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33 views128 pages

QP 2022

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hninhlwanpann

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Cambridge IGCSE™

ACCOUNTING 0452/12
Paper 1 Multiple Choice February/March 2022
1 hour 15 minutes

You must answer on the multiple choice answer sheet.

*5211423493*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INSTRUCTIONS
 There are thirty-five questions on this paper. Answer all questions.
 For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
 Follow the instructions on the multiple choice answer sheet.
 Write in soft pencil.
 Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
 Do not use correction fluid.
 Do not write on any bar codes.
 You may use a calculator.

INFORMATION
 The total mark for this paper is 35.
 Each correct answer will score one mark.
 Any rough working should be done on this question paper.

This document has 12 pages. Any blank pages are indicated.

IB22 03_0452_12/4RP
© UCLES 2022 [Turn over
2

1 What is prepared by a book-keeper?

A appropriation account
B cash book
C income statement
D statement of financial position

2 Which item is an asset?

A an amount owing by credit customers

B an amount owing to credit suppliers
C interest accrued on bank loan
D rent received in advance from tenant

3 Fatima required additional finance for her business and borrowed funds from Ali. This was
deposited into the business bank account.

How should Fatima record this?

account to be debited account to be credited

A bank Ali (loan)

B bank Ali (trade payable)
C Ali (loan) bank
D Ali (trade payable) bank

4 On 1 March, a business owed its suppliers $9500. During March, the following transactions took
place.

goods purchased on credit 10 000

goods returned to suppliers 200
cheques paid to suppliers 8 900
cash discounts received 100

How much did the business owe its suppliers on 31 March?

A $800 B $1000 C $10 300 D $10 500

© UCLES 2022 0452/12/F/M/22

5 Which document from a supplier reduces the amount owed by a customer?

A credit note
B debit note
C invoice
D statement of account

6 What is recorded in a petty cash book?

A all cash transactions

B cash purchases and expenses only
C purchases of all small value items
D small cash transactions

7 Jacob settled the account of Ahmed, a credit supplier. He made the following entries on the credit
side of his cash book.

discount cash bank

$ $ $

Ahmed 5 195

Which entries did Jacob make on the debit side of Ahmed’s account?

A bank 195
B bank 200

C bank 195
discount allowed 5
D bank 195
discount received 5

8 The total of the debit column of a trial balance was more than the total of the credit column.

One account balance had been entered in the wrong column.

Which one was it?

A cash
B discount received
C drawings
D irrecoverable debts

© UCLES 2022 0452/12/F/M/22 [Turn over

9 Davi prepared the following journal entry to correct an error.

debit credit
$ $

Samir 40
Samuel 40

Which error was being corrected?

A Cash paid to Samir had been credited to Samuel.

B Cash received from Samuel had been debited to Samir.
C Goods bought from Samir had been credited to Samuel.
D Goods sold to Samir had been debited to Samuel.

10 A suspense account was opened with a credit balance of $840.

Which error caused this?

A A cheque for $420 received from a customer was debited to his account.
B Discounts allowed, $420, was debited twice in the discounts allowed account.
C Goods costing $420, taken by the owner of the business for own use, were credited to his
drawings account.
D Rent received, $420, was credited twice in the rent receivable account.

11 A trader calculated her profit for the year at $14 800. The following errors were then discovered.

No entry had been made for $200 wages accrued.

The insurance expense included a prepayment of $90.

What is the correct profit for the year?

A $14 510 B $14 690 C $14 910 D $15 090

12 Jack’s cash book showed an overdrawn balance at bank of $2600. Comparing the cash book
with the bank statement, it was discovered that direct debits of $200 had not yet been recorded
by Jack. He then updated his cash book.

What was the bank balance in Jack’s updated cash book?

A $2400 credit
B $2400 debit
C $2800 credit
D $2800 debit

© UCLES 2022 0452/12/F/M/22

13 Which item is debited in a sales ledger control account?

A cash discount
B contra entry
C interest on overdue account
D provision for doubtful debts

14 Leroy provided the following information for May.

May 1 balance owing to credit suppliers 420

31 credit purchases 590
returns to credit suppliers 110
cheques paid to credit suppliers 291
discount received from credit suppliers 9
interest charged by a credit supplier 5

What was the balance on his purchases ledger control account on 1 June?

A $595 B $605 C $613 D $623

15 Which item should be treated as capital expenditure?

A the annual depreciation on office premises

B the cost of building an office extension
C the cost of repairing office equipment
D the purchase of a new computer for resale

16 On the last day of the financial year, Khalid purchased office fittings, $900. This was incorrectly
recorded as office expenses, $90.

Khalid does not charge depreciation in the year of purchase.

What was the effect on the profit for the year?

A overstated by $810
B overstated by $990
C understated by $90
D understated by $900

© UCLES 2022 0452/12/F/M/22 [Turn over

17 Aggie is a trader. She uses the following methods of depreciation for different types of
non-current asset.

straight-line at 20% per annum

reducing balance at 25% per annum
revaluation

On 1 January year 1, Aggie purchased small items of equipment costing a total of $2400 and
fittings costing $8000.

On 31 December year 2, Aggie estimated that the equipment was worth 70% of its original cost.

The statement of financial position showed the net book value of equipment as $1680 and fittings
as $4800.

Which depreciation methods has Aggie used?

equipment fittings

A reducing balance straight-line

B revaluation reducing balance
C revaluation straight-line
D straight-line revaluation

18 Abeo prepares financial statements to 31 December each year.

Abeo bought machinery for $40 000 on 1 January year 1. He charges depreciation on machinery
at 20% per annum using the reducing balance method. Depreciation is charged in the year of
purchase but not in the year of disposal.

On 1 January year 3, the machinery was sold for $22 000.

Which journal entry records the profit or loss on disposal of the machine?

debit credit
$ $

A disposal of machinery 2000

income statement 2000
B disposal of machinery 3600
income statement 3600
C income statement 2000
disposal of machinery 2000
D income statement 3600
disposal of machinery 3600

© UCLES 2022 0452/12/F/M/22

19 Why would a business record the amount owing by a credit customer as an irrecoverable debt?

A The customer has gone out of business.

B The customer has liquidity problems.
C The customer is making a loss.
D The customer is not satisfied with the goods.

20 Anji maintains a provision for doubtful debts at 5% of the trade receivables at the end of each
financial year. At the start of the financial year, the trade receivables were $2000. At the end of
the financial year, the trade receivables were $4500.

Which entry would be made in the income statement for the financial year?

A $125 as an expense
B $125 as an income
C $325 as an expense
D $325 as an income

21 Which businesses do not prepare a trading account section of an income statement?

1 furniture store
2 insurance company
3 newsagent
4 toy shop
5 window-cleaner

A 1 and 2 B 2 and 5 C 3 and 4 D 3 and 5

22 A business provided the following information.

current assets 25 000

current liabilities 12 000
non-current assets 18 000
non-current liabilities 21 000

What was the capital of the business?

A $10 000 B $22 000 C $31 000 D $43 000

© UCLES 2022 0452/12/F/M/22 [Turn over

23 A trader bought a machine for use in the business. He paid a part of the cost in cash and agreed
to pay the remaining part in 15 months’ time.

In addition to the non-current assets, which items in the statement of financial position will
increase as a result of this transaction?

current current non-current

assets liabilities liabilities

A
B
C
D

24 What is the purpose of a partnership appropriation account?

A to calculate partners’ salaries

B to record partners’ drawings
C to show the distribution of profits between partners
D to show the movement on partners’ capital accounts

25 James is a partner in a business. He made a loan to the business and received loan interest.

What is the double entry in the books of the partnership for the loan interest James has received?

debit credit

A bank account James current account

B interest on loan account bank account
C interest on loan account James current account
D James current account bank account

26 A limited company whose capital consisted of ordinary shares ceased trading and was not able to
pay its debts.

Which statement is correct?

A Shareholders would have to pay a proportion of the debt based on the number of shares
owned.
B Shareholders would have to pay a proportion of the debt based on the value of shares
owned.
C Shareholders would have to sell their personal possessions to pay the debts of the company.
D Shareholders would lose the money that was paid when the shares were first purchased.

© UCLES 2022 0452/12/F/M/22

27 A limited company was formed on 1 June 2021.

On that date, the company issued 500 000 $1 shares. Shareholders were asked to pay 60% of
the cost immediately, with the remainder being payable by 1 June 2022.

By 1 August 2021, all shareholders had paid what was due at that date.

What was the share capital of the company on 1 August 2021?

called-up capital paid-up capital

$ $

A 200 000 300 000

B 300 000 300 000
C 500 000 300 000
D 500 000 500 000

28 There are 120 members of a sports club. The annual subscription is $60.

At the beginning of the year, no members had paid in advance and no members had
subscriptions outstanding.

At the end of the year, 7 members had not paid and 3 members had paid in advance.

Which amount was shown for subscriptions in the income and expenditure account?

A $6600 B $6960 C $7200 D $7800

29 What is shown in a manufacturing account?

1 cost of material consumed

2 purchases of finished goods
3 cost of production
4 cost of sales

A 1 and 2 only
B 1 and 3 only
C 1, 2 and 3 only
D 1, 2, 3 and 4

© UCLES 2022 0452/12/F/M/22 [Turn over

30 Tarek produced a statement of affairs at 31 December year 1 and at 31 December year 2.

During year 2, his long-term loan increased by $3000 and his net current assets decreased by
$1000. Depreciation for the year was $500.

By how much did the total of Tarek’s capital decrease?

A $2500 B $3500 C $4000 D $4500

31 Wayne provided the following information.

$ $

revenue 12 800
opening inventory 1 000
purchases 10 500
11 500
closing inventory 1 600 9 900
gross profit 2 900

What was Wayne’s gross profit margin?

A 22.66% B 25.22% C 27.62% D 29.29%

32 A trader provided the following information for the year ended 31 December.

total cash and credit purchases of goods for re-sale 150 000
cash purchases of goods for re-sale 17 000
credit purchases of non-current assets 25 000

His trade payables at that date were $8000.

