1 Dev owns a business selling furniture. The following transactions took place during August 2020. Transaction Date Details $ 1 August 9 Sold goods on credit to Petra 675 2 14 Petra returned damaged goods to Dev 120 3 23 Banked cash sales 412 4 29 Petra settled her outstanding balance at 1 August by credit transfer after taking a cash discount of 5% On 1 August 2020, the balance on credit customer Petra’s sales ledger account was $940 debit. REQUIRED (a) Complete the table to name each business document and book of prime entry for the following transactions in Dev’s accounting records. Transaction Business document Book of prime entry 2 3 4 [6] (b) Prepare the account of Petra for August 2020 as it would appear in Dev’s sales ledger. Balance the account and bring down the balance on 1 September 2020. Dev Petra account Date 2020 Details $ Date 2020 Details $ … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … [6] (c) Identify the section of Dev’s statement of financial position at 31 August 2020 in which the balance on Petra’s account would appear. … [1] Dev allows his credit customers a cash discount of 5% for prompt payment. He is considering reducing this to 2%. REQUIRED (d) State one advantage and one disadvantage to Dev of this proposal. … … … … [2] Dev is considering turning his business into a limited company. REQUIRED (e) Advise Dev whether or not he should form a limited company. Justify your answer with two advantages and two disadvantages of forming a limited company. … … … … … … … … … … … [5] [Total: 20]

1(a) Transaction Business document Book of prime entry 2 Credit note (1) Sales returns journal (1) 3 Paying-in slip (1) Cash book (1) 4 Bank statement (1) Cash book (1) 6 1(b) Dev Petra account 2020 $ 2020 $ Aug 1 Balance b/d 940 Aug 14 Sales returns 120 (1) 9 Sales 675 (1) 29 Bank 893 (1) Discount allowed 47 (1) 31 Balance c/d 555 1 615 1 615 2020 Sept 1 Balance b/d 555 (1)OF + (1) dates 6 1(c) Current assets (1) OF 1 1(d) Advantage Increase profit for the year (1) Increase cash inflow (1) Accept other valid responses Max (1) Disadvantage May lose customers/sales may fall (1) Customers may take longer to pay (1) Accept other valid responses Max (1) 2 1(e) Advantages Dev will have limited liability for the debts of the company (1) The limited company will have a separate legal identity to Dev (1) Dev will have access to different forms of finance/increase in capital employed (1) Accept other valid responses Max (2) Disadvantages The limited company will have greater regulation than Dev as a sole trader (1) The accounting requirements of the limited company will be more complex than for Dev as a sole trader (1) The financial statements of the limited company may be viewed by the public unlike those of Dev as a sole trader (1) Accept other valid responses Max (2) Recommendation (1) 5 (a) To earn marks, you must correctly identify the business document and the book of prime entry for each transaction. (b) To earn marks, you must correctly record the opening balance, sales, sales returns, bank payment, and discount allowed in Petra's account, ensuring correct amounts and sides, and then accurately balance the account and bring down the balance. (c) To earn the mark, you must correctly classify the balance on Petra's account as a current asset. (d) To earn marks, you need to state one valid advantage and one valid disadvantage of offering a cash discount. (e) To earn marks, you must state two advantages and two disadvantages of Dev changing his business to a limited company.

