Igcse Nov 23
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TaimoorIgcse Nov 23
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TaimoorCambridge IGCSE™
* 1 8 6 1 6 1 4 7 6 7 *
ACCOUNTING 0452/21
Paper 2 Structured Written Paper October/November 2023
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 24 pages. Any blank pages are indicated.
DC (SL) 334138
© UCLES 2023 [Turn over
2
1 Shakir started trading in the year ended 31 August 2023 but did not keep proper books of account.
His assets and liabilities at 1 September 2023 are as follows.
$
Motor vehicle 9 500
Inventory 1 240
Cash at bank 1 682
Trade payables:
Latif 200
Harrison 237
REQUIRED
(a) (i) Prepare the journal for Shakir’s opening entries at 1 September 2023. A narrative is not
required.
Shakir
Journal
Date Details Debit Credit
$ $
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[3]
(ii) State two advantages of maintaining double entry records.
1 ........................................................................................................................................
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[2]
© UCLES 2023 0452/21/O/N/23
3
BLANK PAGE
© UCLES 2023 0452/21/O/N/23 [Turn over
4
During September 2023, the following transactions took place.
Sept 2 Paid rent, $420, by credit transfer
4 Withdrew cash, $350, from the bank for business use
7 Paid Latif, $194, by telephone transfer, in full settlement of the amount owing at
1 September 2023
10 Sold goods on credit, $195, to Sydney
12 Paid $161, cash, for wages
17 Cash sales, $290, were paid directly into the bank account
28 Received a cheque, $100, from Sydney
29 Paid $95 to Harrison, by electronic transfer, having deducted $5 cash discount from
the amount due
REQUIRED
(b) Prepare Shakir’s cash book on the page opposite.
Balance the cash book and bring down the balances at 1 October 2023. [11]
© UCLES 2023 0452/21/O/N/23
Shakir
Cash Book
© UCLES 2023
Date Details Discount Cash Bank Date Details Discount Cash Bank
allowed received
2023 $ $ $ 2023 $ $ $
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0452/21/O/N/23
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[Turn over
6
Shakir received a bank statement dated 30 September 2023. The bank statement showed that
Shakir had $763 in the bank account. On comparing the bank statement to his cash book, Shakir
noted the following.
Bank charges, $35, were charged by the bank in September.
Cash Sales, $175, had been paid for by credit transfer but not recorded in the cash book.
The cheque received from Sydney had not yet been cleared by the bank.
The cash sales, $290, had been omitted from the bank statement in error.
REQUIRED
(c) Calculate the corrected bank balance.
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[Total: 20]
© UCLES 2023 0452/21/O/N/23
7
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© UCLES 2023 0452/21/O/N/23 [Turn over
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2 Hilary owns a manufacturing business. She has provided the following information.
$
Inventory at 1 August 2022
Raw materials 9 100
Work in progress 21 357
Finished goods 24 235
For the year ended 31 July 2023
Revenue 457 250
Purchases of raw materials 110 000
Purchases returns of raw materials 2 200
Purchases of finished goods 23 500
Purchases returns of finished goods 4 700
Wages of factory operatives 91 665
Wages of factory supervisor 29 000
Wages of office supervisor 28 000
Heat, light and power 11 600
Rates and insurance 8 250
Factory repairs and renewals 5 125
Factory equipment – at cost 124 000
Factory equipment – provision for depreciation 35 500
Additional information
1 Inventory at 31 July 2023
Raw material 9 980
Work in progress 22 446
Finished goods 25 110
2 Heat, light and power is to be apportioned 4/5 to the factory and 1/5 to the office.
3 Rates and insurance is to be apportioned 3/5 to the factory and 2/5 to the office. Insurance of
$4440 has been paid for the year to 31 December 2023.
4 At 31 July 2023, a factory repair, $644, was unpaid and no adjustment had been made.
5 Factory equipment is depreciated at 25% per annum using the reducing balance method.
© UCLES 2023 0452/21/O/N/23
9
REQUIRED
(a) Prepare Hilary’s manufacturing account for the year ended 31 July 2023.