What was the trade payables turnover?

A 17 days
B 20 days
C 22 days
D 24 days

© UCLES 2022 0452/12/F/M/22

33 A trader decided to reduce her level of inventory in order to reduce the storage costs.

Sales quantity and selling price were not affected.

How did this affect profit for the year and the rate of inventory turnover?

profit for rate of inventory

the year turnover

A decreased decreased
B decreased increased
C increased decreased
D increased increased

34 Azim and Bashir are both sole traders. They provided the following information.

Azim Bashir
$ $

profit for the year ended 31 December before interest 17 200 15 000
long-term loan at 31 December – 12 500
capital at 31 December 86 000 25 000

What was Azim’s return on capital employed?

A double Bashir’s
B half of Bashir’s
C one-third of Bashir’s
D three times Bashir’s

35 Stephanie’s major competitor has invested in a new machine for making goods more cheaply.
Stephanie knows this will affect her sales but did not record this in her accounting records.

Which accounting principle is Stephanie applying?

A going concern
B materiality
C money measurement
D prudence

© UCLES 2022 0452/12/F/M/22

BLANK PAGE

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.

© UCLES 2022 0452/12/F/M/22

Cambridge IGCSE™
* 7 4 6 4 4 0 5 0 0 3 *

ACCOUNTING 0452/22
Paper 2 Structured Written Paper February/March 2022

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 20 pages. Any blank pages are indicated.

DC (CJ) 303841/3
© UCLES 2022 [Turn over
2

1 Nazmeen started in business as a hairdresser on 1 January 2022. She purchases her hairdressing
supplies on credit and uses the imprest system for her petty cash.

Nazmeen’s assets and liabilities at 1 January 2022 were as follows:

$
Motor vehicle 11 000
Balance at bank 2 300
Petty cash 200
Bank loan 2 500

REQUIRED

(a) (i) Prepare the general journal entry to record the opening assets and liabilities at
1 January 2022. A narrative is required.

Nazmeen
General journal

Date Details $ $

................... ................................................................. ................... ...................

[4]

(ii) State one other use of the general journal.

..................................................................................................................................... [1]

Nazmeen makes all payments of less than $100 by petty cash. The imprest amount, which is
$200, is restored on the first day of each month from the bank account.

Nazmeen provided the following information for January 2022.

January 3 Paid for petrol, $35.

8 Paid for magazines for the reception area, $14.
17 Paid $60 to GL Limited, a trade payable.
26 Paid for vehicle cleaning, $9.
29 Paid $38 to Alim, a trade payable.

REQUIRED

(b) (i) Complete Nazmeen’s petty cash book on the following page.
Balance the petty cash book, bring down the balance on 1 February 2022 and restore
the imprest.
© UCLES 2022 0452/22/F/M/22
Nazmeen
Petty Cash Book
Total Date Details Total Motor Sundry Ledger

...................... ...................... ........................................................................... ...................... ...................... ...................... ......................

0452/22/F/M/22
...................... ...................... ........................................................................... ...................... ...................... ...................... ......................

...................... ...................... ........................................................................... ...................... ...................... ...................... ......................

[10]

[Turn over
4

(ii) State one advantage of using the imprest system for petty cash.

..................................................................................................................................... [1]

Nazmeen receives business documents from her credit suppliers.

REQUIRED

(c) Complete the table below by placing a tick (3) to indicate which document(s) each item
appears on. The first one is completed for you.

Invoice Credit note Statement

of account
A credit purchase 3 3
The balance owing by Nazmeen to a
supplier at the end of the month
A purchases return
Trade discount deducted from list price
Payment made to a credit supplier
[4]

[Total: 20]

© UCLES 2022 0452/22/F/M/22

BLANK PAGE

© UCLES 2022 0452/22/F/M/22 [Turn over

2 Ravi is a trader. He provided the following information.

2021 $
1 February Sales ledger control account debit balance 12 510
Sales ledger control account credit balance 1 245
2022
31 January Totals for the year:
Credit sales 134 000
Cash sales 4 625
Bank transfers received from credit customers 96 250
Cash received from credit customers 12 890
Returns from credit customers 4 000
Irrecoverable debts written off 9 100
Contra entries 1 677
Discount allowed 4 643
Discount received 2 119
Interest charged on overdue sales ledger accounts 1 104

Sales ledger control account debit balance ?

Sales ledger control account credit balance nil

REQUIRED

(a) Prepare Ravi’s sales ledger control account for the year ended 31 January 2022.
Balance the account and bring down the balance on 1 February 2022.

Ravi
Sales ledger control account
Date Details $ Date Details $

............. .................................. ............. ............. .................................. .............

[10]

© UCLES 2022 0452/22/F/M/22

(b) State the accounting principle which is being applied when irrecoverable debts are written off.

............................................................................................................................................. [1]

(i) Bank manager

...........................................................................................................................................

..................................................................................................................................... [2]

(ii) Trade payables

...........................................................................................................................................

..................................................................................................................................... [2]

Ravi sends out statements of account to credit customers and charges interest on overdue
accounts. He is concerned about the loss caused to his business by irrecoverable debts. He is
considering employing a part-time credit controller to contact credit customers by telephone and
to start legal action on overdue accounts if necessary. The credit controller would be paid $6800
per annum.

REQUIRED

(d) Advise Ravi whether or not he should employ the credit controller. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

© UCLES 2022 0452/22/F/M/22 [Turn over

3 Pari owns a clothing factory. Her year end is 31 December.

At 31 December 2021, her ledger account balances included the following.

$
Inventory at 1 January 2021
Raw materials 6 100
Work in progress 9 420
Finished goods 11 350
Revenue 230 020
Purchases of raw materials 84 200
Wages
Factory operatives 33 000
Factory supervisor 26 000
Office and sales staff 45 000
Rates and insurance 14 000
General factory expenses 11 500
Factory equipment – at cost 100 000
Factory equipment – provision for depreciation 36 000

Additional information

1. Inventory at 31 December 2021

Raw materials 6 840
Work in progress 9 885
Finished goods 12 630

2. Rates and insurance are to be apportioned equally between the factory and the office.

3. At 31 December 2021, general factory expenses of $500 were unpaid.

4. Factory equipment is depreciated at 20% per annum using the reducing balance method.

© UCLES 2022 0452/22/F/M/22

REQUIRED

(a) Prepare Pari’s manufacturing account for the year ended 31 December 2021.

Pari
Manufacturing Account for the year ended 31 December 2021
$ $

.......................................................................................... ................... ...................

[9]

© UCLES 2022 0452/22/F/M/22 [Turn over

(b) Prepare Pari’s income statement (trading section) for the year ended 31 December 2021.

Pari
Income Statement (trading section) for the year ended 31 December 2021
$ $

................................................................................................ ................... ...................

[4]

Gross margin
working answer

[2]

© UCLES 2022 0452/22/F/M/22

Pari is disappointed in her cost of production and gross profit. She is considering buying in her
products instead of producing them in her factory.

REQUIRED

(d) Advise Pari whether or not she should start to buy in her products. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

© UCLES 2022 0452/22/F/M/22 [Turn over

4 Demis is a trader. His financial year ends on 31 December.

He prepared the following trial balance which contains errors.

Demis
Trial balance at 31 December 2021
Debit Credit

$ $

Sales 90 052
Purchases 52 420
Purchases 52 420
Rates and insurance 11 500
General expenses 1 092
Property 92 500
Fixtures at cost 34 000
Provision for depreciation of fixtures 21 760
Trade receivables 7 410
Trade payables 4 665
Inventory 9 600
Cash at bank 8 095
Capital at 1 January 2021 109 940
Drawings 11 320
Suspense 60 770
283 772 283 772

Additional information

1. There was $80 in the petty cash box at 31 December 2021.

2. The value of inventory on 31 December 2021 was included in the trial balance.
The inventory valuation had increased by 20% since 31 December 2020.

© UCLES 2022 0452/22/F/M/22

REQUIRED

(a) Prepare a corrected trial balance at 31 December 2021.

Demis
Corrected Trial Balance at 31 December 2021
Debit Credit
$ $

Sales ............................. .............................

Purchases ............................. .............................

Rates and insurance ............................. .............................

General expenses ............................. .............................

Property ............................. .............................

Fixtures at cost ............................. .............................

Provision for depreciation of fixtures ............................. .............................

Trade receivables ............................. .............................

Trade payables ............................. .............................

Inventory ............................. .............................

Cash at bank ............................. .............................

Capital at 1 January 2021 ............................. .............................

Drawings ............................. .............................

............................................... ............................. .............................

______________ ______________

[6]

© UCLES 2022 0452/22/F/M/22 [Turn over

Demis has received a bank statement which shows that there were unpresented cheques of $437
at 31 December 2021. There were no outstanding lodgements.

REQUIRED

(b) Calculate the bank balance shown on the bank statement at 31 December 2021. Indicate
whether this balance is a debit or a credit balance.

...................................................................................................................................................

............................................................................................................................................. [2]

Demis later discovered the following errors.

1 Drawings of goods for own use, $317, had been omitted from the books of account.

2 Purchases returns, $93, had been credited to the sales account.

3 A payment for property insurance, $500, had been debited to the property account.

4 A credit purchase, $315, from Erin, had been recorded as $135.

5 A credit sale, $191, to Harvinder, had been debited to the sales account and credited to
Harvinder’s account.

© UCLES 2022 0452/22/F/M/22

REQUIRED

Entries required to correct the error

Error Debit Credit
Account $ Account $

1. Drawings of goods for own use,

$317, had been omitted from the
books of account. ................... .............. ................... ..............

2. Purchases returns, $93, had been

credited to the sales account. ................... .............. ................... ..............

3. A payment for property insurance,

$500, had been debited to the
property account. ................... .............. ................... ..............

