Mark Scheme (Results)

January 2024

Pearson Edexcel International Advanced Level

In Accounting (WAC11) Paper 01
Unit 1: The Accounting System and Costing
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January 2024
Question Paper Log Number P73475A
Publications Code WAC11_01_2401_MS
All the material in this publication is copyright
© Pearson Education Ltd 2024
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.
 SECTION A

Q1
(a)(i) AO1:(4): AO2(6)
AO1: Four marks for recording given balances and using correct labels
AO2: Six marks for calculating and correct use of balance

Cachi
Manufacturing Account for the year ended 31 December 2023
£ £
Opening inventory of plastic 2 500
waste
Purchases of plastic waste 25 000
27 500
Closing inventory of plastic (5 000)
waste
Cost of plastic waste 22 500 (1) AO2
consumed
Production wages 75 000 (1) AO1
Prime cost (1) AO1 97 500 (1of) AO2 No
aliens
Overheads:
Depreciation on machinery 17 000 (1) AO2
Production salaries 40 000 (1) AO2
Indirect production expenses 9 500 (1) AO1
Electricity and water 16 000 (1) AO2
82 500
Cost of production (1) AO1 180 000 (1of) AO2 No
aliens
(10)

FIRST RELEASED ON AP EDEXCEL - DISCORD

https://sites.google.com/view/ap-edexcel
(ii) AO1:(2) AO2(8):
AO1: Two marks for recording given balances
AO2: Eight marks for calculating and correct use of balance

Statement of Profit or Loss and Other Comprehensive Income

for the year ended 31 December 2023
£ £
Revenue 300 000 (1) AO1
less
Opening inventory of finished goods 9 500
Cost of production 180 000 (1of) AO2
+w
189 500
Closing inventory of finished goods (7 500)
Cost of sales (182 000) (1of)
AO2 + w
Gross profit 118 000 (1of)
AO2 + w

Depreciation of office premises 2 500 (1) AO2

fixtures and fittings 3 600 (1) AO2
Office salaries 31 000 (1) AO1
Electricity and water 3 500 (1) AO2
Marketing costs (12 300 – 1 300) 11 000 (1) AO2
Administration expenses (18 700 + 4 22 800 (1) AO2
100)
(74 400)
Profit for the year 43 600
(10)
(iii) AO1:(2) AO2(7):AO3(1)
AO1: Two marks for recording given balances
AO2: Seven marks for calculating and correct use of balance
AO3: One marks for calculating trade receivables

Statement of Financial Position at 31 December 2023

Cost Accumulated Carrying
depreciation Value
Non-current assets £ £ £
Office premises 125 000 (69 000) 56 000 (1of) AO2
Machinery 85 000 (51 000) 34 000 (1of) AO2
Fixtures and fittings 36 000 (28 800) 7 200 (1of) AO2
246 000 (148 800) 97 200
Current assets
Inventory – plastic waste 5 000 (1) AO2 Both
finished goods 7 500
Trade receivables less 33 850
Allowance for irrecoverable debts (1 500) 32 350 (1) AO3
Other receivables 1 300 (1) AO2
Cash and bank 6 150 (1) AO1
52 300
TOTAL ASSETS 149 500

Capital 100 000

Plus Profit for the year 43 600
143 600
Less Drawings (20 000)
123 600 (1of) AO2
Current liabilities
Trade payables 21 800 (1) AO1
Other payables 4 100 (1) AO2
25 900
TOTAL CAPITAL AND LIABILITIES 149 500

(10)
(b) AO1:(4)
AO1: Four marks for explanations

(i) Capital expenditure (ii) Revenue expenditure

Purchasing non-current assets Cost of running a business on a day-
to-day basis
Extending and improving non-current Costs are matched against the
assets revenue for a period
Benefit will last for many trading periods Benefit only applies to that one
so more than one year trading period.
Will be recorded in the statement of Total used will be recorded in the
financial position and subject to carry income statement
over
(1) AO1 x four (two for capital expenditure and two for revenue expenditure) (4)

