WAC11 01 Rms 20180815

Mark Scheme (Results)
Summer 2018
Pearson Edexcel IAL Accounting

In Accounting (WAC11)
Paper 01 The Accounting System and Costing
Edexcel and BTEC Qualifications
Edexcel and BTEC qualifications are awarded by Pearson, the UK’s largest awarding body.
We provide a wide range of qualifications including academic, vocational, occupational and
specific programmes for employers. For further information visit our qualifications websites
at www.edexcel.com or www.btec.co.uk. Alternatively, you can get in touch with us using
the details on our contact us page at www.edexcel.com/contactus.
Pearson: helping people progress, everywhere
Pearson aspires to be the world’s leading learning company. Our aim is to help everyone
progress in their lives through education. We believe in every kind of learning, for all kinds
of people, wherever they are in the world. We’ve been involved in education for over 150
years, and by working across 70 countries, in 100 languages, we have built an international
reputation for our commitment to high standards and raising achievement through
innovation in education. Find out more about how we can help you and your students at:
www.pearson.com/uk
Summer 2018
Publications Code WAC11_01_1806_MS
All the material in this publication is copyright
© Pearson Education Ltd 2018
General Marking Guidance
 All candidates must receive the same treatment. Examiners

must mark the first candidate in exactly the same way as they
mark the last.
 Mark schemes should be applied positively. Candidates must
be rewarded for what they have shown they can do rather than
penalised for omissions.
 Examiners should mark according to the mark scheme not
according to their perception of where the grade boundaries may
lie.
 There is no ceiling on achievement. All marks on the mark
scheme should be used appropriately.
 All the marks on the mark scheme are designed to be
awarded. Examiners should always award full marks if deserved,
i.e. if the answer matches the mark scheme. Examiners should
also be prepared to award zero marks if the candidate’s
response is not worthy of credit according to the mark scheme.
 Where some judgement is required, mark schemes will
provide the principles by which marks will be awarded and
exemplification may be limited.
 When examiners are in doubt regarding the application of
the mark scheme to a candidate’s response, the team leader
must be consulted.
 Crossed out work should be marked UNLESS the candidate
has replaced it with an alternative response.

Question Answer Mark

Number
1 (a) AO1 (1), AO2 (2)
AO1: One mark for sub total.
AO2: Two marks for calculation.
£
Inventory 1 May 2017 23 400
Purchases 152 500 (1) AO1
Unrecorded purchase 1 750 (1) AO2
177 650
Inventory 30 April 2018 (27 300)
Maintenance spares used 150 350 (1) AO2
(3)
Number
1 (b)(i) AO1 (5), AO2 (7)
AO1: Five marks for transferring balances
to the income statement.
AO2: Seven marks for balances requiring
adjustment.
(12)

Future Solar
Statement of Profit or Loss and Other Comprehensive Income for the year ended
30 April 2018
£ £
Revenue 750 000 (1) AO1

Less
Depreciation- Buildings 11 000 (1) AO2
Solar panels and equipment 24 000 (1) AO2
Computers and fixtures 12 500 (1) AO2
Maintenance spares 150 350 (1of) AO1
Wages of maintenance staff (110 000+5 700) 115 700 (1) AO2
Management salaries (280 000 + 11 200) 291 200 (1) AO2
Selling expenses 9 500 (1) AO1
Computer expenses 16 750 (1) AO1
Administration expenses 34 900 (1) AO1
General expenses (41 000 - 1 400) 39 600 (1) AO2
Loss on sale of computers 4 500 (1) AO2
710 000
Profit for the year 40 000

Number
1 (b)(ii) AO1 (5), AO2 (9), AO3 (2)
AO1: Five marks for transferring balances to
the financial position statement.
AO2: Nine marks for balances requiring
adjustment.
AO3: Two marks for adjusting the
non-current asset for the computer sale.
(16)

