WAC11 01 Pef 20210304

Examiners’ Report
Principal Examiner Feedback
January 2021
Pearson Edexcel International Advanced

Subsidiary
In Accounting (WAC11/01)
Unit 1: The Accounting System and Costing
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January 2021
Publications Code WAC11_01_2101_ER
All the material in this publication is copyright
© Pearson Education Ltd 2021
General comments
Candidates generally performed well in the January 2021 examination paper and
Centre’s are again to be congratulated for the preparation of their candidates.
Candidates generally displayed a good knowledge and understanding of accounting
principles and could then apply these principles to the scenarios set.
Again, the general issue that many candidates failed to reach a decision in the
evaluation section of many questions was evident for the second examination in
succession. Centres and candidates should be aware that to obtain full marks in an
evaluation section a conclusion/decision, together with appropriate reasoning for
that decision should be provided.
Specific Comments
Question 1
Candidates generally prepared very good answers to the question. The statement
of profit, loss and other comprehensive income account and the statement of
financial position were generally substantially accurate with many correct or almost
correct answers.
The statement of profit, loss and other comprehensive income was generally
substantially correct and accurate. Only the bank interest and allowance for
irrecoverable debts caused problems in accurate calculation. The statement of
financial position was complete and again was substantially accurate. The only
common error was the failure to divide the bank loan between current and non-
current.
In part (d) the preparation of the capital accounts. Most candidates started with the
closing balances of £40 000 and £50 000 balances, before making the two correct
adjustments. The basis of the question was that candidates needed to work back
from £40 000 and £50 000 to the opening balances of £65 000 and £30 000.
The evaluation of the scenario of whether to admit an existing manager as a partner

was generally answered well. Candidates considered a range of points both for and
against before generally arriving at a reasoned conclusion.
Common errors.
• Failure to divide bank loan between current and non-current in the statement of
financial position.
• Preparation of the capital accounts ending with the closing balances of £40 000
and £50 000.
Question 2
The question was generally answered well by candidates. The trial balance was
substantially accurate with many correct calculations of the suspense account
balance. Candidates were generally aware of the types of error in part (b).
The journal entries in (c) were substantially correct. Entries in the suspense account
were generally correct from a double entry perspective although the narratives were
often incorrect including the regular narrative suspense in the suspense account.
Candidates often created a new balancing figure rather than using the balance
calculated in the trial balance.
The standard of evaluations varied considerably. Many candidates considered the

benefits and drawbacks of using ICT generally rather than relating it to the question
which was as a tool to eliminate errors.
Common errors.
• Not transferring the suspense balance from the trial balance to suspense
account.
• Evaluating the use of ICT generally rather than its use to eliminate errors.
Question 3
Overall, the question was well answered. Candidates generally could explain the
concepts of going concern and business entity. The departmental trading account
was generally in good format and accurately presented.
There were many correct answers to the value of goods stolen. The annual cost of
the security system was often inaccurately calculated. Many candidates added the
total capital cost to the annual maintenance cost.
The evaluation considered a range of valid points both for and against in arriving at
a conclusion to purchase or not to purchase.
Common error.
• The calculation of the annual cost of the security system.

Question 4
Candidates generally understood the meaning of capital expenditure and could

identify capital expenditure and revenue expenditure items.
The majority of candidates prepared the motor vehicle ledger accounts with
considerable accuracy.
The evaluation of depreciation alternative methods was argued well by many

candidates but less so by a significant minority who failed to demonstrate an
understanding of the rationale for different depreciation methods.
Common error.
• Failure to understand the rationale for selection of different depreciation

methods.
Question 5
Candidates were generally unsure why a business would use apportionment of

costs to departments.
The number of hours that would be available for productive work in the year was
generally accurately calculated. Activities that would not be directly recoverable
from a customer invoked a variety of responses. Holiday and sickness are not
accepted as business activities to be undertaken, nor are general costs such as
depreciation. The key word is activities, undertaken within a normal working period.
The calculation of the profit/loss from raw material, labour and overheads were
generally reasonably accurately calculated, and there were many correct answers.
Candidates were familiar with the term piecework and could present arguments for
and against its use.
Common error.
• The reasons why a business would use apportionment of casts to departments.

Question 6
Candidates were generally aware of the terms liquidity and capital employed and
could explain the meaning of each of these terms.
Ratios were generally accurately calculated. Candidates were able to apply the
formulae accurately.
There were plenty of issues that could be cited in the evaluation and these were
raised by candidates. Often candidates merely stated that one ratio for A was
greater/smaller than Z. The examiners are looking for a qualitative judgement that
one ratio is better/worse in one business rather than the other, ideally with some
reasoning as development.
Common error.
• Reaching conclusions from ratios that are qualitative rather than quantitative.
Summary
Centres may wish to consider the following key points to ensure that their
candidates are best equipped to succeed in future examinations.
Key points for centres to consider
The key points for centres to take forward in improving the performance of their
candidates in the examination are very much the same as those which were
identified in the October 2020 series. The main points were.
1. Again, in this examination the examiners observed that in the evaluation section
of each question, a minority of candidates identified and developed points both
for and against, often with excellent development, but failed to arrive at a
decision. Centres may wish to work with candidates on this point as Section A
questions have 3 marks and Section B questions 2 marks per question for
arriving at a reasoned decision. 12 marks or 6% of the total mark will be allocated
to decisions in every candidate’s examination score.
2. Costing also continues to be a weakness in the understanding and application of

candidates. Centres may wish to review their approach to costing to improve the
skills of candidates in addressing costing questions set.
3. Candidates must also read the question carefully to ensure that they are
answering the question set. In Question 2 many candidates saw ICT and stated
a general range of advantages and disadvantages when the question was about
ICT’s ability to ensure that there are no errors in the books.
Pearson Education Limited. Registered company number 872828
with its registered office at 80 Strand, London, WC2R 0RL, United Kingdom

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Examiners’ Report

Principal Examiner Feedback

Pearson Edexcel International Advanced

Pearson: helping people progress, everywhere

The evaluation of the scenario of whether to admit an existing manager as a partner

The standard of evaluations varied considerably. Many candidates considered the

• The calculation of the annual cost of the security system.

Candidates generally understood the meaning of capital expenditure and could

The evaluation of depreciation alternative methods was argued well by many

• Failure to understand the rationale for selection of different depreciation

Candidates were generally unsure why a business would use apportionment of

• The reasons why a business would use apportionment of casts to departments.

Key points for centres to consider

2. Costing also continues to be a weakness in the understanding and application of

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