Hilary
Manufacturing Account for the year ended 31 July 2023
$ $
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[11]
© UCLES 2023 0452/21/O/N/23 [Turn over
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(b) Calculate Hilary’s gross profit for the year ended 31 July 2023.
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Hilary is considering stopping buying any finished goods for resale and instead increasing the
production at her factory.
REQUIRED
(c) Advise Hilary whether she should sell only production from her own factory and increase the
amount produced. Justify your answer by providing arguments for and against selling only
production from her own factory and increasing the amount produced.
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[Total: 20]
© UCLES 2023 0452/21/O/N/23
11
3 Logan is a trader who sells goods on credit. His year end is 30 September. Logan has provided
the following information.
$
At 1 October 2022
Inventory 8 400
Trade receivables 7 500
Other receivables (rent prepaid) 820
For the year ended 30 September 2023
Rent charge for the year 4 940
Bank payments for rent 1 December 2022 2 460
1 June 2023 2 490
At 30 September 2023
Inventory 8 675
Trade receivables 8 700
Other receivables ?
Irrecoverable debts to be written off 325
The provision for doubtful debts is to be maintained at 4% of trade receivables.
REQUIRED
(a) Prepare the inventory account for the year ended 30 September 2023.
Logan
Inventory account
Date Details $ Date Details $
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[3]
© UCLES 2023 0452/21/O/N/23 [Turn over
12
(b) Prepare the provision for doubtful debts account for the year ended 30 September 2023.
Balance the account at 30 September 2023 and bring down the balance at 1 October 2023.
Logan
Provision for doubtful debts account
Date Details $ Date Details $
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[4]
(c) Prepare the rent payable account for the year ended 30 September 2023. Balance the
account at 30 September 2023 and bring down the balance at 1 October 2023.
Logan
Rent payable account
Date Details $ Date Details $
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[6]
© UCLES 2023 0452/21/O/N/23
13
(d) State how:
(i) the prudence principle is applied to the valuation of Logan’s inventory
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(ii) the matching principle is applied when the rent payable account is prepared
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Logan is considering buying business premises instead of renting. He would request a long-term
bank loan to finance the purchase of the premises.
REQUIRED
(e) Advise Logan whether he should purchase business premises using a long-term bank loan.
Justify your answer with advantages and disadvantages of purchasing business premises
using a long-term bank loan.
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[Total: 20]
© UCLES 2023 0452/21/O/N/23 [Turn over
14
4 Asia is a trader. She prepared her trial balance at 31 August 2023. The credit side totalled $273
more than the debit side. Asia placed the difference in a suspense account.
Asia later discovered the following errors.
1 A credit purchase, $112, from Jacques, had been entered twice in the purchases journal.
2 The wages account had been overcast by $300.
3 Cash received, $75, from Savanah, a trade receivable, had only been entered in the cash
book.
4 The total of the sales returns journal for August 2023 of $198, had been credited to both the
sales returns account and the purchases returns account.
5 A payment to Sophie, $93, had been recorded as $39 in Sophie’s account.
REQUIRED
(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.
© UCLES 2023 0452/21/O/N/23
15
Asia
Journal
Error Details Debit Credit
number $ $
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[11]
© UCLES 2023 0452/21/O/N/23 [Turn over
16
(b) Prepare the suspense account, including the original difference on the trial balance.
Asia
Suspense account
Date Details $ Date Details $
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[5]
REQUIRED
(c) Complete the following table by placing a tick (3) to show the effect of each error. The first
one has been completed as an example.
Error Error Gross profit Profit for No effect
number the year
+ – + –
1 A credit purchase, $112, from Jacques,
had been debited twice to the purchases 3 3
account.
2 The wages account had been overcast
by $300.
3 Cash received, $75 from Savanah, a
trade receivable, had only been entered
in the cash book.
4 The total of the sales returns journal for
August 2023, $198, had been credited to
both the sales returns account and the
purchases returns account.
5 A payment to Sophie, $93, had been
recorded as $39 in Sophie’s account.
[4]
[Total: 20]
© UCLES 2023 0452/21/O/N/23
17
BLANK PAGE
© UCLES 2023 0452/21/O/N/23 [Turn over
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5 B Limited provides cleaning services to client offices and factories. The clients provide their own
cleaning materials. The trial balance of B Limited at 30 June 2023 was as follows.
