Cambridge IGCSE Accounting (9-1) 0985 — 2022 May/June Paper 1 · Variant 2
0985/12/M/J/22 · 35 questions · 35 marks · ≈39 min
The question paper and its mark scheme, free to read here and free to download. This is Cambridge’s own paper, exactly as it was sat.
Question paper12 pages
Mark scheme3 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · Which task would be carried out by a book-keeper?
1 Which task would be carried out by a book-keeper? A comparison of financial statements between years B preparation of financial statements C provision of information for decision-making D recording financial transactions
Mark scheme: D
Q2 · The following ledger account appeared in the books of Leah, a trader
2 The following ledger account appeared in the books of Leah, a trader. Amraz account $ $ April 26 purchases returns 150 April 1 balance b / d 2100 30 bank 1900 20 purchases 3000 discount 100 balance c / d 2950 ____ 5100 5100 Which statement is correct? A Amraz allowed Leah $100 trade discount on 30 April. B Amraz owed Leah $2100 on 1 April. C Leah owed Amraz $2950 on 30 April. D Leah’s net purchases from Amraz in April were $2900.
Mark scheme: C
Q3 · Sarah sold goods on credit to Zafar
3 Sarah sold goods on credit to Zafar. How was this recorded in Sarah’s ledgers? general ledger sales ledger A credit sales account debit Zafar account B debit sales account credit Zafar account C credit Zafar account debit sales account D debit Zafar account credit sales account
Mark scheme: A
Q4 · Omar sent a credit note to Miriam for goods returned
4 Omar sent a credit note to Miriam for goods returned. How would Miriam record this transaction? account to be debited account to be credited A purchases returns Omar B sales returns Miriam C Omar purchases returns D Miriam sales returns
Mark scheme: C
Q5 · Ben sold goods to David for $900 cash
5 Ben sold goods to David for $900 cash. In which book of prime entry would David record this transaction? A cash book B general journal C purchases journal D sales journal
Mark scheme: A
Q6 · A petty cashier received $100 from the chief cashier and $10 from an employee who had…
6 A petty cashier received $100 from the chief cashier and $10 from an employee who had made private calls on the business telephone. How would these amounts be recorded in the petty cash book and the cash book? debit petty credit petty debit credit cash book cash book cash book cash book $ $ $ $ A 0 110 100 0 B 10 100 0 100 C 100 10 0 100 D 110 0 0 100
Mark scheme: D
Q7 · What is an example of a compensating error?
7 What is an example of a compensating error? A A payment for office equipment repairs was debited to the office equipment account. B A purchase of goods from C Jones was credited to the account of C Johns. C The sale of goods, $65, to A Aziz was entered in the books as $56. D The wages account was undercast by $100 and the rent account was overcast by $100.
Mark scheme: D
Q8 · After the preparation of Abdul’s draft financial statements, two errors were discovered
8 After the preparation of Abdul’s draft financial statements, two errors were discovered. The purchase of a machine by bank transfer, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital? non-current assets working capital $ $ A increase 15 000 decrease 5000 B increase 15 000 no effect C increase 20 000 decrease 5000 D increase 20 000 no effect
Mark scheme: C
Q9 · Why is a sales ledger control account usually prepared by a different member of staff…
9 Why is a sales ledger control account usually prepared by a different member of staff than the person who maintains the sales ledger? A to deter fraud B to locate errors C to provide an instant total of trade receivables D to speed production of financial statements
Mark scheme: A
Q10 · What would be recorded on the credit side of a sales ledger control account?
10 What would be recorded on the credit side of a sales ledger control account? A cash refunded to credit customers B credit sales C interest charged on overdue accounts D sales returns
Mark scheme: D
Q11 · Maria’s draft income statement for the year ended 31 March 2022 showed a profit for the…
11 Maria’s draft income statement for the year ended 31 March 2022 showed a profit for the year of $38 750. On 31 December 2021, Maria received a 5% bank loan of $4800 which was incorrectly treated as a revenue receipt. In error, a whole year’s interest on the bank loan was included in the draft income statement for the year ended 31 March 2022. What was the correct profit for the year ended 31 March 2022? A $33 770 B $34 130 C $43 370 D $43 730
Mark scheme: B
Q12 · Which statement about the reducing balance method of depreciation is not correct?
12 Which statement about the reducing balance method of depreciation is not correct? A A lower amount of depreciation is charged in the early years of the asset’s life than in the later years. B Each year a given percentage is deducted from the cost of the asset less the depreciation to date. C It is used for assets which give greater benefits in the early years of their life. D The net book value of the non-current asset will never reach a nil value.
