Principles of Accolunts Paper I 2012-2018

CAIE
igcse
accounting
PAPER 1
0452
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IGCSE ACCOUNTING 1 PAPER
Table of Contents
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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

International General Certificate of Secondary Education
*2937408438*
ACCOUNTING 0452/11
Paper 1 May/June 2012
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
FOR ONLINE DELIVERY
CONTACT
ISMAIL BALOL: 03002038998
YAMEEN BUTT: 03028292680

IGCSE ACCOUNTING 4
2 PAPER
1 Which statements about book-keeping and accounting are correct?
1 Accounting is performed periodically rather than daily.

2 Accounting relies on having accurate book-keeping records.
3 Book-keeping involves the preparation of financial statements.
4 Book-keeping is based on the double entry system of recording.
A 1, 2 and 4 B 1 and 3 C 2, 3 and 4 D 2 and 4
2 Padma started a business on 1 April 2011 with $30 000 of her own money. On 31 March 2012
her assets and liabilities were:
machinery at net book value 38 000

other assets 15 000
long-term loan from bank 16 500
What was Padma’s capital on 31 March 2012?
A $30 000 B $36 500 C $46 500 D $53 000
3 Chan returns goods to Yeung.
How is this recorded in the books of Yeung?
account to be debited account to be credited
A Chan sales returns

B sales returns Chan
C Yeung purchases returns
D purchases returns Yeung
4 Winston sold goods on credit to Leroy.
Which entries should Winston make in his ledgers?
sales ledger general ledger
A credit Leroy debit sales

B credit sales debit Leroy
C debit Leroy credit sales
D debit sales credit Leroy
© UCLES 2012 0452/11/M/J/12

IGCSE ACCOUNTING 5
3 PAPER
5 Which book of prime entry is written up from the copies of credit notes issued by a trader?
A purchases journal
B purchases returns journal

C sales journal
D sales returns journal
6 Dave supplies goods to Peter on credit. On 1 April, Peter owed Dave $440. Dave sent or
received the following documents in April.
April 7 Invoice 360

12 Cheque (after deducting $11 cash discount) 429
13 Debit note 50
15 Credit note 50
What was the closing balance on the statement of account on 30 April 2011?
A $260 B $310 C $321 D $421
7 Tahir purchases goods on credit from Yasmin.
How will Yasmin record this?
book of prime entry account to be debited account to be credited
A purchases journal purchases Yasmin

B purchases journal Yasmin purchases
C sales journal sales Tahir
D sales journal Tahir sales
8 A company began trading on 1 January 2012. During that month, the following transactions took
place.
received capital from shareholders, $10 000

received goods for resale, $4000
despatched goods to customer, $5000
paid $3000 for goods received
What was the total in the bank account on 31 January 2012?
A $7000 B $8000 C $11 000 D $12 000
© UCLES 2012 0452/11/M/J/12 [Turn over

IGCSE ACCOUNTING 6
4 PAPER
9 Which is true about a bank reconciliation statement?
A It may uncover any theft of funds.

B It is part of the double entry records of a business.
C It is prepared by the bank.
D It shows items which are in both the cash book and the bank statement.
10 Chang owed Tan $130 which he paid by cheque. Tan credited the bank account and debited
Chang’s account.
Which journal entry will correct this error?
debit credit
$ $
A bank 130
Chang 130
B Chang 130
bank 130
C bank 260
Chang 260
D Chang 260
bank 260
11 Sukesh’s account in the books of Jack showed the following.
Sukesh account
debit credit balance
date
$ $ $
May 1 balance 450 dr

4 sales 200 650 dr
8 bank 432 218 dr
8 discount 18 200 dr
Which statements about the transactions on 8 May are correct?
1 Jack made a payment to Sukesh.

2 Jack received a payment from Sukesh.
3 Sukesh allowed a discount to Jack.
4 Sukesh received a discount from Jack.
A 1 and 3 B 1 and 4 C 2 and 3 D 2 and 4
© UCLES 2012 0452/11/M/J/12

IGCSE ACCOUNTING 7
5 PAPER
12 On 1 April the balance on the purchases account was $7200. During April the following
transactions took place.
cash purchases 1200

credit purchases 5000
goods taken by the owner for her own use 250
What was the balance on the purchases account on 30 April?
A $5950 B $11 950 C $13 150 D $13 400
13 At the start of the financial year insurance was prepaid and commission receivable was still
outstanding.
How would these balances appear in the ledger accounts?
commission
insurance account
receivable account
A credit credit
B credit debit
C debit credit
D debit debit
14 Gary’s financial year ends on 31 March. On 1 April 2011 rent prepaid amounted to $3000. During
the year ended 31 March 2012 a total of $7000 rent was paid. On 31 March 2012 rent
outstanding amounted to $2000.
Which journal entry shows the transfer of the rent to the income statement on 31 March 2012?
debit credit
$ $
A income statement 8 000

rent 8 000
B income statement 12 000
rent 12 000
C rent 8 000
income statement 8 000
D rent 12 000

IGCSE ACCOUNTING 8
6 PAPER
15 Which entries are required to create a provision for doubtful debts?
debit credit
A bad debts account provision for doubtful debts account

B provision for doubtful debts account bad debts account
C income statement provision for doubtful debts account
D provision for doubtful debts account income statement
16 Harry’s income statement showed a loss for the year of $2040. It was later discovered that motor
expenses, $480, had been included in non-current assets.
What was the correct loss for the year?
A $1080 B $1560 C $2520 D $3000
17 A machine cost $30 000. It had an estimated life of six years. Using the reducing (diminishing)
balance method of depreciation at 30 % the first year’s depreciation was $9000.
What was the balance on the provision for depreciation account at the end of the second year?
A $12 000 B $14 700 C $15 300 D $18 000
18 How is the loss on the sale of a non-current asset recorded?
debit credit
A disposal account income statement

B income statement disposal account
C income statement non-current asset account
D non-current asset account income statement
19 An invoice for stationery, $100, was entered as a credit note.
Which entries should be made to correct this error?
debit $ credit $
A stationery 100 supplier 100

B stationery 200 supplier 200
C supplier 100 stationery 100
D supplier 200 stationery 200
© UCLES 2012 0452/11/M/J/12

IGCSE ACCOUNTING 9
7 PAPER
20 What does a debit balance on a sales ledger control account represent?
A amount owed by customers

B amount owed to customers
C total credit sales
D total sales
21 Which is an intangible asset?
A goodwill
B inventory
C machinery
D trade receivables
22 Which is not a service business?
A accountant
B insurance company
C motor trader
D travel agent
23 Two traders are considering forming a partnership.
Which statement is not correct?
A Both partners may have limited liability.

B Both partners may take an active part.
C Partners may share their experience.
D Partners may share their knowledge.
24 Karim did not keep proper accounting records, but provided the following information.
drawings 8 500
capital introduced in year 15 000
capital at 1 January 58 000
capital at 31 December 82 500
What was the profit for the year?
A $16 000 B $18 000 C $33 000 D $48 000

IGCSE ACCOUNTING 10
8 PAPER
25 What is a feature of preference shares?
A The annual dividend is a fixed percentage of the profit of the company.

B The capital is returned before ordinary share capital if the company closes down.
C The holders are usually entitled to attend and vote at shareholders’ meetings.
D The percentage of dividend varies according to the profit of the company.
26 Which group of items would appear in the capital and reserves section of a limited company
balance sheet?
A ordinary share capital, debentures, retained earnings

B ordinary share capital, ordinary share dividend, preference share capital
C preference share capital, ordinary share capital, debentures
D preference share capital, ordinary share capital, retained earnings
27 A manufacturer provided the following information.
factory wages 11 000

carriage on raw material 2 700
machine repairs 3 420
supervisor’s wages 6 000
raw materials used 19 700
What was the prime cost?
A $33 400 B $36 700 C $39 400 D $42 820
28 Esarba has a pension contribution and a trade union subscription deducted from her pay.
Which type of deduction are they?
pension contribution subscription
A statutory statutory
B statutory voluntary
C voluntary statutory
D voluntary voluntary
© UCLES 2012 0452/11/M/J/12

IGCSE ACCOUNTING 11
9 PAPER
29 A business had the following assets and liabilities.
inventory 11 000
trade receivables 39 000
bank overdraft 8 000
trade payables 12 000
long-term loan 30 000
What was the current ratio?
A 1:1 B 1.38 : 1 C 1.95 : 1 D 2.5 : 1
30 Sally applies the historical cost principle and records all her non-current assets at the actual cost.
What is an advantage of applying this principle?
A Cost is a known fact and can be verified.

B It is easy to compare assets bought at different times.
C It provides for the effects of inflation.
D Non-current assets are shown at a realistic value.
© UCLES 2012 0452/11/M/J/12

Question Question
Key Key
Number Number
1 A 16 C
2 B 17 C
3 B 18 B
4 C 19 B
5 D 20 A
6 B 21 A
7 D 22 C
8 A 23 A
9 A 24 B
10 C 25 B
11 D 26 D
12 C 27 A
13 D 28 D
14 B 29 D
15 C 30 A
General comments
There were 81 candidates. The mean mark was 13.15 and the standard deviation was 5.15.
When compared to the target accessibility of 25-80%, one item proved to be slightly easier than expected,
two items proved to be slightly more difficult than expected, three items more difficult than expected and one
item much more difficult than expected.
All the items were within the scope of the syllabus.
The statistics indicate that a significant number of candidates do not appear to have a thorough knowledge
of double entry book-keeping. It is important that candidates have a thorough knowledge of the basic
principles of the subject and that they read each item very carefully before attempting an answer. Many
failed to appreciate the effect of entering an item on the wrong side of an account. Many also seemed
unable to distinguish between entries in the books of the seller and the buyer. Inevitably, there appeared to
be a degree of guesswork on the part of the less-able candidates.
Comments on specific items
Item 1
It was anticipated that most candidates would be able to recognise the differences between book-keeping
and accounting.

© 2012
Items 3, 5, 7, and 11
In each of these items a significant number of candidates made the error of not considering the scenario
from the viewpoint of the trader whose books were being maintained.
Items 4, 15, and 18
The majority of candidates obviously knew the accounts which were affected, but many selected the options
which reversed the entries in those accounts. A lack of understanding of the division of the ledger also
played a part in the incorrect responses to Item 4.
Item 6
27% correctly selected the key, B. The statistics indicate a substantial degree of guesswork. It was
anticipated that candidates would know that the payment and discount cancelled out the original balance and
that the amount owing at the month-end was the invoice less the credit note.
Item 8
This should have been a relatively straight-forward item. It was expected that candidates would appreciate
that receiving and despatching goods did not involve the exchange of money. The bank balance on 31
January should have been $10 000 less $3000.
Item 9
It would appear that a large number of candidates do not understand the purpose of a bank reconciliation
statement. The majority selected option D, which stated that it contained items appearing in both the cash
book and the bank statement. Candidates should have been able to select the key, A, by a process of
elimination of the other three options.
Items 10 and 19
Most candidates recognised the accounts in which entries should be made to correct the errors described,
but a significant number failed to recognise that the accounts would be affected by double the amount of the
error.
Items 13 and 14
These both concerned year-end adjustments. The statistics indicate that this is a topic in which many
candidates would benefit from further study.
Items 25 and 26
The accounts of limited companies continue to be a difficult topic for many candidates. It was expected that
candidates would know that dividend received by preference shareholders is based on the par value of the
shares and is not a percentage of the profit. It was also expected that most candidates would understand
that debentures are long term loans and are not part of the capital and reserves of a company.
Item 28
This concerned deductions from an employee’s gross pay. Candidates should have realised that both the
pension contribution and the subscription were voluntary deductions. Any government/state pension is
provided from statutory deductions in the form of National Insurance, whereas a private pension contribution
is purely voluntary.
Item 29
36% selected the key, D. 41% incorrectly included the long-term loan in the current liabilities.
Item 30
Only 21% selected the key, A. It was expected that the majority of candidates would recognise that options
B, C, and D were not advantages of using the accounting principle of historical cost.

© 2012

ACCOUNTING Paper 1 0452/12

Multiple Choice May/June 2012
1 hour
Additional Materials: Multiple Choice Answer Sheet
Soft clean eraser
*0768255893*
Soft pencil (type B or HB is recommended)
Write in soft pencil.

Do not use staples, paper clips, highlighters, glue or correction fluid.
Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided
unless this has been done for you.
There are thirty questions on this paper. Answer all questions. For each question there are four possible
answers A, B, C and D.
Choose the one you consider correct and record your choice in soft pencil on the separate Answer Sheet.
Read the instructions on the Answer Sheet very carefully.
Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
Any rough working should be done in this booklet.
Calculators may be used.

IGCSE ACCOUNTING 15
2 PAPER
1 Which task would not be carried out by an accountant?
A comparing one year’s results with those of previous years

B interpreting the accounting records
C preparing financial statements
D recording the financial transactions
2 Jane made a payment to a supplier for goods bought on credit. Jane does not have a bank
overdraft.
What is the effect on the accounting equation?
A decrease capital and decrease assets

B decrease liabilities and decrease assets
C increase assets and decrease liabilities
D increase liabilities and decrease capital
3 Anna keeps a full set of accounting records.
Goods purchased by Anna from Winston were returned before they were paid for.
Where will Anna record the return of goods?
A cash book and purchases ledger

B general ledger only
C general ledger and purchases ledger
D purchases ledger only
4 What is true about a statement of account issued by a business?
1 It is a source document for the purchases journal.

2 It is a source document for the sales journal.
3 It is sent by a customer to a supplier.
4 It is sent by a supplier to a customer.
A 1 and 3 B 2 and 4 C 3 only D 4 only
5 Hasina buys radios from Nazneen at a list price of $10 each. Hasina bought 12 radios and was
offered 20 % trade discount and 4 % cash discount. Two radios were faulty and returned to
Nazneen.
What was the total of the credit note issued by Nazneen?
A $15.36 B $16.00 C $19.20 D $20.00
© UCLES 2012 0452/12/M/J/12

IGCSE ACCOUNTING 16
3 PAPER
6 A trader posts the total of her purchases returns journal to the ledger at the end of each month.
On 30 April 2012 the purchases returns journal showed the following totals.
gross trade net

discount
2012 $ $ $
April 30 totals for month 1200 240 960
Which entry should be made in the purchases returns account on 30 April 2012?
A credit $960
B credit $1200
C debit $960
D debit $1200
7 On 1 January Sudip borrowed $15 000 from the bank at an interest rate of 8 % per annum.
On 1 August the loan was increased to $24 000.
How much interest was Sudip charged for the year ended 31 December?
A $1000 B $1500 C $1920 D $2000
8 On 31 March 2012, Ahmed’s bank statement showed a credit balance of $2500. Ahmed found
that a cheque issued for $90 and a deposit of $500 had not been included on the bank statement.
What was the balance at bank shown in Ahmed’s cash book on 31 March 2012?
A $1910 B $2090 C $2910 D $3090
9 Which item is recorded in the general journal before it is entered in the ledger?
A bad debt written off

B cash sales
C equipment purchased by cheque
D purchases returns
10 Which account could have a credit balance?
A bank
B carriage inwards
C carriage outwards
D cash

IGCSE ACCOUNTING 17
4 PAPER
11 What is a trial balance?
A a list of balances remaining on the books of a business at a certain date

B a list of the transactions of a business for the year
C a statement of the assets, liabilities and capital of a business at a certain date
D a summary showing the profit made by a business
12 Which is an error of omission?
A rent paid in cash not entered in the rent account

B rent paid not entered in the cash book or the rent account
C rent paid not included in the income statement
D rent paid not included in the trial balance
13 John’s financial year ends on 31 December. He pays his annual insurance premium on 1 July. He
provided the following information.
insurance premium paid on 1 July 2010 2400

insurance premium paid on 1 July 2011 3000
How much was transferred from the insurance account to the income statement for the year
ended 31 December 2011?
A $2400 B $2700 C $3000 D $4200
14 Raminder maintains a provision for doubtful debts of 2 ½ % of the trade receivables.
On 1 January the balance on the provision account was $1075. The trade receivables at
31 December amounted to $41 000.
Which entry will Raminder make on 31 December to adjust the provision for doubtful debts?
debit $ credit $
A income statement 50 provision for doubtful debts 50

B income statement 1025 provision for doubtful debts 1025
C provision for doubtful debts 50 income statement 50
D provision for doubtful debts 1025 income statement 1025
© UCLES 2012 0452/12/M/J/12

IGCSE ACCOUNTING 18
5 PAPER
15 A company purchased a new computer system.
What would be recorded as revenue expenditure?
A computer hardware
B computer software
C ink cartridges
D inkjet printers
16 What is depreciation?
A an entry to write off the cost of a non-current asset when it is scrapped

B a reserve to finance the purchase of future non-current assets
C a reserve to pay for repairs which increase with the non-current asset’s age
D a system of matching the benefits of using a non-current asset with its cost
17 A machine costing $60 000 is depreciated by 25 % per annum on the reducing (diminishing)
balance method.
What was the depreciation charge for the second year?
A $11 250 B $15 000 C $26 250 D $30 000
18 Lisa’s trial balance failed to balance and a suspense account was opened.
It was found that the return of goods, $20, by Zaffar, a customer, had been correctly entered in
the sales returns account, but had been incorrectly debited to Zaffar’s account.
Which journal entry corrects this error?
debit credit
$ $
A suspense 20
Zaffar 20
B Zaffar 20
suspense 20
C suspense 40
Zaffar 40
D Zaffar 40
suspense 40

IGCSE ACCOUNTING 19
6 PAPER
19 What would be entered in a purchases ledger control account?
A cash purchases
B discounts allowed
C refund to credit customer
D returns outward
20 Which statement is correct?
A cost of goods sold – gross profit – sales returns = revenue
B cost of goods sold – gross profit + sales returns = revenue
C cost of goods sold + gross profit – sales returns = revenue
D cost of goods sold + gross profit + sales returns = revenue
21 When might goodwill appear in a balance sheet?
A when a trader plans to retire and close his business

B when it has been purchased
C when the market value of non-current assets is higher than net book value
D when the workforce is highly skilled
22 A trader provided the following information.
non-current assets 25 000

current assets 12 000
current liabilities 9 000
non-current liabilities 10 000
What was the capital employed?
A $18 000 B $28 000 C $38 000 D $56 000
23 At the end of his financial year Tom owes $150 rent.
How will the adjustment for this amount affect Tom’s financial statements?
A decrease expenses and increase current assets

B decrease expenses and increase current liabilities
C increase expenses and increase current assets
D increase expenses and increase current liabilities
© UCLES 2012 0452/12/M/J/12

IGCSE ACCOUNTING 20
7 PAPER
24 Amina and Sabena are in partnership.
How is interest on drawings recorded in the ledger?
A credit capital account

B credit current account
C debit capital account
D debit current account
25 Which would appear in a receipts and payments account?
A depreciation
B donations
C inventory
D subscriptions owing by members
26 A trader does not keep a full set of accounting records.
How is the profit for the year calculated?
A closing capital less opening capital less capital introduced plus drawings
B closing capital less opening capital less drawings
C closing capital less opening capital plus capital introduced
D closing capital less opening capital plus capital introduced less drawings
27 A manufacturing business provided the following information.
direct expenses 6 000

direct labour 15 000
direct materials 20 000
office expenses 4 000
factory heating and lighting 10 000
selling expenses 8 000
What was the prime cost of production?
A $41 000 B $45 000 C $51 000 D $63 000

IGCSE ACCOUNTING 21
8 PAPER
28 Anne works 40 hours and is paid $5 per hour. She pays income tax at 20 %, national insurance at
10 % and pension contributions at 5 %.
What is her gross pay?
A $130 B $140 C $160 D $200
$ $
revenue 60 000
opening inventory 15 000
purchases 30 000
45 000
closing inventory 10 000 35 000
gross profit 25 000
What was the rate of inventory turnover?
A 2.5 times B 2.8 times C 3.5 times D 4.8 times
30 Loose tools are shown in a balance sheet at valuation.
Which accounting principle is being applied?
A consistency
B going concern
C materiality
D prudence

Question Question
Key Key
Number Number
1 D 16 D
2 B 17 A
3 C 18 C
4 D 19 D
5 B 20 D
6 A 21 B
7 B 22 B
8 C 23 D
9 A 24 D
10 A 25 B
11 A 26 A
12 B 27 A
13 B 28 D
14 C 29 B
15 C 30 C
General comments
There were 5350 candidates. The mean mark was 17.54 and the standard deviation was 6.40.
When compared to the target accessibility of 25-80%, one item proved to be very difficult and two items
proved to be very slightly easier than expected.
All the items were within the scope of the syllabus.
The statistics indicate that a significant number of candidates had a good knowledge of the subject and were
able to apply that knowledge to the given situations.
Item 1
The key, D, was selected by only 11%. It was anticipated that the vast majority of candidates would know
that the accountant would not be involved in recording financial transactions. It may be that candidates
misread the question and did not notice the word “not”.
Item 4
49% correctly selected D as the key. 38% selected B, understanding that a statement of account is sent by
the supplier to the customer, but incorrectly believing that it is a source document for the sales journal.

© 2012
Item 5
Only 29% selected the key, B. The 40% selecting option A incorrectly deducted the cash discount in addition
to the trade discount.
Item 7
46% incorrectly calculated the interest at 8% on $24 000 for a whole year. The calculation should have used
8% on $15 000 for 7 months plus 8% on $24 000 for 5 months.
Item 8
The vast majority understood that the cash book balance would be $410 different to the bank statement
balance, but 35% incorrectly deducted this figure from the bank statement balance, instead of adding it.
Item 13
It was anticipated that the majority of candidates would appreciate that the expense for the year was half of
the payment made on 1 July 2010 and half of the payment made on 1 July 2011. 55% correctly selected the
key, B, but 32% indicated that the expense for the year was $3000 (the payment made on 1 July 2011).
Item 14
75% realised that the entry for the adjustment to the provision for doubtful debts would be $50 and not
$1025, but only 55% knew the correct double entry.
Item 16
It was expected that the majority of candidates would recognise that option D gave the correct definition of
depreciation, but the key, D, was selected by only 40%.
Item 22
Candidates were expected to know that capital employed represents the net assets or, alternatively, the
owner’s capital plus non-current liabilities. 39% incorrectly deducted the non–current liabilities from the net
assets.
Item 25
58% correctly selected the key, B. 30% failed to appreciate that subscriptions owing would not appear in a
receipts and payments account which records only monies paid and received during the period.
Item 28
This should have been a relatively straight-forward item. The key was selected by only 51%. Option A, the
employee’s net pay, was selected by 32%: possibly because they misread the question.
Item 30
The key, C, was correctly chosen by 54%. It was expected that the vast majority of candidates would select
materiality as the accounting principle being applied.

© 2012


Multiple Choice October/November 2012
1 hour
Soft clean eraser
*3600150567*


IGCSE ACCOUNTING 25
2 PAPER
1 On 1 October Winston’s assets totalled $10 000 and his liabilities totalled $3000.
On 2 October he paid $190 to a creditor after deducting $10 cash discount.
What was Winston’s capital after the transaction on 2 October?
A $6800 B $6810 C $6990 D $7010
2 What is the purpose of the double entry book-keeping system?
A to calculate the owner’s capital

B to ensure no transaction is omitted from the books
C to prepare a bank reconciliation statement
D to record both aspects of every transaction
3 Sue returned goods to Ana.
Which entries did Sue make in her books?
debit entry credit entry

account ledger account ledger
A Ana general purchases returns purchases

B Ana purchases purchases returns general
C purchases returns general Ana purchases
D purchases returns purchases Ana general
4 Karim issued an invoice, a credit note and a receipt.
What has happened?
A Karim purchased goods and paid the supplier immediately.

B Karim purchased goods on credit, made returns to the supplier and paid the balance due.
C Karim sold goods and received immediate payment from the customer.
D Karim sold goods on credit, received returns from the customer and received the balance
due.
5 Which statement about a debit note is correct?
A It is sent to a customer to request payment of an account.

B It is sent to a customer when his order cannot be supplied in full.
C It is sent to a supplier to order additional goods.
D It is sent to a supplier when goods are received damaged.
© UCLES 2012 0452/11/O/N/12

IGCSE ACCOUNTING 26
3 PAPER
6 Amina returned goods to Khalid.
Where will this transaction be recorded in Khalid’s books?
book of prime entry account to be debited account to be credited
A purchases returns journal Amina purchases returns

B purchases returns journal purchases returns Amina
C sales returns journal Amina sales returns
D sales returns journal sales returns Amina
7 On 1 October Wayne invoiced Mandy for goods, $5000, less 20 % trade discount. Mandy was
also entitled to a cash discount of 5 % if the balance was paid by 31 October. On 28 October
Mandy sent Wayne a cheque for the amount due.
What entries will Wayne make on the debit side of his cash book on 28 October?
discount allowed bank

$ $
A 200 3800
B 250 3750
C 1200 3800
D 1250 3750
8 On 1 September Miriam’s bank statement showed a credit balance of $3000. She found that
there was an unpresented cheque of $360 and an uncredited deposit of $780.
What was the balance shown in the cash book on 1 September?
A $2580
B $2580 overdrawn
C $3420
D $3420 overdrawn
© UCLES 2012 0452/11/O/N/12 [Turn over

IGCSE ACCOUNTING 27
4 PAPER
9 At the end of Leroy’s financial year it was decided that the balance on the telephone expenses
account, $340, should be split 90 % for business use and 10 % for personal use.
Which journal entry records the closing of the telephone expenses account at the end of the
financial year?
debit credit
$ $
A drawings 34
income statement 306
telephone expenses 340
B drawings 34
C income statement 340

drawings 34
D telephone expenses 340

drawings 34
10 The following balances were extracted from Majid’s purchases and sales ledgers.
Walid account $1500 debit

Xian account $1700 debit
Yu account $2300 credit
Zaid account $2700 credit
How much does Majid owe?
A $1800 B $3200 C $5000 D $8200
11 On which side of the following accounts would an entry be made to transfer the total of the
account to the income statement at the end of the financial year?
carriage inwards purchases returns

sales account
account account
debit credit debit credit debit credit
A
B
C
D
© UCLES 2012 0452/11/O/N/12

IGCSE ACCOUNTING 28
5 PAPER
12 Which appear on the debit side of a trial balance?
1 assets
2 capital
3 expenses
4 revenue
13 A trial balance fails to balance.
Which error caused this?
A A cheque, $300, received from M. Green was entered on the credit side of the cash book
and on the debit side of M. Green’s account.
B Motor vehicle repairs, $500, were entered in the motor vehicle account.
C Purchases of goods on credit from J. Black, $750, were entered in J. Blackshaw’s account.
D The sales journal was overcast by $1000.
14 A trader pays rent for premises.
How is the rent accrued at the end of the financial year shown?
rent account balance sheet
A credit balance brought down current asset

B credit balance brought down current liability
C debit balance brought down current asset
D debit balance brought down current liability
15 Ajay maintains a provision for doubtful debts of 3 % of trade receivables.
On 1 January 2011, the balance on the provision for doubtful debts account was $70. The trade
receivables amounted to $3500 on 31 December 2011.
Which entry would Ajay make on 31 December 2011?
debit credit

B income statement provision for doubtful debts account
C provision for doubtful debts account trade receivables account
D provision for doubtful debts account income statement

IGCSE ACCOUNTING 29
6 PAPER
16 Which are revenue expenditure for a motor vehicle dealer?
1 advertising costs
2 extension to premises
3 purchase of cars for resale
4 purchase of cars for sales people
17 A book-keeper opened a suspense account.
Which type of error had been made?
A addition
B commission
C omission
D principle
18 A book-keeper made two errors.
Repairs to machinery were debited in the machinery account.
Purchase of a motor vehicle was debited in the purchases account.
How are the non-current assets in the balance sheet affected?
machinery motor vehicles
A overstated overstated
B overstated understated
C understated overstated
D understated understated
19 Which is recorded on the credit side of a purchases ledger control account?
A cheques paid
B credit purchases
C discounts received
D returns outwards
© UCLES 2012 0452/11/O/N/12

IGCSE ACCOUNTING 30
7 PAPER
20 The debit balance on the sales ledger control account on 1 August was $8260.
The total of the sales journal on 31 August was $26 840 and the total of the sales returns journal
$1220. The cash book for August showed receipts from credit customers of $22 000.
What was the balance on the sales ledger control account on 31 August?
A $2200 B $4640 C $11 880 D $14 320
21 On 1 January 2011 Kim’s net assets totalled $70 000. On 31 December 2011 they totalled
$55 000. During the year he had withdrawn $4000 for personal use.
What was the profit or loss for the year?
A $11 000 loss

B $11 000 profit
C $19 000 loss
D $19 000 profit
22 On 30 September 2012 a business had an inventory of goods for re-sale which had cost $23 000.
This included goods costing $1000 which were damaged and could only be sold for $700, after
paying re-packing costs of $50.
At what value should inventory be shown in the balance sheet at 30 September 2012?
A $22 000 B $22 250 C $22 650 D $22 700
23 Interest on capital and interest on drawings compensate which partner?
A one with higher capital and higher drawings.

B one with higher capital and lower drawings.
C one with lower capital and higher drawings.
D one with lower capital and lower drawings.
24 Which may be included in an income and expenditure account?
A bad debts
B opening balance on the bank account
C purchase of equipment
D subscriptions received for the following financial year

IGCSE ACCOUNTING 31
8 PAPER
25 What is a statement of affairs?
A a comparison of cash inflows and outflows for a specific period

B a comparison of revenues and expenses for a specific period
C a list of assets and liabilities at a specific date
D a list of trade receivables and trade payables at a specific date
26 A limited company provided the following information.
1 January ordinary shares of $1 each 200 000

1 January retained earnings 12 000
31 December profit for year 43 000
transfer to general reserve 10 000
A dividend of 10 % on ordinary shares was paid during the year.
What was the total of the retained earnings on 31 December?
A $13 000 B $23 000 C $25 000 D $35 000
27 What is the main purpose of a clock card?
A to calculate the net pay

B to record the hours worked
C to show the social security number
D to state the gross pay
28 Wang provided the following information.
revenue 32 000
cost of sales 20 000
closing inventory 5 000
A 1.67 times B 2.67 times C 3.33 times D 5.33 times
© UCLES 2012 0452/11/O/N/12

IGCSE ACCOUNTING 32
9 PAPER
29 A trader decided that all items of office equipment costing less than $500 would be treated as
office expenses in the year of purchase.
A going concern
B historical cost
C materiality
D prudence
30 Waheda updated her information and communications technology equipment and sent her
employees on a training course.
Applying the money measurement principle, which would not be recorded in Waheda’s
accounting records?
A cost of paper and disks

B cost of staff training
C improvement of computer system
D improvement of employees’ knowledge
© UCLES 2012 0452/11/O/N/12

Question Question
Key Key
Number Number
1 D 16 B
2 D 17 A
3 B 18 B
4 D 19 B
5 D 20 C
6 D 21 A
7 A 22 C
8 C 23 B
9 A 24 A
10 C 25 C
11 B 26 C
12 A 27 B
13 D 28 C
14 B 29 C
15 B 30 D
General comments
There were 351 candidates. The mean mark was 16.00 and the standard deviation was 5.22. When
compared to the target accessibility of 25-80%, two items proved slightly easier than anticipated and two
items proved too difficult. All the items were within the scope of the syllabus.
A significant number of candidates had a good knowledge of the subject and were able to apply that
knowledge to the given situations. There is some evidence to suggest that some candidates misread some
of the items: candidates are advised to read the items very carefully before selecting their answers. The
statistics also indicate a degree of guesswork on the part of some candidates.
Item 1
It was expected that the majority of candidates would understand that the capital would increase by the
amount of the cash discount received. 64% incorrectly believed that the capital would reduce by the amount
paid to the creditor.
Item 3
71% knew the correct double entry for the return of goods, but only 44% could select the ledger in which the
accounts would appear.

© 2012
Item 5
It was anticipated that the vast majority of candidates would have sufficient knowledge of business
documents to select the key, D.
Item 7
This item required a thorough knowledge of trade discount and cash discount. Candidates should be aware
that only cash discount is recorded in the cash book and that this is calculated on the price of the goods after
the deduction of trade discount.
Item 8
53% correctly calculated that the balance on the cash book would be $3420, but only half of these
candidates appreciated that the balance would be a debit balance.
Item 9
The statistics indicate a substantial degree of guesswork. It was anticipated that the majority of candidates
would appreciate that the income statement would be debited with the business expense for the year (Option
A).
Item 10
This should have been a relatively straightforward item. It was expected that candidates would appreciate
that the trader owed $5000 to his creditors.
Items 11 and 15
These both involved year-end transfers from the ledger to the income statement.
In Item 11 only 18% selected the key, B. 53% incorrectly selected Option C which represented where the
account balances would appear in the ledger and not the entries required to make transfers to the income
statement.
In Item 15 the majority of candidates understood that the double entry would be in the income statement and
the provision for doubtful debts account, but only 48% chose the key, B.
Item 14
81% recognised that rent accrued represents a current liability, but only 50% understood that the rent
account would have a credit balance brought down.
Item 16
The correct key was selected by 54%of candidates. The statistics indicate a degree of guesswork on the
part of the other candidates.
Item 17
It was expected that candidates would understand that only an error of addition would be revealed by a trial
balance, requiring a suspense account to be opened.
Item 21
76% of candidates correctly calculated that the change in the capital would be $11 000. 57% correctly
identified this as a loss.
Item 24
Candidates should appreciate that an income and expenditure account includes only items of income and
expenditure relating to that particular year. The correct key was A.

© 2012
Item 25
The correct key was selected by 57% of candidates, but the statistics indicate a degree of guesswork by the
other candidates.
Item 26
A thorough knowledge of the preparation of limited company appropriation accounts was required for this
item. Only 47% correctly identified the key, C.
Item 28
Over half the candidates selected the correct key, C. 24% used the total of the opening and closing
inventories instead of the average inventory.
Item 29
Candidates were expected to understand that the stem described an application of the principle of
materiality. The statistics indicate a degree of guesswork on the part of 44% of the candidates.
FOR ONLINE DELIVERY
CONTACT

© 2012


1 hour
Soft clean eraser
*7873627118*


IGCSE ACCOUNTING 37
2 PAPER
1 For which purpose does a sole trader not use the information provided in his financial
statements?
A to assist with decision-making

B to compare performance with previous years
C to determine the amount of his bank overdraft
D to plan for the future
2 Sara had the following assets and liabilities on 1 August 2012.

inventory 1 500
What was Sara’s capital?
A $34 800 B $36 200 C $44 800 D $46 200
3 On 1 January Tan, a sole trader, lent Chan $4000. On 1 November Chan repaid part of the loan
leaving an amount outstanding of $1000.
Which entry was made in the accounts of Tan on 1 November?
account to be debited $ account to be credited $
A bank 1000 Chan loan 1000

B bank 3000 Chan loan 3000
C Chan loan 1000 bank 1000
D Chan loan 3000 bank 3000
4 What is the purpose of an invoice?
A to confirm that a payment has been received

B to confirm that damaged goods have been returned
C to show details of all transactions with a customer during the month
D to show details of goods that have been supplied on credit
© UCLES 2012 0452/12/O/N/12

IGCSE ACCOUNTING 38
3 PAPER
5 Daniel allows Joanne trade discount of 25 % and cash discount of 5 % if invoices are paid within
30 days.
Joanne purchased goods with a list price of $1200 from Daniel.
Which amount would be entered in Joanne’s purchases journal?
A $840 B $855 C $900 D $1200
6 On 30 March the bank columns of a cash book showed an overdraft of $1860. On 31 March the
following transactions took place.
paid cash into the bank 490

bought stationery and paid by cheque 20
What was the bank balance brought down on 1 April?
A $1390 credit
B $1390 debit
C $2330 credit
D $2330 debit
7 A bank reconciliation statement starts with the balance in the cash book. It includes uncredited
deposits and unpresented cheques. It also includes a bank error because bank charges have
been deducted twice on the bank statement.
How are these items shown in the bank reconciliation statement?
added subtracted
A uncredited deposits unpresented cheques

bank error
B uncredited deposits unpresented cheques

bank error
C unpresented cheques uncredited deposits

bank error
D unpresented cheques uncredited deposits

bank error

IGCSE ACCOUNTING 39
4 PAPER
8 On 2 October Nina received a cheque from Zaffar, a credit customer. On 12 October the cheque
was returned unpaid by the bank.
Which entry would Nina make on 12 October?
A bad debts bank

B bad debts Zaffar
C provision for doubtful debts Zaffar
D Zaffar bank
9 The following account appeared in Amna’s ledger.
Syed account
date details
$ $ $
2012
Sept 1 Balance b/d 400 dr
14 Sales 600 1000 dr
26 Bank 390 610 dr
26 Discount 10 600 dr
Which statement is true?
A Amna owed Syed $400 on 1 September.