(c) AO1 (2)

AO1: Two marks for identification
• Purchase of new machinery. Capital expenditure (1) AO1
• Installation of new machinery. Capital expenditure (1) AO1
(2)

(d) AO2(5):AO3(2)
AO2: Five marks for total and cost per ton calculation
AO3: Two marks for calculating depreciation and other costs using new machinery

Existing machinery New machinery

£ £
Raw materials 22 500 36 000 (1) AO2
Production wages 75 000 100 000 (1) AO2
Annual depreciation 17 000 15 000 (1) AO3
Other costs 65 500 74 800 (1) AO3
Total production cost 180 000 (1of) AO2 All four 225 800

Annual output (tons) 500 800

Production cost per ton 360 (1of) AO2 282.25 (1of) AO2

(7)
(e) AO1 (1), AO2 (1), AO3 (5), AO4 (5)

OWN FIGURE RULE APPLIES

Invest in new machinery

The cost of production per ton is significantly reduced, this will increase the profitability
of the business, as all production has a ready market.
Environmentally the business is processing plastic waste back into something that is useful.
The use of the new machinery will increase employment in the area.
More plastic would be recycled and the pollution that it causes reduced.
More waste removed from the environment.
Life of machinery is longer, 8 years instead of 5 years

Do not invest in new machinery

£125 000 for new machinery is a considerable sum and Cachi has little money in the bank
to make the purchase.
The existing machinery appears to be fairly new as it has a high carrying value. There would
probably be a considerable loss on the sale of the existing machinery.
The investment is substantial and there is the risk that the market could suddenly change and
trading could become much more difficult.
Increased costs of extra workers and expenses.
Projections are only estimates and may be different in reality.

Conclusion
Candidates may conclude that Cachi should purchase or reject the purchase of new
machinery. Candidates should support that decision with an appropriate rationale.
Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-3 Isolated elements of knowledge and understanding recall based.
Weak or no relevant application to the scenario set.
Generic assertions may be present.
Level 2 4-6 Elements of knowledge and understanding, which are applied to
the scenario.
Chains of reasoning are present, but may be incomplete or invalid.
A generic or superficial assessment is present.
Level 3 7-9 Accurate and thorough understanding, supported throughout by
relevant application to the scenario.
Some analytical perspectives are present, with developed chains
of reasoning, showing causes and/or effects.
An attempt at an assessment is presented, using financial and
non-financial information, in an appropriate format and
communicates reasoned explanations
Level 4 10 - 12 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective application to the scenario.
A coherent and logical chain of reasoning, showing causes and
effects.
Assessment is balanced, wide ranging and well contextualised
using financial and non-financial information and makes informed
recommendations and decisions.

(12)

Q1 Total marks 55
Q2
(a) AO1:(10) AO2(1)
AO1: Ten marks for recording given balances correctly and label of suspense
AO2: One mark for calculating the correct balancing figure

Naag
Trial Balance at 31 December 2023
Dr Cr
£ £
Revenue 156 720
Purchases 110 000
Inventory- 1 January 2023 9 600
Discount allowed 750
Discount received 420
General expenses 32 450
Rent payable 18 500
Rent receivable 3 900
Non-current assets 40 000
Non-current assets – provision for 10 000
depreciation
Capital 40 000
Drawings 17 000
5% bank loan (repayable 2026) 20 000
Bank overdraft 4 080
Trade payables 7 850
Trade receivables 14 600
Irrecoverable debts 955
Allowance for irrecoverable debts 800
Suspense (1) AO1 85 (1of) AO2
243 855 243 855
9 x 1 mark (1) AO1 for every 2 correct entries = 9 marks.
(1) AO1 x 1 for narrative suspense
(1) AO2 x 1 for correct balancing figure
(11)
(b) AO1:(3)
AO1: Three marks for naming type of error
(1) Omission (1) AO1
(2) Original entry (1) AO1
(3) Commission (1) AO1

(3)

