Cambridge International Examinations

Cambridge International General Certificate of Secondary Education

ACCOUNTING 0452/23
Paper 2 May/June 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.

Cambridge will not enter into discussions about these mark schemes.

Cambridge is publishing the mark schemes for the May/June 2017 series for most Cambridge IGCSE®,
Cambridge International A and AS Level and Cambridge Pre-U components, and some Cambridge O Level
components.

® IGCSE is a registered trademark.

This document consists of 12 printed pages.

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Question Answer Marks

1(a) Shiromi 13
General Ledger
Rent and Account
2017 $
April 4 Bank 495 (1)

Motor Vehicle Account

2017 $
April 10 Bank 5 500 (1)

Sales Account
2017 $
April 21 Cash 600 }(1)
Bank 6 000 }

Drawings Account
2017 $
April 26 Cash 150 (1)

Purchases Account
2017 $
April 30 Total for Month 7 460 (1)

Purchases Returns Account

2017 $
April 30 Total for month 560 (1)

Discount received Account

2017 $
April 30 Total for month 156 (1)

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Question Answer Marks

Purchases Ledger
Lincy account
2017 $ 2017 $
April 7 Returns 560 (1) April 5 Purchases 3 860 (1)
April 18 Bank 3 234 }(1)
Discount 66 }

Gail Account
2017 $ 2017 $
April 24 Bank 3 510 }(1) April 16 Purchases 3 600 (1)
Discount 90 }

+ (1) dates

1(b) Decrease in inventory 2

Decrease in bank/cash balance or increase in overdraft
Increase in trade payables
Increase in short term loans
Increase in other payables
Decrease in other receivables
Purchase of non-current assets
Increase in drawings
Repayment of long term liabilities
Note: Not decrease in trade receivables as sells for cash only
Any two reasons (1) each

1(c) May not be able to pay debts when they fall due 2
May not be able to take advantage of cash discounts
May not be able to take advantage of business opportunities as they arise
May have difficulty in obtaining further supplies
May not be able to take drawings
May not have sufficient funds to pay for day to day expenses
Any two points (1) each

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1(d) increase decrease no effect 4

Take out a short-term bank loan 9(1)

Repay a long-term bank loan 9(1)
Sell goods on credit terms instead of for cash 9(1)
Obtain a higher rate of cash discount 9(1)

1(e) These are goods for re-sale/These goods are purchased for re-sale not for business use/The inventory would increase/ 1
These are short-term assets

1(f) Lower profit for the year 2

Higher capital employed/Higher owner's capital(Equity)/Higher long term loans
Any 2 reasons (1) each

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Question Answer Marks

2(a) Book of prime (original) entry 4

Discount allowed Cash book (1)

Bad debts General journal (1)
Contra General journal (1)
Returns Sales returns journal (1)

2(b) Meaning 2
A contra entry is one which appears on the debit side of the purchases ledger control account and the credit side of the sales
ledger control account. (1)
Reason
The entry is made when a sales ledger account is set off against a purchases ledger account of the same person/business. (1)

2(c) Waheed 10
Sales ledger control account

2017 $ 2017 $
March 1 Balance b/d 2 346 March 1 Balance b/d 140
March 31 Bank (dis.chq) 350 (1) March 31 Bank 2 145 (1)
Sales 2 748 (2)CF/(1)OF Discount 55 (1)
Balance c/d 86 Returns 276 (1)
Contra 182 (1)
Bad debts 62 (1)
Balance c/d 2 670 (1)
5530 5 530

2017 $ 2017 $
April 1 Balance b/d 2 670 (1) April 1 Balance b/d 86 (1)

2(d) Overpayment by customer

Payment made by customer without deducting cash discount 2
Goods returned by customer after payment of balance due
Payment made in advance by customer
Any two points (1) each

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2(e) Satisfied (1) 2

Credit customers are now paying earlier/within credit period allowed/other valid answer (1)

2(f) Do not have to allow Waheed cash discount 1

May charge interest on overdue account

2(g) Have to wait longer for payment/Adversely affects liquidity position 1

Increase risk of bad debt
Any 1 point (1)

2(h) Waheed has the use of the funds for other purposes for 17 days 2
Waheed does not need to use his existing liquid funds to pay suppliers
Improved liquidity position
Or other suitable comment
Any 2 comments (1) each