Statement of Financial Position at 30 April 2018
Non-current assets
Cost
Accumulated Carrying
depreciation value
£ £ £
Land and buildings 800 000 96 000 704 000(1of)AO2
Solar panels and equipment 600 000 144 000 456 000(1of)AO2
Computers and fixtures 60 000 (1)AO3 22 500 (1)AO3 37 500
1 460 000 262 500 1 197 500(1of)AO2
Current assets
Inventory 27 300 (1)AO1
Trade receivables 69 000 (1)AO1
Other receivables 1 400 (1)AO2
Cash and bank (19 100–1 750+1 500–3 000)15 850 AO2
(1) (1) (1) 113 550
Total Assets (1)AO1 1 311 050
Capital 1 250 000

Profit for the year 40 000
1 290 000
Drawings (25 000 + 3 000) (28 000) (1)AO2
1 262 000(1of)AO1
Current Liabilities
Trade payables 32 150 (1)AO1
Other payables (5 700 + 11 200) 16 900 (1)AO2
49 050
Total Capital and Liabilities 1 311 050

Number
1 (c)(i) AO2 (5)
A02: Five marks for calculating
components and profit.
£
Revenue 8 000 x £135 = 1 080 000 (1) AO2
Less
Fixed cost 880 000 (1) + 45 000 (1) = (925 000)
AO2
Variable cost 8 000 x £12 = (96 000) (1) AO2
Profit for the year 59 000 (1of) AO2 (5)

Number
1 (c)(ii) AO2 (3)
A02: Three marks for calculating cost.

925 000 (1of) + 96 000 (1of) AO2
8 000
= £127.625 per megawatt hour (1of) AO2
(3)

Number
1 (d)(i) AO1 (2)
AO1: Two marks for the definition.

A cost which is remains constant (1) AO1 over a
varying range of output/period of time (1) AO1

(2)

Number
1 (d)(ii) AO3 (2)
AO3: Two marks for suggesting reasons.
The generation of electricity requires considerable

capital equipment/non-current assets/staff costs
(1) AO3 this will involve a high level of
depreciation which is a fixed cost and does do not
vary with output (1) AO3
Variable costs usually include raw materials and

direct labour. The raw material is free (1) AO3
and as no product or service is being delivered by
a significant workforce the direct labour is
relatively small. (1) AO3

Max 2

(2)

Question Indicative Content Mark
Number
1 (e) AO1 (1), AO2 (1), AO3 (5), AO4 (5)
Positive points for expanding (own figure rule

applies)
Expansion does produce a higher profit, £59 000

against £40 000.
The energy being generated is ‘clean green energy’
which will probably escape government
environmental taxes in the future.
The energy generated will be well received in the
market place. Social accounting will be seen to
apply.
The source of the energy is constantly renewable.
Increased revenue and market share.
Can take advantage of economies of scale.
Will generate more work and meets social
accounting objectives.
Negative points for expanding (own figure rule

applies)
To expand Future Solar must obtain a major bank

loan of £750 000. Repayment of this loan places
long term risk on the business.
Prices have already fallen. Further falls would result
in losses not profits.
Dealing with a single customer and the risks of that
customer failing.
The energy is sold to a single customer National
Distribution. Decisions of this company will impact
directly upon Future Solar.
At 5.46% the sales margin is very small.
These are only estimates and the actual figures may
vary.
The expansion will require £50 000 from the bank
account which will require an overdraft.
Decision
Candidates may conclude that Solar Futures should
expand manufacture. Candidates should support
that decision with an appropriate rationale.
(12)
Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-3 Isolated elements of knowledge and understanding recall

based.
Weak or no relevant application to the scenario set.
Generic assertions may be present.
Level 2 4-6 Elements of knowledge and understanding, which are
applied to the scenario.
Chains of reasoning are present, but may be incomplete
or invalid.
A generic or superficial assessment is present.
Level 3 7-9 Accurate and thorough understanding, supported
throughout by relevant application to the scenario.
Some analytical perspectives are present, with
developed chains of reasoning, showing causes and/or
effects.
An attempt at an assessment is presented, using
financial and non-financial information, in an appropriate
format and communicates reasoned explanations.
Level 4 10 - 12 Accurate and thorough knowledge and understanding,
supported throughout by relevant and effective
application to the scenario.
A coherent and logical chain of reasoning, showing
causes and effects.
Assessment is balanced, wide ranging and well
contextualised using financial and non-financial
information and makes informed recommendations and
decisions.

