0452 Accounting Past Papers Copm. 22 (2015 To 2019) N

Cambridge International Examinations
Cambridge International General Certificate of Secondary Education

*6433712633*
ACCOUNTING 0452/22
Paper 2 February/March 2015
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 an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, 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.
The businesses mentioned in this Question Paper are fictitious.
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 question.
This document consists of 21 printed pages and 3 blank pages.
IB15 03_0452_22/4RP
© UCLES 2015 [Turn over
2
1 (a) Explain the meaning of the following terms.
Bad debts
Bad debts recovered
Provision for doubtful debts
[6]
(b) Suggest two ways in which the risk of bad debts may be reduced.
[2]
(c) Explain why maintaining a provision for doubtful debts is an application of the principle of
prudence.
[2]
© UCLES 2015 0452/22/M/15

3
Nisha Sharma is a trader. Her financial year ends on 31 January. She maintains a provision for
doubtful debts at 3% of the trade receivables at the end of each year.
She provided the following information.
On 1 February 2014 the provision for doubtful debts amounted to $435.
During the year ended 31 January 2015 bad debts recovered amounted to $123.
On 31 January 2015 trade receivables amounted to $13 950, including $150 owed by
AX Limited which should be written off. The provision for doubtful debts is to be adjusted to
3% of the remaining trade receivables.
REQUIRED
(d) Prepare journal entries on 31 January 2015 to record:
1 writing off the amount owed by AX Limited

2 adjusting the provision for doubtful debts
Narratives are required.
Nisha Sharma
Journal
Debit Credit
$ $
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[6]
© UCLES 2015 0452/22/M/15 [Turn over

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(e) Complete the following table to show the effect on the profit for the year ended
31 January 2015 if the items listed were omitted from the income statement.
The first one has been completed as an example.
Overstated Understated
$ $
Bad debts written off 150
Bad debts recovered
Adjustment to provision for doubtful debts

[4]
[Total: 20]
© UCLES 2015 0452/22/M/15

5
2 Nirmal Singh is a trader. He maintains a full set of accounting records. All purchases are made on
credit terms. His purchases journal and purchases returns journal for February 2015 are shown
below.
Purchases Journal
Amount
Date Name
$
2015
Feb 8 Ansari Stores 640
(after 20% trade discount)
Feb 19 T Marks 480
Purchases Returns Journal
Amount
Date Name
$
2015
Feb 14 Ansari Stores 280
(after 20% trade discount)
REQUIRED
(a) Calculate the list price of the goods purchased by Ansari Stores on 8 February.
[1]
(b) State why trade discount was deducted from the goods returned on 14 February.
[1]
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On 1 February 2015 Nirmal Singh’s purchases ledger included the following accounts.
$
Ansari Stores 560 credit
T Marks 200 credit
The following additional transactions took place in February 2015.
Feb 4 Paid $200 by cheque to T Marks
10 The bank dishonoured the cheque paid to T Marks on 4 February
26 Paid $546 to Ansari Stores by cheque in full settlement of the balance owing on
1 February 2015
28 T Marks charged $10 interest on the overdue account.
REQUIRED
(c) Name the business document Nirmal Singh would use to record the following transactions.
You can find the transactions on page 5 and 6.
February Transaction Document
4 Payment
8 Purchases
14 Purchases returns
[3]
© UCLES 2015 0452/22/M/15

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(d) Prepare the following accounts in the ledger of Nirmal Singh for the month of February 2015.
Balance the accounts and bring down the balances on 1 March 2015.
Nirmal Singh
Ansari Stores account
Date Details $ Date Details $
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T Marks account
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[13]
[Total: 18]
© UCLES 2015 0452/22/M/15 [Turn over

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3 Amla Khan is a trader. Her financial year ends on 31 December.
Amla Khan maintains one combined account for rates and insurance. She provided the following
information.
On 1 January 2014 three months’ rates, $480, was outstanding and four months’ insurance,
totalling $700, was prepaid.
During the year ended 31 December 2014 the following payments were made by cheque.
$
Rates 16 months to 31 January 2015 2560
Insurance 12 months to 30 April 2015 2400
REQUIRED
(a) Prepare the rates and insurance account in the ledger of Amla Khan for the year ended
31 December 2014. Balance the account and bring down the balances on 1 January 2015.
Amla Khan
Rates and insurance account
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[9]
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(b) Name the section of the statement of financial position at 31 December 2014 in which the
balance on the rates and insurance account would appear.
Give a reason for your answer.
Section of statement of financial position
Reason
[2]
On 1 October 2014 Amla Khan decided to sublet part of her premises at an annual rent of $4800.
On that date she received a cheque for two months’ rent.
REQUIRED
(c) Prepare the rent receivable account in the ledger of Amla Khan for the year ended
31 December 2014. Balance the account and bring down the balance on 1 January 2015.
Amla Khan
Rent receivable account
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[4]
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(d) Name the section of the statement of financial position at 31 December 2014 in which the
balance on the rent receivable account would appear.
Section of statement of financial position
Reason
[2]
[Total: 17]
© UCLES 2015 0452/22/M/15

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4 The financial year of Joda Limited ends on 31 January. The following information is available for
the year ended 31 January 2015.
$
Revenue 164 000
Cost of sales 125 542
Expenses 24 748
REQUIRED
(a) Calculate the gross profit as a percentage of revenue. The calculation should be correct to
two decimal places.
[3]
(b) Suggest two reasons why the gross profit as a percentage of revenue is lower than it was for
the previous financial years.
[2]
(c) Calculate the profit for the year as a percentage of revenue. The calculation should be
correct to two decimal places.
[3]
© UCLES 2015 0452/22/M/15 [Turn over

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Joda Limited provided the following information at 31 January 2015.
$
Inventory 18 150
Bank overdraft 7 150
Trade receivables 15 300
Trade payables 10 960
Petty cash 120
REQUIRED
(d) Calculate the current ratio. The calculation should be correct to two decimal places.
[2]
(e) Comment on your answer to (d).
[2]
(f) Calculate the quick ratio. The calculation should be correct to two decimal places.
[2]
(g) Suggest one reason why the quick ratio is lower than it was in the previous financial years.
[1]
© UCLES 2015 0452/22/M/15

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Joda Limited provided the following information for the year ended 31 January 2015.
1 The total revenue was

$
Cash sales 9 600
Credit sales 154 400
Credit customers are allowed a credit period of 30 days.
2 The total of the trade receivables on 31 January 2015 amounted to $15 300.
REQUIRED
(h) Calculate the collection period for trade receivables. Round your answer up to the next
whole day.
[2]
(i) State whether Joda Limited would be satisfied with the collection period for trade receivables.
Satisfied or unsatisfied
Reason
[2]
[Total: 19]
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5 LWS Limited is an advertising agency. Their financial year ends on 30 November. They provided
the following information.
$
At 1 December 2013
Ordinary share capital ($1 shares) 350 000

General reserve 95 000
Retained earnings 13 200
Equipment at cost 65 000
Fixtures and fittings at cost 24 000
Provision for depreciation of equipment 23 400
Provision for depreciation of fixtures and fittings 9 600
For the year ended 30 November 2014
Fees from clients 199 500

General expenses 36 140
Wages 98 200
Insurance 3 450
Other income 17 300
Fixtures and fittings purchased 1 July 2014 7 200
Proceeds from issue of $1 ordinary shares 50 000
Interim dividend paid on ordinary shares 17 500
Final dividend paid on ordinary shares 35 000
Additional information
1 At 30 November 2014 fees owing from clients amounted to $4500 and wages owing to
employees amounted to $12 600.
2 The insurance is for a period of 15 months to 28 February 2015.
3 Equipment is depreciated at 20% per annum using the reducing (diminishing) balance
method.
4 Fixtures and fittings are depreciated at 10% per annum on cost. Depreciation on new fixtures
and fittings is calculated from the date of purchase.
5 $12 000 was transferred to the general reserve on 30 November 2014.
© UCLES 2015 0452/22/M/15

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REQUIRED
(a) Prepare the income statement for the year ended 30 November 2014.
LWS Limited
Income Statement for the year ended 30 November 2014
$ $
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[10]
© UCLES 2015 0452/22/M/15 [Turn over

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(b) Complete the following statement of changes in equity for the year ended
30 November 2014.
LWS Limited
Statement of Changes in Equity for the year ended 30 November 2014
Share General Retained Total

Details capital reserve earnings
$ $ $ $
On 1 December 2013 350 000 95 000 13 200 458 200
Profit for the year

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Dividend paid – interim
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Dividend paid – final
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Transfer to general reserve
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Share issue
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On 30 November 2014
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[6]
LWS Limited requires $100 000 in order to expand the business. After the first two years this
should increase the annual profit before interest by $30 000.
It is proposed to raise the funds by either issuing 3% debentures or 4% preference shares.
REQUIRED
(c) State two features of debentures.
[2]
(d) State two features of preference shares.
[2]
© UCLES 2015 0452/22/M/15

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(e) Suggest two reasons why it may be more beneficial to ordinary shareholders if the additional
funds were raised by an issue of ordinary shares.
[2]
[Total: 22]
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6 (a) State two advantages of being a partner rather than a sole trader.
[2]
(b) State one reason why a partnership agreement should be drawn up when a partnership is
formed.
[1]
Ben and Tom Panesar formed a partnership on 1 February 2014.
The following information is available.
1 On 1 February 2014 Ben contributed $90 000 capital and Tom contributed $60 000.
On 1 August 2014 Ben contributed a further $10 000 capital.
Interest on capital is allowed at the rate of 3% per annum.
2 Tom was to be entitled to an annual salary of $9000 per annum for the first four months of
the first financial year. After that date the salary was to increase to $12 000 per annum.
3 During the year ended 31 January 2015 Ben’s drawings amounted to $9800 and Tom’s
drawings amounted to $20 800.
4 Interest on drawings for the year ended 31 January 2015 amounted to $490 for Ben and
$1040 for Tom.
5 Profits and losses are shared 2/3 to Ben and 1/3 to Tom.
6 On 1 February 2014 Tom made a loan of $15 000 to the business.

The loan is repayable on 31 January 2020.
Loan interest of 4% per annum is to be credited to Tom’s current account.
7 The profit for the year ended 31 January 2015 (after loan interest) was $27 920.
© UCLES 2015 0452/22/M/15

19
REQUIRED
(c) Prepare the profit and loss appropriation account for the year ended 31 January 2015.
Ben and Tom Panesar

Profit and Loss Appropriation Account for the year ended 31 January 2015
$ $
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[8]
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Ben and Tom Panesar provided the following information on 31 January 2015.
$
Premises at book value 95 000
Machinery and equipment at book value 46 500
Inventory 28 750
Other payables 1 390
Bank 5 870 debit
REQUIRED
(d) Prepare the statement of financial position at 31 January 2015.
The calculation of the current account balances may be shown within the statement of
financial position or as separate calculations in the space provided below.
© UCLES 2015 0452/22/M/15

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Ben and Tom Panesar

Statement of Financial Position at 31 January 2015
$ $ $
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[13]
[Total: 24]
© UCLES 2015 0452/22/M/15

* 2 4 2 6 1 5 2 9 7 2 *
ACCOUNTING 0452/22
1 hour 45 minutes

This document consists of 20 printed pages.
DC (LK) 111775/5
2
1 Abhinav maintains a petty cash book using the imprest system. The imprest amount of $120 is
restored on the first day of each month.
The petty cashier entered the transactions in the petty cash book for the first week of
February 2016 in the total column of the petty cash book as shown on the opposite page. He was
then taken ill and was away from the office for the rest of the month.
The following transactions took place.
$
February 10 Received refund from stationery supplier for
overcharge on 7 February 4.00
13 Paid train fare 9.50
15 Paid Office Supply Limited, a credit supplier 29.00
21 Paid taxi fare 9.90
26 Paid window cleaner 17.00
REQUIRED
(a) Complete the entries for the transactions on 4 February and 7 February in Abhinav’s petty
cash book on the page opposite.
Enter the transactions for 10 February to 26 February in the petty cash book.
Balance the petty cash book on 29 February and bring down the balance on 1 March 2016.
[10]
The petty cash book is printed on the next page.
© UCLES 2016 0452/22/F/M/16

Abhinav – Petty Cash Book
Total Date Details Total Postage and Travel Cleaning Ledger
© UCLES 2016
received paid stationery expenses accounts
$ 2016 $ $ $ $ $
24.00 Feb 1 Balance b/d …………. ………….. …………. …………. …………..
96.00 Bank …………. ………….. …………. …………. …………..
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0452/22/F/M/16
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[Turn over
4
(b) (i) State the amount which would have been received on 1 March 2016 when the petty cash
was restored to the imprest amount.
.......................................................................................................................................[1]
(ii) State the double entry for restoring to the imprest amount.
debit credit
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[2]
(c) Show the entries which would be made in the postage and stationery account in
February 2016.
It is not necessary to close the account.
Abhinav
Postage and stationery account
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[2]
(d) Name the accounting principles which Abhinav ignored in each of the following.
(i) Abhinav decided that the profit would increase if he changed the method of depreciation
on fixtures from the straight line method to the reducing (diminishing) balance method.
.......................................................................................................................................[1]
(ii) Abhinav decided that the retirement of the manager would adversely affect the business,
so he reduced the profit for the year by $5000.
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(iii) Abhinav recorded a sale of goods to Wahid who had seen goods on display in the shop
window and promised to return the following week with the cash.
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(iv) Abhinav intends to trade for several years but decided to record his motor vehicle at the
possible sale value rather than the book value.
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[Total: 19]
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2 The cash book of Aireville Limited was balanced on 31 December 2015 and showed an overdraft
of $ 3420. On the same date, the bank statement showed an overdraft of $1800.
A comparison of the cash book and the bank statement revealed the following.
$
1 Items appearing only on the bank statement
Bank charges 190

Dishonoured cheque, PB Limited 330
2 Items appearing only in the cash book
Cash sales paid into bank 28 December 2015 1560

Cheque paid to M Raja, a credit supplier 2700
3 Debit side of the cash book being undercast 1000
REQUIRED
(a) Update the cash book of Aireville Limited.

Bring down the updated bank balance on 1 January 2016.
Aireville Limited
Cash book (bank columns only)
2016
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[4]
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(b) Prepare a bank reconciliation statement for Aireville Limited at 31 December 2015.
Aireville Limited
Bank Reconciliation Statement at 31 December 2015
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[6]
The financial year of Aireville Limited ends on 31 December.
At 1 January 2015 $
Ordinary share capital – 600 000 shares of $0.50 each 300 000
During the year ended 31 December 2015
Issue of ordinary shares – 100 000 shares of $0.50 each 50 000

Payment of final dividend relating to the financial year ended
31 December 2014 25 000
Payment of interim dividend relating to the financial year ended
31 December 2015 15 000
At 31 December 2015
Profit for the year 49 000

Transfer to general reserve 10 000
© UCLES 2016 0452/22/F/M/16

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REQUIRED
(c) Prepare the statement of changes in equity for the year ended 31 December 2015.
Aireville Limited
Statement of Changes in Equity for the year ended 31 December 2015
Ordinary General Retained Total

share reserve earnings
capital
$ $ $ $
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[7]
The profits of Aireville Limited have decreased over the last few years and the directors have
decided on a policy of modernisation. The directors considered raising the extra funds required
from the issue of debentures but decided to issue additional ordinary shares instead.
REQUIRED
(d) Suggest two disadvantages to the ordinary shareholders of issuing debentures instead of
ordinary shares.
1 ................................................................................................................................................
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2 ................................................................................................................................................
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[Total: 19]

8
3 Daksha is a trader. Her financial year ends on 31 January. She does not maintain a full set of
accounting records but was able to provide the following information at 1 February 2015.
$
Premises at cost 90 000
Other payables 330
Inventory 3 000
Bank 1 940 debit
Long-term loan 20 000
Capital 97 200
During the year ended 31 January 2016:
Capital introduced amounted to $12 000

Drawings amounted to $4200
Fixtures and fittings costing $5200 were purchased
A motor vehicle costing $8000 was purchased
A further long-term loan of $10 000 was obtained
In addition to providing this information, Daksha compared her assets and liabilities on
31 January 2016 with those on 1 February 2015 and found:
$
Trade receivables had increased by 1150
Trade payables had decreased by 210
Other payables amounted to 160
Other receivables amounted to 327
Bank balance had reduced by 2300
Petty cash amounted to 100
Inventory had increased by 10%.
On 31 January 2016 it was decided to:
1 Create a provision for doubtful debts of 3% of trade receivables.

2 Provide for depreciation of fixtures and fittings and the motor vehicle at 20% per annum
(based on cost of assets held at the end of the financial year).
REQUIRED
(a) Prepare a statement of affairs at 31 January 2016 showing the total capital at that date.
© UCLES 2016 0452/22/F/M/16

9
Daksha
Statement of Affairs at 31 January 2016
$ $ $
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
.................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
[15]
10
(b) Prepare the capital account of Daksha for the year ended 31 January 2016 to show the profit
or loss for the year.
Daksha
Capital account
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
[5]
[Total: 20]
© UCLES 2016 0452/22/F/M/16

12
4 The Lodi Sports Club was formed some years ago.
The club has 150 members. The annual subscription is $100.

The club rents a sports centre at a monthly rent of $300.
A few years ago the club took out a bank loan of $5000 at 4% per annum interest.
The amounts received and paid during the year ended 31 January 2016 were as follows.
$
Subscriptions: for the year ended 31 January 2015 (2 members) 200
for the year ended 31 January 2016 (140 members) 14 000
for the year ending 31 January 2017 (5 members) 500
Rent for the year ended 31 January 2016 3 600
Rent for the year ending 31 January 2017 300
Insurance 1 550
Purchase of new sports equipment 7 200
Proceeds of sale of old sports equipment (book value $400) 275
Bank interest and repayment of one quarter of the loan 1 400
REQUIRED
(a) Prepare the receipts and payments account for the year ended 31 January 2016.
Balance the account and bring down the balance on 1 February 2016.
Lodi Sports Club

Receipts and Payments Account for the year ended 31 January 2016
2015
........... ............................... ........... Feb 1 Balance b/d 210
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........

[9]
© UCLES 2016 0452/22/F/M/16
13
(b) Calculate the total subscriptions which will appear in the income and expenditure account for
the year ended 31 January 2016.
...................................................................................................................................................
...............................................................................................................................................[2]
(c) Complete the following table to show the entries in the statement of financial position on
31 January 2016.
Statement of financial position

section amount ($)
Bank loan
Interest on bank loan
Rent
[6]
[Total: 17]

14
5 Mohan is a trader. His financial year ends on 31 December.
Mohan depreciates his motor vehicles at 20% per annum on cost, calculated from the date of
purchase.
The following information was available on 1 January 2014.
Cost Accumulated
depreciation
$ $
Motor vehicle A 12 000 7 200
Motor vehicle B 13 000 3 900
On 1 July 2014 Motor vehicle C was purchased for $15 000, by cheque.
REQUIRED
(a) Prepare the following accounts for each of the two years ended 31 December 2014 and
31 December 2015.
Balance the accounts and bring down the balances on 1 January 2015 and 1 January 2016.
Mohan
Motor vehicles account
2014
Jan 1 Balance b/d ........... ............................... ...........
A – 12 000
B – 13 000 25 000 ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
........... .............................. ........... ........... ............................... ...........
© UCLES 2016 0452/22/F/M/16

15
Provision for depreciation of motor vehicles account
2014
........... ............................... ............... Jan 1 Balance b/d
A – 7200
........... ............................... ............... B – 3900 11 100
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... .............. ........... ............................... ..............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............
........... ............................... ............... ........... ............................... ...............

