IGCSE Accounting: Accounting concepts, ethics, technology and sustainability (Cambridge 0452)

Syllabus edition note. This resource follows the Cambridge IGCSE Accounting 0452 syllabus (and Cambridge O Level Accounting 7707, which has the same subject content for the same series) for exams in 2027, 2028 and 2029 (version 1), first examined in the March 2027 series in India and the June 2027 series elsewhere. If you sit 0452 in November 2026, you sit the 2026 syllabus (version 2), which differs: Paper 1 has 35 multiple-choice marks in 1 hour 15 minutes, not 40 marks in 1 hour 30 minutes; Topic 7 is “Accounting principles and policies”, without 7.2 Ethical considerations or 7.3 Technology and sustainability; 4.4 is “Irrecoverable debts and provision for doubtful debts”; income statements are named instead of statements of profit or loss; three-column running balance accounts are not required; Clubs and societies is 5.4 and Manufacturing accounts 5.5; and 6.3 is “Inter-firm comparison”. For this topic, the 2026 syllabus calls the same ten items accounting principles, and its 7.2 is Accounting policies (the influence of international accounting standards and the objectives of comparability, relevance, reliability and understandability), which the 2027-2029 syllabus removes. If you sit in November 2026, work from the 2026 syllabus on the Cambridge International website.

This study guide covers sections 7.1 Accounting concepts, 7.2 Ethical considerations and 7.3 Technology and sustainability of the Cambridge IGCSE Accounting 0452 syllabus for exams in 2027, 2028 and 2029 (version 1). All candidates follow the same content, so there are no tier labels. It teaches through one invented business, Pinewood Cycles, owned by Haleem Bashir. The earlier Accounting Concepts and Modern Practice study guide covers the same sections with different examples. All amounts are in dollars.

Related pages: revision notes, practice questions, the Cambridge IGCSE Accounting hub, the printable checklist and the free 10-minute diagnostics. Many concepts explain Accounting Procedures.

What you must cover

Section	Points the syllabus lists	Here
7.1	The ten accounting concepts, from business entity to realisation	Sections 1 to 4
7.2	Need for an ethical framework; five fundamental principles; significance to stakeholders and society	Section 5
7.3	Digital applications; safe and sustainable storage and its risks; four storage types with advantages and disadvantages	Section 6

The syllabus says you do not need to know any specific accounting software package.

1. Duality and business entity

Duality says every transaction has two sides of equal value. Business entity says the business is a separate unit from its owner, so only the business’s own transactions go in its books.

Haleem starts Pinewood Cycles on 1 March. Four transactions show both concepts.

Transaction	Debit	Credit	Effect on assets = liabilities + capital
Haleem pays 20,000 into a new business bank account	Bank 20,000	Capital 20,000	Assets +20,000; capital +20,000
Buys shop equipment for 4,800 on credit	Equipment 4,800	Trade payables 4,800	Assets +4,800; liabilities +4,800
Pays 1,500 of that invoice by bank transfer	Trade payables 1,500	Bank 1,500	Assets -1,500; liabilities -1,500
Takes 600 from the bank for a family trip	Drawings 600	Bank 600	Assets -600; capital -600

Check the equation after the four lines. Bank is 20,000 - 1,500 - 600 = 17,900 and equipment is 4,800, so assets are 22,700. Trade payables are 4,800 - 1,500 = 3,300 and capital is 20,000 - 600 = 19,400, so liabilities plus capital are also 22,700. The two sides agree because each line changed both sides equally. The family trip is not a business expense: business entity makes it drawings.

2. Matching / accruals and realisation

Matching / accruals puts revenue and the costs of earning it in the period they belong to, whatever the cash timing. Realisation recognises revenue when the goods or services have been provided and the customer is committed to pay.

Pinewood Cycles sells annual service plans at 180 each. On 1 October 30 customers buy a plan and pay in full, so cash received is 30 x 180 = 5,400. The year ends on 31 December, so three of the twelve months have been provided.

