GCE - PastPapers.Co

GCEAccountingAdvanced GCE A2 7808Advanced Subsidiary GCE AS 3808Mark Schemes for the UnitsJune 20063808/7808/MS/R/06www.XtremePapers.netOxford Cambridge and RSA Examinations

OCR (Oxford, Cambridge and RSA Examinations) is a unitary awarding body,established by the University of Cambridge Local Examinations Syndicate and theRSA Examinations Board in January 1998. OCR provides a full range of GCSE, Alevel, GNVQ, Key Skills and other qualifications for schools and colleges in theUnited Kingdom, including those previously provided by MEG and OCEAC. It is alsoresponsible for developing new syllabuses to meet national requirements and theneeds of students and teachers.This mark scheme is published as an aid to teachers and students, to indicate therequirements of the examination. It shows the basis on which marks were awardedby Examiners. It does not indicate the details of the discussions which took place atan Examiners’ meeting before marking commenced.All Examiners are instructed that alternative correct answers and unexpectedapproaches in candidates’ scripts must be given marks that fairly reflect the relevantknowledge and skills demonstrated.Mark schemes should be read in conjunction with the published question papers andthe Report on the Examination.OCR will not enter into any discussion or correspondence in connection with thismark scheme. OCR 2006Any enquiries about publications should be addressed to:OCR PublicationsPO Box 5050AnnersleyNOTTINGHAMNG15 0DLTelephone:Facsimile:E-mail:0870 870 66220870 870 6621publications@ocr.org.ukwww.XtremePapers.net

CONTENTSAdvanced GCE Accounting (3808)Advanced Subsidiary GCE Accounting (7808)MARK SCHEMES FOR THE UNITSUnitContentPage2500Accounting Principles12501Financial Accounting72502Final Accounts132503Management Accounting 1192504Management Accounting 2272505Company Accounts andInterpretations35*Grade Thresholds43www.XtremePapers.net

www.XtremePapers.net

Mark Scheme 2500June 20061www.XtremePapers.net

25001Mark SchemeJune 2006Numerical AnswersAnswers to computational questions or part-questions are mainly through calculation.Marks are awarded for particular calculations.Own figures (‘of’): where ‘of’ is indicated a figure which is incorrect solely because ofan error in an earlier part of the question will be awarded the appropriate marks as if itwere correct.2Quality of Written CommunicationThe specification states that ‘Candidates will be required to select and use a form andstyle of writing appropriate to purpose and to complex subject matter; to organiserelevant information clearly and coherently, using specialist accounting vocabulary andconventions; and to ensure text is legible, and spelling, grammar and punctuation areaccurate, so that meaning is clear.’Up to four marks (5%) may be added to the overall mark for a candidate’s paper, if thecandidate’s written responses have met the specification requirement in some measure.Marks will be allocated according to the following criteria:Narrative Responses2 marksRelatively straightforward ideas have been expressed clearly and fluently,using an appropriate style of writing. Answers are relevant and broadlylogical and coherent. There are few, if any, errors of spelling, punctuationand grammar.1 markSimple ideas have been expressed in a style which, generally, lacksclarity and fluency. Responses have limited coherence and structure,often being of doubtful relevance to the main focus of the question. Thereare errors of spelling, punctuation and grammar which are noticeable anddetract from the quality of the response. Writing may lack legibility.0 marksResponses which fail to achieve the standard required for one mark.Numerical Responses2 marksMost account headings, narratives and balances are included. All figuresare legible, and effective use is made of columns and sub-totals.Accounts are ruled off as appropriate.1 markSome account headings, narratives and balances are included. Mostfigures are legible, and some use is made of columns and sub-totals.Some accounts are ruled off as appropriate.0 marksResponses which fail to achieve the standard required for one mark.In this examination the following questions will be assessed for quality of remePapers.net