[11]

16
(b) Prepare an extract from the statement of financial position on 31 December 2015 to show the
entries for motor vehicles.
Mohan
Extract from Statement of Financial Position at 31 December 2015
Non-current assets
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
On 1 January 2016 Motor vehicle B was sold for $2900, cash.
REQUIRED
(c) Calculate the depreciation on Motor vehicle B up to the date of disposal.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Complete the following table to name the ledger accounts to be debited and credited to record
the disposal of the motor vehicle.
account debited account credited
transferring the original cost of

the motor vehicle from the asset
account
transferring the accumulated
depreciation on the motor vehicle
from the provision account
recording the proceeds of sale of
the motor vehicle
[6]
[Total: 21]
© UCLES 2016 0452/22/F/M/16

18
6 Annie is a wholesaler of ladies’ clothing, selling to retail stores on credit terms. She provided the
following information at the end of her second year of trading on 31 December 2015.
$
Revenue 40 000
Inventory 1 January 2015 3 600
Inventory 31 December 2015 4 800
Capital employed 1 January 2015 92 000
Trade receivables at 31 December 2015 4 350
Annie decided to compare her results with those of her two brothers, Mark and Tony, who formed
a partnership six years ago to operate a wholesale food business.
REQUIRED
(a) Complete the table on the opposite page to show the ratios for Annie’s business for the year
ended 31 December 2015.
You may use the space below for your workings.
Workings
© UCLES 2016 0452/22/F/M/16

19
Ratio Annie Mark and Tony
Percentage of gross profit to revenue 23.75% 16.50%
Percentage of profit for the year to revenue 9.50% 11.35%
Rate of inventory turnover (to two decimal

places) ................ times 20.15 times
Percentage of profit for the year to opening

capital employed (ROCE) (to two decimal
places) ..................... % 10.35%
Trade receivables collection period

(rounded up to the next whole day) ................. days 34 days
[6]
(b) Explain one reason for the difference between the percentages of gross profit to revenue of
Annie and her brothers.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(c) Comment on the possible effects of Annie increasing the selling price of her goods.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) State whose business had better control over its expenses. Give a reason for your answer.
Business ...............................................................
Reason .....................................................................................................................................
...............................................................................................................................................[2]
(e) Explain one reason for the difference in the rate of inventory turnover.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]

20
(f) Suggest one way in which Annie could increase her rate of inventory turnover.
...................................................................................................................................................
...............................................................................................................................................[1]
(g) Suggest one way in which Annie could improve her return on capital employed (ROCE).
...................................................................................................................................................
...............................................................................................................................................[1]
(h) State whose business had the better collection period for trade receivables. Give a reason for
your answer.
Business ..............................................................
Reason .....................................................................................................................................
...............................................................................................................................................[2]
(i) Suggest two factors, excluding those provided in the question, which should be considered
when comparing Annie’s results with those of her brothers.
1 ................................................................................................................................................
2 ............................................................................................................................................[2]
Annie has a bank overdraft but believes that her current ratio could be improved. She is considering
four courses of action.
REQUIRED
(j) Complete the following table by placing a tick (✓) in the correct column to show how each of
the courses of action would affect Annie’s current ratio.
Increase Decrease No effect
Create a provision for doubtful debts
Delay payments to credit suppliers
Obtain a long-term loan
Obtain permission from the bank to increase the overdraft
[4]
[Total: 24]
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International
Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cie.org.uk after
the live examination series.
Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.
© UCLES 2016 0452/22/F/M/16

* 3 1 5 9 1 6 1 4 5 2 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (RCL (GO)) 131322/3

2
1 Mandeep is a trader who maintains a full set of accounting records including a three column cash
book.
His transactions for December 2016 included the following:
December 4 Paid $387 by cheque for repairs to office equipment

11 Received a cheque from Jabin to settle his account of $300 less 2% cash
discount
15 Paid a cheque, $702, to Rama, after deducting a cash discount of 2½%
27 Made cash sales, $6795
29 Withdrew cash, $5000, for personal use
31 Paid all the cash into the bank except $200
REQUIRED
(a) Complete Mandeep’s cash book on the page opposite.
Balance the cash book and bring down the balances on 1 January 2017. [10]
© UCLES 2017 0452/22/F/M/17

Mandeep
Cash Book
© UCLES 2017
Date Details Discount Cash Bank Date Details Discount Cash Bank
allowed received
2016 $ $ $ 2016 $ $ $
Dec 1 Balance b/d ................ 150 ............... Dec 1 Balance b/d ............... ............... 2590
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
3
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
0452/22/F/M/17
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... ...............
.......... .......................... ................ ............... ............... .......... ...................................................... ............... ............... .............. .
[Turn over
4
Mandeep’s financial year ends on 31 December. He prepared his draft financial statements for the
year ended 31 December 2016, but did not close or balance his ledger accounts.
Mandeep provided the following information at 31 December 2016.
1 At 31 December 2016 the inventory was valued at $13 420.
2 The office fixtures, original cost $9500, are depreciated at 20% per annum using the reducing
(diminishing) balance method.
3 The general expenses relating to the financial year ended 31 December 2016 amounted to
$9850.
4 Rent receivable owing by the tenant at 31 December 2016 amounted to $460.
5 No entry has been made in the accounting records for a motor vehicle, $16 000, introduced
into the business by Mandeep on 30 December 2016.
6 The draft profit for the year ended 31 December 2016 was $21 600.
REQUIRED
(b) Complete the following accounts in Mandeep’s ledger at 31 December 2016.
Close the accounts by balancing or by making a transfer to an appropriate account.
Mandeep
Inventory account

2016
Jan 1 Balance b/d 12 650 ............ ............................... ............
............ ............................... ............ ............ ............................... ............
............ ............................... ............ ............ ............................... ............
............ ............................... ............ ............ ............................... ............
............ ............................... ............ ............ ............................... ............
............ ............................... ............ ............ ............................... ............
© UCLES 2017 0452/22/F/M/17

5
Provision for depreciation of office fixtures account

2016
............. ............................... ............. Jan 1 Balance b/d 3420
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............
General expenses account

2016
Dec 31 Total payments 9475 ............. ............................... ............
............ ............................... ............. ............. ............................... ............
............ ............................... ............. ............. ............................... ............
............ ............................... ............. ............. ............................... ............

2016
............ ............................... ............. Dec 31 Total receipts 5060
............ ............................... ............. ............. ............................... ............
............ ............................... ............. ............. ............................... ............
............ ............................... ............. ............. ............................... ............
Drawings account

2016
Dec 31 Total drawings 8950 ............. ............................... ............
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............

6
Capital account

2016
............. ............................... ............. Jan 1 Balance b/d 63 000
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............
............. ............................... ............. ............. ............................... ............

[14]
[Total: 24]
© UCLES 2017 0452/22/F/M/17

7
2 Vinita’s accountant prepared a set of financial statements at the end of her first year of trading on
31 December 2016.
Vinita was not familiar with some of the terms used in these statements.
REQUIRED
(a) State the meaning of each of the following terms.
(i) Income statement
...........................................................................................................................................
.......................................................................................................................................[1]
(ii) Statement of financial position
...........................................................................................................................................
...................................................................................................................................... [1]
(iii) Non-current assets
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(iv) Non-current liabilities
...........................................................................................................................................
.......................................................................................................................................[1]
(v) Capital
...........................................................................................................................................
.......................................................................................................................................[1]
(b) Give one example of an intangible asset.
...............................................................................................................................................[1]

8
The accountant calculated the following ratios for Vinita’s business on 31 December 2016.
Current ratio 3.62 : 1

Quick ratio 0.59 : 1
REQUIRED
(c) Comment on Vinita’s current ratio.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Explain why the quick ratio is a better measure of liquidity than the current ratio.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(e) Suggest two actions Vinita could take to increase her quick ratio.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
© UCLES 2017 0452/22/F/M/17

9
Vinita wished to compare her results with those of a similar business and was able to obtain the
financial statements of a business in the same trade.
REQUIRED
(f) State how each of the following may be regarded as a limitation of financial statements.
(i) Historical cost
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Non-financial factors
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
[Total: 17]

10
3 The financial year of Doshi Manufacturing Company ends on 31 January. The following trial
balance was extracted from the books on 31 January 2017.
$ $
Inventory 1 February 2016
Raw materials 49 500
Work in progress 28 750
Finished goods 63 100
Revenue 1 246 850
Returns inwards 12 250
Purchases
Returns of purchases of raw materials 16 400
Carriage inwards on purchases of finished goods 1 500
Wages
Factory operatives 297 100
Factory supervisors 152 000
Office and sales staff 108 700
Factory machinery at cost 250 000
Office equipment at cost 72 000
Loose tools at valuation 21 150
Provision for depreciation 1 February 2016
Factory machinery 122 000
Office equipment 32 400
Capital 1 February 2016 630 000
Drawings 96 750
Interest-free short term loan 50 000
2 171 250 2 171 250
The following additional information is available.
1 At 31 January $
inventory raw materials 41 100
work in progress 31 250
finished goods 59 100
wages accrued factory supervisors 12 000
office staff 4 300
value of loose tools 19 050
2 The factory machinery is being depreciated at 20% per annum on the reducing (diminishing)
balance method.
3 The office equipment is being depreciated at 15% per annum on the straight line (equal
instalment) method.
4 The loose tools are revalued at the end of each financial year.
5 The general expenses are to be apportioned 3/5 to the factory and 2/5 to the office.
© UCLES 2017 0452/22/F/M/17

11
REQUIRED
(a) Select the relevant figures and prepare the manufacturing account for the year ended
31 January 2017.
Doshi Manufacturing Company

Manufacturing Account for the year ended 31 January 2017
$ $ $
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
[12]
12
(b) Select the relevant figures and prepare the income statement for the year ended
31 January 2017.
Doshi Manufacturing Company

Income Statement for the year ended 31 January 2017
$ $ $
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
[11]
© UCLES 2017 0452/22/F/M/17

13
(c) Suggest one reason why the loose tools are revalued at the end of each financial year rather
than by using the straight line (equal instalment) or reducing (diminishing) balance method of
depreciation.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 24]

14
4 Lahiru is a trader. The following account appeared in his ledger.
Nusrath account

2017 2017
Feb 7 Returns 18 Feb 1 Balance b/d 440
18 Bank 429 4 Purchases 650
Discount 11
28 Contra to sales
ledger 68
REQUIRED
(a) State the section of Lahiru’s ledger in which the above account would appear.
...............................................................................................................................................[1]
(b) Explain the entry on 7 February and state where the double entry would be made in Lahiru’s
accounts.
Explanation ................................................................................................................................
...................................................................................................................................................
Double entry ..........................................................................................................................[2]
(c) (i) Calculate the percentage of discount which was deducted on 18 February.
...........................................................................................................................................
.......................................................................................................................................[1]
(ii) Suggest one reason why this discount was deducted.
...........................................................................................................................................
.......................................................................................................................................[1]
(d) Suggest why the contra entry was made.
...................................................................................................................................................
...............................................................................................................................................[1]
© UCLES 2017 0452/22/F/M/17

15
(e) Prepare the journal entry Nusrath would make to record the contra entry. A narrative is
required.
Nusrath
Journal
Debit Credit
$ $
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
[3]
(f) (i) Calculate the balance of Lahiru’s account which would appear in Nusrath’s ledger on
28 February 2017.
...........................................................................................................................................
.......................................................................................................................................[1]
(ii) State the section of Nusrath’s statement of financial position on 28 February 2017 in
which the balance of Lahiru’s account would appear.
.......................................................................................................................................[1]

16
Lahiru’s financial year ends on 28 February. He maintains a provision for doubtful debts of 4% of
trade receivables at the end of each year.
On 1 March 2016 Lahiru’s provision for doubtful debts amounted to $500. On 28 February 2017
his trade receivables owed $17 900.
REQUIRED
(g) Prepare the provision for doubtful debts account for the year ended 28 February 2017.
Balance the account and bring down the balance on 1 March 2017.
Lahiru
Provision for doubtful debts account
........... ............................... ........... ........... ............................... ............
........... ............................... ........... ........... ............................... ............
........... ............................... ........... ........... ............................... ............
........... ............................... ........... ........... ............................... ............
........... ............................... ........... ........... ............................... ............
........... ............................... ........... ........... ............................... ............
[4]
(h) Explain how Lahiru is applying the accounting principle of prudence by maintaining a provision
for doubtful debts.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(i) Explain how Lahiru is applying the accounting principle of accruals (matching) by maintaining
a provision for doubtful debts.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
[Total: 19]
© UCLES 2017 0452/22/F/M/17

17
5 Jai’s financial year ends on 31 January. He has not maintained a full set of accounting records.
All goods are sold on a cash basis and all purchases are made on credit terms. Jai has no record
of his sales and purchases for the year ended 31 January 2017.
The following information was available.
$
On 1 February 2016
Amount owing to credit suppliers 4 600
Inventory 2 900
During the year ended 31 January 2017

Amounts paid to credit suppliers 32 725
Cash discount received 640
Interest charged by credit supplier on overdue account 15
At 31 January 2017
Inventory 3 400
The gross profit margin is 20%.
REQUIRED
(a) Calculate the purchases for the year ended 31 January 2017.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[6]

18
(b) Prepare an income statement (trading account section) to calculate the revenue for the year.
Jai
Income Statement (Trading Account section) for the year ended 31 January 2017
$ $
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
[7]
(c) Calculate the rate of inventory turnover.
The calculation should be correct to two decimal places.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Suggest two ways in which the rate of inventory turnover could be improved.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
© UCLES 2017 0452/22/F/M/17

19
Jai always values his inventory at the lower of cost and net realisable value.
(e) Name the accounting principle which is being applied.
...............................................................................................................................................[1]
(f) Complete the following table to indicate the effect of Jai overvaluing his inventory at
31 January 2017. An example has been provided.
overstated understated
Current assets at 31 January 2017 ü
Profit for the year ended 31 January 2017
Profit for the year ending 31 January 2018
[2]
Jai is considering increasing his gross profit margin.
REQUIRED
(g) Suggest two ways in which Jai might achieve this increase.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
[Total: 22]

20
6 Amina is a trader. Her financial year ends on 31 December.
The totals of her trial balance on 31 December 2016 did not agree. Amina entered the difference
in a suspense account and prepared draft financial statements.
The following errors were later discovered.
1 One page of the sales journal had been undercast by $1000.
2 Repairs to office equipment, $484, had been treated as capital expenditure.
3 The total of the sales returns journal, $960, had been credited to the purchases returns
account in the ledger.
4 The bank balance, $1500, had been treated as a bank overdraft in the trial balance.
5 A credit note received from AK Stores for $210 had been correctly entered in the purchases
returns journal but had been credited to the account of the supplier as $120.
REQUIRED
(a) Prepare the journal entries to correct errors 3–5. Narratives are not required.
Amina
Journal
Debit Credit
$ $
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................
.......................................................................................... .......................... ..........................

[7]
© UCLES 2017 0452/22/F/M/17

21
(b) Complete the following table to show the effect, if any, that correcting each error would have
on the draft profit. Where an error has no effect on profit, place a (ü) in the No Effect column.
Effect on draft profit for the year of correcting the error
Error
Increase Decrease No Effect
$ $
1
2
3
4
5
[7]
[Total: 14]
© UCLES 2017 0452/22/F/M/17

* 5 8 4 1 2 7 7 0 5 5 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (ST) 144913/2
2
1 Kamika is a clothing wholesaler who buys and sells on both cash and credit terms. She maintains
a full set of accounting records and prepares monthly control accounts.
REQUIRED
(a) State two advantages to Kamika of preparing a monthly sales ledger control account.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(b) State two reasons why it is possible for Kamika to have a credit balance on her sales ledger
control account.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(c) Complete the following table. Place a tick (3) to show where each item would appear in
Kamika’s purchases ledger control account. If the item would not appear, place a tick (3)
in the no entry column.
debit credit no entry

opening balance owed to credit suppliers
credit purchases
cash purchases
cash discount received
trade discount received
cheques paid to credit suppliers
interest charged by credit suppliers
returns to credit suppliers
contra between sales and purchases ledgers
[9]
© UCLES 2018 0452/22/F/M/18

3
Kamika applies all the accounting principles when maintaining accounting records and preparing
financial statements.
REQUIRED
(d) Name the accounting principle applied in each of the following situations.
principle
Kamika uses the double entry system of book-keeping when
recording transactions in her ledgers.
Kamika adjusted the charge for insurance in the income statement
for an amount prepaid at the year-end.
Kamika adjusts her provision for doubtful debts at the end of each
year so it is always 3% of her trade receivables.
Kamika intends to trade for several years and values her premises
at net book value, not expected sales value, in her statement of
financial position.
Kamika did not make any entry in her accounting records when a
competitor reduced his prices even though it may affect her sales.
Kamika did not make any entry in her accounting records when
a customer asked for goods to be put aside for him to collect
sometime in the future.
[6]

4
Kamika purchases fuel for her motor vehicles in bulk and stores it on her own premises.
Her transactions for the year ended 31 January 2018 included the following:
2017 $
March 31 Paid by cheque the balance owed to Fuel2go less
2½% cash discount
June 4 Purchased fuel for motor vehicles and paid by cheque 210
December 10 Purchased fuel for motor vehicles on credit from Fuel2go 3200
On 31 January 2018 Kamika’s inventory of fuel was $1100.
REQUIRED
(e) Enter the transactions in the following accounts in Kamika’s ledger for the year ended
31 January 2018.
Close the accounts by balancing or by making a transfer to the income statement.
Kamika
Fuel2go account

2017
.......... ...................................... ............... Feb 1 Balance b/d 800
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
© UCLES 2018 0452/22/F/M/18

5
Fuel expenses account

2017
Feb 1 Balance b/d 950 .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
[9]
[Total: 28]

6
2 Dipak is a manufacturer. His financial year ends on 30 November.
Dipak depreciates all his non-current assets at the end of each year.
REQUIRED
(a) Explain how providing for depreciation of non-current assets is an application of the principle
of prudence.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
Dipak depreciates his motor vehicles using the reducing (diminishing) balance method at 20% per
annum on all motor vehicles held at the end of each financial year. No depreciation is charged in
the year of disposal.
On 1 December 2015 Dipak owned motor vehicle A, which had cost $40 000 and had been
depreciated by $14 400.
On 1 August 2016 Dipak purchased motor vehicle B on credit from ZY Motors for $50 000.
REQUIRED
(b) Prepare a journal entry to record the purchase of motor vehicle B.
A narrative is not required.
Dipak
Journal
Debit Credit
$ $
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
[2]
© UCLES 2018 0452/22/F/M/18

7
(c) Calculate the depreciation on motor vehicle A for each of the two years ended
30 November 2016 and 30 November 2017.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Calculate the depreciation on motor vehicle B for each of the two years ended
30 November 2016 and 30 November 2017.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(e) Prepare a journal entry to record the transfer to the income statement of the total depreciation
on motor vehicles for the year ended 30 November 2017.
A narrative is not required.
Dipak
Journal
Debit Credit
$ $
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
[2]

8
Dipak sold motor vehicle A on 31 December 2017.
REQUIRED
(f) Calculate the total depreciation provided on motor vehicle A up to the date of disposal.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(g) Prepare journal entries to record the following:
1 the transfer of the original cost of motor vehicle A from the asset account
2 the transfer of the accumulated depreciation on motor vehicle A from the provision for
depreciation account.
Narratives are required.
Dipak
Journal
Debit Credit
$ $
1 .......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
2 .......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
.......................................................................................... ........................ ........................
[6]
[Total: 18]
© UCLES 2018 0452/22/F/M/18
10
3 The ND Sports Club was formed on 1 January 2017.
As well as providing sporting facilities for members the club also has a café for members and
guests. Café supplies are purchased on credit and all café sales are made on cash terms.
The treasurer provided the following information on 31 December 2017.
$
Receipts during the year Subscriptions 14 850
Receipts from café sales 9 520
Net income from competition 710
Interest-free loan from Sport4U 5 000
30 080
Payments during the year Sports equipment 6 200

Café fixtures and fittings 3 500
Wages – sports coach 6 000
café assistant 4 000
General club expenses 540
Rent and insurance 3 700
Café suppliers 5 760
29 700
1 At 31 December 2017
Café inventory was valued at $970.
Café suppliers were owed $130.
Café assistant’s wages accrued amounted to $160.
2 The payment for rent and insurance included $1200 for 12 months to 31 January 2018.
3 One quarter of the rent and insurance is to be allocated to the café.
4 The club has 300 members. The annual subscription is $50. On 31 December 2017
subscriptions were outstanding from 10 members and 7 members had already paid their
subscription for 2018.
5 Sports equipment and café fixtures and fittings are to be depreciated by 20% on cost.
© UCLES 2018 0452/22/F/M/18

11
REQUIRED
(a) Prepare the café income statement for the year ended 31 December 2017.
ND Sports Club
Café Income Statement for the year ended 31 December 2017
$ $
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
[7]

12
(b) Prepare the income and expenditure account for the year ended 31 December 2017.
ND Sports Club
Income and Expenditure Account for the year ended 31 December 2017
$ $
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................

[9]
(c) State one item in the list of receipts and payments which does not appear in the income and
expenditure account. Give a reason for your answer.
Item ...........................................................................................................................................
Reason .....................................................................................................................................
...............................................................................................................................................[2]
© UCLES 2018 0452/22/F/M/18

13
(d) State one item in the income and expenditure account which does not appear in the list of
receipts and payments. Give a reason for your answer.
Item ...........................................................................................................................................
Reason .....................................................................................................................................
...............................................................................................................................................[2]
A member of the club has suggested that any surplus made by the club should be distributed
among the members.
REQUIRED
(e) Comment on this suggestion.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
The owner of the premises rented by the club has offered to sell them to the club for $90 000.
A decision has to be made by 31 August 2018.
A member of the committee has suggested increasing subscriptions and holding fund-raising
events in order to raise the necessary finance.
REQUIRED
(f) State why the member’s suggestions are not suitable methods of raising the necessary
finance.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[1]
(g) Suggest one way in which the club could raise the necessary finance.
...............................................................................................................................................[1]
[Total: 24]

14
4 Amaira is an office equipment wholesaler. Her financial year ends on 31 January.
Amaira has little knowledge of accounting but attempted to prepare financial statements on
31 January 2018.
The statement of financial position (containing errors) which Amaira prepared on 31 January 2018
was as follows.
$
Drawings 7 000
Inventory at 1 February 2017 18 000
171 241
Capital at 1 February 2017 100 000

Provision for doubtful debts at 1 February 2017 450
Provision for depreciation of fixtures and fittings at 31 January 2018 19 520
Loan from EasyLoans (repayable 30 June 2018) 20 000
169 849
Balance 1 392
171 241
The opening inventory was $2000 lower than the closing inventory.
In addition to the obvious errors in the statement of financial position the following errors were
discovered.
1 On 1 August 2017 a motor vehicle costing $11 000, was purchased by cheque. This was only
recorded in the cash book. The motor vehicle should be depreciated by 25% per annum from
the date of purchase.
2 No entry has been made for bank charges, $150.
3 No adjustment has been made to the provision for doubtful debts which should be maintained
at 3% of trade receivables at the end of each financial year.
4 The balance of the petty cash book, $90, was not included in the statement of financial
position.
REQUIRED
(a) Prepare a corrected statement of financial position at 31 January 2018.
The calculation of the corrected profit for the year should be shown within the statement or as
a separate calculation.
You may use the space provided on page 16 for your workings.
© UCLES 2018 0452/22/F/M/18

15
Amaira
Corrected Statement of Financial Position at 31 January 2018
$ $ $
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
[15]
16
You may use this space for workings
REQUIRED
(b) Prepare Amaira’s capital account for the year ended 31 January 2018. Balance the account
and bring down the balance on 1 February 2018.
Amaira
Capital account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............

