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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

s.c
International General Certificate of Secondary Education

om
*6351257674*

ACCOUNTING 0452/13
Paper 1 October/November 2010
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST

Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use a soft pencil for any diagrams or graphs.
Do not use staples, paper clips, highlighters, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.

Answer all questions.

You may use a calculator.

Where layouts are to be completed, you may not need all the lines for your
answer.
For Examiner's Use
The businesses mentioned in this Question Paper are fictitious.
1
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part
2
question.

Total

This document consists of 19 printed pages and 1 blank page.

IB10 11_0452_13/6RP
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1 There are 10 parts to question 1. For

Examiner's
For each of the parts (a) to (j) below there are four possible answers A, B, C and D. Use
Choose the one you consider correct and place a tick (
) in the box to indicate the correct
answer.

(a) What is shown as a liability in a balance sheet?

A bank overdraft

B fixtures and fittings

C inventory (stock)

D prepaid rent [1]

(b) Rent is paid to J. Perigo in cash.

How is this recorded?

account to be debited account to be credited

A cash rent

B J. Perigo rent

C rent cash

D rent J. Perigo [1]

(c) When is a suspense account opened?

A when a balance sheet fails to balance

B when a trial balance fails to balance

C when an error of omission is corrected

D when an error of principle is corrected [1]

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(d) Which item on a bank statement would cause the balance on the bank statement to be For
more than the balance in the cash book? Examiner's
Use

A bank charges

B bank interest credited

C dishonoured cheque

D standing orders paid [1]

(e) Why should costs be matched with revenues at the end of an accounting period?

A so that profit may be calculated

B so that the trial balance will balance

C to calculate the amount owed to trade creditors

D to calculate the bank balance [1]

(f) Peter sold goods on credit to Ann in 2009. In October 2010 Peter wrote off the amount
owed by Ann as a bad debt.

What entries must Peter make in his ledger to write off the bad debt?

account to be debited account to be credited

Ann bad debts

A

Ann sales
B

bad debts Ann

C

sales Ann
D [1]

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(g) The following information is available for a sole trader for the year ended For
30 September 2010. Examiner's
Use

$
sales in year 59 200
inventory (stock) at 1 October 2009 2 500
inventory (stock) at 30 September 2010 3 800
purchases in year 28 600

What is the gross profit for the year?

A $24 300

B $29 300

C $30 600

D $31 900 [1]

(h) Which of the following appears in the income statement (profit and loss account) of a
partnership?

A a partner’s drawings

B a partner’s salary

C interest on a partner’s capital

D interest on a partner’s loan [1]

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(i) A business has calculated the following ratios: For

Examiner's
Use
percentage of gross profit to sales percentage of net profit to sales

Year 1 40 % 19 %

Year 2 40 % 25 %

Why did the percentage of net profit to sales increase in Year 2?

A cost of sales decreased

B cost of sales increased

C expenses decreased

D expenses increased [1]

(j) Which of the following should not be recorded in the books of account?

A canteen costs

B maintenance of office buildings

C wages of staff

D workers' skills [1]

[Total: 10]

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2 (a) Name the business document which is sent to the purchaser by a supplier of goods to For
record the value of the goods purchased. Examiner's
Use

[1]

(b) In the table below, place a tick (
) under the correct heading to show whether the item
is capital or revenue expenditure.

Capital expenditure Revenue expenditure

Purchase of shop

Repairs to shop windows

Purchase of new lock for shop door

[3]

(c) Name the financial statement (final account) in which the provision for doubtful debts
should be shown.

[1]

(d) Explain what is meant by a business preparing its financial statements (final accounts)
on the going concern basis.

[2]

(e) A payment for a new motor car has been debited to the motor expenses account in the
ledger. Name the type of error which has been made.

[1]

(f) Dio owns 5000 shares of $2 each in Diomedes Limited. The company declares a
dividend of $0.25 per share. State how much Dio will receive as a dividend.

[2]

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(g) On 1 July 2010 Helia paid a premium of $600 for a new insurance policy for 12 months For
to 30 June 2011. Examiner's
Use

Calculate the amount for insurance in her income statement (profit and loss account)
for the financial year ended 30 September 2010.

Show your workings.

[3]

(h) Beja’s balance sheet at 31 July 2010 included the following:

$
non-current (fixed) assets 30 000
inventory (stock) 15 000
trade receivables (debtors) 14 500
balance at bank 16 000 Dr
trade payables (creditors) 18 200

Calculate Beja’s working capital at 31 July 2010.

Show your workings.

[4]

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(i) Khanu’s financial statements showed the following: For

Examiner's
Use
$
cash sales 46 500
credit sales 126 000
cash received from trade debtors 122 800
trade receivables (debtors) 13 800

Calculate his collection period for trade receivables (debtors) to the nearest whole day.

Show your workings.

[4]

[Total: 21]

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3 Moma keeps full accounting records and makes up her financial statements (final accounts) For
to 31 October in each year. Examiner's
Use

Extracts from her accounting records for October 2010 show the following:

Purchases Journal
$
October 5 Summa 320
17 Carter 500
29 Summa 270

Purchases Returns Journal

$
October 8 Summa 100

Cash Book (credit side)

Discount Bank
$ $
October 30 Summa 220
31 Carter 15 485

REQUIRED

(a) Write up the accounts of Summa and Carter in Moma’s purchases ledger for the month
of October 2010. Show any balances carried and brought down.

