ASE20104 - Examiner Report - March 2019 PDF

Pearson LCCI Certificate in
Accounting (VRQ)
Level 3
(ASE20104)
Examiner’s Report
March 2019
2012-2013
1 LCCI Certificate in Accounting ASE20104

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March 2019
Publication code: 63698_ER
All the material in this publication is copyright

© Pearson Education Ltd 2019
1 LCCI Certificate in Accounting ASE20104 Level 3

Introduction
Pearson (LCCI) redeveloped the Level 3 Certificate in Accounting (VRQ)
(ASE20104) as a part of the Finance and Quantitative suite of qualifications
from Level 1 to Level 4.
The Pearson LCCI Level 3 Certificate in Accounting (VRQ) gives candidates

an overview of the fundamental accounting principles and concepts that
underlie all financial accounting. Candidates are introduced to topic areas
they are likely to encounter in their working lives in practical, scenario-
based situations.
The qualification has been revised to allow candidates to progress to the

Pearson LCCI Level 4 Certificate in Financial Accounting (VRQ), which
extends and introduces new advanced topic areas in this field.
The assessment is of 100 marks comprising of a total of five questions. All

the questions are compulsory.
The assessment for the March 2019 examination covered the following
topics:
• Accounting concepts and framework.

• Recording financial transactions.
• Preparation of financial statements.
• Preparation of accounting from incomplete records.
• Interpretation of financial statements.
• Budgetary control.
• Introduction to decision making.
Candidates performed very well on the topics related to the preparation

statement of profit or loss, statement of financial position, ledger accounts
relating to non-current assets and preparation of statement of profit or loss
using marginal costing.
They did not perform well on the ’state‘ questions relating to the
characteristics of the financial reporting, definitions of the terms used on
consolidation, the ‘explain’ questions relating to accounting concepts,
change of payment terms, the ‘discuss’ question on decision making using
marginal costing concept and the ‘evaluate’ question on change in one
specific ratio provided.
1 LCCI Certificate in Accounting ASE20104 Level 3

Question 1
Most of the candidates scored well on this question.
The majority of the candidates were able to prepare the statement of

financial position of a company by showing the workings for the retained
earnings and cash and cash equivalents.
Common errors were not treating the inventory scrapped correctly, and not
showing the trade and other receivables, and trade and other payables,
correctly on one row respectively. A majority of the candidates also missed
the label for the total equity as well.
Examiner Comments
Candidates should practice having the correct format for a
financial statement of the company.
Examiner Tip
Each section of a financial statement must have the sub total
with a label.

Question 2
Most of the candidates scored average marks on this question.
A majority of the candidates did not perform very well on completing the
sentences provided with the missing words, despite the fact the first
sentence provided the starting word with the name of the characteristic of
the financial reporting. The statement of profit or loss for a sole trader from
the incomplete records was prepared to a reasonable standard.
Common errors included not having the correct labels for the revenue and
profit for the year along with incorrect treatment of commission received
as this was taken as an expense rather than as other income. Candidates
were able to state the two accounting concepts correctly but did struggle
to explain the treatment of the transaction provided in the financial
statement.
Examiner Comments
Candidates must pay attention to the column headings to
understand the opening balance and closing balance to treat
the figure correctly.
Examiner Tip
The credit sales and credit purchases can be calculated by
preparing the trade receivables and trade payables ledger
control account, but the cash sales and cash purchases must
be added to these to get the total sales and total purchases.

Question 3
Most of the candidates scored average marks on this question.
A majority of the candidates were able to prepare the ledger accounts and
calculate the required figures from the information provided. Some
candidates did not realise that after calculating the closing balance for the
cost account relating to non-current asset, it was possible to calculate the
closing accumulated depreciation, because the closing carrying amount was
provided. By using this information and depreciation on the disposal, the
depreciation charge for the year was the balancing figure in the
accumulated depreciation ledger account.
Candidates were able to calculate the loss on disposal but did not make use
of the columns provided to show the amount and loss. Some candidates
were unable to define the goodwill as they either described it or provided
the reasons for the goodwill. A majority of the candidates were able to
calculate the figures relating to consolidation items by differentiating
between the pre and post-acquisition figures as appropriate.
Examiner Comments
Make use of the columns or tables provided in the question
paper.
Examiner Tip
Candidate must specify whether there is a profit or loss on
disposal either by words or by a sign.