(c) AO1:(4)
AO1: Four marks for explaining

(i) An error of reversal (ii) A compensating error

The debit entry is entered on the At least two entries that are incorrect
credit side and credit entry is and compensate each other
entered on the debit side. (1) AO1 numerically (1) AO1
Correct amount used for the debit and Different amounts used in the debit
credit entry (1) AO1 and credit entry (1) AO1
(1) AO1 x four (two for an error of reversal and two for a compensating error) (4)
(d) AO2(13)
AO2: Thirteen marks for correct account name and value

Journal
Dr Cr
£ £
(1) Drawings 120 (1) AO2
Purchases 120 (1) AO2

(2) Sales/Revenue 90 (1) AO2

Jones 90 (1) AO2

(3) Milner 820 (1) AO2

Maxey 820 (1) AO2

(4) Suspense 140 (1) AO2

Discount received 140 (1) AO2

(5) Bank 630 (1) AO2

Irrecoverable debt/ Bad debts 470 (1) AO2
J.Baahir 1 100 (1) AO2

(6) General expenses 55 (1) AO2

Suspense 55 (1) AO2

(13)
(e) AO2(6) :AO3(6)
AO2: Six marks for correct orientation increase or decrease
AO3: Six marks for calculating and using correct number

Statement of Correction of Draft Profit

£ £ £

Draft profit 4 320

Corrections Increase in Decrease in

draft profit draft profit
(1) Inventory 1 600

(2) General expenses 160

(3) Bank loan interest 200

(4) Rent payable 1 100

(5) Depreciation 2 000

(6) Allowance for 125

irrecoverable debts

1 mark for correct number AO3 and 1 mark for correct orientation AO2 x 6

Working:
Allowance for irrecoverable debts 14 600 – 1 100 = 13 500 x 5% = 675 less existing
allowance 800 = 125 decrease

(12)
(f) AO1 (1), AO2 (1), AO3 (5), AO4 (5)

Removal of errors by installing ICT

The computer will automatically debit and credit the appropriate accounts removing an
element of user error.
Calculations automatically correct.
Reconciliations will be prepared by the computer at regular intervals checking the accuracy
of the entries.
Regular software updates will be required to ensure that software is fully supported.
Audit trail of all actions.

Failure to remove errors by installing ICT

Although the human error element is reduced by the computer there must still be significant
training of the operators to ensure correct operation.
Without appropriate training operatives can still post corrections/entries which are
incorrect.
Need skilled accurate staff.
Cost of latest updates of software required to ensure support and accuracy.

Conclusion
Candidates may conclude that errors would be removed/ not removed by the installation of
ICT. The conclusion must be supported by an appropriate rationale.
Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-3 Isolated elements of knowledge and understanding recall based.
Weak or no relevant application to the scenario set.
Generic assertions may be present.
Level 2 4-6 Elements of knowledge and understanding, which are applied to
the scenario.
Chains of reasoning are present, but may be incomplete or invalid.
A generic or superficial assessment is present.
Level 3 7-9 Accurate and thorough understanding, supported throughout by
relevant application to the scenario.
Some analytical perspectives are present, with developed chains
of reasoning, showing causes and/or effects.
An attempt at an assessment is presented, using financial and
non-financial information, in an appropriate format and
communicates reasoned explanations
Level 4 10 - 12 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective application to the scenario.
A coherent and logical chain of reasoning, showing causes and
effects.
Assessment is balanced, wide ranging and well contextualised
using financial and non-financial information and makes informed
recommendations and decisions.

(12)

Q2 Total marks 55
 SECTION B

Q3
(a) AO1(2)
AO1: Two marks for reasons why

Trade receivables represents the inflow of cash into the business. (1) AO1
Extending trade receivables will restrict the cash that a business has to operate with.
(1) AO1
The more trade receivables is extended the greater the chance of irrecoverable debts.
(1) AO1
Make sure that money has been recovered. (1) AO1
Maintain liquidity. (1) AO1

Max (1) AO1 x 2 (2)

(b) AO1(2)
AO1: Two marks for reasons how

By credit control. (1) AO1

Encourage early payment. (1) AO1

Vetting credit customers credit worthiness.

