Cambridge Assessment International Education: Accounting 0452/21 October/November 2018

Cambridge Assessment International Education
Cambridge International General Certificate of Secondary Education
ACCOUNTING 0452/21
Paper 2 October/November 2018
MARK SCHEME
Maximum Mark: 120
Published
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.
Cambridge International will not enter into discussions about these mark schemes.
Cambridge International is publishing the mark schemes for the October/November 2018 series for most
Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level
components.
This document consists of 17 printed pages.
© UCLES 2018 [Turn over

0452/21 Cambridge IGCSE – Mark Scheme October/November 2018
PUBLISHED
Generic Marking Principles
These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the
specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these
marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
Marks must be awarded positively:
• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the
scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the
question as indicated by the mark scheme. The meaning, however, should be unambiguous.
Rules must be applied consistently e.g. in situations where candidates have not followed instructions or in the application of generic level
descriptors.
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PUBLISHED
Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may
be limited according to the quality of the candidate responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or
grade descriptors in mind.

PUBLISHED
Question Answer Marks
1(a)(i) To notify Thato of an overcharge/faulty goods 1

To notify Thato of goods being returned
To request that Thato reduce the amount of the invoice/request credit note
Any 1 purpose (1)
1(a)(ii) 1
credit Abebe debit Abebe
no entry
account account
9(1)
1(b)(i) To inform Abebe of the amount due 1

To provide a summary of the transactions for the month/period
To allow Abebe to check his records
Any 1 purpose (1)
1(b)(ii) The statement is a summary of the transactions which have already been recorded in the accounting records 1
1(c)(i) Thato purchased in large quantities/to encourage Thato to purchase in large quantities 1
Thato is a loyal customer/encourage repeat business
Thato is in the same trade
Any 1 reason (1)
1(c)(ii) To encourage Thato to pay promptly / within the credit period allowed / within 30 days 1
1(c)(iii) $5000 – (2½% × 5000) = 5000 – 125 = 4875 (1) 1
1(c)(iv) Purchases ledger 1

PUBLISHED
1(d) Thato 5
Purchases journal
Date Details $ $
2018
Aug 4 Nyack
Goods 6 250
Less Trade discount 1 250 5 000 (1)
9 Gaby
Goods 2 600
Less Trade discount 520 2 080 (1)
31 Transfer to purchases account 7 080 (1) OF
Purchases returns journal
Date Details $ $
2018
Aug 13 Gaby
Goods 100
Less Trade discount 20 80 (1)
31 Transfer to purchases returns account 80 (1) OF

PUBLISHED
1(e) Thato 6
Purchases account
Date Details $ Date Details $
2018
Aug 31 Purchases for month (1) OF 7 080
Purchases returns account

2018
Aug 31 Returns for month (1) OF 80
Gaby account
2018 2018
Aug 13 Purchases returns (1) OF 80 Aug 9 Purchases (1)OF 2 080
30 Bank (1) OF 1 960
Discount (1) OF 40
1(f) Business entity (1) 3

Money measurement (1)
Realisation (1)

PUBLISHED
2(a) Reduces the number of entries in the main cash book 1

Reduces the small cash payments in the main cash book
Reduces the number of entries in the ledger
Allows the chief cashier to delegate some of the work
Provides training for junior members of staff
Or other suitable advantage
Any 1 advantage (1)
2(b) Sara 2
Cleaning account
2018 2018
Jul 31 Petty cash (1) 55 Jul 31 Petty cash (1) 5
2(c) Sabeena account (1) Debit (1) 2
2(d) 3
debit credit
$ $
petty cash (1) 104* cash/bank (1) 104*
*(1) for 2 matching correct figures

PUBLISHED
2(e) Sara 4
Commission receivable account
2017 2017
Aug 1 Balance b/d 190 Aug 3 Bank } 190
2018 2018 }(1)
Jul 31 Income Feb 1 Bank } 200
statement (1)OF 420 Jul 31 Balance c/d 220
610 610
2018
Aug 1 Balance b/d (1) 220
+ (1) Dates

PUBLISHED
2(f) Sara 8
Rates and insurance account

2017 2017
Aug 1 Balance (insurance) b/d 570 Aug 1 Balance (rates) b/d 800
2017 2018
Sept 1 Bank (rates) (1) 5 200 Jul 31 Drawings (1) 1 000
Nov 1 Bank (ins.) (1) 3 400 Income statement
(1)
2018 Balance c/d 400 Rates 4800
Jul 31 Ins 2370
(1)OF 7 170
Balance c/d 600
9 570
9 570
2018 2018
Aug 1 Balance 600 Aug 1 Balance
(ins.) b/d (1) (rates) b/d (1) 400
+ (1) Dates
2(g) Financial information is reliable only 2

if it can be depended on to represent actual events
if it is free from error
if it free from bias
Any 2 comments (1) each
2(h) Comparability (1) 3

