Accounting 0452/22 February/March 2025: question paper and mark scheme
Cambridge IGCSE Accounting (0452), Paper 2 Structured Written Paper, February/March 2025. Read both free below, or download them. Done the paper? Get it marked by AI against this mark scheme.
Ria started trading on 1 August 2024.
The balances in Ria’s purchases ledger at 1 January 2025 were as follows:
$
Darena 465
Jadu 170
Ottie 275
Nakir 600
1510
Ottie allows Ria trade discount of 5%.
The following transactions took place in January 2025.
Jan 2 Paid Darena $300 by bank transfer
8 Sold goods for $520 cash
13 Purchased goods, list price $180, on credit from Ottie
17 Paid Nakir the amount due on 1 January 2025, after deducting 3% cash discount
18 Purchased goods, $528, on credit from Nakir
20 Purchased goods, $73, paying immediately by bank transfer
23 Purchased goods, $310, on credit from Darena
29 Sold goods for cash, $640
30 Returned goods, $24, to Darena
REQUIRED
(a) Prepare the purchases journal for January 2025.
Total the journal and indicate the ledger account where the total would be posted.
Ria
Purchases journal
Date Details $
[3]
(b) Prepare the purchases returns journal for January 2025.
Total the journal and indicate the ledger account where the total would be posted.
Ria
Purchases returns journal
Date Details $
[2]
Ria’s total purchases from 1 August 2024 to 31 December 2024 were $6327.
REQUIRED
(c) Prepare Ria’s purchases account for January 2025. Balance the account and bring down the balance on 1 February 2025.
Ria
Purchases account
Date Details $ Date Details $
[4]
(d) Prepare Ria’s purchases ledger control account for January 2025. Balance the account and bring down the balance on 1 February 2025.
Ria
Purchases ledger control account
Date Details $ Date Details $
[6]
Ria is considering increasing her trade payables payment period to provide her with sufficient cash for an advertising campaign.
REQUIRED
(e) Advise Ria whether or not she should increase her trade payables payment period to provide her with sufficient cash for an advertising campaign. Justify your answer by providing two advantages and two disadvantages of your advice.
…… [5]
[Total: 20]
Mark scheme
1(a) Ria 3
Purchases journal
Date Details $
2025
Jan 13 Ottie (180 – 9) 171 (1)
18 Nakir 528}
23 Darena 310} (1)
31 Transfer to purchases account 1 009 (1)OF
1(b) Ria 2
Purchases returns journal
Date Details $
2025
Jan 30 Darena 24 (1)
31 Transfer to purchases returns account 24 (1)
1(c) Ria 4
Purchases account
Date Details $ Date Details $
2025 2025
Jan 1 Balance (1) 6 327 Jan 31 Balance c/d 7 409
20 Bank (1) 73
31 Credit purchases for
Month (1) OF 1 009
7 409 7 409
Feb 1 Balance b/d (1)OF 7 409
1(d) Ria 6
Purchases ledger control account
Date Details $ Date Details $
2025 2025
Jan 31 Purchases returns (1)OF 24 Jan 1 Balance b/d (1) 1510
Bank (300 + 600 – 18) (1) 882 31 Purchases (1)OF 1009
Discount received (1) 18
Balance c/d 1 595
2 519 2 519
Feb 1 Balance b/d (1)OF 1 595
1(e) Advantages 5
Advertising may attract new customers/increase sales/may increase profits (1)
Will not need to use existing cash/bank balance or invest more capital(1)
Would not need to obtain a loan/overdraft or pay loan/overdraft interest(1)
Advertising may be recommended for a new business (1)
Accept other valid points
Max (2)
Disadvantages
Advertising will not necessarily increase sales (1)
May not be able to take advantage of cash discount (1)
Suppliers may charge interest on overdue accounts (1)
Will damage relationship with suppliers (1)
Suppliers may not provide further goods until outstanding balance is paid (1)
Accept other valid points
Max (2)
Recommendation (1)
Viraj is a retailer. He buys on credit and sells for cash. He rents out an area of the shop to another business for $172 per month.
