IGCSE Accounting: Accounting Concepts and Modern Practice — Practice Questions

Syllabus edition note. This resource follows the Cambridge IGCSE Accounting 0452 syllabus 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.

These are original practice questions written in the style of Cambridge IGCSE Accounting (0452) assessment objectives. They are not taken from any past paper and are not endorsed by Cambridge International.

Use these questions alongside the Accounting Concepts and Modern Practice study guide and revision notes. Several questions apply Topic 4 (Accounting Procedures) and Topic 5 (Preparation of Financial Statements). Accounting 0452 is not tiered, so every question below applies to all candidates.

Short-answer questions

Cambridge IGCSE Accounting 0452 question papers are not divided into lettered sections, so the questions below are grouped only by length.

1. Identify the accounting concept that explains each of the following. [3] (a) Every transaction is recorded by a debit entry and a credit entry of the same amount. (b) The owner’s private phone bill, paid from the business bank account, is recorded as drawings. (c) A credit sale is recorded when the goods are supplied and the customer accepts liability to pay, not when the customer pays.

2. Explain the going concern concept and how it affects the value at which non-current assets are shown in the statement of financial position. [2]

3. Explain how the prudence concept is applied to trade receivables. [2]

4. State the meaning of the fundamental principle of confidentiality, and give one example of it in accounting. [2]

5. State two risks of not storing accounting data safely. [2]

6. Suggest two ways a business could store its accounting data more sustainably. [2]

Longer questions

7. A furniture business buys a calculator for $12 and a delivery van for $26,000. Both are expected to last for several years.

(a) Explain the materiality concept. [2] (b) Explain how the business should record each item. [2]

8. A business’s financial year ends on 31 December 2027. On 1 April 2027 it paid $3,600 for insurance for the year to 31 March 2028.

(a) Calculate the insurance expense for the year ended 31 December 2027. [1] (b) Calculate the amount prepaid at 31 December 2027. [1] (c) State where the prepaid amount is shown in the statement of financial position. [1] (d) Name the accounting concept applied. [1]

9. Machinery was bought on 1 January 2026 for $40,000. It has been depreciated by the straight-line method at 20% per year on cost. For the year ended 31 December 2028 only, the owner wants to use the reducing balance method at 20% per year, applied to the net book value at 31 December 2027.

(a) Calculate the depreciation for 2028 using the straight-line method. [1] (b) Calculate the net book value at 31 December 2027, and the depreciation for 2028 using the owner’s proposed method. [2] (c) Calculate the effect of the proposed change on the profit for the year ended 31 December 2028. [1] (d) Explain why the consistency concept means the owner should not make this change. [2]

10. For each situation at Hillview Supplies, identify the fundamental principle that has not been applied, and explain why.

(a) An accounts clerk tells a friend which of the business’s customers are behind with their payments. [2] (b) A book-keeper who has not learned how to calculate reducing balance depreciation guesses the figures instead of checking the method or asking for help. [2] (c) The business’s accountant helps the owner keep some cash sales out of the records so that less tax is paid. [2]

11. Karim is a sole trader. For each of the following, identify the accounting concept involved and state the correct treatment.

(a) Karim paid $2,000 for a family holiday from the business bank account and debited it to the travel expenses account. [2] (b) Land bought for $50,000 is now thought to be worth $80,000. Karim wants the statement of financial position to show $80,000. [2] (c) Karim wants to record an asset of $10,000 for his highly skilled and loyal staff. [2]

12. Lakeside Crafts keeps its sales and purchases ledgers in accounting software on one office computer, and writes up its petty cash book by hand. It keeps its only back-up copy on a USB flash drive in a drawer in the same office. Its bank statements are available through online banking.

(a) Explain what is meant by using digital applications for part of the accounting records, using Lakeside Crafts as an example. [2] (b) State one advantage and one disadvantage of keeping the petty cash book manually. [2] (c) Explain one risk of keeping the only back-up copy on a USB flash drive in the same office. [2] (d) Identify the type of storage system that the online banking records are, and state one disadvantage of relying on it. [2]

13. (Structured question in the style of Paper 2, 20 marks.)

Priya Nair is a sole trader who runs a garden supplies shop. Her book-keeper, Tom, has prepared a draft statement of profit or loss for the year ended 31 March 2028 showing a profit for the year of $36,400. Priya keeps all the business’s records on one laptop at the shop and has no back-up. The following have not yet been adjusted.