[5]
(c) Suggest two reasons why Amaira’s employees would be interested in Amaira’s financial
statements.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(d) Suggest two additional reasons why the manager of Amaira’s business would be interested
in Amaira’s financial statements.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
[Total: 24]
© UCLES 2018 0452/22/F/M/18
18
5 ABC Limited has a share capital consisting of ordinary shares. The financial year ends on
31 December.
The accountant prepared the income statement for the year ended 31 December 2017 which
showed a profit of $21 000.
The accountant started to prepare a statement of changes in equity but was taken ill before it was
completed.
REQUIRED
(a) Complete the following statement of changes in equity for the year ended 31 December 2017.
ABC Limited
Statement of Changes in Equity for the year ended 31 December 2017

capital
$ $ $ $
On 1 January 2017 180 000 25 000 9 500 214 500
Share issue 20 000 ............... ............... ...............
Profit for the year ............... ............... ............... ...............
Final dividend paid for year ended 31 December 2016 ............... ............... ............... (7 200)
Interim dividend for the year ended 31 December 2017 ............... ............... ............... (6 000)
Transfer to general reserve ............... 2 000 ............... ...............
At 31 December 2017 ............... ............... ............... ...............
[6]
ABC Limited provided the following information.

Year ended 31 December
2016 2017
Percentage of gross profit to revenue (gross profit margin) 32% 30%

Percentage of profit for the year to revenue (net profit margin) 12% 14%
© UCLES 2018 0452/22/F/M/18

19
REQUIRED
(b) Suggest two reasons for the change in the percentage of profit for the year to revenue.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(c) State the year in which ABC Limited had better control of the expenses. Give a reason for
your answer.
Year .......................................
Reason .....................................................................................................................................
...............................................................................................................................................[2]
One of the directors has made four proposals for increasing the percentage of profit for the year to
revenue.
REQUIRED
(d) Complete the following table by placing a tick (3) to indicate the effect on the percentage of
profit for the year to revenue of each proposal.
effect on percentage of profit for the

proposal year to revenue
increase decrease no effect
reduce number of employees to reduce the
wages bill
purchase supplies in bulk to get trade discount
purchase supplies on a cash basis only
delay payment of rent of premises
[4]

20
ABC Limited makes all purchases and sales on credit terms.
Credit customers are allowed a credit period of 30 days and credit suppliers allow a credit period
of 24 days.
ABC Limited provided the following information.
2016 2017
Collection period for trade receivables 28 days 38 days

Payment period for trade payables 22 days 30 days
REQUIRED
(e) Comment on the effect on the liquidity of ABC Limited of the change in the collection period
for trade receivables and the change in the payment period for trade payables.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(f) Suggest two ways in which ABC Limited could reduce the collection period for trade
receivables.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
(g) Suggest two ways in which ABC Limited could reduce the possibility of bad debts.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
© UCLES 2018 0452/22/F/M/18

21
(h) Suggest one disadvantage to the trade payables of the change in the payment period.
...................................................................................................................................................
...............................................................................................................................................[1]
(i) Suggest one advantage to the trade payables of the change in the payment period.
...................................................................................................................................................
...............................................................................................................................................[1]
ABC Limited’s return on capital employed (ROCE) for the year ended 31 December 2017 was
lower than that of the previous few years.
REQUIRED
(j) State what is measured by the return on capital employed (ROCE).
...................................................................................................................................................
...............................................................................................................................................[1]
One of the directors has made three proposals for increasing the return on capital employed
(ROCE).
REQUIRED
(k) Complete the following table by placing a tick (3) to indicate the effect on the return on capital
employed (ROCE) of each proposal.
effect on return on capital employed

proposal (ROCE)
reduce cost of insuring motor vehicles
issue more ordinary shares
obtain a short-term interest-free loan from a

director
[3]
[Total: 26]
© UCLES 2018 0452/22/F/M/18

Cambridge Assessment International Education
* 8 2 7 4 5 7 8 9 5 8 *
ACCOUNTING 0452/22
1 hour 45 minutes
Write your centre number, candidate number and name on all the work you hand in.

DC (SC) 160950/3
2
1 Narinder is a wholesaler who trades in handicrafts. He purchases all goods from local producers,
paying by cheque at the time of purchase. Some goods are sold on credit terms to large retail
stores and some goods are sold for cash to smaller stores. Narinder maintains a full set of
accounting records.
The following entries were made in Narinder’s cash book, sales journal and sales returns journal
in January 2019.
Narinder
Cash Book
Discount Cash Bank Cash Bank

Allowed
2019 $ $ $ 2019 $ $
Jan 1 Balance b/d 60 Jan 1 Balance b/d 1420
10 Amrik 540 5 Purchases 1890
28 Noor 26 1274 17 Amrik(Dis. Chq)* 540
30 Sales 1620 31 Wages 1334
31 Balance c/d 2036 Drawings 120
Balance c/d 226
26 1680 3850 1680 3850
* Dis. Chq = Dishonoured cheque
Narinder
Sales Journal
2019 $ $
Jan 1 Amrik Goods 720

Less Trade discount 180 540
16 Noor Goods 1800

31 Total for month 1980
Narinder
Sales Returns Journal
2019 $ $
Jan 18 Noor Goods 175

© UCLES 2019 0452/22/F/M/19

3
REQUIRED
(a) Enter the transactions for January 2019 in the following ledger accounts. It is not necessary
to total or balance any of the accounts.
Narinder
General Ledger
Purchases account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Sales account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Wages account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Drawings account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............

4
Sales returns account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Discount allowed account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Sales Ledger
Amrik account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
Noor account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............

[13]
© UCLES 2019 0452/22/F/M/19

5
Narinder’s financial year ends on 31 January. He maintains a provision for doubtful debts account.
The following account appeared in his ledger.

2019 2018
Jan 31 Balance c/d 155 Feb 1 Balance b/d 136
2019
Jan 31 Income statement 19
155 155
REQUIRED
(b) Explain the following entries in the provision for doubtful debts account.
Name the account in which the double entry would be made for each item.
State whether the account would be debited or credited.
1 February 2018 Balance b/d
Explanation ...............................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Name of account ......................................................................................................................
Debit or credit ..................................
31 January 2019 Balance c/d
Explanation ...............................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Name of account ......................................................................................................................
Debit or credit .................................. [4]
(c) (i) Explain the following entry in the provision for doubtful debts account.
31 January 2019 Income statement
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [1]
(ii) State how this entry affected Narinder’s profit for the year ended 31 January 2019.
...................................................................................................................................... [1]
[Total: 19]
6
2 Aysha trades in children’s shoes. Her financial year ends on 31 January.
Aysha rents a warehouse at an annual rent of $6 000. She sublets part of the premises to a tenant.
2018
February 1 Aysha had paid two months’ rent in advance
The tenant owed $600 rent
March 31 Cash received for rent, $800
April 30 Aysha paid six months’ rent by bank transfer
May 1 Cheque received for rent, $2000
October 31 Aysha paid seven months’ rent by cheque
2019
January 31 Transfer to the income statement from the rent receivable account, $2400
REQUIRED
(a) Prepare the rent payable account and the rent receivable account in the ledger of Aysha for
the year ended 31 January 2019. Balance the accounts and bring down the balances on
1 February 2019.
Aysha
Rent payable account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
© UCLES 2019 0452/22/F/M/19

7
Aysha
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............

[9]
Aysha sells on credit to Ravi.
The following information relates to the month of February 2019.
February 1 Ravi owed $400
6 Credit sales to Ravi, list price $700, less 20% trade discount
Carriage charged on goods sold, $25
12 Ravi requested to be allowed to return some of the goods purchased on

6 February, list price $220
14 Aysha agreed that Ravi could return goods, list price $200
21 Ravi paid the balance due on 1 February 2019 by bank transfer after deducting
2½% cash discount
REQUIRED
(b) Name the document which would be issued on each of the following dates.
Name the person who issued this document.
February 6 Document ....................................................................................................
Person issuing the document ......................................................................
12 Document ....................................................................................................
Person issuing the document ......................................................................
14 Document ....................................................................................................
Person issuing the document ................................................................. [6]

8
(c) Name the document Aysha would issue on 28 February 2019.

Suggest one reason why Aysha may issue this document.
Document .................................................................................................................................
Reason for issue .......................................................................................................................
.............................................................................................................................................. [2]
(d) Write up the account of Aysha as it would appear in the ledger of Ravi for the month of
February 2019. Balance the account and bring down the balance on 1 March 2019.
Ravi
Aysha account
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............
.......... ...................................... ............... .......... ...................................... ...............

[6]
© UCLES 2019 0452/22/F/M/19

9
Ravi sells goods to Aysha in addition to purchasing goods from her.
On 1 March 2019 it was agreed that the balance of Aysha’s account in Ravi’s sales ledger of $230
should be transferred to her account in Ravi’s purchases ledger.
REQUIRED
(e) Prepare a journal entry to record the transfer of the balance of the sales ledger account to the
purchases ledger account in the books of Ravi.
A narrative is required.
Ravi
Journal
Debit Credit
$ $
........................................................................... ........................ ........................
........................................................................... ........................ ........................
........................................................................... ........................ ........................
........................................................................... ........................ ........................
........................................................................... ........................ ........................

[3]
[Total: 26]

10
3 Bari and Nada are in partnership. Their financial year ends on 31 December.
Their partnership agreement provides for residual profits to be shared in proportion to capital
invested.
The balances on their accounts on 1 January 2018 were:
Bari Nada
$ $
Capital account 150 000 100 000
Current account 950 credit 150 debit
During the year ended 31 December 2018 the partners made the following drawings:
Bari Nada
$ $
11 000 13 000
The following is an extract from the draft appropriation account for the year ended
31 December 2018.
Bari and Nada

Draft Appropriation Account for the year ended 31 December 2018
$ $
Interest on drawings Bari 660
Nada 780 1 440
37 030
Interest on capital Bari 7 500
Nada 5 000
12 500
Partner’s salary Bari 20 000 32 500
Profit available for distribution 4 530
The following additional information is available at 31 December 2018.
$
Premises at 1 January 2018 120 000
Premises purchased on 1 July 2018 100 000
Other non-current assets 92 650
Other payables 800
Other receivables 910
Provision for doubtful debts 510
Bank 21 890 debit
Loan (repayable 2025) 80 000
REQUIRED
(a) Prepare the draft statement of financial position at 31 December 2018.
The details of the partners’ current accounts should be shown within the statement.
© UCLES 2019 0452/22/F/M/19

11
Bari and Nada

Draft Statement of Financial Position at 31 December 2018
$ $ $
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................

12
$ $ $
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
................................................................. ........................ ........................ ........................
[13]
Bari and Nada’s receipts and payments during the financial year ended 31 December 2018
included both capital and revenue items.
REQUIRED
(b) State the meaning of each of the following terms and give an example of each.
Capital expenditure
Meaning ....................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Capital receipt
Meaning ....................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue expenditure
Meaning ....................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue receipt
Meaning ....................................................................................................................................
...................................................................................................................................................
Example ............................................................................................................................... [8]
© UCLES 2019 0452/22/F/M/19

13
After the preparation of the draft financial statements for the year ended 31 December 2018 the
accounting records were checked.
The amount debited to the premises account on 1 July 2018 consisted of the following:
$
Cost of premises 89 000
Legal fees (including $250 legal fees for recovery of a bad debt) 5 300
Decoration costs (half of which related to the original premises) 3 300
Insurance of new premises (for 12 months from 1 July 2018) 2 400
100 000
REQUIRED
(c) (i) Calculate the amount which should have been debited to the premises account on
1 July 2018.
$
Cost of premises 89 000
................................................................................ ..............
................................................................................ ..............
................................................................................ ..............
Correct amount to debit to premises account

[3]
(ii) Calculate the correct profit for the year ended 31 December 2018.
$
................................................................................ ..............
................................................................................ ..............
................................................................................ ..............
Corrected profit for the year ended 31 December 2018

[4]
[Total: 28]

14
4 Jai’s financial year ends on 31 December. He has little knowledge of book-keeping but decided to
prepare a trial balance on 31 December 2018.
The trial balance he prepared, which contains errors, was as follows.
$ $
Revenue 196 000
Purchases 116 500
Purchases returns 4 500
Motor vehicle at cost 16 190
Provision for depreciation of motor vehicle 7 000
Office expenses 16 121
Discount received 2 100
Discount allowed 1 900
Drawings 3 100
Capital 1 January 2018 79 100
296 891 310 413
In addition to the obvious errors in the trial balance the following errors were also discovered.
Error 1 Repairs to motor vehicle, $190, had been debited to the motor vehicle account.
Error 2 No entry had been made for bank charges, $34.
Error 3 A debt of $100 should have been written off as irrecoverable.
© UCLES 2019 0452/22/F/M/19

15
REQUIRED
(a) Prepare a corrected trial balance at 31 December 2018. If the trial balance does not balance
insert a balancing figure in a suspense account.
Jai
Corrected Trial Balance at 31 December 2018
Debit Credit
$ $
Revenue ........................ ........................
Purchases ........................ ........................
Inventory 1 January 2018 ........................ ........................
Purchases returns ........................ ........................
Premises at cost ........................ ........................
Fixtures and fittings at cost ........................ ........................
Motor vehicle at cost ........................ ........................
Provision for depreciation of fixtures and fittings ........................ ........................
Provision for depreciation of motor vehicle ........................ ........................
Bank overdraft ........................ ........................
Trade receivables ........................ ........................
Trade payables ........................ ........................
Office expenses ........................ ........................
Discount received ........................ ........................
Discount allowed ........................ ........................
Drawings ........................ ........................
Capital 1 January 2018 ........................ ........................
............................................................................... ........................ ........................
............................................................................... ........................ ........................
............................................................................... ........................ ........................
............................................................................... ........................ ........................
........................ ........................
[13]
16
After the trial balance had been corrected draft financial statements were prepared.
Additional errors were then discovered.
REQUIRED
(b) Complete the table to show the entries required to correct each error.
Entry required to correct the error

Error Debit Credit
Account $ Account $
Error 4 The total of the office expenses
column, in the petty cash book, Office
$21, had not been transferred to expenses 21 Suspense 21
the ledger
Error 5 Discount allowed to Meena, $9,

had not been entered in her
ledger account .................... ...... .................... ......
Error 6 A monthly total of the purchases

returns journal, $490, had been
transferred to the purchases .................... ...... .................... ......
returns account as $940
Error 7 Cash sales, $300, had been

correctly entered in the cash
book but debited to the account .................... ...... .................... ......
of K Limited
.................... ...... .................... ......
[7]
(c) Complete the table by placing a tick (✓) in the correct columns to indicate the effect of errors
4–7 on the profit for the year and on the assets.
effect on the profit for the year effect on assets

error
overstated understated no effect overstated understated no effect
Error 4
Error 5
Error 6
Error 7
[8]
[Total: 28]
© UCLES 2019 0452/22/F/M/19

18
5 The financial year of LW Limited ends on 31 January.
Ratio 31 January 2018 31 January 2019
Rate of inventory turnover 9.45 times 8.17 times
Trade payables payment period 40 days 53 days
Trade receivables collection period 29 days 33 days
Current ratio 2.54:1 ?
Quick (acid test) ratio 1.44:1 ?
At 31 January 2019
$
Inventory 31 200
Short-term bank loan 10 000
Cash at bank 14 000
Cash 100
All goods are bought and sold on credit terms. If credit customers pay their accounts within 30
days they are allowed a cash discount. If the accounts of credit suppliers are paid within 45 days
LW Limited is entitled to a cash discount.
REQUIRED
(a) Comment on the change in the rate of inventory turnover.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(b) State two effects of the change in the trade payables payment period.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
© UCLES 2019 0452/22/F/M/19

19
(c) Comment on the change in the trade receivables collection period.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(d) (i) Calculate the current ratio at 31 January 2019.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(ii) Calculate the quick (acid test) ratio at 31 January 2019.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(e) Suggest one reason for the change in the quick (acid test) ratio.
...................................................................................................................................................
.............................................................................................................................................. [1]

20
The directors of LW Limited are concerned at the change in the quick (acid test) ratio. One of the
directors has made four proposals which he believes would increase the quick (acid test) ratio.
REQUIRED
(f) Complete the table by placing a tick (✓) in the correct column to indicate the effect of each
proposal on the quick (acid test) ratio.

Proposal 1
Buy a new non-current asset on credit
terms
Proposal 2
Sell on cash terms only rather than
on credit
Proposal 3
Arrange for the short-term loan to be
changed into a long-term loan
Proposal 4
Pay the credit suppliers more quickly
in order to obtain a cash discount
[4]
(g) (i) Explain how Proposal 3 would affect the current ratio.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(ii) Explain how Proposal 4 would affect the current ratio.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
[Total: 19]
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2019 0452/22/F/M/19

*9516175015*
ACCOUNTING 0452/22
Paper 2 May/June 2015
1 hour 45 minutes
MODIFIED LANGUAGE

IB15 06_0452_22_ML_RP
2
1 Nyasha Chingono is a trader. She maintains a full set of accounting records. She buys goods on
credit.
On 1 April 2015 Nyasha Chingono owed John Moyo $560.
The following transactions took place in April 2015.
April 3 Bought goods on credit from Wholesalers Limited, $358
12 Bought goods on credit from John Moyo, list price $480, subject to a trade discount
of 25%
18 Returned goods to John Moyo, list price $160
27 Paid John Moyo, by cheque, the balance owing on 1 April, subject to a cash discount of
2½%
REQUIRED
(a) Prepare the purchases journal and the purchases returns journal for April 2015.
Total each journal and indicate the ledger account to which the total would be transferred.
Nyasha Chingono
Purchases journal
Date Details $ $
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
Purchases returns journal
Date Details $ $
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
….…….. ……………....………………………… ….…….. ….…….
….……. ……………....………………………… ….……. ….…….
….……. ……………....………………………… ….……. ….…….
[5]
© UCLES 2015 0452/22/M/J/15

3
(b) Prepare the following accounts in Nyasha Chingono’s ledger for the month of April 2015.
It is not necessary to balance any of the accounts.
Nyasha Chingono
John Moyo account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………….……… …..…. …..…. ………..……..……… …..….
Purchases account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
Purchases returns account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
[7]
(c) State one advantage and one disadvantage of paying credit suppliers before the due date.
Advantage
Disadvantage
[2]
© UCLES 2015 0452/22/M/J/15 [Turn over

4
Nyasha Chingono prepared the following sales ledger control account on 30 April 2015.
Nyasha Chingono
Sales ledger control account

2015 2015
April 1 Balance b/d 750 April 30 Sales returns 60
30 Sales 990 Bank 637
Interest charged 10 Discount 13
Bad debts 120
Contra 120
____ Balance c/d 800
1750 1750
2015
May 1 Balance b/d 800
REQUIRED
(d) Explain the following entries in the control account.

State the source of information for each item.
1 Sales
Explanation The total goods sold on credit in the month
Source of information Sales journal
2 Sales returns
Explanation
Source of information
3 Contra
Explanation
© UCLES 2015 0452/22/M/J/15

5
4 Interest charged
Explanation
[6]
(e) Suggest two ways Nyasha Chingono could reduce the risk of bad debts.
[2]
Nyasha Chingono allows her credit customers 14 days credit.
The total credit sales for the year ended 30 April 2015 were $12 600.
REQUIRED
(f) Calculate the collection period for trade receivables, using the closing balance on the sales
ledger control account.
Round up your answer to the next whole day.
[2]
(g) State whether Nyasha Chingono would be satisfied with the collection period for trade
receivables.
[1]

6
(h) Suggest two ways Nyasha Chingono could improve the collection period for trade
receivables.
[2]
[Total: 27]
© UCLES 2015 0452/22/M/J/15

7
2 (a) State two reasons why a trader should reconcile the cash book balance with the balance
shown on the bank statement at the end of each month.
[2]
On 31 January 2015 David Jones balanced his cash book and brought down a debit balance of
$114 on 1 February. The bank statement showed a credit balance of $154 on 31 January 2015.
A comparison of the cash book and the bank statement revealed the following.
$
1 Items appearing only in the cash book
Cash from sales paid into the bank on 28 January 235
Cheque paid to M Sharp, a credit supplier 490
2 Items appearing only on the bank statement

Bank charges 62
Cheque received from K Taylor, a credit customer, dishonoured 143
Insurance premium paid by standing order 40
Interest on deposit account paid directly into the bank 130
3 The total of the debit side of the cash book had been overcast 100

8
REQUIRED
(b) Update the cash book of David Jones.

Bring down the updated bank balance on 1 February 2015.
David Jones

2015
Feb 1 Balance b/d 114 ……… ………....…………… …..…..
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… ……... …..…. ………..……..……… …..….
….…. ……………….……… …..…. …..…. ………..……..……… …..….
[6]
© UCLES 2015 0452/22/M/J/15

9
(c) Prepare a bank reconciliation statement for David Jones at 31 January 2015.
David Jones
Bank Reconciliation Statement at 31 January 2015
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
……………………………………………………………………………….. ……………..
[6]
(d) (i) State whether the cash book balance or the bank statement balance should be shown in
David Jones’ statement of financial position at 31 January 2015.
(ii) Give a reason for your answer in (i).
[3]
(e) State two reasons why David Jones’ bank manager would be interested in his financial
statements.
[2]
[Total: 19]

10
3 Akhtar Hussain is a trader. He maintains a full set of accounting records. His financial year ends
on 31 March.
Akhtar Hussain provided the following information at 31 March 2015.
1 The inventory was valued at $4150.
2 $54 owed by XY Limited is to be written off as a bad debt.
3 The provision for doubtful debts is to be reduced to $1010.
4 A machine was sold on 1 March. The amount received was recorded, but no other entries
were made. The machine originally cost $3000 and had been depreciated by $2250.
5 The remaining machine cost $5000 and is to be depreciated at 25% per annum using the
straight line method.
REQUIRED
(a) Record this information in the following accounts in Akhtar Hussain’s ledger at
31 March 2015.
Close the accounts by balancing or by making a transfer to an appropriate account.
Some entries have already been made in the accounts during the year.
Akhtar Hussain
Inventory account

2014
April 1 Balance b/d 3560 ……… ………....…………… …..…..
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
…….. ………..…..………… …….. …….. ………..…..………… ……..
…….. ………..…..………… …….. …….. ………..…..………… ……..
Bad debts account

2015
Jan 10 ABC Stores 136 ……… ………....…………… …..…..
….…. ……………..…..…. …..…. ……… ………....…………… …..…..
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
© UCLES 2015 0452/22/M/J/15

11

2014
….…. ……………..…..…. …..…. April 1 Balance b/d 1130
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
Provision for depreciation of machinery account

2014
….…. ……………..…..…. …..…. April 1 Balance b/d 4500
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..….
…….. ……………....……… …..…. ….….. ………..…..………… …..….
Disposal of machinery account

2015
….…. ……………..…..…. …..…. March 1 Bank 550
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….