Number
2 (a) AO1 (5), AO2 (3)
AO1: Five marks for correcting trial
balance.
AO2: Three marks for matching trial
balance totals.

(8)

Roshan
Trial balance at 30 April 2018
Dr Cr
£ £
Capital 60 000
Drawings 11 900
Revenue 205 000
Purchases 125 000
Returns inwards 800 (1)AO1
Inventory -1 May 2017 31 000
Non-current assets (cost) 64 000
Provision for depreciation
– non-current assets 36 000
Discount allowed 1 680 (1)AO1
Discount received 3 100 (1)AO1
Trade receivables 19 000 (1)AO1
Trade payables 15 650
Allowance for doubtful debts 400 (1)AO1
Wages 27 000
Rent and rates 8 500
Electricity and gas 4 600
General expenses 23 500
Cash in hand 3 170 (1)AO2
Suspense - -___
320 150 320 150 (2/1of)AO2
The
same


Number
2 (b) AO2 (12), AO3 (2)
AO2: Twelve marks for adjusting profit.
AO3: Two marks for calculating depreciation.

(14)

Corrected profit/(loss) for the year ended 30 April 2018
£
Draft profit for the year 30 700
Increase Decrease
£ £
(1) The inventory at 30 April 2018 2 800
was recorded in the financial (1) AO2
statements as £35 500. There correct
was an error in the inventory number
count which should have been (1) AO2
£32 700. correct
treatment
(2) No adjustment had been made 350
for discount receivable owing. (1) AO2
£3 100 had been recorded in correct
the financial statements when number
this should have been £3 450. (1) AO2
correct
treatment
(3) No adjustment had been made 1 200 550
for general expenses prepaid £1 (1)AO2 (1) AO2
200 and owing £550.
(4) Annual depreciation on non- 6 400

current assets had been (1) AO3
charged at the rate of 25% on correct
cost, when this should have number
been 15%. (1) AO2
correct
treatment
(5) No adjustment had been made 360
to the allowance for doubtful (1) AO2
debts which should have been correct
maintained at 4%. number
(1) AO2
correct
treatment
(6) A provision was to be made for 1 380
an injury claim from one of (1) AO3
Roshan’s employees. The injury correct
claim would be for 7 weeks loss number
of earnings at £180 per week (1) AO2
plus a total loss of bonus £120. correct
treatment
Total 7 950 (5 090) 2 860
Revised profit/(loss) for the 33 560

year (2/1of)
AO2

Number
2 (c) AO1 (6), AO3 (3)
AO1: Six marks for transferring entries to
the accounts correctly and balancing off
accounts.
AO3: Three marks for deriving bank or
income statement figures.
(9)
Allowance for Doubtful Debts Account

£ £
2017
1 May Balance b/d 400 (1)
AO1
2018 2018
30 Balance c/d 760 30 Income 360 (1of)
April April statement AO3
760 760
1 May Balance b/d 760 (1of)
AO1
Wages Account
£ £
2017/18 Bank/cheque 27 650 2017
(1) AO3
2018 1 May Balance b/d 650
30 April Balance c/d 175 2018
____ 30 Income 27 175
April statement (1) AO1
27 825 27 825
AO1
Electricity and Gas Account
£ £
2017
1 May Balance b/d 250
2017/18 Bank/cheque 4 350 (1)
AO1
2018 2018
30 April Balance c/d 360 30 Income 4 960 (1)
April statement AO3
4 960 4 960
AO1


Number
2 (d)(i) AO1 (4)
AO1: Four marks for explaining the
distinction.

