Mark Scheme (Results)

December 2021

Pearson LCCI Certificate

In Accounting (VRQ) (ASE20104) Level 3
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December 2021
Question Paper Log Number P69257A
Publications Code ASE20104_01_2112_MS
All the material in this publication is copyright
© Pearson Education Ltd 2022
General Marking Guidance

• All candidates must receive the same treatment. Examiners must mark the first
candidate in exactly the same way as they mark the last.

• Mark schemes should be applied positively. Candidates must be rewarded for

what they have shown they can do rather than penalised for omissions.

• Examiners should mark according to the mark scheme not according to their
perception of where the grade boundaries may lie.

• There is no ceiling on achievement. All marks on the mark scheme should be

used appropriately.

• All the marks on the mark scheme are designed to be awarded. Examiners
should always award full marks if deserved, i.e. if the answer matches the mark
scheme. Examiners should also be prepared to award zero marks if the
candidate’s response is not worthy of credit according to the mark scheme.

• Where some judgement is required, mark schemes will provide the principles by
which marks will be awarded and exemplification may be limited.

• When examiners are in doubt regarding the application of the mark scheme to a
candidate’s response, the team leader must be consulted.

• Crossed out work should be marked UNLESS the candidate has replaced it with
an alternative response.

• Where marks are awarded for own figure answers, these marks can only be
awarded if evidence of how the candidate arrived at their values has been
provided (their workings).

• If candidates fail to provide their workings when instructed in the paper, it may
not be possible to achieve all marks associated with the question, even if the final
answer is correct.

• For calculation questions full marks can be awarded where correct answer is
seen with no workings shown, unless question states that candidate must
provide workings.
Abbreviation

of Own Figure rule

Accuracy marks can be awarded where the candidate’s answer does not match
the mark scheme, though is accurate based on their valid method.

cao Correct Answer Only rule

Accuracy marks will only be awarded if the candidate’s answer is correct,
and in line with the mark scheme.
Question Answer AO2 (19) Mark
Number
1(a) Award 1 mark for each correct figure with label as indicated.

Pontus, Reid and Saman

Statement of profit or loss for the year ended
30 September 2021

1 October 2020 - 1 January 2021-

31 December 2020 30 September 2021
$ $
Revenue 92 250 (1) 276 750 (1)
Expenses:
General expenses 9 805 (1) 29 415 (1)
Rent 4 025 (1) 12 075 (1)
Staff salaries 14 825 (1) 44 475 (1)
Depreciation 3 045 (1) 9 135 (1)
31 700 95 100
Profit for the year 60 550 (1of) 181 650 (1of)
Interest on capital
Pontus 1 500 - (1fb)
Reid 1 250 3 750(1fb)
Saman 1 000 3 000 (1fb)
3 750 6 750
Salary - Reid - 22 500 (1)
Profit available for 56 800 152 400
distribution (1of fb)
Share of profit
Pontus 22 720 -
Reid 22 720 76 200
Saman 11 360 76 200
56 800 152 400
(1of for all) (1of for all) (19)

Question Answer (AO1) 2 Mark

Number
1(b) Award marks as indicated up to a maximum of 2 marks.
Additional capital (1)
Shared knowledge (1)
Shared responsibilities (1)
Shared risks (1)

Accept any other appropriate responses. (2)

(Total for Question 1 = 21 marks)

Question Answer (AO2) 8 Mark
Number
2(a) Award marks as indicated.

Year Net cash flow Profit

$ $

1 150 000 (1) 105 000 (1)

2 150 000 (1) 105 000 (1)

3 85 000 (1) 40 000 (1)

4 245 000 (1) 5 000 (1) (8)

Question Answer (AO2) 5 Mark

Number
2(b) Award marks as indicated.

$94 840 (5)

Year Net cash flow Discount factor Present value

$ at 12% $

0 (375 000) 1.000 (375 000)

1 150 000 0.893 133 950 (1of)

2 150 000 0.797 119 550 (1of)

3 85 000 0.712 60 520 (1of)

4 245 000 0.636 155 820 (1of)

Net present value 94 840 (1of) (5)

Additional guidance
Correct answer only scores 5 marks.
No specific format required.
 Question Answer (AO1) 3 Mark
Number
2(c) Award marks as indicated.

Accounting rate of return

Does not take into account the timing of cash flows / uses profits rather
than cash flows so is more subjective. (1)

Net present value

Need to establish the cost of capital. (1)

Payback period
Ignores cash flows after the payback period. (1)

Accept any other appropriate responses. (3)

Question Answer AO3 (2) Mark

Number
2(d) Award 1 mark for identification and 1 mark for linked justification/reasoning.

Matching (1)
To ensure the cost of using the non-current asset is matched with the income it
generates. (1)

OR

Prudence (1)
To ensure that the cost of using the non-current asset is included as expenditure in
the statement of profit or loss so that profit for the year is not overstated. (1)

Accept any other appropriate responses.

(2)

(Total for Question 2 = 18 marks)

Question Answer AO3 (2) Mark
Number
3(a) Award 1 mark for identification and 1 mark for linked justification/reasoning.

Cash flow may be improved (1) as goods can be sold before payment is made to the
supplier. (1)

Accept any other appropriate responses. (2)

Question Answer (AO3) 4 (AO5) 1 Mark

Number
3(b) Award 1 mark for each correctly identified point up to a maximum of 4 marks.
Award 1 mark for supported decision.