Viraj’s trial balance at 31 January 2025 was as follows:
Viraj
Trial Balance at 31 January 2025
Debit Credit
$ $
Revenue 89 600
Rental income 2 580
Sales returns 2 195
Inventory at 1 February 2024 4 500
Purchases 53 700
Rent and insurance 8 760
General expenses 2 945
Wages 7 350
Stationery and advertising 710
Bank charges 143
Fixtures and fittings at cost 12 500
Provision for depreciation of fixtures and fittings 3 750
Trade payables 3 125
Bank overdraft 1 260
Capital 7 793
Drawings 15 305
108 108
…… 108 108
Additional information
1 Inventory at 31 January 2025 was valued at $5900.
2 Depreciation on fixtures and fittings is to be charged at 15% per annum using the straight-line method.
3 Rental income included the amount due for the period from 1 February 2025 to 30 April 2025.
4 At 31 January 2025, Viraj owed $282 for wages and $55 for advertising.
5 After the trial balance was prepared, Viraj received a bank statement which showed that bank charges of $13 had been paid in January 2025.
REQUIRED
(a) Prepare the income statement for Viraj for the year ended 31 January 2025.
Viraj
Income Statement for the year ended 31 January 2025
$ $
[9]
(b) Prepare the current liabilities section of Viraj’s statement of financial position at
31 January 2025.
…… [4]
(c) State the accounting principle which Viraj has followed when he did not include a figure in his statement of financial position for:
(i) his inventory of price labels
…… [1]
(ii) his skills as a salesman.
…… [1]
Viraj wants to refurbish the shop. He thinks that the new fixtures and fittings would cost between
$10 000 and $15 000. There are several local shops selling the same type of goods that Viraj sells.
REQUIRED
(d) Advise Viraj whether or not he should refurbish the shop. Justify your answer by providing two advantages and two disadvantages of Viraj refurbishing the shop.
…… [5]
[Total: 20]
Mark scheme
2(a) Viraj 9
Income Statement for the year ended 31 January 2025
$ $
Revenue 89 600
Less sales returns 2 195
87 405 (1)
Less Cost of goods sold
Opening inventory 4 500
Purchases 53 700
58 200
Less Closing inventory 5 900 52 300 (1)
Gross profit 35 105 (1)OF
Other income
Rental income (2580 – 516) 2 064 (1)
37 169
Less Expenses
Rent and insurance 8 760
General expenses 2 945
Wages (7350 + 282) 7 632 (1)
Stationery and advertising (710 + 55) 765 (1)
Bank charges (143 + 13) 156 (1)
Depreciation of fixtures and fittings
(15% × 12 500) 1 875 (1) 22 133
Profit for the year 15 036 (1)OF
2(b) Viraj 4
Statement of Financial Position at 31 January 2025
$
Current Liabilities
Trade payables 3 125
Other payables (282 + 55) 337 (1)
Income prepaid (172 × 3) 516 (1)
Bank overdraft (1 260 + 13) 1 273 (1)
5 251 (1)OF
2(c)(i) Materiality (1) OR Prudence (1) 1
2(c)(ii) Money measurement (1) 1
2(d) Advantages 5
May attract new customers/may increase sales/may increase profit (1)
Will help to keep up with the competition/diversify products offered (1)
May be more efficient (e.g. energy consumption or layout) (1)
May be better working conditions (1)
May be able to put his prices up (1)
May be able to increase rent charge to the other business (1)
Accept other valid points
Max (2)
Disadvantages
Will require extra capital/loan/increase in overdraft (1)
May need to put prices up to cover cost of refurbishment (1)
May be increased expenses/reduced profit (e.g. interest and depreciation) (1)
Not wise to spend a lot on property which is rented (1)
The existing fixtures and fittings are only two years old (1)
May not actually result in more sales/more customers/more profit (1)
Accept other valid points
Max (2)
Recommendation (1)
Samira has been trading for many years and has a debit bank balance. She prepared her trial balance at 31 January 2025. The total of the credit side was more than the total of the debit side.
Samira entered the difference in a suspense account.
Samira later discovered the following errors.
1 A repair to equipment, $175, had been debited to the equipment account.
2 A credit transfer, $132, from David, a trade receivable, had been debited to David’s account and credited to the bank account.
3 A repayment of a bank loan, $2500, had been debited to bank charges.
4 A bank payment for stationery, $21, had been recorded as $12.
5 Sales returns, $40, had been recorded as purchases returns.
REQUIRED
(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.
