Cambridge IGCSE Accounting 0452 — 2024 Oct/Nov Paper 1 · Variant 3

Question 1

1 What is the purpose of measuring business profit and loss? A to check the productivity of employees B to consider the ability of the business to grow C to determine how much cash is available D to ensure that the inventory is not overstated

Accepted Answer

B

Question 2

2 At the end of her first year of trading Zoe had $6500 in her business bank account. Then she paid $5000 of her own money into the business bank account. She used $2000 of this amount to repay a business loan. What effect would these transactions have on her assets, capital and liabilities? assets capital liabilities $ $ $ A –3000 –5000 +2000 B +3000 +5000 –2000 C +3000 +3000 unchanged D +5000 +5000 unchanged

Accepted Answer

B

Question 3

3 Which business document is used by a trader to record amounts deposited into the bank account? A bank statement B cheque counterfoil C paying-in slip D statement of account

Accepted Answer

C

Question 4

4 A trader kept a petty cash book using the imprest system. He provided the following information. $ 1 March petty cash balance 80 transfer from bank account to restore the 170 imprest 31 March petty cash payments 195 petty cash expense refunded 10 How much was needed to restore the imprest on 1 April? A $55 B $65 C $185 D $250

Accepted Answer

C

Question 5

5 Sahil took goods from the business for his own use. These goods had a cost of $60 and a selling price of $100. Which entry was made in the drawings account to record this withdrawal of goods? A $60 credit B $60 debit C $100 credit D $100 debit

Accepted Answer

B

Question 6

6 What is an advantage of using a sales journal? A It enables monthly totals to be posted to the sales ledger. B It ensures that all credit sales are correctly recorded. C It reduces the number of entries in the sales account. D It shows the amount owed by credit customers at the month end.

Accepted Answer

C

Question 7

7 The following account appeared in the ledger of Eli. Jacob account $ $ June 1 balance b/d 220 June 4 bank 210 22 sales 400 discount 10 ___ 30 balance c/d 400 620 620 Which statement is correct? A On 1 June Eli was owed $220 by Jacob. B On 4 June Eli paid Jacob $210 by cheque. C On 22 June Jacob sold goods to Eli for $400. D On 30 June Jacob was owed $400 by Eli.

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 Mandy’s trial balance failed to agree. The difference of $620 was placed in a suspense account. The suspense account’s balance was shown on the debit side of the trial balance. Which error had caused the difference? A Discounts allowed of $310 had been credited to the discount received account. B Discounts received of $310 had been credited to the discount allowed account. C The value of closing inventory had been overstated by $620. D The value of closing inventory had been understated by $620.

Accepted Answer

A

Question 10

10 Jane took cash drawings from the business. The amount was debited to the purchases account and credited to cash. How did this error affect the profit for the year and the current assets in the financial statements? profit for the year current assets A decrease no effect B increase no effect C no effect decrease D no effect increase

Accepted Answer

A

Question 11

11 What is true about a bank statement? 1 It is a demand by the bank for repayment of an overdraft. 2 It shows a positive bank balance as a debit balance. 3 It shows transactions affecting the bank account in a given period. A 1 and 2 B 1 only C 2 and 3 D 3 only

Accepted Answer

D

Question 12

12 On 30 June the bank column in Farad’s cash book showed an overdrawn balance of $2000. The following items had not been entered in the cash book. $ standing order for rent 200 interest on bank overdraft 50 credit transfer from X Limited 2900 What was the corrected balance of the bank column in the cash book at 1 July? A $650 credit B $650 debit C $1150 credit D $1150 debit

Accepted Answer

B

Question 13

13 What is an advantage of maintaining a purchases ledger control account? A It detects errors of omission. B It guarantees the accuracy of the ledgers. C It prevents fraud. D It shows how much is owed to suppliers.