B Limited
Trial Balance at 30 June 2023
Debit Credit
$ $
Revenue 135 040
Wages and salaries 72 000
Motor expenses 9 820
Insurance 11 040
General expenses 12 780
Motor vehicles at cost 42 000
Provision for depreciation of motor vehicles 16 500
Equipment at cost 5 000
Provision for depreciation of equipment 2 000
Trade receivables 1 640
Bank 19 950
Ordinary share capital 10 000
General reserve 2 000
Retained earnings 13 490
Dividend paid on ordinary shares 4 800
179 030 179 030
Additional information
1 Revenue of $9240 was received in advance.
2 The insurance charge for the 12 months to 31 December 2022 was $7200 and for the
12 months to 31 December 2023 it is $7440. On 1 January 2023 insurance was paid in full for
the 12 months to 31 December 2023.
3 Accrued general expenses at 30 June 2023 were $186.
4 Depreciation is to be charged on motor vehicles at 25% per annum using the reducing
balance method.
5 Depreciation on equipment is to be charged at 20% per annum using the straight line method.
6 No dividends were outstanding at 30 June 2023.
7 $1000 is to be transferred to the general reserve at 30 June 2023.
© UCLES 2023 0452/21/O/N/23
19
REQUIRED
(a) Prepare the income statement for B Limited for the year ended 30 June 2023.
B Limited
Income Statement for the year ended 30 June 2023
$ $
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[6]
© UCLES 2023 0452/21/O/N/23 [Turn over
20
(b) Prepare the statement of changes in equity for B Limited for the year ended 30 June 2023.
B Limited
Statement of Changes in Equity for the year ended 30 June 2023
Details Ordinary General Retained Total
Share reserve earnings
capital
$ $ $ $
On 1 July 2022 ..................... ..................... ..................... .....................
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On 30 June 2023 ..................... ..................... ..................... .....................
[5]
(c) Explain why:
(i) B Limited has no inventory
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(ii) B Limited does not require a provision for doubtful debts
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© UCLES 2023 0452/21/O/N/23
21
The directors of B Limited are also the shareholders. They plan to expand the company. They are
considering whether to issue debentures or ordinary shares.
REQUIRED
(d) Advise the directors whether they should issue debentures or ordinary shares. Justify your
answer.
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[Total: 20]
© UCLES 2023 0452/21/O/N/23
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© UCLES 2023 0452/21/O/N/23
23
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© UCLES 2023 0452/21/O/N/23
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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 2023 0452/21/O/N/23
Cambridge IGCSE™
* 0 3 2 0 2 6 4 0 7 7 *
ACCOUNTING 0452/22
Paper 2 Structured Written Paper October/November 2023
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) 312327/3
© UCLES 2023 [Turn over
2
1 Seok buys and sells goods on credit. He has three credit customers and allows one of them,
Naomi, trade discount of 10%. All customers pay Seok by bank transfer.
The following balances were extracted from Seok’s sales ledger at 1 August 2023.
$
Naomi 450
Siena 155
Bwana 386
991
The following transactions took place in August 2023.
Aug 3 Sold goods on credit, to Naomi, list price $410
5 Sold goods on credit, $89, to Bwana
10 Naomi returned goods, list price $20
11 Naomi paid $423 in full settlement of the amount she owed at 1 August
19 Sold goods on credit, $180, to Bwana
22 Sold goods on credit, to Naomi, list price $230
27 Bwana returned goods, $19
29 Bwana paid $400
REQUIRED
(a) Prepare the sales journal for August 2023.
Total the journal and indicate the ledger account where the total would be posted.
Seok
Sales journal
Date Details $ $
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[4]
© UCLES 2023 0452/22/O/N/23
3
(b) Prepare the sales returns journal for August 2023.
Total the journal and indicate the ledger account where the total would be posted.
Seok
Sales returns journal
Date Details $ $
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[3]
(c) Prepare the account for Naomi for August 2023 as it would appear in the books of Seok.