12
Drawings account

2015
Feb 1 Bank 1000 …..…. ……………..…..…. …..….
….…. ……………..…..…… …..…. ……… ………....…………… …..…..
…..…. ………....…………… …..…. …..…. ………....…………… …..…..
[17]
On 30 March 2015 Akhtar Hussain received an invoice for $9360 from PJ Autos Limited. This
included $360 for repairs to a motor vehicle. The remainder was the cost of a new motor vehicle.
REQUIRED
(b) Prepare a journal entry to record this transaction. A narrative is required.
Akhtar Hussain
Journal
Debit Credit
$ $
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
[3]
© UCLES 2015 0452/22/M/J/15

13
(c) State the meaning of the following terms.
Capital expenditure
Revenue expenditure
[2]
On 31 March 2015 Akhtar Hussain discovered that an item of revenue expenditure had been
recorded as capital expenditure.
REQUIRED
(d) Complete the following table by putting a tick () in the correct column to indicate the effect
of this error on the non-current assets and the profit for the year.
non-current assets at 31 March 2015
profit for the year ended 31 March 2015
[2]
[Total: 24]

14
4 Rania Gharib is a trader. Her financial year ends on 31 January.
All sales are made for cash and all purchases are made on credit terms.
Rania Gharib provided the following information.
1
At 1 February 2014 At 31 January 2015
$ $
Inventory 4 700 3 150
Fixtures and fittings at valuation 6 900 7 300
Trade payables 2 950 3 720
$
2 Payments during the year ended 31 January 2015
Credit suppliers 40 120
Wages 9 520
Rent and rates 5 200
Insurance for 14 months to 31 March 2015 840
Fixtures and fittings 1 100
3 Amounts received during the year ended 31 January 2015

Cash from sales 63 660
4 Cash discounts received from credit suppliers 820
© UCLES 2015 0452/22/M/J/15

15
REQUIRED
(a) Prepare the income statement for the year ended 31 January 2015.
Rania Gharib
Income Statement for the year ended 31 January 2015
$ $
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[13]

16
(b) Calculate the rate of inventory turnover. The calculation should be correct to two decimal
places.
[3]
(c) Suggest two reasons why the rate of inventory turnover has improved.
2 [2]
(d) Explain what is measured by the return on capital employed (ROCE).
[2]
(e) Calculate the return on capital employed (ROCE), using the profit for the year in (a) and the
capital employed of $83 000. The calculation should be correct to two decimal places.
[2]
(f) Suggest one reason why the return on capital employed is higher than it was in the previous
year.
[1]
© UCLES 2015 0452/22/M/J/15

17
After the preparation of the income statement for the year ended 31 January 2015, it was
discovered that the opening inventory had been overvalued by $250.
REQUIRED
(g) Complete the following table to show the effect of this.
overstated understated no effect

gross profit for the year ended

31 January 2014
credit balance on capital account
on 1 February 2014
gross profit for the year ended
31 January 2015
profit for the year ended
31 January 2015
current assets at 31 January 2015
[4]
[Total: 27]

18
5 Craven Limited provided the following information at the start of the financial year on 1 April 2014.
$
Ordinary share capital 200 000
During the year ended 31 March 2015 the following took place.
1 The company made a profit for the year of $43 000.
2 A dividend of $16 000 was paid on the ordinary shares.
3 A transfer of $15 000 was made to general reserve.
REQUIRED
(a) Complete the following statement of changes in equity for the year ended 31 March 2015.
Craven Limited
Statement of Changes in Equity for the year ended 31 March 2015
Share General Retained Total

Details capital reserve earnings
$ $ $ $
On 1 April 2014 200 000 17 000 9 000 226 000
Profit for the year ................ ................. ................ ................
Dividend paid ................ ................ ................. ...............
Transfer to general reserve ................ ................ ................ ...............
On 31 March 2015
............... ................. ................. .................
[4]
Craven Limited provided the following information at 31 March 2015.
$
Fixtures and equipment at book value 54 000
Motor vehicles at book value 22 500
5% Debentures 15 000
Inventory at 31 March 2015 26 525
REQUIRED
(b) Prepare a statement of financial position at 31 March 2015.
© UCLES 2015 0452/22/M/J/15

19
Craven Limited
Statement of Financial Position at 31 March 2015
$ $
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[13]

20
Craven Limited wants to raise funds for expansion. It is considering either issuing more ordinary
shares or more debentures.
REQUIRED
(c) State two features of ordinary shares.
[2]
(d) State two features of debentures.
[2]
(e) State two ways the issue of debentures may affect the ordinary shareholders.
[2]
[Total: 23]
International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cie.org.uk after the live examination series.
© UCLES 2015 0452/22/M/J/15

* 1 0 0 8 7 8 5 5 5 1 *
ACCOUNTING 0452/22
1 hour 45 minutes

This document consists of 19 printed pages and 1 blank page.
DC (ST) 113743/3
2
1 Carol is a trader. She maintains a three column cash book and also a petty cash book. The imprest
amount is $100. All payments below $50 are made from petty cash.
REQUIRED
(a) State two reasons for maintaining a petty cash book.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
Carol had the following transactions during April 2016.
April 1 Petty cash imprest restored from the business bank account.
4 Purchased tea and coffee for office staff, $11.
9 Paid K Mzolo’s account of $450, by cheque, after deducting a cash discount of 2%.
16 Bought stationery, $25.
19 Paid taxi fare, $8.
20 Received a cheque from B Mamba in settlement of his account of $920, less 2½%
cash discount.
23 Paid T Nhete, a credit supplier, $38.
28 Cash sales, $2970.
29 Paid all the cash in the main cash account, except $100, into the bank account.
REQUIRED
(b) Record the above transactions in the following books which appear on pages 3 and 4.
(i) Petty cash book [9]
(ii) Three column cash book [10]
Balance each book and bring down the balances on 1 May 2016.
[Total: 21]
© UCLES 2016 0452/22/M/J/16

(i) Carol
Petty Cash Book
© UCLES 2016
Total Date Details Total Postage & General Ledger
received paid stationery expenses accounts
$ 2016 $ $ $ $
23 April 1 Balance b/d .................. .................... .................. ..................
................. ................. ......................................................... .................. .................... .................. ..................
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3
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0452/22/M/J/16
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[Turn over
(ii) Carol
Cash Book
© UCLES 2016
allowed received
2016 $ $ $ 2016 $ $ $
April 1 Balance b/d ................ 210 ................. April 1 Balance b/d ............... ................ 1437
........... ....................................... ................ ................ ................. ........... ....................................... ............... ................ ................
.......... ....................................... ................ ................. ................ ........... ....................................... ............... ................ ................
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........... ....................................... ................ ................. ................ ........... ....................................... ............... ................ ................
........... ....................................... ................ ................. ................. ........... ....................................... ............... ................ ................
4
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0452/22/M/J/16
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5
2 Aneela started a business on 1 March 2015. She did not maintain a full set of accounting records.
All purchases and sales were made on credit terms. All payments were made by cheque and all
money received was banked.
Aneela was able to provide the following information.

$
On 1 March 2015
Capital introduced 45 000
Business start-up loan received 10 000
During the year ended 29 February 2016

Non-current assets purchased 20 500
Credit purchases 70 150
Cheques received from credit customers 61 230
Cash discount allowed 1 570
Cash discount received 1 860
Returns to credit suppliers 1 110
Returns by credit customers 2 070
On 29 February 2016
Amount owing by credit customers 16 190
Cash at bank 16 970
REQUIRED
(a) Calculate the credit sales for the year ended 29 February 2016.
...................................................................................................................................................
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...............................................................................................................................................[6]

6
(b) Calculate the amount paid to credit suppliers during the year ended 29 February 2016.
...................................................................................................................................................
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...............................................................................................................................................[5]
(c) Prepare the bank account for the year ended 29 February 2016. Insert the missing figure
which represents the expenses for the year.
Aneela
Bank account
2016 2016
Feb 29 …........................... …....... Feb 29 ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
........... ............................... ........... ........... ............................... ...........
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[7]
[Total: 18]
© UCLES 2016 0452/22/M/J/16

7
3 Abid and Faiz are partners. They operate a secretarial agency. Their financial year ends on
31 March.
In addition to the capital invested, Abid made a 10-year loan to the business on 31 March 2016.
REQUIRED
(a) State one advantage of being a partner rather than a sole trader.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) State one disadvantage of being a partner rather than a sole trader.
...................................................................................................................................................
...............................................................................................................................................[1]
(c) State one reason why a partner may make a loan to the business rather than investing
additional capital.
...................................................................................................................................................
...............................................................................................................................................[1]
(d) State two reasons why it is important for the partnership to have an adequate amount of
working capital.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
Abid and Faiz share profits and losses in the ratio of 2 : 1.
The balances on their accounts on 1 April 2015 were:
Abid Faiz
$ $
Current account 110 debit 800 credit
During the year ended 31 March 2016 the partners made the following drawings:
Abid Faiz
$ $
6 000 7 000

8
The following is an extract from the profit and loss appropriation account for the year ended
31 March 2016.
Abid and Faiz

Profit and Loss Appropriation Account for the year ended 31 March 2016
$ $
Interest on drawings Abid 120
Faiz 140 260
13 430
Interest on capital Abid 2 400
Faiz 1 650
4 050
Salary Faiz 5 000 9 050
Profit available for distribution 4 380
The following additional information is available on 31 March 2016.
$
Fixtures and equipment at book value 104 000
Motor vehicles at book value 28 520
Other payables 160
Bank 16 080 debit
Loan from Abid 20 000
REQUIRED
(e) Prepare the statement of financial position at 31 March 2016.
The details of the partners’ current accounts may be shown within the statement or as a
separate calculation in the space provided.
You may use this space for the partners’ current accounts
© UCLES 2016 0452/22/M/J/16

9
Abid and Faiz

$ $ $
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[13]
10
(f) Calculate the return on capital employed (ROCE). Use the capital employed from the
statement of financial position and the profit for the year of $13 170.
The calculation should be correct to two decimal places. Show your workings.
...................................................................................................................................................
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...............................................................................................................................................[2]
(g) Explain the importance of return on capital employed (ROCE).
...................................................................................................................................................
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...............................................................................................................................................[2]
[Total: 22]
© UCLES 2016 0452/22/M/J/16

12
4 Yasmin opened a garment factory on 1 May 2015.
$
On 1 May 2015
Cost of factory machinery 35 000
Cost of office furniture and equipment 8 500
Cost of tools 1 000
For the year ended 30 April 2016

Revenue 113 640
Purchases of raw materials 28 600
Carriage on raw materials 1 500
Purchases of finished goods 15 700
Wages and salaries
Factory operatives 32 300
Factory supervisors 11 860
Office and sales staff 33 150
General expenses
Factory 3 340
Office 1 960
Rates 6 000
At 30 April 2016
Inventory
Raw materials 3 150
Value of tools 830
1 The rates are to be apportioned ¾ to the factory and ¼ to the office.
2 No additional non-current assets were purchased during the year.
3 The factory machinery is to be depreciated at 20% per annum on cost.
4 The office furniture and equipment is to be depreciated at 15% per annum on cost.
5 The tools are to be revalued at the end of each financial year.
© UCLES 2016 0452/22/M/J/16

13
REQUIRED
(a) Prepare the manufacturing account for the year ended 30 April 2016.
Yasmin
Manufacturing Account for the year ended 30 April 2016
$ $
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[13]

14
(b) (i) Calculate the cost of sales for the year ended 30 April 2016.
...........................................................................................................................................
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.......................................................................................................................................[4]
(ii) Calculate the gross profit for the year ended 30 April 2016.
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[1]
(c) (i) Calculate the percentage of gross profit to revenue.
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Suggest two ways in which Yasmin could increase the percentage of gross profit to
revenue.
1 ........................................................................................................................................
...........................................................................................................................................
2 ........................................................................................................................................
.......................................................................................................................................[2]
[Total: 22]
© UCLES 2016 0452/22/M/J/16

15
5 Paul is a trader. He maintains a full set of accounting records. His ledger is divided into a sales
ledger, a purchases ledger and a nominal (general) ledger.
REQUIRED
(a) State one advantage of dividing the ledger into these three sections.
...................................................................................................................................................
...............................................................................................................................................[1]
(b) Name the ledger in which each of the following accounts would appear.
(i) J Smithson, a credit supplier, account ................................................ ledger
(ii) Sales returns account ................................................ ledger
(iii) Discount allowed account ................................................ ledger

[3]
Paul’s financial year ends on 31 December.
He maintains one combined account for rent and rates.
On 1 January 2015 three months’ rates, totalling $900, were prepaid. On the same date four
months’ rent, totalling $3200, was prepaid.
The following transactions took place during the year ended 31 December 2015.
April 1 Paid rates by cheque, $3960, for 12 months to 31 March 2016.
May 1 Paid rent by cheque, $4800, for 6 months to 31 October 2015.

16
REQUIRED
(c) Complete the rent and rates account for the year ended 31 December 2015.
Balance the account and bring down the balances on 1 January 2016.
Paul
Rent and rates account
2015
Jan 1 Balance b/d ............. ............................... .............
Rates 900
Rent 3200 4100 ............. ............................... .............
............. ............................... ............. ............. ............................... .............
............. ............................... ............. ............. ............................... .............
............. ............................... ........... ............. ............................... .............
............. ............................... ............. ............. ............................... .............
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[7]
Paul always values his inventory at the lower of cost and net realisable value.
REQUIRED
(d) Explain why Paul should continue his policy of including inventory in his financial statements
at the lower of cost and net realisable value.
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
© UCLES 2016 0452/22/M/J/16

17
After the preparation of the income statement for the year ended 31 December 2015 it was
discovered that the inventory on 31 December 2014 had been valued at net realisable value which
was higher than the cost price.
REQUIRED
(e) Complete the following table to indicate the effect of this error.
Place a tick (✓) under the correct heading to indicate the effect of this error on each item.
overstated understated no effect

Profit for the year ended
31 December 2014
Profit for the year ended
31 December 2015
Cost of sales for the year ended
31 December 2015
Current assets at
31 December 2014
Current assets at
31 December 2015
[5]
[Total: 18]

18
6 David is a trader. The totals of his trial balance prepared on 31 January 2016 did not balance. The
difference was entered in a suspense account and draft financial statements were prepared.
The following information was extracted from the draft income statement for the year ended
31 January 2016.
$
Gross profit 15 800
REQUIRED
(a) (i) Calculate the percentage of profit for the year to revenue.
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Suggest two reasons why the percentage of profit for the year to revenue is lower than
the previous year.
1 ........................................................................................................................................
...........................................................................................................................................
2 ........................................................................................................................................
.......................................................................................................................................[2]
The following errors were later discovered.
1 No record had been made of office expenses paid in cash, $114.
2 A page total in the sales journal, $45 400, had been incorrectly carried forward as $44 500.
3 Discount allowed, $300, was incorrectly recorded as discount received.
4 Sales returns, $814, had been correctly recorded in the customer’s account, but credited to
the purchases returns account.
5 The provision for doubtful debts of $120 should have been increased to $144.
© UCLES 2016 0452/22/M/J/16

19
REQUIRED
(b) Prepare journal entries to correct errors 1 and 2. Narratives are required.
David
Journal
Debit Credit
$ $
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[6]
(c) Complete the following statement to show the effect on the profit for the year of correcting
errors 1–5. Calculate the corrected profit for the year.
The first correction has been completed as an example.
David
Statement of corrected profit for the year ended 31 January 2016
$
Profit for the year before corrections 3500
Increase Decrease
in profit in profit
$ $
Error 1 114
Error 2 .......... ..........
Error 3 .......... ..........
Error 4 .......... ..........
Error 5 .......... ..........

_____ _____ _____
Corrected profit for the year _____
[9]
[Total: 19]
© UCLES 2016 0452/22/M/J/16
* 5 2 2 1 7 3 2 1 5 5 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (RCL (JDA)) 132471/3

2
1 Shiromi is a trader in office equipment. She maintains a full set of accounting records. Shiromi
made the following entries in her cash book, purchases journal and purchases returns journal in
April 2017.
Shiromi
Cash Book
Cash Bank Discount Cash Bank
Received
April $ $ April $ $ $
1 Balances b/d 90 2 954 4 Rent and rates 495
21 Sales 600 6 000 10 Motor vehicle 5 500
30 Balance c/d 3 785 18 Lincy 66 3 234
24 Gail 90 3 510
26 Drawings 150
30 Balance c/d 540
690 12 739 156 690 12 739
Shiromi
Purchases Journal
$ $
April 5 Lincy
Goods 4825
16 Gail
Goods 4800
Shiromi
Purchases Returns Journal
$ $
April 7 Lincy
Goods 700
© UCLES 2017 0452/22/M/J/17

3
REQUIRED
(a) Enter the transactions for April in the following ledger accounts. It is not necessary to balance
or total any of the accounts.
Shiromi
General Ledger
Rent and rates account
............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
Motor vehicle account

............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
Sales account
............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
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Drawings account
............. ............................... ............. ............. ................................ .............
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............. ............................... ............. ............. ................................ .............

4
Purchases account
............. ............................... ............. ............. ................................ .............
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............. ............................... ............. ............. ................................ .............
Purchases returns account

............. ............................... ............. ............. ................................ .............
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............. ............................... ............. ............. ................................ .............
Discount received account

............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
............. ............................... ............. ............. ................................ .............
Purchases Ledger
Lincy account
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Gail account
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[13]
© UCLES 2017 0452/22/M/J/17
5
Shiromi’s financial year ends on 30 April. She provided the following information.
At 30 April 2016 At 30 April 2017

Current ratio 1.49 : 1 0.92 : 1
All purchases are made on credit terms and all sales are made for cash.
REQUIRED
(b) Suggest two reasons for the change in the current ratio.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
(c) Suggest two problems Shiromi may encounter because her working capital is inadequate.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
Shiromi is hoping to increase her working capital and is considering four courses of action.
REQUIRED
(d) Complete the table by placing a tick (✓) in the correct column to show how each course of
action would affect Shiromi’s working capital.

Take out a short-term bank loan
Repay a long-term bank loan
Sell goods on credit terms instead of for

cash
Obtain a higher rate of cash discount
[4]

6
Shiromi bought office equipment on credit.
REQUIRED
(e) State why this transaction increased Shiromi’s current assets.
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [1]
(f) Suggest two reasons why Shiromi’s return on capital employed (ROCE) was lower on
30 April 2017 than it was on 30 April 2016.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 24]
© UCLES 2017 0452/22/M/J/17

7
2 Waheed is a trader. He maintains a full set of accounting records and prepares control accounts at
the end of each month.
REQUIRED
(a) Name the book of prime (original) entry which Waheed would use to obtain the following
information when preparing his sales ledger control account.
Book of prime (original) entry

Discount allowed
Bad debts
Contra
Returns
[4]
(b) State the meaning of a contra entry in connection with control accounts.
State why Waheed may make such an entry.
Meaning ....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Reason .....................................................................................................................................
.............................................................................................................................................. [2]
The sales journal for March 2017 was destroyed, but Waheed was able to provide the following
information.
2017 $
March 1 Debit balances in sales ledger 2346
Credit balances in sales ledger 140
March 31 Totals for the month

Cheques received from credit customers 2145
Cheques paid to credit suppliers 3013
Cheque received from credit customer (included
in the cheques received), later dishonoured 350
Discount allowed 55
Discount received 90
Returns by credit customers 276
Returns to credit suppliers 198
Contra entry 182
April 1 Debit balances in sales ledger 2670

Credit balances in sales ledger 86

8
REQUIRED
(c) Select the relevant figures and prepare the sales ledger control account for the month of
March 2017. Insert a figure for credit sales.
Balance the account and bring down the balances on 1 April 2017.
Waheed
Sales ledger control account
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............