4. A credit purchase, $315, from

Erin, had been recorded as $135. ................... .............. ................... ..............

5. A credit sale, $191, to Harvinder,

had been debited to the
sales account and credited to
Harvinder’s account. ................... .............. ................... ..............

[10]

(d) Identify the following error types from the table above.

(i) error 2

..................................................................................................................................... [1]

(ii) error 4

..................................................................................................................................... [1]

[Total: 20]

© UCLES 2022 0452/22/F/M/22 [Turn over

5 Priti and Paisley are in partnership renting out properties. Paisley manages the office and
maintains the bookkeeping records for the partnership.

The partnership agreement provides for

Interest on drawings 5% per annum

Interest on capital 4% per annum
Salary to Paisley $6000 per annum
Residual profits and losses to be shared 75% to Priti and 25% to Paisley.

The profit for the year ended 31 January 2022 was $33 100.

© UCLES 2022 0452/22/F/M/22

REQUIRED

(a) Prepare the appropriation account for Priti and Paisley for the year ended 31 January 2022.

Priti and Paisley

Appropriation Account for the year ended 31 January 2022
$ $

................................................................................................ ................... ...................

[6]

© UCLES 2022 0452/22/F/M/22 [Turn over

(b) Prepare Paisley’s current account for the year ended 31 January 2022. Balance the account
and bring down the balance on 1 February 2022.

Paisley
Current account
Date Details $ Date Details $

............. .................................. ............. ............. .................................. .............

[6]

(c) Suggest three reasons why Paisley may not be satisfied with his overall share of the profit for
the year to 31 January 2022.

1 ................................................................................................................................................

...................................................................................................................................................

2 ................................................................................................................................................

...................................................................................................................................................

3 ................................................................................................................................................

............................................................................................................................................. [3]

© UCLES 2022 0452/22/F/M/22

Priti and Paisley are planning to purchase more properties to rent out. They are considering
forming a limited company as they believe this would make it easier for them to raise the finance
for the purchase of the properties.

REQUIRED

(d) Advise Priti and Paisley whether or not they should form a limited company.
Justify your answer with two advantages and two disadvantages.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

© UCLES 2022 0452/22/F/M/22

BLANK PAGE

© UCLES 2022 0452/22/F/M/22

Cambridge IGCSE™

ACCOUNTING 0452/11
Paper 1 Multiple Choice May/June 2022
1 hour 15 minutes

You must answer on the multiple choice answer sheet.

*7031612990*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INFORMATION
 The total mark for this paper is 35.
 Each correct answer will score one mark.
 Any rough working should be done on this question paper.

This document has 12 pages. Any blank pages are indicated.

IB22 06_0452_11/2RP
© UCLES 2022 [Turn over
2

1 Which task would be carried out by a book-keeper?

A comparison of financial statements between years

B preparation of financial statements
C provision of information for decision-making
D recording financial transactions

2 What is the accounting equation?

A assets = capital – liabilities

B assets = liabilities – capital
C assets – liabilities = capital
D assets + capital = liabilities

3 Sarah sold goods on credit to Zafar.

How was this recorded in Sarah’s ledgers?

general ledger sales ledger

A credit sales account debit Zafar account

B debit sales account credit Zafar account
C credit Zafar account debit sales account
D debit Zafar account credit sales account

4 Omar sent a credit note to Miriam for goods returned.

How would Miriam record this transaction?

account to be debited account to be credited

A purchases returns Omar

B sales returns Miriam
C Omar purchases returns
D Miriam sales returns

5 The discount column on the debit side of a trader’s cash book totalled $1300 and the discount
column on the credit side totalled $700.

How much discount did the trader receive?

A $600 B $700 C $1300 D $2000

© UCLES 2022 0452/11/M/J/22

6 Kai bought office equipment from Meena and paid immediately by bank transfer.

How should Kai record this in his accounting records?

account to be debited account to be credited

A bank Meena
B bank office equipment
C Meena bank
D office equipment bank

7 Jabari maintains a petty cash book using the imprest system. The imprest is restored at the end
of each month.

Which amount restores the imprest at the end of a month?

A the amount left in petty cash less the total of vouchers received
B the amount left in petty cash plus the total of vouchers received
C the imprest amount less the total of vouchers received
D the total of vouchers received

8 Which statement about a trial balance is correct?

A It assists in locating arithmetical errors in the book-keeping records.

B It is proof that the entries in the ledger accounts are free from error.
C It reveals all book-keeping errors.
D It shows ledger account errors only.

9 What is an example of a compensating error?

A A payment for office equipment repairs was debited to the office equipment account.
B A purchase of goods from C Jones was credited to the account of C Johns.
C The sale of goods, $65, to A Aziz was entered in the books as $56.
D The wages account was undercast by $100 and the rent account was overcast by $100.

© UCLES 2022 0452/11/M/J/22 [Turn over

10 After the preparation of Abdul’s draft financial statements, two errors were discovered.

The purchase of a machine by bank transfer, $5000, was omitted from the accounts.
The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair
account.

What effect will correcting these errors have on the non-current assets and the working capital?

non-current assets working capital

$ $

A increase 15 000 decrease 5000

B increase 15 000 no effect
C increase 20 000 decrease 5000
D increase 20 000 no effect

11 Raj had a debit balance of $10 800 in the bank column of his cash book. He discovered that
purchases, $890, paid by cheque, had been recorded as $980.

The following appeared in the bank statement but had not been entered in the cash book.

bank charges 76
interest received 120

What was the debit balance in the bank column of Raj’s cash book after adjusting for these
items?

A $10 514 B $10 666 C $10 754 D $10 934

12 Why is a sales ledger control account usually prepared by a different member of staff than the
person who maintains the sales ledger?

A to deter fraud
B to locate errors
C to provide an instant total of trade receivables
D to speed production of financial statements

© UCLES 2022 0452/11/M/J/22

13 Tamal provided the following information for March, his first month of trading.

credit purchases 9100

credit purchases returned 322
total payments to credit suppliers 5358

During the month, Tamal overpaid a supplier by $94. He did not make any further purchases from
this supplier in March.

What were the balances on Tamal’s purchases ledger control account on 1 April?

debit balance credit balance

$ $

A 0 3420
B 0 3514
C 94 3420
D 94 3514

14 The following payments were made by John when he purchased a machine.

purchase of machine 10 000

delivery charge 1 200
insurance 800
installation charge 900
pre-paid maintenance charge 400

How much should have been debited to the machinery account?

A $10 900 B $11 200 C $12 100 D $12 500

© UCLES 2022 0452/11/M/J/22 [Turn over

15 On 1 January, Zac entered the cost of repairing equipment, $420, in the equipment account.

On 31 December, depreciation of 20% per annum, using the straight-line method, was charged
on the balance of the equipment account.

What was the overall effect on the book value of the equipment on 31 December?

A $84 understated
B $336 overstated
C $420 overstated
D $504 understated

16 Atif depreciates his motor vehicles at a rate of 20% per annum using the reducing balance
method.

On 1 May 2021, Atif owned motor vehicles which cost $35 000. At that date, the motor vehicles
had been depreciated by $12 600.

What was the balance on Atif’s provision for depreciation account on 1 May 2022?

A $17 080 B $17 920 C $19 600 D $22 400

17 The financial year of Yeung ends on 31 March. On 1 April 2021, he purchased a machine for
$4000.

He estimated that it would have a useful working life of 3 years and a residual value of $100.
Yeung uses the straight-line method of depreciation.

The machine was sold on 1 April 2022 for $1500.

What was the loss on disposal?

A $1100 B $1200 C $2400 D $2500

© UCLES 2022 0452/11/M/J/22

18 On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the
year ended 31 March 2022 amounted to $4850.

Which journal entry should have been made at the end of the financial year on 31 March 2022?

debit credit
$ $

A commission receivable 4640

income statement 4640
B commission receivable 5060
income statement 5060
C income statement 4640
commission receivable 4640
D income statement 5060
commission receivable 5060

19 Which statement about a debts recovered account is correct?

A The account is used when an amount, previously written off, is received from a customer.
B The account is used when doubtful debts are recovered.
C The balance of the account is debited to the income statement at the end of the year.
D The balance of the account is shown in the statement of financial position.

20 Nula’s financial year ends on 31 December. She maintains a provision for doubtful debts of 5%
of trade receivables.

On 1 January 2021, the provision amounted to $800. On 31 December 2021, trade receivables
owed $13 400, of which $600 was regarded as irrecoverable.

How much was the provision for doubtful debts on 1 January 2022?

A $600 B $640 C $660 D $670

© UCLES 2022 0452/11/M/J/22 [Turn over

21 When preparing his financial statements, a trader valued his inventory at cost.

He then found that 10 units of inventory, costing $12 per unit, were damaged. If he spent $2 per
unit on repairs, he could sell them for $9 each.

What was the effect on the income statement of the incorrect inventory valuation?

gross profit profit for the year

A overstated $30 no effect

B overstated $50 overstated $50
C understated $30 no effect
D understated $50 understated $50

22 At the end of his financial year, Marek was owed $200 for interest on a loan he had made to an
employee. He recorded this in his financial statements.

How did the interest on this loan affect Marek’s profit for the year and where was it recorded in
his statement of financial position?

statement of
profit for the year
financial position

A decreased current assets

B decreased current liabilities
C increased current assets
D increased current liabilities

23 What is the purpose of preparing a partnership appropriation account?

A to calculate the interest to be charged on the drawings made by each partner

B to calculate the interest to be paid on the capital invested by each partner
C to show the amount of salary to which each partner is entitled
D to show the division of the profit or loss for the year between the partners

24 Raj and Seema are in partnership sharing profits and losses 2 : 1.

Raj withdrew $5000 during the year and was charged interest at 3%. Seema did not make any
withdrawals during the year.

The profit for the year was $30 000.

How much was credited to Raj’s current account at the end of the year?