Relevance (1)
Understandability (1)

PUBLISHED
3(a) Sadia 13
Income Statement for the year ended 30 September 2018
$ $
Fees from clients (42 100 – 2880(1) + 3120(1)) 42 340
Wages (29 800 – 3500(1)) 26 300

Advertising (3150 – 630(1)) 2 520
Rent (1200 + 190(1) – 200(1)) 1 190
General expenses 1 775 (1)
Provision for doubtful debts ((5% × 3120(1)) – 144(1)) 12
Depreciation
Office equipment ((26 000 – 9360)(1) × 20%(1)) 3 328
Office furniture (11 100 + 1450 – 11 400) 1 150 (1) 36 275
Profit for the year 6 065 (1) OF
3(b) Revenue 3
Purchases
Inventory (opening/closing)
Returns (sales/purchases)
Carriage inwards
Carriage outwards
Or other suitable item
Any 3 items (1) each
3(c) Assess prospects of any requested loan/overdraft being repaid when due 2
Assess prospects of any interest on loan/overdraft being paid when due
Assess security available to cover any loan/overdraft
Or other acceptable reason
Any 2 reasons (1) each

PUBLISHED
3(d) Competitors 2
Employees
Government
Lenders/potential lenders
Manager
Potential buyers of the business/investors
Potential partners
Trade receivables/clients/customers
Trade payables/suppliers
Owner/Sadia
Or other acceptable interested party
Any two interested parties (1) each
4(a) To ensure that the trial balance totals agree 2

To allow draft financial statements to be prepared
To assist in the correction of errors
To assist in ensuring errors are discovered

PUBLISHED
4(b) Rizwan 10
Journal
Details $ $
1 Suspense 1120 (1)

Rent receivable 560 (1)
Rent payable 560 (1)
Correction of error, rent receivable treated as rent payable (1)
2 Office equipment 890 (1)

Purchases 890 (1)
Correction of error, office equipment treated as purchases (1)
3 (No entry) – (1)

Suspense 21 (1)
Correction of error, petty cash omitted from trial balance (1)
4(c) Higher mark-up 2

Lower cost price of goods
Higher selling price of goods
Lower rate of trade discount allowed to customers
Higher rate of trade discount received from suppliers
Different mix of goods
Or other suitable reason
4(d) Year ended 30 September 2017 (1) 2
Reason
The business was run less efficiently in 2018
The percentage of expenses to revenue was greater in 2018
Any 1 comment (1)

PUBLISHED
4(e) Reduce expenses/control expenses better 2

Obtain more other income
Change the type of expenses
Or other suitable ways
Any 2 ways (1) each
4(f) Increase in profit 2

Reduction in capital/increase in drawings
Reduction in long term loans
5(a) Easier to see amount invested by each partner 2

Easier to calculate interest on capital
Easier to see the profit retained by each partner
Easier to see if a partner is making excessive drawings
Any 2 advantages (1) each

PUBLISHED
5(b) Mark and Ella 7

Current accounts
Date Detail Mark Ella Date Detail Mark Ella
$ $ $ $
2017 2017
Sept 1 Balance b/d 1 800 Sept 1 Balance b/d 2 000
2018 2018
Aug 31 Drawings (1) 12 000 16 000 Aug 31 Interest on capital (1) 6 000 4 000
Interest on drawings (1) 960 1 280 Salary (1) 15 000
Balance c/d 11 640 Profit share (1) 7 920 7 920
Balance c/d 840
14 760 28 920 14 760 28 920

2018 2018
Sept 1 Balance b/d (1)OF 840 Sept 1 Balance b/d (1)OF 11 640

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5(c) Mark and Ella 6

Statement of Financial Position at 31 August 2018
$ $ $
Assets
Non-current assets
Premises at cost 165 000

Fixtures & equipment at book value 24 400
Motor vehicles at book value 14 750
204 150 (1)
Current assets
Inventory 14 950
Trade receivables 16 800
Less Provision for doubtful debts 420 16 380 (1)
Petty cash 150
31 480 (1)
Total assets 235 630
Capital and liabilities

Mark Ella Total
Capital accounts 120 000 80 000 200 000 (1)
Current accounts (840) 11 640 10 800 (1) OF
210 800
Current liabilities
Trade payables 19 240
Bank overdraft 5 590
24 830 (1)
Total capital and liabilities 235 630

