IGCSE Accounting: Financial statements of sole traders (Cambridge 0452) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

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 covers only trading and service businesses in 5.1 and limits drawings adjustments to goods taken by the owner for own use; for limited companies it excludes cumulative and non-cumulative preference shares, rights issues, share premium and capital redemption reserve but requires the difference between redeemable and non-redeemable preference shares (the 2027-2029 syllabus lists none of these); and for incomplete records it does not ask why businesses keep them or what their advantages are. If you sit in November 2026, work from the 2026 syllabus on the Cambridge International website.

These questions cover syllabus section 5.1 Sole traders (Cambridge IGCSE Accounting 0452, exams in 2027, 2028 and 2029). All figures are in dollars and every business is invented. Teaching is in the study guide and the revision notes. More practice on the whole topic is in Preparation of Financial Statements practice. See also the course hub, the checklist and the free diagnostics.

Questions

1. Sana Holroyd is a sole trader. Her business owes 34,000 to suppliers and the bank, and its assets would sell for 21,500. Explain what unlimited liability means for her. [3]

2. Classify each as a trading, service, manufacturing or combination business: (a) Lindenhurst Bakes makes loaves and sells them in its own shop; (b) Kamara Tutoring charges fees for lessons; (c) a bookshop that sells second-hand books and charges for rebinding. State which of the three has no cost of sales. [4]

3. Explain how (a) the statement of profit or loss and (b) the statement of financial position would help Hugo Tavares decide whether to take out a loan. [4]

4. Calculate: (a) the annual charge and the carrying value after three years for equipment costing 18,000 depreciated at 15% straight line; [2] (b) the charge for 2028 on a van bought on 1 January 2026 for 27,000 and depreciated at 30% reducing balance; [2] (c) the charge for tools valued at 3,400 at the start, 900 bought, valued at 3,150 at the end. [1]

5. State the expense or income for the year and the statement of financial position item for: (a) rent paid 7,200, which includes 1,200 for next year; (b) electricity paid 2,640 with 380 owing; (c) commission received 1,900, which includes 450 for next year; (d) bank interest received 340, with 120 earned but not received. [4]

6. Trade receivables are 14,600 before writing off a debt of 600. The allowance is 560 and is to be 5% of the remaining trade receivables. (a) Calculate the total charged to the statement of profit or loss for these items. [3] (b) Present trade receivables as they appear in the statement of financial position. [2]

7. Hugo Tavares has recorded drawings of 9,600. He also took goods that cost 340 (selling price 520), a computer with carrying value 450, and the business paid his private insurance of 275, charged to insurance. (a) Calculate corrected drawings. [2] (b) State the effect on profit. [2]

8. A draft profit is 12,400. Closing inventory was overstated by 600 and electricity of 350 owing was left out. (a) Calculate the corrected profit. [2] (b) State the effect on total assets, liabilities and closing capital. [2]

9. Dalia Fairchild is a mobile photographer. Year ended 30 June 2028: fees 41,300; travel 4,160; insurance 2,100; studio rent 6,000; telephone 960; assistant’s wages 9,600; trade receivables 6,380; allowance for irrecoverable debts 250; camera equipment cost 12,000 with accumulated depreciation 4,800; props valued 700 on 1 July 2027 and 150 bought in the year. Adjustments: fees of 900 earned are not billed; insurance includes 500 for next year; rent of 500 is owing; telephone includes 210 of private calls; a debt of 380 is irrecoverable and the allowance is to be 3% of remaining trade receivables; cameras are depreciated at 25% reducing balance; props are valued at 600. Prepare her statement of profit or loss. [10]

10. Jonas Stanhope makes garden furniture. Year ended 31 December 2027: raw materials 3,100 opening and 3,600 closing; purchases 24,800; carriage inwards 450; direct wages 18,200; indirect factory wages 4,100; factory power 2,900 with 250 owing; machinery cost 25,000 depreciated at 12% straight line; work in progress 1,400 opening and 1,100 closing; finished goods 5,200 opening and 4,600 closing; revenue 82,500; sales returns 1,500. (a) Prepare a manufacturing account that ends at factory cost of production. [7] (b) Calculate cost of sales and gross profit. [3]

11. Tomas Kamara’s balances at 31 December 2028, after all adjustments: land and buildings 70,000; vehicles cost 24,000 with accumulated depreciation 9,600; inventory 6,300; trade receivables 8,200; allowance for irrecoverable debts 410; other receivables 350; bank overdraft 1,900; trade payables 5,100; other payables 480; bank loan repayable 2034 15,000; capital at 1 January 2028 69,460; profit for the year 18,300; drawings 11,400. Prepare his statement of financial position. [9]

Answers

1. Her business and she are the same legal person, so she is personally responsible for its debts [1]. The shortfall is 34,000 - 21,500 = 12,500 [1], which suppliers could recover from her private assets such as her home or car [1]. [3] Examiner insight: Using the figures from the question turns a definition into an explanation, which is what a “explain” command asks for.

2. (a) Manufacturing [1]. (b) Service [1]. (c) Combination [1]. Kamara Tutoring has no cost of sales [1]. [4] Examiner insight: Give the type, then use the last part to show what it means for the statement of profit or loss.

3. (a) It shows the profit made over the year [1], so he can judge whether profit is enough to cover loan interest and repayments [1]. (b) It shows what the business owns and owes on the year-end date [1], including existing borrowing and whether assets exceed liabilities, so he can judge the risk of adding a loan [1]. [4] Examiner insight: Each statement needs its own named use. Saying both “show how the business is doing” gains little.