Credit limits on customers.
Chasing up debts after 28 days.
Possible use of cash discounts.
Letters and personal contact with customers to recover debt.
Charge interest on late payers
(1) AO1 x 1 point made (2)
(c) AO1(1) :AO2(12) :AO3(3)
AO1: One marks for recording given balance
AO2: Twelve marks for calculating answer and correct use of balance in formula
AO3: Three marks for correct figures for trade receivables collection and acid test

Year ended Year ended

31 December 2022 31 December 2023
(i) gross profit as a
percentage of 200 000 (1) AO2 x 100 = 40% 225 000 x 100 = 25% (1) AO2
revenue 500 000 (1) AO2 900 000 (1) AO1

(ii) rate of inventory

turnover 300 000 =5.71 times (1) AO2 675 000 = 10.80 times (1) AO2
52 500 (1) AO2 62 500 (1) AO2

(iii) trade receivables

collection period 60 000 x 365 (1) AO3= 120 000 x 365 (1) AO3 =
(in days) 500 000 900 000
43.80 days(1) AO2 48.67days (1) AO2

(iv) liquid (acid test)

ratio. 60 000 + 10 000 (1) AO3 120 000 __
25 000 85 000 + 30 000 (1) AO2
=2.80:1 (1) AO2 = 1.04:1 (1) AO2
(16)

(d) AO2(4)
AO1: Four marks for stating why bank balance has decreased

She has purchased additional non-current assets in 2023.

Purchased more inventory which is reflected in the inventory level.
Repaid some of the non-current liability which may be a bank loan.
More money tied up in trade receivables. Increased collection period.
Expenses have increased.
Irrecoverable debts.
(1) AO1 x 4 reasons (4)
(e) AO2 (1), AO3 (2), AO4 (3)

OWN FIGURE RULE APPLIES

Points in favour

Sales revenue has increased substantially in the year giving Aaheli a greater market share.
Expenses have been successfully controlled increasing by only £10 000 when sales have
increased by £400 000.
Profit has almost doubled rising from £20 000 to £35 000 per year.
Less idle funds in the current assets.

Points against

The collection period for trade receivables has increased to almost 49 days. Appropriate
credit control should be used.
There has been a significant reduction in the gross profit as a percentage of revenue
from 40% to 25%.
Prices have been reduced or the quality of goods purchased reduced.
The business is probably overtrading with its current long term debt level.
Although the liquid (acid test) ratio is at an acceptable level this is largely because of the
high level of trade receivables. In practice Aaheli has no cash and is unable to pay her debts.

Conclusion
Candidates may conclude that Aaheli’s business is in a good or bad position. Candidates’
answers should be supported by an appropriate rationale.
(6)
 Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-2 Isolated elements of knowledge and understanding which are recall
based.
Generic assertions may be present.
Weak or no relevant application to the scenario set.
Level 2 3-4 Elements of knowledge and understanding, which are applied to the
scenario.
Some analysis is present, with developed chains of reasoning, showing
causes and/or effects applied to the scenario, although these may be
incomplete or invalid.
An attempt at an evaluation is presented, using financial and perhaps
non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding. Application to the
scenario is relevant and effective.
A coherent and logical chain of reasoning, showing causes and effects is
present.
Evaluation is balanced and wide ranging, using financial and perhaps
non-financial information and an appropriate decision is made.
(6)

Q3 Total marks 30

Q4
(a) AO1(8)
AO1: Eight marks for explaining the difference

(i) Perpetual inventory (ii) Periodic inventory

Inventory valued (1) AO1 after each Totals up receipts and issues of
transaction (1) AO1 inventory (1) AO1 and calculates a new
inventory value at the end of a
period (1) AO1