PUBLISHED
5(d) Ella has higher drawings so higher interest/Mark has lower drawings so lower 2
interest
Present agreement may discourage Ella from taking excessive drawings
Not charging interest on drawings will reduce Mark’s share of the profits
Or other suitable comments
Any 2 comments (1) each
5(e) What profit share he would get 2

Whether interest on capital is allowed/interest on drawings is charged
Whether he would get a partnership salary
Comparison of present income with possible income if a partner
Whether capital would have to be invested
Responsibilities compared to those he now has
Will be responsible for the debts of the business
The capital employed/value of the business
Profitability of the business
Prospects for the future
Or other suitable considerations
Any 2 considerations (1) each
6(a) Total of the direct materials, direct labour and direct expenses 1
6(b) Indirect factory wages, factory rent, factory insurance, depreciation of factory machinery, repair of factory machinery, etc. 2
Any 2 factory overheads (1) each
6(c) 36 500 × 20% = 7300 (1) 1

PUBLISHED
6(d) Long term loan 2

Mortgage
Admit a partner
Form a limited company
Government grant
Or other suitable source of finance
Any 2 sources (1) each
6(e) $ 4
Prime cost 30 000 + 20% 36 000 (1)
Factory overheads 6500 + 1500 8 000 (1)
Cost of production 44 000 (1) OF
Alternative calculation
Present cost of production 36 500 (1)
Increase in prime cost 30 000 x 20% 6 000 }(1)
Increase in factory overheads 1 500 }
Cost of production 44 000 (1) OF
Gross profit 44 000 × 18% = 7 920 (1) OF
6(f) Gross profit increases by only $620 OF 4

May not be worthwhile if the gross profit only increases by this amount
Interest may have to be paid on any money borrowed
May not be able to obtain the necessary finance
The figures provided are only estimates
Costs of materials and labour may increase by more than estimated
Customers may demand further price reductions
May not be able to sell additional output
Or other relevant disadvantages
Any 4 disadvantages (1) each

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Cambridge Assessment International Education

Cambridge International General Certificate of Secondary Education

This document consists of 17 printed pages.

© UCLES 2018 [Turn over

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

GENERIC MARKING PRINCIPLE 2:

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

GENERIC MARKING PRINCIPLE 4:

© UCLES 2018 Page 2 of 17

GENERIC MARKING PRINCIPLE 6:

© UCLES 2018 Page 3 of 17

1(a)(i) To notify Thato of an overcharge/faulty goods 1

1(b)(i) To inform Abebe of the amount due 1

1(c)(iii) $5000 – (2½% × 5000) = 5000 – 125 = 4875 (1) 1

1(c)(iv) Purchases ledger 1

© UCLES 2018 Page 4 of 17

31 Transfer to purchases account 7 080 (1) OF

Purchases returns journal

31 Transfer to purchases returns account 80 (1) OF

© UCLES 2018 Page 5 of 17

Aug 31 Purchases for month (1) OF 7 080

Purchases returns account

Aug 31 Returns for month (1) OF 80

1(f) Business entity (1) 3

© UCLES 2018 Page 6 of 17

2(a) Reduces the number of entries in the main cash book 1

Date Details $ Date Details $

Jul 31 Petty cash (1) 55 Jul 31 Petty cash (1) 5

2(c) Sabeena account (1) Debit (1) 2

petty cash (1) 104* cash/bank (1) 104*

*(1) for 2 matching correct figures

© UCLES 2018 Page 7 of 17

© UCLES 2018 Page 8 of 17

Date Details $ Date Details $

2(g) Financial information is reliable only 2

2(h) Comparability (1) 3

© UCLES 2018 Page 9 of 17

Wages (29 800 – 3500(1)) 26 300

© UCLES 2018 Page 10 of 17

Question Answer Marks

4(a) To ensure that the trial balance totals agree 2

© UCLES 2018 Page 11 of 17

1 Suspense 1120 (1)

2 Office equipment 890 (1)

3 (No entry) – (1)

4(c) Higher mark-up 2

4(d) Year ended 30 September 2017 (1) 2

© UCLES 2018 Page 12 of 17

4(e) Reduce expenses/control expenses better 2

4(f) Increase in profit 2

Question Answer Marks

5(a) Easier to see amount invested by each partner 2

© UCLES 2018 Page 13 of 17

5(b) Mark and Ella 7

14 760 28 920 14 760 28 920

© UCLES 2018 Page 14 of 17

5(c) Mark and Ella 6