Samira
Journal
Error Details Debit Credit number $ $
[11]
(b) Complete the table to indicate the effect of each error on profit for the year and on the bank balance. Indicate whether the effect is overstated or understated and by how much. If there is no effect, write ‘no effect’ in the box.
The first one has been completed as an example.
Error number Effect on profit for the year Effect on bank balance
1 Overstated by $175 No effect
2
3
4
5
[4]
Before the errors were corrected, the debit side of Samira’s trial balance totalled $97 400.
REQUIRED
(c) Calculate the trial balance total after the errors have been corrected.
…… [3]
(d) State the number of one error from 1–5 which is:
(i) an error of principle
…… [1]
(ii) an error of original entry.
…… [1]
[Total: 20]
Mark scheme
3(a) Samira 11
Journal
Error Details Debit Credit
number $ $
1 Equipment repairs 175 (1)
Equipment 175 (1)
2 Bank 264 (1)
David 264 (1)
3 Bank loan 2 500 (1)
Bank charges 2500 (1)
4 Stationery 9 (1)
Bank 9 (1)
5 Sales returns 40 (1)
Purchases returns 40 (1)
Suspense 80 (1)
3(b) 4
Error number Effect on profit for the year Effect on bank balance
1 Overstated by $175 No effect
2 No effect Understated by $264 (1)
3 Understated by $2500 No effect (1)
4 Overstated by $9 Overstated by $9 (1)
5 Overstated by $80 No effect (1)
3(c) $ 3
Original total of debit side of trial balance 97 400
Add Error 5 40 (1)
97 440
Less Error 3 2 500 (1)
Corrected trial balance total of trial balance 94 940 (1)OF
3(d)(i) Error 1 (1) OR Error 3 (1) 1
3(d)(ii) Error 4 (1) 1
Raj is a trader who buys and sells on credit.
He has provided the following information.
$
Inventory at 1 January 2024 5 500
For the year to 31 December 2024:
Revenue 112 000
Purchases 68 200
Expenses 21 500
At 31 December 2024:
Inventory 5 700
Trade receivables 16 000
Trade payables 5 100
Bank overdraft 6 890
Capital 285 000
REQUIRED
(a) Complete the following table.
Ratio Workings Answer
(to two decimal places)
Gross margin
Profit margin
Return on capital employed (ROCE)
Rate of inventory turnover (times)
Trade receivables
turnover (days)
Liquid (acid test) ratio
[11]
Raj’s profit margin has decreased over the past few years. It has taken Raj longer to collect money from trade receivables in 2024 than in the previous years.
REQUIRED
(b) Explain how Raj’s lower profit margin may be linked to his trade receivables taking longer to pay.
…… [4]
Raj is considering paying more capital into the business to reduce the bank overdraft.
REQUIRED
(c) Advise Raj whether or not he should pay more capital into the business. Justify your answer by providing points for and against.
…… [5]
[Total: 20]
Mark scheme
4(a) 11
Gross margin 112000 − (5 500 + 68 200 − 5 700) 44 000 (1) 100 39.29% (1)OF
= ×
112000 112000 1
Profit margin (44 000 OF − 21500) 22500 (1)OF 100 20.09% (1)OF
= ×
112000 112000 1
Return on capital 22 500 OF 100 7.89% (1)OF
employed ×
285 000 1
Rate of inventory (5 500 + 68 200 − 5 700) 68 000 (1) 12.14 times (1)OF
turnover (times) =
(5 500 + 5 700) / 2 5 600 (1)
Trade receivables 16 000 365 52.14 days (1)
turnover (days) × OR 53 days
112000 1
Liquid (acid test) 16 000 16 000 } (1) whole formula 1.33 : 1 (1)OF
ratio =
(5100 + 6 890) 11990 }
4(b) May be an increase in irrecoverable debts/decrease in profit because of an increase in irrecoverable debts (1) 4
May have to increase provision for irrecoverable debts (1)
May delay paying trade payables and so not earn cash discount (1)
May incur additional interest charges if bank overdraft increases (1)
Trade payables may charge interest if accounts not paid on time (1)
Max (4)
4(c) Advantages of investing more capital 5
Would avoid paying overdraft interest (1)
May improve the relationship with the bank if he pays off his overdraft (1)
May be more incentive to improve future profit as more personal funds invested (1)
Provides funding until his trade receivables turnover can be improved (1)
Accept other valid points
Max (3)
Disadvantages of investing more capital
More capital is at risk (1)
Return on capital would be reduced (1)
May adversely affect personal financial position (1)
Extra capital is not normally used for short-term finance (1)
Accept other valid points
Max (3)
Max (4)
Recommendation (1)
The ABC Piano Club provides facilities for its members. It also runs a coffee shop where members can buy hot drinks and snacks.