(4)
Accruals Money measurement

Matches income to expenditure for a Recognises that some assets cannot
period be measured in monetary terms in
financial statements
Applies to all expenses and incomes Some assets to the business such as
peoples skill cannot be recorded on
the SOFP
Ensures not overstating profits All assets liabilities which can be
measured in monetary terms should
be included
Marks awarded only if two points are distinguished, one from each concept (1)
AO1 x 4
Number
2 (d)(ii) AO1 (4)
distinction.

(4)
Bad debts Allowance for doubtful debts

Actual bad debts from the last period Estimate of possible debts in the next
period
Actual figure Estimate only
Expense of the period entered in the Application of prudence concept to

income statement value trade receivables accurately
These have occurred in the current This is for a debt which might occur in
period a future period
Two marks awarded for first category and two marks for second category (1)
AO1 x 4

Number
2 (d)(iii) AO1 (4)
distinction.

(4)
Social accounting Ethical accounting

Business should consider their actions Businesses should report with honesty
in a social context not just profit
Considers impact on workers, Not misleading by issuing incorrect
community, environment etc statements or financial statements
Long term benefit for business and Not withholding relevant information
society
Marks awarded only if two points are distinguished, one from each concept (1)
AO1 x 4
Number
2 (e) AO1 (1), AO2 (1), AO3 (5), AO4 (5)
Positive points for the proposal
Errors may be reduced because the software

package will complete the double entry so the
correct corresponding account will receive the entry.
The software package will produce financial reports/
statements on as regular a basis as is required.
Therefore the construction and base data used will
be correctly applied.
The computer will ensure no arithmetical/calculation
errors.
Negative points for the proposal
Although the double entry will be completed with

the debit and credit the computer can only apply the
figures supplied by the inputter. An error in
inputting from the source documents will not be
detected by the computer.
Regular financial reports/ statements will require
period end financial adjustments. If these are not
accurately applied the outcome will be inaccurate.
If poorly programmed errors may occur.
Repetitive input can lead to errors.
Lack of training can lead to input errors.
Some of the errors which do not affect the trial
balance will still not be detected if using ICT e.g.
error of omission or error of original entry.
Decision
Candidates may conclude that errors will be reduced
but there is no guarantee of elimination of errors.
Candidates should support that decision with an
appropriate rationale.
NOT
General advantages and disadvantages of using ICT.
ALL errors not revealed by the trial balance will still
not be detected.
(12)
Level 1 1-3 Isolated elements of knowledge and understanding recall

based.
Chains of reasoning are present, but may be incomplete
or invalid.
A generic or superficial assessment is present.
Level 3 7-9 Accurate and thorough understanding, supported
throughout by relevant application to the scenario.
Some analytical perspectives are present, with
developed chains of reasoning, showing causes and/or
effects.
An attempt at an assessment is presented, using
financial and non-financial information, in an appropriate
format and communicates reasoned explanations.
Level 4 10 - 12 Accurate and thorough knowledge and understanding,
supported throughout by relevant and effective
application to the scenario.
causes and effects.
Assessment is balanced, wide ranging and well
contextualised using financial and non-financial
information and makes informed recommendations and
decisions.


Number
3 (a) AO1 (4)
AO1: Four marks for identifying possible
reasons for the fall.
Sales will probably be falling

If sales for cash, smaller cash inflow
If for sales on credit, fewer trade receivables to
convert into cash
Inventory may rise unless purchases are
restrained
May require bank overdraft to pay expenses
Difficulty in paying trade payables
MAX 4 x (1) AO1 (4)

Number
3 (b) AO2 (12)
AO2: Twelve marks for calculating the
ratio/days.
(12)
30 April 2017 30 April 2018

