2025 Cambridge IGCSE Accounting (0452) 模擬試題連答案詳解

(a) Amara — Cash Book for the month of May 2025

| Date | Details | Discount Allowed ($) | Cash ($) | Bank ($) | Date | Details | Discount Received ($) | Cash ($) | Bank ($) |
| :--- | :--- | :---: | :---: | :---: | :--- | :--- | :---: | :---: | :---: |
| 2025 | | | | | 2025 | | | | |
| May 1 | Balance b/d | | 150 | | May 1 | Balance b/d | | | 420 |
| May 6 | Sales | | 1250 | | May 3 | Rent | | | 380 |
| May 6 | Cash (C) | | | 1000 | May 6 | Bank (C) | | 1000 | |
| May 15 | Charles | 32 | | 608 | May 10 | Bilal | 10 | | 390 |
| May 20 | Bank (C) | | 200 | | May 20 | Cash (C) | | | 200 |
| | Balance c/d | | | 840 | May 24 | Office expenses | | 85 | |
| | | | | | May 28 | Charles (dishonoured) | | | 608 |
| | | | | | May 30 | Wages | | | 450 |
| | | | | | | Balance c/d | | 515 | |
| | | 32 | 1600 | 2448 | | | 10 | 1600 | 2448 |
| Jun 1 | Balance b/d | | 515 | | Jun 1 | Balance b/d | | | 840 |

Workings:
- May 10 Bilal: Discount \( = \$400 \times 2.5\% = \$10 \). Payment \( = \$400 - \$10 = \$390 \).
- May 15 Charles: Discount \( = \$640 \times 5\% = \$32 \). Payment \( = \$640 - \$32 = \$608 \).

(b) Amara's Ledger Accounts

(i) Bilal Account (Purchases Ledger)

| Date | Details | $ | Date | Details | $ |
| :--- | :--- | :---: | :--- | :--- | :---: |
| 2025 | | | 2025 | | |
| May 10 | Bank | 390 | May 1 | Balance b/d | 400 |
| May 10 | Discount Received | 10 | | | |
| | | 400 | | | 400 |

(ii) Charles Account (Sales Ledger)

| Date | Details | $ | Date | Details | $ |
| :--- | :--- | :---: | :--- | :--- | :---: |
| 2025 | | | 2025 | | |
| May 1 | Balance b/d | 640 | May 15 | Bank | 608 |
| May 28 | Bank (dishonoured) | 608 | May 15 | Discount Allowed | 32 |
| May 28 | Discount Allowed reversed | 32 | | | |
| | | 1280 | | | 640 |
| Jun 1 | Balance b/d | 640 | | | |

(c)
- The total of the Discount Allowed column is debited to the Discount Allowed account in the general ledger.
- The total of the Discount Received column is credited to the Discount Received account in the general ledger.

(a) Three-column Cash Book [12 marks]
- 1 mark for correct May 1 Balances: Cash debit $150 and Bank credit $420.
- 1 mark for May 3 Rent: Bank credit $380.
- 2 marks for May 6 Sales ($1250 Cash debit) and Cash deposit Contra (Cash credit $1000 and Bank debit $1000).
- 1 mark for May 10 Bilal: Bank credit $390 and Discount Received $10.
- 1 mark for May 15 Charles: Bank debit $608 and Discount Allowed $32.
- 1 mark for May 20 Contra: Bank credit $200 and Cash debit $200.
- 1 mark for May 24 Office expenses: Cash credit $85.
- 1 mark for May 28 Charles (dishonoured): Bank credit $608.
- 1 mark for May 30 Wages: Bank credit $450.
- 2 marks for balancing and bringing down balances on 1 June: Cash debit b/d $515 (1) and Bank credit b/d $840 (1).

