Cambridge IGCSE Accounting 0452 — 2024 Feb/March Paper 1 · Variant 2

Question 1

1 Which statements about book-keeping and accounting are correct? 1 Accounting is performed periodically rather than daily. 2 Accounting uses information kept in the book-keeping records. 3 Book-keeping includes the preparation of financial statements. 4 Book-keeping involves the recording of financial transactions. A 1, 2 and 4 B 1 and 3 C 2, 3 and 4 D 2 and 4 only

Accepted Answer

A

Question 2

2 Amarjit had the following closing balances in his books at the end of the year. $ non–current assets 25 000 trade receivables 11 000 bank overdraft 3 000 other payables 600 What was Amarjit’s capital at the end of the year? A $7 400 B $10 400 C $32 400 D $38 400

Accepted Answer

C

Question 3

3 On 31 December Manjit was owed commission. How would this commission be shown in Manjit’s statement of financial position on 31 December? A as accrued income in current assets B as accrued income in current liabilities C as prepaid income in current assets D as prepaid income in current liabilities

Accepted Answer

A

Question 4

4 Sami maintains a full set of accounting records. Why does Sami find it useful to complete the cheque counterfoil when he pays a credit supplier by cheque? A It enables him to keep the purchases account up to date. B It helps in preparing the bank reconciliation statement. C It is a source of information for maintaining the cash book. D It is proof that he has paid the correct amount.

Accepted Answer

C

Question 5

5 Paul rents premises from John and pays the rent by credit transfer. How would John record this? account debited account credited A bank rental income B cash rental income C rental income bank D rental income cash

Accepted Answer

A

Question 6

6 A business sold goods with a list price of $50 each. The terms of trade were as follows: trade discount when more than 20 items are purchased: 10% cash discount if customer pays within 30 days: 4% How much was received in full settlement from a customer who bought 25 items and paid after 35 days? A $900 B $1075 C $1125 D $1200

Accepted Answer

C

Question 7

7 What is the name given to a list of ledger balances on a particular date? A control account B income statement C statement of account D trial balance

Accepted Answer

D

Question 8

8 A trader introduced additional capital of $4000. This was debited to the capital account and credited to the bank account in error. What is the effect on the statement of financial position of correcting this error? capital bank $ $ A decreases by 4000 decreases by 4000 B decreases by 8000 decreases by 8000 C increases by 4000 increases by 4000 D increases by 8000 increases by 8000

Accepted Answer

D

Question 9

9 The totals of a trial balance did not agree, and a suspense account was opened. It was later found that purchases returns, $560, had been debited to the sales returns account. Which journal entry was required to correct this error? debit credit $ $ A purchases returns 560 sales returns 560 B purchases returns 560 suspense 560 C purchases returns 1120 sales returns 560 suspense 560 D suspense 1120 purchases returns 560 sales returns 560

Accepted Answer

D

Question 10

10 A trader has received her bank statement. What does she need to record when she is updating her cash book? A a bank error B a credit transfer C an uncredited deposit D the bank statement balance

Accepted Answer

B

Question 11

11 Colin’s cash book showed a debit balance of $2134 in the bank column. When Colin compared his cash book with his bank statement he discovered the following. $ a standing order paid in error by the bank 80 unpresented cheques 563 uncredited deposits 376 What was the closing balance shown on his bank statement? A $2027 credit B $2027 debit C $2241 credit D $2241 debit

Accepted Answer

C

Question 12

12 What is not a reason for preparing a monthly sales ledger control account? A to carry out a check of each entry recorded in the trade receivables’ accounts in the sales ledger B to reduce fraud as the control account is completed by someone who has not been involved in writing up the sales ledger C to prove that the entries made in the sales ledger are arithmetically correct D to provide a summary of the trade receivables’ transactions during the month

Accepted Answer

A

Question 13

13 A sales ledger control account had a debit balance of $10 000. It was found that a $2000 contra entry to the purchases ledger control account had been entered on the wrong side of the sales ledger control account. What was the correct debit balance on the sales ledger control account? A $6000 B $8000 C $12 000 D $14 000

