Cambridge IGCSE Accounting 0452 — 2020 Feb/March Paper 1 · Variant 2

Question 1

1 Which task would be carried out by a book-keeper but not an accountant? A comparing one year’s results with those of previous years B interpreting the accounting records C preparing financial statements D recording transactions in the ledgers and cash book

Accepted Answer

D

Question 2

2 A business provided the following information on 1 February 2019. $ non-current assets 75 000 current assets 40 000 current liabilities 25 000 The business made a profit of $10 000 for the year ended 31 January 2020. The owner did not make any drawings during the year. What was the capital on 31 January 2020? A $35 000 B $50 000 C $70 000 D $100 000

Accepted Answer

D

Question 3

3 Dilip is a manufacturer. He purchased a machine on credit from Sachin. How did Dilip record this? account to account to be debited be credited A machinery Sachin B purchases Sachin C Sachin machinery D Sachin purchases

Accepted Answer

A

Question 4

4 Mui owns a household appliance store. He took home a washing machine for his personal use. Mui recorded this transaction as follows. account debited account credited drawings sales Did Mui make the correct entries to record this transaction? debit entry credit entry A no no B no yes C yes no D yes yes

Accepted Answer

C

Question 5

5 The following account appeared in the books of Abdul. Hanif account 2020 $ 2020 $ Jan  18 returns 100 Jan  1 balance b / d 400 31 bank 392 4 purchases 250 discount 8 balance c / d 150 650 650 Which statement is correct? A On 1 January Abdul owed Hanif $400. B On 4 January Hanif purchased goods, $250, from Abdul. C On 31 January Abdul allowed Hanif $8 trade discount. D On 31 January Hanif owed Abdul $150.

Accepted Answer

A

Question 6

6 Which business document contains details of purchases, returns and payments occurring during a trading period? A credit note B debit note C invoice D statement of account

Accepted Answer

D

Question 7

7 Rashida sells goods on credit and allows her customers a trade discount. Which statements are correct? 1 A debit entry is made in the customer’s account in the sales ledger for the net value of the goods sold. 2 The date of sale, name of the customer, cost price and trade discount are entered in the sales journal. 3 The trade discount is debited to the customer’s account and credited to the discount allowed account. A 1 and 2 B 1 and 3 C 2 only D 2 and 3

Accepted Answer

A

Question 8

8 The totals of a trial balance agreed but it was found that the purchase of office equipment had been debited to office expenses account. Which type of error has been made? A commission B compensating C original entry D principle

Accepted Answer

D

Question 9

9 On 31 January, Somraj’s bank statement showed a credit balance of $740. Comparing the bank statement with the cash book he found the following. $ bank charges not recorded in the cash book 30 cheque paid but not presented to the bank 150 Somraj updated his cash book as required. What was the updated cash book balance on 31 January? A $590 B $620 C $860 D $890

Accepted Answer

A

Question 10

10 When Mark started a car repair business, he purchased premises and equipment. Two years later he spent $5000 on building an extension, $600 on new equipment and $750 on repainting the original premises. By how much will the non-current assets increase because of these transactions? A $5000 B $5600 C $5750 D $6350

Accepted Answer

B

Question 11

11 A farmer sold a piece of land at market value. How should the proceeds of this sale be treated? A as a capital receipt B as a revenue receipt C as capital expenditure D as revenue expenditure

Accepted Answer

A

Question 12

12 Why should a trader provide for the depreciation of a non-current asset? 1 to match the cost against the revenue of the years which benefit from the use of the asset 2 to provide a cash fund to enable the asset to be replaced at the end of its useful life 3 to recognise that most non-current assets lose value with the passage of time 4 to spread the cost of the asset over its expected working life to avoid overstating profit A 1 and 2 only B 1, 3 and 4 C 2 and 3 only D 2, 3 and 4

Accepted Answer

B

Question 13

13 Equipment costing $20 000 was purchased on 1 January 2019. It has a useful working life of 5 years and a residual value of $3000. Depreciation using the straight-line method was included in the income statement for the year ended 31 December 2019. It was then found that the reducing balance method at 30% per annum should have been used. What was the effect on the profit for the year ended 31 December 2019 of this error? A $2000 overstated B $2000 understated C $2600 overstated D $2600 understated