B Amna paid Syed $390 by cheque on 26 September.
C Syed allowed $10 cash discount to Amna on 26 September.
D Syed purchased goods, $600, on credit from Amna on 14 September.
10 Which error would not be revealed by a trial balance?
A an error made when calculating the balance on an account

B a mistake made when totalling the debit column of the trial balance
C a single entry rather than a double entry made for a transaction
D a transaction completely omitted from the accounting records
© UCLES 2012 0452/12/O/N/12

IGCSE ACCOUNTING 40
5 PAPER
11 Alice sublets part of her premises to Mandy. At the end of the financial year Mandy owed $100
rent to Alice.
How would this appear in Alice’s ledger and balance sheet?
rent received account

balance sheet
in the ledger

12 Which entry is made to record a decrease in a provision for doubtful debts?
debit credit
A income statement provision for doubtful debts account

B provision for doubtful debts account income statement
C provision for doubtful debts account trade receivables
D trade receivables provision for doubtful debts account
13 A wholesaler had the following transactions.
sold goods, $30 000, on credit

received cheque, $12 000, from sale of old fixtures at book value
How would these transactions be classified?
revenue receipt capital receipt

$ $
A – 42 000
B 12 000 30 000
C 30 000 12 000
D 42 000 –

IGCSE ACCOUNTING 41
6 PAPER
14 The purchase of a motor vehicle was wrongly recorded as motor expenses.
What is the effect of this error?
A gross profit is understated

B profit for the year is overstated
C total assets are overstated
D total assets are understated
15 What is the reason for charging depreciation on a non-current asset?
A to accumulate a fund of money to replace an asset

B to charge the cost of using an asset against income
C to ensure profits are not understated
D to show the market value of an asset
16 Which entry is required to record the annual depreciation charge on machinery?
debit credit
A income statement machinery at cost account
B income statement provision for depreciation of

machinery account
C machinery at cost account income statement
D provision for depreciation of income statement

machinery account
17 Why is a sales ledger control account usually prepared by a more senior 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
© UCLES 2012 7110/12/O/N/12

IGCSE ACCOUNTING 42
7 PAPER
18 Henri has charged Thibault interest on his overdue accounts.
Where does this interest appear in Thibault’s control accounts?
A on the credit side of the purchases ledger control account

B on the credit side of the sales ledger control account
C on the debit side of the purchases ledger control account
D on the debit side of the sales ledger control account

expenses 8 000
profit for the year 14 000
What was the revenue?
A $48 000 B $62 000 C $84 000 D $92 000
20 How is capital employed calculated?
A current assets – current liabilities

B non-current assets + current assets
C owner’s capital + non-current liabilities
D owner’s capital + total liabilities
21 Nirmal, a business consultant, provided the following information.

rent received from tenant 1 520
general expenses 39 760
loan interest paid 1 230
What was the total of the fees received from clients?
A $60 410 B $61 930 C $62 870 D $63 160

IGCSE ACCOUNTING 43
8 PAPER
22 A rent account showed a debit balance of $2000 on 1 January 2011.
Rent paid during the year ended 31 December 2011 was $12 000.
Rent prepaid at 31 December 2011 amounted to $3000.
What was the charge for rent in the income statement for the year ended 31 December 2011?
A $11 000 B $12 000 C $14 000 D $15 000
23 Which group contains only advantages of being in partnership?
A additional finance is available, profits are shared, action by one partner binds the others
B additional finance is available, responsibilities are shared, losses are shared
C losses are shared, action by one partner binds the others, risks are shared
D responsibilities are shared, profits are shared, risks are shared
24 A partner is entitled to interest on his capital.
How is this recorded in the personal account of the partner?
A credit partner’s capital account

B credit partner’s current account
C debit partner’s capital account
D debit partner’s current account
25 The financial year of a sports club ends on 31 December. Members’ subscriptions received
during 2011 were as follows.
for the year ended 31 December 2010 50

for the year ended 31 December 2011 2500
for the year ending 31 December 2012 25
How much will be shown for subscriptions in the receipts and payments account for the year
A $2475 B $2525 C $2550 D $2575
26 Donald’s rate of inventory turnover was 10 times. The inventory on 1 January was $800 and the
inventory on 31 December was $1000.
What were his purchases?
A $8800 B $9000 C $9200 D $10 800
© UCLES 2012 7110/12/O/N/12

IGCSE ACCOUNTING 44
9 PAPER
27 The issued share capital of DX Ltd consists of ordinary shares.
The retained earnings were $45 000 on 1 January 2011. These had increased to $75 000 on
31 December 2011. The company earned a profit for the year of $80 000.
What was the total ordinary share dividend for the year?
A $30 000 B $35 000 C $45 000 D $50 000
28 Which are statutory deductions from an employee’s gross pay?
A income tax and social security contributions

B income tax and subscription to trade union
C social security contributions and donation to charity
D subscription to trade union and donation to charity
29 What is not included in the calculation of the quick (acid test) ratio?
A bank overdraft
B inventory
C trade payables
D trade receivables
30 The cost of the owner’s personal use of business motor vehicles is excluded from the motor
vehicle expenses.
A accounting entity
B historical cost
C materiality
D money measurement
© UCLES 2012 7110/12/O/N/12

Question Question
Key Key
Number Number
1 C 16 B
2 A 17 A
3 B 18 A
4 D 19 D
5 C 20 C
6 A 21 C
7 C 22 A
8 D 23 B
9 D 24 B
10 D 25 D
11 C 26 C
12 B 27 D
13 C 28 A
14 D 29 B
15 B 30 A
General comments
There were 16 453 candidates. The mean mark was 13.11 and the standard deviation was 5.37. When
compared to the target accessibility of 25-80%, one item proved slightly too difficult. All the items were within
the scope of the syllabus.
knowledge to the given situations. However, the statistics show that many candidates experienced some
difficulty with the items involving double entry. It is essential that candidates have a thorough knowledge of
double entry. There is some evidence to suggest that some candidates misread some of the items:
candidates are advised to read the items very carefully before selecting their answers. The statistics also
indicate a degree of guesswork on the part of some candidates.
Item 1
It was anticipated that the majority of candidates would select the correct key, C. It may be that some
candidates misread the item and did not notice the word “not”.
Item 5
The correct key was selected by 46%. The selection of the other options may indicate that a significant
number of candidates are unsure about the recording of trade discount and cash discount.

© 2012
Items 6, 9, 11, 12, 16, 18
These items required candidates to have a thorough knowledge of double entry.
In Item 6 69% correctly calculated the balance of $1390, but only 45% understood that this would be a credit
balance when brought down.
In Item 9 only those candidates with an understanding of double entry were able to interpret the entries in
the account correctly
51% recognised that rent receivable due represented a current asset in Item 11, but only 29% understood
how this would appear in the ledger.
69% of candidates understood that the double entry would involve the income statement and the provision
for doubtful debts account in Item 12. However, nearly half of these candidates reversed the entry.
In Item 16 78% understood that the double entry would involve the income statement and the provision for
depreciation account. Once again, lack of a thorough knowledge of double entry resulted in many
candidates reversing the entry.
An understanding of double entry was essential in Item 18. 58% knew that interest affected the purchases
ledger control account, but only 32% chose the key, A.
Item 7
The statistics indicate a substantial degree of guesswork and that a significant number of candidates did not
understand bank reconciliation statements.
Item 8
The key was selected by only 28%. It was expected that candidates would know that a dishonoured cheque
does not necessarily mean that the debtor is written off as a bad debt.
Item 15
The correct key, B, was selected by only 27%. The majority of candidates incorrectly selected option D.
Possibly these candidates either did not understand that market value would not appear in the accounts, or
they misread “market value” for “book value”.
Item 17
All the options were reasons for the preparation of a sales ledger control account, but only option A was
relevant to the statement about the account being prepared by someone other than the person who prepared
the sales ledger.
Item 20
A significant number of candidates selected option A, which was the formula for the calculation of working
capital rather than capital employed. It is important to read the items carefully.
Item 21
It was anticipated that most candidates would be able to calculate the fees by adding the expenses and loan
interest to the profit and deducting the item of income. The statistics indicate a degree of guesswork.
Item 24
It was expected that the majority of candidates would know that interest on capital is credited to a partner’s
current account.

© 2012
Item 25
Candidates were expected to understand that a receipts and payments account shows all money received
and paid in the year, irrespective of the year to which it relates. This knowledge should have resulted in the
selection of the correct key, D.
Item 26
The correct key was selected by 36%. Those candidates selecting option B calculated the cost of sales but
did not go on to use this figure, together with the inventories, to calculate the purchases.
Item 29
The majority of candidates selected the correct key. A significant number incorrectly believed that a bank
overdraft is not included in the calculation of the quick (acid test) ratio.
Item 30
It was anticipated that the majority of candidates would recognise that the stem was an example of the
application of the principle of accounting entity. The results indicate a degree of guesswork.

© 2012


1 hour
Soft clean eraser
*3909040573*


IGCSE ACCOUNTING 49
2 PAPER
1 A trader prepares financial statements each year.
What do these assist the trader to do?
A calculate the amount owing to creditors

B calculate the cash drawings
C check the bank statement balance
D make decisions about the future
2 Which is recorded in the sales ledger?
A cash sales
B cheque paid to a creditor
C cheque received from a debtor
D sale of non-current assets
3 What is the accounting equation?
A assets = capital – liabilities

B capital = assets + liabilities
C capital = assets – liabilities
D liabilities = capital + assets
4 Oliver received a statement from Sunway Wholesalers showing a debit balance of $6742.
What does this mean?
A Goods, $6742, are to be delivered to Oliver.

B Oliver has sent a cheque, $6742, to Sunway Wholesalers.
C Oliver owes Sunway Wholesalers $6742.
D Sunway Wholesalers owe Oliver $6742.
5 A customer is given a discount of 25% for buying a large quantity of goods on credit with a list
price of $2000. He is given a further discount of 10% as he pays within 14 days.
How much trade discount does he receive?
A $150 B $500 C $650 D $700
© UCLES 2013 0452/11/M/J/13

IGCSE ACCOUNTING 50
3 PAPER
6 On 1 May Hassan had an overdraft of $1144.
On 2 May he was notified by the bank that a cheque, $133, received from Waheed had been
dishonoured. On the same day cash sales, $950, were paid into the bank. These were entered in
the cash book.
What was the balance brought down in the bank column of Hassan’s cash book on 3 May?
A $327 credit
B $327 debit
C $1961 credit
D $1961 debit
7 Where is the total of the purchases journal posted?
A credit income statement

B debit income statement
C credit purchases account
D debit purchases account
8 The cash book acts as a ledger account for which accounts?
discount allowed discount received

cash account bank account
account account
A
B
C
D
9 On 31 March, Somraj’s bank statement showed a credit balance of $740. Comparing the bank
statement with the cash book he found the following.
bank charges 30
unpresented cheques 150
Somraj updated his cash book as required.
Which figure for bank should be shown in Somraj’s balance sheet on 31 March?
A $590 B $620 C $860 D $890

IGCSE ACCOUNTING 51
4 PAPER
10 A business discovers that cash received from Abdul, a credit customer, has been recorded as a
cash sale.
How can this be corrected?
account to account to
be debited be credited
A Abdul cash
B Abdul sales
C cash Abdul
D sales Abdul
11 Peter is a customer of Paul. On 1 May Peter owed Paul $250.
Transactions during May were as follows.
sales 1470
discount allowed 20
cheques received 930
sales returns 80
What was the debit balance on Peter’s account in the books of Paul on 1 June?
A $440 B $460 C $690 D $710
A a list of balances on a business’s books on a certain date

B a list of the assets, liabilities and capital of a business on a certain date
C a summary of all a business’s transactions for the year
D a summary of the financial position of a business at the year end
13 Which is an error of original entry?
A cash received from Trenchard credited to Trent’s account

B insurance paid debited to the premises account
C purchase of vehicle debited to bank account and credited to vehicle account
D sales invoice, $790, entered in the sales journal as $970
© UCLES 2013 0452/11/M/J/13

IGCSE ACCOUNTING 52
5 PAPER
14 Hani decided to make a provision for doubtful debts of 3% of his trade receivables.
How is this recorded?
debit credit
A income statement provision for doubtful debts account

B provision for doubtful debts account income statement
C provision for doubtful debts account trade receivables account
D trade receivables account provision for doubtful debts account
15 The cost of motor vehicle repairs was debited to the motor vehicle account.
How would this affect the profit and the non-current assets?
profit for the year non-current assets

understated overstated understated overstated
A
B
C
D
16 A computer network costing $100 000 is depreciated by the straight line method at 25% per
annum.
What will be the net book value at the end of year 3?
A nil B $25 000 C $50 000 D $75 000
17 Ernest prepared a trial balance. He omitted the bad debts account, $400, and he entered the
balance of the insurance account as $9000 instead of $900.
What was the balance of the suspense account?
A $7700 credit
B $7700 debit
C $8500 credit
D $8500 debit

IGCSE ACCOUNTING 53
6 PAPER
18 A trader prepares control accounts.
Where will discount received be entered?
A in the purchases ledger control account as a credit entry

B in the purchases ledger control account as a debit entry
C in the sales ledger control account as a credit entry
D in the sales ledger control account as a debit entry
19 A business has two departments, X and Y. The total sales were $120 000, of which 60% related
to department X. The total cost of sales was $90 000 of which 50% related to department X.
What was the gross profit of department Y?
A $3000 B $15 000 C $18 000 D $27 000
20 Sabena is a trader. She provided the following information.

What was the equity?
A $60 000 B $210 000 C $360 000 D $430 000
21 Which would not appear in an income statement of a service business?
A insurance
B inventory
C rent
D wages
© UCLES 2013 0452/11/M/J/13

IGCSE ACCOUNTING 54
7 PAPER
22 A trader took goods for her own use.
How should this be recorded?
account to be account to be
debited credited
A drawings purchases
B drawings sales
C purchases drawings
D sales drawings
23 X and Y are in partnership sharing profits and losses equally. The following information was
extracted from their financial records at 31 December.
interest on capital – X 1300

– Y 1100
salary – Y 4000
The profit for the year was $24 200.
What was Y’s share of the residual profit?
A $8900 B $10 200 C $12 900 D $14 000
24 Which will be included in this year’s receipts and payments account?
1 depreciation of sports equipment

2 subscriptions prepaid at end of year
3 subscriptions prepaid at start of year
4 proceeds of sale of sports equipment
A 1, 2 and 3 B 2, 3 and 4 C 2 and 4 only D 3 and 4 only
25 A business provided the following information.
inventory at 1 January 2012 $6800

inventory at 31 December 2012 $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

IGCSE ACCOUNTING 55
8 PAPER
26 At the end of its first year of trading, Sinola Ltd transferred $10 000 to a general reserve.
In which of the company’s financial statements will this be shown?
profit and loss

income statement balance sheet
appropriation account
A no no yes
B no yes yes
C yes no no
D yes yes no
27 Satnam is a gardener and is paid on a time basis. He works a different number of hours each
day.
What should Satnam complete to enable his employer to calculate his weekly wage?
A clock card
B payslip
C time sheet
D wages sheet
28 A business provided the following information for the year.
profit for year $24 000

expenses $16 000
gross profit/sales percentage 20%
What were the sales for the year?
A $120 000
B $160 000
C $200 000
D $240 000
© UCLES 2013 0452/11/M/J/13

IGCSE ACCOUNTING 56
9 PAPER
29 A trader decided that office equipment costing less than $100 would not be regarded as a
non-current asset.
A accounting entity
B materiality
C money measurement
D prudence
30 What is ensured by applying the principle of consistency?
A Business assets are separate from the owner’s assets.

B Income statements exclude items relating to a different financial period.
C Income statements exclude items which have no monetary value.
D Results can be compared from year to year.
© UCLES 2013 0452/11/M/J/13


Question Question
Key Key
Number Number
1 D 16 B
2 C 17 A
3 C 18 B
4 C 19 A
5 B 20 B
6 A 21 B
7 D 22 A
8 D 23 A
9 A 24 C
10 D 25 B
11 C 26 B
12 A 27 C
13 D 28 C
14 A 29 B
15 D 30 D
Key Messages
Many candidates had a good knowledge of the subject and were able to apply that knowledge to the given
situations. Some candidates did not appear to have a thorough knowledge of double entry which is a basic
requirement for this subject. Candidates are advised to read each item very carefully before selecting their
answers. The statistics indicate a degree of guesswork on the part of some candidates.
General Comments
compared to the target accessibility of 25-80%, two items proved to be slightly easier than anticipated, two
items were slightly more difficult than expected, and one item proved to be too difficult. All the items were
within the scope of the syllabus.
Comments on Specific Items
Item 2
The correct key was selected by 54%. The number of candidates believing that cash sales are recorded in
the sales ledger indicates that there is a lack of understanding of the topic of division of the ledger.

© 2013
Item 5
It was expected that this would be a relatively straightforward item. 54% selected the correct key. 31%
incorrectly added the cash and trade discount together and calculated 35% of $2000.
Item 6
72% of candidates correctly calculated that the bank balance would be $327, but only 59% correctly
identified this as a credit balance.
Item 7
A total of 76% of candidates understood that the total of the purchases journal would be entered in the
purchases account. Lack of knowledge of double entry resulted in 24% incorrectly selecting Option C as the
key.
Item 8
It was anticipated that the majority of candidates would know that the cash book acts as ledger accounts for
cash and bank. The discount columns act as memo columns: they do not represent ledger accounts.
Item 9
A popular incorrect answer was $620. These candidates understood that the cash book would show $150
less than the bank because of un-presented cheques: they failed to appreciate that the difference of $590
($740 - $150) represented the cash book balance after adjustment for the bank charges. The bank balance
to appear in the balance sheet should have been $590 (Option A).
Item 10
52% of candidates understood that entries had to be made in the sales account and Abdul’s account. Once
again, a lack of knowledge of double entry resulted in some candidates incorrectly selecting Option B as the
key.
Item 11
The key was selected by 50%of candidates. The statistics indicate a lack of knowledge of double entry as
some candidates omitted the opening balance and the discount, or treated discount as a debit entry instead
of a credit entry.
Item 14
A lack of understanding of the entries for creating a provision for doubtful debts resulted in a number of
candidates not selecting the correct key, A. It was expected that candidates would know that the provision
does not affect the accounts of trade receivables.
Item 15
44% of candidates correctly selected the key, D. The statistics indicate a degree of guesswork. Treating
revenue expenditure as capital expenditure results in both the profit for the year and the non-current assets
being overstated.
Item 17
A total of 48% of candidates correctly calculated the balance on the suspense account of $7700. 20% of
candidates incorrectly decided that this would be a debit balance. The statistics indicate a substantial
degree of guesswork on the part of some candidates.
Item 24
It was anticipated that candidates would know that a receipts and payments account contains all money
received and paid during the year. Depreciation and subscriptions prepaid at the start of the year would not
appear in the receipts and payments account. The correct key was C.

© 2013
Item 25
The key was correctly selected by 31% of candidates. Most candidates understood how to calculate the cost
of sales from the information provided, but 20% used only the closing inventory in the calculation. 28% of
candidates believed that the cost of the sales ($32 000) equalled the purchases. 13% of candidates treated
the two inventories incorrectly in the calculation of purchases.
Item 28
The key was correctly selected by 43% of candidates. It would appear that 24% of candidates assumed that
the profit for the year ($24 000) represented 20% of the sales. 26% of candidates appear to have deducted
the expenses from the profit for the year and multiplied the answer by 20%.

© 2013


1 hour
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IGCSE ACCOUNTING 61
2 PAPER
1 A trader prepares financial statements each year.
What do these assist the trader to do?
A calculate the amount owing to creditors

B calculate the cash drawings
C check the bank statement balance
D make decisions about the future
A assets = capital – liabilities

B capital = assets + liabilities
C capital = assets – liabilities
D liabilities = capital + assets
3 Which is recorded in the sales ledger?
A cash sales
B cheque paid to a creditor
C cheque received from a debtor
D sale of non-current assets
4 A customer received an invoice for $98 for goods priced at $88.
Which document will the customer use to inform the supplier of this error?
A credit note
B debit note
C receipt
D statement of account
5 Where is the total of the purchases journal posted?
A credit income statement

B debit income statement
C credit purchases account
D debit purchases account
© UCLES 2013 0452/12/M/J/13

IGCSE ACCOUNTING 62
3 PAPER
6 Sue allowed Jane a discount for prompt payment.
How would this be recorded in Jane’s books?
A discount allowed Sue

B discount received Sue
C Sue discount allowed
D Sue discount received
7 A business’s bank statement showed an overdraft of $8500. A cheque, $400, paid to a supplier
has not been presented for payment.
What will be the balance on the bank statement after this cheque has been paid by the bank?
A $8100 credit
B $8100 debit
C $8900 credit
D $8900 debit
8 The following partly-completed account appeared in Edward’s sales ledger.
Ann account
2013 debit credit balance
$ $ $
Jan 4 sales 21 500
11 sales returns 500
On 30 January, Ann paid $10 000 by cheque and was given a cash discount of $200.
Which is correct on 31 January?
A Ann owes Edward $10 800.

B Ann owes Edward $11 200.
C Edward owes Ann $10 800.
D Edward owes Ann $11 200.

IGCSE ACCOUNTING 63
4 PAPER
9 A business discovers that cash received from Abdul, a credit customer, has been recorded as a
cash sale.
How can this be corrected?
A Abdul cash
B Abdul sales
C cash Abdul
D sales Abdul
A a list of balances on a business’s books on a certain date

B a list of the assets, liabilities and capital of a business on a certain date
C a summary of all a business’s transactions for the year
D a summary of the financial position of a business at the year end
11 On 1 January 2012 Ahmed’s rent receivable account had a credit balance of $160.
On 31 December 2012 he transferred $1800 from the rent receivable account to the income
statement.
On 1 January 2013 the rent receivable account had a credit balance of $90.
How much rent did Ahmed receive in 2012?
A $1550 B $1730 C $1870 D $2050
12 Bashir maintains a provision for doubtful debts of 3% of the trade receivables at the end of the
year.
On 31 December 2011 trade receivables amounted to $70 000.

On 31 December 2012 trade receivables amounted to $73 000.
Which double entry should Bashir make on 31 December 2012?
debit $ credit $
A income statement 90 provision for doubtful debts account 90

B income statement 2100 provision for doubtful debts account 2100
C provision for doubtful debts account 90 income statement 90
D provision for doubtful debts account 2100 income statement 2100
© UCLES 2013 0452/12/M/J/13

IGCSE ACCOUNTING 64
5 PAPER
13 Candy purchased a motor vehicle. She also paid for the cost of delivering the vehicle, insurance
and fuel for the vehicle.
Which would be included in Candy’s income statement?
A delivery cost, fuel, insurance

B delivery cost, fuel, insurance, motor vehicle
C delivery cost, motor vehicle
D fuel, insurance
14 A computer network costing $100 000 is depreciated by the straight line method at 25% per
annum.
What will be the net book value at the end of year 3?
A nil B $25 000 C $50 000 D $75 000
15 James was late paying an invoice issued by Henry.
Henry charged James interest on the overdue amount.
Which entry would be made in Henry’s control accounts?
A credit purchases ledger control account

B credit sales ledger control account
C debit purchases ledger control account
D debit sales ledger control account
16 Fatima opened a department store on 1 January 2012. She provided the following information on
31 December 2012.
department X department Y
$ $
revenue 100 000 60 000

sales returns 14 000 8 000
purchases 80 000 40 000
carriage outwards – 1 000
carriage inwards 5 000 –
At 31 December 2012 inventory was valued at $16 000 of which 75% related to Department X.
A $15 000 B $16 000 C $23 000 D $24 000

IGCSE ACCOUNTING 65
6 PAPER
17 Which statement describes a non-current asset?
A It can be turned into cash relatively easily.

B It is acquired for use rather than re-sale.
C It is a short-term asset.
D Its value is frequently changing.
18 Khalid sells two types of goods. He provided the following information at the end of his financial
year.
cost per unit

selling price
type of number carriage
cost total cost per unit
goods of units inwards
$ $ $
$
X 10 900 60 960 950

Y 30 1400 100 1500 2100
What was the value of Khalid’s inventory?
A $51 000 B $51 600 C $54 500 D $54 600
19 Melissa made payments to the following suppliers.
Which suppliers is a service business?
name of business reason for payment
A M1 Insurance Company cost of motor insurance

B Music & Move Company purchase of car radio
C PJ Garages Ltd cost of motor vehicle
D The Petrol Station purchase of petrol
20 A trader took goods for her own use.
How should this be recorded?
debited credited
A drawings purchases
B drawings sales
C purchases drawings
D sales drawings
© UCLES 2013 0452/12/M/J/13

IGCSE ACCOUNTING 66
7 PAPER
21 X and Y are in partnership sharing profits and losses equally. The following information was
extracted from their financial records at 31 December.
interest on capital – X 1300

– Y 1100
salary – Y 4000
The profit for the year was $24 200.
What was Y’s share of the residual profit?
A $8900 B $10 200 C $12 900 D $14 000
22 A social club was formed on 1 January 2012.
During the year ended 31 December 2012 members paid subscriptions totalling $1800.
Subscriptions outstanding at 31 December 2012 amounted to $300. No subscriptions were paid
in advance.
How much was entered for subscriptions in the receipts and payments account and the income
and expenditure account for the year ended 31 December 2012?
receipts and income and

payments account expenditure account
$ $
A 1500 1800
B 1800 1800
C 1800 2100
D 2100 2100
23 Karnail does not keep a full set of accounting records.
Which is not used to calculate his total credit sales?
A debtor’s cheque dishonoured

B discount allowed
C provision for doubtful debts
D returns inwards

IGCSE ACCOUNTING 67
8 PAPER
24 At the end of its first year of trading, Sinola Ltd transferred $10 000 to a general reserve.
In which of the company’s financial statements will this be shown?
profit and loss

appropriation account
A no no yes
B no yes yes
C yes no no
D yes yes no
25 Owusu Ltd was formed with an authorised share capital of 1 000 000 ordinary shares of $0.80
each. It issued 60% of these on 1 April 2013, with half the value being paid immediately and half
to be paid a year later.
What was the value of the issued capital and called up capital on 1 April 2013?
issued capital called up capital

$ $
A 240 000 240 000

B 480 000 240 000
C 480 000 480 000
D 600 000 300 000
26 How is the cost of production calculated?
A direct material + direct labour + direct expenses + factory overheads

B direct material + direct labour + direct expenses + indirect labour
C direct material + direct labour + factory overheads
D direct material + direct labour + indirect labour
© UCLES 2013 0452/12/M/J/13

IGCSE ACCOUNTING 68
9 PAPER
27 On 28 February the statutory deductions account had a credit balance of $2700.
Statutory deductions during March amounted to $1800. The amount due for statutory deductions
was paid on 31 March.
Which entries should be made on 31 March?
A bank 900 statutory deductions 900

B bank 4500 statutory deductions 4500
C statutory deductions 900 bank 900
D statutory deductions 4500 bank 4500
28 Which is used to calculate the current ratio but not the quick (acid test) ratio?
A bank overdraft
B cash at bank
C inventory
D trade receivables
29 The financial statements of a trader include wages paid to employees. The skill and expertise of
the employees is not included.
Which principle is being applied?
A accounting entity
B accounting year
C going concern
D money measurement
30 A business depreciated machinery using the straight line method in year 1 and the diminishing
(reducing) balance method in year 2.
Which accounting principle is not being applied?
A consistency
B dual aspect
C matching (accruals)
D prudence
© UCLES 2013 0452/12/M/J/13

Question Question
Key Key
Number Number
1 D 16 B
2 C 17 B
3 C 18 C
4 B 19 A
5 D 20 A
6 D 21 A
7 D 22 C
8 A 23 c
9 D 24 B
10 A 25 B
11 B 26 A
12 A 27 D
13 D 28 C
14 B 29 D
15 D 30 A
Key Messages
knowledge to the given situations. Some candidates did not appear to have a thorough knowledge of double
entry which is a basic requirement for this subject. Candidates are advised to read each item very carefully
before selecting their answers. The statistics indicate a degree of guesswork on the part of some
candidates.
General Comments
compared to the target accessibility of 25-80% two items proved to be slightly easier than expected and two
items proved to be slightly harder than expected. All the items were within the scope of the syllabus.
Comments on Specific Items
Item 4
The correct key was selected by 48% of candidates. The selection of the other options indicates a degree of
guesswork on what was expected to be a straightforward item.

© 2013
Item 5
73% of candidates understood that the total of the purchases journal would be entered in the purchases
account. Lack of knowledge of double entry resulted in 19% incorrectly selecting Option C as the key.
Item 6
A total of 81% of candidates understood that the transaction involved discount received. Again a number of
candidates were unable to select the correct double entry.
Item 7
The key was selected by only 24%. A total of 58% correctly calculated the bank statement balance to be
$8900 but only 24% were able to correctly identify this as a debit balance.
Item 8
The correct key was A. The majority of candidates correctly calculated the amount at $10 800, but a few
were unable to determine who was the debtor. 35% selected Options B and D: it may be that these
candidates did not read the question carefully and believed that the amount of $10 000 was before the cash
discount was deducted.
Item 9
59% of candidates understood that entries had to be made in the sales account and Abdul’s account. Once
again, a lack of knowledge of double entry resulted in some candidates incorrectly selecting Option B as the
key.
Item 11
The correct key was selected by 38% of candidates. The statistics indicate a substantial degree of
guesswork. The majority of candidates did not appear to have a thorough understanding of year-end
adjustments.
Item 13
It was expected that candidates would understand that the cost of delivering a non-current asset is regarded
as capital expenditure. The items of revenue to be transferred to the income statement would be fuel and
insurance (Option D).
Item 15
79% of candidates understood that the transaction would affect the sales ledger control account, but 25%
incorrectly believed that this would be a credit entry. Those candidates who had a thorough understanding
of double entry correctly selected Option D.
Item 18
Inventory should be valued at the lower of cost and net realisable value. A significant number of candidates
only considered the cost of the actual goods and failed to appreciate that the cost of carriage inwards should
be regarded as part of the cost of the items.
Item 22
Candidates were expected to understand that the total amount received from subscriptions, $1800, would
appear in the receipts and payments account. It was also expected that they would understand that
subscriptions relating to the particular financial year (whether received or not) amounting to $2100 would
appear in the income and expenditure account

© 2013
Item 25
56% of candidates correctly selected B as the key. It was expected that candidates would be able to
calculate that the issued capital was $480 000. Half of that was paid immediately and the other half was to
be paid in a year’s time, so it was expected that candidates would select $240 000 as the called-up capital.
Item 27
The majority of candidates understood that a credit entry would be made in the bank account. About half of
these candidates incorrectly took the statutory deductions for the month away from the opening balance on
the account. The total amount paid should have been $4500 (the opening balance plus the amount due for
March).

© 2013


1 hour
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IGCSE ACCOUNTING 73
2 PAPER
1 What is a benefit of using computers in book-keeping and accounting?
A Anyone with a computer can access the information.

B It is cheap to install.
C Large quantities of information can be stored.
D Staff require special training.
2 Zafar returned goods bought on credit from Khalid.
How was this recorded in Zafar’s books?
A Khalid purchases returns

B Khalid sales returns
C purchases returns Khalid
D sales returns Khalid
3 In which book is a credit note from a supplier entered?
A purchases journal
C sales journal
4 Sabena bought goods from Yasmin for $150 and received a 10% trade discount.
How should Yasmin record this transaction?
debit $ credit $
A purchases 135 Yasmin 135

B purchases 150 Yasmin 135
discount received 15
C Sabena 135 sales 135
D Sabena 150 sales 150
© UCLES 2013 0452/11/O/N/13

IGCSE ACCOUNTING 74
3 PAPER
5 Which is both a book of prime entry and a ledger account?
A cash book
B general ledger
C sales journal
D sales ledger control account
6 LWS Ltd expects to have a short-term financial crisis lasting for one month.
Which type of finance should be arranged?
A bank loan
B bank overdraft
C issue of debentures
D issue of shares
7 A bank statement showed a balance at bank of $3200. The value of unpresented cheques was
$1200 and the value of uncredited deposits was $700.
What was the debit balance in the cash book?
A $1300 B $2700 C $3700 D $5100
8 Which journal entry records the transfer of the profit for the year, $10 000, to a sole trader’s
capital account?
Dr Cr
$ $
A appropriation 10 000
capital 10 000
B capital 10 000
appropriation 10 000
C capital 10 000
D income statement 10 000
capital 10 000

IGCSE ACCOUNTING 75
4 PAPER
9 During its first month of trading, a business had the following transactions.
credit sales 16 000

cash sales 3 000
goods returned by credit customers 500
cash received from credit customers 14 100
cash discounts allowed 650
How much did the credit customers owe the business at the end of the month?
A $750 B $1400 C $2050 D $3750
10 The following rent account appeared in Dixon’s ledger.
Dr Cr balance
2012
$ $ $
Jan 1 balance 1 000 Dr

Jan 30 bank 3 000 4 000 Dr
May 27 bank 3 000 7 000 Dr
Oct 26 bank 3 200 10 200 Dr
Dec 31 income statement 12 600 2 400 Cr
Which statement is correct?
A Dixon always pays his rent in advance.

B Dixon always pays his rent in arrears.
C Dixon both pays and receives rent.
D Dixon sometimes pays his rent in arrears.
11 Why does a business prepare a trial balance?
A to calculate the profit or loss

B to check the arithmetical accuracy of the ledger
C to check the cash and bank balances
D to show the financial position of the business
© UCLES 2013 0452/11/O/N/13

IGCSE ACCOUNTING 76
5 PAPER
12 Wayne rents premises. The monthly rent is $400.
On 1 April 2012 Wayne had prepaid one month’s rent. During the year ended 31 March 2013 he
paid rent totalling $3200.
Which entry would Wayne make at the end of his financial year on 31 March 2013?
debit $ credit $
A income statement 3200 rent account 3200

B income statement 3600 rent account 3600
C income statement 4400 rent account 4400
D income statement 4800 rent account 4800
13 During the year CN Ltd wrote off an unpaid invoice of $540.
Which entries should CN Ltd make at the end of the financial year?
debit credit
A bad debts customer

B bad debts income statement
C customer bad debts
D income statement bad debts
14 Which is a capital receipt for Susan who owns a shoe shop?
A purchase of shoes by cheque

B purchase of shop fittings by cheque
C sale of old shop fittings for cash
D sale of shoes for cash
15 Capital expenditure is treated in error as revenue expenditure.
What effect will this have?
A The balance sheet will not balance.

B The expenses will be overstated.
C The expenses will be understated.
D The trial balance will not balance.

IGCSE ACCOUNTING 77
6 PAPER
16 Imran depreciates his machinery at 20% per annum using the diminishing (reducing) balance
method. His financial year ends on 31 July. On 1 August 2012 his ledger showed the following.
machinery at cost 20 000

provision for depreciation of machinery 7 200
Which journal entry records the depreciation on machinery for the year ended 31 July 2013?
Dr Cr
$ $
A income statement 1440

provision for depreciation of machinery 1440
B income statement 2560
C provision for depreciation of machinery 1440
depreciation of machinery 1440
D provision for depreciation of machinery 2560
17 A machine was purchased for $100 000 and depreciated by 20% per annum using the straight
line method. Three years later it was sold for $25 000.
What was the profit or loss on sale?
A $15 000 loss

B $25 000 profit
C $26 200 loss
D $35 000 profit
18 Expenses accrued, $250, were treated as a prepayment in the income statement.
What effect did this have on the profit for the year?
A overstated by $250
B overstated by $500
C understated by $250
D understated by $500
© UCLES 2013 0452/11/O/N/13

IGCSE ACCOUNTING 78
7 PAPER
19 Which would be included in a sales ledger control account?
A cash discount allowed

B interest charged by creditors
C purchase returns
D trade discount received
20 Tim’s gross profit was $32 000. Opening inventory was $8000, purchases were $52 000 and
closing inventory was $10 000.
How much were the sales?
A $18 000 B $50 000 C $82 000 D $102 000
21 What is added to owner’s capital to calculate capital employed?
A current assets
B current liabilities
C non-current assets
D non-current liabilities
22 Rashid runs an advertising agency. He provided the following information.
$
Amount owed by clients at start of year 100
Amount received from clients during the year 10 000
Amount prepaid by clients at end of year 300
How much would be entered in the income statement for the year?
A $9600 B $9800 C $10 200 D $10 400
23 At the end of the financial year, a trader is owed commission.
How will this be treated in the trader’s financial statements?
A increase expenses increase assets

B increase expenses increase liabilities
C increase income increase assets
D increase income increase liabilities

IGCSE ACCOUNTING 79
8 PAPER
24 At the end of a club’s financial year, some members’ subscriptions were unpaid.
Where would these unpaid subscriptions appear in the club’s financial statements?

balance
payments expenditure
sheet
account account
A
B
C
D
25 A trader’s sales were $300 000. The mark-up was 25%.
What was the cost of sales?
A $60 000 B $75 000 C $225 000 D $240 000
26 Which does not appear in the appropriation account of a limited company?
A directors’ salaries
B dividends paid on ordinary shares
C proposed ordinary share dividend
D retained profits
27 Which is a direct cost to a manufacturer?
A factory cleaner’s wages

B factory supervisor’s salary
C machine operator’s wages
D salesman’s commission
28 Which will improve the gross profit as a percentage of sales?
A increasing expenses
B increasing selling price
C reducing expenses
D reducing selling price
© UCLES 2013 0452/11/O/N/13

IGCSE ACCOUNTING 80
9 PAPER
29 Fatima provided the following information.

purchases 200 000
A 0.19 times
B 0.20 times
C 4.93 times
D 5.33 times
30 Some items have such a low monetary value that it is not worth recording them separately.
A going concern
B historical cost
C materiality
D money measurement
© UCLES 2013 0452/11/O/N/13

Question Question
Key Key
Number Number
1 C 16 B
2 A 17 A
3 B 18 B
4 C 19 A
5 A 20 C
6 B 21 D
7 B 22 A
8 D 23 C
9 A 24 A
10 D 25 D
11 B 26 A
12 D 27 C
13 D 28 B
14 C 29 C
15 B 30 C
Key Messages
A large number of candidates had a good knowledge of the subject and were able to apply that knowledge to
the given situations. Some candidates did not have a thorough knowledge of double entry book keeping
which is essential when sitting an examination of this standard. Candidates are reminded of the importance
of reading each item very carefully before selecting their answers. The stem often contains an important
word or phrase which assists candidates to select the correct key: if the item is not read carefully this piece
of information can be overlooked.
General Comments
There were 269 candidates. The mean mark was 15. All the items were within the scope of the syllabus.
Comments on Specific Questions
Item 4
The majority of candidates (62%) understood that trade discount never appears in a ledger account and only
the net amount is entered. The key was correctly selected by 43%. The other 19% selected option A which
is the entry which would be made in the books of the purchaser not the seller. Careful reading of the item
may have prevented this error.

© 2013
Item 7
While most of the candidates understood that unpresented cheques and uncredited deposits have the
opposite effects on a bank statement balance, only 46% selected the key, B. Others incorrectly believed that
the cash book balance would be $500 more than the balance on the bank statement.
Item 8
A sole trader does not use an appropriation account and this would immediately eliminate options A and B.
70% of candidates selected options C and D, and those candidates with a thorough knowledge of double
entry were able to correctly identify D as the key.
Item 9
Only a few candidates selected the key as the answer. However, many candidates incorrectly selected
option B as they did not include cash discount in their calculation. It may be that they mistakenly believed
that cash discount related to cash sales: it is, in fact, an inducement to credit customers to pay their accounts
promptly.
Item 10
The account had an opening debit balance (a prepayment) and a closing credit balance (an accrual), so
options A and B could be eliminated. Candidates were expected to know that rent receivable would not be
recorded in the same account as rent payable. This meant that the key must be D.
Item 12
This item proved to be more difficult that anticipated. It was expected that most candidates would
understand that the expense for the year was $4800 (12 months x $400) and so select the key, D.
Item 13
The item asked for the entries made at the end of the financial year. This should have prompted candidates
towards the year-end transfer of the bad debts account to the income statement and towards option D.
Item 14
It was expected that candidates would realise that options A and B are payments not receipts, so the choice
should have been between Options C and D. The key was C.
Item 18
The majority of candidates did not appreciate that if an accrual of $250 is treated as a prepayment the profit
will be affected by double that amount. In this case, the profit would be overstated by $500 (option B).
Item 21
42% selected the key, D. It was expected that the majority of candidates would know that capital employed
is equal to the total of the owner’s capital and the non-current liabilities.
Item 22
Like item 12, this involved a calculation of the amount relating to a particular financial year. The income
relating to the financial year was $9600 (option A).
Item 23
This item required knowledge of the effect of accrued income on the income statement and the statement of
financial position (balance sheet). It was expected that candidates would know that accrued income at the
end of the year is added to the income actually received and appears as an asset in the statement of
financial position (balance sheet)

© 2013
Item 25
If the mark-up on goods is 25% then the sales of $300 000 must be equal to 125%. The cost of sales must
be equal to 100% which was $240 000 (option D). The majority of candidates incorrectly based their
calculations on 25% on $300 000.
Item 30
A significant number of candidates incorrectly selected option D instead of option C. Money measurement is
the accounting principle which states that only information which can be expressed in terms of money can be
recorded in the accounts.

© 2013


1 hour
Additional Materials: Multiple Choice Answer Key
Soft clean eraser
*9032842789*
Soft pencil (type B and HB is recommended)


IGCSE ACCOUNTING 85
2 PAPER
1 What is a benefit of using computers in book-keeping and accounting?
A Anyone with a computer can access the information.