1. Priya took garden tools costing $450 from inventory for her own use. No entry was made.
2. The business paid Priya’s private phone bill of $300. It was debited to the telephone expenses account.
3. Closing inventory was valued at cost, $12,600. This includes 20 damaged garden benches that cost $80 each. After repairs costing $10 each, they can be sold for $50 each.
4. Rates of $2,400 were paid on 1 January 2028 for the six months to 30 June 2028. The full amount was charged as an expense.
5. A credit sale of $1,500 was recorded on 28 March 2028. The goods were delivered to the customer on 6 April 2028 and were included in closing inventory at cost.
6. A customer who owes $900 has closed down and will not pay. Priya is applying for a bank loan next month and has asked Tom not to write off the debt until the loan is agreed.

(a) Identify the accounting concept that applies to: (i) items 1 and 2; (ii) item 3; (iii) item 4; (iv) item 5. [4] (b) Calculate the corrected profit for the year ended 31 March 2028 after adjusting for items 1 to 5. [6] (c) (i) Identify the accounting concept that Priya’s request in item 6 breaks, and explain why. [2] (ii) Calculate the profit for the year after the debt in item 6 is also written off. [1] (d) Advise Tom how to respond to Priya’s request in item 6. Refer to two fundamental principles and to the significance for the bank. [3] (e) Discuss whether Priya should move her records from the laptop to a cloud service. [4]

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Answers

1. (a) Duality [1]. (b) Business entity [1]. (c) Realisation [1].

2. The going concern concept assumes the business will continue to trade for the foreseeable future [1]. Its non-current assets are therefore shown at cost less accumulated depreciation, spread over their useful lives, rather than at what they would fetch if sold now because the business was closing [1].

3. Some trade receivables may not be paid, so an allowance for irrecoverable debts is maintained and any increase is charged against profit [1]. The allowance is deducted from trade receivables in the statement of financial position, so neither assets nor profit are overstated [1].

4. Confidentiality means not disclosing information obtained through work without proper authority, unless there is a legal or professional duty to do so, and not using it for personal advantage [1]. Example, any one: not discussing a customer’s overdue account outside the business; not revealing employees’ wages; keeping accounting data secure from unauthorised access [1].

5. Any two of: records lost through fire, flood, theft, device failure or accidental deletion; unauthorised access, hacking or fraud changing the records; confidential customer or employee information exposed; penalties for failing to keep required records; cost and time of rebuilding records; damage to reputation and trust [2].

6. Any two of: print only what is needed and keep records digitally to reduce paper; avoid keeping unnecessary duplicate copies; dispose of or recycle old devices responsibly after securely removing the data; choose storage that will remain usable for as long as the records must be kept [2].

7. (a) Items of small value, which would not change a user’s view of the financial statements, need not be treated with full precision [1]; whether an item is material depends on the size of the business [1]. (b) The $12 calculator is not material, so it is charged as an expense in the statement of profit or loss for the year it is bought and is not depreciated [1]. The $26,000 van is material, so it is capital expenditure recorded as a non-current asset at cost and depreciated over its useful life [1].

8. (a) $3,600 × 9/12 = $2,700 (April to December) [1]. (b) $3,600 × 3/12 = $900 (January to March 2028) [1]. (c) Under current assets, as other receivables [1]. (d) Matching / accruals [1].

9. (a) $40,000 × 20% = $8,000 [1]. (b) Net book value at 31 December 2027 = $40,000 − ($8,000 × 2) = $24,000 [1]; reducing balance depreciation for 2028 = $24,000 × 20% = $4,800 [1]. (c) Depreciation would fall by $8,000 − $4,800 = $3,200, so profit for the year would be $3,200 higher [1]. (d) The consistency concept requires the same method to be used from one period to the next [1]; changing for one year only, to report a higher profit, would mean 2028’s profit could not be compared fairly with earlier years’ profits and would mislead users of the statements [1].

10. (a) Confidentiality [1] — information about customers obtained through work has been disclosed without authority or any legal duty to disclose it [1]. (b) Professional competence and due care [1] — the book-keeper does not have the knowledge needed and has not worked carefully or sought help, so the depreciation and profit figures may be wrong [1]. (c) Professional behaviour [1] — the accountant is helping the business avoid complying with tax law, which discredits the profession [1]. (Integrity is also accepted, with the explanation that the accountant is knowingly making the records dishonest.)

