Accounting Scottish Qualifications Authority 2012

Accounting Scottish Qualifications Authority 2012The information in this publication may be reproduced to support SQA qualifications only on anon-commercial basis. If it is to be used for any other purposes written permission must beobtained from SQA?s NQ Delivery: Exam Operations.Where the publication includes materials from sources other than SQA (secondary copyright),this material should only be reproduced for the purposes of examination or assessment. If itneeds to be reproduced for any other purpose it is the centre?s responsibility to obtain thenecessary copyright clearance. SQA?s NQ Delivery: Exam Operations may be able to directyou to the secondary sources.These Marking Instructions have been prepared by Examination Teams for use by SQAAppointed Markers when marking External Course Assessments. This publication must notbe reproduced for commercial or trade purposes.CNomenclatureThe details in an account are wrong/missing-1NDates The date for an entry is wrong/missing -1DComplete ReversalAll the ledger entries are made thewrong way roundThe question is marked as if correctand then the total mark is divided by 2Reg Total Mark = 12Divided by 2Mark awarded = 6Plus/Minus RuleIf an entry is shown correctly it isawarded the mark (+).If the same entry then appears againin another part of the question themark is deducted (-)ie no mark is gained and there is nopenaltyegCorrect entry?60,000 Sales in theTrading AccountMark awarded 1 (+-)Wrong entry?60,000 Sales also enteredin the Profit & LossMark deducted -1 (+-)PenaltyThe answers given are more thanrequired (4 given instead of 3) andone of them is wrong.A heading is wrong/missing from afinal account.The answer is correct but not given inthe format requestedie question asks for an account or astatement-1PArithmetical error Error made in addition/subtraction etc-1A/E Page 3General1 Assess pencil figures and working. If the script is predominantly in pencil refer to thePrincipal Examiner.2 Work which has been deleted gains no marks even if it is correct. Exceptional casesmay be drawn to the attention of the Principal Examiner.3 Consequential errors MUST NOT be penalised, subject to the marking instructions foreach question.4 Mark workings whether or not they are incorporated in the final answer. Deduct apenalty of -2 marks per question for working which is not incorporated in the finalanswer.5 Incorrect figures, supported by adequate workings ? award marks for any correctoperations performed.6 Incorrect figures, not supported by adequate workings ? lose awards, unless themarking instructions specify otherwise. If arithmetic error ? lose 1 mark.7 EXTRANEOUS ITEMS: see instructions for specific questions.Penalties should be shown beside the figure and encircled, eg -1P -1E -1 +/-8 If right and wrong ie in 2 sections, give value of award where right, deduct value ofaward where wrong (cross reference +/- against relevant figures).9 Indicate awards given for each item, eg ?2,500 1In essay type questions indicate marks awarded beside the point made by candidate ?NOT IN THE MARGIN.Sub-totals for sections should be indicated and encircled, eg 4/6Final total should be clearly indicated and easy to check, eg Q1 = 31/40Page 4Question 1Airlie Bowling ClubAwardMarks LostPenalties(a) Accumulated Fund 9 marksHeading incorrect or missing ? ignoreAward 1 mark if Equipment shown as ?10,000Accept Depreciation as a LiabilityIf all items added together, treat as AssetsExtraneous eg Receipts and Payments12-2E (Max 4)(b) Receipts and Payments Account 13 marksHeading incorrect/omittedAny figure omitted/wrong/wrong sectionClosing Balance must have its label to gain award1 each1-1PExtraneous-2E (Max 4)(c) (i)(ii)Profit/Loss on Dance 5 marksAny figure wrong/omittedProfit/Loss must have its label to gain awardExtraneousProfit/Loss on Raffle 2 marksAny figure wrong/omittedFinal figure must have its label (Profit/Loss)111-2E (Max 4)-1PExtraneous-2E once Page 5AwardMarks LostPenalties(d)Income and Expenditure Account 11 marksHeading