B It is cheap to install.
C Large quantities of information can be stored.
D Staff require special training.
2 How is owner’s equity calculated?
A money invested in the business by the owner, plus the net current assets
B money invested in the business by the owner, plus the non-current liabilities
C total of non-current assets and working capital, less the non-current liabilities
D total of non-current assets, long term liabilities and net current assets
3 Zafar returned goods bought on credit from Khalid.
How was this recorded in Zafar’s books?
A Khalid purchases returns

B Khalid sales returns
C purchases returns Khalid
D sales returns Khalid
4 In which book is a credit note from a supplier entered?
A purchases journal
C sales journal
© UCLES 2013 0452/12/O/N/13

IGCSE ACCOUNTING 86
3 PAPER
5 Ashraf owed Yasmin $2000 for goods bought on credit.
After deducting cash discount of 2½% Ashraf paid Yasmin the balance owing by cheque.
Which entries record this in Ashraf’s books?
$ $
A bank 1950 Yasmin 2000
discount allowed 50
B Yasmin 2000 bank 1950
discount allowed 50
C bank 1950 Yasmin 2000
D Yasmin 2000 bank 1950
6 A bank statement showed a balance at bank of $3200. The value of unpresented cheques was
$1200 and the value of uncredited deposits was $700.
What was the debit balance in the cash book?
A $1300 B $2700 C $3700 D $5100
7 The following account appeared in a trader’s ledger.
equipment account
2013 details debit credit balance
$ $ $
July 31 balance 4000 Dr

August 2 bank 7500
What was the balance on the account on 2 August?
A $3500 credit
B $3500 debit
C $11 500 credit
D $11 500 debit

IGCSE ACCOUNTING 87
4 PAPER
8 Why does a business prepare a trial balance?
A to calculate the profit or loss

B to check the arithmetical accuracy of the ledger
C to check the cash and bank balances
D to show the financial position of the business
9 Ashraf sublets part of his premises for $100 per month. At the end of the financial year the tenant
had paid rent totalling $1000.
Which journal entry would Ashraf make to record the transfer to the income statement?
debit credit
$ $

rent 1000
rent 1200
C rent 1000
D rent 1200
10 In December 2012 Emma paid insurance, $30, in respect of January 2013.
How would this be shown in the 2012 financial statements and in the insurance account in
January 2013?
financial statements for the year insurance account

ended 31 December 2012 on 1 January 2013
accrual prepayment debit balance credit balance
A
B
C
D
© UCLES 2013 0452/12/O/N/13

IGCSE ACCOUNTING 88
5 PAPER
11 A motor vehicle, book value $2400, was sold for $2750.
How would this transaction be treated by the business?
capital receipt revenue receipt

$ $
A – 2750
B 350 2400
C 2400 350
D 2750 –
12 Capital expenditure is treated in error as revenue expenditure.
What effect will this have?
A The balance sheet will not balance.

B The expenses will be overstated.
C The expenses will be understated.
D The trial balance will not balance.
13 What would occur using the diminishing (reducing) balance method of depreciation?
A Depreciation charged in year 2 is greater than depreciation charged in year 1.

B Depreciation charged in year 2 is less than depreciation charged in year 1.
C Depreciation charged in year 2 is the same as depreciation charged in year 1.
D Depreciation charged in year 2 is zero.
14 A machine was purchased for $100 000 and depreciated by 20% per annum using the straight
line method. Three years later it was sold for $25 000.
What was the profit or loss on sale?
A $15 000 loss

B $25 000 profit
C $26 200 loss
D $35 000 profit

IGCSE ACCOUNTING 89
6 PAPER
15 A trial balance failed to balance. The difference was entered in a suspense account.
It was discovered that the purchases returns journal had been undercast.
Which entry should be made to correct this error?
A purchases suspense
B purchases returns suspense
C suspense purchases
D suspense purchases returns
16 Expenses accrued, $250, were treated as a prepayment in the income statement.
What effect did this have on the profit for the year?
A overstated by $250
B overstated by $500
C understated by $250
D understated by $500
17 How can purchases be calculated?
A cost of goods sold – closing inventory – opening inventory
B cost of goods sold – closing inventory + opening inventory
C cost of goods sold + closing inventory – opening inventory
D cost of goods sold + closing inventory + opening inventory
© UCLES 2013 0452/12/O/N/13

IGCSE ACCOUNTING 90
7 PAPER
18 BCD Limited provided the following information.
ordinary shares 300 000

retained earnings 200 000
debentures 170 000
How much was the equity and the capital employed?
equity capital employed

$ $
A 300 000 470 000

B 300 000 670 000
C 500 000 470 000
D 500 000 670 000
19 Alan’s inventory consisted of the following.
quantity goods cost per unit selling price per unit

$ $
100 large t-shirts 5 7

20 small t-shirts 5 3
What was the value of the inventory?
A $560 B $600 C $760 D $800
20 A trader takes goods from the business for personal use.
A drawings inventory
B drawings purchases
C inventory drawings
D purchases drawings

IGCSE ACCOUNTING 91
8 PAPER
21 At the end of the financial year, a trader is owed commission.
How will this be treated in the trader’s financial statements?
A increase expenses increase assets

B increase expenses increase liabilities
C increase income increase assets
D increase income increase liabilities
22 At the end of a club’s financial year, some members’ subscriptions were unpaid.
Where would these unpaid subscriptions appear in the club’s financial statements?

balance
sheet
account account
A
B
C
D

sales for year 60 000
Goods are sold at a mark up of 25%.
What were the purchases?
A $41 000 B $44 000 C $49 000 D $52 000
24 Which does not appear in the appropriation account of a limited company?
A directors’ salaries
B dividends paid on ordinary shares
C proposed ordinary share dividend
D retained profits
© UCLES 2013 0452/12/O/N/13

IGCSE ACCOUNTING 92
9 PAPER
25 A limited company has an issued share capital of 100 000 ordinary shares of $1 each of which
50 000 are fully paid. There are also debentures of $2000.
On 1 January 2012 the retained profits were $2500. Profit retained for the year ended
31 December 2012 was $1600.
What was the total of the shareholders’ funds on 31 December 2012?
A $54 100 B $56 100 C $104 100 D $106 100
26 A business provided the following information at the end of its first year of trading.
prime cost 280 000

factory overheads 110 000
closing work in progress 16 000
What was the cost of production?
A $154 000 B $186 000 C $374 000 D $406 000
27 Mark paid net wages, $5200, for the month of August after statutory deductions of $1200.
Which journal entry records this transaction?
debit credit
$ $
A cash 4000
statutory deductions 1200
wages 5200
B cash 5200
wages 6400
C wages 5200
cash 4000
D wages 6400
cash 5200

IGCSE ACCOUNTING 93
10 PAPER
28 What is not included when calculating the quick (acid test) ratio?
A balance at bank
B cash in hand
C inventory
D trade receivables
29 A balance sheet included non-current assets at cost less depreciation.
Which principle was being applied?
A accounting entity
B going concern
C materiality
D money measurement
30 Abdul applies the accounting year principle.
Why does he do this?
A to be able to compare his results with competitors

B to ensure that all transactions are recorded
C to ensure that non-current assets are not overvalued
D to maintain a full set of accounting records
© UCLES 2013 0452/12/O/N/13

Question Question
Key Key
Number Number
1 C 16 B
2 C 17 C
3 A 18 D
4 B 19 A
5 D 20 B
6 B 21 C
7 D 22 A
8 B 23 D
9 D 24 A
10 D 25 A
11 C 26 C
12 B 27 D
13 B 28 C
14 A 29 B
15 D 30 A
Key Messages
Many candidates had a good knowledge of the subject and were able to apply that knowledge to the given
situations. Some candidates did not have a thorough knowledge of double entry book keeping which is
essential when sitting an examination of this standard. Candidates are reminded of the importance of
reading each item very carefully before selecting their answers. The stem often contains an important word
or phrase which assists candidates to select the correct key: if the item is not read carefully this piece of
information can be overlooked.
General Comments
There were 15 480 candidates and the mean mark was 13.06. There was one item which proved to be
much easier than anticipated, three items were slightly too difficult and three items proved to be more difficult
than expected. All the items were within the scope of the syllabus.

© 2013
Item 2
An element of guesswork is evident from the statistics. It was expected that the majority of candidates would
know that owner’s equity is equal to non-current assets + working capital – non-current liabilities (option C).
Item 4
While majority of the candidates knew that a credit note is entered in a returns journal, only 39% understood
that credit notes received from suppliers are listed in the purchases returns journal.
Item 6
While almost 84% understood that unpresented cheques and uncredited deposits have the opposite effects
on a bank statement balance only half of them selected the key, B. Others incorrectly believed that the cash
book balance would be $500 more than the balance on the bank statement.
Item 7
A lack of understanding of three column running balance accounts resulted in many candidates selecting an
incorrect option. The account has an opening debit balance and there is a debit entry on 2 August, so the
balance after this transaction must be a debit of $11 500.
Item 9
This item proved to be more difficult than anticipated. It was expected that most candidates would realise
that the income for the year was $1200 (12 months x $100). An understanding of double entry should have
enabled candidates to then select the key (D).
Item 12
The key was selected by 46%. If capital expenditure is treated as revenue the expenses will be overstated.
There is no effect on the trial balance as both non-current assets and expenses are debit items. The
statement of financial position (balance sheet) will still balance (the non-current assets will be understated as
will the profit for the year).
Item 16
The majority of candidates did not appreciate that if an accrual of $250 is treated as a prepayment the profit
will be affected by double that amount. In this case the profit would be overstated by $500 (option B).
Item 18
Equity is the total funds provided by shareholders ($500 000 in this case). Capital employed is the total
funds being used by the company which is the shareholders’ funds plus the non-current liabilities ($670 000
in this case).
Item 19
It was anticipated that most candidates would know that inventory is always valued at the lower of cost and
net realisable value. However, many candidates incorrectly valued the inventory at cost price.
Item 20
This should have been a straightforward item. When a trader takes goods for personal use, the purchases
account is credited and the drawings account is debited. There is no effect on the inventory account, which
only records the opening and closing inventory values, not day-to-day transactions.

© 2013
Item 21
This item required knowledge of the effect of accrued income on the income statement and the statement of
financial position (balance sheet). It was expected that candidates would know that accrued income at the
end of the year is added to the income actually received and appears as an asset in the statement of
financial position (balance sheet).
Item 22
Candidates should be aware that only money actually received and paid is entered in a receipts and
payments account. Option A should have been selected as the key.
Item 23
If the mark-up on goods is 25% then the sales of $60 000 must be equal to 125%. The cost of sales must be
equal to 100% which is $48 000 (opening inventory ($10 000) + purchases (?) – closing inventory ($14 000)
is equal to $48 000), so the purchases must be $52 000. The majority of candidates incorrectly based their
calculations on 25% of $60 000.
Item 25
This item was also based on an understanding of funds provided by shareholders. The paid-up share capital
of $50 000 plus the reserves at the end of the year of $4100 equal the shareholders’ funds.
Item 27
A journal entry to record wages is a topic which appears not to be fully understood by a large number of
candidates. Candidates should have realised that the payment of $5200 involved a credit entry in cash
which should have prompted the selection of option D.
Item 28
This should have been a straightforward item. It was expected that that majority of candidates would have
known which items are included in the calculation of the quick (acid test) ratio.
Item 29
The statistics indicated a substantial degree of guesswork. Candidates should have been able to eliminate
options A and C immediately. After careful thought, candidates should have also eliminated option D.
Valuing non-current assets at cost less depreciation is an example of the application of the going concern
principle.
Item 30
The accounting year principle appears to be a principle which is not familiar to many candidates. As reports
are required at regular intervals, the life of the business is divided into accounting periods – usually years.
This allows meaningful comparisons to be made between different periods of the same business and
between one business and another.

© 2013


1 hour
Soft clean eraser
*0953130067*

Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.

IGCSE ACCOUNTING 98
2 PAPER
1 Why does a trader prepare a statement of financial position?
A to calculate the profit for the year

B to check if assets equal capital plus liabilities
C to show the transactions which took place during the year
D to summarise what the business owns and what it owes
2 Which statement about a computerised accounting system is correct?
A The general ledger does not include non-current asset accounts.

B The income statement always shows a profit.
C The statement of financial position does not include non-current asset accounts.
D The trial balance always balances.
3 Which is a liability of a business?
A amount owing by credit customers

B amount owing to credit suppliers
C long term loan to employee
D property tax paid in advance
4 A business bought a computer for office use and paid by cheque.
How will the business record the transaction?
A bank office equipment

B office equipment bank
C bank purchases
D purchases bank
© UCLES 2014 0452/11/M/J/14

IGCSE ACCOUNTING 99
3 PAPER
5 Abdul sold goods on credit to Zaffar.
Which entries will Zaffar make in his ledgers?
sales ledger purchases ledger general ledger

A
B
C
D
6 A business provided the following information for March.
credit notes issued 2 000

debit notes received 1 000
payments received from credit customers 93 000
The total owed by credit customers on 31 March was the same as on 1 March.
What was the value of the invoices issued in March?
A $90 000 B $91 000 C $95 000 D $96 000
7 Fatima returned goods to Youseff.
How would this be recorded by Youseff?
book of prime (original) entry ledger
A purchases returns journal credit Fatima account

B purchases returns journal debit Fatima account
C sales returns journal credit Fatima account
D sales returns journal debit Fatima account

IGCSE ACCOUNTING 100
4 PAPER
8 Melissa transferred $5000 from the bank deposit account to the bank current account on 1 May.
On the same day she received a bank loan, $10 000, which she paid into the bank current
account.
How will Melissa record these transactions?
bank loan account bank deposit account bank current account

A
B
C
D
9 Ali allows Yasmin a trade discount of 20%. Yasmin returned goods to Ali with a list price of $980.
How is this recorded in Ali’s books?
debit $ credit $
A sales returns 784 Yasmin 784

B sales returns 980 Yasmin 980
C Yasmin 784 sales returns 784
D Yasmin 980 sales returns 980
10 The total of the credit side of a trial balance was $9000 more than the total of the debit side.
Which error has been made?
A A debit entry of $4500 was incorrectly posted as a credit entry.

B A debit entry of $9000 was incorrectly posted as a credit entry.
C A purchase of goods, $9000, was completely omitted from the accounting records.
D A purchase invoice for $9000 was credited to Tyler’s account instead of Tailor’s account.
11 On 1 January the motor expenses account had a credit balance of $135.
During the year payments of $462 were made. On 31 December $74 remained unpaid.
Which amount was transferred to the income statement on 31 December?
A $253 B $401 C $523 D $671
© UCLES 2014 0452/11/M/J/14

5 PAPER
12 Andrew issued an invoice to Edward for $1000. After receiving 50% of the invoice value from
Edward, Andrew decided to write off the amount outstanding.
Which entries would Andrew make to write off the amount outstanding?
$ $
debited credited
A bad debts 500 Edward 500

B bad debts 1000 Edward 1000
C Edward 500 bad debts 500
D Edward 1000 bad debts 1000
13 Motor vehicle repairs, $2000, were debited to the motor vehicles account.
Motor vehicles are depreciated at 20% per annum on the balance on the account at the year end.
What is the effect of the error?
effect on motor vehicles

effect on
in statement of financial
profit for the year
position
$ $
A overstated 1600 overstated 1600

B overstated 2000 overstated 2000
C understated 1600 understated 1600
D understated 2000 understated 2000
14 Machinery is depreciated at 20% per annum using the diminishing (reducing) balance method.
A machine, cost $20 000, is sold after two years at book value.
What was the sale price of the machine?
A $7200 B $12 000 C $12 800 D $16 000

6 PAPER
15 Bola provided the following information about her delivery van.
cost 12 800
net book value at end of year 1 8 960
net book value at end of year 2 6 272
How did Bola depreciate her van?
annual rate
method
%
A diminishing (reducing) balance 30

B diminishing (reducing) balance 70
C straight line 30
D straight line 70
16 Tahir is preparing his purchases ledger control account.
From which book of prime (original) entry will he obtain information about contra entries?
A cash book
B general journal
C purchases journal
D sales journal
17 What is prepared to show the trading results for a financial year?
A capital account
B income statement
C statement of financial position
D trial balance
18 At the year end a business wrote off a bad debt.
What is the effect of this?
A capital reduced and current assets reduced

B capital reduced and non-current assets reduced
C current liabilities increased and current assets reduced
D current liabilities increased and non-current assets reduced
© UCLES 2014 0452/11/M/J/14

7 PAPER
19 Which group contains only trading businesses?
A driving school, motor insurance agency, vehicle repair business

B driving school, motor insurance agency, petrol station
C motor parts shop, vehicle repair business, car dealership
D motor parts shop, petrol station, car dealership
20 The owner of a business takes goods for his own use.
21 X and Y are sole traders. They decide to form a partnership and agree to share profits and losses
equally. Goodwill is valued as follows.
X's business $2000

Y's business $0
How is goodwill recorded in the ledger of the partnership?
account(s) to account(s) to
$ $
A goodwill 2000 capital X 1000

capital Y 1000
B capital X 1000 goodwill 2000
capital Y 1000
C capital X 2000 goodwill 2000
D goodwill 2000 capital X 2000

8 PAPER
22 The Allstars Sports Club was formed on 1 October 2012. Some members’ subscriptions were still
outstanding on 30 September 2013.
Where would these outstanding subscriptions appear?
receipts and payments income and statement of

account expenditure account financial position
A
B
C
D
1 April 2013 capital 25 000

31 March 2014 assets 75 000
liabilities 36 500
drawings during the year 7 500
What was the profit for the year ended 31 March 2014?
A $6000 B $13 500 C $17 500 D $21 000
24 On 1 January NH Limited was formed with the issue of 200 000 ordinary shares of $0.50 each.
During the first year it made a profit of $21 000. A dividend of $0.02 per share was paid and
$10 000 was transferred to general reserve.
What was the total of reserves on 31 December?
A $7000 B $9000 C $17 000 D $19 000
25 In which section of a manufacturing account would a royalty payment appear?
A direct expenses
B direct labour
C direct materials
D factory overheads
© UCLES 2014 0452/11/M/J/14

9 PAPER
26 Which items are statutory deductions from an employee’s gross pay?
A donation to charity and social club membership

B donation to charity and social security contributions
C income tax and social club membership
D income tax and social security contributions
27 Martin’s revenue for the year was $100 000 and his expenses were $20 000. His profit for the
year was 10% of revenue.
What was his gross profit?
A $30 000 B $70 000 C $90 000 D $110 000
28 What information is required to calculate the return on capital employed for a sole trader?
A gross profit, non-current liabilities, owner’s capital

B gross profit, non-current liabilities, working capital
C profit for the year, non-current liabilities, owner’s capital
D profit for the year, non-current liabilities, working capital
29 Jai intends to continue trading for many years.
He provided the following information about his assets.
cash at bank 1 000

inventory – historical cost 6 000
inventory – market value 10 000
non-current assets – historical cost 52 000
non-current assets – market value 68 000
Which amount should be entered in the statement of financial position for the total assets?
A $63 000 B $67 000 C $78 000 D $83 000

10 PAPER
30 What is the meaning of the money measurement principle?
A Assets are normally shown at cost price.

B Only items with a monetary value are included in the accounts.
C Profits are calculated after allowing for accruals and prepayments.
D Profits are calculated on the basis of cash received less cash paid.
© UCLES 2014 0452/11/M/J/14

Question Question
Key Key
Number Number
1 D 16 B
2 D 17 B
3 B 18 A
4 B 19 D
5 D 20 B
6 C 21 D
7 C 22 B
8 D 23 D
9 A 24 C
10 A 25 A
11 B 26 D
12 A 27 A
13 A 28 C
14 C 29 A
15 A 30 B
Key Messages
knowledge to the situations described in the items. Some candidates did not possess the thorough
knowledge of double entry book-keeping which is essential when sitting an examination of this standard.
Candidates are reminded that it is essential to read each item very carefully before attempting an answer.
This ensures that any important word, phrase or figure within the stem is not overlooked
General Comments
There were 67 candidates. The mean mark was 15.13 and the standard deviation was 5.35. All the items
were within the scope of the syllabus.
Item 1
The responses reveal an element of guesswork. It was expected that candidates would know that the
purpose of a statement of financial position is to summarise the assets and liabilities (option D).

© 2014
Item 5
Only 24% selected the key (D). 64% understood that the transaction affected the purchases ledger and the
sales ledger, but the majority of these candidates seem to need clarity on the basic principle of double entry
for the purchase of goods on credit.
Item 6
Almost 50% candidates erroneously believed that an entry is made when a debit note is received. A debit
note is simply a request from a credit customer for an invoice to be reduced. If this request is accepted then
a credit note will be issued. This document is then recorded in the books of both parties.
Item 10
Only 37% candidates selected the key, A. Many candidates did not realise that incorrectly posting an item to
the wrong column of a trial balance results in the totals differing by twice that amount.
Item 11
The majority of candidates understood that $135 of the amount paid during the year related to the previous
year and correctly deducted that amount. Candidates should also have understood that the amount owing at
the end of the year should be added to the amount paid to arrive at the expense for the year.
Item 16
Those candidates who read the question carefully would know that the topic was purchases ledger control
accounts. It would appear that many saw the word “contra entries” and immediately thought about a cash
book. Contra entries in relation to control accounts are first recorded in the general journal.
Item 20
The vast majority of candidates understood that the drawings account had to be debited when the owner
took goods for his own use. It was expected that most candidates would know that the credit entry is
purchases account and not inventory account.
Item 21
Most candidates understood that the goodwill account would be debited. Any assets, including goodwill, are
credited to the partner who introduced those assets to the new business. In this case, the capital account of
X should have been credited with the amount of goodwill he/she introduced.
Item 22
The responses indicate a degree of guesswork among the candidates. It was expected that candidates
would know that subscriptions outstanding would not appear in the receipts and payments account and so
would select option B.
Item 23
The key was selected by 40%. Closing capital plus drawings minus the opening capital gives the profit for
the year. A number of candidates seemed unsure of the correct treatment of drawings.
Item 24
Limited companies continue to be a topic which many candidates find challenging. The total of the reserves
was $17 000. This consisted of the general reserve of $10 000 plus the retained profit for the year of $7000
(profit for the year less dividend of $4000 and less transfer to reserve of $10 000).

© 2014
Item 29
Inventory is always valued at the lower of cost and net realisable value. Non-current assets are always
valued historical cost (less any depreciation where applicable) unless it is intended that the business will
close in the foreseeable future.
FOR ONLINE DELIVERY
CONTACT

© 2014


1 hour
Soft clean eraser
*6363003894*


2 PAPER

C The statement of financial position does not include non-current asset accounts.
2 Which is a liability of a business?
A amount owing by credit customers

B amount owing to credit suppliers
C long term loan to employee
D property tax paid in advance
3 A business bought a computer for office use and paid by cheque.
How will the business record the transaction?
A bank office equipment

B office equipment bank
C bank purchases
D purchases bank
4 A trader divides his ledger into sales, purchases and general ledgers.
Which statement is not correct?
A It is easier to locate and refer to ledger accounts.

B Maintaining the ledger can be divided between several people.
C The same type of accounts can be kept together.
D There are fewer entries in the sales and purchases accounts.
© UCLES 2014 0452/12/M/J/14

3 PAPER
5 On 1 April Jane sold goods on credit to Martha subject to a trade discount of 25%. Martha
returned goods, list price $200, to Jane on 7 April.
How will Martha record the transaction of 7 April?
book of prime (original) entry account to be debited account to be credited

$ $
A purchases returns journal Jane 150 purchases returns 150

B purchases returns journal Jane 200 purchases returns 200
C sales returns journal sales returns 150 Martha 150
D sales returns journal sales returns 200 Martha 200
6 The cash book has a credit balance of $1500. There are unpresented cheques of $350 and
uncredited deposits of $150.
What is the balance on the bank statement?
A $1300
B $1300 overdrawn
C $1700
D $1700 overdrawn
account.

A
B
C
D

4 PAPER
8 The following account appeared in Sue’s ledger.
Tony account
$ $
May 1 balance b / d 400 May 16 returns 21

12 sales 590 28 bank 284
discount 6
31 balance c / d 679
990 990
A On 12 May Tony sold goods, $590, to Sue.

B On 16 May Sue returned goods, $21, to Tony.
C On 28 May Tony received discount, $6, from Sue.
D On 31 May Sue owed $679 to Tony.
9 Which error would cause the trial balance totals to disagree?
A Business stationery purchased by cheque had not been recorded.

B Goods purchased on credit had been debited to the supplier’s account.
C Goods sold on credit had been debited to the account of the wrong customer.
D The purchase of a new machine had been debited to the purchases account.
10 Wilmer rents property to a tenant at a monthly rent of $300.
On 1 April 2013 the tenant owed one month’s rent.
During the year ended 31 March 2014 the tenant paid $4800 for the period 1 March 2013 to 30
June 2014.
How much rent will Wilmer transfer to the income statement for the year ended 31 March 2014?
A $3600 B $3900 C $4200 D $4500
11 Amina is a wholesaler selling shoes to retailers.
Which is a revenue receipt?
A capital introduced
B long-term bank loan
C proceeds of sale of shelving at book value
D proceeds of sale of shoes at list price
© UCLES 2014 0452/12/M/J/14

5 PAPER
Provision for depreciation of machinery account

$ $
31 Dec 2011 balance c / d 3000 31 Dec 2011 income statement 3000

3000 3000
31 Dec 2012 balance c / d 5100 1 Jan 2012 balance b / d 3000
31 Dec 2012 income statement 2100
5100 5100
1 Jan 2013 balance b / d 5100
There were no sales or purchases of machinery during the two year period.
What does the $5100 on 1 January 2013 represent?
A accumulated depreciation of machinery using the diminishing (reducing) balance method

B accumulated depreciation of machinery using the straight line method
C net book value of machinery using the diminishing (reducing) balance method
D net book value of machinery using the straight line method
13 Machinery is depreciated at 20% per annum using the diminishing (reducing) balance method.
A machine, cost $20 000, is sold after two years at book value.
What was the sale price of the machine?
A $7200 B $12 000 C $12 800 D $16 000
14 A purchases ledger control account includes interest charged by a supplier on an overdue

account and a contra entry to a sales ledger control account.
Where will these items appear in the purchases ledger control account?
interest charged on contra entry to sales ledger

overdue account control account
debit credit debit credit
A
B
C
D

6 PAPER
15 What is prepared to show the trading results for a financial year?
A capital account
B income statement
D trial balance
16 Janet’s debtor pays the amount owing in cash, after deducting 2% cash discount.
How does this affect Janet’s financial statements?
statement of financial
income statement
position
A increase expenses decrease current assets

B increase expenses increase current assets
C increase revenue decrease current assets
D increase revenue increase current assets
17 A trader maintains a provision for doubtful debts of 2 ½ %.
The provision on 1 January 2013 was $250.
Trade receivables on 31 December 2013 were $28 000.
At what value were trade receivables shown in the statement of financial position on
31 December 2013?
A $27 050 B $27 300 C $27 750 D $28 700
18 Which group contains only trading businesses?
A driving school, motor insurance agency, vehicle repair business

B driving school, motor insurance agency, petrol station
C motor parts shop, vehicle repair business, car dealership
D motor parts shop, petrol station, car dealership
© UCLES 2014 0452/12/M/J/14

7 PAPER
19 The owner of a business takes goods for his own use.
20 X and Y are sole traders. They decide to form a partnership and agree to share profits and losses
equally. Goodwill is valued as follows.
X's business $2000

Y's business $0
How is goodwill recorded in the ledger of the partnership?
account(s) to account(s) to
$ $
A goodwill 2000 capital X 1000

capital Y 1000
B capital X 1000 goodwill 2000
capital Y 1000
C capital X 2000 goodwill 2000
D goodwill 2000 capital X 2000
21 The members of a sports club pay an annual subscription of $60. At the beginning of the year
subscriptions were accrued from 15 members.
During the year subscriptions received amounted to $7500. This included subscriptions of $240
for the following year.
What will be entered in the income and expenditure account for the year?
A $6360 B $6840 C $8160 D $8640

8 PAPER
22 What is the formula for calculating mark-up?

gross profit
A
cost of sales
gross profit
B
sales
profit for the year
C
cost of sales
profit for the year
D
sales
23 Sara does not keep a full set of accounting records.
Which information is needed to calculate her total net purchases?
A cash discount allowed

B goods returned by customers
C goods returned to suppliers
D trade discount allowed
24 RST Limited provided the following information.
retained profits at 1 January 2013 200 000

general reserve at 1 January 2013 48 000
profit for the year ended 31 December 2013 102 000
ordinary share dividends paid 24 000
What was the value of retained profits at 31 December 2013?
A $58 000 B $142 000 C $258 000 D $306 000
25 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
© UCLES 2014 0452/12/M/J/14

9 PAPER
26 Majid’s payslip shows that the following deductions were taken from his gross pay.
donation to a charity 5
income tax 25
contribution to company pension scheme 15
social security 10
subscription to social club 2
What is the total of the voluntary deductions taken from Majid’s gross pay?
A $7 B $17 C $20 D $22
27 LS Limited provided the following information.
sales 470 000

expenses 90 000
What was the profit for the year as a percentage of sales?
A 29.79% B 48.94% C 68.09% D 80.85%
28 What is the formula for calculating the quick ratio (acid test ratio)?
A current assets – closing inventory ÷ current liabilities
B current assets – opening inventory ÷ current liabilities
C current assets + closing inventory ÷ current liabilities
D current assets + opening inventory ÷ current liabilities
29 What is the meaning of the money measurement principle?
A Assets are normally shown at cost price.

B Only items with a monetary value are included in the accounts.
C Profits are calculated after allowing for accruals and prepayments.
D Profits are calculated on the basis of cash received less cash paid.

10 PAPER
30 A trader writes off an amount owed by Mustafa by debiting the bad debts account and crediting
Mustafa’s account.
Which accounting principle is the trader applying?
A accounting entity
B consistency
C dual aspect
D money measurement
© UCLES 2014 0452/12/M/J/14

Question Question
Key Key
Number Number
1 D 16 A
2 B 17 B
3 B 18 D
4 D 19 B
5 A 20 D
6 B 21 A
7 D 22 A
8 C 23 C
9 B 24 C
10 A 25 C
11 D 26 D
12 A 27 A
13 C 28 A
14 C 29 B
15 B 30 C
Key Messages
Many candidates had a good knowledge of the subject and achieved good marks. A thorough knowledge of
double entry book keeping is essential when sitting an examination of this standard. Candidates are
reminded of the need to read through each item very carefully before selecting an answer. There is often a
word, phrase or figure in the stem which will be of assistance when selecting the correct answer.
General Comments
There were 5302 candidates. The mean mark was 19.77 and the standard deviation was 6.38. No items
were too difficult. All the items were within the scope of the syllabus.
Item 4
74% correctly identified the transaction as sales returns. 52% correctly selected option D as the key. Some
candidates did not understand that the trade discount must be deducted from the list price of the goods
returned.

© 2014
Item 6
The key was selected by 46%. Some candidate responses indicate a degree of guesswork. It was expected
that candidates would appreciate that the difference of $200 between the two balances would result in the
bank statement showing a smaller bank overdraft than that shown in the cash book.
Item 10
Candidates could have selected the correct answer by using the information on the first line and multiplying
the monthly rent by 12. A large number of candidates adjusted the amount received for the opening accrual
but did not make any adjustment for the closing prepayment. Some candidates made an adjustment for the
closing prepayment but no adjustment for the opening accrual.
Item 14
Interest charged would increase the amount owed to suppliers, so would be credited in the purchases ledger
control account. A contra entry to the sales leger would reduce the amount owed to suppliers so would be
debited.
Item 16
49% correctly selected A as the key. It was expected that candidates would appreciate that cash discount
increases the expenses. In the current assets, the cash would increase but the amount owed by debtors
would decrease by a larger amount resulting in an overall decrease.
Item 21
As item 10, this item involved making adjustments for accruals and prepayments. Once again, there was
some confusion in the treatment of the opening accrual and the closing prepayment. The income for the
year should have been $6360 (being $7500 received minus the $900 opening accrual and minus the closing
prepayment of $240.)
Item 25
96% candidates understood that the cost of production would be affected by $800 (the difference in the
opening and closing work in progress). 54% correctly calculated that the cost of production would increase
as the opening work in progress was larger than that at the end of the year.
Item 26
The key was correctly selected by 48%. It was expected that the majority of candidates would recognise
income tax and social security as statutory deductions and so be able to calculate that the voluntary
deductions totalled $22.

© 2014


1 hour
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2 PAPER
1 Businesses make use of both book-keeping and accounting procedures.
What is the purpose of book-keeping?
A to interpret the double entry records

B to prepare financial statements at regular intervals
C to record all the financial transactions of the business
D to summarise the financial position of the business
2 Which are reasons for a trader measuring his profit or loss?
1 to calculate the expenses of running the business

2 to calculate the return on his investment
3 to decide whether to continue in business or close down
4 to see how much can be withdrawn without reducing capital
A 1, 2 and 3 B 1 and 2 only C 2, 3 and 4 D 3 and 4 only
A Anyone with a computer can gain access to the accounting records.

B Data input can only be used for one specific purpose.
C Data output can only be understood by computer programmers.
D Operator error may result in inaccurate information.
4 Karen borrowed $80 000 from her father and obtained a bank loan, $6000 in order to start a
business. She bought premises, $120 000, equipment, $22 000, and inventory, $600.
What was Karen’s capital?
A $56 600 B $136 600 C $142 600 D $216 600
5 Andrew purchased a motor vehicle on credit from Claude Motor Company.
How would Claude Motor Company record this?
A Andrew motor vehicle

B Andrew sales
C motor vehicle Andrew
D sales Andrew
© UCLES 2014 0452/11/O/N/14

3 PAPER
6 Which document will a customer issue to inform a supplier of an overcharge?
A credit note
B debit note
C invoice
7 Where are the totals of the purchases returns journal and the sales journal posted?
purchases returns sales

account account
A credit credit
B credit debit
C debit credit
D debit debit
8 On 1 September Wayne sent a cheque to his credit supplier, John. This was correctly entered in
John’s books. On 10 September the cheque was returned unpaid due to lack of funds.
Which entries will be made in John’s books on 10 September?
A bad debts bank

B bank bad debts
C bank Wayne
D Wayne bank
9 A business received its bank statement showing the closing balance as $8500 overdrawn.
It was found that unpresented cheques amounted to $2000 and uncredited deposits amounted to
$1500.
What was the overdraft shown in the cash book?
A $5000 B $8000 C $9000 D $12 000

4 PAPER
Rent and rates account

$ $
May 1 balance b / d 1650 May 1 balance b / d 650

31 bank 650 31 income statement 550
balance c / d 1100
2300 2300
Where did the balance of $1100 appear in the trader’s financial statements?
A income statement as an expense

B income statement as an income
C statement of financial position as a current asset
D statement of financial position as a current liability
11 The purchase of photocopier paper has been debited to the office equipment account.
Which type of error is this?
A commission
B compensating
C principle
D reversal
12 Liam rents premises from Gavin. In December Liam paid the rent in advance for January and
February.
How would the balance on 1 January appear in their ledgers?
Liam’s ledger Gavin’s ledger

rent payable account rent receivable account
A as a credit balance as a credit balance

B as a credit balance as a debit balance
C as a debit balance as a credit balance
D as a debit balance as a debit balance
© UCLES 2014 0452/11/O/N/14

5 PAPER
13 Rashid maintains a provision for doubtful debts of 5% of the trade receivables at the end of each
year.
Trade receivables owed $40 000 on 31 December 2012.
Which journal entry did Rashid make on 31 December 2013?
debit credit
$ $

provision for doubtful debts 300
C provision for doubtful debts 300
D provision for doubtful debts 2300
14 The cost of a motor vehicle was debited to the purchases account in error.
What is the effect of this on the profit and assets?
profit assets
15 How will the annual depreciation charge on a non-current asset be recorded?
debit credit
A asset account provision for depreciation account

B income statement provision for depreciation account
C provision for depreciation account asset account
D provision for depreciation account income statement

6 PAPER
16 An invoice for $200 from PJ Motors for motor repairs was credited to the motor vehicles account
and debited to PJ Motors’ account.
Which journal entry would correct this error?
debit credit
$ $
A motor repairs 200

motor vehicles 200
B motor vehicles 200
motor repairs 200
C PJ Motors 400
motor vehicles 200
motor repairs 200
D motor vehicles 200
motor repairs 200
PJ Motors 400
1 March purchases ledger control account balance 4 000

31 March purchases journal total 53 000
purchases returns journal total 2 000
cheques paid to suppliers 47 000
discounts received 1 000
What was the purchases ledger control account balance on 31 March?
A $7000 B $9000 C $11 000 D $13 000
18 Which item affects gross profit?
A carriage outwards
B discounts allowed
D goods taken by owner
© UCLES 2014 0452/11/O/N/14

7 PAPER

inventory 10 000
cash at bank 15 000
What was the working capital?
A $1000 B $13 000 C $41 000 D $53 000
20 Nirmal sells two products, product G and product H.
The following information is available about his inventory on 31 December 2013.
cost price net realisable

product number of units
per unit value per unit
G 1000 $2.00 $2.50

H 800 $1.50 $1.20
It was found that 100 units of product G were damaged and were unsaleable.
What was the total value of Nirmal’s inventory?
A $2760 B $3000 C $3260 D $3460
21 Which is a service business?
A a business which sells computers and printers

B a business which trains computer operators
C a stationery supplier
D a TV and video supplier

8 PAPER
22 A trader took goods at cost price for his own use.
In which account would he make a credit entry?
A drawings
B inventory
C purchases
D sales
23 X and Y are in partnership with capital contributions of $50 000 and $30 000 respectively.
The partnership agreement provides that profits are to be shared in proportion to capital
contributions and each partner is entitled to 10% interest on capital.
Profit for the year was $37 000.
What was the total amount credited to Y’s current account at the end of the year?
A $10 875 B $13 875 C $18 125 D $23 125
24 On 1 January a sports club’s subscriptions account had a debit balance of $500. During the year
subscriptions received amounted to $6000. Subscriptions due but unpaid on 31 December were
$800.
Which amount will be shown for subscriptions in the income and expenditure account for the year
ended 31 December?
A $5700 B $6300 C $6500 D $6800
25 A trader provided the following information for September 2014.
opening trade payables 40 000

cheques paid to credit suppliers 220 000
purchases on credit 240 000
discount received 10 000
How much were the trade payables on 30 September 2014?
A $10 000 B $30 000 C $50 000 D $70 000
© UCLES 2014 0452/11/O/N/14

9 PAPER
26 What is net pay?
A salary less statutory deductions less employer’s social security contribution

B salary less statutory deductions less voluntary deductions
C salary plus statutory deductions plus employer’s social security contribution
D salary plus statutory deductions plus voluntary deductions
27 How is rate of inventory turnover calculated?
A cost of goods sold ÷ average inventory
B cost of goods sold ÷ closing inventory
C sales ÷ average inventory
D sales ÷ closing inventory
$ $
inventory 60 000
cash 1 000 100 000
bank 62 000 80 000
What was the quick ratio?
A 0.50 : 1 B 0.76 : 1 C 1.25 : 1 D 2.22 : 1
29 ‘A business will continue to trade in the foreseeable future.’
Which accounting principle is described by this statement?
A accounting entity
B accruals (matching)
C consistency
D going concern

10 PAPER
30 A business applies the money measurement principle.
What would be included in the financial statements?
A morale of workers
B quality of the goods sold
C skill of workers
D value of the goods sold
© UCLES 2014 0452/11/O/N/14

Question Question
Key Key
Number Number
1 C 16 D
2 C 17 A
3 D 18 D
4 A 19 B
5 B 20 A
6 B 21 B
7 A 22 C
8 D 23 B
9 C 24 B
10 C 25 C
11 C 26 B
12 C 27 A
13 A 28 A
14 D 29 D
15 B 30 D
Key Messages
Many candidates had a good knowledge of the subject and were able to apply that knowledge to the
situations described in the items. Some candidates did not appear to have a thorough knowledge of double
entry book-keeping.
This ensures that an important word, phrase or figure is not overlooked.
General Comments
The mean mark scored was 15.12. There was only one item that proved to be considerably more difficult
than anticipated. Two items were easier than expected. All the items were within the scope of the syllabus.
Item 2
Very few candidates selected the correct answer. It was expected that candidates would understand that the
expenses have to be calculated before the profit for the year can be calculated.