(b) **Ledger Accounts [6 marks]**
- (i) **Bilal Account** [3 marks]
- Credit balance b/d of $400 (or account showing correct starting debt) (1 mark)
- Debit entry Bank $390 on May 10 (1 mark)
- Debit entry Discount Received $10 on May 10 (1 mark)
- (ii) Charles Account [3 marks]
- Credit entries Bank $608 and Discount Allowed $32 on May 15 (1 mark for both)
- Debit entries Bank (dishonoured) $608 and Discount Allowed reversed $32 on May 28 (2 marks, 1 mark for each)

(c) Discounts Posting [2 marks]
- 1 mark for stating Discount Allowed total is debited to the Discount Allowed account (General Ledger).
- 1 mark for stating Discount Received total is credited to the Discount Received account (General Ledger).

(a) Binh — Sales Ledger Control Account

| Date | Details | $ | Date | Details | $ |
| :--- | :--- | :---: | :--- | :--- | :---: |
| 2025 | | | 2025 | | |
| Oct 1 | Balance b/d | 8420 | Oct 1 | Balance b/d | 150 |
| Oct 31 | Credit sales | 34100 | Oct 31 | Bank / Cheques | 29650 |
| Oct 31 | Balance c/d (credit) | 90 | Oct 31 | Discount allowed | 780 |
| | | | Oct 31 | Sales returns | 1240 |
| | | | Oct 31 | Irrecoverable debts | 340 |
| | | | Oct 31 | Contra / Set-off | 520 |
| | | | Oct 31 | Balance c/d (debit) | 9930 |
| | | 42610 | | | 42610 |
| Nov 1 | Balance b/d (debit) | 9930 | Nov 1 | Balance b/d (credit) | 90 |

*Note: Cash sales ($4800) are not included in the Sales Ledger Control Account.*

(b) **Binh — Purchases Ledger Control Account**

| Date | Details | $ | Date | Details | $ |
| :--- | :--- | :---: | :--- | :--- | :---: |
| 2025 | | | 2025 | | |
| Oct 1 | Balance b/d | 80 | Oct 1 | Balance b/d | 6130 |
| Oct 31 | Bank / Cheques paid | 18900 | Oct 31 | Credit purchases | 21450 |
| Oct 31 | Discount received | 410 | Oct 31 | Interest charged | 60 |
| Oct 31 | Purchases returns | 850 | Oct 31 | Balance c/d (debit) | 110 |
| Oct 31 | Contra / Set-off | 520 | | | |
| Oct 31 | Balance c/d (credit) | 6990 | | | |
| | | **27750** | | | **27750** |
| Nov 1 | Balance b/d (debit) | 110 | Nov 1 | Balance b/d (credit) | 6990 |

*Note: Cash purchases ($3200) are not included in the Purchases Ledger Control Account.*

(c) Advantages of preparing control accounts (any two):
1. Helps to detect errors in the ledger accounts.
2. Helps prevent fraud and acts as an independent check on the accuracy of the ledger clerks.
3. Provides quick totals of trade receivables and trade payables to prepare financial statements.
4. Identifies where double-entry errors have occurred.

(a) Sales Ledger Control Account [10 marks]
- 1 mark for Oct 1 Debit balance b/d ($8420) and Credit balance b/d ($150) on correct sides.
- 1 mark for Debit entry Credit sales ($34100).
- 1 mark for Credit entry Bank/Cheques ($29650).
- 1 mark for Credit entry Discount allowed ($780).
- 1 mark for Credit entry Sales returns ($1240).
- 1 mark for Credit entry Irrecoverable debts ($340).
- 1 mark for Credit entry Contra ($520).
- 1 mark for Oct 31 Debit side closing balance c/d ($90).
- 1 mark for calculating correct debit closing balance c/d of $9930.
- 1 mark for bringing down both Nov 1 balances on the correct sides ($9930 debit and $90 credit).
(Note: Reject Cash Sales in control account)

(b) Purchases Ledger Control Account [8 marks]
- 1 mark for Oct 1 Credit balance b/d ($6130) and Debit balance b/d ($80) on correct sides.
- 1 mark for Credit entry Credit purchases ($21450).
- 1 mark for Credit entry Interest charged ($60).
- 1 mark for Debit entry Bank/Cheques ($18900).
- 1 mark for Debit entries Discount received ($410) and Purchases returns ($850) (both correct for 1 mark).
- 1 mark for Debit entry Contra ($520).
- 1 mark for calculating correct credit closing balance c/d of $6990 and correct debit closing balance c/d of $110.
- 1 mark for bringing down both Nov 1 balances on the correct sides ($6990 credit and $110 debit).
(Note: Reject Cash Purchases in control account)