Sample answer

A non-current asset register will allow a business to know what non-current assets
they own and where they are located (1) which will help them to identify if any
non-current assets are missing/stolen (1).

However, it will take them time to maintain the register (1) which may mean they
need to employ an accountant (1).

Overall, it may be beneficial for a business to keep a non-current assets register if

they own a lot of non-current assets. (1)

Accept any other appropriate responses. (5)

Question Answer AO2 (4)
Number Mark
3(c)(i) Award 1 mark for each correct date, details and amount in combination.

Disposal Account
Date Details $ Date Details $
2021 2021
31 May Motor vehicles 18 000 31 May Motor vehicles 10 406
- cost (1) – provision for (1)
depreciation
Bank 4 200
(1)
Statement of profit or 3 394
loss (1of)
18 000 18 000

(4)
Question Answer (AO2) 11 Mark
Number
3(c)(ii) Award marks for each correct figure against correct label.
Bea
Statement of financial position at 31 May 2021

Assets $ $

Non-current assets

Equipment 13 860

Motor vehicles 6 328

20 188 (1)

Current assets

Inventory 13 883

Other receivables 140 (1)

Bank 12 880 (1) 26 903

Total assets 47 091 (1of)

Equity and liabilities

Equity

Opening balance 26 581 (1)

Capital introduced 9 300 (1)

Profit for the year 14 300 (1)

50 181

Drawings (32 980) (1)

Total equity 17 201 (1of)

Non-current liabilities

Bank loan (2025) 22 000

Current liabilities

Trade payables 7 890

Total liabilities 29 890 (1)

Total equity and liabilities 47 091 (1of) (11)

(Total for Question 3 = 22 marks)

Question Answer (AO1) 2 Mark
Number
4(a) Award marks as indicated.

Advantage
Able to raise more finance (1)

Disadvantage
Potentially less control of your business (1)

Accept any other appropriate responses. (2)

Question Answer (AO1) 2 Mark

Number
4(b) Award marks as indicated.

Stakeholder Interest

Customer To ensure sufficient cash for continuity of supply (1)

Supplier To ensure sufficient cash for payment of goods (1)

Accept any other appropriate responses.

(2)
Question Answer AO2 (13) Mark
Number
4(c) Award marks for correct figures with labels as indicated.
Madsbech Ltd
Statement of cash flows for the year ended 31 August 2021
$ $
Net cash from operating activities 51 280
(1)
Investing activities
Acquisition of land and buildings (45 000)
(1)
Disposal proceeds of machinery 2 650
(1)
Net cash used in investing activities (42 350)
(2/1of)
Financing activities
Proceeds from issue of bank loan 32 000
(1)
Dividend paid (6 000)
(1)
Issue of shares 25 200
(1)
Net cash from financing activities 51 200
(2/1of)
Net increase in cash and cash equivalents 60 130
(1of)
Cash and cash equivalents at the beginning of the (12 455)
year (1)
Cash and cash equivalents at the end of the year 47 675
(1) (13)

Question Answer (AO1) 2 Mark

Number
4(d) Award marks as indicated.
Scenario Principle of professional ethics

He produced misleading financial Integrity (1)

statements.
He shared information about the
company with a friend. Confidentiality (1)

(2)

(Total for Question 4 = 19 marks)

Question Answer (AO2) 9 Mark
Number
5(a) Award marks as indicated.

2022 Receipts from credit Payments to

customers credit suppliers
$ $

April 39 940 (2) W1 28 000 (1)

May 38 460 (2) W2 29 000 (1)

June 35 150 (2) W3 30 000 (1)

W1

16 000 (1) + 23 940 (1) = 39 940

W2

16 800 (1) + 21 660 (1) = 38 460

W3

15 200 (1) + 19 950 (1) = 35 150 (9)

Question Answer (AO2) 4 Mark
Number
5(b)(i) Award marks as indicated.

Winston
Trade receivables budget for the three months ending
30 June 2022

April May June

$ $ $

Opening balance 58 000 (1) 54 800 50 200

Credit sales 38 000 35 000 41 000

(1 row)

Receipts (39 940) (38 460) (35 150)

Discount allowed (1 260) (1 140) (1 050)

(1 row)

Closing balance 54 800 50 200 55 000

(1of) (4)

Question Answer (AO2) 1 Mark

Number
5(b)(ii) Award mark as indicated.

$16 000 (1)

(1)
Additional guidance
Correct answer only scores 1 mark.
No specific format required.

Question Answer (AO1) 1 Mark

Number
5(c) Award mark as indicated.

Irrecoverable debt (1)

(1)
Question Answer (AO4) 4 (AO5) 1 Mark
Number
5(d) Award up to 2 marks for profitability and up to 2 marks for liquidity.
Award 1 mark for supported evaluation.

Sample answer

Profitability

Profitability will improve (1) due to an increase in gross profit providing other
expenses do not increase (1).

Liquidity

Liquidity will improve (1) as suppliers will not require payment in the current or
following month as is the case now (1).

Evaluation
Winston should change suppliers provided the goods purchased are at least the
same quality as currently purchased. (1)

Accept any other appropriate responses.

(5)

(Total for Question 5 = 20 marks)

TOTAL FOR PAPER = 100 MARKS

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