© 2014
Item 5
Vehicles are goods for resale from the viewpoint of Claude Motor Company so the sale would be recorded in
the sales account and not regarded as the disposal of a non-current asset.
Item 6
Few candidates answered the question correctly. When a credit customer is overcharged, he will send a
debit note to the credit supplier requesting a reduction to the invoice. In response, the supplier will issue a
credit note confirming that the balance outstanding has been reduced.
Item 7
The statistics indicate a degree of guesswork. The total of the purchases returns journal is credited to the
purchases returns account and the total of the sales journal is credited to the sales account.
Item 8
Once again, there appears to be a degree of guesswork. When a cheque is dishonoured the entries are the
reverse of those made when the cheque was received: the bank account is credited and the account of the
credit customer is debited. The customer’s account may or may not be written off as a bad debt after a
cheque has been dishonoured – but this is a completely separate transaction.
Item 9
The key was selected by many candidates who correctly made the adjustments for unpresented cheques
and uncredited deposits. Some candidates made the correct adjustments, but treated the balance on the
bank statement as a positive balance rather than an overdraft.
Item 10
It was expected that candidates would appreciate that the balance on an expense account would appear in
the statement of financial position. In this case the balance would be brought down on the debit side so
would be an asset. The expense for the year is shown in the account being transferred to the income
statement so Options A and B were incorrect answers to the question being asked.
Item 12
Some candidates correctly selected C as the key. In Liam’s books the rent account would have a debit
balance brought down representing the rent paid in advance. Gavin is the landlord, so rent paid in advance
to him would appear as a credit balance brought down in the rent receivable account: he has received the
money but is under an obligation to provide the service.
Item 13
Many candidates appreciated that if a provision for doubtful debts is to be adjusted only the amount of the
increase or decrease is transferred to the income statement. Few understood that the increase of $300
would be debited to the income statement and credited to the provision account.
Item 14
The majority of candidates understood that the assets would be understated if an item of capital expenditure
was treated as revenue expenditure. Few candidates also appreciated that the profit for the year would also
be understated (as a result of the expenses being overstated).
Item 15
The annual depreciation charge for a non-current asset is debited to the income statement and credited to
the provision for depreciation account. Only the cost of assets purchased and the cost of those disposed of
are recorded in the asset account: depreciation is not recorded in this account.

© 2014
Item 18
The majority of candidates incorrectly believed that carriage outwards and discounts received affect the
gross profit. Both these items appear in the profit and loss section of the income statement, which is
prepared after the calculation of the gross profit.
Item 20
Inventory is always valued at the lower of cost and net realisable value. The value of product G was 900
units x $2.00 each and the value of product H was 800 units at $1.20 each, making a total of $2760.
Item 22
Candidates reading the item carefully would realise that the question required them to name the account
which would be credited when a trader took goods for his own use. The double entry would be to debit
drawings and credit purchases, so the key was C.
Item 24
Only those candidates with a thorough appreciation of subscriptions accounts selected the correct answer.
Workings in the form of a “T” account would have been helpful to candidates. This would have shown an
opening debit balance of $500 and a credit of $6000 for subscriptions received during the year. The closing
accrual would have been credited and carried down as a debit balance, leaving a transfer to the income and
expenditure of $6300.
Item 28
Some candidates correctly selected A as the key. It was expected that candidates would know that the
calculation of the quick ratio excludes the inventory from the current assets.

© 2014


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2 PAPER
1 Businesses make use of both book-keeping and accounting procedures.
What is the purpose of book-keeping?
A to interpret the double entry records

B to prepare financial statements at regular intervals
C to record all the financial transactions of the business
D to summarise the financial position of the business

3 A trader purchased a motor vehicle for his business using a cheque from his personal bank
account.
How is this recorded in the books of the business?
debited credited
A bank motor vehicles

B capital motor vehicles
C motor vehicles bank
D motor vehicles capital
4 Arnold’s ledgers contain an account for Jim, a credit supplier, and a purchases account.
In which ledgers will these accounts appear?
Jim account purchases account
A general ledger general ledger

B general ledger purchases ledger
C purchases ledger general ledger
D purchases ledger purchases ledger
© UCLES 2014 0452/12/O/N/14

3 PAPER
5 Abdul sells goods to Rekha on credit. The goods are damaged in transit.
Which document will Rekha send to Abdul?
A credit note
B debit note
C invoice
6 Logan records his sales invoices in a sales journal.
What happens at the end of the month?
A Each customer’s account is credited with the total of that customer’s invoices for the month.
B Each customer’s account is debited with the total of that customer’s invoices for the month.
C The sales account is credited with the total of the sales invoices.
D The sales account is debited with the total of the sales invoices.
7 On 1 September Wayne sent a cheque to his credit supplier, John. This was correctly entered in
John’s books. On 10 September the cheque was returned unpaid due to lack of funds.
Which entries will be made in John’s books on 10 September?
A bad debts bank

B bank bad debts
C bank Wayne
D Wayne bank
8 A business received its bank statement showing the closing balance as $8500 overdrawn.
It was found that unpresented cheques amounted to $2000 and uncredited deposits amounted to
$1500.
What was the overdraft shown in the cash book?
A $5000 B $8000 C $9000 D $12 000

4 PAPER
9 Zaffor sold $300 of goods to Yasmin on credit. Zaffor prepared an invoice but posted it as a credit
note.
Which entry will Zaffor make to correct this error?
Yasmin 300
A sales 600
sales returns 300
sales returns 300
B Yasmin 600
sales 300
sales returns 300
C Yasmin 600
sales 300
Yasmin 300
D sales 600
sales returns 300
10 On 15 April, Kalou made the following entries in his accounts.
debit $ credit $
bank account 228 Droghba account 240

discount allowed account 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.
11 What is the purpose of preparing a trial balance?
A to calculate the profit for the year

B to check the arithmetical accuracy of the double entry
C to locate any errors made in the ledgers
D to provide a summary of the assets and liabilities
© UCLES 2014 0452/12/O/N/14

5 PAPER
12 After preparing a trial balance the following errors were discovered.
Error 1: Goods returned to Ken Loo had been debited to Ken Lao.
Error 2: Repairs to motor vehicles had been debited to the motor vehicles account.
Which types of error have been made?
error 1 error 2
A commission principle
B compensating reversal
C principle commission
D reversal compensating
13 On 1 January 2013 advertising of $120 was prepaid. During the year $1280 was paid for
advertising. On 31 December 2013 an amount of $960 was transferred to the income statement.
What was the balance on the advertising account on 1 January 2014?
A $200 accrued
B $200 prepaid
C $440 accrued
D $440 prepaid
year.
Which journal entry should Rashid make on 31 December 2013?
debit credit
$ $


6 PAPER
15 An item of capital expenditure has been incorrectly treated as revenue expenditure.
assets profit for the year
16 The difference on a trial balance was posted to a suspense account. It was later found that a
cheque for $800 paid to Rafiq, a supplier, had been entered correctly in the cash book, but
credited in the purchases account.
Which entry will correct this error?
$ $
debited credited
A purchases 800 suspense 800

B purchases 800 suspense 1600
Rafiq 800
C suspense 800 purchases 800
D suspense 1600 purchases 800
Rafiq 800
1 March purchases ledger control account balance 4 000

31 March purchases journal total 53 000
purchases returns journal total 2 000
cheques paid to suppliers 47 000
What was the purchases ledger control account balance on 31 March?
A $7000 B $9000 C $11 000 D $13 000
© UCLES 2014 0452/12/O/N/14

7 PAPER
18 Which item affects gross profit?
A carriage outwards
B discounts allowed
D goods taken by owner
19 Which item is an intangible non-current asset?
A balance at bank
B goodwill
C premises
D trade receivables
20 Nirmal sells two products, product G and product H.
The following information is available about his inventory on 31 December 2013.
cost price net realisable

product number of units
per unit value per unit
G 1000 $2.00 $2.50

H 800 $1.50 $1.20
It was found that 100 units of product G were damaged and were unsaleable.
What was the total value of Nirmal’s inventory?
A $2760 B $3000 C $3260 D $3460
A a business which sells computers and printers

B a business which trains computer operators
C a stationery supplier
D a TV and video supplier

8 PAPER
22 Candy and Abel are in partnership. Abel made a loan to the partnership.
How will the annual interest on the loan be recorded?
debit credit
A Abel current account appropriation account

B Abel current account income statement
C appropriation account Abel current account
D income statement Abel current account
23 On 1 January a sports club’s subscriptions account had a debit balance of $500. During the year
subscriptions received amounted to $6000. Subscriptions due but unpaid on 31 December were
$800.
Which amount will be shown for subscriptions in the income and expenditure account for the year
ended 31 December?
A $5700 B $6300 C $6500 D $6800
24 Walter provided the following information.
revenue 150 000

expenses 25 000
The mark-up on cost is 25%.
What is the profit for the year?
A $5000 B $12 500 C $30 000 D $37 500
25 The financial year of ABZ Limited ends on 31 March.
Debenture interest is paid annually in arrears on 1 April each year.
Where will debenture interest appear in the financial statements for the year ended
31 March 2014?
income appropriation statement of

statement account financial position
A
B
C
D
© UCLES 2014 0452/12/O/N/14

9 PAPER
26 How is prime cost calculated?
A direct materials + direct labour

B direct materials + direct labour + direct expenses
C direct materials + direct labour + direct expenses + factory overheads
D direct materials + direct labour + direct expenses + factory overheads + change in work in
progress
27 During a week Ali works 40 hours and produces 240 items. He can choose to be paid $6 per
hour, or $1.25 for each item he produces with a guaranteed minimum weekly gross pay of $275.
What is Ali’s gross pay if he chooses to be paid on a piecework basis?
A $240 B $275 C $300 D $540
28 How is the return on capital employed (ROCE) calculated?
net profit 100

A ×
non - current assets 1
net profit 100

B ×
non - current assets + current assets 1
net profit 100

C ×
non - current assets − current liabilities 1
net profit 100

D ×
non - current assets + current assets - current liabilities 1
bank overdraft 1650

trade receivables 2200
trade payables 2900
inventory 4200
short term loan from bank 2000
What was the current ratio?
A 0.34 : 1 B 0.98 : 1 C 1 : 0.34 D 1 : 0.98

10 PAPER
30 ‘Only the financial transactions of the business are recorded in the business’s accounting
records.’
Which accounting principle is being described?
A accounting entity
B going concern
C historical cost
D money measurement
© UCLES 2014 0452/12/O/N/14

Question Question
Key Key
Number Number
1 C 16 B
2 D 17 A
3 D 18 D
4 C 19 B
5 B 20 A
6 C 21 B
7 D 22 D
8 C 23 B
9 C 24 A
10 A 25 A
11 B 26 B
12 A 27 C
13 D 28 D
14 A 29 A
15 D 30 B
Key Messages
Many candidates had an adequate knowledge of the subject and were able to apply that knowledge to the
situations described in the items. It was noticeable that a significant number of candidates did not appear to
have a thorough knowledge of double entry book-keeping.
General Comments
There were 14 835 candidates. The mean mark was 13.38 and the standard deviation was 5.32. When
compared to the target accessibility of 25-80% two items proved to be considerably more difficult than
anticipated. No items were easier than expected. All the items were within the scope of the syllabus.
Item 3
This item required knowledge of double entry book-keeping. Despite the item stating that the vehicle was
purchased by a cheque from the owner’s private bank account, many candidates incorrectly selected Option
C as the key which involved a credit to the business bank account.

© 2014
Item 5
The key was selected by 36% candidates. These candidates appreciated that when goods are damaged or
returned the credit customer will send a debit note to the credit supplier requesting a reduction to the invoice.
In response, the supplier will issue a credit note agreeing to a reduction in the invoice.
Item 8
The key was selected by some candidates who correctly made the adjustments for unpresented cheques
and uncredited deposits. Some candidates made the correct adjustments, but treated the balance on the
bank statement as a positive balance rather than an overdraft.
Item 9
Only those candidates with a good knowledge of double entry book-keeping selected the correct key. It was
necessary to credit sales returns with $300 to cancel the incorrect entry, credit sales with $300 to enter the
item in the correct account and to debit Yasmin with double the amount of the invoice ($300 to cancel the
incorrect credit entry and $300 to make the correct entry).
Item 10
This item also required candidates to understand double entry book-keeping. The entries shown represent a
cheque received from Droghba for $228 and a cash discount of $12 being allowed for prompt payment. It
was expected that candidates would appreciate that trade discount never appears in the ledger.
Item 13
A thorough knowledge of double entry bookkeeping was also required in this item. Those candidates
preparing a “T” account would have shown an opening debit balance of $120 and a debit of $1280 for the
amount paid. The transfer to income statement of $960 would have appeared on the credit side, leaving a
balance to carry down to the debit side of $440, representing a prepayment.
Item 14
Many candidates knew that only the amount of the increase or decrease is transferred to the income
statement if a provision for doubtful debts is to be adjusted. However, only some candidates understood that
the increase of $300 would be debited to the income statement and credited to the provision account.
Item 15
The majority of candidates understood that the assets would be understated if an item of capital expenditure
was treated as revenue expenditure. Only some also appreciated that the profit for the year would also be
understated (as a result of the expenses being overstated).
Item 16
The key was selected by 45%. Once again, a thorough knowledge of double entry book-keeping was
essential. The purchases account had to be debited to remove the incorrect entry, and Rafiq’s account had
to be debited to make the correct entry. The corresponding double entries of $800 each should have been
made in the suspense account.
Item 20
It was expected that candidates would understand that inventory is always valued at the lower or cost and
net realisable value.
Item 22
When a partner makes a loan to a partnership the loan interest is an ordinary financial expense in the
income statement: it is not regarded as an appropriation of profit.

© 2014
Item 23
Only those candidates with a thorough appreciation of subscriptions accounts selected the correct answer.
Workings in the form of a “T” account would have been helpful to candidates. This would have shown an
opening debit balance of $500 and a credit of $6000 for subscriptions received during the year. The closing
accrual would have been credited and carried down as a debit balance, leaving a transfer to the income and
expenditure of $6300.
Item 24
Few candidates selected the correct answer. A significant number of candidates incorrectly calculated the
profit as 25% of revenue: where the mark up is 25% on cost the revenue must be equal to 125%. The gross
profit should have been calculated as $30 000, resulting in a loss for the year of $5000.

© 2014


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2 PAPER
1 How should the owner of a business use his financial statements?
A to calculate the cash drawings for the year

B to determine the amount due to trade payables
C to measure the change in the bank balance
D to monitor the progress of the business
2 A business had the following assets and liabilities.
premises 15 000
inventory 6 000
It took out a bank loan, $2000, to pay for a motor vehicle.
What was the owner’s capital after the transaction?
A $17 000 B $19 000 C $21 000 D $23 000
3 Sarah sells goods on credit to Zafar.
How is 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

D It is sent to a supplier when damaged goods are received.
© UCLES 2015 0452/11/M/J/15

3 PAPER
5 Hassan maintains a sales journal, purchases journal, sales returns journal and a purchases
returns journal.
At the end of each month, Hassan transfers the totals of these journals to the ledger.
Which entries will Hassan make in his ledger to record these totals?
A purchases returns purchases

sales sales returns
B purchases returns purchases
sales returns sales
C purchases purchases returns
sales sales returns
D purchases purchases returns
sales returns sales
6 At the end of April the discount column on the debit side of a three column cash book showed
entries of $80 and $60.
How is this recorded in the ledger?
account(s) to be debited account(s) to be credited
A discount allowed $140 individual debtor

accounts $80 and $60
B discount received $140 individual creditor
C individual creditor discount received $140
D individual debtor discount allowed $140

4 PAPER
7 On 1 May a trader’s bank statement showed an overdraft of $80.
The following were recorded in the cash book but did not appear on the bank statement.
cheques not presented $194

amounts not credited $334
What was the balance in the cash book on 1 May?
A $60 debit
B $60 credit
C $220 debit
D $220 credit
8 The following account appeared in the books of Abdul.
Hanif account
Debit Credit Balance
2015 $ $ $
March 1 Balance 400 400 Cr
4 Purchases 250 650 Cr
18 Returns 100 550 Cr
31 Bank 392 158 Cr
Discount 8 150 Cr
A On 1 March Abdul owed Hanif $400.

B On 4 March Hanif purchased goods, $250, from Abdul.
C On 31 March Abdul allowed Hanif $8 trade discount.
D On 31 March Hanif owed Abdul $150.
9 On 1 January 2014 a trader owed one month’s rent. During the year rent was paid by a cheque.
On 31 December 2014 two month’s rent was prepaid.
How did the trader calculate the rent for the year ended 31 December 2014?
A amount paid + opening accrual + closing prepayment

B amount paid + opening accrual – closing prepayment
C amount paid – opening accrual + closing prepayment
D amount paid – opening accrual – closing prepayment
© UCLES 2015 0452/11/M/J/15

5 PAPER
10 At the end of the financial year, Ryan had accrued motor expenses of $200.
How will this appear in Ryan’s ledger and statement of financial position?
motor expenses account statement of

in the ledger financial position

11 A business maintains a provision for doubtful debts of 2% of trade receivables.
On 1 January 2014 the provision was $1000. On 31 December 2014 the trade receivables
amounted to $150 000.
Which entry should be made on 31 December 2014?
debit $ credit $

B provision for doubtful debts 2000 income statement 2000
C income statement 3000 provision for doubtful debts 3000
12 Ezra received the following cheques.
$210 from the sale of goods

$1000 from the sale of old motor vehicle (at book value)
$150 for rent of premises
How did Ezra classify these receipts?
sale of goods motor vehicle rent received
A capital receipt capital receipt revenue receipt

B capital receipt revenue receipt capital receipt
C revenue receipt capital receipt revenue receipt
D revenue receipt revenue receipt capital receipt

6 PAPER
13 Repairs to a motor vehicle were debited in error to the motor vehicles account.
How does this affect the profit for the year and the non-current assets in the statement of financial
position?
14 What is the formula for calculating the depreciation for the year using the revaluation method?
A closing valuation + additions during the year – opening valuation

B closing valuation – additions during the year – opening valuation
C opening valuation + additions during the year – closing valuation
D opening valuation – additions during the year – closing valuation
15 A vehicle purchased for $15 000 was sold four years later for $2000. The balance on the
provision for depreciation account was $12 000 at the date of sale.
What was the profit or loss on the sale?
A $1000 loss
B $1000 profit
C $2000 profit
D $3000 loss
16 Carla is preparing her sales ledger control account.
Where will she obtain information about contra entries?
A cash book
B general journal
C purchases ledger
D sales ledger
© UCLES 2015 0452/11/M/J/15

7 PAPER
$55 000. During the year Kim withdrew $4000 for personal use.
A $11 000 loss

B $11 000 profit
C $19 000 loss
D $19 000 profit
18 How should inventory be valued?
A cost
B higher of cost and net realisable value
C lower of cost and net realisable value
D net realisable value
19 How is capital employed calculated?
A current assets – current liabilities

B current assets – (current liabilities + non-current liabilities)
C non-current assets + current assets – current liabilities
D non-current assets + current assets – (current liabilities + non-current liabilities)
20 Amelia is a photographer. She provided the following information.
fees owing at the beginning of the year 2 350

fees received during the year 53 410
fees owing at the end of the year 1 890
How much would be entered for fees in the income statement?
A $49 170 B $52 950 C $53 870 D $57 650
21 In the accounts of a partnership, where would interest on drawings appear?
A capital accounts as a credit entry

B capital accounts as a debit entry
C current accounts as a credit entry
D current accounts as a debit entry

8 PAPER
22 Clear is a sole trader making annual profits of $24 000. He decides to admit Deep as a partner.
They agree that Clear would receive salary, and profits and losses would be shared equally.
The forecast appropriation account for the partnership’s first year of trading is:

salary Clear 10 000
profit available for distribution 40 000
By how much will Clear’s total income increase?
A $1000 B $6000 C $16 000 D $26 000
23 At the end of the financial year, some members of Allsports Club had not paid their subscription.
How will these unpaid subscriptions be recorded by Allsports Club?
receipts and income and statement of financial position

account account asset liability
A
B
C
D
24 What is similar to a statement of affairs?
A bank reconciliation statement

B income statement
D trial balance
© UCLES 2015 0452/11/M/J/15

9 PAPER
25 Vivek provided the following information for the month of April.
increase in trade payables during the month 670

amounts paid to credit suppliers 5660
cash refunds from credit suppliers 250
What were purchases for April?
A $4930 B $5050 C $6270 D $6390
January 1 ordinary shares of $1 each 200 000

December 31 profit for the year 43 000
What were the retained earnings on 31 December?
A $13 000 B $23 000 C $25 000 D $35 000
27 Martha received gross pay of $1000 per month. Her employer provided the following information.
percentage
of gross pay
employee’s social security contribution 10 %

employer’s social security contribution 15 %
income tax 20 %
What was Martha’s net pay for the month?
A $550 B $650 C $700 D $750

10 PAPER
28 A company provided the following information about its current ratio.
Year 1 2.3 : 1
Year 2 2.4 : 1
Year 3 2.5 : 1
What would explain the changes in the ratio?
A Inventory is decreasing.
B Other payables are increasing.
C Other receivables are increasing.
D Trade receivables are decreasing.
29 What is the going concern principle?
A Accounting records are prepared assuming that the business will continue to operate in the
foreseeable future.
B Income and expense should be accounted for in the same way they were accounted for in
previous periods.
C Profit should not be anticipated and losses written off as soon as they are known.
D Revenue and costs should be recognised as they are earned or incurred, not when the
money is received or paid.
30 The payment of an insurance premium was entered in the cash book and in the insurance
account.
Which accounting principle was applied?
A accounting year
B dual aspect
C matching (accruals)
D materiality
© UCLES 2015 0452/11/M/J/15

Question Question
Key Key
Number Number
1 D 16 B
2 B 17 A
3 A 18 C
4 D 19 C
5 D 20 B
6 A 21 D
7 A 22 B
8 A 23 D
9 D 24 C
10 B 25 D
11 A 26 C
12 C 27 C
13 A 28 C
14 C 29 A
15 A 30 B
Key Messages
A good knowledge of the subject enabled many candidates to use that knowledge and apply it to the
situations described in the items. It is essential that candidates taking an examination at this level have a
thorough knowledge and understanding of double entry book-keeping. Those candidates who had such
knowledge and understanding were able to gain higher marks.
General Comments
The mean mark was 13.09 and the standard deviation was 4.74. There were only three items which proved
to be more difficult than anticipated. All the items were within the scope of the syllabus.

© 2015
Item 2
This should have been a relatively straightforward item. It was expected that candidates would correctly
calculate the difference between the assets and the liabilities as $19 000. It was surprising that the majority
of candidates appear to have included the bank overdraft as an asset rather than a liability.
Item 3
This item required knowledge of double entry book-keeping as well as an understanding of the division of the
ledger. Many candidates understood that the sales account had to be credited and the account of Zafar had
to be debited, but some candidates did not appreciate that the sales account is included in the general
ledger and the account of the customer appears in the sales ledger.
Item 6
The discount column on the debit side of a cash book represents discount allowed. This is totalled at the end
of the month and the total debit to the discount allowed account in the ledger. The individual accounts of
customers who have been allowed discount are credited.
Item 7
The cash book would show a large overdraft than the bank statement because of the cheques not
presented: it would show a smaller overdraft than the bank statement because of the amounts not credited.
The cash book would show a debit balance of $60.
Item 8
It was expected that candidates would understand that this was an account in Abdul’s ledger so that all
transaction were recorded from Abdul’s viewpoint. A credit balance on a personal account represents money
owed by Abdul.
Item 9
It was expected that candidates would know how to calculate the rent for the year. Many candidates
incorrectly believed that the opening accrual should be added to the amount paid. To calculate the amount
relating to the current financial year both the opening accrual and the closing prepayment should be
deducted. Even though these amounts were paid during the current year they relate to other financial years.
Item 10
It was expected that candidates would know that an accrued expense appears as a credit balance in the
ledger account and is a current liability in the statement of financial position.
Item 11
Most candidates understood that the amount to be charged to the income statement was $2000, but only
those who had a thorough knowledge of double entry selected A as the key.
Item 12
It was anticipated that candidates would recognise that the proceeds of sale of a motor vehicle was a capital
receipt and that the other two items were revenue receipts.
Item 13
If motor repairs were debited to the motor vehicles account in error, the non-current assets would be
overstated. By omitting the repairs the expenses were understated, so the profit for the year would be
overstated.

© 2015
Item 16
Reading the item carefully, candidates would have noted that the question was about preparing a sales
ledger control account. A significant number seemed to associate the words “contra entries” with cash books,
forgetting that contra items can also occur in control accounts. Information for a control account comes from
books of prime entry so options C and D could be discarded immediately.
Item 20
This required candidates to calculate the fees received for a particular financial year. The opening accrual
should have been deducted from the amount received during the year and the closing accrual should have
been added.
Item 22
A significant number of candidates appear to have compared the original profit of $24 000 with the total profit
available for distribution of $40 000. Clear’s total income from the partnership would be $30 000 (salary of
$10 000 plus $20 000 share of profit), so his income would increase by $6 000.
Item 23
If subscriptions were unpaid they would not appear in the receipts and payments account. They would be
included in the subscriptions for the year in the income and expenditure account and would appear as an
asset in the statement of financial position.
Item 24
The key was selected by many candidates. Candidates should understand that when a business has not
maintained a set of double entry accounting records a statement of financial position cannot be prepared and
a statement of affairs is prepared instead.
Item 25
Many candidates appeared to be unsure of how to calculate credit purchases. Preparing a “T” account may
have assisted in the calculation. The amounts paid and the discount received would be on the debit side and
the cash refunds on the credit side. Any figures could be taken for the balances provided there was a
difference of $670. So assuming that the opening balance was $1000 and the closing balance $1670. The
purchases were $6390.
Item 26
A significant number of candidates appear to have correctly calculated the retained earnings for the year, but
omitted to add the opening retained earnings to arrive at the total retained earnings at the end of the year.
Item 27
The net pay of an employee had to be calculated. The gross pay of $1000 should have been reduced by
$100 for social security contribution (10% of $1000) and by $200 for income tax (20% of $1000) making a
net pay of $700. The employer’s social security contribution does not affect the employee’s net pay.

© 2015


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2 PAPER
1 How should the owner of a business use his financial statements?
A to calculate the cash drawings for the year

B to determine the amount due to trade payables
C to measure the change in the bank balance
D to monitor the progress of the business
2 Sarah sells goods on credit to Zafar.
How is 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
3 Gail’s statement of financial position included the following.

What was Gail’s capital?
A $100 000 B $148 000 C $150 000 D $152 000
© UCLES 2015 0452/12/M/J/15

3 PAPER
4 Hassan maintains a sales journal, purchases journal, sales returns journal and a purchases
returns journal.
At the end of each month, Hassan transfers the totals of these journals to the ledger.
Which entries will Hassan make in his ledger to record these totals?
A purchases returns purchases

sales sales returns
B purchases returns purchases
sales returns sales
C purchases purchases returns
sales sales returns
D purchases purchases returns
sales returns sales

D It is sent to a supplier when damaged goods are received.
6 A trader received his monthly bank statement.
Which item(s) may have appeared on this statement?
1 bank charges
2 credit transfers
3 unpresented cheques
A 1 and 2
B 1 only
C 2 and 3
D 3 only

4 PAPER
7 The following account appeared in the books of Mary.
Paul account
Debit Credit Balance
2015 $ $ $
April 1 Balance 90 90 Dr
14 Sales 150 240 Dr
21 Returns 25 215 Dr
30 Bank 88 127 Dr
Discount 2 125 Dr
A On 1 April Paul owed Mary $90.

B On 14 April Paul sold goods, $150, to Mary.
C On 21 April Mary returned goods, $25, to Paul.
D On 30 April Mary owed Paul $125.
8 Which error would be revealed by a trial balance?
A a cheque for $78 entered on the correct sides in both W’s account and the cash book as $87
B goods returned by a customer, $300, not entered in the books
C goods sold to Y for $650 correctly entered in the sales account and credited to Y’s account
D the purchase of a machine, $3500, debited to the purchases account
9 Ali’s financial year ends on 31 March. During the year ended 31 March 2015 Ali paid wages of
$42 500. On 31 March 2015 $1400 wages were accrued.
Which journal entry records the transfer from the wages account to the income statement on
31 March 2015?
debit credit
$ $

wages 42 500
wages 43 900
C wages 42 500
D wages 43 900
© UCLES 2015 0452/12/M/J/15

5 PAPER
10 At the end of the financial year, Ryan had accrued motor expenses of $200.
How will this appear in Ryan’s ledger and statement of financial position?
motor expenses account statement of

in the ledger financial position

11 At the end of her financial year Annie decided to reduce her provision for doubtful debts.
Which entry recorded this?
debit credit
A bad debts provision for doubtful debts

B income statement provision for doubtful debts
C provision for doubtful debts bad debts
D provision for doubtful debts income statement
12 Which transaction is a capital receipt?
A cash received from sale of goods

B interest received from bank
C proceeds of sale of equipment
D rent received from tenant
13 Repairs to a motor vehicle were debited in error to the motor vehicles account.
How does this affect the profit for the year and the non-current assets in the statement of financial
position?

6 PAPER
14 Sara started a business on 1 January 2013 and purchased equipment costing $10 000. She
depreciated the equipment by 20% per annum using the straight-line method. The equipment was
sold for $5200 on 1 January 2015.
What was the profit or loss on the sale of the equipment?
A $800 loss B $800 profit C $1200 loss D $1200 profit
15 The totals of a trial balance failed to agree by $680 and the difference was entered in a suspense
account. It was then found that rent received had been correctly entered in the cash book but
treated as rent paid in the ledger.
Which entry will correct this?
$ $
A rent received 340 suspense 680

rent paid 340
B suspense 680 rent received 340
rent paid 340
C suspense 340 rent paid 680
rent received 340
D suspense 340 rent paid 340
16 Why does a trader prepare a sales ledger control account?
A to determine when interest should be charged on overdue accounts

B to identify bad debts which should be written off
C to locate incorrect postings in the sales ledger
D to obtain totals to enter in the books of prime (original) entry
$55 000. During the year Kim withdrew $4000 for personal use.
A $11 000 loss

B $11 000 profit
C $19 000 loss
D $19 000 profit
© UCLES 2015 0452/12/M/J/15

7 PAPER
A cost
B higher of cost and net realisable value
C lower of cost and net realisable value
D net realisable value
19 The owner of a business took goods for his own use but failed to make an entry in the accounts.
What was the effect of this error?
profit for the year capital employed
A overstated no effect
C understated no effect
D understated overstated
20 The financial year of Tony and Paul ends on 30 April.
On 1 May 2015 Tony had a debit balance of $5000 on his current account.
A He had invested $5000 in the business.

B He had withdrawn $5000 from the business.
C His drawings exceeded his total profit share.
D His total profit share exceeded his drawings.
21 What is similar to a statement of affairs?

B income statement
D trial balance

8 PAPER
22 Omar started a business but did not maintain any accounting records.
Which item(s) are included in a calculation to find credit purchases for his first year of trading?
1 amount owing to trade payables at year end
2 amount owing by trade receivables at year end
3 cash discount received
A 1 and 3
B 1 only
C 2 and 3
D 2 only
23 Which statement applies to preference shareholders?
A They are members of the company.

B They are usually entitled to vote.
C They get a fixed percentage of the profit each year.
D They get a fixed rate of interest each year.
January 1 ordinary shares of $1 each 200 000

December 31 profit for the year 43 000
A $13 000 B $23 000 C $25 000 D $35 000
© UCLES 2015 0452/12/M/J/15

9 PAPER
25 Raminder, a manufacturer, provided the following information for the year ended 30 April 2015.
cost of materials used 54 000

wages – machine operators 48 200
work in progress 1 May 2014 7 000
work in progress 30 April 2015 4 000
What was the cost of production for the year ended 30 April 2015?
A $102 200 B $128 700 C $131 700 D $134 700
26 Heng is paid a basic wage of $6 per hour for a 40 hour week. Any overtime is paid as follows:
Monday to Saturday time and a quarter

Sunday double time
One week, Heng worked 45 hours. Of these, 3 hours were on Sunday.
What was Heng’s gross pay for the week?
A $291 B $313.50 C $351 D $373.50

gross profit 40 000
expenses 25 000
What was the profit for the year as a percentage of revenue?
A 12 % B 15 % C 20 % D 25 %
28 A payment made from the business bank account for petrol for the owner’s private car is not
included in the income statement.
A accounting entity
B going concern
C historical cost
D money measurement

10 PAPER
29 ‘A business's financial statements should include all the costs and income for the period to which
they relate.’
Which accounting principle is referred to in this statement?
A accounting year
B consistency
C prudence
D matching (accruals)
30 What is the purpose of international accounting standards?
A to allow users to rely on the information in financial statements being error-free

B to enable accountants to get work easily anywhere in the world
C to enable non-accountants to understand all the information in financial statements
D to make it easier to compare financial statements prepared in different countries
© UCLES 2015 0452/12/M/J/15

Question Question
Key Key
Number Number
1 D 16 C
2 A 17 A
3 B 18 C
4 D 19 C
5 D 20 C
6 A 21 C
7 A 22 A
8 C 23 A
9 B 24 C
10 B 25 D
11 D 26 A
12 C 27 B
13 A 28 A
14 A 29 D
15 B 30 D
Key Messages
A good knowledge of the subject enabled many candidates to use that knowledge and apply it to the
situations described in the items. It is essential that candidates taking an examination at this level have a
thorough knowledge and understanding of double entry book-keeping. Those candidates who had such
knowledge and understanding were able to gain higher marks.
General Comments
The mean mark was 19.24 and the standard deviation was 6.12. All the items were within the scope of the
syllabus.
Item 2
This item required knowledge of double entry book-keeping as well as an understanding of the division of the
ledger. 78% candidates understood that the sales account had to be credited and the account of Zafar had
to be debited, but 21% candidates did not appreciate that the sales account is included in the general ledger
and the account of the customer appears in the sales ledger.

© 2015
Item 6
The key was selected by 57% candidates. Unpresented cheques do not appear on a bank statement as the
bank has no knowledge of these cheques because they have not yet been paid into the bank by the payees.
Item 7
Many candidates selected the key. It was expected that candidates would understand that this was an
account in Mary’s ledger so that all transactions were recorded from Mary’s viewpoint. A debit balance on a
personal account represents money owed to Mary.
Item 8
Only 51% candidates selected the key. The other candidates seemed unsure about the effect of errors on a
trial balance. The first error would not affect the trial balance as the incorrect figure was entered on both
sides of the ledger. The second error was an error of omission so the trial balance was unaffected. The
fourth error was an error of principle so the trial balance would still balance. The third error resulted in two
credit entries, so the trial balance would not balance.
Item 9
Most of the candidates understood that the expense for the year was $43 900. Many candidates who had a
thorough knowledge of double entry correctly selected B as the key.
Item 10
It was expected that candidates would know that an accrued expense appears as a credit balance in the
ledger account and is a current liability in the statement of financial position.
Item 11
Most of the candidates appreciated that the double entry would be income statement and provision for
doubtful debts. Many understood the double entries required to reduce a provision and correctly selected D
as the key.
Item 14
The difference between the net book value and the proceeds of sale was correctly calculated as $800 by
most candidates, of which the majority understood that this represented a loss on disposal.
Item 15
This item required a thorough knowledge of double entry book-keeping. Candidates who possessed such
knowledge correctly selected B as the key. If a transaction is entered on twice on the credit side the trial
balance totals will differ by twice the amount of the error.
Item 16
Half of the candidates correctly selected the key. Totals from the books of prime (original) entry are used to
prepare a control account, not the other way round.
Item 18
It was anticipated that the majority of candidates would select the key, C. This is a very basic accounting
principle and it was expected that the majority of candidates would be aware of this principle.

© 2015
Item 19
The key was selected by only a few candidates. Goods taken for personal use reduces the purchases. If
these are not recorded the purchases is overstated, so the profit is understated. There is no effect on the
capital employed as both the drawings and the profit are understated.
Item 20
A sound understanding of ledger accounts enabled candidates to select the key, C. A debit balance on a
current account indicates that this is an amount owing to the business by the partner, which occurs as a
result of the drawings exceeding the partner’s total profit share.
Item 23
The majority of candidates incorrectly selected C as the key. Preference shareholders receive a fixed
dividend but the percentage is based on the face value of the shared: it is not a percentage of the profit.
Item 29
A significant number incorrectly selected A. It was expected that candidates would understand that the
principle described was about matching the costs and the income for the same period (the matching/accruals
principle). The accounting year principle ensures that the life of the business is divided into accounting
periods (usually years) so that the progress of the business can be measured at regular intervals.

© 2015


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2 PAPER
inventory 2880
bank overdraft 750
trade payables 1950
loan from bank 2000
loan to employee 150
other payables 70
other receivables 130
What was the total of the liabilities?
A $4420 B $4770 C $4830 D $4920
2 Which item would be recorded by a credit entry in an account?
A a decrease in capital
B a decrease in liabilities
C an increase in assets
D an increase in capital
3 Harvey bought goods on credit from Janet. The goods were unsuitable and Harvey returned them
to Janet.
Which document did Harvey send to Janet?
A credit note
B debit note
C invoice
4 How are the totals of the sales journal and the purchases returns journal recorded in the ledger?
total of sales journal total of purchases returns journal
A credit sales account credit purchases returns account

B credit sales account debit purchases returns account
C debit sales account credit purchases returns account
D debit sales account debit purchases returns account
© UCLES 2015 0452/11/O/N/15

3 PAPER
5 Sally buys goods and is allowed a discount for early payment.
How does Sally record this discount?
A discount allowed supplier

B discount received supplier
C supplier discount allowed
D supplier discount received
6 On 1 April a trader’s cash book showed a debit balance of $3204.
No entry had been made in the cash book for bank charges of $78.
Deposits of $288 had not been credited by the bank.
What was the credit balance on the bank statement on 1 April?
A $2838 B $2994 C $3414 D $3570
7 The following account appears in the ledger of Chan.
Fu account
2015 $ 2015 $
Aug 28 bank 100 Aug 1 balance b/d 100
31 balance c/d 250 12 purchases 250
350 350
A On 1 August Chan is owed $100 by Fu.

B On 12 August Fu purchased goods, $250, from Chan.
C On 28 August Chan paid Fu $100 by cheque.
D On 31 August Fu is a debtor of Chan for $250.

4 PAPER
8 An invoice for goods purchased on credit, $100, was entered in the purchases journal as $1000.
How will this affect the trial balance?
debit balances credit balances

$ $
in trial balance in trial balance
A no effect – no effect –
B no effect – trade payables overstated 900
C purchases overstated 900 no effect –
D purchases overstated 900 trade payables overstated 900
9 On 1 January commission receivable, $210, was outstanding. Commission received during the
year amounted to $4850.
Which journal entry would be made at the end of the financial year on 31 December?
debit credit
$ $
A commission receivable 4640

B commission receivable 5060
commission receivable 4640
D income statement 5060
commission receivable 5060
10 A trader decides to change his provision for doubtful debts from 2% to 3% of trade receivables.
Which entry is made to record this?
debit credit
A bad debts income statement

B income statement bad debts
C income statement provision for doubtful debts
© UCLES 2015 0452/11/O/N/15

5 PAPER
11 On 1 January a builder had tools valued at $3100. During the year he purchased additional tools
costing $490 and tools valued at $140 were scrapped. On 31 December the tools were valued at
$2750.
What was the depreciation for the year?
A $350 B $490 C $700 D $840
12 Which journal entry records the annual depreciation of machinery of $500?
debit credit
$ $

machinery 500
machinery 500
13 Henri has charged Thibault interest on his overdue account.