(c) Advantages of preparing control accounts [2 marks]
- 1 mark per valid advantage stated (max 2 marks):
- Helps to locate/detect errors in the ledger accounts.
- Reduces the possibility of fraud.
- Provides an immediate total of trade receivables/trade payables for the financial statements.
- Acts as an independent check on the accuracy of the ledgers.

### (a) Karan's Income Statement for the year ended 31 December 2024

Workings:
1. Closing Inventory Valuation:
Cost of remaining inventory = $15,600 - $800 = $14,800
Net Realisable Value of damaged items = $500 (selling price) - $100 (repair cost) = $400
Total Closing Inventory = $14,800 + $400 = $15,200

2. **Salaries and Wages:**
$22,400 + $1,200 (accrued) = $23,600

3. Rent and Rates:
$9,600 - $800 (prepaid) = $8,800

4. **Insurance:**
Prepayment period = 3 months (January to March 2025)
Prepaid insurance = $1,200 * (3 / 12) = $300
Insurance expense = $3,200 - $300 = $2,900

5. Depreciation of Fixtures and Fittings:
Reducing balance = 10% * ($25,000 - $5,000) = $2,000

6. **Provision for Doubtful Debts Adjustment:**
New provision = 3% * $15,000 = $450
Existing provision = $320
Increase in provision (expense) = $450 - $320 = $130

| | $ | $ |
|---|---|---|
| **Revenue** | | 185 000 |
| **Cost of sales** | | |
| Opening inventory | 14 200 | |
| Purchases | 98 500 | |
| Carriage inwards | 1 800 | |
| | 114 500 | |
| Less: Closing inventory | (15 200) | (99 300) |
| **Gross Profit** | | **85 700** |
| | | |
| **Expenses** | | |
| Salaries and wages ($22,400 + $1,200) | 23 600 | |
| Rent and rates ($9,600 - $800) | 8 800 | |
| Insurance ($3,200 - $300) | 2 900 | |
| General expenses | 4 500 | |
| Depreciation on fixtures and fittings | 2 000 | |
| Increase in provision for doubtful debts | 130 | (41 930) |
| **Profit for the year** | | **43 770** |

---

### (b) Trade Receivables section of Statement of Financial Position as at 31 December 2024

| Current Assets | $ | $ |
|---|---|---|
| Trade receivables | 15 000 | |
| Less: Provision for doubtful debts | (450) | 14 550 |

---

### (c) Accounting principles applied in inventory valuation

1. **Prudence principle:**
- **Explanation:** Inventory is valued at the lower of cost and net realisable value. This ensures that assets and profits are not overstated in the financial statements.
2. **Accruals/Matching principle:**
- **Explanation:** The cost of the unsold inventory ($15,200) is carried forward to the next accounting period as an asset, so that it is matched against the revenue of the period in which it is actually sold.

(a) Income Statement [12 marks]:
- Revenue: $185 000 [No mark, given]
- Opening inventory + Purchases + Carriage inwards: $114 500 [1 mark for correct additions]
- Carriage inwards treated correctly as addition to purchases [1 mark]
- Closing inventory $15 200 [2 marks] (1 mark for working $15 600 - $400)
- Gross Profit $85 700 [1 mark OF]
- Salaries and wages $23 600 [1 mark]
- Rent and rates $8 800 [1 mark]
- Insurance $2 900 [1 mark]
- Depreciation expense $2 000 [1 mark]
- Increase in provision for doubtful debts $130 [1 mark]
- Total expenses sum and Profit for the year $43 770 [1 mark OF]

(b) Statement of Financial Position extract [3 marks]:
- Trade receivables $15 000 [1 mark]
- Less: Provision for doubtful debts $450 [1 mark OF]
- Net receivables $14 550 [1 mark OF]

