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General Certificate of Education

Accounting ACC1

Unit 1 Financial Accounting:

The Accounting Information
System

Mark Scheme
2007 examination - January series
Mark schemes are prepared by the Principal Examiner and considered, together with the
relevant questions, by a panel of subject teachers. This mark scheme includes any
amendments made at the standardisation meeting attended by all examiners and is the scheme
which was used by them in this examination. The standardisation meeting ensures that the
mark scheme covers the candidates’ responses to questions and that every examiner
understands and applies it in the same correct way. As preparation for the standardisation
meeting each examiner analyses a number of candidates’ scripts: alternative answers not
already covered by the mark scheme are discussed at the meeting and legislated for. If, after
this meeting, examiners encounter unusual answers which have not been discussed at the
meeting they are required to refer these to the Principal Examiner.

It must be stressed that a mark scheme is a working document, in many cases further
developed and expanded on the basis of candidates’ reactions to a particular paper.
Assumptions about future mark schemes on the basis of one year’s document should be
avoided; whilst the guiding principles of assessment remain constant, details will change,
depending on the content of a particular examination paper.

Further copies of this Mark Scheme are available to download from the AQA Website: www.aqa.org.uk

Copyright © 2007 AQA and its licensors. All rights reserved.

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

January 2007 ACC1

MARK SCHEME

INSTRUCTIONS TO EXAMINERS

You should remember that your marking standards should reflect the levels of performance of
candidates, mainly 17 years old, writing under examination conditions.

Positive Marking
You should be positive in your marking, giving credit for what is there rather than being too
conscious of what is not. Do not deduct marks for irrelevant or incorrect answers as candidates
penalise themselves in terms of the time they have spent.

Mark Range
You should use the whole mark range available in the mark scheme. Where the candidate’s
response to a question is such that the mark scheme permits full marks to be awarded, full
marks must be given. A perfect answer is not required. Conversely, if the candidate’s answer
does not deserve credit, then no marks should be given.

Alternative Answers / Layout

The answers given in the mark scheme are not exhaustive and other answers may be valid. If
this occurs, examiners should refer to their Team Leader for guidance. Similarly, candidates
may set out their accounts in either a vertical or horizontal format. Both methods are
acceptable.

Own Figure Rule

In cases where candidates are required to make calculations, arithmetic errors can be made so
that the final or intermediate stages are incorrect. To avoid a candidate being penalised
repeatedly for an initial error, candidates can be awarded marks where they have used the
correct method with their own (incorrect) figures. Examiners are asked to annotate a script with
OF where marks have been allocated on this basis. OF always makes the assumption that
there are no extraneous items. Similarly, OF marks can be awarded where candidates make
correct conclusions or inferences from their incorrect calculations.

Quality of Written Communication

Once the whole script has been marked the work of the candidate should be assessed for the
Quality of Written Communication, using the criteria at the end of the mark scheme. The mark
should be shown separately on the candidate’s script.

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

1 Total for this question: 26 marks

Bill Burgess runs a business selling mobile phones. A trial balance at 31 October 2006 has
been prepared, but the following balances have not yet been included.
£
Premises 10 400
Debtors 3 610
Creditors 1 870
Capital 10 000
Mortgage on premises (repayable 2025) 3 000
Drawings 14 400

REQUIRED

(a) Complete the trial balance below. Enter any difference as ‘balance at bank’.

Trial Balance at 31 October 2006

Account Debit £ Credit £

Sales 57 120
Purchases 18 340
Stock at 1 November 2005 5 300
Motor expenses 8 850
Wages 12 460
Motor vehicles 2 000
Premises 10 400 (1)
Debtors 3 610 (1)
Creditors 1 870 (1)
Capital 10 000 (1)
Mortgage on premises (repayable 2025) 3 000 (1)
Drawings 14 400 (1)
Balance at bank 3 370 (1)OF
Totals 75 360 75 360

7 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

1 (b) Complete the table below to show under which balance sheet heading each of the
following items should appear. Place a tick in the appropriate column. The first item has
been completed as an example.

Fixed Current Current Long-Term Capital

Assets Assets Liabilities Liabilities
!
Capital
!
Debtors

Premises !
Mortgage on premises !
(repayable 2025)
Drawings !
Bank overdraft !