11. (a) Business entity [1]. The holiday is a private expense of the owner, so it is removed from travel expenses and recorded as drawings: debit drawings $2,000, credit travel expenses $2,000 [1]. (b) Historic cost [1]. The land remains in the statement of financial position at its cost of $50,000 [1]. (c) Money measurement [1]. The skill and loyalty of staff cannot be measured reliably in money, so no asset is recorded [1].

12. (a) Some of the records are kept using digital applications and others are kept manually [1]; Lakeside Crafts keeps its sales and purchases ledgers in accounting software but writes up its petty cash book by hand [1]. (b) Advantage, any one: cheap; needs no equipment, power or internet; cannot be hacked [1]. Disadvantage, any one: slow to add up and search; open to arithmetic errors; can be lost, stolen or destroyed by fire or flood; hard to back up [1]. (c) A fire, flood or theft in the office could destroy or remove both the computer and the USB flash drive at the same time [1], so all the ledgers would be lost and the business could not prepare its statements or prove what customers owe [1]. (Also accepted for both marks: the small drive could be lost or stolen, exposing confidential customer information if it is not protected.) (d) Other digital services [1]. Disadvantage, any one: the bank may make records available only for a limited time; access depends on the service and its account security; the statements are not a complete set of accounting records on their own [1]. (Cloud services is also accepted for the first mark if the answer explains that the bank holds the records on its own remote servers, reached over the internet; the disadvantage is then marked the same way.)

13. (a) (i) Business entity [1]; (ii) prudence [1]; (iii) matching / accruals [1]; (iv) realisation [1].

(b)

                                                         $
Draft profit for the year                           36,400
1 Goods taken by owner (Dr Drawings, Cr Purchases)    +450
2 Private phone bill (Dr Drawings, Cr Telephone)      +300
3 NRV per bench = 50 - 10 = 40
  Write down = 20 x (80 - 40)                         -800
4 Rates prepaid Apr-Jun = 2,400 x 3/6               +1,200
5 Sale not yet realised, removed from revenue       -1,500
Corrected profit for the year                       36,050

+$450 [1]; +$300 [1]; −$800 with working [1]; +$1,200 [1]; −$1,500 [1]; corrected profit $36,050 [1, own figure accepted if the adjustments are applied correctly].

(c) (i) Prudence [1]. The debt will not be paid, so leaving it in trade receivables overstates both assets and profit by $900; an expected loss should be recognised as soon as it is known [1]. (ii) $36,050 − $900 = $35,150 [1].

(d) Integrity: Tom should be honest and not prepare statements he knows overstate trade receivables and profit [1]. Objectivity: he should not let Priya’s pressure override his judgement that the debt is irrecoverable, so he should write it off now [1]. (Professional behaviour, explained as not producing statements that mislead a lender and discredit the profession, may replace either principle.) Significance: the bank will rely on the statements to decide whether to lend, and an overstated profit could lead it to lend more than the business can repay [1].

(e) Advantages, any two [2, allow 1 mark each]: the provider usually keeps back-up copies, so the records survive if the laptop is lost, stolen or damaged at the shop; records can be reached from other locations by authorised users, such as Tom; the provider maintains the equipment the records are stored on. Disadvantage, any one: a reliable internet connection is needed; there are ongoing charges; Priya depends on the provider staying available; the data is held by a third party, so passwords and access controls matter [1]. Conclusion: a justified recommendation, for example that she should move to a cloud service because at present one fire or theft would lose every record, while protecting her account with a strong password [1].

A note on exam technique for this topic

Topic 7 answers earn marks for application, not recitation. When a question describes a treatment, work in the same order every time: name the concept, say what it requires, apply it to the figure in the question, and state the effect on profit or on the statement of financial position. For ethics, name the principle and then connect it to the person and the pressure described. For storage, a “discuss” or “advise” answer needs both sides and a conclusion that fits the business in the question. The command words on page 23 of the syllabus define “discuss” as “write about issue(s) or topic(s) in depth in a structured way” and “advise” as “write down a suggested course of action in a given situation”. Keep calculations laid out line by line, as in Question 13, so each adjustment can earn its mark even if a later figure is wrong.