Cambridge IGCSE Accounting 0452 — 2024 Oct/Nov Paper 1 · Variant 2

Question 1

1 A trader prepares financial statements each year. What do these help the trader to do? A calculate the amount owing to credit suppliers B calculate the cash drawings C check the bank statement balance D make decisions about the future

Accepted Answer

D

Question 2

2 A trader bought new fixtures. He paid half the purchase price in cash and agreed to pay the balance at a later date. How does this purchase affect the accounting equation? assets owner’s equity liabilities A decrease decrease no effect B decrease no effect increase C increase decrease increase D increase no effect increase

Accepted Answer

D

Question 3

3 Which account is not kept in the nominal ledger? A capital B cash C inventory D purchases

Accepted Answer

B

Question 4

4 On 15 February Kalou made the following entries in his accounts. debit $ credit $ bank 228 Droghba 240 discount allowed 12 Which transaction was being recorded? A Droghba paid Kalou by cheque after taking a cash discount. B Droghba paid Kalou by cheque after taking a trade discount. C Kalou paid Droghba by cheque after taking a cash discount. D Kalou paid Droghba by cheque after taking a trade discount.

Accepted Answer

A

Question 5

5 Ranjit is a credit customer of Balbir. In April the following activities took place. Balbir sold goods on credit to Ranjit. Ranjit advised Balbir that some of the goods were damaged. Balbir advised Ranjit of a reduction in the amount owing. Which documents were used to record these activities? A debit note, credit note and receipt B invoice, credit note and receipt C invoice, credit note and statement of account D invoice, debit note and credit note

Accepted Answer

D

Question 6

6 What is an advantage to a business of maintaining books of prime entry? A A trial balance can be extracted directly from books of prime entry. B Similar transactions are listed together in date order for reference. C There is no need to make double entries in the ledger. D Trade receivables and trade payables totals are readily available.

Accepted Answer

B

Question 7

7 Which items appear on the debit side of a trial balance? 1 amounts owed from credit customers 2 discount received from credit suppliers 3 drawings made by the owner 4 overdrawn balance at the bank A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

Accepted Answer

B

Question 8

8 A trader had prepared her year-end financial statements. She later discovered that an adjustment to reduce the provision for doubtful debts by $100 had not been made. How did this error affect the trader’s statement of financial position? current assets capital $ $ A overstated 100 overstated 100 B overstated 100 understated 100 C understated 100 overstated 100 D understated 100 understated 100

Accepted Answer

D

Question 9

9 A trader’s draft income statement showed a profit for the year of $24500. The following errors were later discovered. 1 No adjustment had been made for accrued income of $8000. 2 Carriage inwards of $250 had been recorded as carriage outwards. 3 An increase in provision for doubtful debts of $120 had been treated as an addition to the gross profit for the year. What was the corrected profit for the year? A $32010 B $32260 C $32380 D $32740

Accepted Answer

B

Question 10

10 The bank statement of a business had a credit balance of $2690 on 31 October. At that date cheques issued which had not been presented totalled $850. What was the bank balance in the cash book on 31 October? A $1840 credit B $1840 debit C $3540 credit D $3540 debit

Accepted Answer

B

Question 11

11 The bank column of a trader’s cash book showed an overdrawn balance of $1200. When the trader compared the cash book with the bank statement he found the following items were not included in the cash book. $ bank charges 100 credit transfer 400 direct debit 60 What was the balance brought down in the bank column of the cash book after it was updated? A $960 credit B $960 debit C $1640 credit D $1640 debit

Accepted Answer

A

Question 12

12 What is an advantage of preparing a monthly sales ledger control account? A It is necessary to prepare the income statement. B It helps to reduce the possibility of fraud . C It provides a check on the accuracy of trade payables’ accounts. D It shows the total of the cash sales and credit sales.