incorrect/omittedSubscriptions entered as ?50,000 or both adjustmentswrongly appliedSubscriptions ? only one adjustment applied correctlyIf c (i) and (ii) not done but ALL figures are in the Incomeand Expenditure Account, tick items and award 1 eachfor implied profit.If profits calculated in c (i) and (ii), then all items inInc/Exp Acc, lose profit awardsTelephone shown as ?1,750 or ?1,800Final figure must be labelled Surplus/Deficit21211-1PExtraneous eg Equipment purchased-2E (Max 4)Page 6Question 2Ruthven plcAwardMarksLostPenalties(a) (i) Trading, Profit and Loss and Appropriation 18 marksHeading incorrect or missingIgnore omission of ? sign or 000s added to all figuresItems in wrong section lose appropriate award BUT NOPENALTYItems in 2 sections apply +/- rule BUT NO PENALTYEXTRANEOUS ITEMS i.e. Balance Sheet itemsBUTTrial Balance figures for Prov for Bad Debts and Prov forDepn are NOT EXTRANEOUSIf both Prov for Bad Debts and Increase in Prov for BadDebts enteredIf Depreciation charge and Provision for Depreciationare enteredAny label omitted: Gross ProfitNet Profit (before tax)Unappropriated Profit c/fIncrease in Prov for Bad Debts not ?3 i.e. right/wrongAll other Expenses are right/wrong including Deb Int andDepn on Vehicles calculationsCorporation Tax wrong or not deductedP/L Balance b/f not addedOrd Div not ?18 i.e. right/wrongAny other figure wrong/omitted/wrong effect2221 or 21121 or 2-1P once-2P(Max 4)1P onceAny figure calculated or adjusted correctly for Depn,Provision for Bad Debts, Debenture Interest, OrdinaryDividend, Accruals or Prepayments, but in wrongsections, gains calculation/adjustment award.1Page 7AwardMarksLostPenalties(ii)Balance Sheet 16 marksHeading wrong/omitted NOTE do not penalise if penaltyapplied in (i)Items in 2 sections ? apply +/- ruleExtraneous items (i.e. Revenue items)Vehicles ? Depn wrong/not consequentialDo not accept Provision for Bad Debts as a CurrentLiabilityDebtors shown as ?225 i.e. Prov for Bad Debts notdeductedWATCH FOR CONSEQUENTIALITY IN THEFOLLOWING FIGURESProvision for Bad DebtsOrd Div dueDeb Int dueUnappropriated Profit c/fAll other figures are right/wrong i.e. if figurewrong/omitted/wrong effectBUTOrdinary Shares must state either the number or value ofshares and be first in orderDebentures must be last item or subtracted from NetAssets2111 each11-1P-2E (Max 4)(b) Award 1 mark for stating each ratio and correct area and2 marks for each correct formulaIf unclear or incorrect area, lose name award but gainconsequential formula award1 eachAny ratio which is a % must have the x 100or time period etc1 eachPage 8Question 3Ironside & SonsAwardMarks LostPenaltiesPART A ? Manufacturing Account 21 marksMain Heading wrong or omittedItems in wrong sections lose awardAny figure calculated or adjusted correctly for Depn,Accruals or Prepayments, but in wrong sections, gainscalculation/adjustment award.Cost of Raw Materials ConsumedAny item wrong/omitted/wrong effectCost of RM consumed not labelledPrime CostManufacturing Wages award 1 mark for ?100 or ?90Prime cost not labelledIf items subtracted from Cost RM Consumed lose PrimeCost awardFactory OverheadsRent ? 39 ? 3 marks; 48 ? 2 marks 39.5 ? 2 marksAny other figure less than 58Admin Expenses not ?8 but any other figure less than 32Depreciation on Machinery not ?18 or Provision added to?18WIP (start) and WIP (end) wrong/omitted/wrong effectFactory Overheads subtractedbut if it says ADD and then subtracts ? treat asarithmetic slipFactory Cost of Finished Goods wrong/notconsequential/not labelled ? lose awardExtraneous items i.e. Profit and Loss or Balance Sheetitems, Rent portion in Direct CostsIf Sales in Manufacturing Account and used111111 or 2121 each1-1P-2P-1A-2E (Max 4)-2PPage 9AwardMarks LostPenalties(a)PART BBank Account 6 marksIf not in account form, award marks but apply penaltyAward marks as per solution ie item must be in correctcolumn to gain awardBUTItem 4 S O?Malley ?37 in debit column ? award 1 markComplete reversal (excluding opening balance) ? dividetotal marks by 2If items 2 and 3 are included