Liquid 12 000 + 10 000 = 1:1 (1) 26 000
(acid test) AO2 36 000 + 16 000 (1) AO2
ratio 22 000 (1) AO2 = 0.50:1 (1) AO2
Trade 12 000 (1) AO2 x 365 26 000 x 365

receivables 175 200 240 000 (1) AO2
collection =25 days (1) AO2 = 39.5 days (1) AO2
period (in
days)
Percentage 17 500 (1) AO2 x 100 (17 700 + 3 900) (1) AO2
return on 35 000 (50 000 + 40 000) (1) AO2
capital = 50% (1) AO2
employed x 100 = 24%
Number
3 (c) AO1(1), AO3 (2)
AO1: One mark for identifying decline in
liquidity.
AO3: Two/Three marks for analysing the
liquidity position.
The liquid (acid test) ratio is deteriorating (1) AO1

The liquid (acid test) ratio is half of the benchmark
of 1:1 (1) AO3
The business has no liquid funds/now has an
overdraft which makes it difficult to pay expenses
or trade payables (1) AO3
Trade payables are increasing possibly due to
inability to pay (1) AO3
Trade receivables collection period is extending
(1) AO3
MAX 3 marks
(3)

Number
3 (d) AO2 (2)
A02: Two marks for calculating the capital
introduced.
£
Capital 1 May 2017 35 000
Plus profit for year 17 700
52 700
Less Drawings (15 500)
Closing capital 37 200 (1) AO2
Capital introduced 12 800 (1) AO2
Capital 30 April 2018 50 000
(2)

Number
3 (e) AO1 (3)
AO1: Three marks for identifying sources.
Hire the non-current assets

Lease the non-current assets
Introduce greater capital funding/reduce
drawings
Go into partnership to increase capital
Venture capital
Government subsidy
NOT
Issue shares or debentures
Bank overdraft
Extend trade payables
Reduce inventory or trade receivables
Retained profit
3 x (1) AO1
(3)
Number
3 (f) AO2 (1), AO3 (2), AO4 (3)
Positive points for ratios
They provide a yardstick to measure against e.g.

liquidity ratios, profitability, use of assets.
Provide a basis for comparison with previous
performance or compared to competitors.
Compare ROCE to alternative investments.
Negative points for ratios
They do not consider non-financial factors such as

the life of the product or skill of the workforce.
They are always analysing historical data.
Decision
Candidates may conclude that ratios are useful.
(6)

Level 1 1-2 Isolated elements of knowledge and understanding which
are recall based.

Some analysis is present, with developed chains of
reasoning, showing causes and/or effects applied to the
scenario, although these may be incomplete or invalid.
An attempt at an evaluation is presented, using financial
and perhaps non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding.
Application to the scenario is relevant and effective.
causes and effects is present.
Evaluation is balanced and wide ranging, using financial
and perhaps non-financial information and an appropriate
decision is made.

Number
4 (a) AO1 (4)
AO1: Four marks for stating differences.
2 x 2 marks AO1 for stating differences
(4)

Club Sole trader
Non-profit making organisation Profit making business
Accumulated fund representing net Owner invests capital
assets/funded by subscription
Surplus belongs to all the club All the profit belongs to the sole
members trader
Primarily for pursuit of mutual interest Primarily for trading to generate
not trading profit
Decision making is by committee Decision making is by the owner
Prepare receipts and payment account Prepare bank account
Prepare income and expenditure Prepare income statement/profit or
account loss account


Number
4 (b) AO1 (1), AO2 (2)
AO1: One mark for calculating balance.
AO2: Two marks for identifying incomes
and expenditures and adjusting to
opening balance.
1 mark (1) AO2 for 525 and 310 added to the

opening balance
1 mark (1) AO2 for deducting 400, 190, 25 and
120
1 mark (1) AO1 for cash stolen
(3)
Alternative presentations accepted

Cash Account
£ £
Balance 250 Wages 400
Receipts from hire 525 Cleaning 190
charges
Subscriptions 310 Refund 25
Sundry 120
____ Cash stolen 350
1085 1085

Number
4 (c) AO1 (1), AO2 (2), AO3 (1)
AO1: One mark for using given figure for
inventory remaining.
A02: Two marks for calculating the
purchases, cost of sales and gross profit.
AO3: One mark for calculating the
inventory stolen.