Step	Working	Amount
Revenue earned this year	5,400 x 3/12	1,350
Income received in advance	5,400 - 1,350	4,050

Only 1,350 is this year’s revenue. The rest is a liability, because the shop still owes nine months of servicing. A bicycle sold on 29 December but delivered on 3 January is next year’s revenue.

3. Prudence, materiality and consistency

Prudence means do not overstate profit or assets, and do recognise expected losses promptly. A common use is valuing inventory at the lower of cost and net realisable value. Pinewood Cycles’ closing inventory is compared line by line.

Line	Units	Cost per unit	Net realisable value per unit	Total cost	Total NRV	Value used
Mountain bikes	6	310	280	1,860	1,680	1,680
Helmets	40	18	25	720	1,000	720
Child seats	12	22	15	264	180	180
Total				2,844		2,580

Inventory falls by 2,844 - 2,580 = 264, so profit falls by 264. Helmets could sell for more than they cost, but that gain is not recorded until they are sold.

Materiality lets items too small to change a user’s decisions be treated simply. Haleem decides that anything costing under 150 is charged to expense even if it lasts years. A stapler at 18 and a tyre pump at 95 are expenses. A repair stand at 480 is recorded as a non-current asset and depreciated, which is 480 / 29,250 = 1.6% of the year’s profit, large enough to matter. A much larger business might set a higher limit, because materiality depends on size.

Consistency means the same treatment from year to year. A machine costing 24,000 gives profit of 20,000 before depreciation each year. Straight line at 20% of cost charges 4,800, so profit is 15,200 every year. If year 2 switched to reducing balance at 20%, the charge would be 19,200 x 20% = 3,840 and profit 16,160; back on straight line in year 3, profit returns to 15,200. Trading did not change, yet profit seems to rise by 960 then fall by 960.

4. Historic cost, going concern and money measurement

Historic cost records an asset at what was paid. Going concern assumes the business will keep trading for the foreseeable future. Money measurement records only items that can be reliably measured in money.

Pinewood Cycles’ delivery van cost 22,000 and is depreciated at 25% on the reducing balance each year. Depreciation is 22,000 x 25% = 5,500 in year 1, leaving 16,500, then 16,500 x 25% = 4,125 in year 2, leaving a net book value of 12,375. A dealer values the van at 15,500, yet the statement of financial position shows 12,375. As a going concern, the business spreads the van’s cost over its useful life, and historic cost means a higher market value is not recorded. If Haleem planned to close the shop within weeks, the assumption would fail and the expected sale value would become the more relevant figure.

Money measurement explains what is left out. Haleem’s experienced mechanic, the shop’s good reputation and a new rival nearby cannot be reliably valued in money, so none is recorded. The 1,200 paid for a staff training course is recorded, as an expense. The statements therefore do not show everything that affects the business.

5. Ethical considerations (7.2)

The need for a framework. Others rely on accountants’ figures but cannot check them, accountants may face pressure, and they handle private information. A framework sets the standard in advance, so it applies whoever asks.

Principle	Meaning in your own words	A situation where it applies
Integrity	Be honest and straightforward	Refusing to record an invoice from a supplier who does not exist
Objectivity	Do not let bias, a conflict of interest or pressure decide your judgement	Asking someone else to review a debt owed by your own cousin
Professional competence and due care	Have the skills, keep them current and work carefully	Reading the rules before preparing an unfamiliar statement
Confidentiality	Do not pass on or misuse information gained through your work	Not telling a supplier what a rival customer paid
Professional behaviour	Obey the law and avoid actions that damage the profession’s reputation	Declining to hide income from the tax authority

Significance to stakeholders and society. Each group decides from the figures, so false figures harm each differently.

Group	Harm if the framework is not applied
Owners and investors	Money put into a weaker business than it appeared
Lenders	Loans that cannot be repaid
Suppliers	Credit given and then unpaid
Employees	Jobs lost when hidden problems surface
Tax authority and society	Less tax collected for public services; weaker trust in financial information

Worked example. Pinewood Cycles’ draft profit for the year ended 31 December is 31,600 on revenue of 190,000. A 2,350 invoice for a December advertising campaign is unrecorded. Haleem asks the book-keeper to date it January so the profit looks better for a bank loan.