A $19 850 B $19 900 C $20 000 D $20 100

© UCLES 2022 0452/11/M/J/22

25 A limited company raised funds from an issue of debentures.

Which statement is correct?

A The debentures are part of the equity of the company.

B The debenture holders cannot vote at the annual general meeting.
C The debenture holders are repaid only if the company is wound up.
D The debenture interest is paid only if the company earns a profit.

26 A limited company provided the following information.

total equity on 1 January 2021 500 000

ordinary share dividend paid 30 June 2021 25 000
transfer to general reserve on 31 December 2021 12 000
total equity on 31 December 2021 558 000

What was the profit for the year?

A $46 000 B $58 000 C $83 000 D $95 000

27 Which group contains only items included in the prime cost of a manufacturer?

A direct expenses, depreciation of factory machinery, royalties

B direct wages, factory supervisor’s wages, factory insurance
C factory overheads, raw materials, direct expenses
D raw materials, royalties, direct labour

28 The work in progress of ZT Manufacturers on 1 January was valued at $6200. At the end of the
year it was valued at $5400.

What was the effect on the cost of production for the year?

A decrease $800
B decrease $11 600
C increase $800
D increase $11 600

© UCLES 2022 0452/11/M/J/22 [Turn over

29 A trader does not keep full accounting records but was able to provide the following information.

capital at 1 January 2021 26 000

capital at 31 December 2021 37 000
drawings made during year 6 500

During the year, $9500 was withdrawn from the owner’s private bank account to purchase a
motor vehicle to be used by the business.

What was the profit for the year?

A $8000 B $11 000 C $14 000 D $17 500

30 A business provided the following information.

opening inventory $6800

closing inventory $6000
rate of inventory turnover 5 times

What were the purchases for the year?

A $29 200 B $31 200 C $32 000 D $32 800

31 Jerry started his business on 1 January 2022 with no opening inventory. On 19 April 2022, a fire
destroyed all his inventory.

Jerry provided the following information for the period 1 January 2022 to 19 April 2022.

revenue $30 200

purchases $25 600
gross margin 25%

What was the value of inventory destroyed on 19 April 2022?

A $1800 B $2950 C $3450 D $5750

© UCLES 2022 0452/11/M/J/22

32 A trader provided the following information.

profit for the year 24 000

working capital 20 000
capital 120 000
non-current liability 30 000

What was the return on capital employed?

A 14.12% B 16.00% C 17.14% D 20.00%

33 Which actions could a clothing retailer take to improve his rate of inventory turnover?

1 increase the selling prices of all clothing

2 offer discounts on last year’s designs
3 pay clothing suppliers as quickly as possible

A 1 and 3 only B 1, 2 and 3 C 2 only D 3 only

34 A trader is considering selling goods on credit to a new customer.

What could be calculated from the customer’s financial statements to indicate the time normally
taken to pay for goods purchased on credit?

A current ratio
B liquid (acid test) ratio
C trade payables turnover
D trade receivables turnover

35 Which accounting policy requires that the information in financial statements is free from
significant errors and bias?

A comparability
B consistency
C reliability
D understandability

© UCLES 2022 0452/11/M/J/22

BLANK PAGE

© UCLES 2022 0452/11/M/J/22

Cambridge IGCSE™

ACCOUNTING 0452/12
Paper 1 Multiple Choice May/June 2022
1 hour 15 minutes

You must answer on the multiple choice answer sheet.

*7957941451*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INFORMATION
 The total mark for this paper is 35.
 Each correct answer will score one mark.
 Any rough working should be done on this question paper.

This document has 12 pages. Any blank pages are indicated.

IB22 06_0452_12/2RP
© UCLES 2022 [Turn over
2

1 Which task would be carried out by a book-keeper?

A comparison of financial statements between years

B preparation of financial statements
C provision of information for decision-making
D recording financial transactions

2 The following ledger account appeared in the books of Leah, a trader.

Amraz account
$ $

April 26 purchases returns 150 April 1 balance b / d 2100

30 bank 1900 20 purchases 3000
discount 100
balance c / d 2950 ____
5100 5100

Which statement is correct?

A Amraz allowed Leah $100 trade discount on 30 April.

B Amraz owed Leah $2100 on 1 April.
C Leah owed Amraz $2950 on 30 April.
D Leah’s net purchases from Amraz in April were $2900.

3 Sarah sold goods on credit to Zafar.

How was this recorded in Sarah’s ledgers?

general ledger sales ledger

A credit sales account debit Zafar account

B debit sales account credit Zafar account
C credit Zafar account debit sales account
D debit Zafar account credit sales account

© UCLES 2022 0452/12/M/J/22

4 Omar sent a credit note to Miriam for goods returned.

How would Miriam record this transaction?

account to be debited account to be credited

A purchases returns Omar

B sales returns Miriam
C Omar purchases returns
D Miriam sales returns

5 Ben sold goods to David for $900 cash.

In which book of prime entry would David record this transaction?

A cash book
B general journal
C purchases journal
D sales journal

6 A petty cashier received $100 from the chief cashier and $10 from an employee who had made
private calls on the business telephone.

How would these amounts be recorded in the petty cash book and the cash book?

debit petty credit petty debit credit

cash book cash book cash book cash book
$ $ $ $

A 0 110 100 0
B 10 100 0 100
C 100 10 0 100
D 110 0 0 100

7 What is an example of a compensating error?

© UCLES 2022 0452/12/M/J/22 [Turn over

8 After the preparation of Abdul’s draft financial statements, two errors were discovered.

The purchase of a machine by bank transfer, $5000, was omitted from the accounts.
The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair
account.

What effect will correcting these errors have on the non-current assets and the working capital?

non-current assets working capital

$ $

A increase 15 000 decrease 5000

B increase 15 000 no effect
C increase 20 000 decrease 5000
D increase 20 000 no effect

9 Why is a sales ledger control account usually prepared by a different member of staff than the
person who maintains the sales ledger?

A to deter fraud
B to locate errors
C to provide an instant total of trade receivables
D to speed production of financial statements

10 What would be recorded on the credit side of a sales ledger control account?

A cash refunded to credit customers

B credit sales
C interest charged on overdue accounts
D sales returns

11 Maria’s draft income statement for the year ended 31 March 2022 showed a profit for the year of
$38 750.

On 31 December 2021, Maria received a 5% bank loan of $4800 which was incorrectly treated
as a revenue receipt.

In error, a whole year’s interest on the bank loan was included in the draft income statement for
the year ended 31 March 2022.

What was the correct profit for the year ended 31 March 2022?

A $33 770 B $34 130 C $43 370 D $43 730

© UCLES 2022 0452/12/M/J/22

12 Which statement about the reducing balance method of depreciation is not correct?

A A lower amount of depreciation is charged in the early years of the asset’s life than in the
later years.
B Each year a given percentage is deducted from the cost of the asset less the depreciation to
date.
C It is used for assets which give greater benefits in the early years of their life.
D The net book value of the non-current asset will never reach a nil value.

13 The financial year of Yeung ends on 31 March. On 1 April 2021, he purchased a machine for
$4000.

He estimated that it would have a useful working life of 3 years and a residual value of $100.
Yeung uses the straight-line method of depreciation.

The machine was sold on 1 April 2022 for $1500.

What was the loss on disposal?

A $1100 B $1200 C $2400 D $2500

14 On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the
year ended 31 March 2022 amounted to $4850.

Which journal entry should have been made at the end of the financial year on 31 March 2022?

debit credit
$ $

A commission receivable 4640

income statement 4640
B commission receivable 5060
income statement 5060
C income statement 4640
commission receivable 4640
D income statement 5060
commission receivable 5060

15 Nula’s financial year ends on 31 December. She maintains a provision for doubtful debts of 5%
of trade receivables.

On 1 January 2021, the provision amounted to $800. On 31 December 2021, trade receivables
owed $13 400, of which $600 was regarded as irrecoverable.

How much was the provision for doubtful debts on 1 January 2022?

A $600 B $640 C $660 D $670

© UCLES 2022 0452/12/M/J/22 [Turn over

16 After the financial statements for the year ended 30 April 2022 had been prepared, a trader
discovered that the closing inventory had been over-valued.

What will be the effect of this error?

profit for the year capital on profit for the year

ended 30 April 2022 30 April 2022 ending 30 April 2023

A overstated overstated understated

B overstated understated no effect
C understated no effect no effect
D understated understated overstated

17 Mariam owns a business providing accounting services. She provided the following information
for the financial year ended 31 March 2022.

fees owed by clients on 1 April 2021 4 500

fees received from clients during the year ended 31 March 2022 22 500
fees owed by clients on 31 March 2022 1 500

What was the amount of fees shown in the income statement for the year ended 31 March 2022?

A $19 500 B $22 500 C $25 500 D $28 500

18 Which item would not appear in the appropriation account of a partnership?

A interest charged on partners’ drawings

B interest paid on loans from partners
C interest paid on partners’ capital
D salaries paid to partners

19 Carol and Denise are in partnership sharing profits and losses in the ratio 2 : 1.

Denise’s current account balances were as follows.

at 1 May 2021 $2000 debit

at 1 May 2022 $7000 credit

She had made no drawings during the year.

What was the total profit made by the partnership in the year ended 30 April 2022?

A $9000 B $15 000 C $18 000 D $27 000

© UCLES 2022 0452/12/M/J/22

20 Which statements are correct?

1 A debenture holder of a limited company is liable for the debts of the company.
2 A partner is liable to pay business debts from personal assets.
3 A shareholder of a limited company is responsible for the company’s debts.
4 A sole trader is responsible for all the debts of his business.

A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

21 The draft financial statements of a limited company showed retained earnings of $31 820. It was
then found that no adjustment had been made for the following.

commission receivable accrued 450

insurance prepaid 175

What was the correct amount of the retained earnings?