Trading Account 1 April to 27 April 2018
£ £
Revenue 4 200
Less
Opening inventory 3 500
Purchases 2 800 + 400 3 200 (1)AO2
6 700
Closing inventory (2 300) (1)AO1
Inventory stolen (1 250) (1)AO3
Cost of sales (3 150)(1)AO2
Gross profit 1 050
(4)
Alternative presentations accepted.

Number
4 (d) AO1 (1), AO2 (1)
AO1: One mark for calculating the claim
for stolen cash.
A02: One mark for calculating the total
insurance claim.
Insurance claim: 1 250 of + (350 of – 200) (1of) (2)

AO2 = 1 400 (1of) AO1


Number
4 (e) AO1 (2), AO2 (2), AO3 (1)
AO1: Two marks for using given figure for
inventory remaining.
A02: Two marks for calculating the
purchases and gross profit.
AO3: One mark for cost of sales and
inventory stolen.
(5)

Journal
Dr Cr
£ £
Sports Insurance Company (1) 1 400 (1of)
AO1 AO2
Inventory of sports equipment 1 250 (1of)
AO2
Cash 150 (1of)
AO3
Theft of cash and inventory on 27 April 2018. Insurance claim
submitted (1) AO1


Number
4 (f) AO2 (5), AO3 (1)
A02: Five marks for calculating the
incomes and expenses.
AO3: One mark for calculating the
depreciation.
Statement of Profit or Loss for the three months
ending 31 March 2018
£ £
Function room hire-15 days@£250 3 750 (1)AO2

Less
Rates 390 (1)AO2
Wages 1 120 (1)AO2
Advertising 1 650 (1)AO2
Heating 600 (1)AO2
Depreciation – fixtures 200 (1)AO3
(3 960)
Loss on hire (210) (6)


Number
4 (g) AO2 (1), AO3 (2), AO4 (3)
Positive points for closing the functions room
Many of the expenses can be reduced such as

wages and advertising, but closure would not result
in some other costs being saved.
The functions room is making a loss and eliminating
this could increase the surplus/reduce the deficit.
Negative points for closing the functions room
Some of the costs attributed to the functions room

would not be saved if the hire was ceased e.g.
rates. This cost would now need to be borne by the
sports club as a whole.
Does the sports club have an alternative for use or
will the functions room remain unused and
deteriorate?
By offering a room for hire the public is visiting the
Club which may attract future members.
Decision
Candidates will conclude that it is or is not
advantageous to close the functions room to hire.
appropriate rationale. (6)

are recall based.

decision is made.

Number
5 (a) AO1 (4)
concepts.
(i) Historic cost – All assets and expenses

are recorded in the ledger accounts at
their actual cost (1) AO1 at the time of
purchase/not at current market value.
(1) AO1
(2)
(ii) Consistency – where a choice of method

is available, once a method has been
selected (1) AO1 the method must be
used consistently from one accounting
period to the next/to not distort
profits. (1) AO1
(2)
(4)

Number
5 (b) AO2 (8)
A02: Eight marks for calculating the value
of the inventory.
(8)

First In First Out (F.I.F.O)
Purchases from Sales Balance
national mint
(coins) (coins)
Balance 200 @ £900 (1) AO2
January 200 @ £950 110 90 @ £900 (1) AO2

200 @ £950 (1) AO2
February 250 @ £980 220 70 @ £950 (1) AO2
250 @ £980 (1) AO2
March 150 @ £1050 200 120 @ £980 (1) AO2
150 @ £1050 (1) AO2
Total £275 100 (1) AO2
closing
value

Number
5 (c) AO1 (4), AO2 (1), AO3 (1)
AO1: Four marks for using the correct
figures.
A02: One mark for calculating the value of
the expenses.
AO3: One mark for calculating the total
value of the purchases.
Statement of Profit or Loss and Other

