Mark Scheme January 2008

GCE O Level

GCE O Level Accounting (7011)

Edexcel Limited. Registered in England and Wales No. 4496750

Registered Office: One90 High Holborn, London WC1V 7BH
Edexcel is one of the leading examining and awarding bodies in the UK and
throughout the world. We provide a wide range of qualifications including academic,
vocational, occupational and specific programmes for employers.
Through a network of UK and overseas offices, Edexcel’s centres receive the support
they need to help them deliver their education and training programmes to learners.
For further information please call our Customer Services on + 44 1204 770 696, or
visit our website at www.edexcel-international.org.uk.

January 2008
All the material in this publication is copyright
© Edexcel Ltd 2008

2
7011 Mark Scheme January 2008
 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.

3
7011 Mark Scheme January 2008
7011/01 Mark Scheme January 2008

Question Answer Mark

Number
1(a) (13)

General Journal
Debit Credit
Nov 20 Fittings & equipment 2 500√ C
VAT 250√ C
Modern Fittings Ltd 2 750√of
Being purchase of fittings on credit√

Purchases Journal
Goods VAT Total
Nov 6 Leek & Co 6 000 √ C
Less trade discount 25% 1 500 √ C
4 500 √ OF 450 √ OF 4 950 √ OF

Nov 13 Zak Ltd 10 000 √ C

less trade discount 20% 2 000 √ C 2 or
0
8 000 √ OF 784 √√ C 8 784 √ OF
Totals to ledger 12 500 √ OF 1 234 √ OF 13 734

Cash Book
Bank Disc Bank
Rec
Nov 1 Balance b/d 3 500 √ Nov 1 Petty cash 180 √
C
No30 Sales (inc VAT) 33 000 √ Nov 4 Insurance 800 √
C
Nov 9 Zak Ltd 69 √ C3 381 √
C
No 26 Zak Ltd 160 √ C8 624 √
C

229 √
OF

26 x √ = 13 marks

If fittings included in Purchases Journal, no marks for General Journal, even if

correct.

4
7011 Mark Scheme January 2008
Question Answer Mark
Number
1(b) (11)

Stock Account
£
Nov 1 Balance b/d 12 000 √ C

Fittings and Equipment Account

£
Nov 1 Balance b/d 16 000 √ C
Nov 20 Modern fittings 2 500 √ C

Zak Ltd
£
Nov 9 Bank 3 381 √ OF Nov 1 Balance b/d 3 450 √ C
Nov 9 Disc (rec) 69 Nov13 Purchases 8 784 √ OF
Nov 26 Bank 8 624 √ OF
Nov 26 Disc (rec) 160
Bank / Disc. Must be separate √OF. If total must be 3450 C. Save with 2nd payment,
but must say Bank and Disc.
Hag Ltd
£
Nov 13 Petty cash 90 √C Nov 1 Balance b/d 90 √C

Capital Account

Nov 1 Balance b/d 28 010 √C

Leek & Co Account

Nov 6 Purchases 4 950 √ OF

VAT Account
£
Nov 20 Modern Fittings 250 √ of Nov15 Bank (sales) 3 000 √C
Nov 30 Sundries (Pch) 1 234 √ OF
Nov 30 Petty cash 2 √C

Modern Fittings Account

£
Nov20 F & Equip 2 500 √C
Nov20 VAT 250 √of

Sales Account
£
Nov30 Bank / Cash 30 000 √ OF C
(accept
cash)

5
7011 Mark Scheme January 2008
 Purchases Account
£
Nov 30 Sundries 12 500 √ OF
Total, not individual items.
Cleaning Account
£
Nov 30 Petty cash 100

Postage Account
£
Nov 30 Petty cash 37 √
(for both cleaning and postage)

Discount Received
£
Nov30 Sundries 229 √ OF

Insurance
£
Nov 4 Bank 800 √C

22 x √ = 11 marks

6
7011 Mark Scheme January 2008
Question Answer Mark
Number
2(a) (3)

Calculation of gross profit for year ended 31 Dec 2007

original gross profit 65000√ C

add stock drawings 58√√ (√ fig C, √ action)
less carriage inwards -25√√
corrected gross profit 65033√of

6 x √ = 3 marks

Question Answer Mark

Number
2(b) (6)

Business Rates Account

Dec 31 Balance/bank 3 000 √c Dec31 P/L 3 500 √ OF

Balance c/d 500 √c
3 500 3 500

Accept ‘accrual’/’pre-payment’ as well as ‘balance c/d’.