14 How is the profit for the year calculated?
A gross profit + other income + expenses

B gross profit + other income – expenses
C gross profit – other income + expenses
D gross profit – other income – expenses
15 A company had inventory which cost $100 000. The inventory was damaged and would cost
$10 000 to repair after which it could be sold for $80 000.
At which value will the inventory be shown in the company’s financial statements?
A $70 000 B $80 000 C $90 000 D $100 000

6 PAPER
16 How are current liabilities calculated?
A non-current assets + current assets + capital owned + non-current liabilities

B non-current assets + current assets – capital owned – non-current liabilities
C non-current assets – current assets + capital owned + non-current liabilities
D non-current assets – current assets – capital owned – non-current liabilities
17 A trader took out a business bank loan of $5000 and also transferred $2000 to the business bank
account from his own funds.
How did these transactions affect the statement of financial position?
owner’s capital liabilities assets
A no effect increase $5000 increase $5000

B increase $2000 increase $5000 increase $2000
C increase $2000 increase $5000 increase $7000
D increase $7000 no effect increase $7000
18 Alice took goods for her own use but did not enter this in her accounting records.
She made an adjustment for these goods in the year-end financial statements.
How did this adjustment affect the gross profit and the closing capital?
gross profit closing capital

increase decrease increase decrease no effect
A
B
C
D
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7 PAPER
19 Rajid and Sunil formed a partnership on 1 January 2014 but did not prepare a partnership
agreement.
They provided the following information.
Rajid Sunil
capital introduced 1 January 2014 $40 000 $20 000

during the year ended 31 December 2014
drawings $5 000 $3 500
share of work 50% 50%
They decide to draw up a partnership agreement for future years.
Which item would be most beneficial to Rajid in 2014?
A interest on capital
B interest on drawings
C limit on annual drawings
D partnership salaries
20 A partner made a loan to the business.
How was the interest on this loan recorded?
A as a credit in the appropriation account

B as a credit in the income statement
C as a debit in the appropriation account
D as a debit in the income statement
21 A sports club was formed on 1 January 2014. During the year ended 31 December 2014 the club
purchased equipment costing $5000, paying by cheque.
In which of the club’s financial statements did this appear?
receipts and payments income and expenditure statement of financial

account account position
A
B
C
D

8 PAPER
A closing capital – opening capital – capital introduced + drawings

B closing capital – opening capital – drawings
C closing capital – opening capital + capital introduced
D closing capital – opening capital + capital introduced – drawings
23 On 1 January the trade receivables owed $1000 and on 31 December they owed $1500. During
the year $5000 was received from credit customers and a debt of $100 was written off.
How much were the credit sales for the year?
A $2400 B $2600 C $5400 D $5600
24 Which item would not be entered in a statement of changes in equity?
A issue of ordinary shares

B ordinary share dividend proposed
C profit for the year
D transfer to general reserve
25 Zed Limited provided the following information.
issued and paid up share capital 200 000

general reserve 30 000
10% debentures 20 000
What were total shareholders’ funds?
A $215 000 B $230 000 C $245 000 D $265 000
© UCLES 2015 0452/11/O/N/15

9 PAPER
26 Wages are paid by a manufacturing business to machine operators, factory cleaners and office
staff.
Where are these wages recorded in the financial statements?
machine operators factory cleaners office staff
A overheads in income statement income statement

manufacturing account
B overheads in overheads in overheads in
manufacturing account manufacturing account manufacturing account
C prime cost in overheads in income statement
manufacturing account manufacturing account
D prime cost in prime cost in overheads in
manufacturing account manufacturing account manufacturing account
27 Yousef started a business on 1 April. His employees are paid weekly and any statutory
deductions are paid to the authorities monthly in arrears.
For the week ended 7 April the net wages paid to employees totalled $7500 and the statutory
deductions totalled $1750.
Which entries did Yousef make on 7 April?
A bank 9250 wages 7500

B wages 7500 bank 9250
C bank 7500 wages 9250

D wages 9250 bank 7500
28 A trader overvalued his year-end inventory.
Which statements are correct?
1 Current assets are understated.

2 Current liabilities are understated.
3 Gross profit is overstated.
4 Profit for the year is overstated.

10 PAPER
29 Anwar’s profit for the year was $28 000. He provided the following information at the end of his
financial year.
capital 112 000

What was the profit for the year as a percentage of capital employed?
A 7% B 14% C 20% D 25%
30 In a trader’s statement of financial position the non-current assets are shown at cost less
depreciation to date.
A business entity
B duality
C going concern
D materiality
© UCLES 2015 0452/11/O/N/15

Question Question
Key Key
Number Number
1 B 16 B
2 D 17 C
3 B 18 B
4 A 19 A
5 D 20 D
6 A 21 C
7 C 22 A
8 D 23 D
9 A 24 B
10 C 25 C
11 C 26 C
12 B 27 D
13 A 28 D
14 B 29 B
15 A 30 C
Key Messages
Those candidates who had a good knowledge of the subject were able to apply that knowledge to the
situations described in the multiple choice items.
Candidates are advised to read each item very carefully before attempting an answer. This ensures that an
important word or phrase is not overlooked.
General Comments
The mean marks were 14. One item proved to be easier than anticipated and two items proved to be more
difficult than anticipated.
Item 4
The majority of candidates understood that the total of the sales journal would be credited to the sales
account, but only some candidates also realised that the total of the purchases returns journal would be
credited to the purchases returns account. In both instances the goods are leaving the business so must be
credited.

© 2015
Item 5
This was a straightforward item to candidates with a good knowledge of double entry. From the payer’s
viewpoint, the discount was discount received so the discount received account should have been credited
and the supplier debited.
Item 6
A significant number of candidates found this question challenging. The bank statement would have shown a
smaller balance than the cash book because bank charges had already been deducted, and would also
show a smaller balance because deposits had not yet been credited by the bank. This means that the
balance on the bank statement should have been $2838 ($3204 - $78 - $288).
Item 8
Most of the candidates understood that the purchases would be overstated by $900 because of the error. If
an invoice is overstated by $900 in the purchases journal it will also be overstated in the account of the credit
supplier, so in the trial balance the trade payables would be overstated.
Item 9
At the end of the financial year the commission received is transferred to the income statement by debiting
commission received and crediting income statement. Applying the matching principle, only the amount
relating to that particular financial year ($4640) is transferred to the income statement.
Item 13
A significant number of candidates indicated that interest charged would appear as a debit entry and seemed
unsure whether it affected the credit customers or the credit suppliers. Interest charged on an overdue
account increases the amount owing to the supplier so will appear as a credit entry in the purchases ledger
control account.
Item 15
The inventory should have been valued at the lower of cost ($100 000) and the net realisable value
($70 000).
Item 17
The majority of candidates understood that the capital would increase by $2000 and that the liabilities would
increase by $5000. Only some candidates appreciated that the assets would increase by $7000. Applying
the accounting equation candidates should have realised that the assets must equal the total of the capital
and the liabilities.
Item 18
When a trader takes goods for personal use, this is deducted from the purchases so the gross profit and the
profit for the year will increase. The final figure of capital will not be affected as the profit for the year has
increased and the drawings have increased by the same amount.
Item 20
Few candidates provided correct response to this item. When a partner makes a loan to the business the
loan interest is an expense to the business which is debited to the income statement.
Item 23
Candidates did not perform well on this question. Drafting a “T” account for the total trade receivables may
have helped candidates calculate the missing figure of credit sales.

© 2015
Item 24
Statement of changes in equity shows the changes which have taken place in the share capital, retained
earnings and general reserves during the financial year. Proposed ordinary share dividend will not appear in
such a statement as it is only a proposal and has not actually taken place.
Item 27
The wages actually paid to employees of $7500 would be credited to the bank and debited to the wages
account. The statutory deductions ($1750) would not be paid to the authorities until the following month: until
that time it is a liability so is credited to the statutory deductions account and debited to the wages.
Item 29
It was expected that candidates would be able to correctly calculate the profit as a percentage of capital
employed. A significant number used the owner’s capital rather than the capital employed. The total of the
capital employed can be calculated by adding the long term loan to the capital. An alternative calculation is
to deduct the current liabilities from the total assets.

© 2015


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2 PAPER
1 What is prepared by a book-keeper?
A appropriation account
B cash book
C income statement
D statement of financial position
capital 250 000

What was the total of the non-current liabilities?
A $35 000 B $61 000 C $76 000 D $91 000
3 Which item would be recorded by a credit entry in an account?
A a decrease in capital
B a decrease in liabilities
C an increase in assets
D an increase in capital
4 Harvey bought goods on credit from Janet. The goods were unsuitable and Harvey returned them
to Janet.
Which document did Harvey send to Janet?
A credit note
B debit note
C invoice
5 On 1 May Bashir purchases goods on credit with a list price of $200. He is given a trade discount
of $20. If payment is made within 28 days a cash discount of $10 will be given.
Which amount is credited to the supplier’s account on 1 May?
A $170 B $180 C $190 D $200
© UCLES 2015 0452/12/O/N/15

3 PAPER
6 Farouk sells goods on credit. A cheque from Ahmed, a credit customer, was dishonoured by the
bank.
How does Farouk record this?
A Ahmed bad debts

B Ahmed bank
C bad debts Ahmed
D bank Ahmed
7 Sally buys goods and is allowed a discount for early payment.
How does Sally record this discount?
A discount allowed supplier

B discount received supplier
C supplier discount allowed
D supplier discount received
8 Which item is represented by a debit balance on a ledger account?
A accrued expense
B liability
C prepaid expenses
D revenue

4 PAPER
9 The following account appears in the ledger of Chan.
Fu account
2015 $ 2015 $
Aug 28 bank 100 Aug 1 balance b/d 100
350 350
A On 1 August Chan is owed $100 by Fu.

B On 12 August Fu purchased goods, $250, from Chan.
C On 28 August Chan paid Fu $100 by cheque.
D On 31 August Fu is a debtor of Chan for $250.
10 The following ledger account appeared in the books of a trader.
Rent account
$ $
Jan 1 balance b / d 600 Dec 31 income statement 7250

Dec 31 bank 6300
balance c / d 350 ____
7250 7250
What does the balance on 31 December represent?
A rent payable outstanding

B rent payable prepaid
C rent receivable outstanding
D rent receivable prepaid
11 On 1 January 2014 a trader had prepaid general expenses. During the year further general
expenses were paid. On 31 December 2014 general expenses were accrued.
How did the trader calculate the general expenses for the year ended 31 December 2014?
A amount paid + opening prepayment + closing accrual

B amount paid + opening prepayment – closing accrual
C amount paid – opening prepayment + closing accrual
D amount paid – opening prepayment – closing accrual
© UCLES 2015 0452/12/O/N/15

5 PAPER
12 A trader decides to change his provision for doubtful debts from 2% to 3% of trade receivables.
Which entry is made to record this?
debit credit
A bad debts income statement

B income statement bad debts
C income statement provision for doubtful debts
13 Which item is a capital receipt for the owner of a bakery?
A cash discount from a supplier of flour

B cash from sale of a wedding cake
C proceeds from the sale of an oven
D refund of rent from the landlord
14 Hassan depreciates his machinery at 20% per annum using the diminishing (reducing) balance
method. No depreciation is charged in the year of disposal.
He provided the following information.
net book value of machinery on 30 April 2014 36 000

machine disposed of during the year ended 30 April 2015
cost of machine 4 000
depreciation on machine 1 440
How much did Hassan charge for depreciation for the year ended 30 April 2015?
A $6400 B $6688 C $6912 D $7200
15 Which statement about depreciation is correct?
A In the diminishing (reducing) balance method the depreciation charge increases each year.
B In the straight line method the residual value can never fall to zero.
C The straight line and diminishing (reducing) balance method are both suitable for loose tools.
D The straight line and diminishing (reducing) balance methods can both use a percentage
rate.

6 PAPER
16 Henri has charged Thibault interest on his overdue account.

17 Brian’s inventory included one item which had cost $240. The item needed repair at a cost of
$30. After repair, the item could be sold for $260.
At what value should the item be recorded in Brian’s inventory?
A $230 B $240 C $260 D $270
18 Ram provided the following information on 31 December 2014.
$ $
total assets 30 400 capital 20 000

drawings (4 500)
21 500
_____ long-term loan 8 900
30 400 30 400
How much were the owner’s capital and capital employed on 31 December 2014?
owner’s capital capital employed

$ $
A 20 000 21 500
B 20 000 30 400
C 21 500 20 000
D 21 500 30 400
© UCLES 2015 0452/12/O/N/15

7 PAPER
19 On 1 January 2014 Bill started a gardening business. He provided the following information for
the year ended 31 December 2014.
receipts from customers 19 500

van expenses 280
garden machinery expenses 150
general expenses 6 000
cash drawings 10 000
On 31 December 2014 customers owed Bill $1720.
What was Bill’s profit for the year?
A $3070 B $4790 C $13 070 D $14 790
20 Rajid and Sunil formed a partnership on 1 January 2014 but did not prepare a partnership
agreement.
They provided the following information.
Rajid Sunil
capital introduced 1 January 2014 $40 000 $20 000

during the year ended 31 December 2014
drawings $5 000 $3 500
share of work 50% 50%
They decide to draw up a partnership agreement for future years.
Which item would be most beneficial to Rajid in 2014?
C limit on annual drawings
D partnership salaries

8 PAPER
21 X and Y were sole traders. They decided to amalgamate their businesses and to share profits
and losses in the ratio 2 : 1. They brought into the partnership assets of $30 000 and $29 000
respectively. Y’s assets included goodwill of $9000. Goodwill was not to be retained in the
accounts of the partnership.
What was the opening capital of each partner?
X Y
$ $
A 21 000 29 000
B 24 000 26 000
C 27 000 23 000
D 30 000 29 000
22 Hill Tennis Club received $32 000 in subscriptions during the year. At the year end subscriptions
of $350 were owed by members and $450 had been paid in advance for the next year.
How much was transferred to the income and expenditure account for subscriptions?
A $31 200 B $31 900 C $32 100 D $32 800
23 A sports club was formed on 1 January 2014. During the year ended 31 December 2014 the club
purchased equipment costing $5000, paying by cheque.
In which of the club’s financial statements did this appear?
receipts and payments income and expenditure statement of financial

account account position
A
B
C
D
A closing capital – opening capital – capital introduced + drawings

B closing capital – opening capital – drawings
C closing capital – opening capital + capital introduced
D closing capital – opening capital + capital introduced – drawings
© UCLES 2015 0452/12/O/N/15

9 PAPER
25 During 2014, Roger’s credit customers paid him $6200. They owed $1800 on 1 January 2014
and $4300 on 31 December 2014. Cash sales for 2014 amounted to $26 800.
What were the total sales for the year?
A $26 900 B $29 300 C $31 100 D $35 500
26 Which item would be entered in a statement of changes in equity?
A debenture interest accrued

B debenture interest paid
C ordinary dividend paid
D ordinary dividend proposed
27 Zed Limited provided the following information.
issued and paid up share capital 200 000

10% debentures 20 000
What were total shareholders’ funds?
A $215 000 B $230 000 C $245 000 D $265 000
28 Gordon provided the following information for the year.
revenue $90 000

opening inventory $8 000
closing inventory $2 000
gross profit / revenue ratio 33.33 %
Gordon took goods, $7000, for his own use.
What were the purchases?
A $43 000 B $47 000 C $54 000 D $61 000

10 PAPER
29 Lucy has applied the accounting principle of matching (accruals).
Which action has she taken?
A included expenses used but not paid for in the financial statements
B included only items which can be expressed in monetary terms in the books
C prepared the financial statements assuming her business will continue indefinitely
D provided for financial losses as soon as they arose
30 ‘The same accounting treatment should be applied to similar items at all times.’
To which accounting principle does this refer?
A consistency
B going concern
C prudence
D matching (accruals)
© UCLES 2015 0452/12/O/N/15

Question Question
Key Key
Number Number
1 B 16 A
2 B 17 A
3 D 18 D
4 B 19 D
5 B 20 A
6 B 21 B
7 D 22 B
8 C 23 C
9 C 24 A
10 A 25 D
11 A 26 C
12 C 27 C
13 C 28 D
14 B 29 A
15 D 30 A
Key Messages
Those candidates with good knowledge of the subject were to use that knowledge by applying it to the
situations described in the multiple choice items. A thorough knowledge of the use of the ledger and the
double entry system is essential for performing well on this paper.
General Comments
Candidates are advised to read each item very carefully before attempting an answer. This ensures that an
important word, phrase or figure is not overlooked.
Item 3
This involved an understanding of the effect of entries in ledger accounts. Many candidates showed a lack of
understanding of ledger entries.
Item 4
The majority of candidates understood that a debit note and a credit note would be involved. Reading the
question carefully, candidates would see that the document was issued by the customer and so would be a
debit note.

© 2015
Item 6
Almost half of the candidates appear to incorrectly believe that a dishonoured cheque is a bad debt. The
entries for a dishonoured cheque are a credit to the bank and debit to the customer (i.e. the reverse of those
made when the cheque was received).
Item 7
The question required candidates to have a good knowledge of double entry. From the payer’s viewpoint, the
discount was discount received, so the discount received should have been credited and the supplier
debited.
Item 8
It was expected that the majority of candidates would understand that prepaid expenses are represented by
a debt balance on a ledger account.
Items 9 and 10
These items involved interpretation of entries in a ledger account. Candidates required a good knowledge of
double entry in order to select the Keys (C for Item 9 and A for Item 10).
Item 11
Drafting a “T” account may have helped candidates understand that both the opening prepayment and the
closing accrual had to be added to the amount paid in order to calculate the expense for the year.
Item 14
The depreciation had to be calculated on the closing net book value of the machinery, so the net book value
of the machine sold had to be deducted from the total net book value of all the machinery at the start of the
year. The 20% depreciation should have been calculated on $33 440
($36 000 – ($4000 – $1440)).
Item 16
This item involved an understanding of ledger accounts. Interest charged on an overdue account increases
the amount owing to the supplier so will appear as a credit entry in the purchases ledger control account.
Item 17
The inventory should have been valued at the lower of cost ($240) and net realisable value ($260 – $30).
Item 18
Instead of using the closing owner’s capital, as instructed, many candidates incorrectly used the opening
capital.
Item 19
The majority of candidates incorrectly included the owner’s cash drawings as a business expense. A
significant number did not include the amount owing by customers ($1720) in the revenue for the year.
Item 21
Goodwill is credited to the partner who introduced that asset to the new business. When goodwill is written
off it is done so in the profit-sharing ratios. This means that X’s capital would be $30 000 – (2/3 x $9000) and
Y’s capital would be $29 000 – (1/3 x $9000).

© 2015
Item 22
In order to calculate the subscriptions for the year, it was necessary to add the closing accrual and deduct
the closing prepayment from the amount received.
Item 23
It was anticipated that candidates would understand that the purchase of equipment by a sports club is
capital expenditure. This will be included in the receipts and payments account and the statement of financial
position but not the income and expenditure account.
Item 24
Drafting a “T” capital account may have helped candidates to determine the formula for the calculation of the
profit for the year.
Item 25
It was anticipated that the majority of candidates would be able to calculate the total sales. Once again,
drafting a “T” ledger account could have been of assistance. Such an account for credit customers would
have revealed credit sales of $8700. Adding on the cash sales would have given total sales of $35 500.
Item 28
The vast majority of candidates correctly calculated the cost of sales at $60 000 and made the correct
adjustments of the opening and closing inventories, giving a figure of $54 000. The adjustment for the goods
taken for personal use caused problems: the $7000 should have been added back to get the actual
purchases of $61 000. Drafting out a trading account may have helped candidates to determine the correct
treatment of the items.

© 2015


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2 PAPER
1 Which task would not be carried out by a book-keeper?
A posting cash receipts

B preparing financial statements
C recording entries in the purchases ledger
D writing up the sales returns journal
2 Goods purchased by Anna from Winston were returned before they were paid for.

3 Which document does a trader send to a credit customer to summarise the transactions for the
month?
A credit note
B debit note
C receipt
4 Aldo buys and sells goods on credit.
A cheque received by Aldo was dishonoured by the bank.
How would he record this dishonoured cheque?
debited credited
A bank credit customer

B bank credit supplier
C credit customer bank
D credit supplier bank
© UCLES 2016 0452/11/M/J/16

3 PAPER
5 Waseem received a bank statement. He found that the bank had charged interest twice in error
and that a dividend had been received on an investment.
Waseem then updated the cash book and prepared a bank reconciliation statement.
Where did he record these two items?
bank error dividend
A bank reconciliation statement bank reconciliation statement

B bank reconciliation statement updated cash book
C updated cash book bank reconciliation statement
D updated cash book updated cash book
Syed account
date details
$ $ $

14 Sales 600 1000 dr
26 Bank 390 610 dr
A On 1 September Amna owed Syed $400.

B On 14 September Syed purchased goods, $600, on credit from Amna.
C On 26 September Amna paid Syed $390 by cheque.
D On 26 September Syed allowed $10 cash discount to Amna.
A a statement of assets and liabilities on a particular date

B a statement of income and expenditure for a particular period
C a statement of ledger balances on a particular date
D a statement of profit or loss for a particular period

4 PAPER
8 A trial balance did not balance.
A A cheque, $300, received from M. Green was credited in the cash book and debited in
M. Green’s account.
B Purchase of goods from J. Black, $750, was debited in the purchases account and credited
in J. Blackshaw’s account.
C Repairs, $500, were debited in the premises account.
9 Alice’s financial year ends on 31 December.
The balances in her books on 1 January included the following.
commission received 250 dr

rent receivable 500 cr
What do these balances represent?
commission received rent receivable
A income outstanding income outstanding

B income outstanding income prepaid
C income prepaid income outstanding
D income prepaid income prepaid
10 Motor repairs, $250, have been posted in error to the motor vehicles account.
What is the effect on the financial statements?
© UCLES 2016 0452/11/M/J/16

5 PAPER
11 A business allowed Lee, a customer, $40 cash discount. The discount was entered in the
discount allowed account but omitted from Lee’s account.
A suspense account was opened.
What are the correcting entries?
A discount allowed Lee

B Lee discount allowed
C Lee suspense
D suspense Lee
Feb 1 sales ledger control account balance 6 320 dr

28 sales journal total 51 200
sales returns journal total 1 024
cash received from credit customers 830
cheques received from credit customers 50 340
discount allowed 670
What was the balance on the sales ledger control account on 28 February?
A $4656 B $5326 C $5486 D $7180

A $110 500 B $148 000 C $163 500 D $179 000

6 PAPER
14 How is working capital calculated?
A current assets − current liabilities
B current assets − total liabilities
C non-current assets − current liabilities
D non-current assets − total liabilities
15 Leroy sublets part of his premises to Boris.
How can Leroy calculate the rent receivable for the year?
A amount received – opening accrual – closing prepayment

B amount received – opening accrual + closing prepayment
C amount received + opening accrual – closing prepayment
D amount received + opening accrual + closing prepayment
16 Which group of items appears in a partnership appropriation account?
A drawings, interest on capital, partners’ salaries

B interest on capital, interest on drawings, partners’ salaries
C interest on capital, partners’ loan interest, partners’ salaries
D interest on drawings, interest on capital, partners’ loan interest
17 Fran and David are sole traders. They agree to amalgamate their businesses and to share profits
and losses equally.
Fran’s goodwill was valued at $8000 and David’s at $6000.
How will goodwill be recorded in the books of the new business?
$ $
debited credited
A Fran 8 000 goodwill 14 000

David 6 000
B goodwill 14 000 Fran 8 000
David 6 000
C Fran 7 000 goodwill 14 000
David 7 000
D goodwill 14 000 Fran 7 000
David 7 000
© UCLES 2016 0452/11/M/J/16

7 PAPER
18 What may appear in the income and expenditure account of a sports club?
A decrease in bank balance during the year

B increase in inventory of refreshments
C purchase of new sports equipment
D receipts from renting out clubhouse
19 A sports club provided the following information.
$
subscriptions received during the year 12 000
subscriptions owing at the start of the year 1 200
subscriptions owing at the end of the year 800
What was the amount of subscriptions shown in the income and expenditure account?
A $11 600 B $12 400 C $12 800 D $13 200
20 A trader supplied the following information.
$
capital at start of the year 30 000
capital at end of the year 50 000
additional capital introduced during the year 18 000
A $10 000 B $14 000 C $20 000 D $26 000
21 What is mark-up?
A gross profit expressed as a percentage of cost of sales

B gross profit expressed as a percentage of sales
C profit for the year expressed as a percentage of cost of sales
D profit for the year expressed as a percentage of sales

8 PAPER
22 Which item is directly affected by the dividend policy of a limited company?
A general reserve
B ordinary share capital
C preference share capital
D retained earnings
issued share capital – 50 000 ordinary shares of $1 each 50 000

profit for the year ended 30 April 2016 13 000
transfer to general reserve on 30 April 2016 6 000
interim ordinary share dividend paid during the year 3 000
On 30 April 2016 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%
cost of raw materials consumed 20 000

direct wages 10 000
light and heat 5 000
machinery repairs 3 000
A $20 000 B $30 000 C $35 000 D $38 000
© UCLES 2016 0452/11/M/J/16

9 PAPER
25 At the end of the financial year a manufacturer had inventory of finished goods, raw materials and
work-in-progress.
Which inventories will appear in the manufacturing account?
finished goods raw materials work-in-progress

A
B
C
D
26 Dhoni’s basic pay is $4 per hour. He is paid overtime as follows.
Saturday time and a half

Sunday double time
Dhoni worked 6 hours on Saturday and 4 hours on Sunday.
How much was he paid for the overtime worked?
A $40 B $44 C $60 D $68
27 An employer deducts income tax from staff wages each week and pays it to the government once
a month on the last day of the month.
What does the entry posted to the credit side of the income tax account on 10 January
represent?
A a payment made to the government

B a refund of income tax to an employee
C the amount deducted from staff wages on that date
D the total for the month owed to the government

10 PAPER
28 A company provided the following information.
$ $
revenue 500 000

purchases 310 000
345 000
cost of goods sold 300 000
gross profit 200 000
What was the rate of turnover of inventory?
A 5 times
B 6.67 times
C 7.5 times
D 8.57 times
29 Omar purchased land ten years ago for $25 000. He has been offered $60 000 for the land. He
thinks that the land may now be worth $100 000.
At what value should the land be recorded in Omar’s statement of financial position?
A $25 000 B $60 000 C $75 000 D $100 000
30 Which statement is not true about reasons for using international accounting standards?
A helps when making comparisons between companies

B improves the reliability of accounting information
C narrows the areas of difference between companies
D makes the preparation of financial statements less time consuming
© UCLES 2016 0452/11/M/J/16

Question Question
Key Key
Number Number
1 B 16 B
2 C 17 B
3 D 18 D
4 C 19 A
5 B 20 B
6 B 21 A
7 C 22 D
8 D 23 A
9 B 24 B
10 A 25 C
11 D 26 D
12 A 27 C
13 C 28 C
14 A 29 A
15 A 30 D
Key messages
A thorough knowledge of the syllabus is essential as a multiple choice item can be asked on any area of the
syllabus. An understanding of double entry and financial statements is required.
It is important to read each item thought very carefully before attempting an answer. This ensures that an
important word, phrase or figure is not overlooked
General comments
Candidates found some questions more challenging than others.
Comments on specific questions
Item 1
A book-keeper would not prepare financial statements. A significant number of candidates incorrectly
believed that the book-keeper would not be involved with posting cash receipts.

© 2016
Item 5
A bank error would not be corrected by an entry in the cash book but would appear in the reconciliation
statement. Dividend received by the bank would need to be entered into the cash book. It was expected that
candidates would select the key B.
Item 6
Candidates are also expected to be able to explain and interpret ledger accounts prepared using the running
balance format. The account was in the books of Amina who was selling goods to a credit customer Syed. A
debit balance on a personal account indicates that this is an amount owing to the trader, so option A was
incorrect. An entry for bank on the credit side of a personal account indicates that the money is coming from
that person, so options C and D were incorrect. They key was B.
Item 8
Some candidates were unsure how the errors would affect the trial balance. Error A was an error of
commission, error B was an error of reversal, and error C was an error of principle. Error D would result in
the totals of the trial balance not balancing.
Item 9
The vast majority of candidates selected Options B and C as they understood that a debit balance and a
credit balance on income accounts would not represent the same thing. A debit balance on an income
account indicates that there is accrued income and a credit balance represented prepaid income. The key
was B.
Item 11
Those candidates with a good understanding of double entry appreciated that Lee’s account had to be
credited to correct the error. This meant that the suspense account had to be debited.
Item 13
Capital employed is the total funds the business is using. This can be calculated by deducting the current
liabilities from the total assets. A significant number of candidates incorrectly deducted the total liabilities
from the total assets.
Item 15
Preparing a “T” account may have assisted candidates in selecting the key to this item. The majority of
candidates understood that a closing prepayment is deducted from the amount received. An opening accrual
should be deducted from the amount received as this means that money received this year related to the
previous year not the current year.
Item 18
Income and expenditure contains revenue receipts and revenue expenditure. A significant number of
candidates incorrectly selected option C. The purchase of new sports equipment is capital expenditure and
would not be included in the income and expenditure account.
Item 19
As Item 15, this required knowledge of how to treat year-end adjustments. Some of the money received
during the current year related to the previous year so should have been deducted. The closing accrual
should have been added as it related to the current year, even though not actually received.
Item 22
The amount of the share capital and the general reserve will not be affected by the dividend policy of a
limited company. Only the retained earnings will be directly affected.

© 2016
Item 23
This item also concerned dividends paid to shareholders of a limited company. The profit remaining after
transfer to reserve and interim dividend paid was $4000, so the final dividend would be 8%. Candidates
selecting options C and D did not take into consideration that the profit would be reduced by the interim
dividend and the transfer to reserve respectively.
Item 27
Each week the business would debit the wages account with the total gross pay, credit the cash book with
the amount actually paid to employees and credit the accounts of any organisations to whom the business
must pass on various deductions from wages. One such account is the income tax account as the business
is liable to pass on the tax deducted from the wages of employees. The key was C.
Item 29
It was expected that candidates would appreciate that the offer of $60 000 was only an offer not the receipt
from a definite sale. The $100 000 was not an official revaluation merely Omar’s opinion. Applying the going
concern and historical cost principles, the land would be recorded at $25 000.
Item 30
The statements made in options A, B and D are correct. Statement C is not true as the application of
international accounting standards has no effect on the time taken to prepare financial statements.
FOR ONLINE DELIVERY
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© 2016


1 hour
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2 PAPER
1 Which task would not be carried out by a book-keeper?
A posting cash receipts

B preparing financial statements
C recording entries in the purchases ledger
D writing up the sales returns journal
2 Goods purchased by Anna from Winston were returned before they were paid for.

3 Which document does a trader send to a credit customer to summarise the transactions for the
month?
A credit note
B debit note
C receipt
4 Aldo buys and sells goods on credit.
A cheque received by Aldo was dishonoured by the bank.
How would he record this dishonoured cheque?
debited credited
A bank credit customer

B bank credit supplier
C credit customer bank
D credit supplier bank
© UCLES 2016 0452/12/M/J/16

3 PAPER
5 Waseem received a bank statement. He found that the bank had charged interest twice in error
and that a dividend had been received on an investment.
Waseem then updated the cash book and prepared a bank reconciliation statement.
Where did he record these two items?
bank error dividend
A bank reconciliation statement bank reconciliation statement

B bank reconciliation statement updated cash book
C updated cash book bank reconciliation statement
D updated cash book updated cash book
Syed account
date details
$ $ $

14 Sales 600 1000 dr
26 Bank 390 610 dr
A On 1 September Amna owed Syed $400.

B On 14 September Syed purchased goods, $600, on credit from Amna.
C On 26 September Amna paid Syed $390 by cheque.
D On 26 September Syed allowed $10 cash discount to Amna.
A a statement of assets and liabilities on a particular date

B a statement of income and expenditure for a particular period
C a statement of ledger balances on a particular date
D a statement of profit or loss for a particular period

4 PAPER
8 A trial balance did not balance.
A A cheque, $300, received from M. Green was credited in the cash book and debited in
M. Green’s account.
B Purchase of goods from J. Black, $750, was debited in the purchases account and credited
in J. Blackshaw’s account.
C Repairs, $500, were debited in the premises account.
9 Alice’s financial year ends on 31 December.
The balances in her books on 1 January included the following.
commission received 250 dr

rent receivable 500 cr
What do these balances represent?
commission received rent receivable
A income outstanding income outstanding

B income outstanding income prepaid
C income prepaid income outstanding
D income prepaid income prepaid
10 Motor repairs, $250, have been posted in error to the motor vehicles account.
What is the effect on the financial statements?
© UCLES 2016 0452/12/M/J/16

5 PAPER
11 A business allowed Lee, a customer, $40 cash discount. The discount was entered in the
discount allowed account but omitted from Lee’s account.
A suspense account was opened.
What are the correcting entries?
A discount allowed Lee

B Lee discount allowed
C Lee suspense
D suspense Lee
Feb 1 sales ledger control account balance 6 320 dr

28 sales journal total 51 200
sales returns journal total 1 024
cash received from credit customers 830
cheques received from credit customers 50 340
What was the balance on the sales ledger control account on 28 February?
A $4656 B $5326 C $5486 D $7180

A $110 500 B $148 000 C $163 500 D $179 000

6 PAPER
14 How is working capital calculated?
A current assets − current liabilities
B current assets − total liabilities
C non-current assets − current liabilities
D non-current assets − total liabilities
15 Leroy sublets part of his premises to Boris.
How can Leroy calculate the rent receivable for the year?
A amount received – opening accrual – closing prepayment

B amount received – opening accrual + closing prepayment
C amount received + opening accrual – closing prepayment
D amount received + opening accrual + closing prepayment
16 Which group of items appears in a partnership appropriation account?
A drawings, interest on capital, partners’ salaries

B interest on capital, interest on drawings, partners’ salaries
C interest on capital, partners’ loan interest, partners’ salaries
D interest on drawings, interest on capital, partners’ loan interest
17 Fran and David are sole traders. They agree to amalgamate their businesses and to share profits
and losses equally.
Fran’s goodwill was valued at $8000 and David’s at $6000.
How will goodwill be recorded in the books of the new business?
$ $
debited credited
A Fran 8 000 goodwill 14 000

David 6 000
B goodwill 14 000 Fran 8 000
David 6 000
C Fran 7 000 goodwill 14 000
David 7 000
D goodwill 14 000 Fran 7 000
David 7 000
© UCLES 2016 0452/12/M/J/16

7 PAPER
18 What may appear in the income and expenditure account of a sports club?
A decrease in bank balance during the year

B increase in inventory of refreshments
C purchase of new sports equipment
D receipts from renting out clubhouse
$
subscriptions owing at the start of the year 1 200
subscriptions owing at the end of the year 800
What was the amount of subscriptions shown in the income and expenditure account?
A $11 600 B $12 400 C $12 800 D $13 200
20 A trader supplied the following information.
$
capital at start of the year 30 000
capital at end of the year 50 000
additional capital introduced during the year 18 000
A $10 000 B $14 000 C $20 000 D $26 000
21 What is mark-up?
A gross profit expressed as a percentage of cost of sales

B gross profit expressed as a percentage of sales
C profit for the year expressed as a percentage of cost of sales
D profit for the year expressed as a percentage of sales

8 PAPER
22 Which item is directly affected by the dividend policy of a limited company?
A general reserve
B ordinary share capital
C preference share capital
D retained earnings
issued share capital – 50 000 ordinary shares of $1 each 50 000

profit for the year ended 30 April 2016 13 000
transfer to general reserve on 30 April 2016 6 000
interim ordinary share dividend paid during the year 3 000
On 30 April 2016 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%
cost of raw materials consumed 20 000

direct wages 10 000
light and heat 5 000
machinery repairs 3 000
A $20 000 B $30 000 C $35 000 D $38 000
© UCLES 2016 0452/12/M/J/16

9 PAPER
25 At the end of the financial year a manufacturer had inventory of finished goods, raw materials and
work-in-progress.
Which inventories will appear in the manufacturing account?
finished goods raw materials work-in-progress

A
B
C
D
26 Dhoni’s basic pay is $4 per hour. He is paid overtime as follows.
Saturday time and a half

Sunday double time
Dhoni worked 6 hours on Saturday and 4 hours on Sunday.
How much was he paid for the overtime worked?
A $40 B $44 C $60 D $68
27 An employer deducts income tax from staff wages each week and pays it to the government once
a month on the last day of the month.
What does the entry posted to the credit side of the income tax account on 10 January
represent?
A a payment made to the government

B a refund of income tax to an employee
C the amount deducted from staff wages on that date
D the total for the month owed to the government

10 PAPER
$ $
revenue 500 000

purchases 310 000
345 000
cost of goods sold 300 000
gross profit 200 000
A 5 times
B 6.67 times
C 7.5 times
D 8.57 times
29 Omar purchased land ten years ago for $25 000. He has been offered $60 000 for the land. He
thinks that the land may now be worth $100 000.
At what value should the land be recorded in Omar’s statement of financial position?
A $25 000 B $60 000 C $75 000 D $100 000
30 Which statement is not true about reasons for using international accounting standards?

© UCLES 2016 0452/12/M/J/16

Question Question
Key Key
Number Number
1 B 16 B
2 C 17 B
3 D 18 D
4 C 19 A
5 B 20 B
6 B 21 A
7 C 22 D
8 D 23 A
9 B 24 B
10 A 25 C
11 D 26 D
12 A 27 C
13 C 28 C
14 A 29 A
15 A 30 D
Key messages
A thorough knowledge of the syllabus is essential as a multiple choice item can be asked on any area of the
syllabus. An understanding of double entry and financial statements is required.
It is important to read each item thought very carefully before attempting an answer. This ensures that an
important word, phrase or figure is not overlooked
General comments
Candidates found some questions more challenging than others.
Item 1
A book-keeper would not prepare financial statements. A significant number of candidates incorrectly
believed that the book-keeper would not be involved with posting cash receipts.

© 2016
Item 5
A bank error would not be corrected by an entry in the cash book but would appear in the reconciliation
statement. Dividend received by the bank would need to be entered into the cash book. It was expected that
candidates would select the key B.
Item 6
Candidates are also expected to be able to explain and interpret ledger accounts prepared using the running
balance format. The account was in the books of Amina who was selling goods to a credit customer Syed. A
debit balance on a personal account indicates that this is an amount owing to the trader, so option A was
incorrect. An entry for bank on the credit side of a personal account indicates that the money is coming from
that person, so options C and D were incorrect. They key was B.
Item 8
Some candidates were unsure how the errors would affect the trial balance. Error A was an error of
commission, error B was an error of reversal, and error C was an error of principle. Error D would result in
the totals of the trial balance not balancing.
Item 9
The vast majority of candidates selected Options B and C as they understood that a debit balance and a
credit balance on income accounts would not represent the same thing. A debit balance on an income
account indicates that there is accrued income and a credit balance represented prepaid income. The key
was B.
Item 11
Those candidates with a good understanding of double entry appreciated that Lee’s account had to be
credited to correct the error. This meant that the suspense account had to be debited.
Item 13
Capital employed is the total funds the business is using. This can be calculated by deducting the current
liabilities from the total assets. A significant number of candidates incorrectly deducted the total liabilities
from the total assets.
Item 15
Preparing a “T” account may have assisted candidates in selecting the key to this item. The majority of
candidates understood that a closing prepayment is deducted from the amount received. An opening accrual
should be deducted from the amount received as this means that money received this year related to the
previous year not the current year.
Item 18
Income and expenditure contains revenue receipts and revenue expenditure. A significant number of
candidates incorrectly selected option C. The purchase of new sports equipment is capital expenditure and
would not be included in the income and expenditure account.
Item 19
As Item 15, this required knowledge of how to treat year-end adjustments. Some of the money received
during the current year related to the previous year so should have been deducted. The closing accrual
should have been added as it related to the current year, even though not actually received.
Item 22
The amount of the share capital and the general reserve will not be affected by the dividend policy of a
limited company. Only the retained earnings will be directly affected.