1 mark for each correct answer

5 marks

After the trial balance was completed, it was discovered that the payment of £4500 for the
purchase of a motor vehicle had been debited to the motor expenses account.

REQUIRED

(c) Identify the name of this type of error. 1 mark

Error of principle (1)

(d) Explain why the trial balance should still balance.

Debit (1) and credit entries (1) both present. Both entries are debit entries (2).
Error involves mis-posting only (1), not an omission (1) max 2 marks

(e) Explain how the error would affect the net profit for the year.
Effect (max 1 mark)
Profit understated by £4500 (1)
Marker note: Do not allow in isolation +/-£4500 or £4500(£4500) – hedging.

Reasons (max 2 marks)

Motor vehicles are fixed assets, motor expenses are running costs (2)
Motor vehicles on balance sheet, motor expenses on profit and loss account (2)

3 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

After discovering the above error, Bill Burgess tells you that he is thinking of computerising his
accounting records.

REQUIRED
(f) Write a memorandum to Bill advising him of three advantages and one disadvantage of
computerising his accounting records.

To: Bill Burgess

From: A. Student
Date: 11 January 2007
Re: Advantages and disadvantage of computerisation of accounting records

Advantages
• Speed – processes are automatic
• Accuracy – multi-tasking and automatic posting
• Availability of management information
• Legibility – avoids errors
• Efficiency – better use of resources
• Automatic document production – invoices, statements, cheques etc
• Up-to-date information – available through automatic updating
2 marks for each (max 6 marks)
1 mark for identification, 1 mark for development

Disadvantages
• Cost – hardware and software
• Training needs – time and cost
• System failure – danger of loss of work if not backed up
• Security – viruses, hackers etc
• Staff de-motivation – suspicion of change
2 marks for a disadvantage (max 2 marks)
1 mark for identification, 1 mark for development

8 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

2 Total for this question: 12 marks

Razia Alam runs a shop selling soft furnishings. The following list of balances has been
extracted from her books of account at 31 December 2006.
£
Carriage inwards 1 425
Carriage outwards 912
Drawings 6 400
Light and heat 1 246
Motor vehicle 2 000
General expenses 4 193
Postage and stationery 462
Purchases 31 840
Rent and rates 3 248
Returns inwards 1 678
Returns outwards 720
Sales 59 210
Shop assistant’s wages 5 966
Stock at 1 January 2006 4 750

Additional information
Stock at 31 December 2006 5 800

REQUIRED

Prepare a trading account for the year ended 31 December 2006.

Razia Alam
Trading Account for the year ended 31 December 2006 (1)

Sales 59 210 (1)

Less: Returns inwards 1 678 (1)
57 532
Opening stock 4 750 (1)
Purchases 31 840 (1)
Less: Returns outwards 720 (1) 31 120
Carriage inwards 1 425 (1)
37 295
Less: Closing stock 5 800 (1)
Cost of goods sold (1) 31 495 (1)OF
Gross profit (1) 26 037 (1)OF

12 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

3 Total for this question: 11 marks

The totals of Mike Cook’s trial balance at 31 October 2006 did not agree. The totals were:
Debit £84 359 Credit £84 392
On investigation, the following errors were discovered.
(1) A cash payment of £112 for repairs had been debited to the repairs account twice.

(2) A cheque payment of £178 for travel expenses had been credited to the travel expenses
account.

(3) Discount received of £120 was entered in the cash book, but had not been posted to the
general ledger.

(4) The wages account had been overcast by £100.

(5) A cheque for £65 for petrol had been debited as £56 in the motor expenses account.

REQUIRED

(a) Enter the trial balance difference in the suspense account below. Make any necessary entries to
correct the errors.

Suspense Account

Dr Cr
Details £ Details £
Trial balance difference 33 (1) Travel expenses 356 (2) 178 (1)
Repairs 112 (1) Fuel 9 (2) or (0)
Discount received 120 (1)
Wages 100 (1)
365 * 365 *

* (1 OF) for closing off the account and (1) for at least 4 correct narratives.
10 marks

(b) Identify the ledger in which this suspense account should be prepared.
General ledger 1 mark

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

4 Total for this question: 27 marks

The following information has been extracted from the books of Delaney Paints for the
month ended 30 November 2006.
£
Sales ledger balances at 1 November 2006 23 261
Purchase ledger balances at 1 November 2006 14 908
Credit sales 14 720
Credit purchases 11 804
Returns outwards 533
Returns inwards 260
Discounts received 42
Discounts allowed 77
Payments to credit suppliers 9 643
Receipts from credit customers 15 106
Customer’s cheque dishonoured 102
Contra (debit balance set off from the sales ledger to the purchase ledger) 55
Note: Delaney Paints maintain control accounts as part of their double entry system.