A $31 195 B $31 545 C $32 095 D $32 445

22 Which statement about club accounts is correct?

A Capital and revenue transactions are recorded in the income and expenditure account.
B Non-cash transactions are recorded in the income and expenditure account.
C Only revenue transactions are recorded in the receipts and payments account.
D The closing balance in the receipts and payments account represents a surplus or deficit.

23 A sports club provided the following information for the financial year ended 31 December 2021.

1 January 2021 subscriptions paid in advance 200

31 December 2021 subscriptions outstanding 450
subscriptions received during the year 8800

What was the total of the subscriptions that related to the year ended 31 December 2021?

A $8150 B $8550 C $9050 D $9450

© UCLES 2022 0452/12/M/J/22 [Turn over

24 The work in progress of ZT Manufacturers on 1 January was valued at $6200. At the end of the
year it was valued at $5400.

What was the effect on the cost of production for the year?

A decrease $800
B decrease $11 600
C increase $800
D increase $11 600

25 A manufacturing company provided the following information.

cost of production 345 000

finished goods 1 January 2021 42 000
31 December 2021 36 000
purchases of finished goods 15 000

What was the cost of sales?

A $324 000 B $336 000 C $351 000 D $366 000

26 Tahir provided the following information for his first year of trading.

sales 170 000

sales returns 6 000
purchases 129 000

Tahir’s gross margin was 25%.

What was the value of closing inventory?

A $1000 B $2200 C $6000 D $7500

27 A business provided the following information.

opening inventory $6800

closing inventory $6000
rate of inventory turnover 5 times

What were the purchases for the year?

A $29 200 B $31 200 C $32 000 D $32 800

© UCLES 2022 0452/12/M/J/22

28 A trader provided the following information at the end of the financial year.

revenue 80 000
gross profit 20 000
expenses 12 000

What was the profit margin?

A 10% B 15% C 25% D 40%

29 A trader provided the following information.

profit for the year 24 000

working capital 20 000
capital 120 000
non-current liability 30 000

What was the return on capital employed?

A 14.12% B 16.00% C 17.14% D 20.00%

30 Samuel, a trader, decided to issue statements of account each month.

Which ratio does Samuel hope to improve by doing this?

A current ratio
B liquid (acid test) ratio
C trade payables turnover
D trade receivables turnover

31 John’s rate of inventory turnover was 10 times in year 1 and 8 times in year 2.

What may have caused the change in the rate of inventory turnover?

A fall in demand
B higher sales
C lower inventory levels
D lower selling price

© UCLES 2022 0452/12/M/J/22 [Turn over

32 Maya had annual revenue of $100 000.

In year 1, her gross margin was 45% and her profit margin was 5%.

In year 2, her gross margin was 40% and her profit margin was 3%.

What happened to Maya’s cost of sales and expenses in year 2?

cost of sales expenses

A decreased decreased
B decreased increased
C increased decreased
D increased increased

33 Why would a bank manager be interested in the financial statements of a business?

A to calculate and assess the trade payables turnover

B to check that the correct amount of tax is being paid
C to ensure that employees are being paid the correct hourly rate
D to ensure that funds are sufficient to cover loan interest

34 ‘Revenue should only be regarded as earned when the legal title of goods and services passes
from the seller to the buyer.’

To which accounting principle does this statement refer?

A going concern
B matching
C money measurement
D realisation

35 ‘The information provided in financial statements should be capable of being independently

verified.’

To which accounting policy does this statement refer?

A comparability
B relevance
C reliability
D understandability

© UCLES 2022 0452/12/M/J/22

BLANK PAGE

© UCLES 2022 0452/12/M/J/22

BLANK PAGE

© UCLES 2022 0452/12/M/J/22

Cambridge IGCSE™

ACCOUNTING 0452/13
Paper 1 Multiple Choice May/June 2022
1 hour 15 minutes

You must answer on the multiple choice answer sheet.

*4920435654*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INFORMATION
 The total mark for this paper is 35.
 Each correct answer will score one mark.
 Any rough working should be done on this question paper.

This document has 12 pages. Any blank pages are indicated.

IB22 06_0452_13/FP
© UCLES 2022 [Turn over
2

1 Which task would be carried out by a book-keeper?

A comparison of financial statements between years

B preparation of financial statements
C provision of information for decision-making
D recording financial transactions

2 The following ledger account appeared in the books of Leah, a trader.

Amraz account
$ $

April 26 purchases returns 150 April 1 balance b / d 2100

30 bank 1900 20 purchases 3000
discount 100
balance c / d 2950 ____
5100 5100

Which statement is correct?

A Amraz allowed Leah $100 trade discount on 30 April.

B Amraz owed Leah $2100 on 1 April.
C Leah owed Amraz $2950 on 30 April.
D Leah’s net purchases from Amraz in April were $2900.

3 Sarah sold goods on credit to Zafar.

How was this recorded in Sarah’s ledgers?

general ledger sales ledger

A credit sales account debit Zafar account

B debit sales account credit Zafar account
C credit Zafar account debit sales account
D debit Zafar account credit sales account

© UCLES 2022 0452/13/M/J/22

4 Omar sent a credit note to Miriam for goods returned.

How would Miriam record this transaction?

account to be debited account to be credited

A purchases returns Omar

B sales returns Miriam
C Omar purchases returns
D Miriam sales returns

5 Ben sold goods to David for $900 cash.

In which book of prime entry would David record this transaction?

A cash book
B general journal
C purchases journal
D sales journal

6 A petty cashier received $100 from the chief cashier and $10 from an employee who had made
private calls on the business telephone.

How would these amounts be recorded in the petty cash book and the cash book?

debit petty credit petty debit credit

cash book cash book cash book cash book
$ $ $ $

A 0 110 100 0
B 10 100 0 100
C 100 10 0 100
D 110 0 0 100

7 What is an example of a compensating error?

© UCLES 2022 0452/13/M/J/22 [Turn over

8 After the preparation of Abdul’s draft financial statements, two errors were discovered.

The purchase of a machine by bank transfer, $5000, was omitted from the accounts.
The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair
account.

What effect will correcting these errors have on the non-current assets and the working capital?

non-current assets working capital

$ $

A increase 15 000 decrease 5000

B increase 15 000 no effect
C increase 20 000 decrease 5000
D increase 20 000 no effect

9 Why is a sales ledger control account usually prepared by a different member of staff than the
person who maintains the sales ledger?

A to deter fraud
B to locate errors
C to provide an instant total of trade receivables
D to speed production of financial statements

10 What would be recorded on the credit side of a sales ledger control account?

A cash refunded to credit customers

B credit sales
C interest charged on overdue accounts
D sales returns

11 Maria’s draft income statement for the year ended 31 March 2022 showed a profit for the year of
$38 750.

On 31 December 2021, Maria received a 5% bank loan of $4800 which was incorrectly treated
as a revenue receipt.

In error, a whole year’s interest on the bank loan was included in the draft income statement for
the year ended 31 March 2022.

What was the correct profit for the year ended 31 March 2022?

A $33 770 B $34 130 C $43 370 D $43 730

© UCLES 2022 0452/13/M/J/22

12 Which statement about the reducing balance method of depreciation is not correct?

13 The financial year of Yeung ends on 31 March. On 1 April 2021, he purchased a machine for
$4000.

He estimated that it would have a useful working life of 3 years and a residual value of $100.
Yeung uses the straight-line method of depreciation.

The machine was sold on 1 April 2022 for $1500.

What was the loss on disposal?

A $1100 B $1200 C $2400 D $2500

14 On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the
year ended 31 March 2022 amounted to $4850.

Which journal entry should have been made at the end of the financial year on 31 March 2022?

debit credit
$ $

A commission receivable 4640

income statement 4640
B commission receivable 5060
income statement 5060
C income statement 4640
commission receivable 4640
D income statement 5060
commission receivable 5060

15 Nula’s financial year ends on 31 December. She maintains a provision for doubtful debts of 5%
of trade receivables.

On 1 January 2021, the provision amounted to $800. On 31 December 2021, trade receivables
owed $13 400, of which $600 was regarded as irrecoverable.

How much was the provision for doubtful debts on 1 January 2022?

A $600 B $640 C $660 D $670

© UCLES 2022 0452/13/M/J/22 [Turn over

16 After the financial statements for the year ended 30 April 2022 had been prepared, a trader
discovered that the closing inventory had been over-valued.

What will be the effect of this error?

profit for the year capital on profit for the year

ended 30 April 2022 30 April 2022 ending 30 April 2023

A overstated overstated understated

B overstated understated no effect
C understated no effect no effect
D understated understated overstated

17 Mariam owns a business providing accounting services. She provided the following information
for the financial year ended 31 March 2022.

fees owed by clients on 1 April 2021 4 500

fees received from clients during the year ended 31 March 2022 22 500
fees owed by clients on 31 March 2022 1 500

What was the amount of fees shown in the income statement for the year ended 31 March 2022?

A $19 500 B $22 500 C $25 500 D $28 500

18 Which item would not appear in the appropriation account of a partnership?

A interest charged on partners’ drawings

B interest paid on loans from partners
C interest paid on partners’ capital
D salaries paid to partners

19 Carol and Denise are in partnership sharing profits and losses in the ratio 2 : 1.

Denise’s current account balances were as follows.

at 1 May 2021 $2000 debit

at 1 May 2022 $7000 credit

She had made no drawings during the year.

What was the total profit made by the partnership in the year ended 30 April 2022?

A $9000 B $15 000 C $18 000 D $27 000

© UCLES 2022 0452/13/M/J/22

20 Which statements are correct?

A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

21 The draft financial statements of a limited company showed retained earnings of $31 820. It was
then found that no adjustment had been made for the following.

commission receivable accrued 450

insurance prepaid 175

What was the correct amount of the retained earnings?

A $31 195 B $31 545 C $32 095 D $32 445

22 Which statement about club accounts is correct?

23 A sports club provided the following information for the financial year ended 31 December 2021.

1 January 2021 subscriptions paid in advance 200

31 December 2021 subscriptions outstanding 450
subscriptions received during the year 8800

What was the total of the subscriptions that related to the year ended 31 December 2021?