© 2016
Item 23
This item also concerned dividends paid to shareholders of a limited company. The profit remaining after
transfer to reserve and interim dividend paid was $4000, so the final dividend would be 8%. Candidates
selecting options C and D did not take into consideration that the profit would be reduced by the interim
dividend and the transfer to reserve respectively.
Item 27
Each week the business would debit the wages account with the total gross pay, credit the cash book with
the amount actually paid to employees and credit the accounts of any organisations to whom the business
must pass on various deductions from wages. One such account is the income tax account as the business
is liable to pass on the tax deducted from the wages of employees. The key was C.
Item 29
It was expected that candidates would appreciate that the offer of $60 000 was only an offer not the receipt
from a definite sale. The $100 000 was not an official revaluation merely Omar’s opinion. Applying the going
concern and historical cost principles, the land would be recorded at $25 000.
Item 30
The statements made in options A, B and D are correct. Statement C is not true as the application of
international accounting standards has no effect on the time taken to prepare financial statements.

© 2016

PRINCIPLES OF ACCOUNTS 0452/11

Paper 1 Multiple Choice October/November 2016
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2 PAPER
1 Which task would be carried out by a book-keeper?
A comparison of financial statements of one year with another

B preparation of financial statements
C provision of information for decision-making
D recording financial transactions
2 Melanie provided the following information.

amount owing by credit customers 1 250
amount owing to credit suppliers 850
inventory 1 875
bank overdraft 365
What was Melanie’s capital?
A $12 160 B $15 110 C $15 910 D $16 640
A credit Leroy account debit sales account

B credit sales account debit Leroy account
C debit Leroy account credit sales account
D debit sales account credit Leroy account
© UCLES 2016 0452/11/O/N/16

3 PAPER
4 A business keeps a purchases journal, a purchases returns journal, a sales journal and a sales
returns journal.
Which entries are made to transfer the monthly totals of these journals to the ledger?
accounts to be debited accounts to be credited
purchases sales
A
purchase returns sales returns
purchases sales
B
sales returns purchases returns
sales purchases
C
purchases returns sales returns
sales purchases
D
sales returns purchases returns
5 Ali paid Ayub, a credit supplier, by cheque. The bank later dishonoured the cheque.
How would Ali record this dishonoured cheque?
debited credited
A Ali bank
B Ayub bank
C bank Ali
D bank Ayub
6 Annette paid Brian, a supplier, twice in error. Brian sent a refund of the overpaid amount to
Annette.
How would Brian record this refund?
A Annette bank
B bank Annette
C bank sales returns
D sales returns bank

4 PAPER
7 Which account may appear on the debit side of a trial balance?
A bank
B provision for depreciation
D returns outwards
8 Which error is a compensating error?
A cheque received from J. Wilks credited to the account of J. Wilson

B drawings debited to the cash account and credited to the drawings account
C purchase of a motor vehicle debited to the motor expenses account
D sales account and purchases account both undercast by the same amount
9 Omar provided the following information.
expense amount paid amount transferred account balance on

in 2015 to income statement 31 December 2015
for 2015
$ $ $
insurance 1500 1200 300

rent 3400 3600 200
What do the balances on the accounts on 31 December 2015 represent?
insurance account balance rent account balance
A accrual accrual
B accrual prepayment
C prepayment accrual
D prepayment prepayment
© UCLES 2016 0452/11/O/N/16

5 PAPER
10 Raminder maintains a provision for doubtful debts of 2 21 % of the trade receivables.
Which entries will Raminder make on 31 December to adjust the provision for doubtful debts?
debit $ credit $

11 Yeung provided the following information.
loss on sale of machinery 1 500

purchase of fixtures 10 000
cash proceeds from sale of machinery 7 200
profit on disposal of equipment 250
By how much will the profit for the year decrease?
A $1250 B $2550 C $4050 D $11 250
12 At the end of her financial year, Lucy decided to depreciate her fixtures by $1000.
Which journal entry will record this?
debit credit
$ $
A fixtures 1000
provision for depreciation of fixtures 1000
C provision for depreciation of fixtures 1000
fixtures 1000
D provision for depreciation of fixtures 1000

6 PAPER
13 A trader sold his delivery vehicle.
Which statement about the entries in the disposal account is not correct?
A Accumulated depreciation appears on the credit side.

B Loss on disposal appears on the debit side.
C Proceeds of sale appears on the credit side.
D The original cost appears on the debit side.
14 Sam’s purchases ledger control account had an opening debit balance.
What does this balance represent?
A amount owed to suppliers

B cash purchases
C interest on overdue account
D overpayment to suppliers
15 Wayne deals in two products, P and Q.
At the end of his financial year on 31 December, Wayne’s inventories were as follows.
cost net realisable value

$ $
product P 2000 1500
product Q 3500 3800
At which value should the total inventory be shown in the financial statements?
A $5000 B $5300 C $5500 D $5800
16 A trader sold fixtures (book value $3200) for $2800 cash.
How did this affect the statement of financial position?
non-current assets working capital capital

$ $ $
A –2800 +3200 –400

B –2800 +3200 +400
C –3200 +2800 –400
D –3200 +2800 +400
© UCLES 2016 0452/11/O/N/16

7 PAPER
17 Which item does not appear in the financial statements of a service business?
A gross profit
B non-current assets
C non-current liabilities
D profit for the year
18 A trader takes cash drawings from the business.
How will this affect the profit for the year and the current assets?
profit for the year current assets
A decrease no effect
B increase no effect
C no effect decrease
D no effect increase
19 Tracey and Batka decide to form a partnership.
Which is not an advantage to them?
A Access to capital is increased.

B Business debts are shared.
C Business profits are shared.
D Skills and expertise are increased.
20 On 1 January 2015 a club had received prepaid subscriptions of $560. During the year ended
31 December 2015 the club received subscriptions of $8480. On 31 December 2015
subscriptions owing to the club amounted to $400.
Which amount should be shown for subscriptions in the income and expenditure account for
2015?
A $8080 B $8480 C $8880 D $9440

8 PAPER
21 Allsports Club runs a café for its members. The following information was available at the end of
its first year of trading.
café takings 28 600

purchases of supplies 11 600
closing café inventory 1 940
wages of café staff 5 500
What was the profit of the café?
A $9560 B $11 500 C $13 440 D $17 000
22 A trader provided the following information for the year ended 30 April 2016.
capital 1 May 2015 12 600

capital 30 April 2016 7 900
A $2900 loss B $2900 profit C $6500 loss D $6500 profit
23 Which is not a feature of preference shares?
A Dividend has to be paid before any dividend is given to the ordinary shareholders.
B Dividend is fixed and does not vary with the profit made.
C Shareholders have a prior claim on assets if the business is wound up.
D Shareholders have the right to vote at the annual general meeting of the company.
share capital ordinary shares 160 000

loan capital 6% debentures 45 000
What was the total of the equity and reserves section in the statement of financial position?
A $174 000 B $182 000 C $219 000 D $227 000
© UCLES 2016 0452/11/O/N/16

9 PAPER
25 An employer provides each employee with a time sheet.
A It is completed by the employee to calculate the hourly rate of pay.

B It is completed by the employee to show the hours spent on each job.
C It is completed by the employer to calculate the hourly rate of pay.
D It is completed by the employer to show the hours spent on each job.
26 A trader provided the following information for his financial year.

average inventory 20 000
How would the rate of turnover of inventory be calculated?
$280 000
A
$20 000
$280 000
B
$21 000
$280 000
C
$21 000 − $19 000
$280 000
D
$21 000 + $19 000
27 Which action will improve the percentage of gross profit to revenue (sales)?
C reducing expenses

10 PAPER
28 What is the best indicator of the efficiency of a business?
A percentage of gross profit to revenue (sales)

B percentage of profit for the year to revenue (sales)
C rate of turnover of inventory
D return on capital employed
29 Hanna paid $3000 for rent for 15 months on 1 January 2015.
The amount transferred to the income statement for the year ended 31 December 2015
was $2400.
Which accounting principle did Hanna follow when preparing her income statement?
A dual aspect
B going concern
C historical cost
D matching / accruals
30 What is not an aim of the international accounting standards?
A to ensure accounting standards in different countries agree

B to establish an organisation to set standards in every country
C to make it easier to compare companies’ financial statements
D to reduce the variety of accounting practices worldwide
© UCLES 2016 0452/11/O/N/16

Question Question
Key Key
Number Number
1 D 16 C
2 C 17 A
3 C 18 C
4 B 19 C
5 D 20 D
6 A 21 C
7 A 22 A
8 D 23 D
9 C 24 B
10 C 25 B
11 A 26 A
12 B 27 B
13 B 28 D
14 D 29 D
15 A 30 B
Key messages
This paper required candidates to have a thorough understanding of double entry and financial statements.
It is important to read through each item very carefully before selecting an option. This ensures that an
important figure, word or phrase is not overlooked. It is particularly important to focus on any word in a
question that has been emboldened.
General comments
Some items proved to be slightly more challenging for candidates.

© 2016
Item 3
Most candidates understood that the entry would be to credit sales and debit Leroy, but not all were able to
correctly identify the ledger in which each account would appear.
Item 5
The question required entries in the books of the trader who issued the cheque and not the trader who
received the cheque. When the cheque was returned the issuer (Ali) would debit the bank account and credit
Ayub (Option D).
Item 10
Candidates were asked to identify the entries required to reduce a provision for doubtful debts. Most
candidates understood that $50 would be entered in the income statement and the provision for doubtful
debts account. Those candidates with a thorough understanding of double entry correctly selected Option C
as the key.
Item 11
The majority of candidates incorrectly selected Option C ($4050) which was the purchase of fixtures plus the
loss on sale of machinery less the proceeds of sale of machinery and less the profit on disposal of
equipment. Purchase of fixtures and proceeds from the sale of machinery do not affect the profit for the year.
The profit should have decreased by $1250 (the loss on sale minus the profit on disposal).
Item 12
Many candidates understood that the adjustment would appear in the income statement and the provision for
depreciation account, but only few candidates with a thorough knowledge of double entry correctly selected
the key, B.
Item 14
Option A was the most popular answer. The key was Option D. Candidates should have realised that the
question related to a debit balance, which represents an overpayment to suppliers.
Item 15
Inventory is always valued at the lower of cost and net realisable value. This rule is applied to each type of
inventory separately. Product P should have been valued at $1500 and Product Q should have been valued
at $3500, making a total of $5000.
Item 20
The transfer to the income and expenditure account should represent the subscriptions relating to that
financial year. This is the amount received in the year ($8480), plus the amount received last year relating to
this year ($560) and plus the subscriptions outstanding at the end of the year ($400).
Item 22
The missing figure of $2900 was correctly calculated by many candidates, but some could not identify
whether this represented a loss or a profit. Workings in the form of a “T” account can often assist candidates
to correctly interpret the entry as representing a profit or a loss.
Item 23
Many candidates were able to correctly identify the key D. Options A to C are correct statements therefore
not the correct answer.

© 2016
Item 24
Debentures are not part of the equity and reserves of a limited company.
Item 27
Any change to expenses will have no effect on the gross profit percentage. A reduction in the selling price
will reduce gross profit percentage.
Item 28
This item proved to be challenging for many candidates. The key was D. The return on capital employed
measures the profit earned on the funds used in the business: the higher the return the more efficiently the
capital is being employed.
Item 29
Transferring the expense for the year to the income statement ensures that the revenue for the year is
matched against the costs of the same period.
Item 30
International accounting standards aim to narrow the areas of difference of accounting practice and improve
comparability. These aims are covered in Options A, C and D. International accounting standards do not aim
to establish organisations to set separate standards in every country, so Option B was the key.

© 2016

0452/12
ACCOUNTING
Multiple Choice Paper 1 October/November 2016
1 hour
Soft clean eraser
*2290972064*


2 PAPER
1 A company employs a book-keeper and an accountant.
Which task would the accountant perform?
A extracting balances from the ledger accounts to produce a trial balance

B making entries in the journal to adjust a provision for doubtful debts
C preparing a monthly report that analyses the profitability of the company
D recording sales and purchase invoices in the books of prime (original) entry
2 Why does the owner of a business calculate profit?
A to find the return on capital

B to find the total expenses
C to know how much he can borrow from the bank
D to know the loan interest he can afford to pay
3 Melanie provided the following information.

amount owing by credit customers 1 250
amount owing to credit suppliers 850
inventory 1 875
bank overdraft 365
What was Melanie’s capital?
A $12 160 B $15 110 C $15 910 D $16 640
4 Jamal bought goods from Sanjay, paying in cash.
How would Jamal record this transaction?
debited credited
A cash purchases
B cash Sanjay
C purchases cash
D Sanjay cash
© UCLES 2016 0452/12/O/N/16

3 PAPER
A credit Leroy account debit sales account

B credit sales account debit Leroy account
C debit Leroy account credit sales account
D debit sales account credit Leroy account
6 Alex issued a credit note to Marcus.
In which book of prime (original) entry would Alex record this?
A purchases journal
C sales journal
7 A trader sends a monthly statement to a credit customer.
What is the purpose of sending this statement?
A to demand immediate payment in cash

B to inform the customer of his credit limit
C to provide a summary of transactions
D to notify the customer of goods awaiting delivery
8 A trader allows trade discount to regular customers.
Where will this discount appear in his financial statements?
A as a credit entry in the income statement

B as a current asset in the statement of financial position
C as a debit entry in the income statement
D it will not appear in the financial statements

4 PAPER
9 Omar had a debit balance of $6400 on the bank column in his cash book.
The following appeared on the bank statement, but not in the cash book.
bank charges 52
standing order payment 16
direct debit payment 9
dishonoured cheque from a customer 100
What was the debit balance on the bank column in the cash book after making entries for these
items?
A $6223 B $6323 C $6477 D $6577
10 Tan has a transport business. He purchased a motor vehicle and some fuel on credit from Yeung.
The invoice received from Yeung showed the following.
$
purchase of motor vehicle 20 000
purchase of fuel 200
20 200
What are the entries in Tan's books?
account(s) debited account(s) credited
$ $
A motor vehicles 20 200 Yeung 20 200
B motor vehicles 20 000 Yeung 20 200
motor expenses 200
C Yeung 20 200 motor vehicles 20 200
D Yeung 20 200 motor vehicles 20 000
motor expenses 200
11 Which error is a compensating error?
A cheque received from J. Wilks credited to the account of J. Wilson

B drawings debited to the cash account and credited to the drawings account
C purchase of a motor vehicle debited to the motor expenses account
D sales account and purchases account both undercast by the same amount
© UCLES 2016 0452/12/O/N/16

5 PAPER
12 Raminder maintains a provision for doubtful debts of 2 21 % of the trade receivables.
Which entries will Raminder make on 31 December to adjust the provision for doubtful debts?
debit $ credit $

13 At the end of her financial year, Lucy decided to depreciate her fixtures by $1000.
Which journal entry will record this?
debit credit
$ $
A fixtures 1000
C provision for depreciation of fixtures 1000
fixtures 1000
D provision for depreciation of fixtures 1000
14 Paul sold all his office equipment. He provided the following information.
equipment at cost 5000

provision for depreciation of equipment 1250
proceeds of disposal of equipment 1950
What was the effect on the profit?
A $1800 decrease
B $1800 increase
C $4300 decrease
D $4300 increase

6 PAPER
15 What is the purpose of preparing a sales ledger control account?
A to calculate the total credit sales for the period

B to correct any errors in the sales ledger
C to prove the arithmetical accuracy of the sales account
D to prove the arithmetical accuracy of the sales ledger accounts
16 A purchases ledger control account contains discounts received.
Which book of prime (original) entry provides this information?
A cash book
B general journal
C purchases journal
D purchases returns journal
17 Hans sublets part of his premises to Elmer. On 31 December 2015 Elmer had paid two months’
rent in advance.
Where would this appear in Hans’ statement of financial position on 31 December 2015?
A other payables
B other receivables
C trade payables
D trade receivables
18 Wayne deals in two products, P and Q.
At the end of his financial year on 31 December, Wayne’s inventories were as follows.
cost net realisable value

$ $
product P 2000 1500

product Q 3500 3800
At which value should the total inventory be shown in the financial statements?
A $5000 B $5300 C $5500 D $5800
© UCLES 2016 0452/12/O/N/16

7 PAPER
19 A trader takes cash drawings from the business.
How will this affect the profit for the year and the current assets?
profit for the year current assets
A decrease no effect
B increase no effect
C no effect decrease
D no effect increase
20 Which is a trading business?
A food store
B hairdresser
C investment adviser
D motor vehicle repairer
21 Which items may appear on the debit side of a partner’s current account?
share of share of interest on interest on

profit loss capital drawings
A
B
C
D
22 Which item is not included in a partnership agreement?
A annual profit to be earned by the business

B annual salaries to be paid to partners
C capital contributed by each partner
D rate of interest charged on drawings
23 On 1 January 2015 a club had received prepaid subscriptions of $560. During the year ended
31 December 2015 the club received subscriptions of $8480. On 31 December 2015
subscriptions owing to the club amounted to $400.
Which amount should be shown for subscriptions in the income and expenditure account for
2015?
A $8080 B $8480 C $8880 D $9440

8 PAPER
24 Grassfield Golf Club sells refreshments to its members. Suppliers for refreshments were owed
$250 on 1 January and $400 on 31 December. Payments to suppliers during the year were
$7200.
The inventory at the end of the year was $100 less than the inventory at the start of the year.
What was the cost of sales of refreshments?
A $7050 B $7150 C $7300 D $7450
25 A trader provided the following information for his first year of trading.
revenue 90 000
purchases 72 500
closing inventory 560
What was the margin?
A 18.82% B 20.07% C 23.19% D 25.10%
26 An employer provides each employee with a time sheet.
A It is completed by the employee to calculate the hourly rate of pay.

B It is completed by the employee to show the hours spent on each job.
C It is completed by the employer to calculate the hourly rate of pay.
D It is completed by the employer to show the hours spent on each job.
27 A business provided the following information for its financial year.

A 2.25 times B 4.5 times C 8.57 times D 9 times
© UCLES 2016 0452/12/O/N/16

9 PAPER
28 Which action will improve the percentage of gross profit to revenue (sales)?
C reducing expenses
29 Which formula is used to calculate the quick ratio (acid test ratio)?
current assets
A
current liabilities
current assets − inventory

B
current liabilities
current liabilities
C
current assets
current liabilities
D
current assets − inventory
30 Which statement describes the matching / accruals principle?
A A business should continue to use the same accounting methods.

B A business will continue to trade in the foreseeable future.
C Each financial transaction is recorded by two accounting entries.
D Related income and costs should be recorded in the same period.
© UCLES 2016 0452/12/O/N/16

Question Question
Key Key
Number Number
1 C 16 A
2 A 17 A
3 C 18 A
4 C 19 C
5 C 20 A
6 D 21 D
7 C 22 A
8 D 23 D
9 A 24 D
10 B 25 B
11 D 26 B
12 C 27 D
13 B 28 B
14 A 29 B
15 D 30 D
Key messages
This paper required candidates to have a thorough understanding of double entry and financial statements.
It is important to read through each item very carefully before selecting an option. This ensures that an
important figure, word or phrase is not overlooked. It is particularly important to focus on any word in a
question that has been emboldened.
General comments
All the items were within the scope of the syllabus. One item proved to be slightly more challenging for many
candidates.
Item 5
Many candidates selected the correct answer. Though most understood that the entry would be to credit
sales and debit Leroy, not all were able to correctly identify the ledger in which each account would appear.
Item 6
A credit note is issued by the seller when goods are returned. The seller would enter this in the sales returns
journal.

© 2016
Item 7
At the end of each month a supplier may issue a statement of account to the customer. As well as notifying
the customer of the amount due, this also provides a summary of the transactions in the month. The
customer’s credit limit is already established before trading takes place.
Item 8
Candidates should appreciate that, unlike cash discount, trade discount does not appear in the double entry
records and so will not appear in the financial statements.
Item 9
The key was selected by many candidates. These candidates understood that each item required a credit
entry in the cash book, causing the balance to decrease to $6223.
Item 12
Candidates were asked to identify the entries required to reduce a provision for doubtful debts. Most
candidates appreciated that $50 would be entered in the income statement and the provision for doubtful
debts account. Those candidates with a thorough understanding of double entry correctly selected Option C
as the key.
Item 13
Most candidates understood that the adjustment would appear in the income statement and the provision for
depreciation account, but only those candidates with a thorough knowledge of double entry correctly
selected the key, B.
Item 15
Where a trader has maintained a full set of accounting records, control accounts are used as a means of
checking the arithmetical accuracy of the sales and purchases ledgers. Where a trader has maintained only
a few accounting records, total trade receivables and total trade payables accounts may be prepared to
calculate the credit sales and credit purchases.
Item 16
The source of information for discounts received is the cash book.
Item 17
Those candidates who read the question very carefully realised that the rent represented rent received in
advance from the tenant. This represents money received for a service which has not yet been provided and
would appear under “other payables” in the statement of financial position.
Item 18
Inventory is always valued at the lower of cost and net realisable value. However, many candidates did not
appreciate that this rule is applied to each type of inventory separately. Product P should have been valued
at $1500 and Product Q should have been valued at $3500, making a total of $5000.

© 2016
Item 19
Cash drawings do not affect the profit of a business, but they do reduce the cash and so reduce the current
assets of the business.
Item 21
Share of loss and interest in drawings are debited to the current account of a partner and share of profit and
interest on capital are credited.
Item 22
Options B to D are true statements. It is not possible to include the annual profit in a partnership agreement
as will not be known until the end of each financial year.
Item 23
The transfer to the income and expenditure account should represent the subscriptions relating to that
financial year. This is the amount received in the year ($8480), plus the amount received last year relating to
this year ($560) and plus the subscriptions outstanding at the end of the year ($400).
Item 24
The inventory caused a few problems in the calculation of the cost of sales. Candidates selecting Option A
ignored the inventory completely. The difference in the inventories should have been added to the purchases
figure, giving a cost of sales of $7450. Candidates selecting Option B deducted the difference in the
inventories.
Item 26
A time sheet is completed by an employee to show the hours spent on each job. This document is then used
by the employer to calculate the employee’s gross pay based on the hourly rate of pay.
Item 28
Any change to expenses will have no effect on the gross profit percentage. A reduction in the selling price
will reduce gross profit percentage.
Item 30
Those candidates who had a thorough understanding of accounting principles were able to identify Option D
as the key. Transferring the expense for the year to the income statement ensures that the revenue for the
year is matched against the costs of the same period.

© 2016

0452/11 May/
ACCOUNTING
June 2017
Paper 1 Multiple Choice 1 hour
Soft clean eraser
*8196944247*

FOR ONLINE DELIVERY
CONTACT

2 PAPER
1 What is a disadvantage of a computerised book-keeping system?
A Calculations are performed without errors.

B Information can be processed quickly.
C Reconciliations are performed automatically.
D There is an initial cost of training staff.
2 A trader provides the following information.
equipment 10 000
inventory 4 000
insurance prepaid 100
rent owing 200
What is the total of the assets?
A $16 600 B $16 700 C $17 600 D $18 100
3 James bought a motor vehicle costing $10 000 from GF Motors. He paid $2000 by cheque. The
balance was to be paid over the next two years.
How was this recorded in James’ books of account?
A bank 2 000 motor vehicles 10 000

GF Motors 8 000
B bank 2 000 GF Motors 10 000
motor vehicles 8 000
C GF Motors 10 000 bank 2 000
D motor vehicles 10 000 bank 2 000
GF Motors 8 000
© UCLES 2017 0452/11/M/J/17

3 PAPER
4 Sara purchases goods on credit from Zola.
Sara owed Zola $400 on 1 May. She paid this on 1 May after deducting a 5% cash discount. Sara
made further purchases, $280, during May.
What were the opening and closing balances on Sara’s statement of account for May?
opening balance closing balance

$ $
A 380 266
B 380 280
C 400 280
D 400 300
5 A business provided the following information for April 2017.
invoices received for credit purchases 250 000

invoices received for cash purchases 15 000
credit notes received for goods returned 10 000
What was the total of the purchases journal for April 2017?
A $240 000 B $250 000 C $255 000 D $265 000
account.

A
B
C
D

4 PAPER
Sukesh account
date
$ $ $

4 sales 200 650 dr
8 bank 432 218 dr

A No entries have been made for the purchase of stationery by cheque.

B Purchase of stationery has been entered only in the cash book.
C Purchase of stationery has been entered only in the stationery account.
D The stationery account has been omitted from the trial balance.
9 Liam rents premises from Gavin. In March Liam paid the rent in advance for April and May.
How would the balance on 1 April appear in their ledgers?


© UCLES 2017 7110/11/M/J/17

5 PAPER
10 Ahmed decided to write off an amount owing from Yasmin as a bad debt.
Which entries will Ahmed make?
when the debt is written off at the end of the financial year
account to account to account to account to
be debited be credited be debited be credited
A bad debts Yasmin income statement bad debts

B income statement sales sales bad debts
C sales income statement bad debts sales
D Yasmin bad debts bad debts income statement
12 A business sells a machine which has been depreciated over several years.
Which entry records the transfer of depreciation to the machinery disposal account?
A machinery machinery disposal

B machinery disposal machinery
C machinery disposal provision for depreciation
of machinery
D provision for depreciation machinery disposal
of machinery

6 PAPER

$ $

3000 3000
5100 5100

B accumulated depreciation of machinery using the straight-line method
D net book value of machinery using the straight-line method
14 What would not appear in a sales ledger control account?
A a customer’s cheque returned by the bank as dishonoured

B a debt owed by a customer written off as a bad debt during the month
C discount given to a customer because he had placed a large order
D goods returned by credit customers during the month
15 A business has two departments, X and Y. The total revenue was $120 000 of which 60% related
A $3000 B $15 000 C $18 000 D $27 000
A at cost
B at the lower of cost and net realisable value
C at the lower of cost and replacement value
D at the lower of selling price and net realisable value
© UCLES 2017 7110/11/M/J/17

7 PAPER
17 On 1 April a business had a working capital of $6000. On 2 April $1150 was received from credit
customers in settlement of debts of $1200. On the same day damaged inventory costing $200
was written off.
What was the working capital at close of business on 2 April?
A $4600 B $5750 C $6950 D $7150
18 Seema is a business consultant. She provided the following information at the end of her first
financial year on 30 April 2017.
fees earned during the year 244 000

fees owed by clients at 30 April 2017 22 000
cost of computer equipment purchased 26 000
loan interest paid 4 000
other business expenses 142 000
What was Seema’s profit for the year?
A $72 000 B $94 000 C $98 000 D $120 000
19 At the end of Carl’s financial year he made an adjustment for $40 rent owed by his tenant.
How did this adjustment affect Carl’s financial statements?
decrease profit increase profit increase current increase current

for the year for the year assets liabilities
A
B
C
D
20 Gurmit agreed to admit Balbir as a partner from 1 January 2017. A value of $4000 was agreed as
goodwill of Gurmit’s business.
Why was the goodwill of Gurmit’s business valued before admitting Balbir as a partner?
A to recognise that Gurmit’s business has built up a good reputation

B to recognise that Gurmit should have the largest share of profit
C to recognise that Gurmit should receive a partnership salary
D to recognise that Gurmit will have the largest capital

8 PAPER
21 Which item may appear on the debit side of a partner’s current account?
C salary
D share of profit
22 The financial year of a club ends on 30 April. During the year ended 30 April 2017, the club
received an interest-free loan from a member.
In which of the club’s financial statements will this appear?
A income and expenditure account and statement of financial position
B receipts and payments account and income and expenditure account
C receipts and payments account and statement of financial position
D statement of financial position only
subscriptions paid in advance at the start of the year 400

total subscriptions received during the year 3600
subscriptions paid in advance at the end of the year 500
Which amount would appear as subscriptions in the income and expenditure account?
A $3500 B $3600 C $4000 D $4500
24 Nula provided the following information for the year.
drawings for the year 3 900

net assets at 1 January 2016 60 500
net assets at 31 December 2016 72 275
A $7875 loss
B $7875 profit
C $15 675 loss
D $15 675 profit
© UCLES 2017 7110/11/M/J/17

9 PAPER
25 Abdul does not keep a full set of books but was able to provide the following information.
$
purchases 58 000
Abdul applies a mark-up of 20% to obtain the selling price of goods.
What were Abdul’s sales for the year?
A $67 200 B $70 000 C $72 000 D $75 000
26 Which costs are included in prime cost?
direct factory change in work

direct labour
materials overheads in progress
A
B
C
D
27 Paula has the following deductions from her wages.
a subscription to her employer’s social club

a pension contribution
How are these deductions classified?
pension
subscription
contribution
A statutory statutory
B statutory voluntary
C voluntary statutory
D voluntary voluntary

10 PAPER
28 Winston provided the following information on 30 April 2017.
capital at 1 May 2016 42 000

10 year loan (received 1 May 2014) 12 000
What was the profit for the year as a percentage of opening capital employed?
A 10% B 11.11% C 12.5% D 14.29%
29 Which accounting principle requires a business to prepare financial statements at regular

intervals?
A accounting entity
B accounting year
C going concern
D money measurement
30 Joyce depreciates her non-current assets using the straight-line method of depreciation, but she
writes off any office equipment costing under $200 in the year of purchase.
On 1 January 2016 she bought a printer, cost $120, which she expected to use for 3 years.
The book value of her office equipment on 31 December 2016 was $24 610.
What would be the book value of her office equipment on 31 December 2016 if Joyce wrote off
only office equipment costing under $100?
A $24 490 B $24 530 C $24 690 D $24 730
© UCLES 2017 7110/11/M/J/17

Question Question
Key Key
Number Number
1 D 16 B
2 A 17 B
3 D 18 C
4 C 19 C
5 B 20 A
6 D 21 B
7 D 22 C
8 A 23 A
9 C 24 D
10 A 25 A
11 D 26 C
12 D 27 D
13 A 28 B
14 C 29 B
15 A 30 C
Key messages
This paper requires candidates to have an understanding of all the topics on the syllabus.
Candidates are reminded of the importance of reading each item very carefully before selecting an option.
General comments
A few items proved to be slightly more difficult than envisaged. Those candidates that had a thorough
understanding of the double entry system of book-keeping were able to select the correct option on items
involving ledger entries.
Item 5
Only credit purchases are recorded in the purchases journal. Cash purchases are recorded in the cash book
and purchases returns are recorded in the purchases returns journal. The key was B.

© 2017
Item 7
The account of Sukesh in Jack’s books was provided. The entry on 8 May showed a credit to Sukesh’s
account indicating that money had come from Sukesh into Jack’s bank. Sukesh received a cash discount
from Jack for prompt payment.
Item 9
Liam had paid rent in advance to Gavin. In Liam’s books this is an asset (a prepayment) so will be brought
down as a debit balance in his rent payable account. From Gavin’s point of view this is rent receivable paid in
advance (a liability) so will be brought down as a credit balance in his rent receivable account.
Item 10
The majority of candidates understood the accounts in which entries were required to write off a bad debt
and to make a year-end transfer, but some of these candidates did not understand which sides of those
accounts the entries would be made. To write off a bad debt it is necessary to credit the customer and debit
bad debts. To make a year-end transfer it is necessary to debit income statement and credit bad debts.
Item 12
The vast majority of candidates realised that the accounts involved were disposal and provision for
depreciation. Only those candidates with a thorough knowledge of double entry were able to select D as the
key.
Item 13
Candidates were asked what the balance on a provision for depreciation account represented. The balance
on this type of account represents the total depreciation to date. As the transfer to income statement was a
lower figure in the second year then the diminishing (reducing) balance method must have been applied. The
key was A.
Item 14
The statistics indicate that a substantial amount of guesswork took place. The word “not” was emboldened to
draw attention to the fact that the question related to items which would not be included in a sales ledger
control account. The key was C.
Item 17
The key was B. The working capital would decrease by $50 when the credit customers paid $1150 in
settlement of a debt of $1200 as the trade receivables would decrease by $1200 but the bank would only
increase by $1150. Writing off inventory would cause the value of the inventory to decree by $200 and the
working capital decrease by the same amount. After recording these items the working capital would be
$5750.
Item 18
It was expected that this would be a reasonably straightforward item, but candidates found this question
difficult. Some candidates incorrectly included the cost of computer equipment (which was a non-current
asset). A significant number also included the fees owed by clients. In this question the fees did not require
adjustment for the accrual as the first item on the list was described as ‘fees earned’ which represented the
fees actually earned whether received or otherwise.
Item 19
Most candidates selected options B and C (C was the key). At the end of his financial year Carl’s tenant
owed $40 rent. Making adjustments for this would increase the profit for the year and also increase the
current assets. The candidates selecting option B appear to be regarding the rent as rent payable rather
than rent receivable.

© 2017
Item 22
Candidates struggled with this question. If an interest-free loan is received by a club this will be debited in the
receipts and payments account and will be included in the non-current liabilities in the statement of financial
position.
Item 23
It was expected that the majority of candidates would select the key, A. The subscriptions relating to the
current financial year were $3500 which represented the amount received during the year less the amount
which related to the following year and plus the amount paid last year for the current year.
Item 24
The vast majority of candidates calculated that Nula had made a profit, but a significant number treated the
drawings incorrectly which resulted in an incorrect profit figure. Drafting out a ‘T’ account would have
assisted candidates to calculate the correct profit for the year.
Item 27
Candidates clearly misunderstand what represents a statutory deduction and what represents a voluntary
deduction from an employee’s wages. Statutory deductions are those deductions required by the
Government such as income tax. Voluntary deductions are those deductions which the employee chooses to
have deducted.
Item 28
The profit for the year as a percentage of opening capital employed was 11.11 per cent. This was arrived at
by calculating the profit of $6000 as a percentage of the opening capital employed of $54 000 ($42 000 plus
$12 000). A number of candidates did not include the loan and some used the closing capital.
Item 29
The key was B. The accounting year principle requires that businesses prepare financial statements at
regular intervals.
Item 30
Many candidates found this difficult. If it was decided to write off only office equipment under $100 than the
equipment purchased on 1 January for $120 would be regarded as a non-current asset. The deprecation for
one year would be $40, so the net book value of this equipment at the end of the year would be $80. The
total book value of the non-current assets would, therefore, increase by $80.

© 2017


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2 PAPER
1 What is a disadvantage of Information and Communications Technology in book-keeping?
A accuracy of calculations
B capacity of information storage
C cost of training staff
D speed of processing information
2 A trader made the following entries in his accounting records.
debit credit
income statement capital account
What did he record?
A capital introduced
B capital withdrawn
C loss for the year
D profit for the year
3 A customer received a credit note.
In which book of prime (original) entry would the customer record this document?
A purchases journal
C sales journal
4 Total goods returned to Wayne by credit customers in March 2017 had a list price of $440. He
allows a trade discount of 25% on all credit sales.
He posts the total of his sales returns journal to the ledger at the end of each month.
How much should be debited to Wayne’s sales returns account on 31 March 2017?
A $110 B $330 C $440 D $550
© UCLES 2017 0452/12/M/J/17

3 PAPER
account.

A
B
C
D
6 On 31 July the bank column in Jay’s cash book showed he had $312 in the bank. On the same
date his bank statement showed a debit balance of $53.
It was found that bank charges, $47, had not been recorded in the cash book and a cheque,
$318, from a customer had not been credited by the bank.
What is the bank balance that should be shown in Jay’s statement of financial position on
31 July?
A $265 asset
B $324 liability
C $359 asset
D $371 liability
7 Which accounts all have debit balances?
A capital, insurance, purchases

B drawings, sales, purchases returns
C inventory, motor vehicles, cash
D rent received, drawings, wages

4 PAPER
Sukesh account
date
$ $ $

4 sales 200 650 dr
8 bank 432 218 dr

A No entries have been made for the purchase of stationery by cheque.

B Purchase of stationery has been entered only in the cash book.
C Purchase of stationery has been entered only in the stationery account.
D The stationery account has been omitted from the trial balance.
10 Maria started a business on 1 May 2016. The monthly rates on her business premises are $100.
During the year ended 30 April 2017 she paid rates of $1300.
Which journal entry will Maria make on 30 April 2017 to transfer the rates to the income
statement?
debit credit
$ $
rates 1200
rates 1300
C rates 1200
D rates 1300
© UCLES 2017 7110/12/M/J/17

5 PAPER
11 Liam rents premises from Gavin. In March Liam paid the rent in advance for April and May.
How would the balance on 1 April appear in their ledgers?