in Part (a) only? ignoreIf items 2 and 3 are in (b) as well apply +/- ruleNo closing balance or clearly wrong balance12 or 3-2P-1P(b) Bank Reconciliation Statement 7 marksHeading wrong/omitted/no dateOpening and Closing Balances must both be present togain the mark awarded to the labels? do not accept?Balance? on its ownExtraneous items all of 1 and 4 ? ignore ? but if includedin both statements apply +/- ruleIf done as an account lose balance label award andapply penalty for no headingIf done as one Statement ie (a) and (b) together, awardmarks where correct1-1P-1P(c) Mark as per solutionPage 10Question 4Glengate TextilesAwardMarks LostPenaltiesPART A(a) Spinning Process Account 12 marksAward marks as per solution but cost per kg isconsequentialIf done as a list only award marks to inputs6(b)(i)(ii)(iii)Weaving ProcessRight/wrong ? if wrongRight/wrong ? if wrongNot 60% of candidate?s answer to (i) plus candidate?sanswer to (i)Not candidate?s answer to above plus half of thatFinal answer not shown22221PART B Jay Jazeera(a) (i) Mark as per solution. Any part missing lose award 1 each(ii) Not candidate?s answer to (i) multiplied by 2 1(b) Mark as per solution. Any part wrong/omitted ? loseawardBUT if Waiting Staff Wages 9,500, award 1 andCleaners 6,000, award 1Food for Breakfasts will be consequential oncandidate?s answer to (a) (ii)1 or 21 each(c) Not candidate?s answer to (b) divided by candidate?sanswer to (a) (i)2(d) Not candidate?s answer to (c) times 175%2Page 11Question 5Bikes UKAwardMarks LostPenalties(a)(b)(i)(ii)(iii)(iv)Right or wrong ? mark as per solutionRight, wrong or consequentialContribution per model not candidate?s answer to (ii)divided by Machine Hours per modelContribution per model not candidate?s answer to (ii)multiplied by 2,000 unitsTotal contribution or profit not labelledOrder of priority wrong/not consequential2 each2 each1 or 21(c) If opening or closing balances missing/incorrect ? mustshow final Total BalanceAward marks as solution ? right/wrong-1P eachQuestion 6Altamount Engineering(a)(i)(ii)(iii)(iv)(v)PART AVariable Cost ? any figure wrong/omitted lose awardAny extra figuresContribution ? Not SP less candidate?s answer to (i)BEP in Units ? Not Fixed Costs divided by candidate?sanswer to (ii)BEP value ? not candidate?s answer multiplied bySelling PriceProfit from sales level of 5,000 ? not 5,000 lesscandidate?s answer to (iii)Not multiplied by candidate?s answer to (ii)Mark as per solution but contribution will beconsequential on candidate?s answer to a (ii)-1P each(b) (i)(ii)New contribution not SP less new VCNew BEP not new FC divided by candidate?s answer to(b) (i)1 or 21 each(a)(b)(c)PART BHeath & Thatcher plcMark as solution ? right/wrong ? any one entry wronglose one mark each up to a maximum of 2Right/wrong/consequentialMark as per solutionOrder for a custom written PAPER now and one of our online writers will write your assignment from scratch within your deadline! !!!38.AccountingScottish Qualifications Authority 2011The information in this publication may be reproduced to support SQA qualifications only ona non-commercial basis. If it is to be used for any other purposes written permission mustbe obtained from SQA?s NQ Delivery: Exam Operations Team.Where the publication includes materials from sources other than SQA (secondarycopyright), this material should only be reproduced for the purposes of examination orassessment. If it needs to be reproduced for any other purpose it is the centre?sresponsibility to obtain the necessary copyright clearance. SQA?s NQ Delivery: ExamOperations Team may be able to direct you to the secondary sources.These Marking Instructions have been prepared by Examination Teams for use by SQAAppointed Markers when marking External Course Assessments. This publication must notbe reproduced for commercial or trade purposes.Page 22011 AccountingMarking ConventionsCONVENTIONEXPLANATIONMARK(S) ONCANDIDATE PAPERExtraneousItems entered which should not be inthe answer-1EConsequentialIf a figure in a question is wrong, anyfurther calculations