Question 4
This question provided stretch for the candidates.
A majority of the candidates were able to state the name of the

stakeholders and prepare the statement using the marginal costing to show
the profit or loss, but a few candidates missed the label contribution and
completed this question as a calculate question without any format of
statement. Some candidates did not round up the breakeven units which
indicated a lack of understanding of the breakeven concept. A few
candidates were also unable to calculate the contribution per unit.
Examiner Comments
For ‘discuss’ questions, candidates must state the points in
favour or against to form a decision at the end to score the
full marks.
Examiner Tip
Breakeven units are always rounded up. Normal
mathematical rule does not apply. If the units are rounded
down, then the business will have the loss on those units,
which will be against the breakeven concept and the units
cannot be left as a fraction as it is not possible to sell an
item in fractions.

Question 5
This question provided stretch for the candidates.
A majority of the candidates did not perform very well on describing one
benefit of the budgetary control as the responses related to the benefits of
a cash budget. The routine transactions were recorded correctly in the
format provided for the cash budget, but candidates struggled to complete
the cash and credit purchases rows as these involved calculations that
required adjusting the cost of sales due to the change in the closing
inventory.
Candidates did not perform well on stating the effect on cash and cash
equivalents due to proposed change in the purchase payments. A majority
of the candidates also did not perform very well on evaluation of change in
the return on capital employed provided. Most of the responses stated the
ratio is reduced or decreased without stating the possible reason for the
change correctly.
Examiner Comments
The ‘evaluate’ question must have possible reasons for the
change in the ratio/s or an impact on a business due to the
change in the ratio/s provided to have a final evaluation.
Examiner Tip
The ‘explain’ questions must have justification or reasoning
to score full marks.

See below the examples of the candidates’ responses to
reflect the presentation.
Q2(b)

Q3(a)(i)-(iii)

Q4(b)(i)-(ii)

Q4(c)(i)-(iii)
Q5(b)

Paper Summary
Candidates performed better on numerical straightforward questions
relating to the preparation of the statements from the provided
information but did struggle to answer the written questions including
state and explain questions.
Based on their performance on this paper, candidates are offered the

following advice:
• Learn and practice the International Accounting Standards (IAS)

terminology and formats to show subtotal and totals including the
labels for financial statements.
• Show their workings/notes with reference number such as
W1/Note1, W2/Note 2, etc.
• Use the labels for the figures used in the notes/workings.
• Learn and practice preparation of ledger accounts with full details.
• Learn and practice the preparation of all financial statements with
full details and in proper format for the company accounts.
• Learn and practice the preparation of all budgets with full details.
• Do not just practice numerical questions but also try to understand
the theory to be able to answer the ‘explain’ questions.
• Practise ‘discuss’ questions by providing the comparative
statements for both sides.
Practise analysing the results from the information provided by
answering the reasons or what impact it will have on the business
currently or in future.
• Visit the Pearson website for various resources to support
candidates learning
https://qualifications.pearson.com/en/qualifications/lcci/financial-
and-quantitative/accounting-2015.coursematerials.html

Grade Boundaries
Grade boundaries for this, and all other papers, can be found on the
website on this link:
http://qualifications.pearson.com/en/support/support-topics/results-
certification/grade-boundaries.html

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Pearson LCCI Certificate in

1 LCCI Certificate in Accounting ASE20104

Pearson: helping people progress, everywhere

All the material in this publication is copyright

1 LCCI Certificate in Accounting ASE20104 Level 3

The Pearson LCCI Level 3 Certificate in Accounting (VRQ) gives candidates

The qualification has been revised to allow candidates to progress to the

The assessment is of 100 marks comprising of a total of five questions. All

• Accounting concepts and framework.

Candidates performed very well on the topics related to the preparation

1 LCCI Certificate in Accounting ASE20104 Level 3

The majority of the candidates were able to prepare the statement of

2 LCCI Certificate in Accounting ASE20104

3 LCCI Certificate in Accounting ASE20104

4 LCCI Certificate in Accounting ASE20104

A majority of the candidates were able to state the name of the

5 LCCI Certificate in Accounting ASE20104

6 LCCI Certificate in Accounting ASE20104

7 LCCI Certificate in Accounting ASE20104

8 LCCI Certificate in Accounting ASE20104

9 LCCI Certificate in Accounting ASE20104

10 LCCI Certificate in Accounting ASE20104

Based on their performance on this paper, candidates are offered the

• Learn and practice the International Accounting Standards (IAS)

11 LCCI Certificate in Accounting ASE20104

12 LCCI Certificate in Accounting ASE20104

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