[10]
(d) Suggest two reasons why the sales ledger control account had a credit balance on
1 April 2017.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
© UCLES 2017 0452/22/M/J/17

9
Waheed’s financial year ends on 31 March. He provided the following information.
All goods are bought and sold on credit terms. A cash discount is received from credit suppliers
if payment is made within 45 days. A cash discount is allowed to credit customers if payment is
made within 30 days.
At 31 March 2016 At 31 March 2017
Trade receivables collection period 33 days 29 days

Trade payables payment period 44 days 46 days
REQUIRED
(e) State whether Waheed would be satisfied with the change in the collection period for trade
receivables. Give a reason for your answer.
Satisfied? ...............................................
Reason .....................................................................................................................................
.............................................................................................................................................. [2]
(f) State one advantage to Waheed’s suppliers of the change in the payment period.
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [1]
(g) State one disadvantage to Waheed’s suppliers of the change in the payment period.
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [1]
(h) Comment on how a collection period of 29 days and a payment period of 46 days may affect
Waheed’s liquidity position.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 24]

10
3 The A1 Sports Club was formed some years ago.
The club has 100 members. The annual subscription is $70.
A few years ago the club borrowed $3000 from a member at 3% per annum interest.
In addition to providing sporting facilities, the club also has a café for members. All supplies for the
café are purchased on credit terms, and all sales are made for cash.
The following information was available for the year ended 30 April 2017.
$
At 1 May 2016
Amount owing to café suppliers 311
Café inventory 298
Loan from member (interest charged at 3% per annum) 3000
Subscriptions in arrears 560
Bank overdraft 3180
Receipts and payments during the year ended 30 April 2017

Subscriptions for the year ended 30 April 2016 560
for the year ended 30 April 2017 6300
for the year ending 30 April 2018 280
Café sales ?
Payments to café suppliers 3796
Rates of club premises 960
General club expenses 910
Café wages 1040
Loan interest and repayment of half of the loan 1590
Purchase of new sports equipment 4000
At 30 April 2017
Bank overdraft 2626
Café inventory 216
Subscriptions in arrears 700
Amount owing to café suppliers 393
© UCLES 2017 0452/22/M/J/17

11
REQUIRED
(a) Prepare the receipts and payments account for the year ended 30 April 2017. Insert a figure
for receipts from café sales.
Balance the account and bring down the balance on 1 May 2017.
A1 Sports Club
Receipts and Payments Account for the year ended 30 April 2017
2016
............. ................................ ............. May 1 Balance b/d 3180
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............

[12]

12
(b) Prepare the café income statement for the year ended 30 April 2017.
A1 Sports Club
Café Income Statement for the year ended 30 April 2017
$ $
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
................................................................................. .......................... ..........................
[8]
(c) State the amount of subscriptions which will appear in the income and expenditure account
for the year ended 30 April 2017. Give a reason for your answer.
Amount $ .........................
Reason .....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(d) List five items included in the receipts and payments account which will not appear in the
income and expenditure account for the year ended 30 April 2017.
1 ................................................................................................................................................
2 ................................................................................................................................................
3 ................................................................................................................................................
4 ................................................................................................................................................
5 ........................................................................................................................................... [5]
[Total: 27]
© UCLES 2017 0452/22/M/J/17
13
Question 4 is on the next page.

15
REQUIRED
(b) Prepare a statement of affairs at 31 January 2017 showing the total capital at that date.
Virat
Statement of Affairs at 31 January 2017
$ $ $
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
........................................................................... ................... ................... ...................
[14]
16
(c) Prepare the capital account of Virat for the year ended 31 January 2017 to show the profit or
loss for the year.
Virat
Capital account
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
[5]
Virat was disappointed with the results of his business for the year ended 31 January 2017. He
decided to try to obtain the financial statements of other businesses so that he could compare
their results with those of his own business.
REQUIRED
(d) Explain two factors Virat should consider when comparing his results with those of another
business.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [4]
[Total: 24]
© UCLES 2017 0452/22/M/J/17

18
5 Heng is a wholesaler. He maintains a full set of double entry accounting records.
REQUIRED
(a) Name the accounting principle Heng is applying in his accounting records.
.............................................................................................................................................. [1]
Heng’s financial year ends on 31 December. He opened a suspense account on

31 December 2016 and entered a debit balance of $430.
REQUIRED
(b) State two reasons why it was necessary for Heng to open a suspense account.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
Heng discovered that the following errors had been made in his accounting records.
1 Repairs to office equipment, $281, had been correctly entered in the cash book, but had been
entered in the office equipment account.
2 A sales invoice issued to AB Stores had been overcast by $100.
3 The balance of the petty cash book, $150, had not been entered in the trial balance.
4 General expenses, $1120, had been correctly entered in the cash book, but had been entered
in the general expenses account as $1210.
5 The total of the discount allowed column in the cash book, $1024, had not been transferred to
the discount allowed account in the ledger.
6 A cheque, $2060, paid to AK Suppliers, had been debited in the cash book (which had a
positive balance) and credited to the account of AK Suppliers.
7 The total of the purchases returns account, $454, had not been entered in the trial balance.
© UCLES 2017 0452/22/M/J/17

19
REQUIRED
(c) Prepare the suspense account in Heng’s ledger to show the required entries.
The account should be balanced or totalled as necessary.
Heng
Suspense account
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
............. ................................ ............. ............. ................................. .............
[6]
(d) State whether all the errors in Heng’s books have been discovered.
Have all errors been discovered? .......................................
Reason .....................................................................................................................................
.............................................................................................................................................. [2]
(e) Complete the table to show the effect of each of the errors. Where an error has no effect,
write ‘No effect’.
Error Profit for the year Non-current assets Current assets Current liabilities
$ $ $ $
1 281 overstated 281 overstated No effect No effect
2
3
4
5
6
7
[10]
[Total: 21]
© UCLES 2017 0452/22/M/J/17
* 7 5 7 9 0 8 0 5 8 2 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (ST) 144911/2
2
1 J Smith is a wholesaler. He provided the following incomplete document on 28 February 2018.
J Smith
Wholesale Supplier
112 Long Road
Westown
W Jones
High Street
Eastford 28 February 2018
Date Reference Debit Credit Balance
$ $ $
2018
Feb 1 Balance due 700
11 Goods 450 ?
19 Returns 115 ?
28 Payment 686 ?
Discount 14 ?
REQUIRED
(a) (i) State the name of the document.
.......................................................................................................................................[1]
(ii) Calculate the balance on the document at the end of February 2018.
...........................................................................................................................................
.......................................................................................................................................[1]
(iii) Calculate the percentage of the discount on 28 February.
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[1]
(iv) Name the type of discount on 28 February.
.......................................................................................................................................[1]
© UCLES 2018 0452/22/M/J/18

3
(b) Complete the following table by placing a tick (3) in the correct column to indicate how
J Smith would record the issue of this document in his accounting records.
debit entry in ledger credit entry in ledger

no entry would be made
account of W Jones account of W Jones
[1]
(c) Complete the following table relating to the transaction of 11 February.
name of person entries made by W Jones

document issued
issuing document account debited account credited
............................... ............................... ............................... ...............................

[4]
(d) Name the book of prime (original) entry in which each trader would record the transaction of
19 February.
book of prime (original) entry used by

J Smith ..................................................................
book of prime (original) entry used by
W Jones ..................................................................
[2]
The financial year of J Smith ends on 30 April. During the year ended 30 April 2018 he recorded a
bad debt and a bad debt recovered.
REQUIRED
(e) State the meaning of each of the following terms.
(i) Bad debt
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[1]
(ii) Bad debt recovered
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[1]

4
(f) Suggest two ways in which J Smith could reduce the risk of bad debts.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
J Smith maintains a provision for doubtful debts at the same percentage of the trade receivables
at the end of each year.
REQUIRED
(g) Explain how maintaining a provision for doubtful debts is an application of the principle of
prudence.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(h) Explain how maintaining a provision for doubtful debts is an application of the principle of
accruals (matching).
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
J Smith provided the following information.

$
30 April 2017 Trade receivables 18 400
30 April 2018 Trade receivables 17 600
REQUIRED
(i) Calculate the rate of the provision for doubtful debts as a percentage.
...................................................................................................................................................
...............................................................................................................................................[1]
© UCLES 2018 0452/22/M/J/18

5
(j) Prepare the provision for doubtful debts account for the year ended 30 April 2018. Balance
the account and bring down the balance on 1 May 2018.
J Smith
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............

[5]
[Total: 25]

6
2 Sophia is a food wholesaler. Her receipts and payments during the financial year ended
31 March 2018 included both capital and revenue items.
REQUIRED
(a) State the meaning of each of the following terms and give an example of each.
Capital expenditure
Meaning ....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Capital receipt
Meaning ....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue expenditure
Meaning ....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue receipt
Meaning ....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
Example ................................................................................................................................[8]
© UCLES 2018 0452/22/M/J/18

7
After calculating her profit for the year ended 31 March 2018, Sophia discovered some errors had
been made in her accounting records.
Error 1 Rent received from a tenant had been credited to the premises account.
Error 2 Legal costs on the purchase of a new warehouse had been debited to the general
expenses account.
Error 3 Roof repairs to the existing warehouse had been debited to the premises account.
Error 4 Capital introduced had been included in the cash sales.
REQUIRED
(b) Complete the following table by placing a tick (3) in the correct column to indicate the effect
of each of the errors.
effect on profit for the year effect on closing capital

error
overstated understated overstated understated no effect
error 1 3 3
error 2
error 3
error 4
[6]

8
Sophia maintains a full set of books of prime (original) entry including a three column cash book.
REQUIRED
(c) Explain why Sophia’s cash book is both a book of prime (original) entry and also part of the
ledger.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
The bank columns of Sophia’s cash book for the month of April 2018 were as follows.
Date Details $ Date Details Cheque $

2018 2018 number
April 1 Balance b/d 950 April 2 Petty cash 000198 106
8 Goodfoods 140 15 Expenses 000199 25
28 CD Limited 280 21 Lowlands Farm 000200 44
30 Sales 311 29 FF Limited 000201 90
Sophia’s business bank statement for April 2018 was as follows.
Bank Statement for the month of April 2018

2018 Debit Credit Balance
$ $ $
April 1 Balance 850 Cr
5 000198 106 744 Cr
9 Credit 140 884 Cr
12 Standing order (insurance) 50 834 Cr
18 000199 25 809 Cr
20 Dishonoured cheque (Goodfoods) 140 669 Cr
27 000200 44 625 Cr
30 Charges 15 610 Cr
Direct debit (rates) 400 210 Cr
The following errors were discovered.
1 Sophia had brought down the cash book balance on 1 April 2018 incorrectly. It should have
been $850.
2 The bank had incorrectly entered a standing order for insurance in Sophia’s business bank
account instead of her personal bank account.
© UCLES 2018 0452/22/M/J/18

9
REQUIRED
(d) Select the items required to update Sophia’s cash book on 30 April 2018 and write these
items in the table.
Indicate how each item would be entered in the cash book.
entry required in cash book

item debit credit
$ $
cash book error 100
........................................................................................... ......................... .........................
........................................................................................... ......................... .........................
........................................................................................... ......................... .........................
........................................................................................... ......................... .........................
........................................................................................... ......................... .........................
[3]
Sophia prepared a bank reconciliation statement on 30 April 2018. She started with the credit
balance shown on the bank statement at that date.
REQUIRED
(e) Select the items which would be entered in Sophia’s bank reconciliation statement on
30 April 2018 and write these items in the table.
Place a tick (3) in the correct column to indicate how each item would be recorded in the
bank reconciliation statement.
entry in bank reconciliation statement
item deducted from

added to bank
bank statement
statement balance
balance
................................................................................ .............................. ..............................
................................................................................ .............................. ..............................
................................................................................ .............................. ..............................
................................................................................ .............................. ..............................
................................................................................ .............................. ..............................
[4]
[Total: 23]
10
3 Jamil started a business on 1 January 2014. He considered using the straight line (equal
instalment) method to depreciate all his non-current assets.
REQUIRED
(a) Name one other method Jamil could use to depreciate his non-current assets.
...............................................................................................................................................[1]
(b) Suggest two reasons why the straight line (equal instalment) method would not be a suitable
method of depreciation to apply to the hand tools used in Jamil’s factory.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...............................................................................................................................................[2]
Jamil decided to depreciate his office machinery at 20% per annum using the straight line (equal
instalment) method calculated on a month-by-month basis from the date of purchase to the date
of disposal.
He provided the following information.
2014 January 1 Purchased office machine A, $15 000, paying by cheque.
2016 October 1 Purchased office machine B, $18 000, paying by cheque.
2017 July 1 Purchased office machine C, $20 000, on credit from XY Limited.
XY Limited agreed to accept office machine A in part exchange at a
valuation of $6000.
REQUIRED
(c) Calculate the depreciation on office machinery for the year ended 31 December 2016.
Show your calculations and insert your answers in the spaces provided.
Calculation of depreciation for the year ended 31 December 2016
depreciation on office depreciation on office

total
machine A machine B
calculation calculation
answer $ .................. answer $ .................. $ ..................

[2]
© UCLES 2018 0452/22/M/J/18
11
(d) Calculate the depreciation on office machinery for the year ended 31 December 2017.
Show your calculations and insert your answers in the spaces provided.
Calculation of depreciation for the year ended 31 December 2017
depreciation on office depreciation on office depreciation on office

total
machine A machine B machine C
calculation calculation calculation
answer $ .................. answer $ .................. answer $ .................. $ ..................

[3]
(e) Prepare the following accounts in the ledger of Jamil for each of the two years ended
31 December 2016 and 31 December 2017.
Balance the accounts and bring down the balances on 1 January 2017 and 1 January 2018.
Jamil
Office machinery account

2016
Jan 1 Balance A b/d 15 000 ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............

12
Provision for depreciation of office machinery account

2016
............ .................................... .............. Jan 1 Balance A b/d 6 000
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............
............ .................................... .............. ............ .................................... ..............

[11]
(f) Calculate the profit or loss on the disposal of office machine A.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
[Total: 23]
© UCLES 2018 0452/22/M/J/18

14
4 The financial year of AB Limited ends on 31 March. The income statement for the year ended
31 March 2018 showed a profit for the year of $35 000.
REQUIRED
(a) Complete the following statement of changes in equity for the year ended 31 March 2018,
which has been partially prepared by the accountant.
AB Limited
Statement of Changes in Equity for the year ended 31 March 2018

capital
$ $ $ $
On 1 April 2017 200 000 14 000 6 000 220 000
Profit for the year .............. .............. ............... 35 000
Final dividend paid (for year ended 31 March 2017) .............. .............. ............... (10 000)
Interim dividend paid (for year ended 31 March 2018) .............. .............. ............... (4 000)
Transfer to general reserve .............. 2 000 ............... ..............
At 31 March 2018 .............. .............. ............... ..............
[6]
The following additional information was available on 31 March 2018.
$
4% Debentures (repayable 1 April 2022) 30 000
Machinery at cost 98 000
Office equipment at cost 39 500
Provision for depreciation of machinery 35 280
Provision for depreciation of office equipment 15 800
Other payables 950
Petty cash 200
Bank 2 040 credit
Inventory 12 120
Bank loan (repayable 1 January 2019) 20 000
© UCLES 2018 0452/22/M/J/18

15
REQUIRED
(b) Prepare the statement of financial position at 31 March 2018.
AB Limited
$ $ $
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
.......................................................................................... ................ ................ ................
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16
$ $ $
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[14]
The directors of AB Limited want to raise $100 000 in order to expand the business. After the first
two years this should increase the annual profit before interest by $25 000.
It is proposed to raise the funds by either issuing more debentures or more ordinary shares.
REQUIRED
(c) Suggest two disadvantages to the existing ordinary shareholders if the funds are raised by
the issue of debentures.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
(d) Suggest two disadvantages to the existing ordinary shareholders if the funds are raised by
the issue of additional ordinary shares.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[2]
[Total: 24]
© UCLES 2018 0452/22/M/J/18

18
5 Aretta opened a clothes store on 1 April 2018.
She invested $12 800 as capital. Her father gave her a loan of $7200, repayable on 1 October 2018.
Interest of 5% per annum was to be paid on the loan at the end of each month.
The credit side of Aretta’s cash book for April 2018 was as follows.
$
April 1 Shop fixtures and fittings 9 500
Credit suppliers 15 000
Rent of premises for 6 months 2 400
Insurance for 12 months 3 600
April 30 Operating expenses 980

Wages 1 900
Drawings 1 500
1 All purchases were made on credit terms and all sales were made for cash.
2 Aretta’s gross profit margin was 25%.
3 No record was made of cash sales.
4 Aretta decided to depreciate the shop fixtures and fittings at 12% per annum using the
straight line (equal instalment) method.
5 On 30 April 2018 inventory was valued at $4080 and $810 was owed to credit suppliers.
© UCLES 2018 0452/22/M/J/18

19
REQUIRED
(a) Prepare Aretta’s income statement for the month ended 30 April 2018 to show the revenue,
gross profit and profit for the month.
Aretta
Income Statement for the month ended 30 April 2018
$ $
................................................................................. ......................... .........................
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................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
................................................................................. ......................... .........................
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[12]

20
On 30 April 2018 Aretta was concerned that her quick (acid test) ratio was very low. She considered
six proposals to improve the ratio.
REQUIRED
(b) State the formula for the calculation of the quick (acid test) ratio.
...................................................................................................................................................
...............................................................................................................................................[1]
(c) Complete the following table by placing a tick (3) in the correct column to indicate the effect
of each proposal on Aretta’s quick (acid test) ratio.
effect on quick ratio

proposal
1 purchase a motor vehicle on credit 3
pay credit suppliers early to receive cash

2
discount
obtain a bank overdraft and repay the loan
3
immediately
4 arrange for the loan to be extended to 2 years
5 sell on credit terms rather than on cash terms
6 reduce inventory by selling half at cost price
[5]
(d) State which proposal would affect the quick (acid test) ratio but not affect the current ratio.
Explain the reason for your answer.
Proposal number .............................
Reason .....................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
© UCLES 2018 0452/22/M/J/18

21
Aretta decided to compare her business performance with that of another clothes store in the
same town.
REQUIRED
(e) Explain two factors Aretta should consider when comparing her business performance with
that of the other business.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
[Total: 25]
© UCLES 2018 0452/22/M/J/18

* 9 0 2 3 2 2 0 6 5 7 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (LT) 161808/2
2
1 Annabel is a wholesaler. She maintains a three column cash book.
The following transactions took place in April 2019.
April 8 Received a cheque from Ellie in full settlement of her account of $450 after deducting
2% cash discount
15 Paid Ed $468 by bank transfer to settle his account after deducting 2 12 % cash discount
21 Received a cheque from Caleb, $310
25 Withdrew cash from bank for business use, $200
27 Paid operating expenses in cash, $296
Annabel received her bank statement for April 2019.
The following items appeared on her bank statement but had not been recorded in her accounting
records.
1 The cheque received from Caleb on 21 April had been dishonoured.
2 Carly, a credit customer, had paid $294 by credit transfer to settle her account of $300.
3 Bank charges for the month amounted to $82.
REQUIRED
(a) Complete Annabel’s cash book on the page opposite.

Balance the cash book and bring down the balances on 1 May 2019. [13]
© UCLES 2019 0452/22/M/J/19

Annabel
Cash Book
© UCLES 2019
allowed received
2019 $ $ $ 2019 $ $ $
April 1 Balance b/d ............... 150 ............... April 1 Balance b/d ............... ............... 988
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
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3
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
0452/22/M/J/19
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
........... ......................................... ............... ............... ............... ........... ......................................... ............... ............... ...............
[Turn over
4
Annabel purchases goods on credit from Ed. They exchanged various business documents during
April 2019.
REQUIRED
(b) Name the person who issued each of the following documents.
document person issuing the document
invoice ................................................................
debit note ................................................................
credit note ................................................................
statement of account ................................................................

[4]
(c) Explain the difference between a debit note and a credit note.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[4]
(d) State one purpose of issuing a statement of account.
...................................................................................................................................................
...............................................................................................................................................[1]
[Total: 22]
© UCLES 2019 0452/22/M/J/19

6
2 The financial year of the NS Musical Society ends on 31 January.
On 31 January 2019 it was confirmed that the treasurer had disappeared and had taken some
money belonging to the NS Musical Society.
The new treasurer was able to provide the following information relating to the financial year ended
31 January 2019.
The Society has 60 members. The annual subscription is $50.
$
On 1 February 2018
Subscriptions accrued 100

Subscriptions prepaid 250
Bank overdraft 780
Musical instruments at book value 3600
During the year ended 31 January 2019
Payment of rates of premises covering 10 months to 30 November 2018 2000

Payment of insurance for 14 months to 31 March 2019 700
Receipts from sales of concert tickets 2560
Concert expenses paid 1610
Proceeds of sale of old musical instruments (book value $120) 100
Cost of musical instruments purchased 2100
(Half of this amount was paid immediately and the balance was
payable in February 2019)
At 31 January 2019
Bank overdraft 2430

Subscriptions prepaid 200
Musical instruments are depreciated at 10% per annum based on the value of instruments owned
at the end of each financial year.
© UCLES 2019 0452/22/M/J/19

7
REQUIRED
(a) Prepare the subscriptions account for the year ended 31 January 2019 to show the
subscriptions received during the year.
NS Musical Society
Subscriptions account
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
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[7]

8
(b) Prepare the receipts and payments account for the year ended 31 January 2019 to calculate
the amount of money which is missing from Society funds.
NS Musical Society
Receipts and Payments Account for the year ended 31 January 2019
.............. ................................. .............. .............. ................................. ..............
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.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
.............. ................................. .............. .............. ................................. ..............
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.............. ................................. .............. .............. ................................. ..............
[11]
© UCLES 2019 0452/22/M/J/19

9
(c) Complete the following table to show the amount which would appear in the income and
expenditure account for the year ended 31 January 2019 for each item.
Item $
Concert ...................
Rates ...................
Insurance ...................
Depreciation of musical instruments ...................
Sale of musical instruments ...................
[6]
Workings
A member of the committee of the NS Musical Society has expressed concern about the bank
overdraft and has proposed that the annual subscription should be increased by $10.
REQUIRED
(d) Discuss the implications of increasing the annual subscription by $10.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]
[Total: 27]

10
3 Jamal opened a toy factory on 1 March 2018.
On that date he purchased the following non-current assets.
$
Premises 100 000
Loose tools for factory 1 650
Office fixtures and fittings 15 450
Jamal decided on the following depreciation policy.
1 No depreciation would be charged on premises.
2 Factory machinery and office fixtures and fittings would be depreciated by 20% per annum
using the straight line (equal instalment) method of depreciation.
3 Loose tools would be revalued at the end of each financial year.
Jamal provided the following information.