are awardedmarks if correct, as a consequence ofusing that figureCNomenclatureThe details in an account are wrong/missing-1NDatesThe date of an entry is wrong/missing-1DComplete ReversalAll the ledger entries are made thewrong way round.The question is marked as if correctand then the total mark is divided by 2REg total mark = 12Divided by 2Mark awarded = 6Plus/Minus RuleIf an entry is shown correctly it isawarded the mark (+)If the same entry then appears inanother part of the question the markis deducted (-)ie no mark is gained and there is nopenaltyEg Correct entry ?60,000Sales in the TradingAccount ? mark awarded 1(+/-)Wrong entry ?60,000 Salesalso entered in the BalanceSheet ? mark deducted -1(+/-)PenaltyThe answers given are more thanrequired (4 given instead of 3) andone of them is wrongA heading is wrong/missing from afinal accountThe answer is correct but not given inthe format requested ie the questionasks for an account or a statementand a list is given-1PPage 3General1. Asses pencil figures and working. If the script is predominantly in pencil refer to thePrincipal Examiner.2. A maximum of 10% of marks gained on any individual question may be deducted foruntidy work and poor style. This penalty should only be applied in exceptionalcircumstances.3. Work which has been deleted gains no marks, even if correct. Exceptional cases maybe drawn to the attention of the Principal Examiner.4. Consequential errors MUST NOT be penalised, subject to the marking instructions foreach question.5. Mark workings whether or not they are incorporated into the final answer. Deduct apenalty of -1 mark per question for working which is not incorporated in the final answer.6. Incorrect figures, supported by adequate workings ? award marks for any correctoperations performed.7. Incorrect figures, not supported by adequate workings ? lose awards, unless the markinginstructions specify otherwise. If arithmetic error lose 1 mark.8. EXTRANEOUS ITEMS ? see instructions for specific questions9. If right and wrong ? give value of award where figure is correct, deduct value of awardwhere figure is wrong (cross reference +/- against relevant figures).10. Indicate awards given for each item next to the appropriate figure eg ?1,5001.In essay type questions indicate the marks awarded beside the point made by thecandidate ? NOT IN THE MARGIN.Sub-totals for each section should be indicated and encircled, eg 5/6Final totals should be clearly indicated and easy to check eg Q1 = 42/50Page 4Awardmarks lostPenaltiesappliedQUESTION 1 ? ABC plc(a) (i) PROFITABILITY/PERFORMANCE RATIOSMaximum of 6 marks for this section forminimum of 3 ratios.One mark is awarded for each correctly calculatedratio for each year.Any ratio using wrong formula 2(ii) EFFICIENCY RATIOSMaximum of 8 marks for this section forminimum of 4 ratios.One mark is awarded for each correctly calculatedratio for each yearAny ratio using wrong formula 2(iii) LIQUIDITY RATIOSMaximum of 4 marks for this section forminimum of 2 ratios.One mark is awarded for each correctly calculatedratio for each year.Any ratio using wrong formula 2Ratios in wrong section: give awards but apply pen -1 onceRatio expressed in reverse eg 1:0.8 instead of0.8:1-1 onceNo %, days, times (whole question) -1 max -3Page 5Awardmarks lostPenaltiesappliedQUESTION 1 (continued)(b)1 mark for improvement/deterioration1 mark for explaining whyPROFITABILITY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.EFFICIENCY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.LIQUIDITY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.(c) (i) ? (iv) Mark as per solution. Two marks areawarded for each correct answer.Any ratio using wrong formula 2(d) (i) Four marks are awarded for the calculation ofthe gearing ratios.Wrong formula used 4(ii) Two marks are awarded for comment.Page 6Awardmarks lostPenaltiesappliedQUESTION 2 ? Wilson, Kepple and BettiePart A(a) REALISATION ACCOUNT ? 