(iii) Allocation of overheads (iv) Apportionment

The allotment of whole cost items of The allotment of proportions (1) AO1
cost to centres or cost units (1) AO1 of items of cost to cost centres or cost
units
Category of costs will relate only to Apportionment based on the most
that cost centre or cost unit (1) AO1 equitable basis. (1) AO1
(8)
(b) AO1 (1): AO2(12) :AO3(3)
AO1: One mark for recording heading job number
AO2: Twelve marks for calculating and correct use of balance
AO3: Three marks for complex calculation and correct use of balance

Quotation for Job 652 (1) AO1

£ £

Raw materials

Cloth material (150 @ £6 + 300 @ £6.50) 2 850 (4) AO2

Buttons and thread 3 @ £30 90 (1) AO2

2 940

Direct labour

Cutting and machining (300 x 10/60 [1] x £9) 450 (2) AO2
[1]
Finishing and packing (300 x 6/60 [1] x £7 210 (2) AO2
[1])
660

Overheads

Cutting and machining (300 x 10/60 [1] x 400 (2) AO3

£8[1] )
Finishing and packing (300 x 6/60 [1] x £6[1] 180 (2) AO2
)
580

4 180

Profit margin 836 (1of) AO3

Quotation price 5 016 (1of) AO2

(16)
Workings
Cloth material
Date Receipts Issues Balance
1 Aug 400 @ £5

23 Aug 150 @ £5 250 @ £5

26 Sept 350 @ £6 250 @ £5

350 @ £6 [1] both
17 Oct 250 @ £5
50 @ £6 300 @ £6 [1]
27 Nov 400 @ £6.50 300 @ £6
400 @ £6.5 [1] both
15 Dec 150 @ £6 150 @ £6
400 @ £6.5

Overheads
Cutting and machining
Overhead recovery rate £80 000 divided by 10 000 hours = £8 per hour
Recovered over 300 x 10 mins/60 mins = 50 hours

Finishing and packing

Overhead recovery rate £36 000 divided by 6 000 hours = £6 per hour
Recovered over 300 x 6 mins/ 60 mins = 30 hours

(c) AO2 (1), AO3 (2), AO4 (3)

In favour of piecework in cutting and machining

Workers will work faster, avoid ‘down time’ and produce the output in less time.
The cost per unit will fall as production time decreases.
The most able workers will be the most appropriately remunerated.
Against piecework in cutting and machining

Teamwork within the department will be lost as workers become more focused on their
own work.
Quality issues may occur as workers work faster and make more mistakes.
Wastage of material will be higher and material appears to be a high proportion of the cost.
Accident levels may increase.

Conclusion
Candidates may conclude that the use of piecework should/ should not be used as the
method of remuneration in the Cutting and Machining Department. Candidates should
support their conclusion with an appropriate rationale.

Level Mark Descriptor

0 A completely incorrect response.
Level 1 1-2 Isolated elements of knowledge and understanding which are
recall based.
Generic assertions may be present.
Weak or no relevant application to the scenario set.
Level 2 3-4 Elements of knowledge and understanding, which are applied to
the scenario.
Some analysis is present, with developed chains of reasoning,
showing causes and/or effects applied to the scenario, although
these may be incomplete or invalid.
An attempt at an evaluation is presented, using financial and
perhaps non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding. Application
to the scenario is relevant and effective.
A coherent and logical chain of reasoning, showing causes and
effects is present.
Evaluation is balanced and wide ranging, using financial and
perhaps non-financial information and an appropriate decision is
made.
(6)

Q4 Total marks 30
Q5
(a)(i) AO1 (2)
AO1: Two marks for explaining how the concept is used

Ensures that profits and assets are not overstated (1) AO1 and liabilities are not understated.
(1) AO1
(2)

(ii) AO1 (2)

AO1: Two marks for explaining how the concept is used

In areas of accounting where a choice of method is available. (1) AO1

Once selected that same method must be used consistently from period to period. (1) AO1
(2)

(b)(i)AO1 (1): AO2(3) :AO3(1)

AO1: One mark for recording balance brought down
AO2: Three marks for posting transactions
AO3: One marks for calculating and posting year end transfer

