0452/23/O/N/24 Question Paper – Accounting Oct/Nov 2024 Paper 23

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Cambridge Accounting (0452) question paper for paper 23, Oct/Nov 2024 — 0452/23/O/N/24, file 0452_w24_qp_23.pdf.

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ACCOUNTING

0452/23

Paper 2 Structured Written Paper

October/November 2024
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 24 pages. Any blank pages are indicated.
DC (PQ) 326661/3
© UCLES 2024

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Jenny runs a small trading business.
Jenny received her bank statement which showed a credit balance of $1367 on 29 February 2024.
On the same date her bank column in her cash book showed an overdrawn balance of $1933.
When comparing her bank statement and cash book she found that the following items appeared
on her bank statement and not in her cash book:
February
26
26
27
28
28

$
1 900
358
1 121
125
290

M Stores, a credit customer, had paid by bank transfer
Interest received
A cheque previously received from C Stores had been dishonoured
Bank charges
A direct debit for electricity had been taken

The following items appeared in her cash book but not on her bank statement
February
23
27
28

A cheque paid to B Properties
A payment by credit transfer to pay for rent and insurance
A cheque received from a credit customer Y Traders was paid into the bank

$
1 025
2 300
792

Upon investigation, she discovered the following error:
A cheque made payable to D Sports $45 had been recorded in the bank column of her cash
book. The cheque had been written from her personal account to pay for her gym membership.
REQUIRED:
(a) Update the bank column of Jenny’s cash book.
Balance the account and bring down the balance on 1 March 2024.

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Details

Date

Details

[7]

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Date

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Jenny
Cash book – bank columns

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3
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(b) Prepare a bank reconciliation statement at 29 February 2024.
Start with the balance from Jenny’s bank statement.
Jenny
Bank reconciliation at 29 February 2024
$

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[5]
(c) Suggest two advantages of preparing a bank reconciliation statement.
1

[2]
(d) Explain why a bank overdraft is shown as a debit balance on a bank statement.

[1]
© UCLES 2024

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4
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Jenny is concerned about her bank overdraft and is considering adding additional capital into
the business from her personal funds.
REQUIRED:
(e) Advise Jenny whether she should contribute additional capital to pay off her bank overdraft.
Justify your answer.

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[5]
[Total: 20]

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Question 2 is on page 6.

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6
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Ali and Sai are in partnership. Their financial year ends on 30 June. Their partnership agreement
includes the following items.
Interest on capital is allowed at 6% per annum.
Interest on drawings is charged at 5%.
Sai is entitled to a partnership salary of $10 050 per annum.

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Ali and Sai have provided the following information:
Ali
$
Drawings for the year ended 30 June 2024
Capital at 1 July 2023
Current account at 1 July 2023

11 000
60 000
1800 debit

Sai
$
16 000
40 000
250 credit

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Ali and Sai share residual profits and losses in the ratio 3:2.

Ali provided a loan to the partnership of $10 000 at an interest rate of 5% per annum. The interest
payment for the year ended 30 June 2024 has been made. The partnership has no other loans.
REQUIRED:

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(a) Prepare the profit and loss appropriation account on page 7 for the year ended 30 June 2024.

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Profit for the year before interest on loan was $42 700.

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7
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Ali and Sai
Profit and loss appropriation account for the year ended 30 June 2024
$

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[8]

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(b) Prepare the capital and current accounts for Sai for the year ended 30 June 2024 and bring
down the balances on 1 July 2024.
Sai
Capital account for the year ended 30 June 2024
Date

Details

Date

Details

Sai
Current account for the year ended 30 June 2024
Date

Details

Date

Details

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8
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[8]

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9
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[2]
(d) Prepare the journal entry to record the payment of interest on the loan provided by Ali. A
narrative is not required.
Ali & Sai
Journal
Details

Debit
$

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Credit
$

[2]

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[Total: 20]

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Natalie prepared her trial balance at the end of the year 31 March 2024. The totals did not agree
and she had to open a suspense account. The debit side of the trial balance was $357 higher than
the credit side.
Natalie later discovered the following errors.
1

A bank transfer, $420, received from a credit customer Sarah had been correctly recorded in
the bank but no other entry had been made.

Natalie contributed a personal vehicle to the business valued at $7000. This had been debited
to the capital account and credited to the vehicle maintenance account.

Purchases of $270 had been correctly entered in the suppliers account but had been debited
as $207 in the purchases account.

No entry had been made for general expenses, $126, paid by bank transfer.

Cash drawings of $200 had been debited to the cash account and credited to the drawings
account.

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10
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(a) Prepare the journal entries on page 11 required to correct errors 1 to 5. Narratives are not
required.

