Cambridge IGCSE Accounting 0452 — 2018 Oct/Nov Paper 1 · Variant 2

This document consists of 22 printed pages and 2 blank pages. DC (RCL/GO) 156837/3 © UCLES 2018 [Turn over Cambridge International Examinations Cambridge International General Certificate of Secondary Education ACCOUNTING 0452/12 Paper 1 October/November 2018 1 hour 45 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 an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. 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. * 3 7 0 3 5 8 4 6 1 8 *

2 0452/12/O/N/18 © UCLES 2018 There are 10 parts to Question 1. For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Choose the one you consider correct and place a tick (ü) in the box to indicate the correct answer. 1 (a) Profit is only recorded in the financial statements when legal title passes between buyer and seller. Which accounting principle is being applied? A consistency B going concern C prudence D realisation [1] (b) David and Bashir are in partnership. David made a loan to the partnership. What is the double entry to record this transaction? account debited account credited A bank David capital B bank David loan C David loan David capital D David loan David current [1] (c) Which statement about debentures is not correct? A Debentures have a fixed rate of interest. B Debenture interest must be paid regardless of profit made. C Debentures are a non-current liability. D Debentures carry voting rights. [1]

3 0452/12/O/N/18 © UCLES 2018 [Turn over (d) Marvin provided the following information. $ revenue for the year 10 000 percentage of gross profit to revenue 40% percentage of profit to revenue 15% What were the expenses for the year? A $1500 B $2500 C $6000 D $8500 [1] (e) Matthias provided the following summary from his financial statements. $ Non-current assets 67 400 Current assets 48 700 Non-current liabilities 29 100 Current liabilities 8 000 What was the capital employed? A $11 600 B $40 700 C $79 000 D $108 100 [1] (f) In Alice’s books an invoice received from Cait was credited to Kate’s account. Which type of error has been made? A commission B compensating C original entry D principle [1]

4 0452/12/O/N/18 © UCLES 2018 (g) What does the term ‘limited liability’ mean in relation to a company? A A company can only issue a limited number of shares. B A company can only pay a fixed amount of dividends. C Shareholders are not at risk of losing personal possessions. D Shareholders’ liability is not limited to the amount paid for their shares. [1] (h) Pia sells two products, X and Y. She provided the following information about her inventory at the year end. Product Cost $ Selling price $ X 1750 1850 Y 1924 1858 What was the total value of inventory to be included in the financial statements? A $2608 B $2674 C $2708 D $2774 [1] (i) What is the role of a book-keeper? A to advise on business plans B to analyse the profit or loss for the period C to maintain records of financial transactions D to prepare financial statements [1] (j) Baljit paid rent, $2700, in advance for the three months ended 31 March 2018. He adjusted his financial statements for the year ended 31 January 2018 for rent prepaid. Which effect did this have on the total expenses for the year? A decrease by $900 B decrease by $1800 C increase by $900 D increase by $1800 [1] [Total: 10]

5 0452/12/O/N/18 © UCLES 2018 [Turn over 2 Jennifer started in business on 1 June 2018 with the following assets and liabilities. $ Delivery van 15 000 Fixtures and fittings 12 700 Inventory 16 200 Cash 11 500 Loan from Amina 15 000 REQUIRED (a) Prepare Jennifer’s opening journal entry on 1 June 2018. A narrative is required. Jennifer Journal Date Debit $ Credit $ ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… ………… …………………………………………………………… ………… ………… [5] (b) State the purpose of a narrative in a journal entry. … … [1] (c) State two uses of the general journal in addition to the recording of opening entries of a business. 1 … … 2 … … [2]

6 0452/12/O/N/18 © UCLES 2018 Jennifer’s cousin, John, is also a trader. He started his business on 1 October 2018. He introduced capital of $30 000, of which he paid $25 000 into the business bank account. The table shows the account balances following transactions that have taken place. 1 October 2018 2 October 2018 3 October 2018 4 October 2018 $ $ $ $ Assets Office equipment 11 500 11 500 11 500 Motor vehicle 10 000 10 000 Bank 25 000 25 000 25 000 25 000 Cash 15 000 13 500 13 500 12 500 Liabilities Payables 10 000 10 000 Capital 30 000 30 000 30 000 29 000 REQUIRED (d) State for each date the transaction which has taken place. The first transaction has been completed as an example. 1 October 2018 John introduced capital of which some was banked and some kept in cash. … … 2 October 2018 … … 3 October 2018 … … 4 October 2018 … … [6]