The club’s assets and liabilities were as follows:
31 December 2023 31 December 2024
$ $
Pianos at cost 12 000 12 000
Pianos – Provision for depreciation 4 800 6 000
Subscriptions received in advance 650 715
Subscriptions received in arrears 390 325
Club insurance paid in advance 140 155
Club rent paid in arrears 435 –
Coffee shop inventory 320 382
Trade payables for coffee shop supplies 200 186
Cash at bank (debit balances) 2 045 4 675
REQUIRED
(a) Calculate the accumulated fund at 31 December 2023.
…… [4]
The following totals have been taken from the club’s receipts and payments account for the year ended 31 December 2024.
Receipts $
Subscriptions received 7 800
Coffee shop sales 8 320
Payments
Club rent and insurance 6 700
Other club expenses 375
Trade payables 3 815
Coffee shop wages 2 600
REQUIRED
(b) Prepare the subscriptions account for the year ended 31 December 2024. Balance the account and bring down the balances on 1 January 2025.
ABC Piano Club
Subscriptions account
Date Details $ Date Details $
[6]
(c) Prepare the Club’s rent and insurance account for the year ended 31 December 2024.
Balance the account and bring down the balance on 1 January 2025.
ABC Piano Club
Club’s rent and insurance account
Date Details $ Date Details $
[5]
(d) Prepare the income statement for the coffee shop for the year ended 31 December 2024.
ABC Piano Club
Coffee shop income statement for the year ended 31 December 2024
$ $
[5]
[Total: 20]
Mark scheme
5(a) $ $ 4
Assets
Pianos at book value 7 200 (1)
Subscriptions in arrears 390 }
Insurance prepaid 140 } (1)
Coffee shop inventory 320 }
Cash at bank 2 045 } 10 095
Liabilities
Subscriptions in advance 650 }
Rent accrued 435 }(1)
Coffee shop trade payables 200 } 1 285
Accumulated fund 8 810 (1) OF
Alternative presentation
(12 000 – 4800) (1) + (390 + 140 + 320+ 2045) (1) – (650 + 435 + 200) (1) = 8810 (1)OF
5(b) ABC Piano Club 6
Subscriptions account
Date Details $ Date Details $
2024 2024
Jan 1 Balance b/d * 390 Jan 1 Balance b/d *(1) 650
Dec 31 Income and expenditure (1)OF 7670 Dec 31 Bank/Cash (1) 7 800
Balance c/d 715 Balance c/d 325
8 775 8 775
2025 2025
Jan 1 Balance b/d (1) 325 Jan 1 Balance b/d (1) 715
*(1) for both opening balances
(1) for dates
5(c) ABC Piano Club 5
Rent and insurance account
Date Details $ Date Details $
2024 2024
Jan 1 Balance b/d * 140 Jan 1 Balance b/d *(1) 435
Dec 31 Bank/Cash (1) 6 700 Dec 31 Income and expenditure (1)OF 6 250
Balance c/d 155
6 840
2025 6 840
Jan 1 Balance b/d (1) 155
*(1) for both opening balances
(1) for dates
5(d) ABC Piano Club 5
Coffee shop income statement for the year ended 31 December 2024
$ $
Revenue 8 320
Cost of sales
Opening inventory 320 *
Purchases (3 815 – 200 + 186) 3 801 (1)
4 121
Less Closing inventory 382 * (1)both 3 739 (1)OF
4 581
Shop wages 2 600 (1)
Profit for the year on shop 1 981 (1) OF
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Accounting 0452/22 for February/March 2025 is out of 100 marks, with 1 hour 45 minutes to answer it, across 5 questions.
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