13 Which cost would not be depreciated?
A improvement of non-current assets

B installation of non-current assets
C purchase of non-current assets
D repair of non-current assets

6 PAPER

$ $

3000 3000
5100 5100

B accumulated depreciation of machinery using the straight-line method
D net book value of machinery using the straight-line method
15 The totals of a trial balance did not agree and a suspense account was opened. It was later found
that the total of the discount allowed column in the cash book, $100, had been credited to the
discount allowed account.
debit credit
$ $
A discount allowed 100
suspense 100
B discount allowed 200
suspense 200
C suspense 100
D suspense 200
© UCLES 2017 7110/12/M/J/17

7 PAPER
16 A trader calculated her draft profit for the year at $28 400.
She later discovered the following errors.
A prepayment of rent payable was understated by $1000.
Closing inventory was understated by $1500.
What was the correct profit for the year?
A $25 900 B $27 900 C $28 900 D $30 900
17 A business has two departments, X and Y. The total revenue was $120 000 of which 60% related
A $3000 B $15 000 C $18 000 D $27 000
18 Alex purchased goods for resale costing $1000 to which she would normally apply a 25%
mark-up. These goods remained unsold at the financial year end as they were found to be
damaged. Alex estimated that they could be sold for $600.
At which value should these goods be recorded in the year end financial statements?
A $400 B $600 C $750 D $1250
19 On 1 April a business had a working capital of $6000. On 2 April $1150 was received from credit
customers in settlement of debts of $1200. On the same day damaged inventory costing $200
was written off.
What was the working capital at close of business on 2 April?
A $4600 B $5750 C $6950 D $7150
20 Pooja owns a hair salon. She lives in a flat above the salon. The business pays rent for the whole
building. No adjustment has been made in the financial statements for the rent for the flat.
What is the effect of omitting this adjustment?
profit for the year capital employed
A overstated no effect
C understated no effect
D understated overstated

8 PAPER
21 Ben and Joe decide to form a partnership. Ben is to invest $50 000 in the business and Joe
$10 000.
Ben wants the partnership agreement to reflect the differences in the amounts invested by the
partners.
What should Ben insist is included in the partnership agreement?
C interest on partner’s loan
D salary for extra responsibilities
22 A sports club was formed on 1 January 2016.
Which amount will appear for subscriptions in the income and expenditure account for the year
A total subscriptions received during the year

B total subscriptions received less amounts owing plus amounts paid in advance
C total subscriptions received plus amounts owing less amounts paid in advance
D total subscriptions received plus amounts owing
23 The financial year of a club ends on 30 April. During the year ended 30 April 2017, the club
received an interest-free loan from a member.
In which of the club’s financial statements will this appear?
A income and expenditure account and statement of financial position
B receipts and payments account and income and expenditure account
C receipts and payments account and statement of financial position
D statement of financial position only
24 How can profit for the year be calculated?
A closing capital + opening capital + drawings

B closing capital + opening capital – drawings
C closing capital – opening capital + drawings
D closing capital – opening capital – drawings
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9 PAPER
25 Abdul does not keep a full set of books but was able to provide the following information.
$
purchases 58 000
Abdul applies a mark-up of 20% to obtain the selling price of goods.
What were Abdul’s sales for the year?
A $67 200 B $70 000 C $72 000 D $75 000
26 What are the main features of debentures?
return received rate of return voting rights
A dividend fixed rate no

B dividend varies with profit yes
C interest fixed rate no
D interest varies with profit yes
27 Which items are shown in a statement of changes in equity?
changes in changes changes in long term

share capital in reserves loans and debentures
A
B
C
D
28 Which document is used in the calculation of gross pay?
A payroll register
B payslip
C time sheet
D wages sheet

10 PAPER
tangible non-current assets 15 000

intangible non-current assets 25 000
What was the working capital ratio (current ratio)?
A 1.5 : 1 B 2.5 : 1 C 3.5 : 1 D 7.5 : 1
30 Mario has decided that all items purchased by his business should be recorded at the amount he
actually paid for them.
Which accounting principle is Mario applying?
A accounting entity
B consistency
C going concern
D historical cost
© UCLES 2017 0452/12/M/J/17

Question Question
Key Key
Number Number
1 C 16 D
2 D 17 A
3 B 18 B
4 B 19 B
5 D 20 C
6 A 21 A
7 C 22 C
8 D 23 C
9 A 24 C
10 A 25 A
11 C 26 C
12 D 27 B
13 D 28 C
14 A 29 C
15 B 30 D
Key messages
This paper requires candidates to have an understanding of all the topics on the syllabus.
Candidates are reminded of the importance of reading each item very carefully before selecting an option.
General comments
A few items proved to be slightly more difficult than envisaged. Those candidates that had a thorough
understanding of the double entry system of book-keeping were able to select the correct option on items
involving ledger entries.
Item 2
A credit entry in a capital account indicates an increase in the capital. In this case the corresponding debit
was in the income statement. This means that an item has been transferred to the capital account from the
income statement, so this must represent the profit for the year.

© 2017
Item 6
The bank balance in the cash book of a business is included in the statement of financial position. The bank
statement balance does not appear in the accounting records of the business. The cash book of the
business showed a balance at bank of $312, but this had to be reduced by the bank charges so the balance
to appear in the statement of financial position was $265.
Item 10
The majority of candidates understood that the year-end transfer of rates to the income statement involved
debiting the income statement and crediting the rates account. However, some candidates did not appreciate
that the rates transferred to the income statement should equal the rates relating only to that financial year.
Item 13
The word ‘not’ was emboldened to draw attention to the fact that the item related to costs which would not be
depreciated. This item required an understanding of capital and revenue expenditure. Capital expenditure
includes the acquisition and improvement of non-current assets together with any costs of purchase and
installation. Such items would be debited in the asset account and so included in the amount on which
depreciation is calculated. The key was D as repairs are revenue expenditure.
Item 16
Candidates struggled with this question. If a prepayment of rent payable is understated then the expenses
are overstated so the profit is understated. If the closing inventory is understated then the cost of sales is
overstated so the profit is understated. The correct profit for the year was $30 900.
Item 18
Inventory is valued at the lower of cost and net realisable value. The goods cost $1000 and it is estimated
that they could now be sold for $600. They should be recorded in the financial statements at $600.
Item 19
The key was B, but an almost equal number of candidates selected option C. The working capital would
decrease by $50 when the credit customers paid $1150 in settlement of a debt of $1200 as the trade
receivables would decrease by $1200 but the bank would only increase by $1150. Writing off inventory
would cause the value of the inventory to decrease by $200 and the working capital to decrease by the same
amount. After recording these items the working capital would be $5750.
Item 20
The income statement was charged with the rent of the whole building so the expenses were overstated and
the profit understated. This error would not, however, affect the capital as the profit was understated but the
drawings were also understated by the amount of the rent relating to the owner’s flat.
Item 22
It was expected that the majority of candidates would correctly identify C as the key. There were no opening
balances on the subscriptions account as this was the first year of the club’s existence. The subscriptions
relating to the year were the amount received minus subscriptions prepaid and plus subscriptions owing.
Drafting out a ‘T’ account would have assisted candidates to understand the relationship between the items.

© 2017
Item 23
Candidates found this question difficult. If an interest-free loan is received by a club this will be debited in the
receipts and payments account and will be included in the non-current liabilities in the statement of financial
position.
Item 28
Candidates seemed unsure of the document used in the calculation of gross pay. A payslip is given to the
employee showing the gross pay, deductions and net pay. A payroll register or wages sheet is a list showing
the total gross pay, deductions and net pay for each employee. A time sheet is completed by an employee to
record the hours worked each day. This is used by the employer to calculate the gross pay of that employee.

© 2017


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2 PAPER
1 What would be the most useful way of monitoring the progress of a retail business?
A comparing the financial statements of one year with those of previous years
B comparing the financial statements with those of a business in another country
C comparing the financial statements with those of a business of a different size
D comparing the financial statements with those of a manufacturing business

3 What increases owner’s capital?
A bank loan extended from five to ten years

B purchase of inventory on credit
C purchase of machinery by cheque
D transfer of vehicle to business from private use
4 Which account always has a credit balance?
A capital account
B cash account
C drawings account
D premises account
5 Kamal purchases and sells goods on credit.
Where does he maintain the accounts of his credit suppliers?
A purchases journal
B purchases ledger
C sales journal
D sales ledger
© UCLES 2017 0452/11/O/N/17

3 PAPER
6 Ali sold goods, $600, on credit to Malik on 19 October.
The terms of the sale were 2 21 % cash discount if payment was received within 14 days.
Payment was received on 25 October.
How would Ali record this discount?
debit credit
A discount allowed Malik

B discount received Malik
C Malik discount allowed
D Malik discount received
7 What is correct about a bank reconciliation statement?
prepared by prepared by part of double entry

the bank the trader book-keeping
A no yes no
B no yes yes
C yes no no
D yes no yes
8 Which transaction of a manufacturer would be entered in the general journal?
A payment of wages by cash

B purchase of raw materials on credit
C sales of finished goods on credit
D writing off a bad debt

4 PAPER
Tony account
$ $

12 sales 590 28 bank 284
discount 6
990 990

10 The totals of a trial balance agreed.
A All the arithmetic in the ledger is correct.

B All transactions have been entered in the correct ledger accounts.
C All transactions have been entered on the correct sides of the ledger.
D Total debit balances equal total credit balances in the ledger.
© UCLES 2017 0452/11/O/N/17

5 PAPER
11 Gary rents his business premises. His financial year ends on 30 September. On 1 October 2016
rent prepaid amounted to $3000. During the year ended 30 September 2017 a total of $7000 rent
was paid. On 30 September 2017 rent outstanding amounted to $2000.
Which journal entry shows the transfer of the rent to the income statement on
30 September 2017?
debit credit
$ $
rent 8 000
rent 12 000
C rent 8 000
D rent 12 000
12 Ann’s financial year ends on 31 August. The annual rates on her shop are $3000. On
1 September 2016 rates prepaid amounted to $750. Rates paid during the year ended
31 August 2017 amounted to $2750.
What was the balance brought down on the rates account on 1 September 2017?
A $250 credit
B $250 debit
C $500 credit
D $500 debit
13 Ajay maintains a provision for doubtful debts of 3% of trade receivables.
Which entry did Ajay make on 31 December 2016?
debit credit

C provision for doubtful debts account income statement
D provision for doubtful debts account trade receivables account

6 PAPER
14 Mona paid $32 000 for a new motor vehicle. This included $100 for fuel and $250 for road tax.
She debited the purchases account and credited the cash book with $32 000.
debit credit
$ $
A motor vehicle 32 000

purchases 32 000
B purchases 32 000
C motor vehicles 31 650

motor vehicle expenses 350
purchases 32 000
D purchases 32 000
motor vehicle expenses 350
15 A trader incorrectly posted sales returns of $100 to the credit of purchases returns account.
What was the effect on the gross profit?
A overstated $100
B overstated $200
C understated $100
D understated $200

How will these items be recorded in a purchases ledger control account?
interest charged on contra entry to sales

overdue account ledger control account
A
B
C
D
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7 PAPER
17 The owner of a business paid $5000 into the business bank account.
A loan for $10 000 repayable in 2020 was also obtained and the money used to purchase a motor
vehicle.
Which changes would take place in the statement of financial position as a result of these
transactions?
non-current owner’s non-current

assets equity liabilities
$ $ $
A +5 000 +10 000 +5 000
B +10 000 –5 000 +10 000
C +10 000 +5 000 +10 000
D +15 000 +15 000 –10 000
18 Tareq started a business on 1 October 2016. He provided the following information.
On 28 November 2016 he paid an insurance premium, $1800, for the year starting
1 December 2016.
On 31 December 2017 he paid advertising costs for 1 July to 31 December 2017 totalling $2400.
What was shown in the statement of financial position at 30 September 2017?
other other
receivables payables
$ $
A advertising 400 insurance 300

B advertising 1200 insurance 300
C insurance 300 advertising 400
D insurance 300 advertising 1200
19 Which business is not a service business?
A accountant’s practice
B computer repair shop
C flower shop
D hairdressing salon

8 PAPER
20 What is a disadvantage of forming a partnership?
A additional skills are available

B profits are shared
C responsibilities are shared
D risks are shared
21 Abi and Erni are in partnership. They share profits and losses equally. Erni is entitled to an
annual partnership salary of $3000. The profit for the year ended 31 August 2017 was $12 600.
On 1 September 2016 the partners’ current account balances were as follows.
Abi 2500 credit

Erni 1400 debit
What was the credit balance on Erni’s current account on 1 September 2017?
A $400 B $3200 C $6400 D $9200
22 A golf club has 230 members. The annual subscription is $100.
At the beginning of the year subscriptions prepaid amounted to $1000 and at the end of the year
subscriptions in arrears amounted to $1500.
How much did the club receive for subscriptions during the year?
A $20 500 B $22 500 C $23 500 D $25 500
23 What would not appear in the income and expenditure account of a sports club?
A cost of sports equipment

B depreciation of sports equipment
C insurance of sports equipment
D repairs to sports equipment
© UCLES 2017 0452/11/O/N/17

9 PAPER
24 Karim did not keep proper accounting records, but was able to provide the following information.

capital introduced in the year 15 000
A $16 000 B $18 000 C $33 000 D $48 000
25 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
D returns inwards
26 Which is shown as loan capital in the statement of financial position of a limited company?
A bank overdraft
B debentures
C ordinary shares
D preference shares
27 The financial year of AB Limited ends on 30 September.
Debenture interest is paid annually in arrears on 1 October each year.
Where did debenture interest appear in the financial statements for the year ended
30 September 2017?
income statement of statement of

statement changes in equity financial position
A
B
C
D

10 PAPER
28 In year 1, Sam’s gross profit was calculated as follows.
$ $
revenue 180 000

purchases 118 000
124 000
closing inventory (4 000) 120 000
gross profit 60 000
In year 2, the amount of revenue and gross profit was the same as in year 1 but the purchases
increased to $124 000.
What was the rate of turnover of inventory in year 2?
A 20 times B 21 times C 24 times D 30 times
29 Stephan’s major competitor has invested in a new machine for making goods more cheaply.
Stephan knows this will affect his sales but did not record this in his accounting records.
Which accounting principle is Stephan applying?
A going concern
B materiality
C money measurement
D prudence
30 At the end of the financial year Omar’s inventory was 100 units of which 10 units were damaged
and could not be sold.
The selling price per unit is $5 and the cost price per unit is $3.50.
Which value should Omar place on his inventory?
A $315 B $350 C $450 D $500
© UCLES 2017 0452/11/O/N/17

Question Question
Key Key
Number Number
1 A 16 C
2 D 17 C
3 D 18 D
4 A 19 C
5 B 20 B
6 A 21 C
7 A 22 A
8 D 23 A
9 C 24 B
10 D 25 C
11 B 26 B
12 D 27 A
13 B 28 A
14 C 29 C
15 B 30 A
Key messages
Candidates are required to have knowledge and understating of all the topics on the syllabus.
It is important to read each item very carefully before selecting an option.
General comments
Candidates found one item significantly challenging. Those candidates who had a thorough understanding of
double entry book-keeping were able to select the correct option on the items involving ledger entries.
Item 5
This should have been a straight-forward item and it was anticipated that the majority of candidates would
know that the accounts of credit suppliers are maintained in the purchases ledger. The purchases journal
does not contain any ledger accounts.

© 2017
Item 6
The vast majority of candidates understood that discount given to a customer for prompt payment would be
recorded in the discount allowed account and the account of the customer, Malik. Those candidates with a
thorough understanding of double entry appreciated that the discount allowed account would be debited and
Malik’s account would be credited.
Item 7
This proved to be challenging for most candidates. A bank reconciliation statement is prepared by the trader
to explain any differences between the cash book and the bank statement and is not part of the double entry
book-keeping.
Item 11
The expense for the year, which was $12 000, should be transferred to the income statement. This involves
crediting the rent account and debiting the income statement (option B).
Item 12
The majority of candidates correctly calculated that there would be a balance on the rates account of $500.
This represented an amount prepaid which would be credited to the rates account on 31 August and bought
down as a debit balance on 1 September. The key was D.
Item 15
Crediting sales returns to the purchases returns account results in the net sales being overstated and the net
purchases being understated in the income statement. The gross profit would, therefore, be overstated by
$200 (option B).
Item 16
Those candidates with a thorough knowledge of double entry were able to select the correct answer. Interest
charged by a supplier will be credited to the purchases ledger control account as it increases the amount
owing. A contra entry to the sales ledger control account will be debited to the purchases ledger control
account as it reduces the amount owing.
Item 18
An insurance premium of $1800 was paid for twelve months from 1 December 2016 meant that on
30 September 2017 there was a prepayment of $300, which would be included in the other receivables in the
statement of financial position. Advertising costs, $2400, covering the period 1 July to 31 December 2017,
were paid in December 2017. This meant that there was $1200 accrued at the end of the financial year on
30 September 2017. This would appear under other payables in the statement of financial position.
Item 22
Those candidates who had a good understanding of double entry could have reconstructed a subscriptions
account to calculate the missing figure. Alternatively, an arithmetic calculation would have arrived at the
same answer. The subscriptions for the year were $23 000, but of this $1500 had not been received from
members and $1000 had been prepaid by members in the previous financial year. The amount actually
received was $20 500.
Item 27
This item required candidates to appreciate that debentures are long-term loans. Interest on those loans is
an expense in the income statement of a limited company and any accrued interest is included in the current
liabilities in the statement of financial position. The key was A.

© 2017
Item 28
This proved to be a very challenging to candidates. In year 2 the revenue, the gross profit and the cost of
sales were the same as they were in year 1. The closing inventory in year 1 was the opening inventory in
year 2 and the purchases were $124 000. As the cost of sales was $120 000, the closing inventory must
have been $8000. The rate of turnover was calculated by dividing the cost of sales of $120 000 by the
average inventory of $6000 ($4000 + $8000 ÷ 2).
Item 29
This was an application of the money measurement principle. Stephan could not record the effect of a
competitor making goods more cheaply as he could not quantify the effect in terms of money.

© 2017

0452/12
PRINCIPLES OF ACCOUNTS
Multiple Choice Paper 1 October/November 2017
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2 PAPER

2 What increases owner’s capital?
A bank loan extended from five to ten years

B purchase of inventory on credit
C purchase of machinery by cheque
D transfer of vehicle to business from private use
3 A trader provided the following extract from his sales journal.
sales journal
2017 $ $
October 7 J Sango
goods 100
trade discount 20 80
Which entry was made in the account of J Sango in the sales ledger?
A credit $80
B credit $100
C debit $80
D debit $100
4 What is correct about a bank reconciliation statement?
prepared by prepared by part of double entry

the bank the trader book-keeping
A no yes no
B no yes yes
C yes no no
D yes no yes
© UCLES 2017 0452/12/O/N/17

3 PAPER
5 Which transaction is recorded in the general journal?
A payment of cash into a business bank account

B purchase of a motor vehicle on credit
C receipt of a cheque from a customer
D sale of goods on credit
Tony account
$ $

12 sales 590 28 bank 284
discount 6
990 990

7 Mark sold goods on credit to Paul for $5000. Paul returned goods costing $200 to Mark.
What were the balances in Paul’s ledger accounts after these transactions?
purchases purchases Mark account

account returns account
$ $ $
A 4800 credit 200 credit 5000 debit

B 4800 debit 200 debit 5000 credit
C 5000 credit 200 debit 4800 debit
D 5000 debit 200 credit 4800 credit

4 PAPER
8 The totals of a trial balance agreed.
A All the arithmetic in the ledger is correct.

B All transactions have been entered in the correct ledger accounts.
C All transactions have been entered on the correct sides of the ledger.
D Total debit balances equal total credit balances in the ledger.
9 Gary rents his business premises. His financial year ends on 30 September. On 1 October 2016
rent prepaid amounted to $3000. During the year ended 30 September 2017 a total of $7000 rent
was paid. On 30 September 2017 rent outstanding amounted to $2000.
Which journal entry shows the transfer of the rent to the income statement on
30 September 2017?
debit credit
$ $
rent 8 000
rent 12 000
C rent 8 000
D rent 12 000
10 Elizabeth issued an invoice to Jane for $500 on 1 February. On 30 April Elizabeth received $300
from Jane. She wrote off the remaining balance on 28 October.
Which entries did Elizabeth make on 28 October?
account debited $ account credited $
A bad debts 200 Jane 200

B Jane 200 bad debts 200
C bad debts 200 income statement 200
D income statement 200 bad debts 200
© UCLES 2017 0452/12/O/N/17

5 PAPER
11 Ajay maintains a provision for doubtful debts of 3% of trade receivables.
Which entry did Ajay make on 31 December 2016?
debit credit

C provision for doubtful debts account income statement
D provision for doubtful debts account trade receivables account
12 Which are examples of capital receipts?
1 a loan received from a bank, repayable in three years’ time

2 a profit made on the sale of a non-current asset
3 cash received from the sale of a non-current asset at book value
4 rent received from letting part of the business premises to a tenant
13 A business purchased a motor vehicle and included it as a business expense in the income
statement.
How did this affect the financial statements?

6 PAPER
14 A café owner decided to use the revaluation method to calculate depreciation on the kitchen
equipment.
Kitchen equipment costing $3200 was purchased on 1 January 2016. This was expected to have
a useful life of 4 years.
Additional kitchen equipment was purchased during the year for $400. The total kitchen
equipment was valued at $2900 on 31 December 2016.
What was the depreciation charge for the year ended 31 December 2016?
A $300 B $700 C $800 D $900
15 Imran’s financial year ends on 31 December. A machine purchased on 1 January 2015 for
$20 000 was sold on 30 June 2017 for $8500. The machine had been depreciated using the
straight-line method at 25% per annum on a month by month basis.
What was the profit or loss on the disposal of the machine?
A loss $1000
B loss $1500
C profit $1000
D profit $1500

How will these items be recorded in a purchases ledger control account?
interest charged on contra entry to sales

overdue account ledger control account
A
B
C
D
© UCLES 2017 0452/12/O/N/17

7 PAPER
17 Anita’s business has two departments, X and Y. She provided the following information for
department X.
expenses 28 000
Total revenue for the year was $180 000 of which one-third related to department X.
What was the gross profit of department X?
A $19 000 B $32 000 C $37 000 D $51 000
18 How is owner’s equity calculated?
A non-current assets + current assets – current liabilities – non-current liabilities

B non-current assets + current assets + current liabilities + non-current liabilities
C non-current assets – current assets – current liabilities – non-current liabilities
D non-current assets – current assets + current liabilities + non-current liabilities
19 David provided the following information.
capital employed 435 000

What was the total of his current assets?
A $235 000 B $359 000 C $559 000 D $759 000

8 PAPER
20 Gurpreet is a broker and receives a commission from an insurance company when a client
purchases a car insurance policy.
The following information is available for the year ended 31 March 2017.
commission received from insurance 15 000

company
commission on policies arranged in 1 200
March 2017 not yet received
office rent 2 500
depreciation of non-current assets 900
heating and lighting 520
A $10 780 B $11 080 C $11 980 D $12 280
21 What is the disadvantage to a sole trader of bringing in a partner?
A The business will benefit from the knowledge of the new partner.
B The new partner may bring additional capital into the business.
C The profits made by the business will have to be shared with the new partner.
D The responsibility for running the business may be shared with the new partner.
22 A club had an accumulated fund at the start of the year of $18 000 and at the end of the year of
$16 200.
Total running costs for the year were $9550. New equipment costing $1100 was bought during
the year. The only income came from subscriptions.
How much were subscriptions for the year?
A $7750 B $8850 C $11 350 D $12 450
© UCLES 2017 0452/12/O/N/17

9 PAPER
23 Karim did not keep proper accounting records, but was able to provide the following information.

capital introduced in the year 15 000
A $16 000 B $18 000 C $33 000 D $48 000
24 A trader has not kept proper accounting records for his business.
What will he use when calculating trade payables at the end of the year?
A bad debt written off

B discount allowed
C returns inwards
D returns outwards
25 The financial year of AB Limited ends on 30 September.
Debenture interest is paid annually in arrears on 1 October each year.
Where did debenture interest appear in the financial statements for the year ended
30 September 2017?
income statement of statement of

statement changes in equity financial position
A
B
C
D

10 PAPER
26 The issued share capital of CD Limited consists of ordinary shares.
Retained earnings were $86 000 on 1 September 2016 and $88 500 on 31 August 2017.
The company made a profit during the year of $26 000 and made a transfer to general reserve of
$5000.
What was the total ordinary share dividend paid during the year?
A $18 500 B $23 500 C $28 500 D $33 500
27 A manufacturer provided the following information at the end of his financial year.
prime cost 98 400

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
28 Which document shows employees the details of deductions made from their wages?
A clock card
B payslip
C time sheet
D wages sheet
29 What is not included when calculating the quick ratio (acid test ratio)?
A bank overdraft
B inventory
C short-term bank loan
D trade receivables
© UCLES 2017 0452/12/O/N/17

11 PAPER
30 Manvinder started a business and paid a cheque for $1000 into a business bank account. He
recorded this in the books of the business by debiting the bank account and crediting the capital
account.
Which accounting principles did he apply?
A accounting entity and dual aspect

B accounting entity and going concern
C going concern and matching / accruals
D matching / accruals and dual aspect
© UCLES 2017 0452/12/O/N/17

Question Question
Key Key
Number Number
1 D 16 C
2 D 17 C
3 C 18 A
4 A 19 B
5 B 20 D
6 C 21 C
7 D 22 A
8 D 23 B
9 B 24 D
10 A 25 A
11 B 26 A
12 A 27 C
13 D 28 B
14 B 29 B
15 C 30 A
Key messages
Candidates are required to have knowledge and understating of all the topics on the syllabus.
It is important to read each item very carefully before selecting an option.
General comments
A few items proved slightly challenging to candidates. Those candidates who had a thorough understanding
of double entry book-keeping were able to select the correct option on the items involving ledger entries.
Item 2
The key was D. A significant number of candidates incorrectly selected option A. A bank loan does not affect
the owner’s capital.

© 2017
Item 3
The majority of candidates understood that $80 would be entered in the account of the customer, but of
these approximately half incorrectly selected option A as the key. When goods are sold on credit the account
of the customer is debited with the net cost of those goods.
Item 4
This proved to be very problematic for most candidates. A bank reconciliation statement is prepared by the
trader to explain any differences between the cash book and the bank statement. It is not part of the double
entry book-keeping.
Item 5
One of the uses of the general journal is to record transactions which are not entered in one of the other
books of prime (original) entry. Option B was the key as this was the only transaction which would not be
recorded in another book of prime (original) entry.
Item 9
The expense for the year, which was $12 000, should be transferred to the income statement. This involves
crediting the rent account and debiting the income statement (option B).
Item 10
This required candidates to know the double entry to write off a bad debt. Over half the candidates
understood that the transaction affected the accounts of Jane and bad debts. Those candidates with a good
understanding of double entry correctly selected option A as the key.
Item 12
It was expected that candidates would understand the meaning of capital receipts and be able to select the
relevant items. Option A was the key. The receipt of a bank loan and cash from sale of a non-current asset
are both capital receipts.
Item 13
The inclusion of the purchase of a motor vehicle in the expenses means that both the profit for the year and
the non-current assets will be understated.
Item 15
The depreciation on the machine sold should have been calculated at $12 500 which represented 30 months’
depreciation. This meant that the book value was $7500 and the profit on disposal was $1000. A substantial
number of candidates appear to have included deprecation for only 24 months in the calculation.
Item 16
Those candidates with a thorough knowledge of double entry were able to select the correct answer. Interest
charged by a supplier will be credited to the purchases ledger control account as it increases the amount
owing. A contra entry to the sales ledger control account will be debited to the purchases ledger control
account as it reduces the amount owing.
Item 22
Candidates found this item challenging. The key was A. The difference between the opening and closing
accumulated fund indicated that the club had made a deficit for the year of $1800. The running costs were
$9550, which meant that the total income from subscriptions must equal $7750. The purchase of new
equipment did not affect the income and expenditure account.

© 2017
Item 24
Candidates had to select an item which would affect the calculation of trade payables when proper
accounting records had not been maintained. Bad debts, discount allowed and returns inwards affect the
sales not the purchases. The key was option D (returns outwards).
Item 25
This item required candidates to appreciate that debentures are long-term loans. Interest on those loans is
an expense in the income statement of a limited company and any accrued interest is included in the current
liabilities in the statement of financial position. The key was A.
Item 26
Candidates found this item challenging. CD Limited had opening retained earnings of $86 000 and the profit
for the year was $26 000. These totalled $112 000, of which $5000 was transferred to general reserve and
$88 500 was retained. This meant that the ordinary share dividend was $18 500.

© 2017

0452/12 May/
ACCOUNTING
Paper 1 Multiple Choice June 2018
1 hour
Soft clean eraser
*7990156511*

FOR ONLINE DELIVERY
CONTACT
This document consists of 10 printed pages and 2 blank pages.
IB18 06_0452_12/2RP
© UCLES 2018 [Turn over

2 PAPER

C The statement of financial position does not include non-current assets.
2 Which group contains only liabilities?
A bank loan, trade payables, prepaid rent

B bank overdraft, trade payables, unpaid wages
C trade payables, cash at bank, unpaid rates
D trade payables, inventory, unpaid wages
A assets – liabilities = capital

B assets + liabilities = capital
C liabilities – assets = capital
D liabilities – capital = assets
4 Omar returned faulty goods to Yasmin, the supplier.
Which document did Omar send to Yasmin?
A credit note
B debit note
C invoice
© UCLES 2018 0452/12/M/J/18

3 PAPER
5 Jacob settled the account of Ahmed, a credit supplier. He made the following entries on the credit
side of his cash book.
discount cash bank

$ $ $
Ahmed 5 195
Which entries did Jacob make on the debit side of Ahmed’s account?
A Bank 195
B Bank 200
C Bank 195
Discount allowed 5
D Bank 195
Discount received 5
6 What may a credit balance on a ledger account represent?
A accrued income
B asset
C expense
D prepaid income
Ann account
$ $ $
April 4 sales 21 500
On 29 April, Ann paid $10 000 by cheque and was given a cash discount of $200.
Which statement is correct on 30 April?
A Ann owed Edward $10 800.

B Ann owed Edward $11 200.
C Edward owed Ann $10 800.
D Edward owed Ann $11 200.

4 PAPER
8 The totals of a trial balance did not agree. The total of the debit column was $13 400.
It was found that the purchases journal had been overcast by $195 and goods bought from
supplier X for $85 had been incorrectly credited to Y.
What was the total of the credit column of the trial balance?
A $13 120 B $13 205 C $13 595 D $13 680
9 Leo is unable to pay the debt he owes to Sam.
Which entry did Sam make to write off this bad debt?
debit credit
A bad debts account income statement

B bad debts account Leo account
C income statement Leo account
D Leo account income statement
year.
Trade receivables owed $40 000 on 31 March 2017.
Which journal entry should Rashid make on 31 March 2018?
debit credit
$ $

© UCLES 2018 0452/12/M/J/18

5 PAPER
11 What are examples of revenue receipts?
1 a cheque received from the sale of a non-current asset at book value

2 a profit made on the sale of a non-current asset
3 a loan from a bank that is repayable in 2020
4 discounts received from credit suppliers for prompt payment
12 Jon paid $18 000 for machinery on 1 January 2016.
He depreciated this asset using the diminishing (reducing) balance method at 5% per annum.
What was the balance on the provision for depreciation account on 1 January 2018?
A $1755 credit B $1755 debit C $1800 credit D $1800 debit
13 A motor vehicle cost $20 000. It was sold for $12 000. At the date of disposal the motor vehicle
had been depreciated by $7200.
Which journal entry records the closing of the disposal account?
debit credit
$ $
A disposal account 800

B disposal account 8000
disposal account 800
D income statement 8000
disposal account 8000

6 PAPER
sales ledger control account balance on 1 March 3 950 debit

credit sales 92 600
cash sales 14 800
receipts from credit customers 73 900
discounts allowed 5 700
returns inwards 15 200
returns outwards 9 600
What was the sales ledger control account balance on 31 March?
A $1750 B $6650 C $16 550 D $21 450

16 Dennis runs a business with two departments, one selling carpets and one selling furniture.
Total sales were $210 000 of which 60% related to the carpet department.
The total gross profit was $54 600 of which 60% related to the furniture department.
What was the cost of sales of the carpet department?
A $51 240 B $62 160 C $93 240 D $104 160
© UCLES 2018 0452/12/M/J/18

7 PAPER
A buildings
B goodwill
C inventory
D trade receivables
18 A business has no non-current liabilities.
What is added to the non-current assets in order to calculate the capital employed?
A current assets
C owner’s capital
D working capital

$ $

A $560 B $600 C $760 D $800
20 Which item is credited in a partnership appropriation account?
C partners’ drawings
D partners’ salaries

8 PAPER
21 Y and Z formed a partnership and agreed to share profits equally. Y deposited $30 000 into the
business bank account. Z introduced a motor vehicle worth $15 000 and goodwill of $15 000.
How should these transactions be recorded in the books of the partnership?
accounts to be debited accounts to be credited

$ $
A bank 30 000 capital Y 30 000
goodwill 15 000 capital Z 30 000
motor vehicle 15 000
B bank 30 000 capital Y 37 500

goodwill 15 000 capital Z 22 500
C capital Y 30 000 bank 30 000

capital Z 30 000 goodwill 15 000
D capital Y 37 500 bank 30 000

capital Z 22 500 goodwill 15 000
revenue 100 000

gross profit 20 000
What was the percentage mark-up?
A 20% B 25% C 75% D 80%
How can he calculate credit sales?
A cheques received from customers + owed by customers at start of year + owed by customers
at end of year
B cheques received from customers + owed by customers at start of year – owed by customers
at end of year
C cheques received from customers – owed by customers at start of year + owed by customers
at end of year
D cheques received from customers – owed by customers at start of year – owed by customers
at end of year
© UCLES 2018 0452/12/M/J/18

9 PAPER

C ordinary dividend paid for current year
D ordinary dividend proposed for current year
A $7000 B $9000 C $17 000 D $19 000
26 Which type of labour would be classified as direct?
1 factory managers
2 factory office staff
3 factory production workers
A 1, 2 and 3
B 1 and 3 only
C 2 only
D 3 only
prime cost 30 500

cost of goods produced 46 000
office and selling expenses 9 500
opening work-in-progress 5 100
What was the value of the closing work-in-progress?
A $1700 B $3400 C $6800 D $16 300

10 PAPER
28 Which document is used to inform employees of their social security / national insurance
contributions?
A clock card
B payroll register
C payslip
D time sheet
2016 2017
% %
gross profit / sales 40 30

net profit / sales 8 10
What may have caused the change in the net profit/sales ratio?
A expenses have decreased

B expenses have increased
C the percentage of expenses to sales has decreased
D the percentage of expenses to sales has increased
30 A trader spreads the cost of a machine over the years which benefit from the use of that machine.
A accounting year
B dual aspect
C matching / accruals
D materiality
© UCLES 2018 0452/12/M/J/18

Question Question
Key Key
Number Number
1 D 16 D
2 B 17 B
3 A 18 D
4 B 19 A
5 D 20 B
6 D 21 A
7 A 22 B
8 B 23 C
9 B 24 C
10 A 25 C
11 D 26 D
12 A 27 C
13 C 28 C
14 A 29 C
15 D 30 C
Key messages
It is important that candidates have knowledge and understanding of all the topics on the syllabus.
Candidates should read through each item very carefully before selecting an option.
General comments
One item proved to be slightly more challenging than anticipated and two items proved to be slightly easier
than anticipated.
Those candidates with a thorough understanding of double entry book-keeping were able to select the
correct key in many items on the paper.
Item 5
The majority of candidates understood that both the amount of the cheque and the discount would be
entered in the supplier’s account. A significant number incorrectly believed that the discount was discount
allowed. The payment had been made on the credit side of the cash book so the discount would be entered
in the discount received column.

© 2018
Item 6
The key was D. Accrued income is represented by a debit balance as it is an amount owing to the business
and prepaid income is represented by a credit balance as it represents a liability to the business.
Item 8
Just over half of the candidates correctly selected the key, B, but the item proved a little challenging for the
other candidates. If the purchases journal was overcast then the debit side of the trial balance would be
overstated. Goods purchased from X incorrectly credited to Y is an error of commission and would not affect
the total of the trial balance. The total of the credit column of the trial balance would be $13 205.
Item 18
Capital employed can be calculated in two ways. It is the total of the capital and the non-current liabilities or it
is the total of the non-current assets and the current assets less the current liabilities. The key was D.
Item 19
The majority of candidates correctly selected the key, A. Candidates should know that inventory is always
valued at the lower of cost and net realisable value. The large t-shirts should have been valued at $5 each
and the small t-shirts should have been valued at $3 each.
Item 20
Partners’ drawings could be immediately discounted as these do not appear in an appropriation account. Of
the remaining options, interest on capital and partners’ salaries are deducted from the profit for the year and
interest on drawings is added to the profit for the year. The key was B.
Item 25
This proved to be challenging for many candidates. The retained earnings for the year were $7000 (profit for
the year less dividend of $4000 and transfer to general reserve of $10 000). The total of the reserves at the
end of the year was the retained earnings of $7000 plus the general reserve of $10 000. It must be
remembered that the total of the reserves is not just represented by the general reserve.
Item 29
The difference between the gross profit/sales and the net profit/sales represents the expenses/sales. The
 32   20 
percentage of expenses to sales decreased from 80 per cent  × 100  in 2016 to 50 per cent  × 100 
 40   30 
in 2017. The key was C. No monetary figures were provided so it is not possible to say whether the actual
amount of expenses increased or decreased.
Item 30
Spreading the cost of a non-current asset over the year which benefit from the use of that asset is an
application of the matching/accruals principle whereby the revenue of the year is matched against the costs
of the same period.

© 2018

0452/13 May/
ACCOUNTING
Paper 1 Multiple Choice June 2018
1 hour
Soft clean eraser
*2265445548*


2 PAPER

C The statement of financial position does not include non-current assets.
2 Which item is a liability?
A accrued interest on loan to employee

B insurance premium paid in advance
C rent receivable paid in advance
D short-term loan to employee
A assets – liabilities = capital

B assets + liabilities = capital
C liabilities – assets = capital
D liabilities – capital = assets
4 A retailer received a credit note from his wholesaler.
Where would the wholesaler record this?
A cash book
B general journal
C purchases returns journal
5 A cheque received from Kate, a credit customer, was dishonoured.
How was this recorded?
account debited account credited
A bank Kate
B Kate bank
C Kate sales
D sales Kate
© UCLES 2018 0452/13/M/J/18

3 PAPER
6 The balance of the bank column in a trader’s cash book was $520 debit.
The trader discovered the following did not appear on the bank statement.
A cheque, $80, paid to a supplier

A cheque, $470, paid into the bank
What was the balance on the trader’s bank statement?
A $130 credit B $130 debit C $910 credit D $910 debit
7 Joe buys and sells motor vehicles. He bought a new van on credit from JD Motors. The van’s list
price was $15 000, subject to a trade discount of 20% and a cash discount of 5% if paid for within
30 days.
Which entries record the purchase of the van in Joe’s books?
account debited $ account credited $
A purchases 11 250 JD Motors 11 250

B purchases 11 400 JD Motors 11 400
C purchases 12 000 JD Motors 12 000
D purchases 15 000 JD Motors 15 000
Ann account
$ $ $
April 4 sales 21 500
On 29 April, Ann paid $10 000 by cheque and was given a cash discount of $200.
Which statement is correct on 30 April?
A Ann owed Edward $10 800.

B Ann owed Edward $11 200.
C Edward owed Ann $10 800.
D Edward owed Ann $11 200.

4 PAPER
9 Which error is an error of principle?
A A cheque for $100 received from X was credited to Y’s account.

B A purchase invoice of $400 had not been entered in the ledger accounts.
C A purchase of a delivery vehicle, $12 000, was debited to the purchases account.
D Rent paid, $200, was debited to the bank account and credited to the rent account.
10 At the end of the financial year a rent account shows that three payments of $750 had been
made.
$750 was still owed to the landlord.
Which double entry would be made at the end of the financial year?
debit credit
$ $
A income statement 2250 rent account 2250
B income statement 3000 rent account 3000
C rent account 2250 income statement 2250
D rent account 3000 income statement 3000
year.
Which journal entry should Rashid make on 31 March 2018?
debit credit
$ $

© UCLES 2018 0452/13/M/J/18

5 PAPER
12 After the preparation of a trial balance it was found that both sales and purchases accounts were
overcast by $700.
debit credit
$ $
A trade payables 700

B trade receivables 700
trade payables 700
C purchases 700
sales 700
D sales 700
purchases 700
13 Which type of error is corrected using a suspense account?
A commission
B compensating
C original entry
D single entry
14 Jason provided the following information.
March 1 sales ledger control account balance 400 debit

31 credit sales 520
cheques received from trade receivables 300
bad debts written off 45
cheque received from a credit customer dishonoured 10
What was the balance on the sales ledger control account on 31 March?
A $565 B $585 C $620 D $655

6 PAPER

A buildings
B goodwill
C inventory
D trade receivables
17 A business has no non-current liabilities.
What is added to the non-current assets in order to calculate the capital employed?
A current assets
C owner’s capital
D working capital

$ $

A $560 B $600 C $760 D $800
© UCLES 2018 0452/13/M/J/18

7 PAPER
A a bakery
B a car showroom
C a hairdresser
D a newsagent
20 At the end of Carol’s financial year on 30 April 2018, a tenant had paid rent in advance.
What was the effect of adjusting for this prepaid rent?
A increase profit for the year, increase current assets

B increase profit for the year, increase current liabilities
C reduce profit for the year, increase current assets
D reduce profit for the year, increase current liabilities
21 What would not appear in the receipts and payments account of a sports club?
A cost of repairing equipment
B depreciation of equipment
C proceeds of sale of old equipment
D purchase of new equipment
22 A club provided the following information for the year ended 31 December 2017.
subscriptions in arrears on 1 January 2017 560

subscriptions in arrears at 31 December 2017 870
subscriptions received in advance at 31 December 2017 600
How much will be shown for subscriptions in the income and expenditure account for year ended
31 December 2017?
A $22 410 B $22 430 C $22 970 D $23 530

8 PAPER

C ordinary dividend paid for current year
D ordinary dividend proposed for current year
A $7000 B $9000 C $17 000 D $19 000
25 What is included in prime cost in a manufacturing account?
A carriage outwards
B depreciation of factory machinery
C factory manager’s salary
D royalties
26 Where is work-in-progress shown in the statement of financial position of a manufacturing

business?
A current assets
© UCLES 2018 0452/13/M/J/18

9 PAPER
$ $
revenue 3600
opening inventory 200
purchases 2600
2800
gross profit 1100
It was found that the closing inventory should have been $400.
What is the correct rate of turnover of inventory?
A 6.25 times
B 8 times
C 8.33 times
D 12 times
28 A company provided the following information about its working capital ratio (current ratio).
Year 1 2:1
Year 2 1.8 : 1
Year 3 1.6 : 1
What would explain the changes in the ratio?
A Cash at bank is increasing.