2 The K Music Club provides facilities for listening to music and also provides a refreshment bar for members. The club had the following assets and liabilities at 1 April 2019. $ Subscriptions in advance 250 Subscriptions in arrears 845 Cash at bank 1 570 Cash in hand 130 Wages outstanding (refreshment bar) 140 Inventory (refreshment bar) 615 Fixtures and fittings at book value 11 200 REQUIRED (a) Calculate the accumulated fund at 1 April 2019. … … … … … … … … … [4] (b) State how the accumulated fund of a club is built up over time. … … [2] The following information is available for the year ended 31 March 2020. $ Subscriptions received (all by cheque) 8 500 Subscriptions written off as irrecoverable 155 Wages paid to refreshments bar staff 1 250 Balances at 31 March 2020 included the following. $ Subscriptions in advance 215 Subscriptions in arrears 975 Wages outstanding (refreshments bar) 115 REQUIRED (c) Calculate the refreshment bar staff wages for the year ended 31 March 2020. … …………………………………………………………………………………………………… [2] (d) Prepare the subscriptions account for the year ended 31 March 2020. Balance the account and bring down the balances on 1 April 2020. K Music Club Subscriptions account Date ……… ……… ……… ……… ……… ……… ……… ……… ……… Details …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... $ ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. Date ……… ……… ……… ……… ……… ……… ……… ……… ……… Details …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... …………………………... $ ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. [7] (e) Advise the club treasurer whether or not club members should be required to pay their subscriptions by direct debit. Justify your answer by providing two advantages and two disadvantages. … … … … … … … … … … … … [5] [Total: 20] PLEASE TURN OVER

2(a) $ $ Subscriptions in arrears 845 (1) Cash at bank 1 570 Cash in hand 130 Inventory 615 Fixtures and fittings 11 200 14 360 (1) Subscriptions in advance 250 Wages outstanding 140 390 (1) Accumulated fund 13 970 (1)(OF) 4 2(b) The accumulated fund is built up from the annual surpluses (1) less any annual deficits (1) Accept other valid points 2 2(c) 1250 + 115 – 140 (1) = 1225 (1)OF 2 2(d) K Music Club Subscriptions account 2019 $ 2019 $ Apr 1 Balance b/d 845 (1) Apr 1 Balance b/d 250 (1) 2020 2020 Mar 31 Income and Expenditure 8 820 (1)OF Mar 31 Bank 8 500 (1) Balance c/d 215 Irrecoverable debts 155 (1) Balance c/d 975 9 880 9 880 2020 2020 Apl 1 Balance b/d 975 (1)OF Apl 1 Balance b/d 215 (1)OF 7 2(e) Advantages Subscriptions in arrears have risen from $845 to $975, so this may be a concern (1) Subscriptions in arrears are significantly higher than subscriptions in advance (1) Irrecoverable debts would be minimised particularly if the direct debits were set up for the start of the year (1) The timing of cash receipts from members will be known (1) Administration costs may be reduced (1) Accept other valid points Max (2) Disadvantages Members may prefer to choose their own method of payment (1) They may prefer to pay their subscription at a time of their choosing (1) Some members may decide not to renew their membership (1) Accept other valid points Max (2) Recommendation (1) 5 (a) To earn marks, you must correctly identify and sum all assets, then correctly identify and sum all liabilities. Finally, you must subtract total liabilities from total assets to calculate the accumulated fund. (b) You earn marks by explaining that the accumulated fund is built up from annual surpluses and reduced by annual deficits. (c) To earn marks, you must correctly calculate the amount of subscriptions in arrears by adding the opening balance and the amount written off, then subtracting the closing balance. (d) Marks are earned by correctly entering the opening balances, bank receipts, irrecoverable debts, and closing balances into the subscriptions account, then calculating the income and expenditure figure and bringing down the correct balances. (e) To earn marks, you need to provide valid advantages of using direct debits for subscriptions, such as improved cash flow or reduced administration costs.

