Edexcel IGCSEAccountingGeneral Applications12 Marks

K. Singh, a sole trader, provided the following information from his books for June 2024:

(a)Prepare the following entries in K. Singh's General Journal for June 2024. Narrations are not required.[6]
(b)Explain why it is important for K. Singh to prepare a Trial Balance at the end of an accounting period.[6]

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

(a) General Journal Entries (6 marks)
Information for Journal Entries (hypothetical, based on common scenarios):
1. June 5: Purchased office stationery on credit from Office Supplies Ltd $120.
2. June 10: Paid cash for motor expenses $80.
3. June 15: An old machine (cost $5,000, accumulated depreciation $4,000) was sold for $800 cash.
4. June 20: Received a cheque from a credit customer, J. Bloggs, $300, after allowing him a cash discount of $10.
B1 for each correct debit entry (account name and amount).
B1 for each correct credit entry (account name and amount).
Example marking for entry 1: Dr Stationery/Office Expenses (1 mark), Cr Office Supplies Ltd (1 mark) (for $120 each).
Example marking for entry 3: Dr Bank/Cash (800) (1 mark), Dr Accumulated Depreciation - Machine (4,000) (1 mark), Cr Machine (5,000) (1 mark), Cr Profit on Disposal (X) / Loss on Disposal ($Y) (1 mark). (Requires calculation of profit/loss on disposal: Selling Price $800 - (Cost $5,000 - Acc. Dep. $4,000) = $800 - $1,000 = $200 Loss). So Cr Loss on Disposal $200.
Overall: 6 marks for 3 complete correct journal entries from the specific scenarios given in the actual paper.
(b) Importance of Trial Balance (6 marks)
B1 for identifying that it checks arithmetical accuracy / mathematical equality of debits and credits.
B1 for explanation that if debits ≠ credits, there's an error.
B1 for stating it's a prerequisite for preparing financial statements (Income Statement, Statement of Financial Position).
B1 for explanation that organised data is easier to use for statements.
B1 for identifying that it helps detect certain types of errors (e.g. single entry, transposition, incorrect amount).
B1 for explanation of how it aids error detection (e.g. difference between total D and C might indicate exact value of error, or half value for transposition error).
Max 6 marks (3 points with explanation, or 6 distinct points).