2500Mark SchemeJune 20061(a)Glenn WhiteTrading and Profit and Loss Account for the year ended 31 March 2006SalesOpening stock12,000 (1)Purchases174,000 (1)186,000Carriage inwards3,000 (1)189,000Purchase returns4,000 (1)185,000Closing stock15,000 (1)Cost of salesGross profitProvision for doubtful debtsCommission receivableRent and ratesSalariesDiscount allowedGeneral expenses (62,200 – 700)Bad debts (300 600)Loan interest (2,000 400)Depreciation equipmentDepreciation motor vehicles (3,000 1,500)378,000 (1)170,000208,000300 (1)3,700 (1)212,00028,400 (1)93,500 (1)1,800 (1)61,500 (2)900 (2)2,400 (2)4,000 (2)4,500 (3)197,00015,000Net profit[22]3www.XtremePapers.net

2500Mark SchemeJune 20061(b)Balance Sheet as at 31 March 2006 (1)Fixed AssetsEquipment (40,000 – 16,000)Motor vehicles (30,000 – 10,500)24,000 (1 of)19,500 (1 of)43,500Current AssetsStockDebtors (9,600 – 1,100 – 1,200)General expenses prepaidCommission receivable15,000 (1)7,300 (3)700 (1)3,700 (1)26,700Current LiabilitiesCreditorsLoan interest owingLoanBank (700 – 500)14,600 (1)400 (1)30,000 (1)200 (2)45,200Working capital(18,500)25,000Financed ByCapitalNet profit17,600 (1)15,000 (1 of)32,6007,600 (1)25,000Drawings[17]Total marks [39]4www.XtremePapers.net

2500Mark SchemeJune 20062(a)(i)InsuranceBank700 (1)Profit and Loss5,300 (1)Balance c/d6,000Balance b/dBank400 (1)4,750 (1 of)850 (1)6,000[5]2(a)(ii)BankBal c/d78,700 (1)4,700 (1)83,400WagesBal b/dProfit and Loss4,300 (1)79,100 (1 of)83,400[4]2(a)(iii)Bal b/dProfit and Loss (1)Commission receivableBank (1)600Bal c/d6,520 (1 of)7,1206,200 (2)9207,120[5]2(b)Balance Sheet extractCurrent Assets (1)Insurance prepaidCommission receivableCurrent Liabilities (1)Wages owing850 (1)920(1)4,700 (1)[5]2(c)(i)Accruals (matching) concept (1)[1]2(c)(ii)Revenues and costs are accrued as they are earned or incurred, regardless of whether paidor received. Ensures correct amount entered for the period.(3 x 1 mark)[3]Total marks [23]5www.XtremePapers.net

2500Mark SchemeJune 20063(a)54,000 1,000 2,000 57,000 (2)[2]3(b)57,000 – 4,000 (1) 10,6005 (1)[2]3(c)Machinery (1)Disposal of Machinery57,000Depreciation (1)Bank (1)Profit and Loss (1)57,00042,40012,000 (1)2,600 (1)57,000[6]3(d)Provision made to ensure spreading of cost in Profit and Loss AccountProvision made to ensure correct Balance Sheet valuationDepreciation reduces profit and could argue saving cash for replacementBook-keeping entry onlyApplication of accruals (matching concept)Does not provide for replacement(4 x 2 marks)(1 for point plus 1 for development)[8]Total marks [18]6www.XtremePapers.net

Mark Scheme 2501June 20067www.XtremePapers.net

25011Mark SchemeJune 2006Numerical AnswersAnswers to computational questions or part-questions are mainly through calculation.Marks are awarded for particular calculations.Own figures (‘of’): where ‘of’ is indicated a figure which is incorrect solely because ofan error in an earlier part of the question will be awarded the appropriate marks as if itwere correct.2Quality of Written CommunicationThe specification states that ‘Candidates will be required to select and use a form andstyle of writing appropriate to purpose and to complex subject matter; to organiserelevant information clearly and coherently, using specialist accounting vocabularyand conventions; and to ensure text is legible, and spelling, grammar and punctuationare accurate, so that meaning is clear.’Up to four marks (5%) may be added to the overall mark for a candidate’s paper, if thecandidate’s written responses have met the specification requirement in somemeasure.Marks will be allocated according to the following criteria:Narrative Responses2 marksRelatively straightforward ideas have been expressed clearly andfluently, using an appropriate style of writing. Answers are relevantand broadly logical and coherent. There are few, if any, errors ofspelling, punctuation and grammar.1 markSimple ideas have been expressed in a style which, generally, lacksclarity and fluency. Responses have limited coherence and structure,often being of doubtful relevance to the main focus of the question.There are errors of spelling, punctuation and grammar which arenoticeable and detract from the quality of the response. Writing maylack legibility.0 marksResponses which fail to achieve the standard required for one mark.Numerical Responses2 marksMost account headings, narratives and balances are included. Allfigures are legible, and effective use is made of columns and subtotals. Accounts are ruled off as appropriate.1 markSome account headings, narratives and balances are included. Mostfigures are legible, and some use is made of columns and sub-totals.Some accounts are ruled off as appropriate.0 marksResponses which fail to achieve the standard required for one mark.In this examination the following questions will be assessed for quality of remePapers.net