Mark scheme: A
More questions on Accounting for depreciation and disposal of non-current assets
Q13 · The financial year of Yeung ends on 31 March
13 The financial year of Yeung ends on 31 March. On 1 April 2021, he purchased a machine for $4000. He estimated that it would have a useful working life of 3 years and a residual value of $100. Yeung uses the straight-line method of depreciation. The machine was sold on 1 April 2022 for $1500. What was the loss on disposal? A $1100 B $1200 C $2400 D $2500
Mark scheme: B
More questions on Accounting for depreciation and disposal of non-current assets
Q14 · On 1 April 2021, commission receivable, $210, was outstanding
14 On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the year ended 31 March 2022 amounted to $4850. Which journal entry should have been made at the end of the financial year on 31 March 2022? debit credit $ $ A commission receivable 4640 income statement 4640 B commission receivable 5060 income statement 5060 C income statement 4640 commission receivable 4640 D income statement 5060 commission receivable 5060
Mark scheme: A
Q15 · Nula’s financial year ends on 31 December
15 Nula’s financial year ends on 31 December. She maintains a provision for doubtful debts of 5% of trade receivables. On 1 January 2021, the provision amounted to $800. On 31 December 2021, trade receivables owed $13 400, of which $600 was regarded as irrecoverable. How much was the provision for doubtful debts on 1 January 2022? A $600 B $640 C $660 D $670
Mark scheme: B
More questions on Irrecoverable debts and allowance for irrecoverable debts
Q16 · After the financial statements for the year ended 30 April 2022 had been prepared, a…
16 After the financial statements for the year ended 30 April 2022 had been prepared, a trader discovered that the closing inventory had been over-valued. What will be the effect of this error? profit for the year capital on profit for the year ended 30 April 2022 30 April 2022 ending 30 April 2023 A overstated overstated understated B overstated understated no effect C understated no effect no effect D understated understated overstated
Mark scheme: A
Q17 · Mariam owns a business providing accounting services
17 Mariam owns a business providing accounting services. She provided the following information for the financial year ended 31 March 2022. $ fees owed by clients on 1 April 2021 4 500 fees received from clients during the year ended 31 March 2022 22 500 fees owed by clients on 31 March 2022 1 500 What was the amount of fees shown in the income statement for the year ended 31 March 2022? A $19 500 B $22 500 C $25 500 D $28 500
Mark scheme: A
Q18 · Which item would not appear in the appropriation account of a partnership?
18 Which item would not appear in the appropriation account of a partnership? A interest charged on partners’ drawings B interest paid on loans from partners C interest paid on partners’ capital D salaries paid to partners
Mark scheme: B
Q19 · Carol and Denise are in partnership sharing profits and losses in the ratio 2 : 1
19 Carol and Denise are in partnership sharing profits and losses in the ratio 2 : 1. Denise’s current account balances were as follows. at 1 May 2021 $2000 debit at 1 May 2022 $7000 credit She had made no drawings during the year. What was the total profit made by the partnership in the year ended 30 April 2022? A $9000 B $15 000 C $18 000 D $27 000
Mark scheme: D
Q20 · Which statements are correct?
20 Which statements are correct? 1 A debenture holder of a limited company is liable for the debts of the company. 2 A partner is liable to pay business debts from personal assets. 3 A shareholder of a limited company is responsible for the company’s debts. 4 A sole trader is responsible for all the debts of his business. A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4
Mark scheme: C
Q21 · The draft financial statements of a limited company showed retained earnings of $31 820
21 The draft financial statements of a limited company showed retained earnings of $31 820. It was then found that no adjustment had been made for the following. $ commission receivable accrued 450 insurance prepaid 175 What was the correct amount of the retained earnings? A $31 195 B $31 545 C $32 095 D $32 445
Mark scheme: D
Q22 · Which statement about club accounts is correct?
22 Which statement about club accounts is correct? A Capital and revenue transactions are recorded in the income and expenditure account. B Non-cash transactions are recorded in the income and expenditure account. C Only revenue transactions are recorded in the receipts and payments account. D The closing balance in the receipts and payments account represents a surplus or deficit.