4. (a) 18,000 x 15% = 2,700 a year [1]; 18,000 - 3 x 2,700 = 9,900 [1]. (b) 2026: 27,000 x 30% = 8,100; 2027: 18,900 x 30% = 5,670 [1]; 2028: 13,230 x 30% = 3,969 [1]. (c) 3,400 + 900 - 3,150 = 1,150 [1]. [5] Examiner insight: Reducing balance is a common place to slip by using cost each year. Writing each year’s carrying value lets an examiner follow your method.

5. (a) Rent expense 6,000; other receivables 1,200 [1]. (b) Electricity expense 3,020; other payables 380 [1]. (c) Commission income 1,450; other payables 450 [1]. (d) Interest income 460; other receivables 120 [1]. [4] Examiner insight: Naming the statement of financial position heading, not just the amount, is part of what the question asks.

6. (a) Remaining 14,600 - 600 = 14,000 [1]; allowance 5% x 14,000 = 700, an increase of 140 [1]; total 600 + 140 = 740 [1]. (b) Trade receivables 14,000 [1] less allowance 700 = 13,300 [1]. [5] Examiner insight: The statement of profit or loss takes only the change in the allowance, while the statement of financial position deducts all of it.

7. (a) Additional drawings 340 + 450 + 275 = 1,065 [1]; corrected drawings 9,600 + 1,065 = 10,665 [1]. (b) Purchases fall by 340 and insurance by 275 [1], so profit rises by 615; the computer has no effect on profit [1]. [4] Examiner insight: Goods taken for own use are valued at cost, so the selling price of 520 is a distractor.

8. (a) 12,400 - 600 = 11,800 [1]; 11,800 - 350 = 11,450 [1]. (b) Total assets fall by 600 and liabilities rise by 350 [1]; closing capital falls by 950, the fall in profit [1]. [4] Examiner insight: Say whether each balance rises or falls. A bare number with no direction is unclear.

9.

Dalia Fairchild: statement of profit or loss, year ended 30 June 2028
Fees (41,300 + 900)                      42,200  [1]
Add Decrease in allowance (250 - 180)        70  [1]
                                         42,270
Less Expenses
 Travel 4,160; wages 9,600                         [1]
 Insurance (2,100 - 500)                 1,600  [1]
 Studio rent (6,000 + 500)               6,500  [1]
 Telephone (960 - 210)                     750  [1]
 Irrecoverable debts                       380  [1]
 Depreciation: cameras 25% x 7,200       1,800  [1]
 Depreciation: props 700 + 150 - 600       250  [1]
 Total expenses                         25,040
Profit for the year                      17,230  [1]

Allowance: remaining receivables 6,000; 3% = 180. [10] Examiner insight: Show the adjustment inside each expense line, as here, so a reader can see which adjustments you made even if the total is wrong.

10. (a) Raw materials used 3,100 + 24,800 + 450 - 3,600 = 24,750 [1]; prime cost 24,750 + 18,200 = 42,950 [1]; power 2,900 + 250 = 3,150 [1]; depreciation 12% x 25,000 = 3,000 [1]; overheads 3,150 + 3,000 + 4,100 = 10,250 [1]; add opening and deduct closing work in progress: 42,950 + 10,250 + 1,400 - 1,100 [1] = 53,500 [1]. (b) Net revenue 82,500 - 1,500 = 81,000 [1]; cost of sales 5,200 + 53,500 - 4,600 = 54,100 [1]; gross profit 26,900 [1]. [10] Examiner insight: Working in the order raw materials, prime cost, overheads and work in progress keeps each subtotal visible.

11. Non-current assets: vehicles 24,000 - 9,600 = 14,400 [1]; total 70,000 + 14,400 = 84,400 [1]. Current assets: trade receivables 8,200 - 410 = 7,790 [1]; total 6,300 + 7,790 + 350 = 14,440 [1]; total assets 98,840 [1]. Capital: 69,460 + 18,300 - 11,400 [1] = 76,360 [1]. Non-current liability: loan 15,000 [1]. Current liabilities: 5,100 + 480 + 1,900 = 7,480 [1]. Total 76,360 + 15,000 + 7,480 = 98,840. [9] Examiner insight: Treat a bank overdraft as a current liability. A matching total is a useful check on your layout.

Where marks are usually lost

• Writing “unlimited liability” without saying what it means for the owner.
• Using cost, not carrying value, for reducing balance.
• Treating a prepayment as an addition to the expense.
• Charging the whole allowance, not the change, to the statement of profit or loss.
• Valuing goods taken at selling price.
• Showing no workings for adjusted lines.
• Placing a bank overdraft among current assets.
• Leaving out opening or closing work in progress.

Next steps

• Review the revision notes and the study guide.
• Open the course hub or the checklist.
• Take the free diagnostics.
• Book a free trial class.

Frequently asked questions

How do you explain unlimited liability in an exam answer? Say what it means for the owner in the case given, for example that unpaid supplier debts could force the sale of the owner’s private assets. Writing “unlimited liability” as a label alone does not earn the explanation mark.

What value is used for goods taken by the owner? Goods taken for personal use are valued at cost, not selling price, and added to drawings. Valuing them at selling price is a common error in Cambridge IGCSE Accounting (0452) questions.

Where does a bank overdraft go in a sole trader’s statement of financial position? A bank overdraft is a current liability, not a current asset. Placing it among current assets is a common way to lose marks.

Why should workings be shown for adjusted figures? Workings for each adjusted line, such as depreciation or the allowance for irrecoverable debts, show how the figure was reached, so method marks can still be earned if a later figure is wrong.

Official syllabus

Cambridge International Education, Cambridge IGCSE Accounting 0452 syllabus for exams in 2027, 2028 and 2029 (version 1), section 5.1 Sole traders.