$
For the year ended 28 February 2019
Purchases of raw materials 45 680

Purchases of finished goods 12 400
Purchase returns of raw materials 1 030
Carriage on raw materials 3 240
Direct factory wages 29 750
Indirect factory wages 18 750
Office and sales staff wages 25 360
Operating expenses 8 250
Insurance (for 16 months to 30 June 2019) 3 200
Sales returns 2 250
Revenue ?
At 28 February 2019
Inventory of raw materials 4 150

Inventory of work in progress 3 310
Inventory of finished goods 8 900
Loose tools at valuation 1 320
Direct factory wages accrued 3 040
Operating expenses accrued 550
The operating expenses and the insurance are to be apportioned 75% to the factory and 25% to
the office.
Jamal’s mark-up is 25%.
© UCLES 2019 0452/22/M/J/19

11
REQUIRED
(a) Prepare the manufacturing account for the year ended 28 February 2019.
Jamal
Manufacturing Account for the year ended 28 February 2019
$ $
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[15]

12
(b) Prepare the income statement (trading section) for the year ended 28 February 2019 to show
the revenue, cost of sales and gross profit for the year.
Jamal
Income Statement (Trading section) for the year ended 28 February 2019
$ $
..................................................................................... ........................ ........................
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..................................................................................... ........................ ........................

[7]
After the preparation of the financial statements for the year ended 28 February 2019 it was
discovered that some errors had been made.
REQUIRED
(c) Complete the following table to indicate the effect of each of the errors.
Error effect on effect on effect on

cost of gross profit profit for the
production year
Returns of finished goods to the

supplier, $1 200, were omitted no effect understated understated
Operating expenses accrued were

$850 not $550 ................... ................... ...................
Salesman’s commission, $1 850,

had been included in indirect
factory wages ................... ................... ...................
[6]
[Total: 28]
© UCLES 2019 0452/22/M/J/19
14
4 Shen is a retailer of men’s clothes. His financial year ends on 31 January.
The annual rates of Shen’s shop are $960. On 1 February 2018 Shen owed rates, $240. He paid
rates by bank transfer on the following dates.
$
2018
March 31 640
October 31 720
Shen receives a commission from Wang, who owns a shoe shop, on goods purchased by Shen’s
customers.
Shen provided the following information.

$
2018
February 1 Commission outstanding 210
March 1 Commission received by bank transfer 210
August 31 Commission received in cash 95
2019
January 31 Commission outstanding 114
REQUIRED
(a) Prepare the following accounts in the ledger of Shen for the year ended 31 January 2019.
Balance the accounts and bring down the balances on 1 February 2019.
Shen
Rates account
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
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© UCLES 2019 0452/22/M/J/19

15
Commission receivable account
............... .................................. ............... ............... .................................. ...............
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............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
............... .................................. ............... ............... .................................. ...............
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[9]
Shen’s rate of inventory turnover for the year ended 31 January 2018 was 11.50 times.
He provided the following information for the year ended 31 January 2019.
$
Revenue 25 850
Gross profit 5 150
Inventory 1 February 2018 1 890
REQUIRED
(b) Calculate the rate of inventory turnover for the year ended 31 January 2019. The calculation
should be correct to two decimal places.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[3]

16
(c) State whether Shen would be satisfied with the change in the rate of inventory turnover. Give
a reason for your answer.
Satisfied? ............................................
Reason ......................................................................................................................................
...............................................................................................................................................[2]
(d) Suggest two ways in which Shen could improve the rate of inventory turnover.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
(e) Suggest two reasons why Shen always values his inventory at the lower of cost and net
realisable value.
1 .................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...............................................................................................................................................[2]
After the preparation of the income statement for the year ended 31 January 2019 Shen discovered
that the inventory at 31 January 2019 had been overstated.
REQUIRED
(f) Complete the table by placing a tick (✓) in the correct column to indicate whether each item
would be overstated or understated as a result of the error.
current assets at 31 January 2019 ✓
gross profit for the year ended 31 January 2019
capital at 31 January 2019
cost of sales for the year ending 31 January 2020
profit for the year ending 31 January 2020
[4]
[Total: 22]
© UCLES 2019 0452/22/M/J/19

17
5 Myra is a trader. Her financial year ends on 31 December.
Myra provided the following information.

$
For the year ended 31 December 2018
Sales (all on credit) 118 000

Purchases (all on credit) 94 000
Profit for the year before interest 14 100
Profit for the year after interest 9 900
At 31 December 2018
Non-current assets at book value 266 000

Inventory 8 500
Myra allows her credit customers 14 days credit. The trade receivables collection period calculated
at 31 December 2017 was 18 days.
Myra is allowed 28 days credit by her credit suppliers. The trade payables payment period
calculated at 31 December 2017 was 30 days.
REQUIRED
(a) (i) Calculate the trade receivables collection period for the year ended 31 December 2018.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Suggest two ways in which the trade receivables collection period may be improved.
1 .........................................................................................................................................
...........................................................................................................................................
2 .........................................................................................................................................
.......................................................................................................................................[2]

18
(b) (i) Calculate the trade payables payment period for the year ended 31 December 2018.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Suggest two ways in which the change in the trade payables payment period may affect
Myra.
1 .........................................................................................................................................
...........................................................................................................................................
2 .........................................................................................................................................
.......................................................................................................................................[2]
(c) Calculate the following to two decimal places.
(i) Percentage of gross profit to revenue (gross profit margin)
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(ii) Profit for the year to revenue (net profit margin)
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
(iii) Return on capital employed (ROCE)
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
.......................................................................................................................................[2]
© UCLES 2019 0452/22/M/J/19

19
Myra’s brother, Raj, also has a business.
After he prepared his draft financial statements for the year ended 31 March 2019 the following
errors were discovered.
1 The total cost of an advertising campaign, $900, which covered a period of 15 months to
30 June 2019, had been charged to the income statement.
2 Discount allowed, $1200, had been recorded as discount received.
3 Depreciation on office equipment for the year ended 31 March 2019 had been calculated at
10% per annum using the reducing (diminishing) balance method instead of the straight line
(equal instalment) method. On 1 April 2018 the cost of the office equipment was $15 000 and
the accumulated depreciation was $3000.
REQUIRED
(d) Complete the following statement to show the effect on the draft profit for the year of
correcting errors 1–3. Calculate the corrected profit for the year.
Raj
Statement of corrected profit for the year ended 31 March 2019
$
Draft profit for the year before corrections 8550
Increase Decrease
in profit in profit
$ $
Error 1 .......... ..........
Error 2 .......... ..........
Error 3 ..........
_____ ..........
_____
_____ _____ _____
Corrected profit for the year _____
[7]
[Total: 21]
© UCLES 2019 0452/22/M/J/19

*7240471273*
ACCOUNTING 0452/22
Paper 2 October/November 2015
1 hour 45 minutes

IB15 11_0452_22/FP
2
1 Shahid Ayub is a trader who maintains a full set of accounting records including a three column
cash book.
On 1 August 2015 Shahid Ayub had the following balances in his cash book:
$
Cash 50
Bank overdraft 7150
Shahid Ayub’s transactions for August 2015 included the following.
August 9 A cheque received in July for $362 from El Nil Supply Company was dishonoured
by the bank
18 Paid $54 by cheque for fuel of private motor vehicle
24 Received a cheque from Mariam Soliman to settle her debt of $520, less 2½%
cash discount
30 Cash sales, $3224
31 Paid all the remaining cash into the bank except $100
REQUIRED
(a) Complete Shahid Ayub’s cash book on the page opposite.
Balance the cash book and bring down the balances on 1 September 2015.
[9]
© UCLES 2015 0452/22/O/N/15

© UCLES 2015
Shahid Ayub - Cash Book
allowed received
$ $ $ $ $ $
……….. ……………………… …………. ……….. ……….. ……….. ……………………… …………. ……….. ………..
……….. ……………………… …………. ……….. ……….. ……….. ……………………… …………. ……….. ………..
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3
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0452/22/O/N/15
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[Turn over
4
The following incomplete statement of account was available on 31 August 2015.
STATEMENT OF ACCOUNT
Shahid Ayub
44 Narrow Lane, Anytown
Mariam Soliman
The Avenue
Weston 31 August 2015
Debit Credit Balance

Date Reference
$ $ $
2015
August 1 Balance due 520
9 Goods 340 860
13 Returns 24 ?
24 Payment 507 ?
Discount 13 ?
REQUIRED
(b) (i) Calculate the balance due on 31 August.
[1]
(ii) State the name of the trader who owes the balance at 31 August.
[1]
(c) State the business document and the book of prime (original) entry Shahid Ayub would use
to record the following transactions which appear on the statement of account.
Book of prime (original)

Transaction Document
entry
August 9 Goods ........................................ ......................................
13 Returns ........................................ .....................................
24 Payment ........................................ .....................................
[6]
© UCLES 2015 0452/22/O/N/15

5
(d) Prepare the account of Shahid Ayub as it would appear in the ledger of Mariam Soliman.
Balance the account and bring down the balance on 1 September 2015.
Mariam Soliman
Shahid Ayub account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
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….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
[6]
[Total: 23]
© UCLES 2015 0452/22/O/N/15 [Turn over

6
2 Grace Zindi runs a secretarial agency. Her financial year ends on 31 July.
She provided the following information on 31 July 2015.
$
Capital 1 August 2014 85 000
Cash drawings 15 500
Fees from clients 28 500
Wages 21 600
Rates and insurance 3 900
General expenses 990
Heat and light 710
Commission receivable 7 600
Motor vehicles at cost 1 August 2014 12 500
Provision for depreciation of motor vehicles 1 August 2014 4 500
Office equipment at valuation 1 August 2014 11 400
1 At 31 July 2015
Insurance prepaid amounted to $300
Commission receivable of $250 was outstanding
Fees from clients of $3400 was outstanding.
2 Grace Zindi lives in a flat above the business premises. One quarter of the rates and
insurance relate to the flat.
3 On 31 July 2015 Grace Zindi decided to create a provision for doubtful debts of 1% of the
amount owed by clients.
4 The motor vehicles are being depreciated by 20% per annum on the reducing (diminishing)
balance method.
5 The office equipment was valued at $14 500 on 31 July 2015.

Additional office equipment costing $6900 was purchased during the year.
No office equipment was disposed of during the year.
© UCLES 2015 0452/22/O/N/15

7
REQUIRED
(a) Prepare Grace Zindi’s income statement for the year ended 31 July 2015.
Grace Zindi
Income Statement for the year ended 31 July 2015
$ $
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
………………………………………………………… …………….. ……………..
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………………………………………………………… …………….. ……………..
[16]

8
(b) Prepare the capital account for Grace Zindi for the year ended 31 July 2015.
Balance the account and bring down the balance on 1 August 2015.
Grace Zindi
Capital account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… ……... …..…. ………..……..……… …..….
….…. ……………….……… …..…. …..…. ………..……..……… …..….
[6]
(c) State the meaning of the accruals (matching) principle. Give one example of how this
principle was applied in the preparation of the income statement in (a).
Meaning
Example
[2]
(d) State the meaning of the business entity principle. Give one example of how this principle
was applied in the preparation of the income statement in (a).
Meaning
Example
[2]
[Total: 26]
© UCLES 2015 0452/22/O/N/15

9
3 (a) State two causes of depreciation of non-current assets.
2 [2]
(b) Explain the straight line method of depreciation.
[2]
(c) Explain the reducing (diminishing) balance method of depreciation.
[2]
(d) Explain how charging depreciation is an example of the application of the principle of
prudence.
[2]
(e) Name one other accounting principle which is applied when charging depreciation.
[1]

10
On 1 October 2013 Natasha Salim started a business altering and mending clothes. On that date
she purchased a machine, $4000, paying by cheque.
On 1 January 2014 she purchased another machine, $6000, on credit from ABC Machines.
She decided to depreciate the machines using the reducing (diminishing) balance method at 20%
per annum. A whole year’s depreciation was to be charged in the year of purchase, but no
depreciation in the year of sale.
On 1 February 2015 Natasha Salim decided that the machine purchased on 1 October 2013 was
no longer required. She sold it for $2100, cash.
REQUIRED
(f) Prepare the following accounts in the ledger of Natasha Salim for each of the two years
ended 30 September 2014 and 30 September 2015.
Balance the accounts and bring down the balances on 1 October 2014 and 1 October 2015.
Natasha Salim
Machinery account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… ……... …..…. ………..……..……… …..….
….…. ……………….……… …..…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. ….…. ………..……..……… ….….
….…. ………..……..……… ….…. ….…. ………..……..……… ….….
© UCLES 2015 0452/22/O/N/15

11
Provision for depreciation of machinery account
….…. ……………..…..………. …..…. ……… ………....…………… …..…..
…….. ……………....……… …..…. ….….. ………..…..………… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… …..…. …..…. ………..……..……… …..….
….…. ……………....……… ……... …..…. ………..……..……… …..….
….…. ……………….……… …..…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
….…. ………..……..……… ….…. …..…. ………..……..……… …..….
…..… ………..……..……… …..…. …..…. ………..……..……… …..….
…..… ………..……..……… …..…. …..…. ………..……..……… …..….
[12]
(g) Calculate the profit or loss on the disposal of the machine on 1 February 2015.
[4]
[Total: 25]

12
4 Moses and Tobias Iyambo are in partnership. Their financial year ends on 31 October. They
share profits and losses equally. A capital and a current account are maintained for each partner.
Despite having little accounting knowledge, Tobias prepared the following statement of financial
position on 31 October 2015.
Statement of Financial Position 31 October 2015

$ $
Fixtures and equipment at book value 1 September 2014 24 800
Inventory 6 950
Bank 1 500
Drawings – M Iyambo 8 000
T Iyambo 5 500 13 500
131 950

Capital account 1 September 2014 – M Iyambo 65 000
T Iyambo 35 000 100 000
Current account 1 September 2014 – M Iyambo Debit 2 000

T Iyambo Credit 3 500 5 500
114 150
Balance 17 800
131 950
The following matters were then discovered.
1 The income statement included adjustments for the following which should have been
included in the statement of financial position:
$
Depreciation for the year on fixtures and equipment 3100
Expenses accrued 1130
2 Bank charges, $70, had been correctly recorded in the income statement but had not been
entered in the cash book.
3 Cash in hand, $500, had not been included in the statement of financial position.
4 Profit for the year was $18 000.
REQUIRED
(a) Prepare a corrected statement of financial position at 31 October 2015 showing the different
types of assets and liabilities, and the capital and current accounts of each partner.
The calculation of the current account balances may be shown within the statement of
financial position or as separate calculations in the space provided.
© UCLES 2015 0452/22/O/N/15

13
Moses and Tobias

Corrected Statement of Financial Position at 31 October 2015
$ $ $
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
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………………………………………………………… …………….. …………….. ……………..
………………………………………………………… …………….. …………….. ……………..
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14
[16]
(b) State two items which Moses and Tobias Iyambo could have included in their partnership
agreement in addition to profit-sharing ratios.
2 [2]
(c) State two ways in which Moses and Tobias Iyambo could obtain long-term funds to finance
expansion of the business.
2 [2]
(d) Complete the following table by placing a tick () in the correct column to show how each of
the following transactions would affect the working capital of Moses and Tobias Iyambo.
Selling surplus equipment
Delay paying credit suppliers
Paying surplus cash into bank
Writing off a bad debt

[4]
[Total: 24]
© UCLES 2015 0452/22/O/N/15

15
5 Kelbrook Limited provided the following information.
1 The issued share capital consists of 180 000 ordinary shares of $0.50 each.
2 On 1 October 2014:
General reserve $4000
Retained earnings $5500
3 The profit for the year ended 30 September 2015 was $9000.
$2000 of this was transferred to the general reserve.
An interim dividend of $4500 was paid during the year.
No dividends were proposed at the end of the year.
REQUIRED
(a) Prepare the equity and reserves section of the statement of financial position at
30 September 2015.
Kelbrook Limited
Extract from Statement of Financial Position at 30 September 2015
[5]
Question 5(b) is on the next page.

16
Kelbrook Limited provided the following information at 30 September 2015.
$
Non-current assets at book value 102 200
Inventory 5 100
Other payables 1 400
REQUIRED
(b) Complete the following table.
Current ratio
Workings Answer to two
decimal places
Quick ratio
decimal places
Return on capital employed (ROCE)

decimal places
[6]
© UCLES 2015 0452/22/O/N/15

17
The ratios calculated at 30 September 2014 were:
Current ratio 2.51 : 1

Quick ratio 1.57 : 1
Return on capital employed (ROCE) 12.55%
REQUIRED
(c) Comment on the change in the current ratio.
[2]
(d) Suggest one reason for the change in the quick ratio.
[1]
(e) Suggest two ways to improve the return on capital employed (ROCE).
2 [2]
Question 5(f) is on the next page.

20
BLANK PAGE
International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cie.org.uk after the live examination series.
© UCLES 2015 0452/22/O/N/15

* 9 5 3 8 1 2 1 4 4 7 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (AL) 132554
2
1 Amira’s financial year ends on 30 September. She buys and sells on both cash and credit terms
and maintains a full set of accounting records.
Control accounts are prepared at the end of each month.
REQUIRED
(a) Name the book of prime (original) entry which Amira would use to obtain the following
information when preparing her sales ledger control account.
Book of prime (original) entry

Cheque refund to credit customer
Bad debts written off
Returns by credit customers
Interest charged on customer’s overdue account
[4]
(b) State two reasons why Amira prepares a purchases ledger control account.
1 ...........................................................................................................................................
...................................................................................................................................................
2 ...........................................................................................................................................
.............................................................................................................................................. [2]
Amira provided the following information for September 2016.
$
September 1 Debit balances in purchases ledger 93
Credit balances in purchases ledger 4210
September 30 Totals for the month

Credit purchases 5366
Cash purchases 1469
Cheques paid to credit suppliers 3705
Cheques received from credit customers 6102
Discount allowed 204
Interest charged by supplier on overdue account 12
Cash refund received from credit supplier 150
Contra entry 494
October 1 Debit balances in purchases ledger 68

Credit balances in purchases ledger ?
© UCLES 2016 0452/22/O/N/16

3
REQUIRED
(c) Select the relevant figures and prepare the purchases ledger control account for the month of
September. Balance the account and bring down the balances on 1 October 2016.
Amira
Purchases ledger control account
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ............................... ........... ........... ............................... ...........
............ ................................. ........... ........... ............................... ...........
........... ................................. .......... .......... ............................... ..........
[12]
(d) Suggest one advantage of paying credit suppliers before the due date.
...................................................................................................................................................
.............................................................................................................................................. [1]
(e) Suggest one disadvantage of paying credit suppliers before the due date.
...................................................................................................................................................
.............................................................................................................................................. [1]
[Total: 20]

4
2 Diane is a trader. She buys goods on credit from Udomo. On 1 October 2016 Diane owed Udomo
$720.
Several transactions took place between the traders in October 2016.
REQUIRED
(a) Complete the following table. Name the book of prime (original) entry in which each document
would be recorded by each trader.
If the document is not entered in a book of prime (original) entry, write “No entry”.
Date Document Book of prime entry Book of prime entry

used by used by
Diane Udomo
Oct
8 Invoice $560 ................................. .................................
12 Debit note $115 ................................. .................................
16 Credit note $100 ................................. .................................
24 Cheque $720 ................................. .................................
31 Statement of account $460 ................................. .................................
[10]
(b) Name the person who issued each of the following documents. In each case suggest one
reason for the issue of that document.
(i) Debit note 12 October
Name of person issuing the document ...............................................................................
Reason for the issue of the document................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(ii) Credit note 16 October
...........................................................................................................................................
.......................................................................................................................................[2]
© UCLES 2016 0452/22/O/N/16

5
(iii) Statement of account 31 October
...........................................................................................................................................
...................................................................................................................................... [2]
(c) Prepare the account of Diane as it would appear in the ledger of Udomo for October 2016.
Balance the account and bring down the balance on 1 November 2016.
Udomo
Diane account

2016 2016
Oct 1 Balance b/d 720 ……… …………...………..... ………
........... ............................... ........... ........... …………...………..... ...........
........... ............................... ........... ........... …………...………..... ...........
........... ............................... ........... ........... …………...………..... ...........
........... ............................... ........... ........... …………...………..... ...........
........... ............................... ........... ........... …………...………..... ...........
........... ............................... ........... ........... …………...………..... ...........
[4]
[Total: 20]

6
3 The Bolton Road Music Club was formed on 1 September 2015. The club has 60 members and
the annual subscription is $100. The club provides musical instruments for members to use. In
addition the club also has a shop selling CDs.
The treasurer provided the following information for the year ended 31 August 2016.
Amounts received $ Amounts paid $

Subscriptions 6 300 Purchases of CDs for shop 12 422
Revenue from shop 15 520 Wages of shop assistant 1 850
Loan from Music4all received Insurance 1 200
on 1 March 2016 20 000 Rent and rates 3 300
Purchase of musical instruments 4 800
Repairs to musical instruments 197
General expenses of club 2 293
At 31 August 2016
1 The shop suppliers were owed $1112.
2 Shop inventory was valued at $1964.
3 Five members had paid their subscription for the following financial year.
4 Two members had not paid their subscription for the current financial year.
5 10% of the insurance relates to the shop.
6 Rent and rates accrued amounted to $300. Half of the rent and rates relates to the shop.
7 A loan of $100 to the shop assistant is included in the wages.
8 Interest of 4% per annum was accrued on the loan from Music4all.
9 Musical instruments are to be depreciated at 15% per annum on cost.
© UCLES 2016 0452/22/O/N/16

7
REQUIRED
(a) State the meaning of the following terms.
Subscriptions
...................................................................................................................................................
...................................................................................................................................................
Accumulated fund
...................................................................................................................................................
...................................................................................................................................................
Receipts and payments account
...................................................................................................................................................
.............................................................................................................................................. [3]
(b) Prepare the shop income statement for the year ended 31 August 2016.
Bolton Road Music Club Shop

Income Statement for the year ended 31 August 2016
$ $
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
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.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
[8]
8
(c) Prepare the income and expenditure account for the year ended 31 August 2016.
Bolton Road Music Club

Income and Expenditure Account for the year ended 31 August 2016
$ $
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
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.................................................................................. ........................... ...........................
[11]
[Total: 22]
© UCLES 2016 0452/22/O/N/16

10
4 The financial year of Nawaz ends on 31 August. He sells on credit terms and maintains a provision
for doubtful debts.
REQUIRED
(a) State the meaning of the following terms.
Bad debts
...................................................................................................................................................
...................................................................................................................................................
Bad debts recovered
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [3]
(b) Name two accounting principles which Nawaz is applying by maintaining a provision for
doubtful debts.
1 ...........................................................................................................................................
2 ...................................................................................................................................... [2]
(c) Suggest two ways in which Nawaz could reduce the possibility of bad debts.
1 ...........................................................................................................................................
2 ...................................................................................................................................... [2]
Nawaz provided the following information.
$
On 1 September 2015
Provision for doubtful debts 1 450
During the year ended 31 August 2016

Debts written off 2 064
On 31 August 2016
On 31 August 2016 it was decided to write off $250 owed by Uzma. The provision for doubtful
debts was adjusted to 2% of the remaining trade receivables.
© UCLES 2016 0452/22/O/N/16

11
REQUIRED
(d) Prepare journal entries on 31 August 2016 to record the following.
1 Writing off the bad debt

2 Closing the bad debts account
3 Adjusting the provision for doubtful debts.
Narratives are not required.
Nawaz
Journal
Debit Credit
$ $
1 .................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
2 .................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
3 .................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
.................................................................................. ........................... ...........................
[6]
(e) Prepare an extract from the statement of financial position on 31 August 2016 to show the
trade receivables.
Nawaz
Extract from Statement of Financial Position at 31 August 2016
Current assets
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 15]

12
5 The financial year of Sandton Limited ends on 30 September.
During the year ended 30 September 2016 the following transactions took place.
1 The company made a profit for the year of $14 750.

