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Cambridge IGCSE™

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ACCOUNTING 0452/21
Paper 2 Structured Written Paper October/November 2024

1 hour 45 minutes

You must answer on the question paper.

No additional materials are needed.

INSTRUCTIONS
● Answer all questions.
● Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
● Write your name, centre number and candidate number in the boxes at the top of the page.
● Write your answer to each question in the space provided.
● Do not use an erasable pen or correction fluid.
● Do not write on any bar codes.
● You may use a calculator.
● International accounting terms and formats should be used as appropriate.
● You should show your workings.

INFORMATION
● The total mark for this paper is 100.
● The number of marks for each question or part question is shown in brackets [ ].
● Where you are asked to complete a layout, you may not need all the lines for your answer.

This document has 24 pages. Any blank pages are indicated.

DC (EV) 347340
© UCLES 2024 [Turn over
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1 Jenny runs a small trading business.

Jenny received her bank statement which showed a credit balance of $1367 on 29 February 2024.
On the same date her bank column in her cash book showed an overdrawn balance of $1933.

When comparing her bank statement and cash book she found that the following items appeared
on her bank statement and not in her cash book:

February $
26 M Stores, a credit customer, had paid by bank transfer 1 900
26 Interest received 358

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27 A cheque previously received from C Stores had been dishonoured 1 121
28 Bank charges 125
28 A direct debit for electricity had been taken 290

The following items appeared in her cash book but not on her bank statement

February $
23 A cheque paid to B Properties 1 025
27 A payment by credit transfer to pay for rent and insurance 2 300
28 A cheque received from a credit customer Y Traders was paid into the bank 792

Upon investigation, she discovered the following error:

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A cheque made payable to D Sports $45 had been recorded in the bank column of her cash
book. The cheque had been written from her personal account to pay for her gym membership.

REQUIRED:

(a) Update the bank column of Jenny’s cash book.

Balance the account and bring down the balance on 1 March 2024.

Jenny
Cash book – bank columns

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Date Details $ Date Details $

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[7]
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(b) Prepare a bank reconciliation statement at 29 February 2024.

Start with the balance from Jenny’s bank statement.

Jenny
Bank reconciliation at 29 February 2024

$ $
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(c) Suggest two advantages of preparing a bank reconciliation statement.

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1 ................................................................................................................................................

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(d) Explain why a bank overdraft is shown as a debit balance on a bank statement.

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Jenny is concerned about her bank overdraft and is considering adding additional capital into
the business from her personal funds.

REQUIRED:

(e) Advise Jenny whether she should contribute additional capital to pay off her bank overdraft.
Justify your answer.

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[Total: 20]
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Question 2 is on page 6.
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2 Ali and Sai are in partnership. Their financial year ends on 30 June. Their partnership agreement
includes the following items.

Interest on capital is allowed at 6% per annum.

Interest on drawings is charged at 5%.

Sai is entitled to a partnership salary of $10 050 per annum.

Ali and Sai share residual profits and losses in the ratio 3:2.

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Ali and Sai have provided the following information:

Ali Sai
$ $

Drawings for the year ended 30 June 2024 11 000 16 000

Capital at 1 July 2023 60 000 40 000
Current account at 1 July 2023 1800 debit 250 credit

Profit for the year before interest on loan was $42 700.

Ali provided a loan to the partnership of $10 000 at an interest rate of 5% per annum. The interest

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payment for the year ended 30 June 2024 has been made. The partnership has no other loans.

REQUIRED:

(a) Prepare the profit and loss appropriation account on page 7 for the year ended 30 June 2024.

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Ali and Sai

Profit and loss appropriation account for the year ended 30 June 2024

$ $
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[8]
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(b) Prepare the capital and current accounts for Sai for the year ended 30 June 2024 and bring
down the balances on 1 July 2024.

Sai
Capital account for the year ended 30 June 2024

Date Details $ Date Details $

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Sai
Current account for the year ended 30 June 2024

Date Details $ Date Details $

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[8]
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(c) State two disadvantages of operating as a partnership.

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(d) Prepare the journal entry to record the payment of interest on the loan provided by Ali. A
narrative is not required.

Ali & Sai

Journal
Details Debit Credit
$ $
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[2]

[Total: 20]
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3 Natalie prepared her trial balance at the end of the year 31 March 2024. The totals did not agree
and she had to open a suspense account. The debit side of the trial balance was $357 higher than
the credit side.

Natalie later discovered the following errors.

1 A bank transfer, $420, received from a credit customer Sarah had been correctly recorded in
the bank but no other entry had been made.

2 Natalie contributed a personal vehicle to the business valued at $7000. This had been debited
to the capital account and credited to the vehicle maintenance account.

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3 Purchases of $270 had been correctly entered in the suppliers account but had been debited
as $207 in the purchases account.

