Cambridge International Examinations Cambridge International General Certificate of Secondary Education

Cambridge International Examinations
Cambridge International General Certificate of Secondary Education
ACCOUNTING 0452/21
Paper 2 May/June 2016
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 2016 series for most Cambridge IGCSE®,
Cambridge International A and AS Level components and some Cambridge O Level components.
® IGCSE is the registered trademark of Cambridge International Examinations.
This document consists of 11 printed pages.
© UCLES 2016 [Turn over

Page 2 Mark Scheme Syllabus Paper
Cambridge IGCSE – May/June 2016 0452 21
1 (a)
Katie
Stationery account
Date Details $ Date Details $

2015 2015
May 1 Balance b/d 182 Dec 6 A1 Stationers (1) 53
12 Cash (1) 95 2016
Nov 30 A1 Stationers (1) 217 Apl 30 Income Statement (1)OF 245
___ Balance c/d 196
494 494
2016
May 1 Balance b/d (1) 196
A1 Stationers account

2015 2015
July 9 Bank (1) 114 May 1 Balance b/d 114
Dec 6 Stationery (1) 53 Nov 30 Stationery (1) 217
2016
Apl 30 Balance c/d 164 ___
331 331
2016
May 1 Balance b/d (1)OF 164
Commission receivable account

2015 2015
May 1 Balance b/d 1680 Jun 16 Bank (1) 1680
2016 Sep 10 Bank (1) 1710
Apl 30 Income Statement (1)OF 2016
3300 Apl 30 Balance c/d 1590
4980 4980
2016
May 1 Balance b/d (1) 1590
+ (1) dates [14]
(b) General/nominal ledger (1) [1]
(c) Current assets (1)

It is an amount owing to Katie, payable in the next 12 months (1) [2]
[Total: 17]
© Cambridge International Examinations 2016

2 (a) (i) Cost is the purchase price of the goods plus any additional costs incurred in bringing the
inventory to its present condition and position (1)
(ii) Net realisable value is the estimated receipts from the sale of the inventory less any
costs of completing or selling the goods (1) [2]
(b) Inventory should always be valued at the lower of cost and net realisable value
This is an application of the principle of prudence
Over-valuing the inventory causes the profit for the year to be overstated
Over-valuing the inventory causes the current assets to be overstated
Any 2 points (1) each [2]
(c)
overstated understated
cost of sales (1)
profit for the year (1)

[2]
cost of goods sold }

(d) (i) Either (1) whole formula
average inventory }
average inventory }
Or × 365 whole formula [1]
cost of goods sold }
49 900 }
(ii) Either (1) whole formula = 6.65 times (1)
7500 }
7500
Or × 365 (1) whole formula = 54.86 days = 55 days (1) [2]
49 900
(e) Unsatisfied (1)

Or OF based on answer to (d) (ii)
Not selling goods as quickly as previously (1)

OR OF based on answer to (d) (ii) [2]
(f) Reduce inventory levels

Increase sales activity
Only replace inventory when necessary
Any one point (1) [1]

(g) (i) Cash represents the cash the trader possesses (1)
Bank represents an overdraft/what the trader owes the bank (1) [2]
(ii) Not enough money in the account

Cheque unsigned
Amount in words and figures disagree
Cheque undated/out of date
Takes account into unauthorised overdraft
Or other acceptable reason
Any two reasons (1) each [2]
(iii) Received (1) [1]
15 100
(iv) × = 2.50% (1) [1]
(585 + 15) 1
(v) This is a contra entry (1)

Money was transferred from the cash into the bank (1) [2]
(vi) Debited (1) [1]
(vii) Cash balance $2 debit (1)

Bank balance $638 debit (1) [2]
[Total: 23]

3 (a)
Hillcrest Athletics Club
Café Income Statement for the year ended 30 April 2016
$ $
Revenue 10 430 (1)
Less Cost of sales
Opening inventory 790 (1)
Purchases (7998 (1) + 1137 (1) – 1292 (1)) 7 843
8 633
Less Closing inventory 850 (1) 7 783
Profit on café 2 647 (1) OF
[7]
(b)
$
Subscriptions received 16 910 (1)
Add Opening prepayment 1 045 (1)
17 955
Add Closing accrual 285 (1)
18 240
Less Opening accrual 760 (1)
Subscriptions for the year 17 480 (1) OF
Alternative presentation acceptable [5]
(c)
Hillcrest Athletics Club
Income and Expenditure Account for the year ended 30 April 2016
$ $
Income Subscriptions 17 480 (1) OF
Café profit 2 647 (1) OF
Profit on sale of equipment
(1059 – 956) 103 (1)
20 230
Expenditure Rent, rates & insurance
(4860 (1) + 155 (1) – 180 (1)) 4 835
General expenses 14 794
Depreciation – equipment 2 445 22 074
Deficit 1 844 (1) OF
[9]
[Total: 21]

4 (a) $19 360 – (4% × 80 000 (1)) = $16 160 (1) [2]
8000 100
(b) (i) × = 4% (1) [1]
200 000 1
(6250 + 5000) (1) 100

(ii) × = 4.5% (1)OF [3]
(200 000 + 50 000) (1) 1
(c)
Nyeko Limited
Statement of Changes in Equity for the year ended 29 February 2016
Ordinary General Retained Total

share capital reserve earnings
$ $ $ $
On 1 March 2015 200 000 34 000 8 000 242 000 (1)
Share issue 50 000 50 000 (1)
Profit for the year 16 160 16 160 (1)OF
Dividend paid (for year (8 000) (8 000) (1)

ended 28 February 2015)
Dividend paid (for year (6 250) (6 250) (1)

ended 29 February 2016)
Transfer to general 6 000 (6 000) (1)

reserve
On 29 February 2016 250 000 40 000 3 910 293 910 (1)
OF OF OF OF
[7]