7 0452/12/O/N/18 © UCLES 2018 [Turn over (e) State the accounting principle which John applied when recording all these transactions. … [1] (f) State the meaning of iii(i) assets … … ii(ii) liabilities … … (iii) capital … … [3] (g) Explain what is meant by a ‘statement of financial position’. … … … … [2] [Total: 20]

8 0452/12/O/N/18 © UCLES 2018 3 Saul prepared the following trial balance at 31 March 2018 which contains errors. $ $ Motor vehicle at net book value 138 000 Revenue 109 000 Purchases 180 230 Inventory 1 5 100 Bank overdraft 113 900 Cash in hand 111 500 Drawings 16 500 Discount allowed 11 720 Other operating expenses 9 350 Wages and salaries 116 500 Capital 135 000 Difference 160 700 188 250 188 250 REQUIRED (a) Prepare a corrected trial balance at 31 March 2018. Saul Corrected Trial Balance at 31 March 2018 Debit $ Credit $ Motor vehicle at net book value Revenue Purchases Inventory Bank overdraft Cash in hand Drawings Discount allowed Other operating expenses Wages and salaries Capital [7]

9 0452/12/O/N/18 © UCLES 2018 [Turn over From 1 April 2018, Saul decided to make sales and purchases on credit. He maintains a full set of accounting records and prepares control accounts at the end of each month. REQUIRED (b) State what is meant by a ‘book of prime (original) entry’. … … [1] (c) Complete the table to name the book of prime (original) entry which Saul uses to obtain information when preparing his control accounts. The first one has been completed as an example. Book of prime (original) entry Purchases Purchases Journal Cash and cheques received from credit customers Bad debts written off Discount received from credit suppliers Sales returns Interest charged by credit suppliers [5]

10 0452/12/O/N/18 © UCLES 2018 Saul provided the following information for the month ended 30 June 2018. 2018 $ June 1 Sales ledger debit balances 16 420 Sales ledger credit balances 390 30 Credit sales 39 800 Sales returns 2 700 Cash and cheques received from credit customers 36 350 Bad debt written off 340 Sales ledger balance set off against purchases ledger balance 760 Discount allowed ? Interest charged to credit customers on overdue accounts 175 July 1 Sales ledger debit balances 15 485 Sales ledger credit balances 200

11 0452/12/O/N/18 © UCLES 2018 [Turn over REQUIRED (d) Prepare the sales ledger control account for the month of June 2018. Insert the figure for discount allowed. Balance the account and bring down the balances on 1 July 2018. Saul Sales ledger control account Date Details $ Date Details $ …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… …… ………………………… ………… [10] (e) State two benefits of maintaining a sales ledger control account. 1 … … 2 … … [2] [Total: 25]

12 0452/12/O/N/18 © UCLES 2018 4 Most businesses have receipts and payments which include both capital and revenue items. REQUIRED (a) Complete the table by inserting a tick (ü) to show how each item should be classified. The first one has been completed as an example. Capital expenditure Revenue expenditure Capital receipt Revenue receipt Motor vehicle repairs ü Legal fees on purchase of office building Purchase of goods for resale Insurance of plant and equipment Proceeds of sale of fixtures at net book value Discount received from supplier [5] Ahmed is a wholesaler. He provided the following draft income statement for the year ended 30 September 2018, which contains errors. Ahmed Draft Income Statement for the year ended 30 September 2018 $ $ Revenue 75 000 Proceeds from sale of motor vehicle 52 600 77 600 Opening inventory 58 500 Purchases 52 200 60 700 Closing inventory 5(7 300) Cost of sales (53 400) Gross profit 24 200 Expenses (12 900) Profit for the year 11 300 Additional information 1 Purchases included $15 000 for new plant and equipment. 2 The motor vehicle was sold at net book value. No entry had been made in the motor vehicles account.