3 x √ = 1½ marks

Insurance Account

Dec 31 Balance/bank 2 400 √c Dec31 P/L 1 400 √ OF

Dec31 Balance c/d 1 000 √c
2 400 2 400

3 x √ = 1½ marks

Provision for Deprn on F & E Account

Dec 31 Balance/bank 4 230 √of Jan 1 Balance b/d 1 800 √ c

Dec31 P/L 2 430 √ c
4 230 4 230

3 x √ = 1½ marks

7
7011 Mark Scheme January 2008
 Provision for Bad Debts Account
c
Dec 31 P/L 285 √ Jan 1 Balance b/d 600 √c
Dec 31 Balance c/d 315 √ OF
600 600

3 x √ = 1½ marks

Question Answer Mark

Number
2(c) (7)

Profit and loss account for year ended 31 December 2007

Gross profit 65033√ OF

add prov for bad debts 285√√ OF

(√ fig, √action)

65318

Less
Bad debts 120√C
Rent 18200√ C
Rates 3500√ OF
Wages 23000√C
Carriage outwards 575√√ C (600√ or 625√)
Insurance 1400√√ OF
Prov for depn on F&E 2430√√ OF 49225
16093√ OF
Net Profit NC

14 x √ = 7 marks

8
7011 Mark Scheme January 2008
Question Answer Mark
Number
2(d) (8)

Balance Sheet at 31 December 2007

Fixed Assets
furniture & equipment at
cost 18000√c
13770√OF
less provision for deprn 4230√ OF NCSM

Current Assets
Stock 10000√C
Debtors 6300√C 5985√√
less provision for bad
debts -315√ OF
Prepaid insurance 1000√C
32485√ OF
Bank 15500√C NCSM

Less Current Liabilities

Creditors 2200√C
2700√OF
Rates accrued 500√C NCSM
Working Capital 29785
43555
Capital 49520√C
Net Profit 16093√ OF 65613
22058√√
(or
22000√ 43555
less Drawings 58√) (or 21942√)

16 x √ = 8 marks

9
7011 Mark Scheme January 2008
Question Answer Mark
Number
3(a) (8)

Where 2√ split between DIRECTION and FIGURE

Item Trial balance Net profit

(i) No effect Lower than it should be by £460

(ii) Debit side would exceed credit side Lower than it should be by £450√
by £450√√
(iii) No effect √ Lower than it should be by £600√√
(√ fig, √ dir)

(iv) Debit side would exceed the credit Lower than it should be by £200√√
side by £200√√
(v) Credit side would exceed the debit Higher than it should be by £300√√
side by £300√√
(vi) No effect √ No effect √

16 x √ = 8 marks

Question Answer Mark

Number
3(b) If a suspense account had been opened to make the
trial balance agree, what would have been the
suspense account balance and on which side?

The suspense account would have needed a credit

balance√ of £350√
4 x √ = 2 marks (2)

Question Answer Mark

Number
3(c) (3)

Suspense Account
Balance b/d 350√OF√C
C√√OF√
Bad debt recovered 450√C Discount received 150√C
Returns inward 200√C Discount allowed 150√C

650 650

6 x √ = 3 marks

10
7011 Mark Scheme January 2008
Question Answer Mark
Number
4(a) (4)

Give ticks for correct/OF figures and narration. Items must not be included in BOTH
cash book and bank reconciliation statement. This is known as “duplication” and will
result in non award of mark in cash book and bank reconciliation statement. Such
items will be marked “D” by examiners.

Bank reconciliation statement at 31 December 2007

Bank statement balance at 31 Dec 2007 2 460-40√C
Add amounts not yet credited by bank 370-30√√
(√ fig, √ adding)
2 830-70
Less
Cheques not yet presented
Beale 330-20√ (fig
and action)
Khan 475-00√
Acharya 76-00√ 881-20

Corrected balance 1 949-50√√of(nc)

√OF√√C

8 x √ = 4 marks

11
7011 Mark Scheme January 2008
Question Answer Mark
Number
4(b) (4)

Write up the cash book and work back to calculate original balance on 31 December
2007.

Cash Book (bank columns only)

Narration £ Narration £
Balance b/d 1 759-64√√of √√C
√OF
Juggasaw 51-50√c Trade association 101-20√c
( 371-50√√)Jenko 320-00√c Charges 80-44√c
Balance c/d 1 949-50√√of
2 131-14 2 131-14

2 or 0 of

Give ticks for initial Balance b/d only if OF Balance c/d is included form the Bank
rec.
If narration and figure don’t match, award marks for correct actions according to the
figure.
8 x √ = 4 marks

Question Answer Mark

Number
4(c) Evaluate the usefulness of a bank rec statement to
Julia Campbell’s business.