Balance the account and bring down the balance at 1 September 2023.
Seok
Naomi account
Date Details $ Date Details $
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[6]
© UCLES 2023 0452/22/O/N/23 [Turn over
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On 31 August Seok decided to write off the amount owing by Siena as an irrecoverable debt.
REQUIRED
(d) Prepare Seok’s sales ledger control account for August 2023. Balance the account and bring
down the balance at 1 September 2023.
Seok
Sales ledger control account
Date Details $ Date Details $
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[7]
[Total: 20]
© UCLES 2023 0452/22/O/N/23
5
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© UCLES 2023 0452/22/O/N/23 [Turn over
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2 Sara owns a clothing factory. She sells the clothing to a small number of local shops.
She allows 30 days credit.
At 30 September 2023, Sara’s ledger account balances included the following.
$
Inventory at 1 October 2022
Raw materials 4 875
Work in progress 8 125
Finished goods 12 890
Purchases of raw materials 56 400
Wages
Machine operators 43 300
Factory supervisor 25 000
Delivery vehicle driver 14 250
Rates and insurance 29 600
General factory expenses 9 650
Factory machinery – at cost 80 000
Factory machinery – provision for depreciation 35 000
Trade receivables 27 000
Cash at bank 1 050
Additional information
1. Inventory at 30 September 2023
Raw material 5 110
Work in progress 7 365
Finished goods 13 725
2. At 30 September 2023 general factory expenses of $335 were unpaid.
3. Insurance of $8000 had been paid for the year July 2023 to June 2024.
4. Rates and insurance are to be apportioned equally between the factory and the office.
5. Factory machinery is depreciated at 25% per annum using the reducing balance method.
© UCLES 2023 0452/22/O/N/23
7
REQUIRED
(a) Prepare Sara’s manufacturing account for the year ended 30 September 2023.
Sara
Manufacturing Account for the year ended 30 September 2023
$ $
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[11]
© UCLES 2023 0452/22/O/N/23 [Turn over
8
(b) Prepare the current assets section of Sara’s statement of financial position at
30 September 2023.
Sara
Statement of financial position (current assets section) at 30 September 2023
$ $
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
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……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
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[3]
Sara’s factory supervisor is very efficient at running the factory.
REQUIRED
(c) State which accounting principle Sara is complying with by not recording any value for this
efficiency in her financial statements.
............................................................................................................................................. [1]
© UCLES 2023 0452/22/O/N/23
9
Sara has now been asked to supply a local drama school with theatrical costumes. The drama
school would place an order with Sara each month and would require 60 days credit.
REQUIRED
(d) Advise Sara whether she should start supplying the drama school with costumes. Justify your
answer by providing advantages and disadvantages of supplying the costumes.
...................................................................................................................................................
...................................................................................................................................................
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[Total: 20]
© UCLES 2023 0452/22/O/N/23 [Turn over
10
3 Lionel started trading on 1 July 2022. He paid $15 000 of his own personal money into the business
bank account. He did not keep full accounting records but has supplied the following information
at 30 June 2023.
1. Cash sales of $90 000 were made and paid into the bank. No other money was received.
Lionel marks up his goods by 50%.
2. Payments from the bank:
$
Purchase of motor vehicle (van) 8 000
Payments to credit suppliers 55 000
Wages 8 060
General expenses 1 140
Rent and insurance 5 585
Motor expenses 4 992
Cash drawn from bank 14 600
3. Purchases returns amounted to $3000.
4. Inventory at 30 June 2023 was valued at $4175.
5. One third of the motor expenses paid were for Lionel’s private car.
6. A full year’s depreciation at 25% is to be charged on the van using the reducing balance
method.
7. Lionel withdrew $1000 each month from the business cash, for personal use. The remaining
cash drawn from the bank was used to pay wages.
© UCLES 2023 0452/22/O/N/23
11
REQUIRED
(a) Prepare Lionel’s income statement for the year ended 30 June 2023.
Lionel
Income Statement for the year ended 30 June 2023
$ $
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
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……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
……………………………………………………………........... …………….... ……………....
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[9]
(b) Prepare Lionel’s capital account for the year ended 30 June 2023. Balance the account and
bring down the balance at 1 July 2023.