Comprehensive Income
for the three months ended 31 March 2018
£ £
Revenue 550 000 (1)AO1
Less
Opening inventory 180 000 (1)AO1
Purchases 592 500 (1)AO3
772 500
Less closing inventory (275 100) (1of)AO1
Cost of sales (497 400)
Gross profit 52 600
Expenses (12 200 x 3) (36 600) (1)AO2
Profit for the 3 months 16 000 (1of)AO1

(6)

Number
5 (d)(i) AO1 (1), AO2 (3)
AO1: One mark for using the correct
opening inventory.
A02: Three marks for calculating the
monthly balance.
(4)
Last In First Out (L.I.F.O)

Purchases from Sales Balance
National Mint
(coins) (coins)
Balance 200 @ £900 (1) AO1
January 200 @ £950 110 200 @ £900

90 @ £950
(1) AO2
February 250 @ £980 220 200 @ £900
90 @ £950
30 @ £980
(1) AO2
March 150 @ £1050 200 200 @ £900
70 @ £950
(1) AO2
Total £246 500
closing
value

Number
5 (d)(ii) AO3 (2)
AO3: Two marks for the effect on
quarterly profit.
Closing inventory valuation – FIFO £275 100 –

LIFO £246 500 = £28 600 (1of) AO3 less
(2)
(1of) AO3

Number
5 (e) AO2 (1), AO3 (2), AO4 (3)
Positive points FIFO
FIFO is a more logical approach to inventory

rotation in that you would look to sell your oldest
inventory first. This is not particularly important
with gold but would be important with perishable
items.
FIFO will yield higher profits when commodity
prices are rising because the most expensive
items are valued in closing inventory. Therefore a
higher value is deducted from the goods for resale
giving a lower cost of sales and a higher profit.
If prices are rising FIFO will yield a higher profit but
if the reverse is the case the profits will be lower.
The value of inventory in the statement of financial

position will be nearer to the replacement
valuation.
Negative points for FIFO
The reverse will be the case when commodity

prices are falling. When prices are falling profit
will be reduced because the value of the closing
inventory will be smaller increasing the cost of
sales and reducing the profit.
Decision
Candidates should conclude that the Sales
Manager’s statement is not always valid.
appropriate rationale. (6)

are recall based.

decision is made.


Number
6 (a) AO1 (3)
AO1: Three marks for stating the rule.
Interest on loans – Will be paid at 5% per annum

(1) AO1
Partners salaries – There will be no salaries paid
(1) AO1
Share of profit or loss- Equal shares (1) AO1
(3)

Number
6 (b)(i) AO1 (3), AO2 (4)
AO1: Three marks for recording given
balances.
A02: Four marks for calculating the
balance and correctly recording this in the
account.
Appropriation section of the Statement of Profit or

Loss and Other Comprehensive Income
for the year ended 30 April 2018
£ £
Profit for the year 45 585 (1)AO1
Plus
Interest on drawings
Asanka 290
Bhulo 325 (1)AO2 all
Padman 400
1 015
46 600
Interest on capital:
Asanka 2 000 (1)AO2
Salaries:
Bhulo 8 000 (1)AO1
Padman 10 000 (1)AO1
(20 000)
26 600
Share of profit:
Asanka 5 910 (1of)AO2 If ratio
correct
Bhulo 11 820
Padman 8 870 (1of)AO2
26 600
(7)


Number
6 (b)(ii) AO1 (2), AO2 (2), AO3 (3)
AO1: Two marks for recording the opening
balance and balancing the account.
A02: Two marks for recording the bank
entries correctly.
AO3: Three marks for calculating and
recording the impact of goodwill.
(7)

Capital Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Goodwill 4 000 8 000(1) 6 000(1) Balance 30 000 25 000(1)
b/d
Bank 10 000(1) Bank 20 000(1)
Balance 25 000 26 000 14 000 Goodwill 9 000(1) 9 000 _____
c/d
39 000 34 000 20 000 39 000 34 000 20 000
Balance 25 000 26 000 14 000
b/d
(1of) All
Balances b/d (1) AO1 x2

