Cambridge IGCSE Accounting 0452 — 2006 May/June Paper 2 · Variant 1

Centre Number Candidate Number Name UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education ACCOUNTING 0452/02 Paper 2 May/June 2006 1 hour 30 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name on all the work you hand in. Write in dark blue or black pen. You may use a soft pencil for rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. You may use a calculator. Where layouts are to be completed, you may not need all the lines for your answer. The businesses mentioned in this Question Paper are fictitious. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. For Examiner’s Use 1 2 3 4 5 Total This document consists of 11 printed pages and 1 blank page. IB06 06_0452_02/5RP  UCLES 2006 [Turn over www.theallpapers.com

2 © UCLES 2006 0452/02/M/J/06 For Examiner's Use 1 (a) In which book of prime (original) entry should discount allowed and discount received be recorded? [1] (b) Which accounting principle is being applied when an adjustment is made for a prepaid expense? [1] (c) In which section of the balance sheet will a provision for depreciation be shown? [1] (d) Explain what is meant by an error of omission. [1] (e) In the following table, place a tick (
) under the correct heading for each item. Income Expense Discount received Carriage outwards Interest on bank deposit Bad debts written off [4] (f) In a partnership Appropriation Account, name two items which may be added to, or deducted from, net profit before the partners’ share of profit is calculated. (i) (ii) [2] www.theallpapers.com

3 © UCLES 2006 0452/02/M/J/06 [Turn over For Examiner's Use (g) State what is meant by working capital. [2] (h) Frank maintains his petty cash on the imprest system. He keeps a balance of $200. At the end of April the balance in hand is $65 and there are vouchers for expenditure of $125. (i) How much will Frank draw from the bank to restore his petty cash balance? [1] (ii) Suggest one reason for the difference in the petty cash balance. [2] (i) (i) State what is meant by the quick ratio. [2] (ii) Explain why this is a useful accounting ratio. [2] [Total: 19] www.theallpapers.com

4 © UCLES 2006 0452/02/M/J/06 For Examiner's Use 2 Loretti started a business on 1 April 2006. On that day he introduced the following into the business: Stock $12 000, office furniture $1500, and cash $2500, of which $200 was kept on hand for petty cash and the balance, $2300, was paid into a business bank account. On the same day his cousin Hassan paid $3000 into the business bank account as a loan to the business. REQUIRED (a) Show the opening journal entry to record these transactions. A narrative is not required. Loretti Journal Dr $ Cr $ [8] Loretti decided to keep his petty cash book on the imprest system. In the month of April 2006 he paid the following expenses from his cash balance. $ 3 April Stationery 35 8 April Refreshments 40 13 April Cleaning 50 20 April Travelling 20 On 1 May he withdrew the appropriate amount from the bank to restore the imprest amount. REQUIRED (b) Write up Loretti’s petty cash book, on the page opposite, for the month of April and show the amount transferred from the bank on 1 May. www.theallpapers.com

5 © UCLES 2006 0452/02/M/J/06 [Turn over For Examiner's Use $ $ $ $ Total paid $ Details Date Total received $ Details Loretti – Petty Cash Book Date [8] [Total: 16] www.theallpapers.com

6 © UCLES 2006 0452/02/M/J/06 For Examiner's Use 3 Hilota has a business supplying spare parts for cars. His financial year ends on 31 March. At 31 March 2006 his accounts showed the following balances: $ Fixed assets at cost 22 000 Provision for depreciation 9 300 Stock (at 1 April 2005) 3 200 Balance at bank (Dr) 1 550 Sales 56 500 Sales returns 500 Purchases 34 200 Carriage outwards 950 Rent 4 000 Wages 7 200 General expenses 2 600 Capital 20 000 Drawings 9 600 REQUIRED (a) Prepare Hilota’s Trial Balance at 31 March 2006. Hilota Trial Balance at 31 March 2006 Dr $ Cr $ [12] www.theallpapers.com

7 © UCLES 2006 0452/02/M/J/06 [Turn over For Examiner's Use Hilota has stock on hand at 31 March 2006 amounting to $3800. REQUIRED (b) From the information above and in part (a), prepare Hilota’s Trading Account for the year ended 31 March 2006. Hilota Trading Account for the year ended 31 March 2006 [7] (c) (i) Calculate Hilota’s gross profit percentage for the year, to two decimal places. [3] www.theallpapers.com

8 © UCLES 2006 0452/02/M/J/06 For Examiner's Use (ii) On the basis that Hilota had no sales returns in the period, calculate his revised gross profit percentage to two decimal places. [3] [Total: 25] www.theallpapers.com

9 © UCLES 2006 0452/02/M/J/06 [Turn over For Examiner's Use 4 (a) Complete the following sentence: “Stock is valued at the of and .” [3] Rudi buys and sells engineering parts. The following information about his stock is available. Part number Units in stock at 30 April 2006 Cost per unit $ Selling price per unit $ A005 250 1.30 1.95 B017 600 2.00 1.80 C060 150 2.50 3.50 The stock of part C060 has been delivered in three consignments. Carriage inwards has been charged at $25 per consignment. REQUIRED (b) Compute the value of stock to be shown in Rudi’s Balance Sheet at 30 April 2006. [12] (c) State the accounting principle applied in part (b) above. [2] [Total: 17] www.theallpapers.com