Accepted Answer

D

Question 14

14 Raj is both a customer of and a supplier to Balbir. Raj’s account in Balbir’s sales ledger showed a debit balance of $300. There was a credit balance of $100 on Raj’s account in Balbir's purchases ledger. A contra entry between the two accounts was agreed. Which entry would Balbir make in his purchases ledger control account? A credit $100 B credit $200 C debit $100 D debit $200

Accepted Answer

C

Question 15

15 A limited company sells office equipment. The following amounts were recorded in the company’s books of account. 1 cash received from disposal of motor vehicle $6000 2 cash received from issue of shares $9000 3 discount received $8000 4 rent received $5000 What was the total of the capital receipts of the company? A $13000 B $14000 C $15000 D $23000

Accepted Answer

C

Question 16

16 On 1 January 2023 Kate paid $400 for a two-year maintenance contract on her machinery starting on that date. In error this amount was debited to the machinery account. Kate depreciates her machinery at the rate of 20% per annum. What effect did the error have on Kate’s profit for the year ended 31 December 2023? A overstated by $80 B overstated by $120 C understated by $80 D understated by $120

Accepted Answer

B

Question 17

17 Why should a business depreciate its non-current assets? A to charge the cost of an asset as an expense in the year of purchase B to ensure that cash is available to replace the non-current assets C to ensure the value of non-current assets is not understated D to match capital expenditure against the revenue it has helped to earn

Accepted Answer

D

Question 18

18 A trader had a credit balance on his heat and light account at the start of the financial year. What does this balance represent? A accrued income B an accrued expense C prepaid income D a prepaid expense

Accepted Answer

B

Question 19

19 Which statements about irrecoverable debts are correct? 1 They are an application of the historic cost principle. 2 They are debts which will not be paid by credit customers. 3 They increase the value of current liabilities. 4 They reduce the total value of trade receivables. A 1 and 2 B 1 and 4 C 2 and 3 D 2 and 4

Accepted Answer

D

Question 20

20 At the end of his financial year Raminder made an adjustment for rent owed to him by a tenant. How did this affect Raminder’s financial statements? profit for the year current assets A decrease decrease B decrease increase C increase decrease D increase increase

Accepted Answer

D

Question 21

21 What is a disadvantage of operating as a sole trader? A Access to capital is restricted. B Book-keeping records are more complex. C Decisions may take longer to implement. D The liability of the owner is limited.

Accepted Answer

A

Question 22

22 John and Mark are in partnership. Profits and losses are shared in the ratio 3:2. John is entitled to an annual salary of $12000. The profit for the year ended 31 August 2023 was $52000. How much would be credited to the partners’ current accounts on 31 August 2023? John’s Mark’s current account current account $ $ A 24000 16000 B 26000 26000 C 31200 20800 D 36000 16000

Accepted Answer

D

Question 23

23 Which statement correctly describes the effect of limited liability if a business fails? A A shareholder can only lose the money they agreed to pay for their shares. B A shareholder risks losing all their personal possessions. C A sole trader can only lose the capital they have invested. D A sole trader risks losing all their personal possessions.

Accepted Answer

A

Question 24

24 At the start of the year, V Limited had $45750 total equity, of which $10750 was retained earnings. At the year end, the company had transferred $1000 to general reserve, paid a dividend of $2800 and made a profit for the year of $4995. What was the total equity at the end of the year? A $36195 B $46945 C $47945 D $48945

Accepted Answer

C

Question 25

25 The treasurer of a sports club provided the following information. $ clubhouse and sports fields 250000 sports equipment 80000 cash at bank 12000 bank loan 14000 subscriptions accrued 2800 What was the amount of the accumulated fund? A $325200 B $328000 C $330800 D $342000

Accepted Answer

C

Question 26

26 What will be included in a receipts and payments account of a social club? 1 cash payment for new furniture for the clubhouse 2 depreciation charged on the clubhouse furniture 3 outstanding subscriptions from the previous year received in the current year 4 subscriptions owed by members at the end of the current year A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

Accepted Answer

B

Question 27

27 Thato is a manufacturer. His manufacturing account for the year ended 31 December showed that his work in progress had increased. How did this affect the cost of production and the cost of sales? cost of production cost of sales A decreased decreased B decreased no effect C increased increased D increased no effect

Accepted Answer

A

Question 28

28 A factory makes uniforms for school children. What is not included in the calculation of prime cost in the factory’s manufacturing account? A cost of the cloth used to make the uniforms B delivery costs of bringing the cloth to the factory C wages of the drivers who deliver the completed uniforms to shops D wages of the sewing machinists who make the uniforms