2501Mark SchemeJune 2006(a)SalesPurchasesClosing stockCost of salesGross profitExpensesNet ProfitLIFO14,820 (1)FIFO14,820 (1)10,650 (1)(9@235) 2,115 (1)10,650(1)(9@250) 2,250 (3)8,4006,4201,5004,9208,5356,2851,500 (1)4,785 (1)[12](b)SSAP9 stocks and work in progress.Prudence requires that stock must be valued at the lower of cost and net realisablevalue.The application of the prudence concept will not overstate the profit and the netassets of the business.Consistency must be applied from one financial year to the next.The same method of stock valuation should be used.[6](3 x 2 marks)(1 for point plus 1 for development)Total Marks [18]9www.XtremePapers.net

2501Mark SchemeJune 2006(a)Balance b/dSalesDishonoured chequesSales Ledger Control Account51,000 (1)Bank620,000 (1)Cash5,100 (1)Discount allowedBad debtsSales returnsContra purchase ledger(1)Balance c/d676,100 (1)584,000 (1)6,000 (1)24,900 (2)4,000 (1)8,200 (2)8,000 (1)41,000 (1)676,100[14](b)Original balanceLess contraLess sales returnsCorrected schedule of debtorsRevised schedule of debtors43,600900 (2)1,700 (2)41,000 (1)[5](c)Easier detection of errors.Errors can be identified quicker.Division of duties helps in the prevention of fraud.Control accounts totals can be used in the trial balance.(3 x 2 marks)(1 for point plus 1 for development)[6]Total Marks [25]10www.XtremePapers.net

2501(a)Mark SchemeJune 2006Karen GwyneTrading and Profit and Loss Account for the year ended 28 February 2006Sales( 60,000 25,000 1,000 30,000 - 26,000)90,000 (4)Opening stock18,000Purchases (32,000 700 20,000 - 18,000 - 2,000)32,700 (4)50,700Closing stock16,000Cost of sales (1)Gross profitDiscount receivedRent (6,300 1,000 - 1,200)RatesWagesGeneral expenses (9,700-900 1,300-4,200)Discount allowedDepreciation34,70055,300700 (1)56,0006,100 (2)4, 100 (1)20,0005,900 (3)1,000 (1)1,500 (2)38,60017,400Net profit[19]11www.XtremePapers.net

2501(b)Mark SchemeBalance sheet as at 28 February 2006Fixed AssetsFixturesCurrent AssetsStockDebtorsPrepaidCurrent LiabilitiesCreditorsAccruals/general expensesBankJune 20068,000 (1)16,000 (1)30,0001,200 (1)47,20020,0001,300 (1)2,600 (2)23,900Working capital23,30031,300Financed byOpening capitalCapital introduced27,100 (2)8,000 (1)35,10017,400 (1of)52,50021,200 (2)31,300Net profitDrawings[12](c)Would provide management information such as stock reports and debtors reports.Saves money with her account as quicker to complete final accounts and tax return.Quicker and would reduce manual errors.Possibility of trading through website.(3 x 2 marks)(1 for point plus 2 for development)[6]Total marks [37]12www.XtremePapers.net

Mark Scheme 2502June 200613www.XtremePapers.net