(c) Accounting principles [5 marks]:
- Identify Prudence [1 mark]
- Explain application of Prudence (valuing at lower of cost and NRV to prevent overstating profit/assets) [1.5 marks]
- Identify Accruals/Matching [1 mark]
- Explain application of Accruals/Matching (carrying forward unused cost to match future revenue) [1.5 marks]

### (a) Calculation of Profit for the Year

- Operating profit before adjustments: $48,200
- **Less Depreciation:**
- Premises: 2% * $220,000 = $4,400
- Equipment: 20% * ($64,000 - $25,600) = 20% * $38,400 = $7,680
- **Less Debenture Interest:** 8% * $50,000 = $4,000

$$\text{Profit for the Year} = \$48,200 - \$4,400 - \$7,680 - \$4,000 = \$32,120$$

---

### (b) Statement of Changes in Equity for the year ended 31 August 2025

*(Note: The proposed final dividend of $0.02 per share is not included as it has not been approved by shareholders before the year-end).*

| Details | Ordinary Share Capital ($) | General Reserve ($) | Retained Earnings ($) | Total ($) |
|---|---|---|---|---|
| Balance at 1 September 2024 | 150 000 | 20 000 | 18 400 | 188 400 |
| Profit for the year | - | - | 32 120 | 32 120 |
| Transfer to General Reserve | - | 12 000 | (12 000) | - |
| Interim dividend paid | - | - | (5 000) | (5 000) |
| Balance at 31 August 2025 | 150 000 | 32 000 | 33 520 | 215 520 |

---

### (c) Differences between Ordinary Shares and Debentures

- (i) Ownership of the company: Ordinary shareholders are the actual owners (equity holders) of the company and possess voting rights. Debenture holders are long-term creditors (lenders) of the company and have no voting rights.
- (ii) Payment of return: Dividends on ordinary shares are paid out of profits, are discretionary, and their rate can vary. Debenture interest is a fixed rate expense that must be paid regardless of whether the company has made a profit.

---

### (d) Application of Accruals/Matching Principle

- Explanation: The debenture interest of $4,000 represents an expense incurred during the current financial year for using the borrowed funds. Under the accruals principle, this expense must be matched against the revenues of the current year in the income statement, even though it has not yet been paid.

(a) Profit for the Year Calculation [6 marks]:
- Operating Profit $48 200 [Given]
- Depreciation on Premises $4 400 [1 mark]
- Depreciation on Equipment $7 680 [1 mark for correct NBV calculation, 1 mark for rate calculation]
- Debenture interest $4 000 [1 mark]
- Correct subtraction of expenses to get Profit for the year $32 120 [2 marks OF]

**(b) Statement of Changes in Equity [8 marks]:**
- Correct 1 September 2024 balances row [1 mark]
- Profit for the year row correctly added to Retained Earnings and Total column [1 mark OF]
- Transfer of $12 000 correctly added to General Reserve and subtracted from Retained Earnings [2 marks]
- Interim dividend paid ($5 000) subtracted from Retained Earnings and Total columns [1 mark]
- Correct treatment of proposed final dividend (excluded from statement) [1 mark]
- Correct calculation of ending balances column-wise [2 marks OF]

(c) Differences [4 marks]:
- (i) Ownership difference explained correctly [2 marks]
- (ii) Return payment difference (discretionary dividend vs fixed legal interest expense) explained [2 marks]

(d) Accruals Principle Explanation [2 marks]:
- Recognizing that the expense is incurred during the period [1 mark]
- Explaining that it must be matched against current revenue regardless of payment status [1 mark]

(a) Calculations for 2024:

(i) Gross margin
\[ \text{Gross Profit} = \text{Revenue} - \text{Cost of sales} = \$240 000 - \$192 000 = \$48 000 \]
\[ \text{Gross Margin} = \frac{\text{Gross Profit}}{\text{Revenue}} \times 100 = \frac{\$48 000}{\$240 000} \times 100 = 20.00\% \]