Lionel
Capital account
Date Details $ Date Details $
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
[5]
© UCLES 2023 0452/22/O/N/23 [Turn over
12
(c) State one reason why Lionel should keep double-entry bookkeeping records.
............................................................................................................................................. [1]
Lionel currently makes cash sales only. He would like to start selling on credit and is considering
whether to offer a 10% trade discount to regular customers or a 3% discount for payment within
21 days.
REQUIRED
(d) Advise Lionel whether he should offer the 10% trade discount or the 3% cash discount.
Justify your answer.
...................................................................................................................................................
...................................................................................................................................................
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............................................................................................................................................. [5]
[Total: 20]
© UCLES 2023 0452/22/O/N/23
13
4 Rachel is a trader.
The totals of Rachel’s trial balance prepared on 30 September 2023 did not agree and the
difference was placed in a suspense account.
Rachel later discovered the errors shown in the following table.
REQUIRED
(a) Complete the following table to show the entries required to correct each error. The first one
has been completed as an example.
Entries required to correct the error
Error Debit Credit
Account $ Account $
A payment for rent, $350, had been Rent
350 Wages 350
debited to the wages account. payable
The sales journal for September had ................... .............. ................... ..............
been overcast by $90.
................... .............. ................... ..............
Sales returns, $110, had been ................... .............. ................... ..............
recorded as purchases returns.
................... .............. ................... ..............
................... .............. ................... ..............
................... .............. ................... ..............
A payment for office expenses, $18, ................... .............. ................... ..............
had been recorded in the office
expenses account as $81. ................... .............. ................... ..............
A petty cash book payment, $29, to ................... .............. ................... ..............
Cole, a supplier, had been recorded
in the column for motor expenses. ................... .............. ................... ..............
[9]
© UCLES 2023 0452/22/O/N/23 [Turn over
14
(b) Prepare the suspense account. Include the balancing figure as the original difference on the
trial balance.
Rachel
Suspense account
Date Details $ Date Details $
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
.......... ....................................... ............... .......... ...................................... ...............
[5]
Rachel’s draft profit before the errors were discovered was $18 243.
REQUIRED
(c) Calculate Rachel’s profit for the year ended 30 September 2023 after the errors in the table
have been corrected.
...................................................................................................................................................
...................................................................................................................................................
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...................................................................................................................................................
...................................................................................................................................................
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............................................................................................................................................. [5]
(d) State why financial statements may still be reliable even if errors are present.
...................................................................................................................................................
............................................................................................................................................. [1]
[Total: 20]
© UCLES 2023 0452/22/O/N/23
15
5 Nala is a retailer who sells toys and games. All sales are on a cash basis and all purchases are on
credit.
She has provided the following information.
$
At 31 August 2023:
Inventory 6 265
Cash at bank 992
Trade payables 4 880
Capital 125 000
For the year to 31 August 2023:
Revenue 98 420
Purchases 78 130
Expenses 11 325
Inventory at 1 September 2022 was valued at $6175.
REQUIRED
(a) Complete the following table.
Ratio Working Answer (to 2
decimal places )
Gross margin
Profit margin
Return on capital
employed (ROCE)
Rate of inventory
turnover (times)
Liquid (acid test)
ratio
[11]
© UCLES 2023 0452/22/O/N/23 [Turn over
16
Nala increased her advertising expenses over the year to 31 August 2023 and sells at a lower
price than her nearest competitor. This has resulted in Nala selling her inventory faster than her
nearest competitor. Nala and her nearest competitor buy inventory at the same prices. Nala is
pleased with her results.
REQUIRED
(b) Explain why Nala should not be entirely pleased with her results.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [3]
Nala is planning to expand her business and to take out a bank loan to finance the expansion. The
loan would be repayable after five years.
REQUIRED
(c) Advise Nala whether she should obtain a bank loan to expand the business. Justify your
answer by providing two points for and two points against obtaining the bank loan to expand
the business.
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............................................................................................................................................. [5]
© UCLES 2023 0452/22/O/N/23
17
(d) State why Nala’s bank manager would be interested in her financial statements if she requests
the loan.