A $8150 B $8550 C $9050 D $9450

© UCLES 2022 0452/13/M/J/22 [Turn over

24 The work in progress of ZT Manufacturers on 1 January was valued at $6200. At the end of the
year it was valued at $5400.

What was the effect on the cost of production for the year?

A decrease $800
B decrease $11 600
C increase $800
D increase $11 600

25 A manufacturing company provided the following information.

cost of production 345 000

finished goods 1 January 2021 42 000
31 December 2021 36 000
purchases of finished goods 15 000

What was the cost of sales?

A $324 000 B $336 000 C $351 000 D $366 000

26 Tahir provided the following information for his first year of trading.

sales 170 000

sales returns 6 000
purchases 129 000

Tahir’s gross margin was 25%.

What was the value of closing inventory?

A $1000 B $2200 C $6000 D $7500

27 A business provided the following information.

opening inventory $6800

closing inventory $6000
rate of inventory turnover 5 times

What were the purchases for the year?

A $29 200 B $31 200 C $32 000 D $32 800

© UCLES 2022 0452/13/M/J/22

28 A trader provided the following information at the end of the financial year.

revenue 80 000
gross profit 20 000
expenses 12 000

What was the profit margin?

A 10% B 15% C 25% D 40%

29 A trader provided the following information.

profit for the year 24 000

working capital 20 000
capital 120 000
non-current liability 30 000

What was the return on capital employed?

A 14.12% B 16.00% C 17.14% D 20.00%

30 Samuel, a trader, decided to issue statements of account each month.

Which ratio does Samuel hope to improve by doing this?

A current ratio
B liquid (acid test) ratio
C trade payables turnover
D trade receivables turnover

31 John’s rate of inventory turnover was 10 times in year 1 and 8 times in year 2.

What may have caused the change in the rate of inventory turnover?

A fall in demand
B higher sales
C lower inventory levels
D lower selling price

© UCLES 2022 0452/13/M/J/22 [Turn over

32 Maya had annual revenue of $100 000.

In year 1, her gross margin was 45% and her profit margin was 5%.

In year 2, her gross margin was 40% and her profit margin was 3%.

What happened to Maya’s cost of sales and expenses in year 2?

cost of sales expenses

A decreased decreased
B decreased increased
C increased decreased
D increased increased

33 Why would a bank manager be interested in the financial statements of a business?

A to calculate and assess the trade payables turnover

B to check that the correct amount of tax is being paid
C to ensure that employees are being paid the correct hourly rate
D to ensure that funds are sufficient to cover loan interest

34 ‘Revenue should only be regarded as earned when the legal title of goods and services passes
from the seller to the buyer.’

To which accounting principle does this statement refer?

A going concern
B matching
C money measurement
D realisation

35 ‘The information provided in financial statements should be capable of being independently

verified.’

To which accounting policy does this statement refer?

A comparability
B relevance
C reliability
D understandability

© UCLES 2022 0452/13/M/J/22

BLANK PAGE

© UCLES 2022 0452/13/M/J/22

BLANK PAGE

© UCLES 2022 0452/13/M/J/22

Cambridge IGCSE™
* 1 6 0 0 1 0 5 9 1 5 *

ACCOUNTING 0452/21
Paper 2 Structured Written Paper May/June 2022

1 hour 45 minutes

You must answer on the question paper.

No additional materials are needed.

This document has 20 pages. Any blank pages are indicated.

DC (LK) 303848/2
© UCLES 2022 [Turn over
2

1 Nakul is a trader. He buys and sells goods on credit. He buys most of his supplies from one
supplier, Nadia, who allows Nakul a trade discount of 20%.

The following transactions took place in January 2022.

Jan 2 Paid $441 by cheque to Nadia, in full settlement of $450 owed to her at
1 January 2022.

12 Bought goods on credit from Nadia, list price $350

14 Returned faulty goods to Nadia, list price $80

18 Bought goods on credit from Nadia, list price $400

23 Sold goods on credit, $800

29 Bought goods on credit, $60, from Sophie

30 Returned goods to Sophie, $9

REQUIRED

(a) Prepare the purchases journal for January 2022.

Total the journal and indicate the ledger account to which the total would be posted.

Nakul
Purchases journal
Date Details $ $

............. ...................................................................... ....................... .......................

............. ..................................................................... ....................... .......................

............. ...................................................................... ....................... .......................

[4]

© UCLES 2022 0452/21/M/J/22

(b) Prepare the purchases returns journal for January 2022.

Total the journal and indicate the ledger account to which the total would be posted.

Nakul
Purchases returns journal
Date Details $ $

............. ...................................................................... ....................... .......................

[3]

(c) Prepare the account for Nadia, for January 2022, as it would appear in the books of Nakul.
Balance the account and bring down the balance on 1 February 2022.

Nakul
Nadia account
Date Details $ Date Details $

............. ................................. ............ ............ ................................. ............

[6]

(d) Complete the table by placing a tick (3) to show where each item is shown on the statement
of financial position.

Current liabilities Non-current liabilities

Trade payables

Bank overdraft
[2]
© UCLES 2022 0452/21/M/J/22 [Turn over
4

Nakul has a bank overdraft and would like to reduce it. He is considering paying his suppliers later
than he currently does in order to help him reduce his bank overdraft.

REQUIRED

(e) Advise Nakul whether or not he should take longer to pay his suppliers. Justify your answer
by providing two advantages and two disadvantages.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

© UCLES 2022 0452/21/M/J/22

BLANK PAGE

© UCLES 2022 0452/21/M/J/22 [Turn over

2 Fatima is a sole trader. She prepares her financial statements to the end of March each year.

At 31 March 2022, Fatima’s ledger account balances included the following.

$
Revenue 79 400

Sales returns 3 970

Purchases 36 500

Rent and rates 9 000

Wages 10 100

General expenses 1 287

Insurance 1 800

Discount received 1 095

Inventory at 1 April 2021 3 000

Fixtures and equipment at cost 80 000

Fixtures and equipment – provision for depreciation 39 040

Trade receivables 6 400

Trade payables 4 995

Provision for doubtful debts 156

Cash drawings 8 580

Capital at 1 April 2021 59 000

The following information is also available.

1 Inventory at 31 March 2022 was $3120.

2 Fatima took goods for her own use from the business during the year ended 31 March 2022.
These goods cost $1300.

3 Depreciation on fixtures and equipment is to be charged at 20% per annum using the reducing
balance method.

4 Accrued wages at 31 March 2022 were $800.

5 Rent includes a payment of $1500 for the 3 months from 1 March 2022 to 31 May 2022.

6 An irrecoverable trade receivable of $200 is to be written off.

7 The provision for doubtful debts is to be set at 3% of trade receivables.

© UCLES 2022 0452/21/M/J/22

REQUIRED

(a) Prepare Fatima’s income statement for the year ended 31 March 2022.

Fatima
Income Statement for the year ended 31 March 2022

$ $

................................................................................................. ................... ...................

................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
................................................................................................. ................... ...................
[11]
© UCLES 2022 0452/21/M/J/22 [Turn over
8

(b) Prepare Fatima’s capital account for the year ended 31 March 2022. Balance the account
and bring down the balance on 1 April 2022.

Fatima
Capital account
Date Details $ Date Details $

........... ................................. ............ ........... ................................. ............

[4]

Fatima would like to expand the business. She thinks that additional finance of $20 000 would be
required for the equipment which she would need. Fatima’s bank have offered to lend her $20 000,
to be repaid after four years at interest of 6% per annum.

REQUIRED

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

© UCLES 2022 0452/21/M/J/22

BLANK PAGE

© UCLES 2022 0452/21/M/J/22 [Turn over

3 Jules is a hairdresser. He bought some new energy-saving hairdrying equipment, $1900, on credit
from YZH Limited on 30 April 2022.

REQUIRED

(a) Prepare the journal entry to record the purchase of these hairdryers. A narrative is required.

Jules
Journal
Date Details Debit Credit
$ $

............. ........................................................................... ..................... .....................

[3]

The new hairdryers will use less electricity than his old ones. There will be an additional insurance
charge for the new hairdryers. The old hairdryers had been fully depreciated so that their net book
value was nil.

REQUIRED

(b) Complete the table by placing a tick (3) to show whether these changes in expenses increase
or decrease the profit.

Expense Increase Decrease

in profit in profit
Heat and light

Depreciation

Insurance

[3]

Jules has discovered the following five errors in his accounting records for the year ended
30 April 2022.

1 The total for general expenses, $28, in the petty cash book for April 2022 has not been posted
to the general ledger.

2 A direct debit to Isaac, a supplier, $195 had been recorded as $159 in the account for Isaac.

3 A payment by credit transfer for wages, $144, has not been recorded in the accounting
records.

© UCLES 2022 0452/21/M/J/22

4 The discount received total for January 2022, $38, had been debited to the discount received
account.

5 The account for rent and the account for commission receivable had both been overcast by
$200.

REQUIRED

Jules
Journal
Error Details Debit Credit
number $ $

............. ........................................................................... ..................... .....................

[10]

© UCLES 2022 0452/21/M/J/22 [Turn over

(d) Prepare the suspense account. Include the original difference on the trial balance as a
balancing figure.

Jules
Suspense account
Date Details $ Date Details $

………. .……………………… ……….. ………. .……………………… ………..

[4]

[Total: 20]

© UCLES 2022 0452/21/M/J/22

4 Ekua is a trader who sells household furnishings. She has provided the following information.

$
At 30 April 2022:

Inventory 14 650

Trade receivables 12 700

Bank overdraft 5 375

Trade payables 7 125

For the year to 30 April 2022:

Revenue 112 300

Purchases 72 250

Expenses 19 820

All sales and purchases are on credit.

Inventory at 1 May 2021 was valued at $12 800.

REQUIRED

(a) Complete the following tables.