REQUIRED

(a) Prepare a sales ledger control account and a purchase ledger control account. Balance each
account at 30 November 2006 and bring down any balances.

Sales Ledger Control Account

Dr Cr
Date Details £ Date Details £
1 Nov B/fwd 23 261 (1) 30 Nov Ret inwards 260 (1)
30 Nov Sales 14 720 (1) 30 Nov Disc allowed 77 (1)
30 Nov Bank 102 (1) 30 Nov Bank 15 106 (1)
30 Nov Contra 55 (2)
30 Nov C/fwd 22 585 *(1)OF

38 083 38 083

1 Dec B/fwd 22 585 *

1 mark for an appropriate narrative for each item

* 1OF for both balances
1 mark for correct dates
11 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

Purchase Ledger Control Account

Dr Cr
Date Details £ Date Details £
30 Nov Ret outwards 533 (1) 1 Nov B/fwd 14 908 (1)
30 Nov Disc received 42 (1) 30 Nov Purchases 11 804 (1)
30 Nov Bank 9 643 (1)
30 Nov Contra 55 (2)
30 Nov C/fwd 16 439 *(1)OF

26 712 26 712

1 Dec B/fwd 16 439 *

1 mark for an appropriate narrative for each item

*1 OF for both balances
1 mark for correct dates

10 marks

Overall 21 marks

(b) Explain, with reasons, where the closing balances on the sales ledger control account and the
purchase ledger control account would appear in the final accounts of Delaney Paints.

Sales ledger control account balance

• Balance sheet (1) under current assets (1) ie trade debtors (1) represents money owing
to Delaney Paints (1). max 3 marks

Purchase ledger control account balance

• Balance sheet (1) under current liabilities (1) ie trade creditors (1) represents money
owing by Delaney Paints (1). max 3 marks

6 marks

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 Accounting ACC1 - AQA GCE Mark Scheme 2007 January series

QUALITY OF WRITTEN COMMUNICATION

After the candidate’s script has been marked, the work should be assessed for the Quality of Written
Communication, using the following criteria.

Marks

0 Accounts and financial statements are unclear and poorly presented.

There is little or no attempt to show workings or calculations.
Descriptions and explanations lack clarity and structure.
There is very limited use of specialist vocabulary.
Answers may be legible but only with difficulty.
Errors in spelling, punctuation and grammar are such that meaning is unclear.

1-2 There is some attempt to present accounts and financial statements in an

appropriate format.
Workings are missing or are not clearly linked to the answers.
Descriptions and explanations are understandable but they lack a logical structure.
There is some use of specialist vocabulary but this is not always applied
appropriately.
In most cases answers are legible, but errors in spelling, punctuation and grammar
are such that meaning may be unclear.

3 Accounts and financial statements are generally well presented but there are a few
errors.
Workings are shown and there is some attempt to link them to the relevant
account(s).
Descriptions and explanations are usually clearly expressed but there are some
weaknesses in the logical structure. There is a good range of specialist vocabulary
which is used with facility.
Answers are legible. Spelling is generally accurate and the standard conventions
of punctuation and grammar are usually followed.

4 Accounts and financial statements are well organised and clearly presented.
Workings are clearly shown and easy to follow. Descriptions and explanations are
clearly expressed.
Arguments are logically structured. There is wide use of specialist vocabulary
which is used relevantly and precisely.
Answers are clearly written and legible. Spelling is accurate and the standard
conventions of punctuation and grammar are followed so that meaning is clear.

To help them to make judgements, examiners should focus on the following issues.

Are there clear presentations of formats and prose answers?

Are there clear and logical workings, where appropriate?

Is the whole script legible, understandable and logically argued (including spelling, punctuation and
grammar)?

Is there a grasp of accounting terminology (eg avoiding slang, avoiding text language, avoiding
abbreviations in prose answers)?

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