Accepted Answer

A

Question 14

14 A business bought two assets, X and Y, on 1 January 2022, for $2000 each. It depreciates asset X by 10% per annum using the straight-line method, and asset Y by 10% per annum using the reducing balance method. Which statements are correct? asset X will be fully in 2022 the depreciation depreciated before charge is lower for asset Y asset X than for asset Y A false false B false true C true false D true true

Accepted Answer

C

Question 15

15 After the preparation of his financial statements, a trader discovered the following errors. 1 A revenue receipt of $1000 had been recorded as a capital receipt. 2 Capital expenditure of $800 had been recorded as revenue expenditure. 3 A capital receipt of $900 had been recorded as a revenue receipt. What was the overall effect of these errors on the profit for the year? A overstated by $700 B overstated by $900 C understated by $700 D understated by $900

Accepted Answer

D

Question 16

16 The following ledger account appeared in the books of a trader. rent receivable account $ $ Dec 31 income statement 2500 Jan 1 balance b / d 200 Dec 31 bank 2000 balance c / d 300 ____ 2500 2500 What does the balance of $300 on 31 December represent? A accrued expense B accrued income C prepaid expense D prepaid income

Accepted Answer

B

Question 17

17 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 required adjustment to the provision for doubtful debts be recorded? 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 18

18 Which asset is valued at the lower of cost and net realisable value? A goodwill B inventory C loose tools D machinery

Accepted Answer

B

Question 19

19 Vikram made two errors when preparing his draft financial statements. These caused his gross profit to be overstated by $600 and his profit for the year to be understated by $250. Which two errors had he made? closing inventory depreciation charge A $600 overstated $350 overstated B $600 overstated $850 overstated C $600 understated $350 understated D $600 understated $850 understated

Accepted Answer

B

Question 20

20 What is not a service business? A a computer repair shop B a furniture factory C a hairdressing salon D a travel agent

Accepted Answer

B

Question 21

21 Simon bought a new non-current asset. Why did he decide to use the reducing balance method to depreciate it? A The non-current asset will be subject to rapid technological change. B The non-current asset will lose value faster in the later years. C The benefits from using the non-current asset will be lower in the earlier years. D The cash set aside to replace the non-current asset will increase quickly.

Accepted Answer

A

Question 22

22 Which statement about a statement of financial position is correct? A It is part of the double entry system. B It proves the arithmetical accuracy of the accounts. C It shows income and expenses for a certain period of time. D It shows the assets and liabilities on a certain date.

Accepted Answer

D

Question 23

23 The owner of a business took goods for his own use but forgot to make an entry in the accounts. What was the effect of this error? profit for the year capital A overstated no effect B overstated understated C understated no effect D understated overstated

Accepted Answer

C

Question 24

24 What are advantages to a sole trader of forming a partnership? 1 All partners would be entitled to drawings and dividends. 2 Profits would be shared with the partners. 3 The partners may bring additional skills and experience. 4 The partners would share responsibility for running the business. A 1, 2 and 3 B 1 and 2 only C 3 only D 3 and 4

Accepted Answer

D

Question 25

25 X, Y and Z are partners sharing profits and losses in the ratio 5 : 3 : 2. Their business made a profit for the year of $8000. They provided the following information. partner X partner Y partner Z total $ $ $ $ partner's salary – – 1500 1500 interest on capital 500 300 200 1000 interest on drawings – 50 100 150 What was Z’s share of the residual profit? A $1070 B $1130 C $1530 D $1730

Accepted Answer

B

Question 26

26 What can cause an increase in the total equity of a company? 1 a profit for the year 2 a receipt of a long-term loan 3 a transfer to general reserve 4 an issue of shares A 1 and 4 B 1 only C 2 and 3 D 4 only

Accepted Answer

A

Question 27

27 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 28

28 A tennis club provided the following information for the year ended 31 December 2020. $ at 1 January at 1 January prepaid subscriptions prepaid subscriptions 1250 during the year ended 31 December during the year ended 31 December subscriptions received for 2020 9750 subscriptions received for 2021 1100 at 31 December subscriptions owing for 2020 1500 What was the amount of subscriptions included in the income and expenditure account for the year ended 31 December 2020? A $11 250 B $11 400 C $12 500 D $13 600

Accepted Answer

C

Question 29

29 Which costs of a manufacturing business are indirect costs? 1 heating and lighting of the factory 2 raw materials used in production 3 rent and rates of the factory 4 wages of employees who make the product A 1, 3 and 4 B 1 and 3 only C 1 only D 2 and 4