2 An interim dividend of $4500 was paid on the ordinary shares.
3 A transfer of $5000 was made to general reserve.
REQUIRED
(a) Complete the following statement of changes in equity for the year ended 30 September 2016.
Sandton Limited
Statement of Changes in Equity for the year ended 30 September 2016
Details Share General Retained Total

capital reserve earnings
$ $ $ $
On 1 October 2015 150 000 14 000 31 000 195 000
Profit for the year ................ ................. ................ ................
Dividend paid ................ ................ ................. ...............
Transfer to general reserve ................ ................ ................ ...............
On 30 September 2016 ............... ................. ................. .................
[4]
Sandton Limited provided the following information at 30 September 2016.

$
3% Debentures (repayable 2020) 15 000
Fixtures and equipment at cost 37 600
Motor vehicles at cost 54 000
Provision for depreciation – fixtures and equipment 7 520
motor vehicles 10 800
Other payables 130
Bank 4 294 credit
Inventory 12 613
© UCLES 2016 0452/22/O/N/16

13
REQUIRED
(b) Prepare a statement of financial position at 30 September 2016.
Sandton Limited
Statement of Financial Position at 30 September 2016
$ $ $
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
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................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
................................................................. ...................... ...................... ......................
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[14]

14
Sandton Limited sells and buys on both cash and credit terms. Credit customers are allowed
28 days in which to pay their accounts. The credit suppliers allow Sandton Limited 30 days in
which to pay their accounts.
The following information was available for the year ended 30 September 2016.
Sales Purchases
$ $
Cash 67 500 28 600
Credit 152 500 95 000
REQUIRED
(c) (i) Calculate the collection period for trade receivables. Use the amount of trade receivables
before the provision for doubtful debts.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(ii) Calculate the payment period for trade payables.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(iii) Comment on your answers to (c)(i) and (c)(ii).
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
[Total: 24]
© UCLES 2016 0452/22/O/N/16

15
6 Daniel’s financial year ends on 31 July.
He provided the following information for the year ended 31 July 2015.
$
Gross profit was 30% of cost of sales.
REQUIRED
(a) (i) Calculate the gross profit.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [1]
(ii) Calculate the revenue.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [1]
(iii) Calculate the percentage of gross profit to revenue. The calculation should be to two
decimal places.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]
(iv) Calculate the percentage of profit for the year to revenue. The calculation should be to
two decimal places.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [2]

16
(b) Suggest two reasons why the percentage of gross profit to revenue is higher than it was in
the previous financial year.
1 ...........................................................................................................................................
...................................................................................................................................................
2 ...........................................................................................................................................
.............................................................................................................................................. [2]
(c) Suggest two reasons why the percentage of profit for the year to revenue is lower than it was
in the previous financial year.
1 ...........................................................................................................................................
...................................................................................................................................................
2 ...........................................................................................................................................
.............................................................................................................................................. [2]
After the preparation of the draft financial statements for the year ended 31 July 2016 the
following errors were discovered.
1 No entry had been made for bank charges, $110.
2 Rent receivable, $780, had been recorded as $870.
3 The total of a page of the wages account, $10 050, had been carried forward as $10 500.
4 A credit customer who owed $500 had sent a cheque for 75 cents for each dollar owed. The
balance should have been written off as a bad debt.
5 The provision for doubtful debts, $650, should have been adjusted to 2% of the trade
receivables who owed $30 800.
© UCLES 2016 0452/22/O/N/16

17
REQUIRED
(d) Complete the following statement to show the effect on the draft profit for the year of
correcting errors 1–5. Calculate the corrected profit for the year.
The first correction has been completed as an example.
Daniel
Statement of corrected profit for the year ended 31 July 2016
$
Draft profit for the year before corrections 41 000
Increase Decrease
in profit in profit
$ $
Error 1 ................... 110
Error 2 ................... ...................
Error 3 ................... ...................
Error 4 ................... ...................
Error 5 ................... ...................
Corrected profit for the year

[9]
[Total: 19]
© UCLES 2016 0452/22/O/N/16

* 6 5 6 0 4 2 0 4 2 4 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (RCL (KM)) 136499/4

2
1 Saffie is a trader. She maintains a three column cash book and also a petty cash book. The
imprest amount is $150. All payments below $100 are made from petty cash.
Saffie had the following transactions in September 2017.
September 1 Petty cash imprest restored from the business bank account
3 Paid taxi fare, $12
7 Paid $461 by cheque for repairs to office machinery
11 Purchased office stationery, $64
15 A cheque for $210 received from SL Stores in August was
dishonoured by the bank
21 Paid Faariqa, a credit supplier, $29
26 Received a cheque from Thushari, $392, in settlement of the
amount due less 2% cash discount
28 Cash sales, $4840, of which $4800 was immediately paid into
the bank
29 Paid Sopitha’s account of $480 after deducting a cash
discount of 2½%
30 Paid postage, $22
REQUIRED
(a) Record the above transactions in the following books which appear on the next two pages.
Balance each book and bring down the balances on 1 October 2017.
(i) Petty cash book [9]
(ii) Cash book [10]
© UCLES 2017 0452/22/O/N/17

Saffie
Petty Cash Book
© UCLES 2017
Total Date Total Travel Postage and Ledger
received Details paid stationery accounts
$ $ $ $ $
2017
63 Sept 1 Balance b/d .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................

3
.................. .................. ............................................................. .................. .................. .................... ..................
0452/22/O/N/17
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
.................. .................. ............................................................. .................. .................. .................... ..................
[Turn over
Saffie
Cash Book
© UCLES 2017
allowed received
2017 $ $ $ 2017 $ $ $
Sept 1 Balance b/d ................ 120 ................ Sept 1 Balance b/d ................ ................ 3841
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
4
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
0452/22/O/N/17
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
........... ....................................... ................ ................ ................ ........... ....................................... ................ ................ ................
5
On 30 September 2017 Saffie’s bank statement showed an overdraft of $4649. She compared
the cash book with her bank statement and found that the bank had not recorded the transactions
shown in the cash book on the following dates.
September 26
28
29
In addition, the bank had debited Saffie’s business bank account with $50 which should have
been debited to her personal bank account.
REQUIRED
(b) Prepare a bank reconciliation statement at 30 September 2017.
Saffie
Bank Reconciliation Statement at 30 September 2017
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...............................................................................................................................................[6]
[Total: 25]

6
2 Mustafa opened a garment factory on 1 August 2016.
On that date he purchased the following non-current assets.

$
Premises 210 000
Office fixtures and equipment 29 800
Loose tools 19 600
Mustafa decided to revalue the loose tools at the end of each financial year and also decided
that no depreciation would be charged on premises. The other non-current assets are to be
depreciated using the straight line (equal instalment) method of depreciation at the following rates.
Factory machinery at 20% per annum

Office fixtures and equipment at 15% per annum
During his first year of trading, Mustafa purchased raw materials costing $447 400 (of which $1800
were returned to the supplier) and finished goods costing $22 200. His sales of finished goods
amounted to $998 500.
Mustafa made the following payments during the year ended 31 July 2017.
$
Wages – factory operatives 287 400
factory supervisors 101 150
office staff 75 790
Carriage inwards 2 590
Carriage outwards 2 180
At 31 July 2017 $
Inventories were valued at
Loose tools were valued at 18 100
Wages of factory operatives accrued 3 760
The general expenses are to be apportioned 3⁄4 to the factory and 1⁄4 to the office.
The rates and insurance are to be apportioned 2⁄3 to the factory and 1⁄3 to the office.
© UCLES 2017 0452/22/O/N/17

7
REQUIRED
(a) Prepare the manufacturing account for the year ended 31 July 2017.
Mustafa
Manufacturing Account for the year ended 31 July 2017
$ $
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
................................................................................. ......................... ...........................
[13]

8
(b) Calculate the cost of sales for the year ended 31 July 2017.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [4]
Mustafa wants to expand his business and needs to obtain long-term funds to finance this. He
decided to apply for a 10-year bank loan.
REQUIRED
(c) Suggest one disadvantage of raising funds by means of a bank loan.
...................................................................................................................................................
...............................................................................................................................................[1]
(d) Suggest two other ways of raising long-term funds.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 20]
© UCLES 2017 0452/22/O/N/17

10
3 Zikri is a retailer. His financial year ends on 31 August.
Ashley pays Zikri a commission on goods purchased from Ashley by Zikri’s customers. The
commission is paid quarterly in arrears.
Zikri provided the following information:

$
Commission outstanding on 1 September 2016 495
Cheques received
4 September 2016 495
3 December 2016 515
5 March 2017 374
2 June 2017 404
Commission outstanding on 31 August 2017 392
REQUIRED
(a) Prepare the commission receivable account in the ledger of Zikri for the year ended
31 August 2017. Balance the account and bring down the balance on 1 September 2017.
Zikri
Commission receivable account
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
[6]
© UCLES 2017 0452/22/O/N/17

11
On 1 January 2017 Zikri rented premises at an annual rent of $9600, payable six-monthly in
advance.
Rent was paid by cheque on 1 January 2017 and 1 July 2017.
REQUIRED
(b) Prepare the rent account in the ledger of Zikri for the year ended 31 August 2017. Balance
the account and bring down the balance on 1 September 2017.
Zikri
Rent account
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
.......... ...................................... .............. .......... ...................................... ..............
[4]

12
The following account appeared in Zikri’s ledger.
Stationery account

2016 2017
Sept 1 Balance b/d 84 July 31 Drawings 15
2017
Feb 8 XY Limited 212
On 31 August 2017 the inventory of stationery was valued at $76.
REQUIRED
(c) Explain each entry in the stationery account.
State where the double entry for each transaction would be made.
Balance b/d 1 September 2016
Explanation ................................................................................................................................
...................................................................................................................................................
Double entry ..............................................................................................................................
XY Limited 8 February 2017
Explanation ...............................................................................................................................
...................................................................................................................................................
Double entry .............................................................................................................................
Drawings 31 July 2017
Explanation ...............................................................................................................................
...................................................................................................................................................
Double entry ........................................................................................................................ [6]
(d) Calculate the amount which would be transferred from the stationery account to the income
statement on 31 August 2017.
...................................................................................................................................................
.............................................................................................................................................. [1]
© UCLES 2017 0452/22/O/N/17

13
(e) Name the section of the statement of financial position at 31 August 2017 in which the balance
of the stationery account should be included.
.............................................................................................................................................. [1]
After the preparation of Zikri’s financial statements for the year ended 31 August 2017 some errors
were discovered.
REQUIRED
(f) Complete the following table to indicate the effect of each error on the gross profit and the
profit for the year. Where the error does not affect the profits write No Effect.
Error Effect on gross Effect on profit for

profit the year
General expenses omitted from income No Effect Overstated
statement
Opening inventory over-valued
Wages account over-added
Sales returns omitted from income

statement
Carriage inwards included in the
expenses in the income statement
Purchases returns added to the
purchases
[10]
[Total: 28]

14
4 Rashida is a wholesaler. Her financial year ends on 30 September. She provided the following
information.
$
At 1 October 2016

Office equipment at valuation 21 000
Inventory 37 150
During the year ended 30 September 2017
Revenue 572 000

Purchases 455 900
Returns by customers 1 840
Returns to suppliers 2 750
Payments by cheque
Carriage inwards 6 940
Wages 74 200
Loan interest 400
Office equipment 2 800
1 Inventory at 30 September 2017 was valued at $41 160.
2 A loan of $20 000 was received on 1 April 2017. Interest is charged at 6% per annum.
3 Rashida lives in a flat above the business premises. One quarter of the rates and insurance
relate to the flat.
4 The fixtures and fittings are being depreciated at the rate of 20% per annum using the
reducing (diminishing) balance method.
5 The office equipment is revalued at the end of each financial year. The value at
30 September 2017 was $20 600.
6 The trade receivables include $300 which should be written off. A provision for doubtful debts
of 2% of the remaining amount should be created.
© UCLES 2017 0452/22/O/N/17

15
REQUIRED
(a) Prepare the income statement for the year ended 30 September 2017.
Rashida
Income Statement for the year ended 30 September 2017
$ $ $
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
............................................................................... ................. ................. .................
[14]
16
(b) Explain how the accruals (matching) principle has been applied in the preparation of the
income statement. Support your answer by reference to one of the items in your answer
to (a).
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(c) Explain how the business entity principle has been applied in the preparation of the income
statement. Support your answer by reference to one of the items in your answer to (a).
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
Rashida was disappointed with the performance of her business in the year ended
30 September 2017 and decided to compare her financial statements with those of another
business.
REQUIRED
(d) Explain two factors Rashida should consider when comparing her financial statements with
those of another business.
1 .................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 .................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
[4]
[Total: 22]
© UCLES 2017 0452/22/O/N/17

17
5 Ben opened a retail store on 1 April 2017. He introduced the following into the business.
$
Inventory 15 200
Shop fittings 14 300
Cash 17 900 (of which $17 400 was paid into a business bank account)
On the same day, Ben received a business start-up loan of $15 000 which was paid into the
business bank account. Interest at 5% per annum was payable at six-monthly intervals.
REQUIRED
(a) Prepare the opening journal entry. A narrative is not required.
Ben
Journal
Debit Credit
$ $
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
[5]

18
The following transactions took place in September 2017.
September 3 Invoice received from EF Limited for office equipment, $1900
28 Goods taken by Ben for personal use, $430
REQUIRED
(b) Prepare journal entries to record these transactions. Narratives are required.
Ben
Journal
Debit Credit
$ $
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
.............................................................................. ....................... .........................
[6]
© UCLES 2017 0452/22/O/N/17

19
(c) Explain each of the following terms and give one example of each.
Capital expenditure
Explanation ...............................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue expenditure
Explanation ...............................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
Revenue receipts
Explanation ...............................................................................................................................
...................................................................................................................................................
Example ....................................................................................................................................
[6]
Question 5(d) is on the next page.

20
On 30 September 2017 Ben calculated his profit for his first six months of trading. The following
errors were then discovered.
Error 1 $500 received from the sale of old shop fittings (book value $550) was debited to the
cash account and credited to the sales account. No other entries were made to record
this disposal.
Error 2 6 months’ loan interest was treated as part-repayment of the loan.
Error 3 The shop fittings account was debited with $1450. Of this $1300 was for new shop
fittings and the balance was for repairs.
REQUIRED
(d) Complete the following table to indicate the effect of each of the errors. The first one has
been completed as an example.
Effect on assets Effect on liabilities Effect on profit

Overstated Understated Overstated Understated Overstated Understated
$ $ $ $ $ $
Error 1 550 – – – 450 –
Error 2
Error 3
[8]
[Total: 25]
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International
Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cie.org.uk after
the live examination series.
© UCLES 2017 0452/22/O/N/17

* 0 9 6 3 2 2 4 4 3 5 *
ACCOUNTING 0452/22
1 hour 45 minutes

DC (RCL (GO)) 156839/3

2
1 Rajinder owns an engineering business. His financial year ends on 31 July.
His cash book for July 2018 was as follows.
Rajinder
Cash Book
Date Details Dis.* Cash Bank Date Details Dis.* Cash Bank
2018 $ $ $ 2018 $ $ $
July 1 Balance b/d 113 July 1 Balance b/d 4074
3 W Limited 18 582 2 Petty cash 193
15 Sale of old 7 Ayesha (cheque
machinery 500 dishonoured) 1133
22 Cash 450 18 Machinery 1420
29 Sales 220 880 22 Bank 450
27 AM Limited 8 1312
* Dis. stands for discount
REQUIRED
(a) ii(i) State the significance of the balance shown on the credit side of the cash book on 1 July
2018.
...................................................................................................................................................
.............................................................................................................................................. [1]
i(ii) State why the entry on 2 July was required.
...................................................................................................................................................
.............................................................................................................................................. [1]
(iii) Calculate the percentage that the discount on 3 July represents.
...................................................................................................................................................
.............................................................................................................................................. [1]
(iv) Suggest one possible reason why the cheque from Ayesha was dishonoured.
...................................................................................................................................................
.............................................................................................................................................. [1]
i(v) Explain the entries on 22 July.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
© UCLES 2018 0452/22/O/N/18
3
(vi) State the meaning of the entry on 29 July.
...........................................................................................................................................
...........................................................................................................................................
...................................................................................................................................... [1]
(b) Calculate the cash and bank balances at the end of July. Name the section of the statement
of financial position in which each balance would appear.
Cash balance $ ……………………………
Section of statement of financial position …………………………………………………………
Bank balance $ ……………………………
Section of statement of financial position ……………………………………………………… [4]
(c) Complete the following accounts in Rajinder’s ledger.
Close the accounts on 31 July 2018 by balancing or by making a transfer to an appropriate

account.
Rajinder
Sales account

2018
……… ………………………… ………… June 30 Total to date 13 500
……… ………………………… ………… ……… ………………………… ………
……… ………………………… ………… ……… ………………………… ………
……… ………………………… ………… ……… ………………………… ………
AM Limited account

2018
……… ………………………… ………… July 1 Balance b/d 250
……… ………………………… ………… 14 Purchases 440
……… ………………………… ………… ……… ………………………… ………
……… ………………………… ………… ……… ………………………… ………
……… ………………………… ………… ……… ………………………… ………
[5]
4
(d) Prepare the discount allowed account for the year ended 31 July 2018.
The total discount allowed up to 30 June 2018 was $178.
Close the account on 31 July 2018 by making a transfer to an appropriate account.
Rajinder
Discount allowed account
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
[3]
[Total: 19]
© UCLES 2018 0452/22/O/N/18

5
2 Adil is a wholesaler. All his sales are made on credit terms. His financial year ends on 31 August.
REQUIRED
(a) State the meaning of each of the following terms.
Bad debts
...................................................................................................................................................
...................................................................................................................................................
Bad debts recovered
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [3]
On 31 August 2018 Adil received a cheque for $0.20 in a dollar from Mahinda, a credit customer.
The balance of the account was irrecoverable.
REQUIRED
(b) Record this information in the following accounts in Adil’s ledger.
Close the accounts on 31 August 2018 by balancing or by making a transfer to an appropriate

account.
Adil
Mahinda account

2018 2018
Feb 1 Sales 600 Feb 10 Sales returns 30
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………

6
Bad debts account

2018
Aug 30 Total to date 710 ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
[4]
Adil is proposing to stop selling on credit and to sell on cash terms only.
REQUIRED
(c) (i) State one possible advantage to Adil of going ahead with this proposal.
............................................................................................................................................
....................................................................................................................................... [1]
(ii) State one possible disadvantage to Adil of going ahead with this proposal.
...........................................................................................................................................
...................................................................................................................................... [1]
(d) Suggest two ways (apart from stopping selling on credit) in which Adil could reduce the risk of
bad debts.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
© UCLES 2018 0452/22/O/N/18