(ii) Profit margin
\[ \text{Profit Margin} = \frac{\text{Profit for the year}}{\text{Revenue}} \times 100 = \frac{\$14 400}{\$240 000} \times 100 = 6.00\% \]

(iii) Return on Capital Employed (ROCE)
\[ \text{ROCE} = \frac{\text{Profit for the year}}{\text{Capital Employed}} \times 100 = \frac{\$14 400}{\$160 000} \times 100 = 9.00\% \]

(iv) Current ratio
\[ \text{Total Current Assets} = \text{Inventory} + \text{Trade Receivables} = \$30 000 + \$30 000 = \$60 000 \]
\[ \text{Total Current Liabilities} = \text{Trade Payables} + \text{Bank Overdraft} = \$24 000 + \$6 000 = \$30 000 \]
\[ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{\$60 000}{\$30 000} = 2.00 : 1 \]

(v) Liquid (acid test) ratio
\[ \text{Liquid Ratio} = \frac{\text{Current Assets} - \text{Inventory}}{\text{Current Liabilities}} = \frac{\$60 000 - \$30 000}{\$30 000} = \frac{\$30 000}{\$30 000} = 1.00 : 1 \]

***

(b) Profitability Analysis:
- Overall, profitability has deteriorated over the period.
- Gross margin declined from 25.00% to 20.00%, profit margin declined from 10.00% to 6.00%, and ROCE fell from 15.00% to 9.00%.
- Reasons for lower gross margin:
1. Higher buying cost/cost of goods purchased from suppliers without a corresponding increase in selling price.
2. Offering higher trade discounts to customers or lowering selling prices to stimulate sales volume.
- Reason for lower profit margin:
1. Higher operating expenses (overheads) incurred in 2024, or a direct consequence of the lower gross profit earned.

***

(c) Liquidity Analysis:
- The current ratio has apparently improved from 1.80 : 1 to 2.00 : 1, which sits exactly at the standard benchmark.
- However, the liquid (acid test) ratio has deteriorated from 1.05 : 1 to 1.00 : 1.
- This divergence suggests that a significant amount of working capital is tied up in slow-moving inventory (which doubled from $15 000 to $30 000), leaving the business with less actual liquid cash to meet short-term debts immediately.

***

(d) Limitations of Accounting Ratios:
- Historical data: They rely on past accounts which may not represent the current or future economic reality of the business.
- Inflation: Ratios do not account for inflation, meaning comparison over time can be distorted.
- Accounting policies: Different businesses may employ different depreciation methods or inventory valuations, making inter-firm comparisons unreliable.

(a) Calculation table [10 marks]:
- (i) Gross margin: 1 mark for correct workings, 1 mark for correct answer (20.00%).
- (ii) Profit margin: 1 mark for correct workings, 1 mark for correct answer (6.00%).
- (iii) ROCE: 1 mark for correct workings, 1 mark for correct answer (9.00%).
- (iv) Current ratio: 1 mark for correct workings, 1 mark for correct answer (2.00 : 1).
- (v) Liquid ratio: 1 mark for correct workings, 1 mark for correct answer (1.00 : 1).
(Apply OF rule if previous calculated totals are used incorrectly but logically)

(b) Profitability commentary [5 marks]:
- State that overall profitability has deteriorated / decreased (1 mark).
- Reference to trend values of gross margin, profit margin or ROCE (1 mark).
- Up to 2 marks for reasons for gross margin change (e.g., cost price increase, trade discount offered, selling price reduction).
- Up to 1 mark for reasons for profit margin change (e.g., disproportionate overhead increase, expenses control issues).

(c) Liquidity commentary [3 marks]:
- Mention the improvement in current ratio versus deterioration in liquid ratio (1 mark).
- Identify the significant increase in inventory as the cause of this variance (1 mark).
- Conclude that the business is actually less liquid as capital is tied up in stock (1 mark).

(d) Limitations of ratios [2 marks]:
- 1 mark for each valid limitation stated (max 2 marks), such as:
- Historical records do not reflect future changes.
- Inflation distortions.
- Different accounting policies affect comparability.
- Ratios ignore qualitative / non-financial factors.