Accepted Answer

C

Question 14

14 A business provided the following information about two expenses. amount paid during 1 January 2019 year ended 31 December 2019 $ 31 December 2019 $ $ electricity 240 accrued 1500 360 accrued insurance 180 prepaid 1200 220 prepaid Which amounts will be charged to the income statement for the year ended 31 December 2019? electricity insurance $ $ A 900 800 B 1380 1240 C 1620 1160 D 2100 1600

Accepted Answer

C

Question 15

15 Anjum rents part of her premises to Ajay for $6120 per annum. At the beginning of the year Ajay had paid two months rent in advance. At the end of the year Ajay had paid three months rent in advance. How much rent was received from Ajay during the year? A $3570 B $5610 C $6630 D $8670

Accepted Answer

C

Question 16

16 A business maintains a provision for doubtful debts of 5% of trade receivables. The balance on the provision for doubtful debts account on 31 December 2018 was $2700. On 31 December 2019 the trade receivables amounted to $50 000. How will the provision for doubtful debts be recorded on 31 December 2019? provision for $ income statement $ doubtful debts account A credit 200 added to gross profit 200 B credit 200 deducted from gross profit 200 C debit 200 added to gross profit 200 D debit 200 deducted from gross profit 200

Accepted Answer

C

Question 17

17 At the end of the financial year Cindy valued her inventory at cost. This valuation incorrectly included damaged goods costing $300. Cindy estimated these goods could be sold for $100. What is the effect of correcting the inventory valuation? gross profit profit for the year current assets A decreases by $200 decreases by $200 decrease by $200 B decreases by $300 decreases by $300 decrease by $300 C increases by $100 increases by $100 decrease by $100 D increases by $200 increases by $200 decrease by $200

Accepted Answer

A

Question 18

18 Hassan had the following assets on 31 January 2020. $ premises 12 000 inventory 500 balance at bank 360 goodwill 3 000 cash 120 There were no liabilities on 31 January 2020. Which entries will be made in Hassan’s statement of financial position on 31 January 2020? intangible non-current current capital assets assets assets $ $ $ $ A nil 12 000 980 12 980 B nil 15 000 480 15 480 C 3000 12 000 980 15 980 D 3000 15 000 480 18 480

Accepted Answer

C

Question 19

19 AB Stores had the following transactions. 1 The owner invested a further $20 000 capital. 2 $2000 was paid to trade payables. 3 A long-term loan of $5000 was repaid. By how much would the working capital increase after these transactions? A $13 000 B $15 000 C $20 000 D $27 000

Accepted Answer

B

Question 20

20 The balances in the books of a business included the following. $ goodwill 10 000 premises 25 000 trade receivables 9 500 trade payables 6 000 inventory 15 000 cash at bank 500 debit long-term loan 5 000 What was the capital employed? A $50 000 B $54 000 C $60 000 D $65 000

Accepted Answer

B

Question 21

21 What is a disadvantage of operating a business as a partnership? A Partners may not agree on how to run the business. B Partners may not have the same skills. C The financial statements must be published. D The risks and responsibilities are shared.

Accepted Answer

A

Question 22

22 What does not affect the total equity of a limited company? A issue of ordinary shares B ordinary share dividend paid C profit for the year D transfer from retained earnings to general reserve

Accepted Answer

D

Question 23

23 What is called-up share capital? A the amount received by the company for issued shares B the amount requested from shareholders by the company C the value of shares the company could issue D the value of shares actually issued by the company

Accepted Answer

B

Question 24

24 A limited company provided the following information. $ issued share capital (50 000 ordinary shares of $1 each) 50 000 profit for the year ended 31 December 2019 13 000 transfer to general reserve on 31 December 2019 6 000 interim ordinary share dividend paid during the year 3 000 On 31 December 2019 it was decided to use the remaining profit to pay a final ordinary share dividend. What percentage final dividend would the ordinary shareholders receive? A 8% B 14% C 20% D 26%

Accepted Answer

A

Question 25

25 A cricket club set up a snack bar on 1 January 2019. The following information is available. $ for the year ended 31 December 2019 receipts from sales of snacks 3250 cost of purchases of snacks 2500 wages of snack bar assistant 250 at 31 December 2019 cost of snacks unsold 520 What was the profit made by the snack bar? A $500 B $750 C $1020 D $1270

Accepted Answer

C

Question 26

26 A social club had the following assets and liabilities. $ non-current assets 6550 cafe expenses owing 25 subscriptions owing by members 50 balance at bank 500 debit owing to credit suppliers 300 cafe inventory 500 What was the accumulated fund? A $6275 B $6325 C $7175 D $7275