4 No entry had been made for general expenses, $126, paid by bank transfer.

5 Cash drawings of $200 had been debited to the cash account and credited to the drawings
account.

REQUIRED:

(a) Prepare the journal entries on page 11 required to correct errors 1 to 5. Narratives are not

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required.

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0452/21/O/N/24
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Natalie
Journal

Error Details Debit Credit

number $ $

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[10]
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0452/21/O/N/24 [Turn over
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(b) Prepare the suspense account at 31 March 2024.

Natalie
Suspense Account

Date Details $ Date Details $

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(c) Complete the table by identifying the type of errors that occurred in errors 4 and 5.

Error Error type

Number

Error 4

Error 5

[2]

(d) Complete the table below by placing a tick (3) in the appropriate column to indicate the effect

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on the profit for the year after correcting each of the errors.

Error Effect on profit

Number decrease increase no effect

Error 1

Error 2

Error 3
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Error 4

Error 5

[5]

[Total: 20]
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0452/21/O/N/24
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4 A company has a fleet of delivery vehicles. Information from their statement of financial position at
31 December 2022 shows that the vehicles originally cost $440 000 with accumulated depreciation
of $270 000.

The business purchased two additional vehicles costing a total of $70 000 on 1 April 2023 on
credit from L Autos.

On 30 November 2023, the business sold one of its vehicles. The vehicle had originally cost
$28 000 with accumulated depreciation of $16 800. The vehicle was sold for $10 500 to a local
garage who paid by bank transfer.
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The business provides for depreciation using the straight-line method at a rate of 20% per annum.

A full year’s depreciation is charged in the year of purchase.

No depreciation is charged in the year of disposal.

REQUIRED:

(a) Calculate the depreciation charge for the year ended 31 December 2023.

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(b) Prepare the company’s ledger accounts for the delivery vehicles, provision for depreciation
and disposal of delivery vehicles for the year ended 31 December 2023.

Balance the accounts and bring down the balances on 1 January 2024.

Delivery vehicles account

Date Details $ Date Details $

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Provision for depreciation of delivery vehicles account

Date Details $ Date Details $

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Disposal of delivery vehicles account

Date Details $ Date Details $

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0452/21/O/N/24 [Turn over
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After talking to his accountant, the owner of the company is considering changing the method of
depreciation for his delivery vehicles to the reducing balance method but maintaining the rate of
depreciation at 20% per annum.

REQUIRED:

(c) Advise the owner of the company whether he should pursue this course of action. Justify
your answer by providing two advantages and two disadvantages of changing the method of
depreciation to the reducing balance method.

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 * 0000800000017 *
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(d) Complete the following table by placing a tick (3) in the appropriate column to indicate the
most suitable method of depreciation for each of the non-current assets.

Non-current asset Straight-line Revaluation No depreciation

Land

Fixtures & fittings

Loose tools
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[Total: 20]
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 ,

5 The following information was provided by G Limited, a manufacturing company, for the year
ended 31 March 2024.

$
Purchases:
Raw materials 68 000
Finished goods 32 413

Wages:
Factory operatives 183 700
Factory supervisors 47 200

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Administration salaries 34 925
Factory machinery at cost 247 000
Provision for depreciation of factory machinery 51 500
Factory general expenses 20 250
Rates & insurance 7 100
Administration expenses 5 470
Carriage on purchases of finished goods 2 180
Royalties 3 240

1 April 2023 31 March 2024

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$ $
Inventory:
Raw materials 18 200 19 280
Work in progress 23 400 22 650
Finished goods 6 820 9 350

Additional information

1 Factory machinery is to be depreciated at 15% per annum using the reducing balance
method.

2 On 31 March 2024 rates, $620, were owing.

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3 Rates and insurance are to be apportioned 60% to the factory and 40% to the office.

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 * 0000800000019 *
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REQUIRED

(a) Prepare the manufacturing account for the year ended 31 March 2024.

G Limited
Manufacturing account for the year ended 31 March 2024

$ $
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[10]
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G Limited apply a standard rate of mark-up of 35%.

REQUIRED:

(b) Prepare the trading section of the income statement of G Limited for the year ended
31 March 2024.

G Limited
Income Statement (Trading section) for the year ended 31 March 2024

$ $

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[5]
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G Limited make all sales on credit and have supplied the following information:

Trade receivables turnover Irrecoverable debts

(days) $
At 31 March 2024 38 32 060
At 1 April 2023 29 19 200

The directors of G Limited are worried about the level of debts from credit customers and are
considering employing a consultant to review their credit control policy and implement any
changes. They would provide training to the existing staff in the new procedures.
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The consultant would charge a fee of $14 000 for their services.

REQUIRED:

(c) Advise G Limited whether to employ the consultant to review their credit control policy. Justify
your answer with two advantages and two disadvantages.

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............................................................................................................................................. [5]

[Total: 20]

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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 Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.
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