Accepted Answer

C

Question 29

29 The average inventory of a business was $40000. The rate of inventory turnover was 5 times a year. Mark-up was 20%. What was the revenue for the year? A $160000 B $200000 C $240000 D $250000

Accepted Answer

C

Question 30

30 Shelley does not maintain a full set of accounting records but was able to provide the following information. $ sales for the year ended 31 August 2023 (80% of which 97500 were on credit) amounts received from trade receivables during the year 71500 ended 31 August 2023 amount owing by trade receivables on 31 August 2023 14000 How much was owed by the trade receivables on 1 September 2022? A $6500 B $7500 C $12000 D $20500

Accepted Answer

B

Question 31

31 Wayne provided the following information. $ non-current assets 110000 current assets 25000 current liabilities 15000 profit for the year 23000 What was the return on capital employed? A 15.33% B 19.17% C 23.00% D 32.86%

Accepted Answer

B

Question 32

32 The trade payables turnover of a business is 36 days. What do these 36 days represent? A the average number of days before the business purchases further goods on credit B the average number of days taken by the business to pay its credit suppliers C the average number of days the business is allowed by credit suppliers to pay for goods D the average number of days the business takes to sell goods purchased on credit

Accepted Answer

B

Question 33

33 Paul’s gross margin increased from 16.5% in year 1 to 17.5% in year 2. What would explain the improvement in the gross margin? A increasing the quantity of goods sold B increasing the selling price of the goods sold C offering trade discounts to customers buying in bulk D selling goods at a reduced price

Accepted Answer

B

Question 34

34 M Limited has made sure that its financial statements are comparable with those of previous years. How does this affect interested parties? A They are made aware of any changes in accounting policies. B They can be sure that the information in the financial statements is up to date. C They can understand the financial statements easily. D They know that there are no significant errors in the financial statements.

Accepted Answer

A

Question 35

35 Which accounting principle states that profit should be recognised when title to the goods passes to the customer? A materiality B money measurement C prudence D realisation

Accepted Answer

D

Question paper12 pages

Mark scheme3 pages

Questions as text

Q1 · What is the purpose of measuring business profit and loss?

Q2 · At the end of her first year of trading Zoe had $6500 in her business bank account

Q3 · Which business document is used by a trader to record amounts deposited into the bank…

Q4 · A trader kept a petty cash book using the imprest system

Q5 · Sahil took goods from the business for his own use

Q6 · What is an advantage of using a sales journal?

Q7 · The following account appeared in the ledger of Eli

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

Q9 · Mandy’s trial balance failed to agree

Q10 · Jane took cash drawings from the business

Q11 · What is true about a bank statement?

Q12 · On 30 June the bank column in Farad’s cash book showed an overdrawn balance of $2000

Q13 · What is an advantage of maintaining a purchases ledger control account?

Q14 · Raj is both a customer of and a supplier to Balbir

Q15 · A limited company sells office equipment

Q16 · On 1 January 2023 Kate paid $400 for a two-year maintenance contract on her machinery…

Q17 · Why should a business depreciate its non-current assets?

Q18 · A trader had a credit balance on his heat and light account at the start of the financial…

Q19 · Which statements about irrecoverable debts are correct?

Q20 · At the end of his financial year Raminder made an adjustment for rent owed to him by a…

Q21 · What is a disadvantage of operating as a sole trader?

Q22 · John and Mark are in partnership

Q23 · Which statement correctly describes the effect of limited liability if a business fails?

Q24 · At the start of the year, V Limited had $45750 total equity, of which $10750 was retained…

Q25 · The treasurer of a sports club provided the following information

Q26 · What will be included in a receipts and payments account of a social club?

Q27 · Thato is a manufacturer

Q28 · A factory makes uniforms for school children

Q29 · The average inventory of a business was $40000

Q30 · Shelley does not maintain a full set of accounting records but was able to provide the…

Q31 · Wayne provided the following information

Q32 · The trade payables turnover of a business is 36 days

Q33 · Paul’s gross margin increased from 16.5% in year 1 to 17.5% in year 2

Q34 · M Limited has made sure that its financial statements are comparable with those of…

Q35 · Which accounting principle states that profit should be recognised when title to the…

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