Gross margin
workings answer (to two decimal places)

Profit margin
workings answer (to two decimal places)

© UCLES 2022 0452/21/M/J/22 [Turn over

Rate of inventory turnover (times)

workings answer (to two decimal places)

Current ratio
workings answer (to two decimal places)

Liquid (acid test) ratio

workings answer (to two decimal places)

[11]

© UCLES 2022 0452/21/M/J/22

One of Ekua’s suppliers has offered to sell her a large quantity of inventory at a reduced price.
Ekua is considering accepting this offer and increasing her expenditure on advertising in order to
sell more inventory.

REQUIRED

(b) Advise Ekua whether she should purchase the additional inventory. Justify your answer by
providing two advantages and two disadvantages.

...................................................................................................................................................

............................................................................................................................................. [5]

...................................................................................................................................................

............................................................................................................................................. [2]

(d) State two non-financial factors which may affect Ekua’s trading results.

1 ................................................................................................................................................

...................................................................................................................................................

2 ................................................................................................................................................

...................................................................................................................................................
[2]

5 The Sew and Soup Club offers membership to people who are interested in sharing sewing and
knitting patterns. It runs a refreshment café for members. The club had the following assets and
liabilities at 31 December.

2020 2021

$ $

Subscriptions in advance 2 260 1 745

Subscriptions in arrears 1 820 2 115

Inventory of refreshments 1 070 1 130

Rent paid in advance 500 500

Trade payables for refreshment supplies 1 940 1 580

Bank balance 4 628 7 743

The following totals are for the year ended 31 December 2021.

Receipts

Subscriptions received (all by cheque) 13 900

Cash sales from refreshments 17 650

Payments

Rent 6 000

Wages 7 000

Other expenses 5 000

Trade payables for refreshment supplies 10 435

REQUIRED

(a) (i) Prepare the subscriptions account for the year ended 31 December 2021. Balance the
account and bring down the balances on 1 January 2022.

Sew and Soup Club

Subscriptions account

Date Details $ Date Details $

........... ................................ ............. ........... ................................ .............

[6]

(ii) Explain whether the treasurer should be satisfied with the amount of cash received from
member subscriptions during the year ended 31 December 2021.

...........................................................................................................................................

..................................................................................................................................... [3]

(b) Calculate the profit on refreshments for the year ended 31 December 2021.

$ $

.............................................................................................. ................... ...................

(c) Prepare the current assets section of the club’s statement of financial position at
31 December 2021.
Sew and Soup Club
Statement of financial position (extract) at 31 December 2021

$ $

Current Assets
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
.............................................................................................. ................... ...................
[4]

BLANK PAGE

Cambridge IGCSE™
* 3 0 7 4 6 1 2 7 9 2 *

ACCOUNTING 0452/22
Paper 2 Structured Written Paper May/June 2022

1 hour 45 minutes

You must answer on the question paper.

No additional materials are needed.

This document has 20 pages. Any blank pages are indicated.

1 Peter is a trader. The following transactions took place in April 2022.

April 2 Cash sales, $410, were paid directly into the bank account

3 Paid $798 to Rahat, by cheque, in full settlement of a debt of $840

8 Paid $42 cash for a motor vehicle repair

15 Purchased goods, list price $320, on credit subject to a trade discount of 10%, from
Rahat

18 Cash sales, $460

20 Paid $392 to Samir by telephone transfer, having deducted 2% cash discount from
the amount due

25 A cheque for commission receivable, $115, was paid into the bank account

29 Paid $285 to Rafael by cash, in full settlement of a debt of $300

REQUIRED

(a) Prepare Peter’s cash book on the page opposite.

Balance the cash book and bring down the balances on 1 May 2022.

Peter
Cash Book

Apr 1 Balance b/d 135 920 ........... ........................................ …............ …............ …............

........... ........................................ …............ …............ …............ ........... ........................................ ................ ................ ................

0452/22/M/J/22
........... ........................................ …............ …............ …............ ........... ........................................ ................ ................ ................

........... ........................................ …............ …............ …............ ........... ........................................ …............ …............ …............

[11]

[Turn over
4

Peter has received a bank statement for April. He is using it to prepare a bank reconciliation
statement and to update his cash book.

REQUIRED

(b) Place a tick (✓) to show how each item in the table below would be used to prepare the bank
reconciliation statement or to update the cash book.

Prepare bank reconciliation Update cash book

statement
Added Deducted
Items to be adjusted to bank from bank Debited to Credited to
statement statement cash book cash book
balance balance
Bank charges

Direct debit for rent

Cheque paid to a supplier

but not yet cashed
Cheque for commission
received dishonoured
Dividend received

[5]

REQUIRED

(c) Prepare the account for Rahat as it would appear in the ledger of Peter.
Balance the account and bring down the balance on 1 May 2022.

Peter
Rahat account
Date Details $ Date Details $
2022 2022

............ ..................................... ............. Apr 1 Balance b/d 840

............ ..................................... ............. ............ ..................................... ............

2 Stalla started trading on 1 April 2021. All receipts are paid into the bank and all payments are made
from the bank. She has not kept a full set of books but has provided the following information.

Summary of receipts and payments for the year ended 31 March 2022

Receipts

Capital introduced 8 000

Loan received (repayable 2027) 5 000

Sales (all cash) 36 000

Payments

Trade payables 17 850

Fixtures and fittings 12 000

General expenses 1 920

Rent and insurance 7 100

Drawings ?

Bank balance at 31 March 2022 2 330

REQUIRED

(a) Record the total receipts and total payments to Stalla’s bank account showing the cash
drawings for the year ended 31 March 2022. Balance the bank account and bring the balance
down on 1 April 2022.

Stalla
Bank account
Date Details $ Date Details $

............. ................................. ............... ............. ................................ ...............

[4]

During the year ended 31 March 2022, Stalla took goods from the business for her own personal
use. The selling price of these goods is $3375. Her mark-up is 25%.

REQUIRED

(b) Calculate Stalla’s total drawings for the year ended 31 March 2022.

...................................................................................................................................................

............................................................................................................................................. [2]

Stalla has provided a list of balances at 31 March 2022.

Fixtures and fittings (net book value) 10 800

Inventory 2 150

Prepaid rent 500

Balance at bank 2 330

Trade payables 1 875

Loan (repayable 2027) 5 000

Capital ?

REQUIRED

(c) Prepare a statement of affairs to calculate Stalla’s capital at 31 March 2022.

Stalla
Statement of Affairs at 31 March 2022
$ $
......................................................................................... ....................... .......................

......................................................................................... ....................... .......................

[5]

(d) Calculate Stalla’s profit for the year ended 31 March 2022.

...................................................................................................................................................

............................................................................................................................................. [4]

Stalla is now considering whether she should start to sell at least some of her goods on credit.

REQUIRED

(e) Advise Stalla whether or not she should start selling on credit terms. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

BLANK PAGE

3 Mosi is a trader. The totals of his trial balance at 30 April 2022 did not agree and the difference
was placed in a suspense account.

Mosi later discovered the following errors.

1 Commission received, $96, had been debited to the discount received account. The entry to
the bank account was correctly made.

2 The total of the sales journal for April 2022, $1258, was transferred to the sales account as
$2185.

3 A cheque payment for motor expenses, $77, had been omitted from the book-keeping
records.

4 A payment by electronic transfer, $135, was recorded as a payment in the petty cash book.

5 An invoice received from Tracey, $160, was credited to the account for Stacey.

REQUIRED

(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.

Mosi
Journal
Error Details Debit Credit
number $ $

................. ...................................................……........ .................…… .................……

[11]

(b) Prepare the suspense account. Include the original difference on the trial balance as a
balancing figure.

Mosi
Suspense account
Date Details $ Date Details $

.............. ................................. .............. .............. ................................. ..............

[4]

Mosi’s original draft profit, before correcting the errors, was $39 970.

REQUIRED

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

4 Nala is a trader who buys and sells stationery.

She provided the following information about her inventory at 28 February 2022.

Item Number of Cost per unit Carriage Selling Selling

units inwards per expenses price per
unit per unit unit
$ $ $ $
Packs of paper 240 4.50 – – 8.00
Packs of envelopes 225 5.50 1.00 1.50 10.00
Notepads 150 4.00 2.00 – 5.00
Boxes of pencils 96 3.50 – – 6.00

REQUIRED

(a) (i) Calculate the value of Nala’s inventory at 28 February 2022.

...........................................................................................................................................

..................................................................................................................................... [6]

(ii) State the accounting principle used to value inventory.

..................................................................................................................................... [1]

(b) (i) Complete the table by placing a tick (✓) to show how Nala should treat each item of her
expenditure.

Capital Revenue
expenditure expenditure
Computer printer paper
Computer equipment
Installation of computer equipment
Motor vehicle
Insurance of motor vehicle
Delivery of motor vehicle
[4]
© UCLES 2022 0452/22/M/J/22 [Turn over
14

(b) (ii) Explain how the materiality principle is applied to the treatment of non-current assets.

...........................................................................................................................................

..................................................................................................................................... [2]

Nala has treated the receipt of a bank loan as a revenue receipt.

REQUIRED

overstated understated

Effect on capital

Effect on liabilities
[2]

Nala has charged depreciation on her shop fittings at 25% per annum using the reducing balance
method. This year she is considering changing this to 10% per annum using the straight-line
method, as this would improve her profit for the year.