13 0452/12/O/N/18 © UCLES 2018 [Turn over REQUIRED (b) Complete the following table by inserting a tick (ü) to show the effect of correcting the errors on each of the following items. Increase Decrease Plant and equipment Motor vehicle [2] (c) Complete the statement to calculate the corrected gross profit for the year ended 30 September 2018. Ahmed Statement of corrected gross profit for the year ended 30 September 2018 Increase $ Decrease $ $ Draft gross profit 24 200 Corrected gross profit [3] Ahmed’s brother, Khalid, also has a business. His financial year ends on 31 March. Khalid provided the following information. 1 April 2017: $ Office equipment: cost 9000 provision for depreciation 3600 Khalid provides depreciation on the office equipment at 20% per annum on the straight line (equal instalment) basis. A full year’s depreciation is charged in the year of purchase and none in the year of sale. On 31 March 2018 Khalid sold office equipment which had been purchased on 1 April 2016 at a cost of $1500. Sales proceeds, $1100, were received by cheque. On the same day Khalid purchased new office equipment, costing $2500.

14 0452/12/O/N/18 © UCLES 2018 REQUIRED (d) Prepare the provision for depreciation account for office equipment for the year ended 31 March 2018. Balance the account and bring down the balance on 1 April 2018. Khalid Provision for depreciation account for office equipment Date ……… ……… ……… ……… ……… ……… ……… Details ………………………… ………………………… ………………………… ………………………… ………………………… ………………………… ………………………… $ ………… ………… ………… ………… ………… ………… ………… Date ……… ……… ……… ……… ……… ……… ……… Details ………………………… ………………………… ………………………… ………………………… ………………………… ………………………… ………………………… $ ………… ………… ………… ………… ………… ………… ………… [5] (e) Prepare the office equipment disposal account. Khalid Office equipment disposal account Date ……… ……… ……… ……… ……… Details ………………………… ………………………… ………………………… ………………………… ………………………… $ ………… ………… ………… ………… ………… Date ……… ……… ……… ……… ……… Details ………………………… ………………………… ………………………… ………………………… ………………………… $ ………… ………… ………… ………… ………… [4]

15 0452/12/O/N/18 © UCLES 2018 [Turn over (f) Prepare an extract from Khalid’s statement of financial position at 31 March 2018 to show the office equipment. Khalid Extract from Statement of Financial Position at 31 March 2018 … … … … … [3] (g) Name the accounting principle applied when charging depreciation. … [1] [Total: 23]

16 0452/12/O/N/18 © UCLES 2018 5 TP Limited manufactures toys. REQUIRED (a) Complete the table by inserting a tick (ü) to show how each type of manufacturing cost should be classified. The first one has been completed as an example. Direct material Direct labour Factory overhead Purchase of plastic toy parts ü Rent of factory Wages of machine operator Purchase of packaging Wages of supervisor [4] (b) State how prime cost is calculated. … … [2] TP Limited provided the following information. $ Inventory on 1 June 2017 Raw materials 1 18 000 Work in progress 1 15 750 Finished goods 1 27 200 For the year ended 31 May 2018 Purchases of raw material 323 000 Factory wages 1 98 000 Factory overheads 125 000 Purchases of finished goods 1128 900 Revenue 836 000 Inventory on 31 May 2018 Raw materials 122 100 Work in progress 11 6 820 Finished goods 130 100

17 0452/12/O/N/18 © UCLES 2018 [Turn over REQUIRED (c) Prepare the manufacturing account for the year ended 31 May 2018. TP Limited Manufacturing Account for the year ended 31 May 2018 $ $ ………………………………………………………………………… ………… ………… ………………………………………………………………………… ………… ………… ………………………………………………………………………… ………… ………… ………………………………………………………………………… ………… ………… ………………………………………………………………………… ………… ………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… ………………………………………………………………………… …………… …………… [6]

18 0452/12/O/N/18 © UCLES 2018 (d) Prepare the income statement (trading account section) for the year ended 31 May 2018. TP Limited Income Statement (Trading Account section) for the year ended 31 May 2018 $ $ ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… ……………………………………………………………………… …………… …………… [4] (e) State two reasons why TP Limited purchases finished goods. 1 … … 2 … …[2]

19 0452/12/O/N/18 © UCLES 2018 [Turn over (f) Name the accounting principle applied when valuing inventory. … [1] TP Limited’s inventory turnover was 19.78 times for the year ended 31 May 2018 and 25.24 times for the previous year. REQUIRED (g) Suggest two reasons why the rate of inventory turnover is lower than the previous year. 1 … … 2 … … [2] The directors of TP Limited compared their rate of inventory turnover with that of GH Limited, a bakery. GH Limited has a rate of inventory turnover of 53.41 times. REQUIRED (h) Suggest two reasons why GH Limited has a higher rate of inventory turnover than TP Limited. 1 … … 2 … … [2] [Total: 23]

