Cambridge IGCSE™

ACCOUNTING 0452/22
Paper 22 March 2020
MARK SCHEME
Maximum Mark: 100

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 International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the March 2020 series for most Cambridge
IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level components.

This document consists of 14 printed pages.

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Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the
specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these
marking principles.

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.

GENERIC MARKING PRINCIPLE 2:

Marks awarded are always whole marks (not half marks, or other fractions).

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the
scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the
question as indicated by the mark scheme. The meaning, however, should be unambiguous.

GENERIC MARKING PRINCIPLE 4:

Rules must be applied consistently e.g. in situations where candidates have not followed instructions or in the application of generic level
descriptors.

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GENERIC MARKING PRINCIPLE 5:

Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may
be limited according to the quality of the candidate responses seen).

GENERIC MARKING PRINCIPLE 6:

Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or
grade descriptors in mind.

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Question Answer Marks

1(a) Amara 10
Petty Cash Book

Total Date Details Total Travel Postage Ledger

received paid and accounts
stationery
$ $ $ $ $

2020
65 Jan 1 Balance b/d
135 Bank (1)
3 Stationery (1) 24 24
7 Travel (1) 49 49
14 Razvan (1) 85 85
22 Taxi fare (1) 18 18
29 Postage (1) 11 11
187 67 35 85
31 Balance c/d 13
200 200
13 Feb 1 Balance b/d (1)

+ (1) dates
+ (1) OF totalling analysis columns
+ (1) OF for 2 matching totals

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Question Answer Marks

1(b) Razvan 6
Amara account

2020 $ 2020 $
Jan 1 Balance b/d 85 (1) Jan 14 Petty cash 85 (1)
19 Sales 180 (1) 28 Sales returns 36 (1)
31 Balance c/d 144
265 265
Feb 1 Balance b/d 144 (1)OF

+ (1) dates

1(c) 2
debit credit no entry

Amara account  (1)

Discount allowed account  }

Discount received account  }(1)

1(d) Direct debit (1) 2

Credit card/Debit card (1)
Online/electronic payment (1)
Telephone transfer (1)
Credit transfer (1)
Accept other valid points
Max (2)

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Question Answer Marks

2(a) GHB Limited 9

Purchases ledger control account
2019 $ 2019 $
Nov 30 Purchases returns 1 160 (1) Nov 1 Balance b/d 12 050 (1) OF
Discount received 650 (1) 30 Purchases 14 200 (1)
Bank 11 420 (1) Interest 95 (1)
Sales ledger 250 (1) Bank 330 (1)
Balance c/d 13 195
26 675 26 675
Dec 1 Balance b/d 13 195 (1)

2(b) The purchases ledger control account does not include capital expenditure/non-current assets (1) 2
The purchases ledger control account only includes purchases of goods for resale (1)
The purchases ledger control account only includes transactions relating to trade payables (1)
Accept other valid points
Max (2)

2(c)(i) Reducing balance method (1) 1

2(c)(ii) More depreciation is charged in the early years of its life (1) 3
Most of the benefit of the asset is gained in the early years (1)
The net book value is more likely to relate to the amount which will be realised on sale (1)
The vehicle may become out-of-date quickly depending on the vehicle type (1)
As repair costs are likely to be minimal in the early years, the overall charge to the income statement each year is more likely
to be fairly constant if the reducing balance method is used (1)
Accept other valid points
Max (3)

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Question Answer Marks

2(d) Ordinary shares 5

Advantages:
Shares could be sold to new or existing shareholders (1)
Shares are permanent capital/do not have to be repaid (1)
Dividends vary according to the profit (1)
Accept other valid points
Max (1)

Disadvantages:
It may take longer to raise the funds (1)
Increased dividends may have to be paid (1)
All the shares need to be sold in order to raise the amount required (1)
Less control for existing shareholders (1)
Accept other valid points
Max (1)

Bank loan
Advantages:
Easier to set up/quicker to obtain funds (1)
May be repaid early (1)
Accept other valid points
Max (1)

Disadvantages:
A fixed rate of interest needs to be paid each year (1)
The interest would be payable irrespective of profit (1)
Must be re-paid in full within a fixed period (1)
Security would have to be provided (1)
Accept other valid points
Max (1)
Recommendation (1)

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Question Answer Marks

3(a) Tia and Sarna 8

Income Statement for the year ended 31 December 2019

$ $
Revenue 124 000
Cost of sales
Opening inventory 5 390
Purchases 55 440
60 830
Less Closing inventory 5 165
55 665 (1)
Gross profit 68 335 (1)OF
Discount received 1 385 (1)
69 720
Less Expenses
Discount allowed 2 400 }
Carriage outwards 6 160 }(1)
Insurance (7 920 – 1 080) 6 840 (1)
General expenses 8 100 }
Wages 9 600 }(1)
Depreciation on Furniture (20% × 24 000) 4 800 (1) 37 900
Profit for the year 31 820 (1)OF