Accepted Answer

B

Question 13

13 A summary of Jim's cash book for the year included the following: $ total cheques paid to suppliers 3750 total discount received 65 Which entries are made in his purchases ledger control account? debit $ credit $ A bank 3750 discount received 65 B bank 3750 – – discount received 65 C – – bank 3750 discount received 65 D discount received 65 bank 3750

Accepted Answer

B

Question 14

14 Hamid owns a grocery store. He bought a motor vehicle, $2000, and fuel, $50. Both of these amounts were incorrectly debited to the purchases account. What was the effect of this error on the income statement for the year? gross profit motor vehicle expenses $ $ A overstated 2000 overstated 2050 B overstated 2050 overstated 50 C understated 2000 understated 2050 D understated 2050 understated 50

Accepted Answer

D

Question 15

15 Which statements are correct about depreciation? 1 It is a non-cash expense item. 2 It is an estimated amount. 3 It is the amount of money set aside to replace a non-current asset. 4 It is a gradual loss in the value of a current asset. A 1, 2 and 3 B 1 and 2 only C 2, 3 and 4 D 2 and 4 only

Accepted Answer

B

Question 16

16 A machine with an original cost of $10000 had been depreciated for two years at the rate of 10% per annum using the straight-line method. It was then sold for cash with the loss on disposal amounting to $700. A replacement machine was bought on the same day for $12400 cash. What was the net decrease in the cash balance? A $3700 B $5100 C $11700 D $13100

Accepted Answer

B

Question 17

17 Abdul is a trader. He rents out part of his warehouse to other businesses. Abdul is preparing his financial statements for the year ended 31 December. His rental income account shows that: rent received during the year totalled $2750 rental income transferred to the income statement was $3000 What does the closing balance on the rental income account represent? A accrued income B an accrued expense C an expense paid in advance D income received in advance

Accepted Answer

A

Question 18

18 What is the journal entry required to close the irrecoverable debts account at the year end? account to be debited account to be credited A income statement irrecoverable debts B irrecoverable debts income statement C irrecoverable debts trade receivables D trade receivables irrecoverable debts

Accepted Answer

A

Question 19

19 After preparing draft financial statements at the end of her first year of trading, Lucy discovered two errors. 1 Damaged inventory had been valued at its cost price of $340. It was expected to sell for $180. 2 100 items which had been expected to sell for $12 each had been valued at their cost price of $7 each. Carriage inwards of $1 for each item had not been included in the cost. What was the effect of these errors on the gross profit? A overstated $60 B overstated $240 C understated $60 D understated $240

Accepted Answer

A

Question 20

20 Which items would appear in the income statement for an accountancy business? gross profit profit for the year surplus A ✓ ✓ ✗ B ✓ ✗ ✓ C ✗ ✓ ✗ D ✗ ✗ ✓

Accepted Answer

C

Question 21

21 A business provided the following information. $ long-term loan 20000 trade receivables 12000 trade payables 9700 bank overdraft 2000 prepaid insurance 400 accrued wages 1000 rental income prepaid 500 What was the total of the current liabilities? A $13200 B $15400 C $31200 D $32700

Accepted Answer

A

Question 22

22 What is an advantage to a trader of forming a partnership? A continuity of existence B decision making is quicker C profits are shared D risks are shared

Accepted Answer

D

Question 23

23 Which items should be entered in the appropriation account of a partnership? interest on interest on partners’ partners’ partners’ drawings drawings loans A ✓ B ✓ ✓ C ✓ ✓ D ✓ ✓

Accepted Answer

A

Question 24

24 X Limited provided the following information. $ ordinary share capital 300000 general reserve 50000 retained earnings 35000 8% debenture 60000 What was the total of the equity? A $335000 B $350000 C $385000 D $445000

Accepted Answer

C

Question 25

25 Which item is shown in the income statement and in the statement of changes in equity of a limited company? A accrued interest on debentures B ordinary share dividend paid C profit for the year D transfer to general reserve

Accepted Answer

C

Question 26

26 The Daylee Sports Club was formed in January. During its first year the club purchased equipment costing $5000, paying by cheque. Which of the club’s financial statements are affected by the purchase of this equipment? receipts and income and statement of payments expenditure financial account account position A ✓ ✓ B ✓ ✓ C ✓ ✓ D ✓

Accepted Answer

B

Question 27

27 The following ledger account appeared in the books of a club for the year ended 31 December. Subscriptions account $ $ Jan 1 Balance b/d 2000 Dec 31 Bank 29000 Dec 31 Income and expenditure 24000 Balance c/d 3000 _____ 29000 29000 Which statement is correct? A Subscriptions prepaid on 1 January amounted to $2000. B Subscriptions prepaid on 31 December amounted to $3000. C Subscriptions received during the year ended 31 December amounted to $24000. D Subscriptions relating to the year ended 31 December amounted to $29000.