1 (a) Faraz buys and sells new and used motor vehicles. He purchased a used motor vehicle from Tahir for $7000 which he paid for by cheque. How would Faraz record this transaction? account debited account credited A motor vehicles bank B motor vehicles Tahir C purchases bank D purchases Tahir [1] (b) Kala had the following assets and liabilities on 1 February 2019. $ $ Assets Non-current assets 48 000 Inventory 14 000 Trade receivables 16 500 78 500 Liabilities Trade payables 17 000 Bank overdraft 9 100 26 100 On 2 February she paid Suki, a credit supplier, $1950 by cheque, after deducting a cash discount of $50. What was Kala’s capital after this transaction? A $50 400 B $50 450 C $52 350 D $52 450 [1] (c) Which tasks would be carried out by a book-keeper? 1 analysing business results 2 maintaining a cash book 3 preparing financial statements 4 writing up ledger accounts A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4 [1] (d) Zara provided the following information for the year ended 31 December 2018. $ Amount owing by credit customers 1 January 2018 2 250 31 December 2018 1 500 Cheques paid by credit customers 14 220 Discount allowed to credit customers 80 Goods returned by credit customers 2 150 How much were the credit sales for the year? A $11 400 B $12 900 C $15 700 D $17 200 [1] (e) Which statement about a bank reconciliation statement is correct? A It includes items recorded by the trader not yet recorded by the bank. B It is a copy of the trader’s account as it appears in the books of the bank. C It is sent by the bank to the trader at regular intervals. D It summarises the bank columns in a trader’s cash book. [1] (f) A trader provided the following information for his financial year. $ Revenue for the year 60 000 Inventory at the start of the year 6 000 Purchases for the year 44 000 The mark-up is 25%. What was the value of the inventory at the end of the year? A $2000 B $5000 C $12 000 D $15 000 [1] (g) ‘Financial statements must be free from errors and bias.’ Which accounting objective is this statement describing? A comparability B reliability C relevance D understandability [1] (h) A trader provided the following information. $ Cost of sales 48 000 Gross profit 32 000 Expenses 17 000 What was the profit for the year as a percentage of revenue? A 15.46% B 18.75% C 30.61% D 35.42% [1] (i) Which will increase a trader’s working capital? A delaying payment to credit suppliers B obtaining a short-term bank loan C selling inventory at cost price D selling non-current assets [1] (j) Which accounting principle requires profit to be recognised as earned when the legal ownership of goods passes to the purchaser? A going concern B money measurement C prudence D realisation [1] [Total: 10]

1(a) C 1 1(b) D 1 1(c) C 1 1(d) C 1 1(e) A 1 1(f) A 1 1(g) B 1 1(h) B 1 1(i) D 1 1(j) D 1 Glossary (b) A 52 400 – (1950 + 50) B 52 400 – 1950 C 52 400 – 50 D 52 400 + 50 (d) A (14 220 + 80 + 1500) – (2250 + 2150) B (2250 +14 220 + 80) – (2150 +1500) C (14 220 + 80 + 2150 + 1500) – 2250 D (14 220 +80 +2150 +2250) – 1500 (f) A GP = 25/125 × 60 = 12 C of S = 48 Opening inventory + Purchases = 50 Closing inventory = 2 B GP = 25% × 60 = 15 C of S = 45 Opening inventory + Purchases = 50 Closing inventory = 5 C 25/125 × 60 = 12 D 25% × 60 = 15 (h) Profit = 32 – 17 = 15 A 15/(48 + 32 + 17) × 100 = 15.46% B 15/(48 + 32) × 100 = 18.75% C 15/(32 + 17) × 100 = 30.61% D 17/48 × 100 = 35.42 % To earn the mark, you must select option C, which correctly identifies 'purchases' as the account debited and 'bank' as the account credited for Faraz's transaction.

