
A
$1840 credit
B
$1840 debit
C
$3540 credit
D
$3540 debit
The bank column of a trader’s cash book showed an overdrawn balance of $1200. When the trader
compared the cash book with the bank statement he found the following items were not included
in the cash book.
$
bank charges
100
credit transfer
400
direct debit
60
What was the balance brought down in the bank column of the cash book after it was updated?
A
$960 credit
B
$960 debit
C
$1640 credit
D
$1640 debit
12 What is an advantage of preparing a monthly sales ledger control account?
A
It is necessary to prepare the income statement.
B
It helps to reduce the possibility of fraud .
C
It provides a check on the accuracy of trade payables’ accounts.
D
It shows the total of the cash sales and credit sales.
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13 A summary of Jim's cash book for the year included the following:
$
total cheques paid to suppliers
3750
total discount received
65
Which entries are made in his purchases ledger control account?
debit
$
credit
$
A
bank
3750
discount received
B
bank
discount received
3750
65
–
–
C
–
–
bank
discount received
3750
65
D
discount received
bank
3750
65
65
14 Hamid owns a grocery store. He bought a motor vehicle, $2000, and fuel, $50. Both of these
amounts were incorrectly debited to the purchases account.
What was the effect of this error on the income statement for the year?
motor vehicle expenses
gross profit
$
$
A
overstated
2000
overstated
2050
B
overstated
2050
overstated
50
C
understated
2000
understated
2050
D
understated
2050
understated
50
15 Which statements are correct about depreciation?
A
1
It is a non-cash expense item.
2
It is an estimated amount.
3
It is the amount of money set aside to replace a non-current asset.
4
It is a gradual loss in the value of a current asset.
1, 2 and 3
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B
1 and 2 only
C
2, 3 and 4
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D
2 and 4 only
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16 A machine with an original cost of $10 000 had been depreciated for two years at the rate of 10%
per annum using the straight-line method. It was then sold for cash with the loss on disposal
amounting to $700.
A replacement machine was bought on the same day for $12 400 cash.
What was the net decrease in the cash balance?
$3700
A
B
$5100
C
$11 700
D
$13 100
17 Abdul is a trader. He rents out part of his warehouse to other businesses.
Abdul is preparing his financial statements for the year ended 31 December. His rental income
account shows that:
rent received during the year totalled $2750
rental income transferred to the income statement was $3000
What does the closing balance on the rental income account represent?
A
accrued income
B
an accrued expense
C
an expense paid in advance
D
income received in advance
18 What is the journal entry required to close the irrecoverable debts account at the year end?
account to be debited
account to be credited
A
income statement
irrecoverable debts
B
irrecoverable debts
income statement
C
irrecoverable debts
trade receivables
D
trade receivables
irrecoverable debts
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19 After preparing draft financial statements at the end of her first year of trading, Lucy discovered
two errors.
1
Damaged inventory had been valued at its cost price of $340. It was expected to sell
for $180.
2
100 items which had been expected to sell for $12 each had been valued at their
cost price of $7 each. Carriage inwards of $1 for each item had not been included in
the cost.
What was the effect of these errors on the gross profit?
A
overstated $60
B
overstated $240
C
understated $60
D
understated $240
20 Which items would appear in the income statement for an accountancy business?
gross profit
profit for the year
surplus
A
✓
✓
✗
B
✓
✗
✓
C
✗
✓
✗
D
✗
✗
✓
21 A business provided the following information.
$
long-term loan
20 000
trade receivables
12 000
trade payables
9 700
bank overdraft
2 000
prepaid insurance
400
accrued wages
1 000
rental income prepaid
500
What was the total of the current liabilities?
A
$13 200
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B
$15 400
C
$31 200
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D
$32 700
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22 What is an advantage to a trader of forming a partnership?
A
continuity of existence
B
decision making is quicker
C
profits are shared
D
risks are shared
23 Which items should be entered in the appropriation account of a partnership?
interest on
partners’
drawings
A
✓
B
✓
C
✓
interest on
partners’
loans
partners’
drawings
✓
✓
D
✓
✓
24 X Limited provided the following information.
$
ordinary share capital
300 000
general reserve
50 000
retained earnings
35 000
8% debenture
60 000
What was the total of the equity?
A
$335 000
B
$350 000
C
$385 000
D
$445 000
25 Which item is shown in the income statement and in the statement of changes in equity of a limited
company?
A
accrued interest on debentures
B
ordinary share dividend paid
C
profit for the year
D
transfer to general reserve
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26 The Daylee Sports Club was formed in January. During its first year the club purchased equipment
costing $5000, paying by cheque.
Which of the club’s financial statements are affected by the purchase of this equipment?
receipts and
payments
account
income and
expenditure
account
A
✓
✓
B
✓
C
statement of
financial
position
✓
✓
✓
D
✓
27 The following ledger account appeared in the books of a club for the year ended 31 December.
Subscriptions account
$
Jan 1
Balance b / d
Dec 31
Income and expenditure
Balance c / d
2 000
$
Dec 31
Bank
29 000
24 000
3 000
29 000
29 000
Which statement is correct?
A
Subscriptions prepaid on 1 January amounted to $2000.
B
Subscriptions prepaid on 31 December amounted to $3000.
C
Subscriptions received during the year ended 31 December amounted to $24 000.
D
Subscriptions relating to the year ended 31 December amounted to $29 000.
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11
28 After a manufacturing account had been completed it was discovered that wages paid to factory
cleaners had not been included.
Which items in the manufacturing account would change after this error was corrected?
A
1
direct wages
2
indirect wages
3
prime cost
4
production cost
1 and 2
B
1, 3 and 4
C
2 and 4
D
3 and 4 only
29 W Limited manufactures motorbikes. The following information relates to the first year in business.
$
purchases of motorbike parts
40 000
wages of factory workers
25 000
production overheads
8 000
inventory of motorbike parts at the year end
3 000
inventory of partly finished motorbikes at the year end
7 000
What was the cost of production of the motorbikes completed during the year?
A
$63 000
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B
$65 000
C
$70 000
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D
$77 000
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30 Anya did not keep a full set of double entry records but provided the following information.
$
At 1 February 2022
capital
10 000
At 31 January 2023
bank overdraft
1 500
equipment
20 000
inventory
2 000
trade receivables
15 000
trade payables
10 500
Anya’s drawings during the year ended 31 January 2023 were $8500.
What was her profit for the year ended 31 January 2023?
A
$23 500
B
$25 000
C
$26 500
D
$29 500
D
$50 885
31 A jewellery retailer marks up his goods by 100%.
He provided the following information.
$
revenue
68 200
discount received
1 080
profit for the year
18 395
What was the total of his expenses?
A
$14 625
B
$16 785
C
$48 725
32 Omar had an increase in his gross profit margin.
What could have caused this?
A
a decrease in the selling price of his goods
B
an increase in the quantity of goods purchased
C
a decrease in the purchase price of his goods
D
an increase in the quantity of goods sold
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33 Who would be interested in the value of non-current assets which a business has available as
security?
A
bank manager
B
credit customers
C
employees and trade unions
D
government departments
34 Which accounting principle is the accounting equation based on?
A
duality
B
going concern
C
materiality
D
realisation
35 Which qualitative factor requires that financial information is provided in a timely manner so that it
can be used for decision making?
A
comparability
B
relevance
C
reliability
D
understandability
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