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Question Answer Marks

3(a) A1 Sports Club 12

Receipts and Payments Account for the year ended 30 April 2017
2017 $ 2016 $
April 30 Subscriptions 7 140 (1) March 1 3 180
Sales of 430 (1) 2017
equipment
Café sales 5 280 } (2)CF April 30 Café suppliers 3 796 (1)
} (1)OF Rates 960 (1)
Balance c/d 2 626 General expenses 910 (1)
Café wages 1 040 (1)
Loan Repaid 1 500 (1)
Loan interest 90 (1)
Equipment 4 000 (1)
15 476 15 476 (1)
2017
May 1 Balance b/d 2626 (1)

3(b) A1 Sports Club 8

Café Income Statement for the year ended 30 April 2017
$ $
Revenue 5 280 (1) OF
Cost of Sales
Opening Inventory 298 (1)
Purchases (3796 (1) – 311 (1) + 393 (1)) 3 878
4 176
Closing inventory 216 (1)
3 960
Café wages 1 040 (1) 5 000
Café profit 280 (1) OF

3(c) $7000 (1) 2

This is the amount of subscriptions which relates to this financial year (1)

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Question Answer Marks

3(d) Opening bank balance/closing bank balance 5

Purchase of equipment
Proceeds of sale of equipment
Repayment of loan
Café sales
Payments to café suppliers
Café wages
Subscriptions accrued at the start of the year
Any five items (1) each

Question Answer Marks

4(a) 1
$ $
Premises 58 500
Fixtures and fittings 9 400
Inventory 9 700
Trade receivables 8 120 85 720
Trade payables 7 100
Loan 15 000
Bank overdraft 5 300 27 400
Capital 58 320 (1)

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4(b) Virat - Statement of Affairs at 31 January 2017 14

Assets $ $ $

Non-current assets Cost Accumulated Book

depreciation value
Premises 58 500 58 500
Fixtures and Fittings 9 400 1 880 (1) 7 520 (1)OF
Motor Vehicle 15 200 3 800 (1) 11 400 (1)OF
83 100 5 680 77 420 (1)OF

Current Assets 10 750 (1)

Inventory (12 900 × 100/120) 11 430
Trade receivables (8120 + 3310) 130
Less Bad debts written off 11 300 (1)
Less Provision for doubtful debts 226 (1) 11 074 (1) OF
Cash 100 (1)

Total Assets 21 924

Capital and Liabilities 99 344

Capital
Balance 73 418 (1)OF

Non-current liabilities
Loan – A Singh (repayable 2019) 10 000 (1)

Current Liabilities 7 526 (1)

Trade Payables (7100 + 6%) 8 400 (1)
Bank overdraft (5300 + 3100) 15 926

Total Liabilities 99 344

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4(c) Virat 5
Capital account
2017 $ 2016 $
Jan 31 Drawings 11 320 (1) Feb 1 Balance b/d 58 320 (1)OF
Balance c/d 73 418 (1) OF 2017
Jan 31 Motor Vehicle 15 200 (1)
Profit 11 218 (1)OF
84 738 84 738
2017
Feb 1 Balance b/d

4(d) Should compare with a business in the same trade 4

Should compare with a business of approximately the same size
Should compare with a business of the same type (sole trader)
The financial statements may be for one year which will not show trends
The financial statements may be for one year which is not a typical year
The financial year may end on different dates (when inventories are high/low)
The businesses may operate different accounting policies
The statements do not show non-monetary factors
It may not be possible to obtain all the information needed to make comparisons
Or other suitable points
Any 2 points (1) for basic statement and (1) for development

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5(a) Duality (1) 1

5(b) To ensure that the totals of the trial balance agree 2

To allow draft financial statements to be prepared
To facilitate the correction of errors
To make sure that all the errors are discovered
Any 2 reasons (1) each

5(c) Heng 6
Suspense account
2016 $ 2016 $
Dec 31 Balance 430 (1) Dec 31 Petty Cash 150 (1)
General exp 90 (1) Discount alld 1 024 (1)
Purchases Returns 454 (1)
Balance c/d 200 (1)OF
1 174 1 174
2017
Jan 1 Balance b/d 200

5(d) Either 2
All the errors have not been found (1)
There is still a balance on the suspense account (1)
Or – if the suspense account in (c) is closed –
All the errors have been discovered (1)
There is no balance remaining on the suspense account (1)

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5(e) Error Profit for the year Non-current assets Current assets Current liabilities 10
$ $ $ $
1 281 overstated 281 overstated No effect No effect
2 100 overstated (1) No effect 100 overstated (1) No effect
3 No effect No effect 150 understated (1) No effect
4 90 understated (1) No effect No effect No effect
5 1024 overstated (1) No effect No effect No effect
6 No effect No effect 4 120 overstated (2) 4 120 overstated (2)
Or Or
2 060 overstated (1) 2 060 overstated (1)
7 454 understated (1) No effect No effect No effect

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