16 160 100
(d) (i) OF × (1) OF whole formula = 8.97% (1)OF [2]
180 200 1
(ii) Increase gross profit

Reduce expenses
Increase other income
16 160 100
(e) (i) OF × (1) OF whole formula = 6.68% (1)OF [2]
242 000 1
(ii) Increase profit for the year

Increase efficiency
Use resources more efficiently
Or other suitable point
(f) Reduction in profit available for ordinary shareholders

Prior claim on the profits of the company
Prior claim on the assets of the company in the event of a winding-up
Or other suitable comment
[Total: 23]

5 (a)
Samar
Provision for doubtful debts account
Date $ Date Details $

2016 2015
Apl 30 Income statement (1) 38 May 1 Balance b/d (1) 474
Balance c/d 436 ___
474 474
2016
May 1 Balance b/d (1)OF 436
+ (1) dates
[4]
(b)
Samar
Extract from Statement of Financial Position at 30 April 2016
Current assets $ $
Trade receivables 17 440
Less Provision for doubtful debts 436 (1)OF 17 004 (1)OF
[2]
(c) A bad debt is an amount owing to a business which will not be paid by a credit customer (1)
A provision for doubtful debts is an estimate of the amount which a business will lose in the
financial year because of bad debts (1) [2]
(d) Ensures that the profit for the year is not overstated (1)
Ensures that the trade receivables (current assets) are not overstated (1) [2]
(e) Accruals/matching (1) [1]
(f) Reduce credit sales/sell on a cash basis

Obtain references from new credit customers
Fix a credit limit for each customer
Improve credit control
Issue invoices and monthly statements promptly
Refuse further supplies until outstanding balance is paid
Invoice discounting/debt factoring

(g)
Samar
Journal
Debit Credit
$ $
Bank 49 (1)
Bad debts recovered 49 (1)
Recovery of debt previously written off (1)
Alternative presentation
M Khan 49 }(1)
Bad debts recovered 49 }
Bank 49 }(1)
M Khan 49
Recovery of debt previously written off (1)
[3]
[Total: 16]

6 (a)
Wasim
Suspense account

2016 2016
Mar 31 Difference on trial balance (1) 495 Mar 31 Purchases (1) 18
Balance c/d 190 Petty cash (1) 100
Discount Alld (1) 250
Discount Recd (1) 250
___ Stationery (1) 67
685 685
2016
Apl 1 Balance b/d (1)OF 190
[7]
(b)
Wasim
Journal
Error Debit Credit

number $ $
2 DDE Limited 150
DEC Limited 150
Correction of error – DDE Limited
wrongly credited
4 Motor repairs 283
Motor vehicles 283
Correction of error – repairs
wrongly debited
5 Fixtures 4400
Office Supplies Company 4400
Correction of reversal of entries
Any TWO of the above journal entries (1) debit entry

(1) credit entry
(1) narrative
[6]
(c) Error of commission (1) [1]

(d)
error number affects profit for the year does not affect the profit
for the year
1
2 (1)
3 (1)
4 (1)
5 (1)
6 (1)
7 (1)
[6]
[Total: 20]

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Cambridge International Examinations

Cambridge International General Certificate of Secondary Education

® IGCSE is the registered trademark of Cambridge International Examinations.

This document consists of 11 printed pages.

© UCLES 2016 [Turn over

Date Details $ Date Details $

Date Details $ Date Details $

Commission receivable account

Date Details $ Date Details $

+ (1) dates [14]

(b) General/nominal ledger (1) [1]

(c) Current assets (1)

© Cambridge International Examinations 2016

cost of sales (1)

profit for the year (1)

cost of goods sold }

(e) Unsatisfied (1)

Not selling goods as quickly as previously (1)

(f) Reduce inventory levels

© Cambridge International Examinations 2016

(ii) Not enough money in the account

(iii) Received (1) [1]

(v) This is a contra entry (1)

(vi) Debited (1) [1]

(vii) Cash balance $2 debit (1)

© Cambridge International Examinations 2016

Alternative presentation acceptable [5]

© Cambridge International Examinations 2016

(6250 + 5000) (1) 100

Ordinary General Retained Total

On 1 March 2015 200 000 34 000 8 000 242 000 (1)

Share issue 50 000 50 000 (1)

Profit for the year 16 160 16 160 (1)OF

Dividend paid (for year (8 000) (8 000) (1)

Dividend paid (for year (6 250) (6 250) (1)

Transfer to general 6 000 (6 000) (1)

On 29 February 2016 250 000 40 000 3 910 293 910 (1)

© Cambridge International Examinations 2016

(ii) Increase gross profit

(ii) Increase profit for the year

(f) Reduction in profit available for ordinary shareholders

© Cambridge International Examinations 2016

Date $ Date Details $

(e) Accruals/matching (1) [1]

(f) Reduce credit sales/sell on a cash basis

© Cambridge International Examinations 2016

© Cambridge International Examinations 2016

Date Details $ Date Details $

Error Debit Credit

Any TWO of the above journal entries (1) debit entry

(c) Error of commission (1) [1]

© Cambridge International Examinations 2016

© Cambridge International Examinations 2016

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