11 MARKSMark as per solution, wrong figure lose award 1but note thatAny premises, furniture, motor vehicles, stocks or debtorsfigure missing.1Accept creditors and payment to creditors instead ofdiscount receivedCreditors entered as well as discount apply +/-Bank figure for Motor Vehicles or Stock wrong or missing 1Extraneous items eg loan repayment, capital -2 max -4(b) BETTIE?S CAPITAL ACCOUNT ? 3 MARKSMark as per solution, any wrong figure lose awardOpening balance wrong or omitted -1(c) BANK ACCOUNT ? 6 MARKSMark as per solution, wrong figure lose awardIf any of the following are wrong or missing, Openingbalance, amounts received for Furniture, Motor Vehicles,Debtors or Stocks.1Part BRECONCILIATION STATEMENT ? 20 MARKSMark as per solutionAny figure wrong, wrong effect or missing lose awardFigure correct but wrong effect -1 eachFigure wrong lose award (but check for working)Figure missing lose whole awardCorp Tax/Deb int incl in changes to WC ? +/- if already usedIgnore if notNo final total/not labelled -1 penPage 7Awardmarks lostPenaltiesappliedQUESTION 3 ? RIVERSIDE LTDPart ACONSOLIDATED BALANCE SHEET ? 20 MARKSMark as per solutionAny figure wrong or omitted lose awardInvestment costs not ?1,500,000 1Percentage stake calculated not 60% 1Net assets acquired not ?1,200,000 1Goodwill calculated wrong or omitted 1Goodwill written off wrong, not consequential 1Tangible assets not ?5,700 1Stock total not ?600 + ?225 1Unrealised profit not 20% of ?90,000 or consequential 1Debtors not ?900 + 375 1Lakeside?s debt of ?60,000 owing to Riverside wrong notdeducted1Bank wrong/omitted 1Cash in transit, wrong, omitted, incorrectly treated 1Creditors not ?525 + ?180 1Amount outstanding not ?60 ? ?15 or omitted/incorrectly treated 1Accrued charges not ?1,125 + ?270 1Ordinary shares not Riverside?s ?5,250 1Minority interest not 40% of ?1,650 1Consolidated reserves:Riverside reserves not ?1,350,000 1Goodwill written off wrong, not consequential 1Unrealised profits not ?18,000 1Post Acquisition profits not ?60% of ?450,000 1Page 8Awardmarks lostPenaltiesappliedQUESTION 3 (continued)Part BWONDERWORLD plcISSUE OF SHARES ? 20 MARKSMark as per solutionIgnore datesNomenclature omitted-1p(max -3)Complete reversal ? mark and then award half marksIf more than 1 double entry is correct then not complete reversalPage 9Awardmarks lostPenaltiesappliedTheory Questions ? award marks for any valid point notidentified in the theory solutions.QUESTION 4(a) Mark as per solution ? 10 marksTwo marks awarded for each valid point ? maximum 10(b) Mark as per solution ? 20 marksTwo marks awarded for each valid point ? maximum of10 for each Accounting StandardQUESTION 5(a) Mark as per solution ? 16 marks for this section.(i) ? (iv) Two marks awarded for each valid point.Maximum of 4 marks for each section.(b) Mark as per solution ? 14 marks for this section.Two marks awarded for each valid pointPage 10Awardmarks lostPenaltiesappliedQUESTION 6Watch consequentiality throughoutArithmetic errors with working 1 each(a) Based on % ? 80,000 award marks but apply penalty -6Variable direct expenses not 15p per unit/not implied 2Variable maintenance expenses not 25p per unit/notimplied2Maintenance fixed cost not ?10,000/not implied 1Variable miscellaneous expenses not 15p per unit/notimplied2Miscellaneous fixed cost not ?48,000/not implied 1Direct materials and labour wrong/omitted 1 eachDirect expenses any one wrong/omitted/not cons on unitcost1Rent, rates and insurance ? any one wrong/omitted 1Heat and Light ? any one wrong/omitted 1Office salaries ? any one wrong/omitted 1Maintenance and miscellaneous expenses cons onvariable cost per unit and fixed elementEach one wrong/omitted/not cons 1Final totals not shown/incorrect 1 once(b) The variance amounts are cons on the answers to part (a)Maintenance and miscellaneous variance amounts areworth 2 marks eachEach one wrong/omitted/not cons 2All other variance amounts are worth one mark eachEach one wrong/omitted/not cons 1Favourable/adverse label is cons on part (a) and theactual cost calculated in part (b)Each one wrong/omitted/not cons 1If the budgeted costs at 75% from part (a) are not usedor actual costs are wrong, award