20 0452/12/O/N/18 © UCLES 2018 6 CC Club provides sporting facilities and also runs a café for its members. The receipts and payments account for the year ended 30 September 2018 is as follows. CC Club Receipts and Payments Account for the year ended 30 September 2018 $ $ 2017 Oct 1 Balance b/d 13 125 2018 Sep 30 Rent 14 000 2018 Purchases of food for café 12 300 Sep 30 Subscriptions 24 500 General expenses 16 870 Receipts from café 14 145 Purchase of sports Competition entry fees 11 550 equipment 17 600 Wages of club staff 16 900 Wages of café staff 11 800 Competition prizes 1 1500 Balance c/d 13 350 43 320 43 320 Oct 1 Balance b/d 13 350 Additional information. 1 Café inventory $ 1 October 2017 200 30 September 2018 185 2 Subscriptions in arrears $ 1 October 2017 750 30 September 2018 650 3 Sports equipment was valued at $37 400 on 1 October 2017 and $36 750 on 30 September 2018. 4 At 30 September 2018, rent paid in advance was $500 and general expenses owing were $320.

21 0452/12/O/N/18 © UCLES 2018 [Turn over REQUIRED (a) Calculate the profit of the club café for the year ended 30 September 2018. … … … … … … … … [4] (b) Prepare CC Club’s income and expenditure account for the year ended 30 September 2018. CC Club Income and Expenditure Account for the year ended 30 September 2018 $ $ ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… ……………………………………………………………………… ………… ………… [9]

22 0452/12/O/N/18 © UCLES 2018 (c) State three differences between a receipts and payments account and an income and expenditure account. 1 … … … 2 … … … 3 … … … [3] CC Club wishes to improve the profit earned by the café. REQUIRED (d) Suggest three ways the club could improve its café profit. 1 … … 2 … … 3 … … [3] [Total: 19]

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This document consists of 19 printed pages. © UCLES 2018 [Turn over Cambridge Assessment International Education Cambridge International General Certificate of Secondary Education ACCOUNTING 0452/12 Paper 1 October/November 2018 MARK SCHEME Maximum Mark: 120 Published This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge International will not enter into discussions about these mark schemes. Cambridge International is publishing the mark schemes for the October/November 2018 series for most Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level components.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 2 of 19 Generic Marking Principles These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these marking principles. GENERIC MARKING PRINCIPLE 1: Marks must be awarded in line with: • the specific content of the mark scheme or the generic level descriptors for the question • the specific skills defined in the mark scheme or in the generic level descriptors for the question • the standard of response required by a candidate as exemplified by the standardisation scripts. GENERIC MARKING PRINCIPLE 2: Marks awarded are always whole marks (not half marks, or other fractions). GENERIC MARKING PRINCIPLE 3: Marks must be awarded positively: • marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate • marks are awarded when candidates clearly demonstrate what they know and can do • marks are not deducted for errors • marks are not deducted for omissions • answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the question as indicated by the mark scheme. The meaning, however, should be unambiguous. GENERIC MARKING PRINCIPLE 4: Rules must be applied consistently e.g. in situations where candidates have not followed instructions or in the application of generic level descriptors.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 3 of 19 GENERIC MARKING PRINCIPLE 5: Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may be limited according to the quality of the candidate responses seen). GENERIC MARKING PRINCIPLE 6: Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or grade descriptors in mind.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 4 of 19 Question Answer Marks Glossary (d) A 10 000 × 0.15 B 10 000 × (0.4–0.15) C 10 000 × (1–0.4) D 10 000 × (1–0.15) (e) A 48 700–29 100–8000 B 48 700–8000 C 67 400+48 700–29 100–8000 D 67 400+48 700–8000 (h) A 1750+858 B 1750+924 C 1850+858 D 1850+924 1(a) D 1 1(b) B 1 1(c) D 1 1(d) B 1 1(e) D 1 1(f) A 1 1(g) C 1 1(h) A 1 1(i) C 1 1(j) B 1