...................................................................................................................................................
............................................................................................................................................. [1]
[Total: 20]
© UCLES 2023 0452/22/O/N/23
18
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© UCLES 2023 0452/22/O/N/23
19
BLANK PAGE
© UCLES 2023 0452/22/O/N/23
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.
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 2023 0452/22/O/N/23
Cambridge IGCSE™
* 7 6 2 2 3 5 2 6 9 0 *
ACCOUNTING 0452/23
Paper 2 Structured Written Paper October/November 2023
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 24 pages. Any blank pages are indicated.
DC (PQ) 312328/3
© UCLES 2023 [Turn over
2
1 Shakir started trading in the year ended 31 August 2023 but did not keep proper books of account.
His assets and liabilities at 1 September 2023 are as follows.
$
Motor vehicle 9 500
Inventory 1 240
Cash at bank 1 682
Trade payables:
Latif 200
Harrison 237
REQUIRED
(a) (i) Prepare the journal for Shakir’s opening entries at 1 September 2023. A narrative is not
required.
Shakir
Journal
Date Details Debit Credit
$ $
............. ............................................................................. ................. .................
............. ............................................................................. ................. .................
............. ............................................................................. ................. .................
............. ............................................................................. ................. .................
............. ............................................................................. ................. .................
............. ............................................................................. ................. .................
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[3]
(ii) State two advantages of maintaining double entry records.
1 ........................................................................................................................................
...........................................................................................................................................
2 ........................................................................................................................................
...........................................................................................................................................
[2]
© UCLES 2023 0452/23/O/N/23
3
BLANK PAGE
© UCLES 2023 0452/23/O/N/23 [Turn over
4
During September 2023, the following transactions took place.
Sept 2 Paid rent, $420, by credit transfer
4 Withdrew cash, $350, from the bank for business use
7 Paid Latif, $194, by telephone transfer, in full settlement of the amount owing at
1 September 2023
10 Sold goods on credit, $195, to Sydney
12 Paid $161, cash, for wages
17 Cash sales, $290, were paid directly into the bank account
28 Received a cheque, $100, from Sydney
29 Paid $95 to Harrison, by electronic transfer, having deducted $5 cash discount from
the amount due
REQUIRED
(b) Prepare Shakir’s cash book on the page opposite.
Balance the cash book and bring down the balances at 1 October 2023. [11]
© UCLES 2023 0452/23/O/N/23
Shakir
Cash Book
© UCLES 2023
Date Details Discount Cash Bank Date Details Discount Cash Bank
allowed received
2023 $ $ $ 2023 $ $ $
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5
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0452/23/O/N/23
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[Turn over
6
Shakir received a bank statement dated 30 September 2023. The bank statement showed that
Shakir had $763 in the bank account. On comparing the bank statement to his cash book, Shakir
noted the following.
Bank charges, $35, were charged by the bank in September.
Cash Sales, $175, had been paid for by credit transfer but not recorded in the cash book.
The cheque received from Sydney had not yet been cleared by the bank.
The cash sales, $290, had been omitted from the bank statement in error.
REQUIRED
(c) Calculate the corrected bank balance.
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............................................................................................................................................. [4]
[Total: 20]
© UCLES 2023 0452/23/O/N/23
7
BLANK PAGE
© UCLES 2023 0452/23/O/N/23 [Turn over
8
2 Hilary owns a manufacturing business. She has provided the following information.
$
Inventory at 1 August 2022
Raw materials 9 100
Work in progress 21 357
Finished goods 24 235
For the year ended 31 July 2023
Revenue 457 250
Purchases of raw materials 110 000
Purchases returns of raw materials 2 200
Purchases of finished goods 23 500
Purchases returns of finished goods 4 700
Wages of factory operatives 91 665
Wages of factory supervisor 29 000
Wages of office supervisor 28 000
Heat, light and power 11 600
Rates and insurance 8 250
Factory repairs and renewals 5 125
Factory equipment – at cost 124 000
Factory equipment – provision for depreciation 35 500
Additional information
1 Inventory at 31 July 2023
Raw material 9 980
Work in progress 22 446
Finished goods 25 110
2 Heat, light and power is to be apportioned 4/5 to the factory and 1/5 to the office.
3 Rates and insurance is to be apportioned 3/5 to the factory and 2/5 to the office. Insurance of
$4440 has been paid for the year to 31 December 2023.