B Inventory is increasing.
C Trade payables are increasing.
D Trade receivables are increasing.
29 What will not be included in the accounting records of a business?
A cash received from sales

B cost of goods sold
C quality of product produced
D value of inventory held

10 PAPER
30 Which international accounting objectives are described by the following statements?
1 Information in financial statements must be free from material error and bias.
2 Users must be able to identify differences and similarities between information in
different financial statements.
statement 1 statement 2
A comparability understandability
B reliability comparability
C reliability understandability
D understandability reliability
© UCLES 2018 0452/13/M/J/18

Question Question
Key Key
Number Number
1 D 16 B
2 C 17 D
3 A 18 A
4 D 19 C
5 B 20 D
6 A 21 B
7 C 22 A
8 A 23 C
9 C 24 C
10 B 25 D
11 A 26 A
12 D 27 B
13 D 28 C
14 B 29 C
15 D 30 B
Key messages
It is important that candidates have knowledge and understanding of all the topics on the syllabus.
Candidates should read through each item very carefully before selecting an option.
General comments
Candidates found two items particularly challenging. One item proved to be slightly easier than anticipated.
Those candidates with a thorough understanding of double entry book-keeping were able to select the
correct key in many items on the paper.
Item 2
This item proved challenging for many candidates. Reading the options carefully, candidates should have
realised that in A and D the employee owed the loan and the interest on that loan – so these were assets
from the point of view of the business. Rent receivable prepaid is a liability from the point of view of the
business and this was the key.

© 2018
Item 4
The majority of candidates knew that a credit note is issued when goods are returned, but many, incorrectly
believed that a credit note received would be entered in the purchases returns journal. The key was D.
Item 5
Most learners understood that a dishonoured cheque would be entered in the bank account and in the
account of Kate. Those candidates with a thorough understanding of double entry correctly selected B as the
key.
Item 6
Most candidates found this question to be challenging. The cash book showed a positive bank balance. An
unpresented cheque would mean that the bank statement showed a higher balance and an amount not
credited would mean that the bank statement would show a lower balance. The bank statement would show
a credit balance of $130.
Item 8
The majority of candidates appreciated that at the month end Ann would be indebted to Edward. The
balance of Ann’s account after entering the transaction of 29 April would be $10 800 (option A).
Item 10
It was expected that candidates would understand that at the end of the financial year the rent relating to that
particular year is transferred to the income statement. The rent payable for the year was $3000 so this would
be credited to the rent account and debited to the income statement (option B).
Item 11
The majority of candidates understood that there would be a year-end transfer from the provision for doubtful
debts account to the income statement. The provision had to be increased by $300 so it was necessary to
debit the income statement and credit the provision account with this amount (option A).
Item 13
A suspense account is opened when a trial balance does not balance. Options A, B and C are errors which
would to be revealed by a trial balance so the key must be option D.
Item 15
James is obviously a customer of Henry so his account would appear in Henry’s sales ledger. Henry has
charged James interest so James’ account would be debited. There would be a similar entry in the sales
ledger control account.
Item 17
Capital employed can be calculated in two ways. It is the total of the capital and the non-current liabilities or it
is the total of the non-current assets and the current assets less the current liabilities. The key was D.
Item 18
Candidates should know that inventory is valued at the lower of cost and net realisable value.
The large t-shirts should have been valued at $5 each and the small t-shirts should have been valued at $3
each.
Item 20
Candidates found this question to be challenging. If a tenant pays in advance it is deducted from the rent
receivable in the income statement. As a result the profit decreases. Income received in advance is a liability
as Carol still has to fulfil an obligation. As a result the current liabilities increase.

© 2018
Item 23
Debenture interest is a finance cost, which is recorded in the income statement. Only dividend which is
actually paid during the year, irrespective of the year to which it relates, is recorded in the statement of
changes in equity. The key was C.
Item 24
The retained earnings for the year were $7000 (profit for the year less dividend of $4000 and transfer to
general reserve of $10 000). The total of the reserves at the end of the year was the retained earnings of
$7000 plus the general reserve of $10 000. It must be remembered that the total of the reserves is not just
represented by the general reserve.
Item 27
If the closing inventory increases by $100, the average inventory will be $300. The increase in the closing
inventory will decrease the cost of sales by $100, so the cost of sales will be $2400. The rate of turnover of
inventory should be eight times.

© 2018

0452/11
ACCOUNTING
October/November 2018
Paper 1 Multiple Choice
1 hour
Soft clean eraser
*2607787703*

FOR ONLINE DELIVERY
CONTACT

2 PAPER

3 Book-keeping includes the preparation of financial statements.
4 Book-keeping involves the recording of financial transactions.
2 A trader invested $4000 into the business. $2000 was used to pay a credit supplier. The rest of
the money was paid into the business bank account.
What changes would take place within the accounting equation?
owner’s equity
assets liabilities
(capital)
A –$2000 –$4000 +$2000

B +$2000 +$2000 no effect
C +$2000 +$4000 –$2000
D +$4000 +$4000 no effect
3 Wilma bought 55 items from Margot at a list price of $40 each, subject to a 15% trade discount.
Wilma later returned 25 items as they were faulty.
Which document did Margot issue to Wilma for the returned items?
A credit note for $850

B credit note for $1000
C debit note for $850
D debit note for $1000
4 The bank agreed to allow Dan an overdraft with a limit of $500.
What did this mean?
A A sum of $500 would be transferred into Dan’s account by the bank.

B All cheques issued by Dan would be paid by the bank.
C Cheques issued by Dan would be paid by the bank provided the account was not overdrawn
by more than $500.
D Only cheques issued by Dan for less than $500 would be paid by the bank if there was not
enough money in the account.
© UCLES 2018 0452/11/O/N/18

3 PAPER
5 On 30 September 2018, Ahmed’s bank statement showed a credit balance of $2500. Ahmed
found that a cheque issued for $90 and a deposit of $500 had not been included on the bank
statement.
What was the balance at bank shown in Ahmed’s cash book on 30 September 2018?
A $1910 B $2090 C $2910 D $3090
6 Which statement about a debit balance brought down on a ledger account is not correct?
A It may represent a loss.

B It may represent a prepaid expense.
C It may represent an accrued expense.
D It may represent an asset.
7 On 1 September 2018 Chan owed Tan $570. During September 2018 the following transactions
took place.
Tan sold goods, $380, on credit to Chan

Chan returned goods, $150, to Tan
Chan paid Tan $500 by cheque
What was the balance brought down on Chan’s account in Tan’s ledger on 1 October 2018?
A $300 credit
B $300 debit
C $840 credit
D $840 debit
8 Which name is given to a statement of ledger balances on a particular date?

B general ledger
D trial balance
9 The balance of which account will appear in the debit column of a trial balance?
A carriage inwards
B discounts received
D purchases returns

4 PAPER
10 Ella rents business premises. She owed rent at both the start and the end of the financial year.
How can rent payable for the year be calculated?
A rent paid – amount owing at start of year

B rent paid – amount owing at start of year + amount owing at end of year
C rent paid + amount owing at end of year
D rent paid + amount owing at start of year – amount owing at end of year
year.
On 31 August 2017 trade receivables amounted to $70 000.

Which double entry should Bashir make on 31 August 2018?
debit $ credit $

12 Leroy has an engineering business. On 31 May he received an invoice from AB Machines

showing the following:
cost of replacement parts for machine

cost of repairs to machine
cost of machine
cost of installation of machine
Which costs are capital expenditure in Leroy’s books?
A machine, installation
B machine only
C replacement parts, machine
D replacement parts, repairs, installation
© UCLES 2018 0452/11/O/N/18

5 PAPER
13 Why is depreciation charged on a non-current asset?
A to accumulate a fund of money to replace the asset

B to charge the cost of using the asset against income
C to determine the market value of the asset
D to ensure that profits are not understated
14 Chris purchased a machine costing $15 000 on 1 January 2016. He depreciates the machine
using the diminishing (reducing) balance method at 20% per annum.
Which journal entry did Chris make on 31 December 2017?
debit credit
$ $
15 Hossam took out a 5-year bank loan on 1 January 2018. All of the money borrowed was used to
purchase a delivery van.
Under which heading will these items be shown in Hossam’s statement of financial position on
31 March 2018?
bank loan delivery van
A current liability current asset

B current liability non-current asset
C non-current liability current asset
D non-current liability non-current asset

6 PAPER
16 Beth provided the following information at 31 December 2017.
capital 1 January 2017 26 000

drawings 2 500
Beth paid a personal cheque to the business on 30 December 2017 amounting to $5000.
What was the capital employed on 31 December 2017?
A $24 100 B $32 100 C $35 100 D $40 100
17 Which businesses do not prepare a trading account section of an income statement?
1 furniture store
2 gym
3 newsagent
4 toy shop
5 window-cleaner
18 The following entries appeared in a trader’s ledger.
Dr. drawings account Cr.

$ $
purchases 200
Dr. purchases account Cr.

$ $
drawings 200
Which transaction has taken place?
A Goods purchased for resale have been paid for from the owner’s private bank account.
B The owner has purchased goods for cash from the business.
C The owner has taken goods for his own use which the business had purchased for resale.
D The owner has taken cash out of the business for his own use.
© UCLES 2018 0452/11/O/N/18

7 PAPER
19 X and Y are sole traders. They decided to form a partnership.
Which group contains only disadvantages of forming a partnership?
A disagreements may occur between the partners, profits are shared

B disagreements may occur between the partners, risks are shared
C losses are shared, responsibilities are shared
D profits are shared, risks are shared
A bad debts
21 At the end of the financial year a sports club owed rent for the clubhouse. Some members had
paid their subscriptions in advance for the following year.
How would these items be recorded in the club’s statement of financial position?
subscriptions paid
rent owing
in advance
A current asset current asset

B current asset current liability
C current liability current asset
D current liability current liability
22 Tariq provided the following information.
31 August 2017 31 August 2018

$ $
non-current assets 60 000 70 000

current assets 20 000 25 000
current liabilities 15 000 19 000
Tariq’s drawings for the year ended 31 August 2018 were $5000.
What was the profit for the year ended 31 August 2018?
A $6000 B $11 000 C $14 000 D $16 000

8 PAPER
opening inventory $8000

closing inventory $10 000
rate of turnover of inventory 12 times
mark-up 50%
What was the revenue?
A $54 000 B $108 000 C $162 000 D $180 000
24 Which group contains only indirect costs?
A carriage inwards, factory rent, wages of factory supervisors

B carriage inwards, raw materials, wages of machine operators
C depreciation of machinery, factory rent, wages of factory supervisors
D depreciation of machinery, raw materials, wages of machine operators
prime cost 250 000

factory overhead expenses 50 000
office and selling expenses 25 000
work-in-progress at 1 January 1 500
work-in-progress at 31 December 2 500
What was the production cost of goods completed?
A $249 000 B $299 000 C $301 000 D $324 000
A donation to charity and club subscription

B donation to charity and social security contribution
C income tax and club subscription
D income tax and social security contribution
© UCLES 2018 0452/11/O/N/18

9 PAPER
27 Karim works 40 hours a week at a rate of $5 per hour and any overtime is paid at time and a half.
He is paid monthly in arrears.
He worked 12 hours, 16 hours and 18 hours overtime in May, June and July respectively.
How much was Karim paid in June? (Assume 4 weeks in a month)
A $800 B $890 C $920 D $935
28 What is included in the working capital ratio (current ratio), but not the quick ratio (acid test
ratio)?
A cash
B inventory
C other receivables
D trade payables
29 Kim has been in business for many years and expects this will continue.
She provided the following information.
premises
at cost 50 000
at market value 65 000
trade receivables
at book value 14 000
Trade receivables included a debt of $2000 which was unlikely to be paid.
At which total value were these assets recorded in Kim’s statement of financial position?
A $62 000 B $64 000 C $77 000 D $79 000

© UCLES 2018 0452/11/O/N/18

October/November
IGCSE ACCOUNTING 338 2018
PAPER
Question Answer Marks
1 A 1
2 C 1
3 A 1
4 C 1
5 C 1
6 C 1
7 B 1
8 D 1
9 A 1
10 B 1
11 A 1
12 A 1
13 B 1
14 A 1
15 D 1
16 D 1
17 B 1
18 C 1
19 A 1
20 A 1
21 D 1
22 D 1
23 C 1
24 C 1
25 B 1
26 D 1
27 B 1
28 B 1

October/November
PAPER
29 A 1
30 D 1


0452/12
ACCOUNTING
October/November 2018
1 hour
Soft clean eraser
*2206786660*


2 PAPER

3 Book-keeping includes the preparation of financial statements.
4 Book-keeping involves the recording of financial transactions.
2 Ava had $4000 in the bank. She paid a supplier $575 by cheque in full settlement of $600 owing.
Which changes would take place within the accounting equation?
owner’s equity
assets liabilities
(capital)
A –$600 –$25 –$625

B –$600 +$25 –$625
C –$575 +$25 –$600
D +$575 –$25 +$600
3 Winston returned goods to Hanif.
Which entries will Winston make in his ledgers?
debit entry credit entry

ledger account ledger account
A general Hanif purchases purchases returns

B general purchases returns purchases Hanif
C purchases Hanif general purchases returns
D purchases purchases returns general Hanif
© UCLES 2018 0452/12/O/N/18

3 PAPER
4 Andy purchases goods from Charles.
The account of Charles in Andy’s books for the month of September showed the following
entries.

$ $ $
Sept 1 purchases 625 625 cr

8 returns 27 598 cr
17 purchases 317 915 cr
30 bank 598 317 cr
Which document would be issued by Charles on 8 September?
A cheque
B credit note
C debit note
D invoice
5 The following amounts were recorded in the bank columns of Tamir’s cash book in September.
receipts from customers 4022

payments 4819
cheques banked later dishonoured 256
On 30 September the balance in the bank column of Tamir’s cash book was $1265 overdrawn.
What was the credit balance on the bank column of the cash book on 1 September?
A $212 B $724 C $1806 D $2318
6 On 30 September 2018, Ahmed’s bank statement showed a credit balance of $2500. Ahmed
found that a cheque issued for $90 and a deposit of $500 had not been included on the bank
statement.
What was the balance at bank shown in Ahmed’s cash book on 30 September 2018?
A $1910 B $2090 C $2910 D $3090

4 PAPER
7 On 1 September 2018 Chan owed Tan $570. During September 2018 the following transactions
took place.
Tan sold goods, $380, on credit to Chan

Chan returned goods, $150, to Tan
Chan paid Tan $500 by cheque
What was the balance brought down on Chan’s account in Tan’s ledger on 1 October 2018?
A $300 credit
B $300 debit
C $840 credit
D $840 debit
8 Lisa is a credit customer of Daniel. Her account in Daniel’s ledger showed the following entries.

$ $ $
Aug 1 balance 10 cr
Aug 8 sales 300 ?
On 10 August Lisa returned goods, list price $140, subject to a 20% trade discount.
What was the debit balance on Lisa’s account after this transaction?
A $150 B $170 C $178 D $198
© UCLES 2018 0452/12/O/N/18

5 PAPER
9 Seema’s financial year ends on 30 September. She rents premises at a monthly rent of $2000.
During the year ended 30 September 2018 she paid $26 000 rent.
Which journal entry will Seema make on 30 September 2018 to transfer the rent to the income
statement?
debit credit
$ $

rent 24 000
rent 26 000
C rent 24 000
D rent 26 000
year.

Which double entry should Bashir make on 31 August 2018?
debit $ credit $


6 PAPER
11 Leroy has an engineering business. On 31 May he received an invoice from AB Machines

showing the following:
cost of replacement parts for machine

cost of repairs to machine
cost of machine
cost of installation of machine
Which costs are capital expenditure in Leroy’s books?
A machine, installation
B machine only
C replacement parts, machine
D replacement parts, repairs, installation
12 Why is depreciation charged on a non-current asset?
A to accumulate a fund of money to replace the asset

B to charge the cost of using the asset against income
C to determine the market value of the asset
D to ensure that profits are not understated
13 Sally bought a non-current asset. It was to be used for 10 years, after which it would have no
scrap value. Sally used the straight-line method of depreciation.
Which statements are correct?
accumulated depreciation
annual depreciation charge
after five years
A equalled half of cost decreased each year

B equalled half of cost was constant
C was more than half of cost decreased each year
D was more than half of cost was constant
14 A draft income statement showed a gross profit of $12 200.
It was later found that carriage on purchases, $260, and carriage on sales, $230, had both been
included as expenses in the profit and loss section of the income statement.
What was the corrected gross profit?
A $11 710 B $11 940 C $12 460 D $12 690
© UCLES 2018 0452/12/O/N/18

7 PAPER
15 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 the purchases ledger. A contra entry between the two
accounts was agreed.
Which entry would Balbir make in Raj’s account in the purchases ledger?
A credit $100
B credit $200
C debit $100
D debit $200
16 Michael’s financial year ends on 31 August.
On 30 August 2018 he purchased a motor vehicle using a bank loan which is repayable on
30 August 2020.
On 31 August 2018 Michael had a bank overdraft.
In which sections of Michael’s statement of financial position on 31 August 2018 did these items
appear?
motor vehicle bank loan bank overdraft
A current asset current liability non-current liability

B current asset non-current liability current liability
C non-current asset current liability non-current liability
D non-current asset non-current liability current liability
A bad debts

8 PAPER
18 A club’s financial year ends on 31 July. During the year ended 31 July 2018 the following
subscriptions were received.
subscriptions for the year ended 31 July 2017 50

subscriptions for the year ended 31 July 2018 3400
subscriptions for the year ending 31 July 2019 20
How much would be included in the receipts and payments account for the year ended
31 July 2018?
A $3400 B $3420 C $3450 D $3470
19 A trader does not keep full accounting records.
How can credit purchases for his first year of trading be calculated?
A cheques paid + discounts received + amount owing to suppliers at year end

B cheques paid + discounts received – amount owing to suppliers at year end
C cheques paid – discounts received + amount owing to suppliers at year end
D cheques paid – discounts received – amount owing to suppliers at year end
revenue 100 000

gross profit 40 000
What was the mark-up?
A 20% B 33.33% C 40% D 66.67%
21 Which statements about ordinary shares are correct?
1 If a company is wound up ordinary shares are repaid after debentures.

2 Ordinary shares are a non-current liability of the company.
3 The holders of ordinary shares are the owners of the company.
A 1 and 3 B 1 only C 2 and 3 D 3 only
© UCLES 2018 0452/12/O/N/18

9 PAPER
22 Which items are included in the equity section of the statement of financial position of a limited
company?
A ordinary shares, retained earnings, debentures and current liabilities

B ordinary shares, retained earnings and debentures only
C ordinary shares and retained earnings only
D ordinary shares only
23 During the financial year, a manufacturing company’s payments included the following.
purchase of a new machine

running costs of the machine
Where would these appear in the financial statements prepared at the end of the financial year?
running costs
machine
of machine
A manufacturing account income statement

B manufacturing account manufacturing account
C statement of financial position income statement
D statement of financial position manufacturing account
24 Which group contains only indirect costs?
A carriage inwards, factory rent, wages of factory supervisors

B carriage inwards, raw materials, wages of machine operators
C depreciation of machinery, factory rent, wages of factory supervisors
D depreciation of machinery, raw materials, wages of machine operators
25 A factory employee records his time of arrival and departure each day.
Which document is used for recording his hours of work?
A clock card
B payroll register
C time sheet
D wages sheet

10 PAPER
A donation to charity and club subscription

B donation to charity and social security contribution
C income tax and club subscription
D income tax and social security contribution
revenue 95 000
purchases 40 000
A 2.10 times
B 2.21 times
C 5 times
D 5.28 times
28 A business provided the following information about its percentage of gross profit to sales.
Year 1 40%
Year 2 38%
Year 3 35%
What could explain the changes in the percentage of gross profit to sales?
A Cost of sales is decreasing.

B Expenses are decreasing.
C Quantity of goods sold is decreasing.
D Selling price is decreasing.
© UCLES 2018 0452/12/O/N/18

11 PAPER
29 A business values its inventory at the lower of cost and net realisable value.
A accounting entity
B dual aspect
C money measurement
D prudence

© UCLES 2018 0452/12/O/N/18

October/November
PAPER
1 A 1
2 C 1
3 C 1
4 B 1
5 A 1
6 C 1
7 B 1
8 C 1
9 A 1
10 A 1
11 A 1
12 B 1
13 B 1
14 B 1
15 C 1
16 D 1
17 A 1
18 D 1
19 A 1
20 D 1
21 A 1
22 C 1
23 D 1
24 C 1
25 A 1
26 D 1
27 B 1
28 D 1

October/November
PAPER
29 D 1
30 D 1


0452/11 May/
ACCOUNTING
June 2019
1 hour
Soft clean eraser
*8993801881*

Write your name, centre number and candidate number on the Answer Sheet in the spaces provided

1 Which task is undertaken by an accountant?
A extracting a trial balance

B maintaining a petty cash book
C preparing an income statement
D writing up a cash book
2 What are advantages of using ICT (Information and Communications Technology) in

book-keeping and accounting?
1 Accounts are instantly updated and a new balance calculated after each entry.
2 Accuracy is increased as entries only need to be input once.
3 Documents such as invoices can be produced quickly and accurately.
A 1 and 2 only B 1 only C 1, 2 and 3 D 2 and 3 only
3 Which does not reduce the owner’s capital?
A business expenses paid using a personal cheque

B cash withdrawn from the business bank account for personal use
C goods taken from inventory for personal use
D personal expenses paid using business cash
4 A statement of account issued to a customer on 31 March 2019 showed the following information.
invoices 250
credit note 10
cash discount 5% if payment made within 14 days of date of statement of account
The customer made payment on 12 April 2019.
How much did the customer pay?
A $227.50 B $228 C $237.50 D $247

book of prime (original) account account

entry debited credited

6 Suzi owed $200 for goods supplied by Mandy. Suzi paid the amount owing by cheque, after
deducting a cash discount of $10.
Which entries would Suzi make in Mandy’s account to record this transaction?
A credit entries: bank $190, discount $10

B credit entries: bank $200, discount $10
C debit entries: bank $190, discount $10
D debit entries: bank $200, discount $10
7 The following account appeared in the ledger of Chan.
Fu account
2019 $ 2019 $
March 28 bank 100 March 1 balance b/d 100
350 350
A On 1 March Chan was owed $100 by Fu.

B On 12 March Fu purchased goods, $250, from Chan.
C On 28 March Chan paid Fu $100 by cheque.
D On 31 March Fu owed Chan $250.

4 PAPER
8 A trial balance is a listing of which balances?
A assets
B closing balances of all accounts
C liabilities
D opening balances of all accounts
9 A business purchased a motor vehicle, $8900, on credit from AKS Limited.
The book-keeper made an error of reversal when recording this purchase.
What was the incorrect debit entry he made?
account $
A AKS Limited 8900

B AKS Limited 9800
C motor vehicles 8900
D motor vehicles 9800
10 Ali’s financial year ends on 31 March. During the year ended 31 March 2019, Ali paid wages of
$42 500. On 31 March 2019, $1400 wages were accrued.
31 March 2019?
debit credit
$ $
wages 42 500
wages 43 900
C wages 42 500
D wages 43 900

5 PAPER
11 On 1 March 2019, a trader paid rent of $1200 covering the period 1 March 2019 to 31 May 2019.
The trader’s financial year ends on 31 March 2019.
What balance was brought down on the rent payable account on 1 April 2019?
A credit $400
B credit $800
C debit $400
D debit $800
12 An amount owed by Baloch was written off.
Which entries were made?
account debited account credited
A bad debts Baloch

B bad debts provision for doubtful debts
C Baloch bad debts
D provision for doubtful debts Baloch
13 Kevin depreciated his motor vehicle by $2000 at the end of the financial year.
Which journal entry would record this?
debit credit
$ $
provision for depreciation of motor vehicles 2000
B motor vehicles 2000
provision for depreciation of motor vehicles 2000
C provision for depreciation of motor vehicles 2000
D provision for depreciation of motor vehicles 2000
motor vehicles 2000

6 PAPER
14 Ravi’s financial year ends on 30 April.
Ravi bought a motor vehicle for $8000 on 1 May 2016 and sold it for $4050 on 1 May 2018.
He uses the diminishing (reducing) balance method of depreciation at 20% per annum.
What would be recorded in the income statement for the year ended 30 April 2019 for the
disposal of the motor vehicle?
A $750 loss
B $750 profit
C $1070 loss
D $1070 profit
15 Which would not appear in a sales ledger control account?
A bad debts written off

B cash discount allowed
C customer’s cheque dishonoured
D provision for doubtful debts
31 December 2018.
$ $
revenue 100 000 60 000

purchases 80 000 40 000
At 31 December 2018 inventory was valued at $16 000 of which 75% related to department X.
A $15 000 B $16 000 C $23 000 D $24 000

7 PAPER
17 Which section of a statement of financial position would include goodwill?
A current assets
18 At the end of the financial year Omar was owed $200 by a credit customer and he owed $10 for
electricity. He also had a 2-year bank loan of $5000.
In which sections of Omar’s statement of financial position will these items appear?
credit customer unpaid electricity bill loan from bank
A current assets current assets non-current assets

B current assets current liabilities non-current liabilities
C current liabilities non-current assets current assets
D current liabilities non-current liabilities current liabilities
19 A club received subscriptions from members totalling $12 600 in the year ended 30 April 2019.
The following information was available.
at 30 April 2018 at 30 April 2019

$ $
subscriptions paid in advance 1300 –

subscriptions in arrears 800 1100
Which amount appeared in the income and expenditure account for subscriptions for the year
ended 30 April 2019?
A $11 000 B $11 600 C $13 600 D $14 200
20 A golf club sells refreshments to its members. Suppliers of refreshments were owed $250 on
1 January 2018 and $400 on 31 December 2018. Payments to suppliers during the year were
$7200.
What was the cost of sales of refreshments for the year ended 31 December 2018?
A $7050 B $7150 C $7300 D $7450

8 PAPER
21 Mariam provided the following information.
at 1 January 2018 at 31 December 2018

$ $
Receipts from credit customers in the year ended 31 December 2018 amounted to $47 500.
What were the credit sales for year ended 31 December 2018?
A $39 000 B $46 000 C $47 500 D $49 000
22 Sue started a business on 1 January 2019. The only accounting record she maintained was a
bank account.
Why is the balance on the bank account not equal to the profit for the year?
1 Expenses may be accrued at the year-end.

2 Goods may have been taken for personal use.
3 Non-current assets may have depreciated.
A 1 and 2 only B 1 only C 1, 2 and 3 D 2 and 3 only

31 December profit for the year 43 000
A dividend of 10% on ordinary shares was paid during the year.
A $13 000 B $23 000 C $25 000 D $35 000
24 What does not appear in a statement of changes in equity?
A debenture interest paid

B interim dividend paid on ordinary shares
C issue of ordinary shares
D transfer to general reserve

9 PAPER
25 Which cost would be included in prime cost in a manufacturing account?
A depreciation of machinery
B factory manager’s salary
C insurance
D royalties
26 Jacob works 30 hours each week and is paid $10 per hour. He pays income tax at 30%, national
insurance at 10% and makes a voluntary contribution to charity of 5%.
What is his net weekly pay?
A $165 B $180 C $195 D $210
27 A business’s sales are $100 000, the expenses are $30 000 and the profit for the year is $20 000.
What is the gross profit/sales ratio?
A 10% B 50% C 70% D 80%

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%
29 A business prepares its accounts on the basis that it will continue to trade in the foreseeable
future.
A accounting entity
B accounting year
C going concern
D matching/accruals

10 PAPER
30 Which statement is not correct about reasons for using international accounting standards?


May/June 2019
1 C 1
2 C 1
3 A 1
4 B 1
5 D 1
6 C 1
7 C 1
8 B 1
9 A 1
10 B 1
11 D 1
12 A 1
13 A 1
14 C 1
15 D 1
16 B 1
17 C 1
18 B 1
19 D 1
20 D 1
21 B 1
22 C 1
23 C 1
24 A 1
25 D 1
26 A 1
27 B 1
28 B 1
© UCLES 2019 Page 2 of 3

0452/11 Cambridge O Level – Mark Scheme May/June 2019
IGCSE ACCOUNTING PUBLISHED
364 PAPER
29 C 1
30 D 1


0452/12 May/
ACCOUNTING
June 2019
1 hour
Soft clean eraser
*9454943788*

Write your name, centre number and candidate number on the Answer Sheet in the spaces provided

2 PAPER
1 What is the main function of book-keeping?
A communicating information
B interpreting information
C recording information
D summarising information
2 Which does not reduce the owner’s capital?
A business expenses paid using a personal cheque

B cash withdrawn from the business bank account for personal use
C goods taken from inventory for personal use
D personal expenses paid using business cash
3 What would be recorded by a debit entry in a ledger account?
A a decrease in an asset
B an increase in a liability
C an increase in an asset
D an increase in capital employed
4 In April Meena sent Ralph invoices for $170, $240, $125 and a credit note for $63. In the same
month Ralph sent Meena a debit note for $70 and a cheque for $107.
What was the balance on Meena’s account in Ralph’s books on 1 May?
A $295 credit
B $295 debit
C $365 credit
D $365 debit

3 PAPER
5 Tahir purchased goods on credit from Yasmin.
How did Yasmin record this?
book of prime (original) account account

entry debited credited

6 Jane invoiced John for goods, $5000. John took a cash discount of 5% and sent Jane a cheque
for the amount due.
Which entries will appear in Jane’s cash book?
discount discount
bank debit bank credit
allowed received
$ $
$ $
A 250 4750
B 250 4750
C 250 5000
D 250 5000
7 After receiving her bank statement Lyn updated her cash book.
Which items would reduce the overdrawn balance in the cash book?
1 bank interest received

2 credit transfer received
3 direct debit payment
A 1 and 2 only B 1 and 3 only C 1, 2 and 3 D 2 and 3 only

4 PAPER
8 The following account appeared in the ledger of Chan.
Fu account
2019 $ 2019 $
March 28 bank 100 March 1 balance b/d 100
350 350
A On 1 March Chan was owed $100 by Fu.

B On 12 March Fu purchased goods, $250, from Chan.
C On 28 March Chan paid Fu $100 by cheque.
D On 31 March Fu owed Chan $250.
9 After preparing a trial balance it was found that a cheque, $300, received from Oliver, had been
debited in Oliver’s account and credited in the bank account.
No other errors were found.
Which statement about the trial balance before correcting the error is correct?
A The credit column was equal to the debit column.

B The credit column was $300 more than the debit column.
C The debit column was $300 more than the credit column.
D The debit column was $600 more than the credit column.

5 PAPER
10 Ali’s financial year ends on 31 March. During the year ended 31 March 2019, Ali paid wages of
$42 500. On 31 March 2019, $1400 wages were accrued.
31 March 2019?
debit credit
$ $
wages 42 500
wages 43 900
C wages 42 500
D wages 43 900
11 A trader created a provision for doubtful debts.
Why did he create this provision?
1 to ensure that money was available to cover bad debts

2 to ensure that the current assets were not overstated
3 to ensure that the matching / accruals principle was followed

4 to ensure that the profit for the year was not overstated
A 1 and 3 B 1 only C 2 and 4 only D 2, 3 and 4
12 Which item is revenue expenditure for a manufacturer?
A buying new office equipment

B extending the factory
C purchasing motor vehicles
D repairing machinery

6 PAPER
13 An item of revenue expenditure was treated as an item of capital expenditure.
What was the effect of this error?
14 What causes computer equipment to depreciate?
A depletion
B economic reasons
C passage of time
D physical deterioration
15 On 1 January 2017 Wayne purchased a motor vehicle for $8000. He decided to depreciate it
using the diminishing (reducing) balance method at 20% per annum.
Which journal entry did Wayne make on 31 December 2018?
debit credit
$ $
provision for depreciation 1280
provision for depreciation 1600
C provision for depreciation 1280
D provision for depreciation 1600

7 PAPER
16 A cheque received from D Pawson, a trade receivable, was correctly debited to the bank account
but was credited to the account of P Dawson, a trade payable.
What was the effect of correcting this error?
trade receivables trade payables
A decrease decrease
B decrease increase
C increase decrease
D increase increase
17 Which items are used to calculate cost of goods sold?
A carriage on purchases, carriage on sales, net purchases, opening inventory

B carriage on purchases, closing inventory, net purchases, opening inventory
C carriage on sales, closing inventory, net purchases, opening inventory
D carriage on sales, closing inventory, net purchases, sales returns
31 December 2018.
$ $
revenue 100 000 60 000

purchases 80 000 40 000
At 31 December 2018 inventory was valued at $16 000 of which 75% related to department X.
A $15 000 B $16 000 C $23 000 D $24 000

8 PAPER
19 Muriel had a bank overdraft of $3820 and was owed $2100 by Ada.
Ada paid promptly by cheque and received a 5% cash discount.
What was the effect on Muriel’s statement of financial position when Ada paid her debt?
current assets $ current liabilities $ capital $
A decrease 1995 decrease 2100 decrease 105

B decrease 1995 decrease 2100 increase 105
C decrease 2100 decrease 1995 decrease 105
D decrease 2100 decrease 1995 increase 105
20 On 1 January 2019 a commission receivable account had a credit balance.
What does this balance represent?
commission commission
receivable receivable asset liability
paid in advance outstanding
A
B
C
D
21 What is an advantage of trading as a partnership?
A A partnership is a separate legal entity.

B Decision-making is easy and quick.
C Liability is unlimited.
D Responsibilities are shared.
22 A golf club sells refreshments to its members. Suppliers of refreshments were owed $250 on
1 January 2018 and $400 on 31 December 2018. Payments to suppliers during the year were
$7200.
What was the cost of sales of refreshments for the year ended 31 December 2018?
A $7050 B $7150 C $7300 D $7450

9 PAPER
23 After the preparation of the financial statements of a sports club it was found that no adjustment
had been made for subscriptions received for the following financial year.
How will correcting this error affect the financial statements?
income and statement of

expenditure account financial position
A decrease income increase current assets

B decrease income increase current liabilities
C increase income increase current assets
D increase income increase current liabilities
sales 100 000

gross profit 5 000
What was the value of the purchases?
A $85 000 B $95 000 C $105 000 D $115 000

31 December profit for the year 43 000
A dividend of 10% on ordinary shares was paid during the year.
A $13 000 B $23 000 C $25 000 D $35 000

10 PAPER
26 What is not included in a statement of changes in equity of a limited company for the year ended
31 March 2019?
A an issue of additional ordinary shares that was made during the year
B an interim dividend paid to the ordinary shareholders on 1 November 2018
C a proposed final dividend which is to be paid to ordinary shareholders on 1 August 2019
D a transfer made to general reserve from retained earnings on 31 March 2019
27 A business’s sales are $100 000, the expenses are $30 000 and the profit for the year is $20 000.
What is the gross profit/sales ratio?
A 10% B 50% C 70% D 80%
28 A business prepares its accounts on the basis that it will continue to trade in the foreseeable
future.
A accounting entity
B accounting year
C going concern
D matching/accruals
29 A cheque paid by a business for fuel for the delivery vehicle was recorded in the books of the
business. A cheque paid by the business owner for fuel for his motorcycle was not recorded in
the books of the business.
Which accounting principle was applied?
A accounting entity
B going concern
C materiality
D money measurement
30 Which statement is not correct about reasons for using international accounting standards?


May/June 2019
1 C 1
2 A 1
3 C 1
4 C 1
5 D 1
6 A 1
7 A 1
8 C 1
9 A 1
10 B 1
11 D 1
12 D 1
13 A 1
14 B 1
15 A 1
16 A 1
17 B 1
18 B 1
19 C 1
20 B 1
21 D 1
22 D 1
23 B 1
24 A 1
25 C 1
26 C 1
27 B 1
28 C 1

May/June 2019
29 A 1
30 D 1

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1 Which statements about book-keeping and accounting are correct?

1 Accounting is performed periodically rather than daily.

A 1, 2 and 4 B 1 and 3 C 2, 3 and 4 D 2 and 4

machinery at net book value 38 000

What was Padma’s capital on 31 March 2012?

A $30 000 B $36 500 C $46 500 D $53 000

3 Chan returns goods to Yeung.

How is this recorded in the books of Yeung?

account to be debited account to be credited

A Chan sales returns

4 Winston sold goods on credit to Leroy.

Which entries should Winston make in his ledgers?

sales ledger general ledger

A credit Leroy debit sales

© UCLES 2012 0452/11/M/J/12

B purchases returns journal

April 7 Invoice 360

A $260 B $310 C $321 D $421

7 Tahir purchases goods on credit from Yasmin.

How will Yasmin record this?

book of prime entry account to be debited account to be credited

A purchases journal purchases Yasmin

received capital from shareholders, $10 000

What was the total in the bank account on 31 January 2012?

A $7000 B $8000 C $11 000 D $12 000

© UCLES 2012 0452/11/M/J/12 [Turn over

9 Which is true about a bank reconciliation statement?

A It may uncover any theft of funds.

Which journal entry will correct this error?

11 Sukesh’s account in the books of Jack showed the following.

May 1 balance 450 dr

Which statements about the transactions on 8 May are correct?

1 Jack made a payment to Sukesh.

A 1 and 3 B 1 and 4 C 2 and 3 D 2 and 4

© UCLES 2012 0452/11/M/J/12

cash purchases 1200

What was the balance on the purchases account on 30 April?

A $5950 B $11 950 C $13 150 D $13 400

How would these balances appear in the ledger accounts?

A income statement 8 000

© UCLES 2012 0452/11/M/J/12 [Turn over

15 Which entries are required to create a provision for doubtful debts?

A bad debts account provision for doubtful debts account

What was the correct loss for the year?

A $1080 B $1560 C $2520 D $3000

A $12 000 B $14 700 C $15 300 D $18 000

18 How is the loss on the sale of a non-current asset recorded?

A disposal account income statement

19 An invoice for stationery, $100, was entered as a credit note.

Which entries should be made to correct this error?

A stationery 100 supplier 100

© UCLES 2012 0452/11/M/J/12