Accepted Answer

D

Question 27

27 A manufacturing business provided the following information for the year ended 30 November 2019 $ factory supervisor’s salary 25 000 factory power 5 000 machinery depreciation 11 000 machinery operators’ wages 29 000 raw materials consumed 82 000 What was the total of the direct costs? A $111 000 B $116 000 C $127 000 D $152 000

Accepted Answer

A

Question 28

28 What would be included in the statement of financial position of a manufacturing business but not a wholesale business? A cash B office equipment C trade receivables D work in progress

Accepted Answer

D

Question 29

29 The average inventory of a business was $40 000. The rate of inventory turnover was 5 times a year. Mark-up was 20%. What was the revenue for the year? A $160 000 B $200 000 C $240 000 D $250 000

Accepted Answer

C

Question 30

30 Sumit does not maintain a full set of accounting records. What does Sumit not need to calculate his credit sales? A customer’s dishonoured cheque B discounts allowed C discounts received D returns from credit customers

Accepted Answer

C

Question 31

31 Jake had current liabilities of trade payables and had current assets of inventory, trade receivables and cash at bank. Which measure would improve his current ratio? A buying additional inventory and paying in cash B decreasing drawings C revaluing non-current assets D selling inventory on credit rather than for cash

Accepted Answer

B

Question 32

32 Flo and Mo are traders selling similar goods at similar prices. They provided the following information. Flo Mo gross margin 50% 40% profit margin 10% 8% Which trader has better control of cost of sales and expenses? costs of sales expenses A Flo Flo B Flo Mo C Mo Flo D Mo Mo

Accepted Answer

B

Question 33

33 Which is an application of the materiality principle? A always using the straight-line method when depreciating assets B buying raw materials on credit rather than paying immediately C charging the cost of light bulbs and batteries to operating expenses D recording goods sold only when its legal title passes to the buyer

Accepted Answer

C

Question 34

34 Which accounting principle states that revenue should not be recorded before it is earned? A consistency B matching C money measurement D realisation

Accepted Answer

D

Question 35

35 Which accounting objective requires that financial statements are free from bias and errors? A comparability B relevance C reliability D understandability

Accepted Answer

C

Question paper12 pages

Mark scheme3 pages

Questions as text

Q1 · Which task would be carried out by a book-keeper but not an accountant?

Q2 · A business provided the following information on 1 February 2019

Q3 · Dilip is a manufacturer

Q4 · Mui owns a household appliance store

Q5 · The following account appeared in the books of Abdul

Q6 · Which business document contains details of purchases, returns and payments occurring…

Q7 · Rashida sells goods on credit and allows her customers a trade discount

Q8 · The totals of a trial balance agreed but it was found that the purchase of office…

Q9 · On 31 January, Somraj’s bank statement showed a credit balance of $740

Q10 · When Mark started a car repair business, he purchased premises and equipment

Q11 · A farmer sold a piece of land at market value

Q12 · Why should a trader provide for the depreciation of a non-current asset?

Q13 · Equipment costing $20 000 was purchased on 1 January 2019

Q14 · A business provided the following information about two expenses

Q15 · Anjum rents part of her premises to Ajay for $6120 per annum

Q16 · A business maintains a provision for doubtful debts of 5% of trade receivables

Q17 · At the end of the financial year Cindy valued her inventory at cost

Q18 · Hassan had the following assets on 31 January 2020

Q19 · AB Stores had the following transactions

Q20 · The balances in the books of a business included the following

Q21 · What is a disadvantage of operating a business as a partnership?

Q22 · What does not affect the total equity of a limited company?

Q23 · What is called-up share capital?

Q24 · A limited company provided the following information

Q25 · A cricket club set up a snack bar on 1 January 2019

Q26 · A social club had the following assets and liabilities

Q27 · A manufacturing business provided the following information for the year ended 30…

Q28 · What would be included in the statement of financial position of a manufacturing business…

Q29 · The average inventory of a business was $40 000

Q30 · Sumit does not maintain a full set of accounting records

Q31 · Jake had current liabilities of trade payables and had current assets of inventory, trade…

Q32 · Flo and Mo are traders selling similar goods at similar prices

Q33 · Which is an application of the materiality principle?

Q34 · Which accounting principle states that revenue should not be recorded before it is earned?

Q35 · Which accounting objective requires that financial statements are free from bias and…

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