4 At 31 July 2023, a factory repair, $644, was unpaid and no adjustment had been made.
5 Factory equipment is depreciated at 25% per annum using the reducing balance method.
© UCLES 2023 0452/23/O/N/23
9
REQUIRED
(a) Prepare Hilary’s manufacturing account for the year ended 31 July 2023.
Hilary
Manufacturing Account for the year ended 31 July 2023
$ $
............................................................................................... ..................... .....................
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............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
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[11]
© UCLES 2023 0452/23/O/N/23 [Turn over
10
(b) Calculate Hilary’s gross profit for the year ended 31 July 2023.
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............................................................................................................................................. [4]
Hilary is considering stopping buying any finished goods for resale and instead increasing the
production at her factory.
REQUIRED
(c) Advise Hilary whether she should sell only production from her own factory and increase the
amount produced. Justify your answer by providing arguments for and against selling only
production from her own factory and increasing the amount produced.
...................................................................................................................................................
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............................................................................................................................................. [5]
[Total: 20]
© UCLES 2023 0452/23/O/N/23
11
3 Logan is a trader who sells goods on credit. His year end is 30 September. Logan has provided
the following information.
$
At 1 October 2022
Inventory 8 400
Trade receivables 7 500
Other receivables (rent prepaid) 820
For the year ended 30 September 2023
Rent charge for the year 4 940
Bank payments for rent 1 December 2022 2 460
1 June 2023 2 490
At 30 September 2023
Inventory 8 675
Trade receivables 8 700
Other receivables ?
Irrecoverable debts to be written off 325
The provision for doubtful debts is to be maintained at 4% of trade receivables.
REQUIRED
(a) Prepare the inventory account for the year ended 30 September 2023.
Logan
Inventory account
Date Details $ Date Details $
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
[3]
© UCLES 2023 0452/23/O/N/23 [Turn over
12
(b) Prepare the provision for doubtful debts account for the year ended 30 September 2023.
Balance the account at 30 September 2023 and bring down the balance at 1 October 2023.
Logan
Provision for doubtful debts account
Date Details $ Date Details $
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
[4]
(c) Prepare the rent payable account for the year ended 30 September 2023. Balance the
account at 30 September 2023 and bring down the balance at 1 October 2023.
Logan
Rent payable account
Date Details $ Date Details $
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
[6]
© UCLES 2023 0452/23/O/N/23
13
(d) State how:
(i) the prudence principle is applied to the valuation of Logan’s inventory
...........................................................................................................................................
..................................................................................................................................... [1]
(ii) the matching principle is applied when the rent payable account is prepared
...........................................................................................................................................
..................................................................................................................................... [1]
Logan is considering buying business premises instead of renting. He would request a long-term
bank loan to finance the purchase of the premises.
REQUIRED
(e) Advise Logan whether he should purchase business premises using a long-term bank loan.
Justify your answer with advantages and disadvantages of purchasing business premises
using a long-term bank loan.
...................................................................................................................................................
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............................................................................................................................................. [5]
[Total: 20]
© UCLES 2023 0452/23/O/N/23 [Turn over
14
4 Asia is a trader. She prepared her trial balance at 31 August 2023. The credit side totalled $273
more than the debit side. Asia placed the difference in a suspense account.
Asia later discovered the following errors.
1 A credit purchase, $112, from Jacques, had been entered twice in the purchases journal.
2 The wages account had been overcast by $300.
3 Cash received, $75, from Savanah, a trade receivable, had only been entered in the cash
book.
4 The total of the sales returns journal for August 2023 of $198, had been credited to both the
sales returns account and the purchases returns account.
5 A payment to Sophie, $93, had been recorded as $39 in Sophie’s account.
REQUIRED
(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.