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 5 of 19 Question Answer Marks 2(a) Jennifer Journal Date 2018 Debit $ Credit $ Jun 1 Delivery van/Motor vehicles 15 000 } (1) both Fixtures and fittings 2 700 Inventory 6 200 } (1) both Cash 1 500 Loan from Amina 5 000 (1) Capital 20 400 (1) 25 400 25 400 Assets, liabilities and capital at the start of the business (1) 5 2(b) Useful because it may be necessary to recall the reasons/it can involve non-regular transactions/can contain a reference to any prime documents. (1 mark for any acceptable purpose) 1

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 6 of 19 Question Answer Marks 2(c) Purchase/sale of non-current assets on credit Non-regular transactions not recorded in any other book of prime entry Correction of errors Year end transfers (1 mark per use – maximum 2) 2 2(d) 2 October 2018 Purchased office equipment (1), for cash (1) 3 October 2018 Purchased motor vehicle (1), on credit (1) 4 October 2018 Took drawings (1), in cash (1) 6 2(e) Duality 1 2(f)(i) What the business owns and what is owed to the business 1 2(f)(ii) What the business owes 1 2(f)(iii) Resources provided by the owner of the business/what the business owes to the owner of the business 1 2(g) Statement of the assets, liabilities, capital (1) of the business on a certain date (1) 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 7 of 19 Question Answer Marks 3(a) Saul Corrected Trial Balance at 31 March 2018 Debit $ Credit $ Motor vehicle at net book value 38 000 Revenue 109 000 (1) Purchases 80 230 (1) Inventory 5 100 (1) Bank overdraft 13 900 (1) Cash in hand 1 500 Drawings 6 500 (1) Discount allowed 720 (1) Other operating expenses 9 350 Wages and salaries 16 500 Capital 35 000 1 OF if matching totals 157 900 157 900 7 3(b) A book in which transactions are recorded before being entered in the ledger. Or books used to record information from source documents 1

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 8 of 19 Question Answer Marks 3(c) Book of prime (original) entry Purchases Purchases journal Cash and cheques received from credit customers Cash book (1) Bad debts written off (General) journal (1) Discount received from credit suppliers Cash book (1) Sales returns Sales returns journal (1) Interest charged by credit suppliers (General) journal (1) 5

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 9 of 19 Question Answer Marks 3(d) Saul Sales ledger control account Date 2018 Details $ Date 2018 Details $ Jun 1 Balance b/d* 16 420 Jun 1 Balance b/d* 390 Jun 30 Sales (1) 39 800 Jun 30 Sales Returns (1) 2 700 Interest charged (1) 175 Bank/cash (1) 36 350 Balance c/d 200 Discount allowed (1) OF 570 Bad debt (1) 340 Contra/PLCA/set off (1) 760 Balance c/d 15 485 56 595 56 595 Jul 1 Balance b/d (1) 15 485 Jul 1 Balance b/d (1) 200 * 1 mark for both opening balances. 10

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 10 of 19 Question Answer Marks 3(e) Helps to prove the arithmetical accuracy of sales ledger Helps to reduce fraud Can (assist in) locating errors, allow help, identify errors Easy access to total receivables figure Quicker production of financial statements Provides a summary of transactions relating to trade receivables (1 mark per benefit, maximum 2) 2 Question Answer Marks 4(a) Capital expenditure Revenue expenditure Capital receipt Revenue receipt Motor vehicle repairs 9 Legal fees on purchase of office building 9 (1) Purchase of goods for resale 9 (1) Insurance of plant and equipment 9 (1) Proceeds of sale of fixtures at net book value 9 (1) Discount received from supplier 9 (1) 5

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 11 of 19 Question Answer Marks 4(b) Increase Decrease Plant and equipment 9 (1) Motor vehicle 9 (1) 2 4(c) Ahmed Statement of corrected gross profit for the year ended 30 September 2018 Increase $ Decrease $ $ Draft gross profit 24 200 Disposal proceeds 2 600 (1) Capital expenditure 15 000 (1) 15 000 2 600 12 400 Corrected gross profit 36 600 (1) OF 3

