YCSS POA 2026 4E5N Prelim Papers MarkersReport

1 YUAN CHING SECONDARY SCHOOL PRELIMINARY EXAMINATION 2026 SECONDARY FOUR EXPRESS / FIVE NORMAL ACADEMIC PRINCIPLES OF ACCOUNTS (7087/01) SUGGESTED MARKING SCHEME Name: _____________________________ ( ) Class: _____________ Instructions to students: 1. Highlight the content that you do not have. 2. Reflect on: a. Why were you unable to score in that question? (Did you understand what the question was asking for? Was there anything you were confused by? If there was, what was your confusion?) b. How would you improve in answering the question? What help do you believe you need? QUESTION 1 (a) Transaction Source document Purchased motor vehicle on credit Invoice [1] Informed credit customer, Winnie, that her account was undercharged Debit note [1] Received rental income via bank transfer Receipt / Bank statement [1] QUESTION 1 (b) Objectivity theory [1] states that accounting information recorded must be supported by reliable and verifiable evidence so that financial statements will be free from opinions and biases. Source documents are considered reliable and verifiable evidence. [1] QUESTION 1 (c) The role of accounting is that it is an information system that provides accounting information for stakeholders to make informed decisions regarding the management of resources and performance of businesses. [1] QUESTION 1 (d) The accountant has applied the materiality theory [1] which states that r elevant information should be reported in the financial statements if it is likely to make a difference to the decision- making process. Since the amount paid for the hole puncher is insignificant, it was treated as a stationery expense. [1]

2 Marker’s report: Question 1(a) Many students did not answer the 2nd transaction correctly. Question 1(b) Many students were able to correctly identify the accounting theory but the explanation was not strong. Keywords like reliable and verifiable evidence is lacking in many answers. Question 1(c) Many students lost marks as they simply wrote that the information is meant for owners / investors / shareholders to make decisions. It is important to note that accounting helps all stakeholders by providing them with accounting information for all of them to make informed decisions. Question 1(d) Few students were able to identify the correct accounting theory. Common mistakes include monetary theory, prudence theory and accrual basis of accounting theory.

3 QUESTION 2 (a) Any one of the following: [1] • Mike will have minimal administrative duties that’s why he formed a sole proprietorship. • Mike will have absolute control of the business that’s why he formed a sole proprietorship. QUESTION 2 (b) Journal Dr $ Cr $ Drawings 8 400✓ Inventory 8 400✓ Drawings of inventory for owner’s personal use [1] QUESTION 2 (c) Capital Account Dr Cr Balance 2025 $ $ $ Apr 1 Balance b/d 75 000 Cr 2026 Mar 31 Drawings 8 400✓ 66 600 Cr 31 Income Summary 62 000✓ 128 600 Cr Apr 1 Balance b/d 128 600 Cr✓ QUESTION 2 (d) Any one of the following: [1] • It would be easier to raise funds in a private limited company as banks are more willing to lend money to a company than a sole proprietorship. • There is limited liability in a private limited company . If the business fails, Mike is not obliged to pay for the business debts using his personal assets. • A private limited company will exists forever until wound up or struck off. Marker’s report: Question 2(a) Most students were able to answer this part question. Question 2(b) Many students were able to get this journal entry correct. However, some did not put in their narrations. Many narrations were missing the owner in their description. Question 2(c) Most students were unfamiliar with the format of the ledger account. For the few students who attempted it with the correct format, most of them did not record the correct date for drawings. Question 2(d) Most students were able to answer this part question.

4 QUESTION 3 (a) A trial balance that balanced does not prove that all the transactions have been recorded correctly because there may be errors that cancelled out each other which are not shown by the trial balance. [1] QUESTION 3 (b) Kenny Co Trial Balance as at 30 April 2026 Debit $ Credit $ Capital 25 000 Trade receivables (2240 + 6000) 8 240✓ Trade payables (3800 – 1800 – 200) 1 800✓ Sales revenue (41950 + 6000) 47 950✓ Sales returns 1 860 Cost of sales (27100 + 3300) 30 400✓ Discount received (250 + 200) 450✓ Motor vehicles 25 000 Inventory (6350 – 3300) 3 050✓ Cash at bank (7960 – 1800) 6 160✓ Utilities expense 490 75 200 75 200✓OF QUESTION 3 (c) Any one of the following: [1] • Local or overseas suppliers • Online vs brick-and-mortar suppliers • After-sales service • Return policy • Warranty • Reputation of suppliers QUESTION 3 (d) The business, Kenny Co, returned goods costing $590 to credit supplier William. [1] QUESTION 3 (e) Rate of discount = Cash Discount Amount Owed 𝑥100 = 300 5700+300 𝑥100 = 5% [1]

5 Marker’s report: Question 3(a) Many students were unable to explain the limitation. Students simply mention that it can only show arithmetic accuracy, or it is not an absolute proof of accuracy, without further explanation. Question 3(b) Many students were unfamiliar with the format of the trial balance. Some students did not attempt any of the additional information too. For those who tried, common mistakes include discount received and inventory. Question 3(c) Many students provided non-accounting information on inventory, rather than on credit supplier. Question 3(d) Many students were able to answer this part question. Question 3(e) Few students were able to get this correct. The total amount owed is the total of the discount and the payment. Many students incorrectly only divided by the payment amount.

6 QUESTION 4 (a) Bank reconciliation is performed to check that the difference between the ending balances in the business cash at bank account and the bank statement is due to timing differences in recording. [1] QUESTION 4 (b) Acai Trading Bank Reconciliation Statement as at 30 June 2026 $ Balance as per bank statement 7 010✓ Add: Deposits-in-transit – Sales Revenue 4 700✓ Less: Cheques not yet presented – Advertising Expense (1 850)✓ Adjusted balance as per cash at bank account 9 860✓ QUESTION 4 (c) Profit for the year will decrease [1] by $490. [1] QUESTION 4 (d) Any five of the following: [5] – 1 mark each, at least 1 trend and 1 cause Trend: • Acai Trading’s current ratio has worsened by 2.36 from 30 June 2025 to 30 June 2026. • Acai Trading is liquid at 30 June 2025 as the current ratio is above the acceptable norm of 2 but the business’ liquidity has worsened and is illiquid at 30 June 2026. • Acai Trading’s quick ratio has worsened by 1.96 from 30 June 2025 to 30 June 2026. • Acai Trading is liquid at 30 June 2025 as the quick ratio is above the acceptable norm of 1 but the business’ liquidity has worsened and is illiquid at 30 June 2026. Causes: • This may be due to Acai Trading having insufficient money in their cash at bank account. At 30 June 2025, there is $6200 in the cash at bank but it has worsened and at 30 June 2026, Acai Trading has no money in their bank account and owes $1100 to the bank due to the bank overdraft. • This may be due to Acai Trading having to pay off the current portion of long -term borrowings as at 30 June 2026. The loan portion to be paid off has increased their liabilities and worsened their liquidity position. • This may be due to the increase in trade payables by $2740. An increase in trade payables may be due to Acai Trading having difficulty paying off their trade payables. • Acai Tradi