marks only to thefavourable/adverse labels10(c) Variance amounts are either right or wrong ie (i) and (iii)or may be conseq ie (ii) and (iv)Each one wrong/omitted 1Favourable/adverse labels are cons on variancecalculationsEach label wrong/omitted/not cons 1Accept ? or figure in brackets instead of adverse labelWrong formula = 0Page 11Awardmarks lostPenaltiesappliedQUESTION 7Watch consequentiality throughoutArithmetic errors with workingPart A(a) Projects 1 and 2 initial costs wrong/omitted 1 eachProject 1 npvs:Year 1 and 3 wrong/omitted 1 eachYear 2 and 4 adjustments for additional cost, sale ofequipment or clean-up wrong/omitted1 eachProject 2 npvs:Year 4 adjustments for sale of equipment or clean-upwrong/omitted1 eachFinal total npv not shown for either project 1 once(b) Cons on part (a)Wrong formula 6Mark as per solution ? first part of formula wrong 2 eachNot ?2 for Projects or ?4 for Project 2 1 eachAccept formula applied in reverseFinal answer not shown 1 once(c) Cons on part (b) ? if wrong/not cons 1Part B(a) (i) Mark as per solution ? figures wrong/omitted 1 each(ii) Mark as per solution ? rent wrong/omitted 2XTC data omitted 1(iii) Mark as per solutionFixed costs wrong/omitted 1Contribution from Novo wrong/omitted 2Accept sales and variable costs of Novo usedcorrectlyXTC data omitted 1(i) ? (iii) Accept net cost of ?5,000 for XTCFinal profit increase/reduction omitted 1 once(b) Cons on part (a)(iii)Mark as per solution ? figures wrong/omitted 1 each(c) Cons on contribution from part (b)Cont per unit wrong/not cons 2Selling price wrong/not cons on cont pu 2Page 12Awardmarks lostPenaltiesappliedQUESTION 8Watch consequentiality throughoutArithmetic errors with working 1 eachPart A(a) Work completed and work certified ? mark as per solutionIf wrong/omitted 1 eachCosts (except overheads) ? mark as per solutionIf wrong/omitted 1 eachNote that there is no mark for basic cost whereadjustments are required ? marks are for the adjustmentsonlyOverheads cons on ? accept 17 or 20 for 1 mark 1otherwise if wrong/omitted 2Transfer to Profit and Loss cons on Notional ProfitIf wrong/not cons 2Profit retained not notional profit less transfer to P&L 1Accept detached adjustments(b) (i) Mark as per solution ? if wrong/omitted 2(ii) Accept any correct explanation for 2 marksPart B(a) (i) WIP at start included ? ignoreNote only the cost element columns are requiredGood output and abnormal loss any figure wrong/omitted1WIP: each figure wrong 1Total equivalent units omitted 1 once(ii) Materials cost wrong/omitted 1Labour or Overheads costs wrong/omitted 1 onceWIP bf wrong/omitted 1 onceScrap value wrong/omitted 1Equivalent units produced wrong/omitted/not cons 1 onceTotal cost per equivalent unit wrong/omitted 1(iii) Cons on parts (i) and (ii)Each element wrong 1Final value/omitted 1Page 13Awardmarks lostPenaltiesappliedQUESTION 8 (continued)(b) Cons on part (a) (i), (ii) and (iii)Work in Progress wrong/omitted not cons 1Note materials, labour and overheads must all be corrector cons to gain the 1 mark, otherwise1Normal loss wrong/omitted not cons 1Good output and abnormal loss must both be correct orcons to gain 3 marks, otherwise3WIP wrong/omitted not cons 1If good output shown with no AL award 1 mark 2Page 14Awardmarks lostPenaltiesappliedQUESTION 9(a) Award 2 marks for each correct point givenAward a maximum of 4 marks (ie 2 examples) forexamples of activities/drivers(b) Award 2 marks for each correct point givenAt least 2 arguments for, and 2 arguments against ABCare required for full marksQUESTION 10(a) and (b) Award 2 marks for each correct point givenOrder for a custom written PAPER now and one of our online writers will write your assignment from scratch within your deadline! !!!39.AccountingScottish Qualifications Authority 2011The information in this publication may be reproduced to support SQA qualifications only ona non-commercial basis. If it is to be used for any other purposes written permission mustbe obtained from SQA?s NQ Delivery: Exam Operations Team.Where the publication includes materials