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 12 of 19 Question Answer Marks 4(d) Khalid Provision for depreciation account for office equipment Date 2018 Mar 31 Details Disposal (1) Balance c/d $ 300 5 300 _ ___ 5 600 Date 2017 Apr 1 2018 Mar 31 Apr1 Details Balance b/d Income Statement * Balance b/d (1) OF $ 3 600 2 000 5 600 5 300 * 2 500 × 0.2 = 500 (1) * (9 000 – 1 500) × 0.2 = 1 500 (1) + 1 dates 5 4(e) Khalid Office equipment disposal account Date 2018 Mar 31 Details Office equipment (1) $ 1 500 _ ___ 1 500 Date 2018 Mar 31 Details Provision for depreciation Bank Income Statement (1) OF (1) (1) OF $ 300 1 100 100 1 500 4

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 13 of 19 Question Answer Marks 4(f) Khalid Extract from Statement of Financial Position at 31 March 2018 $ $ $ Cost Accumulated depreciation Net book value Office equipment 10 000 (1) 5 300 (1)OF 4 700 (1)OF 3 4(g) Accruals (matching), Prudence 1 Question Answer Marks 5(a) Direct material Direct labour Factory overhead Purchase of plastic toy parts 9 Rent of factory 9 (1) Wages of machine operator 9 (1) Purchase of packaging 9 (1) Wages of supervisor 9 (1) 4 5(b) Total of direct materials plus direct labour (1) plus direct expenses/royalties (1) 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 14 of 19 Question Answer Marks 5(c) TP Limited Manufacturing Account for the year ended 31 May 2018 $ $ Cost of raw materials used Opening inventory 18 000 Purchases 323 000 341 000 Less: Closing inventory 22 100 318 900 (1) Factory wages 98 000 (1) Prime cost 416 900 (1) Factory overheads 125 000 (1) 541 900 Opening work in progress 5 750 547 650 Closing work in progress (1) (6 820) Production cost of goods completed 540 830 (1)OF 6

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 15 of 19 Question Answer Marks 5(d) TP Limited Income Statement (Trading Account section) for the year ended 31 May 2018 * for both inventories $ $ Revenue 836 000 Less: cost of sales Opening inventory finished goods 27 200 * Production cost 540 830 (1) OF Purchases of finished goods 28 900 (1) 596 930 Closing inventory finished goods (30 100) *(1) (566 830) Gross profit 269 170 (1) OF 4

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 16 of 19 Question Answer Marks 5(e) Cheaper to buy than make Cannot manufacture those particular items themselves Production cannot keep up with demand 1 mark per point – maximum 2 2 5(f) Prudence or Accruals (matching) 1 5(g) Lower sales activity/no reference to selling price Higher levels of inventory Cost of sales is decreased Cheaper suppliers (or other acceptable reason) 1 mark per point - maximum 2 2 5(h) Different type of goods Food is a necessity Food sells quicker than toys Food must be sold more quickly Food might spoil (or other acceptable reason) 1 mark per point - maximum 2 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 17 of 19 Question Answer Marks 6(a) $ $ Café receipts 4 145 (1) Less: cost of sales Opening inventory 200 Purchases 2 300 2 500 Closing inventory (185) (2 315) (1) Gross profit 1 830 Wages (1 800) (1) Café profit 30 (1)OF Any format acceptable 4

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 18 of 19 Question Answer Marks 6(b) CC Club Income and Expenditure Account for the year ended 30 September 2018 $ $ Subscriptions 24 500–750 (1) +650 (1) 24 400 Café profit 30 (1) OF Competition entry fees 1 550 Cost of prizes (500) 1 050 (1) 25 480 Rent (4 000–500) 3 500 (1) General expenses (6 870+320) 7 190 (1) Wages 6 900 Depreciation on sports equipment 8 250 37 400+7 600 (1) –36 750 (1) (25 840) Deficit for the year 360 (1) OF 9

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED October/November 2018 © UCLES 2018 Page 19 of 19 Question Answer Marks 6(c) 1 mark for each difference – maximum 3 Receipts and payments account Income and expenditure account Shows opening and closing bank balance Shows surplus and deficit for the year Makes no adjustment for accruals and prepayments Makes adjustment for accruals and prepayments Does not include non-cash items Includes non-cash items Includes capital and revenue items Includes only revenue items 3 6(d) Increase selling prices Find cheaper suppliers/obtain discounts Change the mix of sales Reduce expenses Reduce wages Buy cheaper products (or other acceptable suggestions) 1 mark for each suggestion – maximum 3 3