3(b) Tia and Sarna 4

Appropriation Account for the year ended 31 December 2019

$ $
Profit for the year 31 820 (1) OF
Less Interest on capital Tia 4 000
Sarna 2 000
6 000 (1)
Salary Tia 6 000 (1) 12 000
19 820
Profit share Tia 9 910 }(1) OF
Sarna 9 910 } 19 820

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Question Answer Marks

3(c) Tia and Sarna 4

Sarna Current account
2019 $ 2019 $
Dec 31 Drawings 17 000 (1) Jan 1 Balance b/d 1 600
Dec 31 Interest on capital 2 000 (1)OF
Profit 9 910 (1)OF
Balance c/d 3 490
17 000 17 000
2020
Jan 1 Balance b/d 3 490 (1)OF

3(d) Advantages 4
It would reduce cash sitting idle in the business bank account (1)
The levels of trade receivables and trade payables suggest that there will be future net cash inflow (1)
Interest would be earned on the amount transferred (1)
Accept other valid points
Max (2)

Disadvantages
It may not be possible to withdraw money from the deposit account without giving notice (1)
Cash may not be available if Tia decides to draw the full amount to which she is entitled at the end of the year (1)
Will decrease working capital/will reduce liquidity (1)
Tia and Sarna may be considering other uses for the cash (1)
Accept other valid points
Max (2)

Max (3) for advantages and disadvantages

Recommendation (1)

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Question Answer Marks

4(a) Arjun 9
Journal
Error Details Debit Credit
number $ $

1 Commission receivable 135 (1)

Discount received 135 (1)
Correction of error – cash book total for discount received incorrectly posted (1)

2 Fixtures and fittings 200 (1)

Disposal of fixtures and fittings 200 (1)
Correction of error – proceeds of sale of fittings incorrectly posted (1)

3 Purchases 40 (1)
Cash 40 (1)
Correction of error – cash drawings posted in error to purchases (1)

4(b) Arjun 4
Suspense account

2020 $ 2020 $
Jan 31 Difference on trial 1 077 (1)OF Jan 31 Equipment repairs 575 (1)
balance Equipment 575 (1)
Office expenses 73 (1)
1 150 1 150

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Question Answer Marks

4(c) 4
Error number Increases Decreases No effect
capital capital on capital

3 

4 (1)

5  (1)

6  (1)

7 (1)

4(d) Full control of the business (1) 3

Decisions can be taken quickly (1)
Profits do not have to be shared/distributed (1)
Book-keeping and accounting are simpler (1)
Financial statements do not have to be published (1)
Accept other valid points
Max (3)

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Question Answer Marks

5(a) 8
profit margin

workings answer

27 900 100 (1) whole formula 15% (1)

×
186 000 1

Trade payables turnover (days)

workings answer

9 435 365 (1) whole formula 37 days (1)

×
93 075 1

Trade receivables turnover (days)

workings answer

14 010 365 (1) whole formula 28 days (1)

×
186 000 1

Liquid ratio

workings answer

14 010 : 11 675 (1) whole formula 1.2 : 1 (1)

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Question Answer Marks

5(b) Bank 5
May damage relationship with bank (1)
Already has a bank loan as well as the overdraft (1)
Has nearly reached his overdraft limit (1)
Bank may charge increased interest if overdraft limit is exceeded (1)
Accept other valid points
Max (2)

Trade payables
Relationship with suppliers may be damaged if he delays paying them (1)
Is taking longer to pay trade payables than he did last year (1)OF
May already be taking longer to pay than the credit period allowed (1)
Trade payables may refuse future supplies (1)
Interest may be charged on the overdue amount/cash discount will be forfeited (1)
Accept other valid points
Max (2)

Recommendation (1)

5(c) Sell surplus non-current assets (1) 3

Increase bank loan/additional bank loan (1)
Obtain loan from another source (1)
Convert to a partnership/limited company (1)
Introduce additional capital (1)
More efficient credit control (1)
Sell on a cash basis (1)
Reduce drawings (1)
Accept other valid points
Max (3)

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Question Answer Marks

5(d)(i) To calculate the profit for the year (1) 2

To assess progress of the business (1)
To provide information for calculation of ratios (1)
For comparison purposes (1)
To indicate where corrective action is required (1)
To assist planning (1)
To provide required information for the tax authorities (1)
Accept other valid points
Max (2)

5(d)(ii) Non-monetary items cannot be recorded/only items which can be expressed in monetary terms can be recorded (1) 2
Money is a widely used/understood unit of measure (1)
Transactions are traditionally recorded in money terms (1)
Subjectivity/personal opinion is avoided (1)
Easier to make comparisons year-on-year/with other businesses (1)
Accept other valid points
Max (2)

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