Measure	Draft	Correct
Profit for the year	31,600	31,600 - 2,350 = 29,250
Profit for the year as % of revenue	31,600 / 190,000 = 16.6%	29,250 / 190,000 = 15.4%

The advertising belongs to this year, so leaving it out breaks matching / accruals. Agreeing would breach integrity (knowingly misleading), objectivity (giving way to pressure) and probably professional behaviour (misleading a lender). The sound response is to explain why the invoice must be recorded and produce only the correct figures. The bank would otherwise lend on a margin 1.2 percentage points too high.

6. Technology and sustainability (7.3)

Digital applications for all or part of the records. A business may keep everything digitally or only some books, for example sales invoices on a spreadsheet and a handwritten petty cash book. Software can post both sides of an entry, update totals and produce a trial balance quickly. The cost is training, set-up, reliance on the system and the risk that one wrong input is repeated everywhere.

Why store data safely. Records are needed for the statements, collecting debts, lenders, tax enquiries and evidence. Safe storage keeps them complete, accurate, available and protected from loss or unauthorised access, which supports confidentiality.

Why store data sustainably. Storage has environmental costs: paper, printing, discarded devices and the electricity devices and remote servers use. Printing three copies of 20 invoices a day for 250 days uses 15,000 sheets; emailing two copies and printing one uses 5,000, saving 10,000 (about 67%), or 20 reams of 500.

Risk of poor storage	Possible result	Protective measure
Fire, flood or theft	All records lost	Copy held at another place
Device failure or accidental deletion	Recent entries lost	Regular back-ups
Hacking or unauthorised access	Records altered, customer details exposed	Passwords and limited access
Old devices unreadable or discarded	Records inaccessible; waste	Keep records readable; wipe data and dispose of devices responsibly

Penalties, rebuilding costs and lost trust are further risks.

The four types of storage system, compared:

	Manual	Data storage devices	Cloud services	Other digital services
Access	Only on site	Where the device is	Anywhere with internet	Anywhere with the service
Loss risk	Fire, flood, theft	Loss, damage, failure	Outage, provider failure	Records may be kept for a limited time
Sustainability	Paper and space	E-waste	Servers use power	Less paper but scattered data

Manual books work without power but are slow to search and hard to copy. Devices are fast, but small ones are easily lost. Cloud services give remote access and off-site safety at a continuing cost, depending on a third party. Other digital services, such as online banking, create records automatically but spread data across systems. Most businesses use a mix.

Common errors

• Defining a concept without linking it to the figures in the question.
• Treating prudence as understating profit rather than not overstating it.
• Using market value instead of historic cost.
• Listing only advantages when asked to discuss a storage type.

Frequently asked questions

What are the ten accounting concepts in Cambridge IGCSE Accounting 0452? For exams in 2027 to 2029, section 7.1 covers duality, business entity, matching (accruals), realisation, prudence, materiality, consistency, historic cost, going concern and money measurement. Answers should apply each concept to the figures in the question.

What is the difference between matching and realisation? Matching (accruals) puts revenue and the costs of earning it in the period they belong to, whatever the cash timing. Realisation recognises revenue when goods or services have been provided and the customer is committed to pay, so cash received in advance is a liability.

Why do accountants need an ethical framework? Others rely on accountants’ figures but cannot check them, accountants may face pressure, and they handle private information. A framework sets the standard in advance, so it applies whoever is asking.

Why should accounting data be stored safely? Records are needed for the financial statements, collecting debts, lenders, tax enquiries and evidence. Safe storage keeps them complete, accurate, available and protected from loss or unauthorised access, which also supports confidentiality.

Do you need to know specific accounting software for 0452? No. The syllabus says you do not need to know any specific accounting software package, so answers should describe what digital applications do rather than naming a product.

Official syllabus

Cambridge IGCSE Accounting 0452 syllabus for exams in 2027, 2028 and 2029, version 1, published by Cambridge University Press & Assessment (Cambridge International Education). Sections 7.1 to 7.3.