REQUIRED

(d) Advise Nala whether or not she should change her depreciation method. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

BLANK PAGE

5 The trial balance of M Limited at 30 November 2021 was as follows.

M Limited
Trial Balance at 30 November 2021

Debit Credit

$ $

Revenue 203 600

Inventory at 1 December 2020 12 945

Purchases 143 750

Rent and rates 12 460

Operating expenses 12 920

Wages 24 380

Equipment at cost 40 000

Provision for depreciation of equipment 17 500

Trade receivables 9 800

Provision for irrecoverable debts 295

Bank 162

Trade payables 11 585

Ordinary share capital 20 000

General reserve 3 000

Retained earnings 2 037

Dividend paid on ordinary shares 1 600

258 017 258 017

Additional information

1 Inventory at 30 November 2021 was valued at $12 830.

2 Depreciation on equipment is to be charged at 25% per annum using the reducing balance
method.

3 Accrued operating expenses at 30 November 2021 were $415.

4 Rent includes a payment of $2250 for the 3 months from 1 October 2021 to 31 December
2021.

5 The provision for doubtful debts is to be set at 4% of trade receivables.

6 No dividends were outstanding at 30 November 2021.

7 $1000 is to be transferred to the general reserve at 30 November 2021.

REQUIRED

(a) Prepare the income statement for M Limited for the year ended 30 November 2021.

M Limited
Income Statement for the year ended 30 November 2021
$ $
......................................................................................... ....................... ..................….

......................................................................................... ..................…. ..................….

[7]

(b) Prepare the statement of changes in equity for M Limited for the year ended 30 November 2021.

M Limited
Statement of Changes in Equity for the year ended 30 November 2021
Details Ordinary General Retained Total
Share capital reserve earnings

$ $ $ $

On 1 December 2020 .................… .................… .................… .................…

...................................……. .................… .................… .................… .................…

On 30 November 2021 .................… .................… .................… .................…

[5]

(c) Calculate the liquid ratio for M Limited at 30 November 2021.

The answer should be correct to two decimal places.

Liquid (acid test) ratio

workings answer

[3]

The managing director, Emily, plans to buy new equipment to be used to improve the profitability
of the company. She is considering whether to fund the equipment by issuing further ordinary
shares or requesting a bank overdraft.

REQUIRED

(d) Advise Emily whether to fund the purchase of the equipment by issuing further ordinary
shares or by requesting a bank overdraft. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

BLANK PAGE

Cambridge IGCSE™
* 0 3 3 0 6 4 6 1 4 1 *

ACCOUNTING 0452/23
Paper 2 Structured Written Paper May/June 2022

1 hour 45 minutes

You must answer on the question paper.

No additional materials are needed.

This document has 20 pages. Any blank pages are indicated.

1 Peter is a trader. The following transactions took place in April 2022.

April 2 Cash sales, $410, were paid directly into the bank account

3 Paid $798 to Rahat, by cheque, in full settlement of a debt of $840

8 Paid $42 cash for a motor vehicle repair

15 Purchased goods, list price $320, on credit subject to a trade discount of 10%, from
Rahat

18 Cash sales, $460

20 Paid $392 to Samir by telephone transfer, having deducted 2% cash discount from
the amount due

25 A cheque for commission receivable, $115, was paid into the bank account

29 Paid $285 to Rafael by cash, in full settlement of a debt of $300

REQUIRED

(a) Prepare Peter’s cash book on the page opposite.

Balance the cash book and bring down the balances on 1 May 2022.

Peter
Cash Book

Apr 1 Balance b/d 135 920 ........... ........................................ …............ …............ …............

0452/23/M/J/22
........... ........................................ …............ …............ …............ ........... ........................................ ................ ................ ................

[11]

[Turn over
4

Peter has received a bank statement for April. He is using it to prepare a bank reconciliation
statement and to update his cash book.

REQUIRED

(b) Place a tick (✓) to show how each item in the table below would be used to prepare the bank
reconciliation statement or to update the cash book.

Prepare bank reconciliation Update cash book

statement
Added Deducted
Items to be adjusted to bank from bank Debited to Credited to
statement statement cash book cash book
balance balance
Bank charges

Direct debit for rent

Cheque paid to a supplier

but not yet cashed
Cheque for commission
received dishonoured
Dividend received

[5]

REQUIRED

(c) Prepare the account for Rahat as it would appear in the ledger of Peter.
Balance the account and bring down the balance on 1 May 2022.

Peter
Rahat account
Date Details $ Date Details $
2022 2022

............ ..................................... ............. Apr 1 Balance b/d 840

............ ..................................... ............. ............ ..................................... ............

2 Stalla started trading on 1 April 2021. All receipts are paid into the bank and all payments are made
from the bank. She has not kept a full set of books but has provided the following information.

Summary of receipts and payments for the year ended 31 March 2022

Receipts

Capital introduced 8 000

Loan received (repayable 2027) 5 000

Sales (all cash) 36 000

Payments

Trade payables 17 850

Fixtures and fittings 12 000

General expenses 1 920

Rent and insurance 7 100

Drawings ?

Bank balance at 31 March 2022 2 330

REQUIRED

Stalla
Bank account
Date Details $ Date Details $

............. ................................. ............... ............. ................................ ...............

[4]

During the year ended 31 March 2022, Stalla took goods from the business for her own personal
use. The selling price of these goods is $3375. Her mark‑up is 25%.

REQUIRED

(b) Calculate Stalla’s total drawings for the year ended 31 March 2022.

...................................................................................................................................................

............................................................................................................................................. [2]

Stalla has provided a list of balances at 31 March 2022.

Fixtures and fittings (net book value) 10 800

Inventory 2 150

Prepaid rent 500

Balance at bank 2 330

Trade payables 1 875

Loan (repayable 2027) 5 000

Capital ?

REQUIRED

(c) Prepare a statement of affairs to calculate Stalla’s capital at 31 March 2022.

Stalla
Statement of Affairs at 31 March 2022
$ $
......................................................................................... ....................... .......................

......................................................................................... ....................... .......................

[5]

(d) Calculate Stalla’s profit for the year ended 31 March 2022.

...................................................................................................................................................

............................................................................................................................................. [4]

Stalla is now considering whether she should start to sell at least some of her goods on credit.

REQUIRED

(e) Advise Stalla whether or not she should start selling on credit terms. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

BLANK PAGE

3 Mosi is a trader. The totals of his trial balance at 30 April 2022 did not agree and the difference
was placed in a suspense account.

Mosi later discovered the following errors.

1 Commission received, $96, had been debited to the discount received account. The entry to
the bank account was correctly made.

2 The total of the sales journal for April 2022, $1258, was transferred to the sales account as
$2185.

3 A cheque payment for motor expenses, $77, had been omitted from the book‑keeping
records.

4 A payment by electronic transfer, $135, was recorded as a payment in the petty cash book.

5 An invoice received from Tracey, $160, was credited to the account for Stacey.

REQUIRED

(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.

Mosi
Journal
Error Details Debit Credit
number $ $

................. ...................................................……........ .................…… .................……

[11]

(b) Prepare the suspense account. Include the original difference on the trial balance as a
balancing figure.

Mosi
Suspense account
Date Details $ Date Details $

.............. ................................. .............. .............. ................................. ..............

[4]

Mosi’s original draft profit, before correcting the errors, was $39 970.

REQUIRED

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

4 Nala is a trader who buys and sells stationery.

She provided the following information about her inventory at 28 February 2022.

Item Number of Cost per unit Carriage Selling Selling

REQUIRED

(a) (i) Calculate the value of Nala’s inventory at 28 February 2022.

...........................................................................................................................................

..................................................................................................................................... [6]

(ii) State the accounting principle used to value inventory.

..................................................................................................................................... [1]

(b) (i) Complete the table by placing a tick (✓) to show how Nala should treat each item of her
expenditure.

(b) (ii) Explain how the materiality principle is applied to the treatment of non‑current assets.

...........................................................................................................................................

..................................................................................................................................... [2]

Nala has treated the receipt of a bank loan as a revenue receipt.

REQUIRED

overstated understated

Effect on capital

Effect on liabilities
[2]

Nala has charged depreciation on her shop fittings at 25% per annum using the reducing balance
method. This year she is considering changing this to 10% per annum using the straight‑line
method, as this would improve her profit for the year.

REQUIRED

(d) Advise Nala whether or not she should change her depreciation method. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

BLANK PAGE

5 The trial balance of M Limited at 30 November 2021 was as follows.

M Limited
Trial Balance at 30 November 2021

Debit Credit

$ $

Revenue 203 600

Inventory at 1 December 2020 12 945

Purchases 143 750

Rent and rates 12 460

Operating expenses 12 920

Wages 24 380

Equipment at cost 40 000

Provision for depreciation of equipment 17 500

Trade receivables 9 800

Provision for irrecoverable debts 295

Bank 162

Trade payables 11 585

Ordinary share capital 20 000

General reserve 3 000

Retained earnings 2 037

Dividend paid on ordinary shares 1 600

258 017 258 017

Additional information

1 Inventory at 30 November 2021 was valued at $12 830.

2 Depreciation on equipment is to be charged at 25% per annum using the reducing balance
method.

3 Accrued operating expenses at 30 November 2021 were $415.

4 Rent includes a payment of $2250 for the 3 months from 1 October 2021 to 31 December
2021.

5 The provision for doubtful debts is to be set at 4% of trade receivables.

6 No dividends were outstanding at 30 November 2021.

7 $1000 is to be transferred to the general reserve at 30 November 2021.

REQUIRED

(a) Prepare the income statement for M Limited for the year ended 30 November 2021.

......................................................................................... ..................…. ..................….

[7]

(b) Prepare the statement of changes in equity for M Limited for the year ended 30 November 2021.

M Limited
Statement of Changes in Equity for the year ended 30 November 2021
Details Ordinary General Retained Total
Share capital reserve earnings

$ $ $ $

On 1 December 2020 .................… .................… .................… .................…

...................................……. .................… .................… .................… .................…

On 30 November 2021 .................… .................… .................… .................…

[5]

(c) Calculate the liquid ratio for M Limited at 30 November 2021.

The answer should be correct to two decimal places.

Liquid (acid test) ratio

workings answer

[3]

REQUIRED

(d) Advise Emily whether to fund the purchase of the equipment by issuing further ordinary
shares or by requesting a bank overdraft. Justify your answer.

...................................................................................................................................................

............................................................................................................................................. [5]

[Total: 20]

BLANK PAGE

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.

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