Electricity Account
Date Narrative £ Date Narrative £
2023 2023
30 Mar Bank 388 1 Jan Balance b/d 400
Discount 12 (1) AO3 13 Nov Bank 15 (1) AO2
received
4 Oct Bank 900 (1) AO2 31 Dec Income stat’ent 1 235 (1of) AO2
31 Dec Balance c/d 350 _____
1 650 1 650
2024 2024
1 Jan Balance b/d 350 (1) AO1
(5)
(ii)AO1 (2): AO2(2): AO3(1)
AO1: Two mark for recording opening balance carried down and second bank entry
AO2: Two marks for posting transaction and transfer to income statement
AO3: One mark for calculating and posting year end balance

Advertising Account
Date Narrative £ Date Narrative £
2023 2023
3 Jan Bank 1 200 1 Jan Balance b/d 1 200 (1) AO1
3 Mar Bank 1 600 (1) 31 Dec Income 3 350 (1of)
AO2 statement AO2
1 Oct Bank 3 500 (1) Balance c/d 1 750 (1) AO3
AO1
6 300 6 300
2024 2024
1 Jan Balance b/d 1 750
(5)

(iii) AO1 (1): AO2(3) :AO3(1)

AO1: Two mark for recording balance brought down
AO2: Two marks for posting transactions
AO3: One marks for calculating and posting year end transfer

Rent Receivable Account

Date Narrative £ Date Narrative £
2023 2023
1 Jan Balance b/d 250 9 Jan Bank 500 (1)
AO2
31 Dec Income 1 000 (1of) 26 Jun Bank 500
stat’ent AO2
4 Dec Bank 500 (1)
AO2
Balance c/d 250 (1) AO3 ____
1 500 1 500
2024 2024
1 Jan Balance b/d 250 (1)
AO1
(5)
(iv)AO1 (1): AO2(4)
AO1: Two mark for recording balance brought down
AO2: Two marks for posting transactions

Provision for depreciation- motor vehicles

Date Narrative £ Date Narrative £
2023 2023
31 Dec Disposal (1) 28 000 (1) 1 Jan Balance b/d 50 000 (1) AO2
AO1 AO2
Balance c/d 68 000 31 Dec Income stat’ent 46 000 (1) AO2
96 000 96 000
2024 2024
1 Jan Balance b/d 68 000 (1of)
AO2
(5)

Workings
Depreciation 220 000 – 70 000 + 80 000 = 230 000 x 20% = 46 000

(c) AO2 (1), AO3 (2), AO4 (3)

For using the accruals concept

There will be a comparison of income for a period with the expenses for that period.
Profit for the period will not be distorted by the pattern of payments and receipts.
Presents a true and fair view.

Against using the accruals concept

Requires some accounting expertise.

Therefore, it will be more costly to employ the appropriate staff.
Timing issues of calculations
Requires a degree of estimation.

Conclusion
Candidates may conclude that the use of the accruals concept should/ should not be used
when preparing financial statements. Candidates should support their conclusion with an
appropriate rationale.
Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-2 Isolated elements of knowledge and understanding which are
recall based.
Generic assertions may be present.
Weak or no relevant application to the scenario set.
Level 2 3-4 Elements of knowledge and understanding, which are applied to
the scenario.
Some analysis is present, with developed chains of reasoning,
showing causes and/or effects applied to the scenario, although
these may be incomplete or invalid.
An attempt at an evaluation is presented, using financial and
perhaps non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding. Application
to the scenario is relevant and effective.
A coherent and logical chain of reasoning, showing causes and
effects is present.
Evaluation is balanced and wide ranging, using financial and
perhaps non-financial information and an appropriate decision is
made.
(6)

Q5 Total marks 30
Q6
(a)
AO1 (2): AO2(2)
AO1: Two mark for opening balance and cash sales
AO2: Two marks for reductions in cash and balance stolen