1 (a) The employees of a business are highly skilled but this is not recorded in the financial statements of the business. Which accounting principle is being applied? A going concern B money measurement C prudence D realisation [1] (b) Khalid started a business on 1 April 2018 with a capital of $90 000. He provided the following information on 31 March 2019. $ non-current assets 75 000 current assets 32 000 current liabilities 24 000 drawings during the year 19 000 What was the profit or loss for the year ended 31 March 2019? A $12 000 loss B $12 000 profit C $26 000 loss D $26 000 profit [1] (c) How is cost of production calculated? A direct materials + direct labour + direct expenses B direct materials + direct labour + direct expenses + factory overheads C direct materials + direct labour + direct expenses + factory overheads + decrease in work in progress D direct materials + direct labour + direct expenses + factory overheads – decrease in work in progress [1] (d) Lisa returned goods previously purchased from Tara. How did Tara record this? account debited account credited A Lisa purchases returns B Lisa sales returns C purchases returns Lisa D sales returns Lisa [1] (e) When preparing his financial statements for the year ended 30 April 2019 Tebogo recorded his opening inventory of $6400 as $4600 in error. What was the effect of this error? effect on gross profit for the year effect on profit for the year effect on capital at 30 April 2019 overstated understated overstated understated overstated understated A 3 3 3 B 3 3 3 C 3 3 3 D 3 3 3 [1] (f) Amrik started a business on 1 January 2017 and purchased a machine costing $18 000. He decided to depreciate the machine at 20% per annum using the reducing (diminishing) balance method. No depreciation was to be charged in the year of disposal. The machine was sold for $13 300 on 1 July 2018. What was the profit or loss on the sale of the machine? A loss $1100 B loss $4700 C profit $1780 D profit $2500 [1] (g) ‘Financial information must be free from errors and bias.’ To which accounting objective does this refer? A comparability B relevance C reliability D understandability [1] (h) Amelia rented premises to a tenant. At the end of Amelia’s financial year the tenant had paid 2 months’ rent in advance. Which entries would Amelia make in her ledger? A credit the rent payable account and carry down as a debit balance B debit the rent payable account and carry down as a credit balance C credit the rent receivable account and carry down as a debit balance D debit the rent receivable account and carry down as a credit balance [1] (i) John paid Tahir, a credit supplier, $200 by cheque. This was credited to the account of Tarek, another credit supplier. Which journal entry corrects this error? debit $ credit $ A suspense Tahir Tarek 400 200 200 B Tahir Tarek 200 200 C Tahir Tarek suspense 200 200 400 D Tarek Tahir 200 200 [1] (j) A business provided the following information. $ opening inventory 36 000 closing inventory 24 000 purchases 360 000 revenue 480 000 What was the rate of inventory turnover? A 12.0 times B 12.4 times C 15.5 times D 16.0 times [1] [Total: 10]

1(a) B 1 1(b) B 1 1(c) C 1 1(d) D 1 1(e) A 1 1(f) A 1 1(g) C 1 1(h) D 1 1(i) C 1 1(j) B 1 To earn the mark, you must select the correct option (B, B, C, D, A, A, C, D, C, B) for each part of the multiple-choice question.

Cambridge IGCSE Accounting · 0452

IGCSE Accounting (0452) The fundamentals of accounting past paper questions

Questions on the accounting equation and the purpose of accounting records.

90 free questions from 2017–2021, each with its marking scheme. Open the full topical bank to filter by subtopic, paper, and year.

The fundamentals of accounting in IGCSE Accounting 0452 exams, 2020–2025

Across 2020–2025, The fundamentals of accounting accounted for 142 questions worth 272 marks in Cambridge IGCSE Accounting (0452) papers.

By year
Year	Questions	Marks
2020	23	61
2021	28	28
2022	21	37
2023	25	25
2024	20	39
2025	25	82

Most-tested subtopics

1.2 The accounting equation140 marks
1.1 The purpose of accounting0 marks

Appears in

Paper 1 · 135 qs
Paper 2 · 7 qs

All most-tested Accounting topics

2020 Oct/Nov · Paper 2 · Q1 · 20 marks
Marking scheme
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2020 May/Jun · Paper 2 · Q2 · 20 marks
Marking scheme
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2019 Feb/Mar · Paper 1 · Q1 · 10 marks
Marking scheme
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2019 May/Jun · Paper 1 · Q1 · 10 marks
Marking scheme
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2021 Feb/Mar · Paper 1 · Q1 · 1 mark
Marking scheme
Mark scheme — 2021 Paper 1 Q1
Answer: C
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