Award √√ for conclusion …. √√√√ for reason in favour

and √√√√ for reason against.

Example answer:
Very useful √√ because it seeks to find the correct
amount of money held at the bank √√ by correcting
both versions... they should then be the same. √√
However, errors can still be present. √√ The
reconciliation does not guarantee the correct bank
balance. √√

1 mark for conclusion but cannot be an attempt at a

justification e.g. ‘it is very useful’.

10 x √ = 5 marks (5)

12
7011 Mark Scheme January 2008
Question Answer Mark
Number
5(a)(i) (4)

Calculation of Total Sales

Total Debtors Account

Balance b/d 740√C Bank 7 340√C
SALES 7 280√OF Balance c/d 680√C
8 020 8 020

Credit sales 7 280√OF

Cleaning shop windows 200√C
Cash sales 98 800√C
TOTAL SALES 106 280√OF

8 x √ = 4 marks

Question Answer Mark

Number
5(a)(ii) (2)

Rent Account
Balance b/d 800√C Profit and loss 6 880√OF
Bank / cash 6 900√C Balance c/d 820√C
7 700 7 700

4 x √ = 2 marks

Question Answer Mark

Number
5(a)(iii) (2)

Stock Account
Balance b/d 10 200√ C Trading 10 200√OF
Trading 15 000√ OF Balance c/d 15 000√C

4 x √ = 2 marks

13
7011 Mark Scheme January 2008
Question Answer Mark
Number
5(b) Up to √√√√ for a point explaining value of accruals
using example for Joan’s business.
Up to √√√√ for a point explaining absence of
accruals/alternative method.
Up to √√ for conclusion.

Maximum √√√√ if accruals concept explained without

reference to Joan’s business.

Example answer
The rent account has been adjusted so that the rent
consumed during this accounting period is transferred
to the P/L account to give an accurate profit. √√ Rent
prepaid at the end of the year is shown in the balance
sheet as at asset. √√
Without this adjustment, profit would be inaccurate
√√ and balance sheet would not give a fair view. √√
Overall, it is essential that accruals concept is applied
to give an accurate profit and a true and fair balance
sheet. √√
10 x √ = 5 marks (5)

Question Answer Mark

Number
6(a) (6)

K Knife and F Fork

Profit and loss Appropriation Account for 8 months ended 31 December 2007
Interest on Capital Net Profit 90 000√
K Knife 1 840√√OF Interest on Drawings
F Fork 560√√ OF 2 400 Knife 300√
Salary to Fork 24 000√√ 26 400 Fork 260√√
OF
Share of Profit
K Knife 32 080√ OF
F Fork 32 080√ OF 64 160
90 560 90 560

12 x √ = 6 marks

14
7011 Mark Scheme January 2008
 Question Answer Mark
Number
6(b) (5)

Current Account of F Fork

Dec 31 Drawings 26 000 √√ OF Dec31 Int on Capital 560 √ OF

Dec 31 Int on drawings 260 √ OF
Dec 31 Capital –Fork 25 380 √√ OF Dec31 Salary 24 000 √ OF
Dec 31 Balance c/d 5 000 √ OF Dec31 Share of Prft 32 080 √ OF
56 640 56 640
Jan 1 Balance b/d 5 000 √

10 x √ = 5 marks

Question Answer Mark

Number
6(c) (2)

Capital Account of F Fork

Dec 31 Balance c/d 39 380 √ Apr 1 Balance b/d 14 000 √

Dec31 Current –F 25 380 √
39 380 39 380
Jan 1 Balance b/d 39 380 √

4 x √ = 2 marks

15
7011 Mark Scheme January 2008
Further copies of this publication are available from
Edexcel UK Regional Offices at www.edexcel.org.uk/sfc/feschools/regional/
or International Regional Offices at www.edexcel-international.org/sfc/academic/regional/

For more information on Edexcel qualifications, please visit www.edexcel-international.org/quals

Alternatively, you can contact Customer Services at www.edexcel.org.uk/ask or on + 44 1204 770 696

Edexcel Limited. Registered in England and Wales no.4496750

Registered Office: One90 High Holborn, London, WC1V 7BH

16
7011 Mark Scheme January 2008