from sources other than SQA (secondarycopyright), this material should only be reproduced for the purposes of examination orassessment. If it needs to be reproduced for any other purpose it is the centre?sresponsibility to obtain the necessary copyright clearance. SQA?s NQ Delivery: ExamOperations Team may be able to direct you to the secondary sources.These Marking Instructions have been prepared by Examination Teams for use by SQAAppointed Markers when marking External Course Assessments. This publication must notbe reproduced for commercial or trade purposes.Page 22011 AccountingMarking ConventionsCONVENTIONExtraneousItems entered which should not be inthe answer-1EConsequentialIf a figure in a question is wrong, anyfurther calculations are awardedmarks if correct, as a consequence ofusing that figureCNomenclatureThe details in an account are wrong/missing-1NDatesThe date of an entry is wrong/missing-1DComplete ReversalAll the ledger entries are made thewrong way round.The question is marked as if correctand then the total mark is divided by 2REg total mark = 12Divided by 2Mark awarded = 6Plus/Minus RuleIf an entry is shown correctly it isawarded the mark (+)If the same entry then appears inanother part of the question the markis deducted (-)ie no mark is gained and there is nopenaltyEg Correct entry ?60,000Sales in the TradingAccount ? mark awarded 1(+/-)Wrong entry ?60,000 Salesalso entered in the BalanceSheet ? mark deducted -1(+/-)PenaltyThe answers given are more thanrequired (4 given instead of 3) andone of them is wrongA heading is wrong/missing from afinal accountThe answer is correct but not given inthe format requested ie the questionasks for an account or a statementand a list is given-1PPage 3General1. Asses pencil figures and working. If the script is predominantly in pencil refer to thePrincipal Examiner.2. A maximum of 10% of marks gained on any individual question may be deducted foruntidy work and poor style. This penalty should only be applied in exceptionalcircumstances.3. Work which has been deleted gains no marks, even if correct. Exceptional cases maybe drawn to the attention of the Principal Examiner.4. Consequential errors MUST NOT be penalised, subject to the marking instructions foreach question.5. Mark workings whether or not they are incorporated into the final answer. Deduct apenalty of -1 mark per question for working which is not incorporated in the final answer.6. Incorrect figures, supported by adequate workings ? award marks for any correctoperations performed.7. Incorrect figures, not supported by adequate workings ? lose awards, unless the markinginstructions specify otherwise. If arithmetic error lose 1 mark.8. EXTRANEOUS ITEMS ? see instructions for specific questions9. If right and wrong ? give value of award where figure is correct, deduct value of awardwhere figure is wrong (cross reference +/- against relevant figures).10. Indicate awards given for each item next to the appropriate figure eg ?1,5001.In essay type questions indicate the marks awarded beside the point made by thecandidate ? NOT IN THE MARGIN.Sub-totals for each section should be indicated and encircled, eg 5/6Final totals should be clearly indicated and easy to check eg Q1 = 42/50Page 4Awardmarks lostPenaltiesappliedQUESTION 1 ? ABC plc(a) (i) PROFITABILITY/PERFORMANCE RATIOSMaximum of 6 marks for this section forminimum of 3 ratios.One mark is awarded for each correctly calculatedratio for each year.Any ratio using wrong formula 2(ii) EFFICIENCY RATIOSMaximum of 8 marks for this section forminimum of 4 ratios.One mark is awarded for each correctly calculatedratio for each yearAny ratio using wrong formula 2(iii) LIQUIDITY RATIOSMaximum of 4 marks for this section forminimum of 2 ratios.One mark is awarded for each correctly calculatedratio for each year.Any ratio using wrong formula 2Ratios in wrong section: give awards but apply pen -1 onceRatio expressed in reverse eg 1:0.8 instead of0.8:1-1 onceNo %, days, times (whole question) -1 max -3Page 5Awardmarks lostPenaltiesappliedQUESTION 1 (continued)(b)1 mark for improvement/deterioration1 mark for explaining whyPROFITABILITY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.EFFICIENCY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.LIQUIDITY RATIOSMinimum of 1 ratio must be commented on.Two marks awarded for each valid comment.