Bank entries (1) AO2 x 2
Goodwill adjustment (1) AO3 x3

Number
6 (b)(iii) AO1 (1), AO2 (6)
AO1: One mark for recording the opening
balance and balancing the account.
A02: Six marks for correctly recording the
transfers from appropriation and the
salaries and drawings paid.
(7)
Current Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Balance 1 500 Balance 600
b/d b/d
Int on 290 325 400
dr’gs (1of)
Salaries 7 500 9 000 Int on 2 000
paid (1) cap (1of)
Drawings 5 800 6 500 8 000 Salaries 8 000 (1) 10 000
(1)
Balance 2 420 3 995 1 470 Share 5 910 11 820 8 870
c/d of pr’t (1of)
8 510 19 820 18 870 8 510 19 820 18 870
Balance 2 420 3 995 1 470
b/d
(1of)

Balances (1) AO1

Appropriation, salary and drawings paid entries (1) AO2 x 6
Marks are for ALL three partners entries correct

Number
6 (c) AO2 (1), AO3 (2), AO4 (3)
Positive points for partnership agreement
Partners are clear about the terms of their

partnership relationship.
This clarity should help to avoid disagreements or
understandings at a later date.
Negative points for partnership agreement
If the agreement is formalised there is the cost and

time of doing this.
No agreement can cater for all eventualities that
the partnership will face.
Decision
Candidates should conclude that a partnership
agreement in some form will be valuable.
NOT (6)
General benefits of a partnership

are recall based.
decision is made.
Pearson Education Limited. Registered company number 872828
with its registered office at 80 Strand, London WC2R 0RL, United Kingdom

WAC11 01 Rms 20180815

Uploaded by

Copyright:

Available Formats

WAC11 01 Rms 20180815

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

WAC11 01 Rms 20180815

Uploaded by

Copyright:

Available Formats

Mark Scheme (Results)

Pearson Edexcel IAL Accounting

Pearson: helping people progress, everywhere

 All candidates must receive the same treatment. Examiners

Question Answer Mark

Revenue 750 000 (1) AO1

Capital 1 250 000

= £127.625 per megawatt hour (1of) AO2

The generation of electricity requires considerable

Variable costs usually include raw materials and

Positive points for expanding (own figure rule

Expansion does produce a higher profit, £59 000

Negative points for expanding (own figure rule

To expand Future Solar must obtain a major bank

0 A completely incorrect response.

Level 1 1-3 Isolated elements of knowledge and understanding recall

Question Answer Mark

(4) Annual depreciation on non- 6 400

Revised profit/(loss) for the 33 560

Question Answer Mark

Allowance for Doubtful Debts Account

Question Answer Mark

Accruals Money measurement

Bad debts Allowance for doubtful debts

Expense of the period entered in the Application of prudence concept to

Question Answer Mark

Social accounting Ethical accounting

Positive points for the proposal

Errors may be reduced because the software

Negative points for the proposal

Although the double entry will be completed with

0 A completely incorrect response.

Level 1 1-3 Isolated elements of knowledge and understanding recall

Question Answer Mark

Sales will probably be falling

MAX 4 x (1) AO1 (4)

30 April 2017 30 April 2018

Trade 12 000 (1) AO2 x 365 26 000 x 365

The liquid (acid test) ratio is deteriorating (1) AO1

Hire the non-current assets

Positive points for ratios

They provide a yardstick to measure against e.g.

Negative points for ratios

They do not consider non-financial factors such as

Level Mark Descriptor

0 A completely incorrect response.

Level 2 3-4 Elements of knowledge and understanding, which are

2 x 2 marks AO1 for stating differences

Question Answer Mark

1 mark (1) AO2 for 525 and 310 added to the

Question Answer Mark

Insurance claim: 1 250 of + (350 of – 200) (1of) (2)

Question Answer Mark

Question Answer Mark

Function room hire-15 days@£250 3 750 (1)AO2

Question Indicative Content Mark

Positive points for closing the functions room

Many of the expenses can be reduced such as

Negative points for closing the functions room