© UCLES 2023 0452/23/O/N/23
15
Asia
Journal
Error Details Debit Credit
number $ $
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
................. ...................................................……........ .................…… .................……
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[11]
© UCLES 2023 0452/23/O/N/23 [Turn over
16
(b) Prepare the suspense account, including the original difference on the trial balance.
Asia
Suspense account
Date Details $ Date Details $
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
.......... ......................................... .............. .......... ......................................... ..............
[5]
REQUIRED
(c) Complete the following table by placing a tick (3) to show the effect of each error. The first
one has been completed as an example.
Error Error Gross profit Profit for No effect
number the year
+ – + –
1 A credit purchase, $112, from Jacques,
had been debited twice to the purchases 3 3
account.
2 The wages account had been overcast
by $300.
3 Cash received, $75 from Savanah, a
trade receivable, had only been entered
in the cash book.
4 The total of the sales returns journal for
August 2023, $198, had been credited to
both the sales returns account and the
purchases returns account.
5 A payment to Sophie, $93, had been
recorded as $39 in Sophie’s account.
[4]
[Total: 20]
© UCLES 2023 0452/23/O/N/23
17
BLANK PAGE
© UCLES 2023 0452/23/O/N/23 [Turn over
18
5 B Limited provides cleaning services to client offices and factories. The clients provide their own
cleaning materials. The trial balance of B Limited at 30 June 2023 was as follows.
B Limited
Trial Balance at 30 June 2023
Debit Credit
$ $
Revenue 135 040
Wages and salaries 72 000
Motor expenses 9 820
Insurance 11 040
General expenses 12 780
Motor vehicles at cost 42 000
Provision for depreciation of motor vehicles 16 500
Equipment at cost 5 000
Provision for depreciation of equipment 2 000
Trade receivables 1 640
Bank 19 950
Ordinary share capital 10 000
General reserve 2 000
Retained earnings 13 490
Dividend paid on ordinary shares 4 800
179 030 179 030
Additional information
1 Revenue of $9240 was received in advance.
2 The insurance charge for the 12 months to 31 December 2022 was $7200 and for the
12 months to 31 December 2023 it is $7440. On 1 January 2023 insurance was paid in full for
the 12 months to 31 December 2023.
3 Accrued general expenses at 30 June 2023 were $186.
4 Depreciation is to be charged on motor vehicles at 25% per annum using the reducing
balance method.
5 Depreciation on equipment is to be charged at 20% per annum using the straight line method.
6 No dividends were outstanding at 30 June 2023.
7 $1000 is to be transferred to the general reserve at 30 June 2023.
© UCLES 2023 0452/23/O/N/23
19
REQUIRED
(a) Prepare the income statement for B Limited for the year ended 30 June 2023.
B Limited
Income Statement for the year ended 30 June 2023
$ $
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
............................................................................................... ..................... .....................
[6]
© UCLES 2023 0452/23/O/N/23 [Turn over
20
(b) Prepare the statement of changes in equity for B Limited for the year ended 30 June 2023.
B Limited
Statement of Changes in Equity for the year ended 30 June 2023
Details Ordinary General Retained Total
Share reserve earnings
capital
$ $ $ $
On 1 July 2022 ..................... ..................... ..................... .....................
.......................................... ..................... ..................... ..................... .....................
.......................................... ..................... ..................... ..................... .....................
.......................................... ..................... ..................... ..................... .....................
On 30 June 2023 ..................... ..................... ..................... .....................
[5]
(c) Explain why:
(i) B Limited has no inventory
...........................................................................................................................................
..................................................................................................................................... [2]
(ii) B Limited does not require a provision for doubtful debts
...........................................................................................................................................
..................................................................................................................................... [2]
© UCLES 2023 0452/23/O/N/23
21
The directors of B Limited are also the shareholders. They plan to expand the company. They are
considering whether to issue debentures or ordinary shares.
REQUIRED
(d) Advise the directors whether they should issue debentures or ordinary shares. Justify your
answer.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
[Total: 20]
© UCLES 2023 0452/23/O/N/23
22
BLANK PAGE
© UCLES 2023 0452/23/O/N/23
23
BLANK PAGE
© UCLES 2023 0452/23/O/N/23
24
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 2023 0452/23/O/N/23
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