Accepted Answer

B

Question 30

30 A manufacturer provided the following information at the end of his financial year. $ prime cost 98 400 factory overheads 17 800 work in progress at start of year 6 300 work in progress at end of year 7 600 What was the cost of production for the year? A $79 300 B $81 900 C $114 900 D $117 500

Accepted Answer

C

Question 31

31 A trader does not maintain a full set of accounting records. He provided the following information for the year ended 31 December. 1 January 31 December $ $ non-current assets 45 000 60 000 current assets 9 000 7 500 working capital 6 000 4 500 non-current liabilities 4 000 6 500 During the year he made drawings of $3500. What was his profit for the year? A $6000 B $7500 C $13 000 D $14 500

Accepted Answer

D

Question 32

32 A trader provided the following information. $ opening inventory 8 000 purchases 108 000 closing inventory 16 000 What was the rate of inventory turnover? A 4.17 times B 4.83 times C 8.33 times D 9.67 times

Accepted Answer

C

Question 33

33 A limited company has invited potential investors to purchase shares in the business. What information would be of interest to a potential investor? 1 the amount that they would pay for the shares 2 the expected future profits of the business 3 the expected rate of dividend that the business might pay 4 when the limited company will pay back the money invested A 1, 2 and 3 B 1, 3 and 4 C 1 and 2 only D 2 and 3 only

Accepted Answer

A

Question 34

34 Why would a bakery business not include a value for inventory of stationery in the statement of financial position? A It was to be used in the next few months. B It was purchased regularly and paid for in cash. C It was new and unused. D It was of very low value.

Accepted Answer

D

Question 35

35 A trader decides to write off the balance owed by a credit customer as an irrecoverable debt. A credit entry is made in the account of the credit customer and a debit entry in the irrecoverable debts account. Which accounting principles are being applied? A business entity and realisation B consistency and materiality C duality and prudence D materiality and prudence

Accepted Answer

C

Question paper16 pages

Mark scheme3 pages

Questions as text

Q1 · Which statements about book-keeping and accounting are correct?

Q2 · Amarjit had the following closing balances in his books at the end of the year

Q3 · On 31 December Manjit was owed commission

Q4 · Sami maintains a full set of accounting records

Q5 · Paul rents premises from John and pays the rent by credit transfer

Q6 · A business sold goods with a list price of $50 each

Q7 · What is the name given to a list of ledger balances on a particular date?

Q8 · A trader introduced additional capital of $4000

Q9 · The totals of a trial balance did not agree, and a suspense account was opened

Q10 · A trader has received her bank statement

Q11 · Colin’s cash book showed a debit balance of $2134 in the bank column

Q12 · What is not a reason for preparing a monthly sales ledger control account?

Q13 · A sales ledger control account had a debit balance of $10 000

Q14 · A business bought two assets, X and Y, on 1 January 2022, for $2000 each

Q15 · After the preparation of his financial statements, a trader discovered the following…

Q16 · The following ledger account appeared in the books of a trader

Q17 · A business maintains a provision for doubtful debts of 5% of trade receivables

Q18 · Which asset is valued at the lower of cost and net realisable value?

Q19 · Vikram made two errors when preparing his draft financial statements

Q20 · What is not a service business?

Q21 · Simon bought a new non-current asset

Q22 · Which statement about a statement of financial position is correct?

Q23 · The owner of a business took goods for his own use but forgot to make an entry in the…

Q24 · What are advantages to a sole trader of forming a partnership?

Q25 · X, Y and Z are partners sharing profits and losses in the ratio 5 : 3 : 2

Q26 · What can cause an increase in the total equity of a company?

Q27 · What is called-up share capital?

Q28 · A tennis club provided the following information for the year ended 31 December 2020

Q29 · Which costs of a manufacturing business are indirect costs?

Q30 · A manufacturer provided the following information at the end of his financial year

Q31 · A trader does not maintain a full set of accounting records

Q32 · A trader provided the following information

Q33 · A limited company has invited potential investors to purchase shares in the business

Q34 · Why would a bakery business not include a value for inventory of stationery in the…

Q35 · A trader decides to write off the balance owed by a credit customer as an irrecoverable…

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