Accepted Answer

B

Question 28

28 After a manufacturing account had been completed it was discovered that wages paid to factory cleaners had not been included. Which items in the manufacturing account would change after this error was corrected? 1 direct wages 2 indirect wages 3 prime cost 4 production cost A 1 and 2 B 1, 3 and 4 C 2 and 4 D 3 and 4 only

Accepted Answer

C

Question 29

29 W Limited manufactures motorbikes. The following information relates to the first year in business. $ purchases of motorbike parts 40000 wages of factory workers 25000 production overheads 8000 inventory of motorbike parts at the year end 3000 inventory of partly finished motorbikes at the year end 7000 What was the cost of production of the motorbikes completed during the year? A $63000 B $65000 C $70000 D $77000

Accepted Answer

A

Question 30

30 Anya did not keep a full set of double entry records but provided the following information. $ At 1 February 2022 capital 10000 At 31 January 2023 bank overdraft 1500 equipment 20000 inventory 2000 trade receivables 15000 trade payables 10500 Anya’s drawings during the year ended 31 January 2023 were $8500. What was her profit for the year ended 31 January 2023? A $23500 B $25000 C $26500 D $29500

Accepted Answer

A

Question 31

31 A jewellery retailer marks up his goods by 100%. He provided the following information. $ revenue 68200 discount received 1080 profit for the year 18395 What was the total of his expenses? A $14625 B $16785 C $48725 D $50885

Accepted Answer

B

Question 32

32 Omar had an increase in his gross profit margin. What could have caused this? A a decrease in the selling price of his goods B an increase in the quantity of goods purchased C a decrease in the purchase price of his goods D an increase in the quantity of goods sold

Accepted Answer

C

Question 33

33 Who would be interested in the value of non-current assets which a business has available as security? A bank manager B credit customers C employees and trade unions D government departments

Accepted Answer

A

Question 34

34 Which accounting principle is the accounting equation based on? A duality B going concern C materiality D realisation

Accepted Answer

A

Question 35

35 Which qualitative factor requires that financial information is provided in a timely manner so that it can be used for decision making? A comparability B relevance C reliability D understandability

Accepted Answer

B

Question paper16 pages

Mark scheme3 pages

Questions as text

Q1 · A trader prepares financial statements each year

Q2 · A trader bought new fixtures

Q3 · Which account is not kept in the nominal ledger?

Q4 · On 15 February Kalou made the following entries in his accounts

Q5 · Ranjit is a credit customer of Balbir

Q6 · What is an advantage to a business of maintaining books of prime entry?

Q7 · Which items appear on the debit side of a trial balance?

Q8 · A trader had prepared her year-end financial statements

Q9 · A trader’s draft income statement showed a profit for the year of $24500

Q10 · The bank statement of a business had a credit balance of $2690 on 31 October

Q11 · The bank column of a trader’s cash book showed an overdrawn balance of $1200

Q12 · What is an advantage of preparing a monthly sales ledger control account?

Q13 · A summary of Jim's cash book for the year included the following: $ total cheques paid to…

Q14 · Hamid owns a grocery store

Q15 · Which statements are correct about depreciation?

Q16 · A machine with an original cost of $10000 had been depreciated for two years at the rate…

Q17 · Abdul is a trader

Q18 · What is the journal entry required to close the irrecoverable debts account at the year…

Q19 · After preparing draft financial statements at the end of her first year of trading, Lucy…

Q20 · Which items would appear in the income statement for an accountancy business?

Q21 · A business provided the following information

Q22 · What is an advantage to a trader of forming a partnership?

Q23 · Which items should be entered in the appropriation account of a partnership?

Q24 · X Limited provided the following information

Q25 · Which item is shown in the income statement and in the statement of changes in equity of…

Q26 · The Daylee Sports Club was formed in January

Q27 · The following ledger account appeared in the books of a club for the year ended 31…

Q28 · After a manufacturing account had been completed it was discovered that wages paid to…

Q29 · W Limited manufactures motorbikes

Q30 · Anya did not keep a full set of double entry records but provided the following…

Q31 · A jewellery retailer marks up his goods by 100%

Q32 · Omar had an increase in his gross profit margin

Q33 · Who would be interested in the value of non-current assets which a business has available…

Q34 · Which accounting principle is the accounting equation based on?

Q35 · Which qualitative factor requires that financial information is provided in a timely…

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