Mark scheme: B
Q23 · A sports club provided the following information for the financial year ended 31 December…
23 A sports club provided the following information for the financial year ended 31 December 2021. $ 1 January 2021 subscriptions paid in advance 200 31 December 2021 subscriptions outstanding 450 subscriptions received during the year 8800 What was the total of the subscriptions that related to the year ended 31 December 2021? A $8150 B $8550 C $9050 D $9450
Mark scheme: D
Q24 · The work in progress of ZT Manufacturers on 1 January was valued at $6200
24 The work in progress of ZT Manufacturers on 1 January was valued at $6200. At the end of the year it was valued at $5400. What was the effect on the cost of production for the year? A decrease $800 B decrease $11 600 C increase $800 D increase $11 600
Mark scheme: C
Q25 · A manufacturing company provided the following information
25 A manufacturing company provided the following information. $ cost of production 345 000 finished goods 1 January 2021 42 000 31 December 2021 36 000 purchases of finished goods 15 000 What was the cost of sales? A $324 000 B $336 000 C $351 000 D $366 000
Mark scheme: D
Q26 · Tahir provided the following information for his first year of trading
26 Tahir provided the following information for his first year of trading. $ sales 170 000 sales returns 6 000 purchases 129 000 Tahir’s gross margin was 25%. What was the value of closing inventory? A $1000 B $2200 C $6000 D $7500
Mark scheme: C
More questions on Calculation and understanding of accounting ratios
Q27 · A business provided the following information
27 A business provided the following information. opening inventory $6800 closing inventory $6000 rate of inventory turnover 5 times What were the purchases for the year? A $29 200 B $31 200 C $32 000 D $32 800
Mark scheme: B
More questions on Calculation and understanding of accounting ratios
Q28 · A trader provided the following information at the end of the financial year
28 A trader provided the following information at the end of the financial year. $ revenue 80 000 gross profit 20 000 expenses 12 000 What was the profit margin? A 10% B 15% C 25% D 40%
Mark scheme: A
More questions on Calculation and understanding of accounting ratios
Q29 · A trader provided the following information
29 A trader provided the following information. $ profit for the year 24 000 working capital 20 000 capital 120 000 non-current liability 30 000 What was the return on capital employed? A 14.12% B 16.00% C 17.14% D 20.00%
Mark scheme: B
More questions on Calculation and understanding of accounting ratios
Q30 · Samuel, a trader, decided to issue statements of account each month
30 Samuel, a trader, decided to issue statements of account each month. Which ratio does Samuel hope to improve by doing this? A current ratio B liquid (acid test) ratio C trade payables turnover D trade receivables turnover
Mark scheme: D
Q31 · John’s rate of inventory turnover was 10 times in year 1 and 8 times in year 2
31 John’s rate of inventory turnover was 10 times in year 1 and 8 times in year 2. What may have caused the change in the rate of inventory turnover? A fall in demand B higher sales C lower inventory levels D lower selling price
Mark scheme: A
Q32 · Maya had annual revenue of $100 000
32 Maya had annual revenue of $100 000. In year 1, her gross margin was 45% and her profit margin was 5%. In year 2, her gross margin was 40% and her profit margin was 3%. What happened to Maya’s cost of sales and expenses in year 2? cost of sales expenses A decreased decreased B decreased increased C increased decreased D increased increased
Mark scheme: C
More questions on Calculation and understanding of accounting ratios
Q33 · Why would a bank manager be interested in the financial statements of a business?
33 Why would a bank manager be interested in the financial statements of a business? A to calculate and assess the trade payables turnover B to check that the correct amount of tax is being paid C to ensure that employees are being paid the correct hourly rate D to ensure that funds are sufficient to cover loan interest
Mark scheme: D
Q34 · ‘Revenue should only be regarded as earned when the legal title of goods and services…
34 ‘Revenue should only be regarded as earned when the legal title of goods and services passes from the seller to the buyer.’ To which accounting principle does this statement refer? A going concern B matching C money measurement D realisation
Mark scheme: D
Q35 · ‘The information provided in financial statements should be capable of being…
35 ‘The information provided in financial statements should be capable of being independently verified.’ To which accounting policy does this statement refer? A comparability B relevance C reliability D understandability
Mark scheme: C
What was in this paper
The subtopics covered by these 35 questions, and how many questions each got. Open one in a new tab to see every Cambridge question on it.
5Corrections of errors4Other payables and other receivables3The double entry system of book-keeping3Accounting concepts2Accounting for depreciation and disposal of non-current assets2Books of prime entry2Clubs and societies2Control accounts2Interpretation of accounting ratios2Manufacturing accounts2Partnerships2Interested parties1Irrecoverable debts and allowance for irrecoverable debts1Limited companies1The purpose of accounting1What you needed in this session
Cambridge’s own grade thresholds for 2022 May/June, Paper 1 · Variant 2. A higher threshold means an easier paper — the bar moves with how the cohort did.