(c) (i) ? (iv) Mark as per solution. Two marks areawarded for each correct answer.Any ratio using wrong formula 2(d) (i) Four marks are awarded for the calculation ofthe gearing ratios.Wrong formula used 4(ii) Two marks are awarded for comment.Page 6Awardmarks lostPenaltiesappliedQUESTION 2 ? Wilson, Kepple and BettiePart A(a) REALISATION ACCOUNT ? 11 MARKSMark as per solution, wrong figure lose award 1but note thatAny premises, furniture, motor vehicles, stocks or debtorsfigure missing.1Accept creditors and payment to creditors instead ofdiscount receivedCreditors entered as well as discount apply +/-Bank figure for Motor Vehicles or Stock wrong or missing 1Extraneous items eg loan repayment, capital -2 max -4(b) BETTIE?S CAPITAL ACCOUNT ? 3 MARKSMark as per solution, any wrong figure lose awardOpening balance wrong or omitted -1(c) BANK ACCOUNT ? 6 MARKSMark as per solution, wrong figure lose awardIf any of the following are wrong or missing, Openingbalance, amounts received for Furniture, Motor Vehicles,Debtors or Stocks.1Part BRECONCILIATION STATEMENT ? 20 MARKSMark as per solutionAny figure wrong, wrong effect or missing lose awardFigure correct but wrong effect -1 eachFigure wrong lose award (but check for working)Figure missing lose whole awardCorp Tax/Deb int incl in changes to WC ? +/- if already usedIgnore if notNo final total/not labelled -1 penPage 7Awardmarks lostPenaltiesappliedQUESTION 3 ? RIVERSIDE LTDPart ACONSOLIDATED BALANCE SHEET ? 20 MARKSMark as per solutionAny figure wrong or omitted lose awardInvestment costs not ?1,500,000 1Percentage stake calculated not 60% 1Net assets acquired not ?1,200,000 1Goodwill calculated wrong or omitted 1Goodwill written off wrong, not consequential 1Tangible assets not ?5,700 1Stock total not ?600 + ?225 1Unrealised profit not 20% of ?90,000 or consequential 1Debtors not ?900 + 375 1Lakeside?s debt of ?60,000 owing to Riverside wrong notdeducted1Bank wrong/omitted 1Cash in transit, wrong, omitted, incorrectly treated 1Creditors not ?525 + ?180 1Amount outstanding not ?60 ? ?15 or omitted/incorrectly treated 1Accrued charges not ?1,125 + ?270 1Ordinary shares not Riverside?s ?5,250 1Minority interest not 40% of ?1,650 1Consolidated reserves:Riverside reserves not ?1,350,000 1Goodwill written off wrong, not consequential 1Unrealised profits not ?18,000 1Post Acquisition profits not ?60% of ?450,000 1Page 8Awardmarks lostPenaltiesappliedQUESTION 3 (continued)Part BWONDERWORLD plcISSUE OF SHARES ? 20 MARKSMark as per solutionIgnore datesNomenclature omitted-1p(max -3)Complete reversal ? mark and then award half marksIf more than 1 double entry is correct then not complete reversalPage 9Awardmarks lostPenaltiesappliedTheory Questions ? award marks for any valid point notidentified in the theory solutions.QUESTION 4(a) Mark as per solution ? 10 marksTwo marks awarded for each valid point ? maximum 10(b) Mark as per solution ? 20 marksTwo marks awarded for each valid point ? maximum of10 for each Accounting StandardQUESTION 5(a) Mark as per solution ? 16 marks for this section.(i) ? (iv) Two marks awarded for each valid point.Maximum of 4 marks for each section.(b) Mark as per solution ? 14 marks for this section.Two marks awarded for each valid pointPage 10Awardmarks lostPenaltiesappliedQUESTION 6Watch consequentiality throughoutArithmetic errors with working 1 each(a) Based on % ? 80,000 award marks but apply penalty -6Variable direct expenses not 15p per unit/not implied 2Variable maintenance expenses not 25p per unit/notimplied2Maintenance fixed cost not ?10,000/not implied 1Variable miscellaneous expenses not 15p per unit/notimplied2Miscellaneous fixed cost not ?48,000/not implied 1Direct materia

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