7
Adil has maintained a provision for doubtful debts for many years. He provided the following
information.
$
Trade receivables on 31 August 2017 44 200
Trade receivables on 31 August 2018 (after writing off Mahinda’s account) 42 000
On 31 August 2018 Adil decided to reduce the rate of the provision for doubtful debts from 3%
to 2½%.
REQUIRED
(e) Prepare the provision for doubtful debts account for the year ended 31 August 2018. Balance
the account and bring down the balance on 1 September 2018.
Adil
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
……… ………………………… ……… ……… ………………………… ………
[4]
(f) Explain how Adil is applying the accruals (matching) principle by maintaining a provision for
doubtful debts.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(g) Name two other accounting principles which Adil is applying maintaining a provision for
doubtful debts.
1 ................................................................................................................................................
2 ........................................................................................................................................... [2]

8
On 20 September 2018 Adil received a cheque for $250 from Amaya whose account had been
written off in 2017.
REQUIRED
(h) State how this was recorded in Adil’s books of account.
debit credit
[2]
(i) State how this transaction would affect the profit for the year ending 31 August 2019.
...............................................................................................................................................[1]
[Total: 22]
© UCLES 2018 0452/22/O/N/18

10
3 Paul and Ann are in partnership. Their financial year ends on 30 September.
When they started the business they drew up a partnership agreement which provided for:
Interest on capital at 4% per annum

Interest on drawings at 5%
An annual salary of $7000 for Paul
Interest on any loans from partners at 6% per annum
Sharing of profits and losses equally
On 1 October 2017 the balances on the partners’ accounts were as follows:
Paul Ann
$ $
Current account 1 150 credit 3 125 debit
Loan account 10 000
The interest on loan is credited to Paul’s current account at the end of each financial year.
On 1 April 2018 Paul introduced a motor vehicle, $14 500, into the business. He also deposited
an amount into the business bank account so that his total capital was $80 000.
The partners agreed that Paul’s salary should be increased by $1000 per annum starting on
1 April 2018.
Drawings during the year ended 30 September 2018 were as follows:
$
Paul 9 000
Ann 11 000
On 30 September 2018 Ann transferred $5000 from her capital account to her current
account.
The profit for the year ended 30 September 2018 after loan interest was $11 350.
© UCLES 2018 0452/22/O/N/18

11
REQUIRED
(a) Prepare journal entries to record the following:
1 The introduction of additional capital by Paul on 1 April 2018.
2 The transfer of $5000 from Ann’s capital account to her current account on 30 September
2018.
Narratives are not required.
Paul and Ann

Journal
Date Details Debit Credit

$ $
………… ………………………………………… ……………… ………………
………… ………………………………………… ……………… ………………
………… ………………………………………… ……………… ………………
………… ………………………………………… ……………… ………………
………… ………………………………………… ……………… ………………
………… ………………………………………… ……………… ………………
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………… ………………………………………… ……………… ………………
[5]

12
(b) Prepare the profit and loss appropriation account for the year ended 30 September 2018.
Paul and Ann

Profit and Loss Appropriation Account for the year ended 30 September 2018
$ $
………………………………………………………… ………………… …………………
………………………………………………………… ………………… …………………
………………………………………………………… ………………… …………………
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[8]
© UCLES 2018 0452/22/O/N/18

13
(c) Prepare the current account of Paul for the year ended 30 September 2018. Balance the
account and bring down the balance on 1 October 2018.
Paul
Current account
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
[8]
[Total: 21]

14
4 The financial year of LS Limited ends on 30 June.
$
On 1 July 2017
Issued share capital of ordinary share of $0.50 each 150 000
5% Debentures repayable in 2022 20 000
Long-term bank loan 10 000
The directors of LS Limited are hoping to expand the business and have estimated that $80 000
will be required. They anticipate that the expansion will increase the profits of the company, but
that there will be no significant increase until 2020.
The finance director has proposed raising funds from

either an issue of ordinary shares of $0.50 each
or an issue of 6% preference shares of $1 each
or an issue of 5% debentures repayable in 2024.
REQUIRED
(a) Complete the table to indicate how each value would change if an issue of debentures was
made.
Where the value changes insert the amount in the relevant column.
Where there is no effect, place a tick () in the column headed ‘no effect’.

$ $
total of current assets
total profit for the year
total equity
[3]
(b) State two ways in which the existing ordinary shareholders may be affected if an issue of
preference shares is made.
1 ................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
© UCLES 2018 0452/22/O/N/18

15
(c) State two ways in which the existing ordinary shareholders may be affected if an issue of
additional ordinary shares is made.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
.............................................................................................................................................. [2]
One of the directors has made the following alternative proposals for raising the necessary funds.
Proposal 1 – use the general reserve
Proposal 2 – request a bank overdraft
REQUIRED
(d) State why each of these proposals should not be accepted.
Proposal 1
...................................................................................................................................................
...................................................................................................................................................
Proposal 2
...................................................................................................................................................
.............................................................................................................................................. [2]
(e) Suggest one method which the directors have not yet considered to raise the funds required
for expansion.
.............................................................................................................................................. [1]
[Total: 10]

16
5 Mariam is a trader. Her financial year ends on 31 July.
$
For the year ended 31 July 2018
Total sales – credit 192 000
cash 28 000
220 000
Total purchases – credit 154 500

cash 20 500
175 000
At 31 July 2018
Inventory 14 900
Cash 100

REQUIRED
(a) Complete the table on the opposite page to show the ratios for the year ended 31 July 2018.
Workings
© UCLES 2018 0452/22/O/N/18

17
Ratio 2018 2017
Current ratio (to two decimal places) 1.95 : 1
Quick (acid test) ratio (to two decimal places) 1.15 : 1
Trade receivables collection period (rounded up to 27 days

the next whole day)
Trade payables payment period (rounded up to 32 days

the next whole day)
[8]
(b) Suggest two reasons for the change in the current ratio.
1 ................................................................................................................................................
2 ........................................................................................................................................... [2]
(c) Complete the following table by placing a tick () in the correct column to show how each of
the following courses of action would affect Mariam’s current ratio.

introduce $4000 additional capital in order to
pay off the bank overdraft
sell half the inventory at cost price to a cash

purchaser
convert a $10 000 long-term bank loan into a

bank overdraft
increase the bank overdraft by $16 500 in order

to repay the trade payables
[4]

18
(d) Explain why the quick (acid test) ratio is more reliable than the current ratio as an indicator of
liquidity.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(e) Comment on the change in the quick (acid test) ratio.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(f) Comment on the change in the trade receivables collection period.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
(g) (i) Suggest one advantage to Mariam of the change in the trade payables payment period.
...........................................................................................................................................
...................................................................................................................................... [1]
(ii) Suggest one disadvantage to Mariam of the change in the trade payables payment
period.
...................................................................................................................................................
.............................................................................................................................................. [1]
[Total: 22]
© UCLES 2018 0452/22/O/N/18

19
6 Priti opened a retail food store on 1 October 2017. She did not keep many accounting records.
Priti makes purchases on both cash and credit terms. All sales are made for cash.
$
On 1 October 2017
Capital introduced into the business bank account 30 000
Purchase of non-current assets by cheque 19 400

Cheques paid to credit suppliers 33 150
Cash paid into bank from shop sales 48 500
Withdrawals from bank for cash purchases 4 820
Expenses paid ?
On 30 September 2018
Amount owing to credit suppliers 3180

Expenses accrued 120
Cash at bank 16 040
REQUIRED
(a) Calculate the total purchases for the year ended 30 September 2018.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [6]

20
(b) Prepare the bank account for the year ended 30 September 2018. Insert the missing figure
which represents the expenses paid during the year.
Priti
Bank account
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
……… ………………………… ………… ……… ………………………… …………
[7]
Priti did not value her inventory on 30 September 2018.
All goods are sold at a gross profit margin of 20%.
Non-current assets are to be depreciated at the rate of 10%.
© UCLES 2018 0452/22/O/N/18

21
REQUIRED
(c) Prepare the income statement for the year ended 30 September 2018. Show the value of the
closing inventory, the gross profit and the profit for the year.
Priti
Income Statement for the year ended 30 September 2018
$ $
………………………………………………………… ………………… …………………
………………………………………………………… ………………… …………………
………………………………………………………… ………………… …………………
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[11]
(d) State the difference between margin and mark-up.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
.............................................................................................................................................. [2]
[Total: 26]
© UCLES 2018 0452/22/O/N/18

* 4 9 5 8 6 7 5 4 8 3 *
ACCOUNTING 0452/22
1 hour 45 minutes
Write your centre number, candidate number and name on all the work you hand in.

DC (LEG) 169007/3
2
1 Tebogo is a trader. His financial year ends on 31 August.
Tebogo maintains a full set of accounting records. He sells goods on credit terms.
On 1 August 2019 Kayla, a credit customer, owed $900.
The following transactions took place in August 2019.
August 6 Sold goods on credit to Kayla, list price $1400, less a trade discount of 20%
12 Kayla returned some of the goods purchased on 6 August, list price $300
18 Sold goods on credit to Nyack, $620
24 Nyack returned one quarter of the goods purchased on 18 August
29 Received a cheque from Kayla in settlement of the balance due on

1 August, less 2% cash discount
30 Sold goods on credit to Kayla, $160
REQUIRED
(a) Prepare the sales journal and the sales returns journal for August 2019.
Total each journal and indicate the ledger account to which the total would be transferred.
Tebogo
Sales Journal
Date Details $ $
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
.............. ........................................................... .................... ....................
© UCLES 2019 0452/22/O/N/19

3
Tebogo
Sales Returns Journal
Date Details $ $
.............. ........................................................... ..................... .....................
.............. ........................................................... ..................... .....................
.............. ........................................................... ..................... .....................
.............. ........................................................... ..................... .....................
.............. ........................................................... ..................... .....................

[5]
(b) Prepare the following accounts in Tebogo’s ledger for the month of August 2019.
Close the accounts by balancing or by making a transfer to the income statement.
Tebogo
Kayla account

2019
Aug 1 Balance b/d 900 ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............
............... ................................. ............... ............... ................................. ...............

4
Sales account

2019
.............. ................................ .............. Aug 1 Total sales to date 21 400
.............. ................................ .............. .............. ................................ ..............
.............. ................................ .............. .............. ................................ ..............
.............. ................................ .............. .............. ................................ ..............
Sales returns account

2019
Aug 1 Total returns to date 1 560 .............. ................................ ..............
.............. ................................ .............. .............. ................................ ..............
.............. ................................ .............. .............. ................................ ..............
.............. ................................ .............. .............. ................................ ..............

[8]
Tebogo allows his credit customers a 2% cash discount if they settle their accounts within 30 days.
From 1 September 2019 Tebogo decided to reduce the credit period to 21 days and reduce the
percentage of cash discount to 1%.
REQUIRED
(c) (i) Suggest, giving a reason, one possible effect this decision may have on the profit for the
year ending 31 August 2020.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
(ii) Suggest, giving a reason, one possible effect this decision may have on the liquidity for
the year ending 31 August 2020.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
[Total: 17]
© UCLES 2019 0452/22/O/N/19
5
2 Amelia opened a business on 1 April 2017. On that date she made the following payments by
bank transfer.
$
Premises 100 000
Office furniture 3 450
Carriage on office furniture 50
Stationery and small office equipment 30
Legal expenses on purchase of premises 1 400
Computer equipment 1 600
Installation of computer equipment 100
Ink cartridges and printer paper 40
REQUIRED
(a) Complete the table by placing a tick (3) in the correct column to indicate whether each
payment is capital expenditure or revenue expenditure.
Payment Capital Revenue

expenditure expenditure
Premises
Office furniture
Carriage on office furniture
Stationery and small office equipment
Legal expenses on purchase of premises
Computer equipment
Installation of computer equipment
Ink cartridges and printer paper
[6]
Amelia decided to depreciate her non-current assets using the reducing (diminishing) balance
method at the following rates.
Premises 2% per annum

Office furniture 20% per annum
Computer equipment 30% per annum
She decided that no depreciation would be charged in the year of disposal.
REQUIRED
(b) Name one other method of depreciation which Amelia could apply.
............................................................................................................................................. [1]

6
(c) Prepare the following accounts for each of the years ended 31 March 2018 and 31 March
2019.
Balance the provision for depreciation of computer equipment account and bring down the
balance on 1 April 2018 and 1 April 2019.
Amelia
Computer equipment account
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
Provision for depreciation on computer equipment account
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
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............. .............................. ............. ............. .............................. .............

[6]
© UCLES 2019 0452/22/O/N/19

7
On 30 September 2019 Amelia sold the office furniture as it was no longer suitable and received
$1750 in cash.
REQUIRED
(d) Calculate the total depreciation on the office furniture up to the date of disposal.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [3]
(e) Calculate the profit or loss on the disposal of the office furniture.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [4]
[Total: 20]

9
3 The financial year of the KS Sports Club ends on 31 July. The club has 150 members and the
annual subscription is $50.
On 1 August 2018 subscriptions were outstanding from 5 members and 2 members had paid their
subscription in advance for the next financial year.
On 31 July 2019 subscriptions had been paid in advance for the next financial year by 4 members.
REQUIRED
(a) Prepare the subscriptions account for the year ended 31 July 2019 to show the amount
received for subscriptions during the year.
KS Sports Club
Subscriptions account
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............

[6]

10
The treasurer of the KS Sports Club provided the following information.
$
At 1 August 2018
Bank overdraft 2620

5% loan from AB Loans 2000
Receipts and payments during the year ended 31 July 2019
Subscriptions received from members ?

Loan interest and repayment of loan 2100
Short-term interest-free loan received from a member 1000
General expenses 435
Rates and insurance 3120
Purchase of new sports equipment 4150
Repairs to sports equipment 215
Receipts from sports tournament 525
Expenses of sports tournament 335
At 31 July 2019
General expenses accrued 25

Insurance prepaid 150
© UCLES 2019 0452/22/O/N/19

11
(b) Prepare the receipts and payments account for the year ended 31 July 2019.
KS Sports Club
Receipts and Payments Account for the year ended 31 July 2019
............. .............................. ............. ............. .............................. .............
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............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
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............. .............................. ............. ............. .............................. .............

[13]
[Total: 19]

12
4 Mariam’s financial year ends on 30 September. She does not maintain a full set of accounting
records, but was able to provide some information.
On 1 October 2018
$ $
Premises at cost 80 000 Capital ?
Fixtures and fittings at cost 7 800 Loan 21 000
Motor vehicle at cost 10 000 Trade payables 6 220
Inventory 6 350
Bank balance 6 170
Mariam’s non-current assets have not been depreciated.
Mariam’s drawings amounted to $3125

Mariam transferred $5000 of her own money into the business bank account
One-third of the loan was repaid and it was agreed that a further one-third would be repaid on
1 March 2020.
Comparing the assets and liabilities on 30 September 2019 with those on 1 October 2018 the
following differences were found:
inventory had decreased by $510

trade payables had increased by $880
the balance at bank had increased by 10%
trade receivables had increased to $6450
other payables amounted to $260
On 30 September it was decided to:
write off a debt of $150 as irrecoverable

create a provision for doubtful debts of 5% of the remaining trade receivables
provide for depreciation on the fixtures and fittings for the year at 15% per annum on cost
provide for depreciation on the motor vehicle for the year at 20% per annum on cost
maintain the premises at cost price.
© UCLES 2019 0452/22/O/N/19

13
REQUIRED
(a) Prepare a statement of affairs at 30 September 2019 showing the total capital at that date.
Mariam
Statement of Affairs at 30 September 2019
$ $ $
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
.......................................................................... ...................... ...................... ......................
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.......................................................................... ...................... ...................... ......................

[15]

14
(b) Prepare the capital account of Mariam for the year ended 30 September 2019 to show the
profit or loss for the year.
Mariam
Capital account
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............
............. .............................. ............. ............. .............................. .............

[5]
Mariam has been advised to start maintaining double entry records.
REQUIRED
(c) State two advantages to Mariam of maintaining double entry records.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
............................................................................................................................................. [2]
[Total: 22]
© UCLES 2019 0452/22/O/N/19

16
5 Sabir’s financial year ends on 30 September. The totals of the trial balance prepared on
30 September 2019 did not balance and Sabir opened a suspense account with a debit entry of
$7000.
Sabir used the trial balance to prepare draft financial statements for the year ended 30 September
2019.
After the preparation of these draft financial statements five errors were discovered.
REQUIRED
(a) Complete the table to show the entries required to correct each error.
Entry required to correct the error

Debit Credit
Error
account $ account $
1 The total of the sales returns journal, sales 990 suspense 1980
$990, had been posted to the credit of
the sales account. sales returns 990
2 A bad debt written off, $65, had been

credited to the account of Nadia
instead of the account of Nadira. ........................ ............ ........................ ............
3 No entry had been made for goods,

cost price $150, withdrawn by Sabir for
personal use. ........................ ............ ........................ ............
4 The opening inventory, $4100, had not

been entered in the trial balance. ........................ ............ ........................ ..........
5 The total of the discount allowed

column in the cash book, $430,
had been posted to the credit of the
discount received account as $340. ........................ ............ ........................ ............
........................ ............ ........................ ............

[9]
(b) State whether all the errors in Sabir’s books have been discovered.
Have all the errors been discovered? ..................................
Reason .....................................................................................................................................
............................................................................................................................................. [2]
© UCLES 2019 0452/22/O/N/19

17
(c) Complete the following statement to show the effect on the draft profit for the year of
correcting errors 1–5.
Calculate the corrected profit for the year.
If the error does not affect the profit place a tick (3) in the ‘No effect on profit’ column.
Sabir
Statement of corrected profit for the year ended 30 September 2019
Draft profit for the year before corrections $31 400
No effect Increase Decrease

on profit in profit in profit
Error 1 ......... $ ......... $.........
Error 2 ......... $......... $.........
Error 3 ......... $......... $.........
Error 4 ......... $......... $.........
Error 5 ......... $......... $.........

______ ______
$______ $______ ______
Corrected profit for the year $______
[9]
[Total: 20]

18
6 Rashida started a business trading in fruit and vegetables on 1 July 2017. She rents shop
premises. She works in the shop herself and does not employ any staff. All goods are sold on
cash terms.
Rashida provided the following information at the end of her second year of trading.
$
Capital 53 000
Interest-free long term loan from family 10 000
Inventory 1 July 2018 860
Inventory 30 June 2019 920
Revenue 42 000
Operating expenses 3 772
REQUIRED
(a) Complete the table to show the ratios for Rashida for the year ended 30 June 2019.
Calculations should be correct to two decimal places.
You may use the space at the bottom of this page for your workings.
Percentage of gross profit to revenue ..................%
Percentage of profit to revenue ..................%
Return on capital employed ..................%
Rate of inventory turnover ..................times
[8]
Workings
© UCLES 2019 0452/22/O/N/19

19
Rashida decided to compare her results with those of her two brothers Damon and Hakim. They
formed a partnership eight years ago when they purchased premises and started a business as
furniture wholesalers. They now employ ten warehouse workers. All goods are sold on credit terms
to retail stores.
REQUIRED
(b) Explain why Rashida had a lower percentage of gross profit to revenue than her brothers.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
(c) Suggest one reason why Rashida’s rate of inventory turnover is higher than that of her
brothers.
...................................................................................................................................................
............................................................................................................................................. [1]
(d) Suggest two expenses which would appear in the income statement of Damon and Hakim
but would not appear in the income statement of Rashida.
1 ................................................................................................................................................
2 .......................................................................................................................................... [2]
(e) Suggest four factors which Rashida should consider when comparing her results with those
of her brothers.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
4 ................................................................................................................................................
............................................................................................................................................. [4]

20
Rashida is disappointed with the percentage of gross profit to revenue. She is considering
increasing the selling price.
REQUIRED
(f) Discuss how an increase in selling price may affect Rashida’s business.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
Rashida is considering asking her sister, Sabeena, to join her in the business.
(g) State three factors Rashida should consider before formally inviting Sabeena to become a
partner.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
............................................................................................................................................. [3]
[Total: 22]
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2019 0452/22/O/N/19

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Cambridge International Examinations

Cambridge International General Certificate of Secondary Education

READ THESE INSTRUCTIONS FIRST

Answer all questions.

This document consists of 21 printed pages and 3 blank pages.

1 (a) Explain the meaning of the following terms.

Bad debts recovered

Provision for doubtful debts

© UCLES 2015 0452/22/M/15

She provided the following information.

On 1 February 2014 the provision for doubtful debts amounted to $435.

(d) Prepare journal entries on 31 January 2015 to record:

1 writing off the amount owed by AX Limited

Narratives are required.

1 ………………………………………………….. …………….. ……………..

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© UCLES 2015 0452/22/M/15 [Turn over

The first one has been completed as an example.

Bad debts recovered

Adjustment to provision for doubtful debts

© UCLES 2015 0452/22/M/15

Feb 19 T Marks 480

Purchases Returns Journal

© UCLES 2015 0452/22/M/15 [Turn over

The following additional transactions took place in February 2015.

Feb 4 Paid $200 by cheque to T Marks

10 The bank dishonoured the cheque paid to T Marks on 4 February

28 T Marks charged $10 interest on the overdue account.

February Transaction Document

© UCLES 2015 0452/22/M/15

Date Details $ Date Details $

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Date Details $ Date Details $

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© UCLES 2015 0452/22/M/15 [Turn over

3 Amla Khan is a trader. Her financial year ends on 31 December.

Date Details $ Date Details $