10 © UCLES 2006 0452/02/M/J/06 For Examiner's Use 5 Rajit has a business making furniture. After preparing his Trading and Profit and Loss Account for the year ended 31 December 2005, a summary of his trial balance shows the following items: $ Fixed assets at cost 62 500 Provision for depreciation 12 500 Current assets 47 000 Current liabilities 19 000 Capital account at 1 January 2005 74 000 Drawings 9 000 Profit for the year 13 000 REQUIRED (a) Prepare Rajit’s Balance Sheet at 31 December 2005. Rajit Balance Sheet at 31 December 2005 [10] www.theallpapers.com

11 © UCLES 2006 0452/02/M/J/06 For Examiner's Use (b) Calculate to two decimal places Rajit’s return on his capital employed. Use the capital at 1 January 2005. [3] [Total: 13] www.theallpapers.com

12 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. University of Cambridge International Examinations is part of the University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0452/02/M/J/06 BLANK PAGE www.theallpapers.com

UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the May/June 2006 question paper 0452 ACCOUNTING 0452/02 Paper 2, maximum raw mark 90 These mark schemes are published as an aid to teachers and students, to indicate the requirements of the examination. They show the basis on which Examiners were initially instructed to award marks. They do not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. Any substantial changes to the mark scheme that arose from these discussions will be recorded in the published Report on the Examination. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the Report on the Examination. The minimum marks in these components needed for various grades were previously published with these mark schemes, but are now instead included in the Report on the Examination for this session. • CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the May/June 2006 question papers for most IGCSE and GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses. www.theallpapers.com

Page 1 Mark Scheme Syllabus Paper IGCSE – May/June 2006 0452 02 © University of Cambridge International Examinations 2006 Question Number Question (including any source details) Part Mark 1 (a) Cash book [1] (b) Matching [1] (c) Fixed assets [1] (d) A transaction completely omitted from the books e.g. cash sales not recorded [1] (e) Income Expense Discount received
(1) Carriage outwards
(1) Interest on bank deposit
(1) Bad debt written off
(1) [4] (f) Interest on capital, partners salaries, interest on drawings (any two) [2] (g) Current assets less current liabilities [2] (h) (i) $200 less $65 = $135 [1] (ii) Missing voucher or $10 lost/pilfered from cash box [2] (i) (i) Current assets less stock/current liabilities [2] (ii) Shows whether the business has sufficient liquid assets to meet its current liabilities [2] Total marks [19] www.theallpapers.com

Page 2 Mark Scheme Syllabus Paper IGCSE – May/June 2006 0452 02 © University of Cambridge International Examinations 2006 Question Number Question (including any source details) Part Mark 2 (a) Loretti Journal $ $ Office furniture 1 500 (1) Stock 12 000 (1) Bank 5 300 (2) Cash 200 (1) Loan – Hassan 3 000 (1) Capital – Loretti 16 000 (2) 19 000 19 000 [8] See next page for 2 (b) www.theallpapers.com

Page 3 Mark Scheme Syllabus Paper IGCSE – May/June 2006 0452 02 © University of Cambridge International Examinations 2006 www.theallpapers.com

Page 4 Mark Scheme Syllabus Paper IGCSE – May/June 2006 0452 02 © University of Cambridge International Examinations 2006 Question Number Question (including any source details) Part Mark 3 (a) Hilota – Trial balance at 31 March 2006 $ $ Fixed assets 22 000 (1) Provision for depreciation 9 300 (1) Stock at 1 April 2005 3 200 (1) Balance at bank 1 550 (1) Sales 56 500 (1) Sales returns 500 (1) Purchases 34 200 (1) Carriage outwards 950 (1) Rent 4 000 Wages 7 200 (1) General expenses 2 600 Capital 20 000 (1) Drawings 9 600 (1) Totals 85 800 85 800 (1) to agree total [12] (b) Hilota Trading account for the year ended 31 March 2006 $ $ Sales 56 500 (1) less sales returns 500 (1) 56 000 Opening stock 3 200 (1) Purchases 34 200 (1) 37 400 less closing stock 3 800 (1) Cost of goods sold 33 600 (1) Gross profit 22 400 (1) OF [7] (c) Gross profit percentage = Gross profit/net sales = 22 400 (1)(OF)/56 000 (1) x 100 = 40.00% (1) [3] (d) If no sales returns, use gross sales: Gross profit percentage = 22 900 (1)(OF)/56 500 (1) x 100 = 40.43% (1) [3] Total marks [25] www.theallpapers.com

Page 5 Mark Scheme Syllabus Paper IGCSE – May/June 2006 0452 02 © University of Cambridge International Examinations 2006 Question Number Question (including any source details) Part Mark 4 (a) Stock is valued at the lower (1) of cost (1) and net realisable value (1) [3] (b) Rudi- stock valuation $ $ Part A005: 250 (1) units @ $1.30 per unit (1) 325.00 (1) Part B017: 600 (1) units @ $1.80 per unit (2) 1 080.00 (1) Part C060: 150 (1) units @ $2.50 per unit (1) 375.00 (1) add: carriage inwards 3 x $25 = 75.00 (1) 450.00 Total value of stock 1 855.00 (1) [12] (c) Prudence [2] Total marks [17] 5 (a) Rajit Summary Balance Sheet at 31 December 2005 Cost Provision for depreciation Net book value $ $ $ Fixed assets 62 500 (1) 12 500 (1) 50 000 (1) Current assets 47 000 (1) less current liabilities 19 000 (1) Net current assets/working capital 28 000 (1) 78 000 Financed by Capital at 1 January 2005 74 000 (1) Add Profit for the year 13 000 (1) 87 000 less drawings 9 000 (1) 78 000 (1) to agree balance [10] (b) Return on capital employed = profit/opening capital = 13 000 (1)/74 000 (1) = 17.57% (1) [3] Total marks [13] www.theallpapers.com