Cash Stolen
£
Cash 1 November 825 (1) AO1
Cash sales 9 130 (1) AO1
9 955
Less
Cash banked (8 500) (1) AO2
Expenses (735) both
(9 235)
Cash stolen 720 (1of) AO2
(4)

(b) AO2(4): AO3(3)

AO2: Four marks for recording revenue, inventory and purchases
AO3: Three marks for calculating cost of sales and inventory stolen

Value of inventory stolen

£ £
Sales 15 000 (1) AO2
less
Inventory 1 November 12 400 (1) AO2
Purchases 8 700 (1) AO2
21 100
Inventory 3 December
Remaining (1 730) (1) AO2
Stolen (9 370) (1of) AO3

Cost of sales 10 000 (2) AO3/ (1of)

AO3
Gross profit 5 000
15 000
(7)
(c) (i) AO1 (2): AO2(4)
AO1:Two mark for balancing and purchases
AO2: Four marks posting entries

Trade Payables Control Account

Date Details £ Date Details £
2023 2023
Nov Bank 7 850 1 Nov Balance b/d 5 100
(1)AO2
Discount 150 Purchases 8 700 (1)AO1
received (1)AO2
Contra 230 Interest 60 (1)AO2
(1)AO2
3 Dec Balance c/d 5 630
13 860 13 860
4 Dec Balance b/d 5 630
(1of)AO1
If on Cr side
(6)

(ii) AO1 (2): AO2(3)

AO1: Two marks calculating the total credit required and the remaining credit limit
AO2: One mark for stating that Cabe is within the credit limit

£ £
Credit limit 15 000
less
Existing debt to trade receivables 5 630 of
Replacement of inventory on credit 9 370 of
(15 000) (1of) AO2
Remaining credit limit 0 (1of) AO2

Cabe will be able replace his stolen inventory within the credit limits given by his suppliers.
(1of) AO1
(3)
(ii) AO1 (2): AO2(3)
AO1: Two marks calculating the total credit required and the remaining credit limit
AO2: One mark for stating that Cabe is within the credit limit
(d) AO1 (4)
AO1: Four marks for explaining the role of accounting

Need to:

1. Recording information (1) AO1 in an orderly manner for the information to readily be
retrieved for use within the business. (1) AO1

2. Analyse information (1) AO1 in a way that enables the reader to understand the issues
that the business has and lead to a way of rectifying or making best use of the
business advantage. (1) AO1

3. Communicate information (1) AO1 to users in a manner which is understandable and

in common with other businesses eg financial statements. (1) AO1

MAX 2 points x (1) AO1 for recognition and (1) AO1 for development.
(4)

(e) AO2 (1), AO3 (2), AO4 (3)

In favour of not accepting cash payments

Cabe has lost out by the theft of cash from the shop. Not accepting cash payments will
eliminate cash from the shop premises and the risk of theft will be removed.
The requirement to handle cash and bank it would be removed.

Against not accepting cash payments

Some customers prefer to deal in cash, possibly because they do not have a bank account
or a credit card.
The total sales of the business may be reduced due to the policy.
If some form of credit is provided this will not aid the cash flow of the business and could
increase the possibility of irrecoverable debts.
The majority of Cabe’s sales are for cash.
Conclusion
Candidates may conclude that the use of cash payments should/should not be used.
Candidates should support their conclusion with an appropriate rationale.

Level Mark Descriptor

0 A completely incorrect response.
Level 1 1-2 Isolated elements of knowledge and understanding which are recall
based.
Generic assertions may be present.
Weak or no relevant application to the scenario set.
Level 2 3-4 Elements of knowledge and understanding, which are applied to the
scenario.
Some analysis is present, with developed chains of reasoning, showing
causes and/or effects applied to the scenario, although these may be
incomplete or invalid.
An attempt at an evaluation is presented, using financial and perhaps
non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding. Application to the
scenario is relevant and effective.
A coherent and logical chain of reasoning, showing causes and effects is
present.
Evaluation is balanced and wide ranging, using financial and perhaps
non-financial information and an appropriate decision is made.
(6)

Q6 Total marks 30
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