Purchases Ledger

Summa account

[7]

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Carter account For

Examiner's
Use

[5]

At 1 October Moma had 200 units of inventory (stock) which had cost $2.80 per unit. In the
month of October her purchases were:

October Units Cost per unit

$
5 100 3.20
10 130 3.10
27 120 2.90

REQUIRED

(b) Calculate the following. Show your workings.

(i) The value of inventory (stock) at 1 October.

[2]

(ii) The total cost of purchases for October.

[6]

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(c) Stock is sold in the order in which it is received. At 31 October Moma had 250 units in stock. For
The net realisable value of each unit was $3.00. Examiner's
Use

Calculate the value of inventory (stock) at 31 October.

[5]

[Total: 25]

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4 Gorman Limited has prepared the following trial balance from the company’s accounting For
records for the year ended 30 September 2010. Examiner's
Use

Gorman Limited
Trial Balance at 30 September 2010

$ $
Bank (overdrawn) 2 200
Revenue (sales) 92 000
Ordinary goods purchased (purchases) 70 300
Carriage inwards 600
Inventory (stock) at 1 October 2009 13 900
Rent payable 2 600
Property tax 1 500
Electricity 850
Wages and salaries 5 250
Equipment and office fittings 17 000
Provision for depreciation
on equipment and office fittings 1 700
Repairs and maintenance 1 100
Administrative expenses 4 000
Retained profit at 1 October 2009 28 000
Share capital 9 000
Trade receivables (debtors) 17 600
Trade payables (creditors) 1 800
134 700 134 700

Additional information

1 Inventory (stock) at 30 September 2010 was $14 300.

2 Wages accrued but unpaid were $500.

3 Property tax prepaid was $300.

4 The bank statement for 30 September showed bank charges of $120. This has not
been entered in the books.

5 Depreciation of $1700 is to be provided for the year.

REQUIRED

(a) Define a trial balance.

[3]

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(b) Prepare Gorman Limited’s income statement (trading and profit and loss account) for For
the year ended 30 September 2010. Examiner's
Use

Gorman Limited
Income Statement (Trading and Profit and Loss Account)
for the year ended 30 September 2010

[13]

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(c) Name the accounting principle which has been applied to the amount included in the For
income statement (trading and profit and loss account) for each of the following. Examiner's
Use

(i) Inventory (stock)

(ii) Property tax

[4]

(d) From your answer to (b) calculate Gorman Limited’s rate of inventory (stock) turnover.

Show your workings.

[5]

(e) Gorman Limited had a bank overdraft at 30 September 2010. Suggest one way in which
the company could reduce or eliminate the overdraft.

[2]

[Total: 27]

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5 Sohara has a shop and sells goods for cash and on credit. She keeps the cash book herself For
but her accountant writes up her ledger each month. Examiner's
Use

Sohara puts her cash receipts in a till and enters them into her three-column cash book
each week. She offers a cash discount of 3% to her debtors for payment within 15 days.

She buys stock in bulk from Apollo for cash and receives trade discount of 5% for orders in
excess of $1000.

She pays wages each week in cash.

On 1 September 2010 Sohara’s cash book showed cash in hand of $700 and cash at bank
of $3000.

Sohara had the following transactions in one week in September 2010.

$
September 6 Cheque received from Juno for goods sold on 24 August 291
7 Sold goods on credit to Hercules 100
8 Paid cash to Apollo for goods purchased 1900
9 Cheque received from Minos for goods sold on 29 June 85
10 Cash sales for the week 1850
10 Wages paid for the week 350

REQUIRED

(a) (i) State the type and amount of discount allowed to Juno by Sohara.

[3]

(ii) State the type and amount of discount received by Sohara on paying Apollo.

[3]

(b) Make the necessary entries in Sohara’s cash book to record the above transactions for
the week ended 10 September 2010. You are not required to balance the cash book.

The cash book is on the next page.

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Sohara Cash Book For

September 2010 Examiner's
Use

[12]
Bank

$
Cash

$
Discount

$
Details
Date
Bank

$
Cash

$
Discount

$
Details
Date

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Sohara also keeps a petty cash book on the imprest system with an imprest of $300. For
Examiner's
Use
On 30 September 2010 there was $20 in the petty cash box and vouchers for expenses
totalling $270.

REQUIRED

(c) (i) State the amount of cash there should have been in the petty cash box.

[2]

(ii) Suggest one reason why there was a difference in the petty cash between the
amount actually in the box and the expected amount.

[2]

(iii) State the amount which was transferred from the bank on 1 October to restore the
imprest.

[2]

[Total: 24]

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6 Norman started a business on 1 July 2010 selling machines. For

Examiner's
Use
On that day he bought inventory (stock) for $12 000 and office furniture for $1500.

He paid an additional $2300 into a new business bank account and kept $200 on hand as a
petty cash float.

On 2 July his brother Peter paid $3000 into the business bank account as a loan to the
business.

REQUIRED

(a) Show the journal entries to record these transactions. Narratives are not required.

Norman
Journal

Dr Cr
$ $

[8]

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For
Examiner's
Use

Norman understands he should depreciate the office furniture.

He decides his office furniture will have a useful life of four years and will have no scrap
value.

REQUIRED

(b) Name two possible methods of depreciation he could use.

(i)

(ii) [2]

(c) Select which method Norman should use. Give a reason for your answer.

[3]

[Total: 13]

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University of Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of
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© UCLES 2010 0452/13/O/N/10