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REQUIRED:

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11
,

Natalie
Journal
Error
number

Details

Debit
$

Credit
$

[10]

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(b) Prepare the suspense account at 31 March 2024.
Natalie
Suspense Account
Date

Details

Date

Details

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[3]
(c) Complete the table by identifying the type of errors that occurred in errors 4 and 5.
Error
Number

Error type

Error 4
Error 5

(d) Complete the table below by placing a tick (3) in the appropriate column to indicate the effect
on the profit for the year after correcting each of the errors.
Effect on profit

Error
Number

decrease

increase

no effect

Error 1
Error 2

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[2]

Error 4
Error 5
[5]

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[Total: 20]
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Error 3

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13
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A company has a fleet of delivery vehicles. Information from their statement of financial position at
31 December 2022 shows that the vehicles originally cost $440 000 with accumulated depreciation
of $270 000.
The business purchased two additional vehicles costing a total of $70 000 on 1 April 2023 on
credit from L Autos.
On 30 November 2023, the business sold one of its vehicles. The vehicle had originally cost
$28 000 with accumulated depreciation of $16 800. The vehicle was sold for $10 500 to a local
garage who paid by bank transfer.
The business provides for depreciation using the straight-line method at a rate of 20% per annum.
A full year’s depreciation is charged in the year of purchase.
No depreciation is charged in the year of disposal.
REQUIRED:
(a) Calculate the depreciation charge for the year ended 31 December 2023.

[2]

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Delivery vehicles account
Date

Details

Date

Details

Provision for depreciation of delivery vehicles account
Date

Details

Date

Details

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Balance the accounts and bring down the balances on 1 January 2024.

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(b) Prepare the company’s ledger accounts for the delivery vehicles, provision for depreciation
and disposal of delivery vehicles for the year ended 31 December 2023.

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15
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Disposal of delivery vehicles account
Date

Details

Date

Details

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[10]

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After talking to his accountant, the owner of the company is considering changing the method of
depreciation for his delivery vehicles to the reducing balance method but maintaining the rate of
depreciation at 20% per annum.
REQUIRED:
(c) Advise the owner of the company whether he should pursue this course of action. Justify
your answer by providing two advantages and two disadvantages of changing the method of
depreciation to the reducing balance method.

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[5]

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17
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(d) Complete the following table by placing a tick (3) in the appropriate column to indicate the
most suitable method of depreciation for each of the non-current assets.
Non-current asset

Straight-line

Revaluation

No depreciation

Land
Fixtures & fittings
Loose tools

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[3]

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[Total: 20]

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18
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The following information was provided by G Limited, a manufacturing company, for the year
ended 31 March 2024.
$

Wages:
Factory operatives
Factory supervisors

183 700
47 200

Administration salaries
Factory machinery at cost
Provision for depreciation of factory machinery
Factory general expenses
Rates & insurance
Administration expenses
Carriage on purchases of finished goods
Royalties

34 925
247 000
51 500
20 250
7 100
5 470
2 180
3 240

Inventory:
Raw materials
Work in progress
Finished goods

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68 000
32 413

1 April 2023
$

31 March 2024
$

18 200
23 400
6 820

19 280
22 650
9 350

Additional information
1

Factory machinery is to be depreciated at 15% per annum using the reducing balance
method.

On 31 March 2024 rates, $620, were owing.

Rates and insurance are to be apportioned 60% to the factory and 40% to the office.

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Purchases:
Raw materials
Finished goods

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19
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REQUIRED
(a) Prepare the manufacturing account for the year ended 31 March 2024.
G Limited
Manufacturing account for the year ended 31 March 2024
$

[10]

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(b) Prepare the trading section of the income statement of G Limited for the year ended
31 March 2024.
G Limited
Income Statement (Trading section) for the year ended 31 March 2024
$

[5]

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REQUIRED:

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G Limited apply a standard rate of mark-up of 35%.

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21
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G Limited make all sales on credit and have supplied the following information:
Trade receivables turnover
(days)
38
29

At 31 March 2024
At 1 April 2023

Irrecoverable debts
$
32 060
19 200

The directors of G Limited are worried about the level of debts from credit customers and are
considering employing a consultant to review their credit control policy and implement any
changes. They would provide training to the existing staff in the new procedures.
The consultant would charge a fee of $14 000 for their services.
REQUIRED:
(c) Advise G Limited whether to employ the consultant to review their credit control policy. Justify
your answer with two advantages and two disadvantages.

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[5]
[Total: 20]

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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
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.

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Accounting (0452) · Oct/Nov 2024 · Question paper 23

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