G2 POA Paper 1 (2026) Answer Scheme

1

Master POA

Answer Scheme · G2 Paper 1 · 2026 · 1-column

7086/01 · 40 Marks

Suggested answer scheme — for teachers© Jump Grades Education Pte Ltd

Question 1 — Ethics, capital and revenue expenditure [9]

(a)(i) Integrity [1]

Being honest and straightforward in all professional and business relationships.

[1]

(a)(ii) Objectivity [1]

Not allowing bias, conflict of interest or the undue influence of others to override professional judgement.

[1]

(b) Classification [5]

Item	Capital	Revenue
Purchase price of machinery	✓
Insurance for machinery		✓
Installation of machinery	✓
Wages and salaries for machine operators		✓
Servicing of machinery		✓

1 mark per correct row.

[5]

(c) Materiality theory [2]

An item of low value compared with the size of the business is treated as revenue expenditure (expensed) even if it will benefit more than one period, e.g. a stapler , because its effect on the financial statements is insignificant and will not affect users’ decisions .

[2]

[Total Q1: 9]

2

2026 Paper 1 Answer Scheme

Question 2 — Accounting equation and journal entries [10]

(a) Value of assets [2]

Assets = Liabilities + Owner’s equity
= ($4 000 + $1 500 + $1 200) + $2 800
= $9 500

[2]

(b) Expanded accounting equation [2]

Assets = Liabilities + Capital + Income − Expenses − Drawings

[2]

(c) Journal entries [6]

	Particulars	Dr $	Cr $
1	Cash at bank	5 000
	Capital		5 000
2	Inventory	2 500
	Trade payables – Ping		2 500
3	Motor vehicle	6 800
	Capital		6 800

1 mark per correct line with amount.

[6]

[Total Q2: 10]

3

2026 Paper 1 Answer Scheme

Question 3 — Depreciation of non-current assets [10]

(a)(i) Straight-line [3]

($50 000 − $6 000) ÷ 4

Year ended 31 July 2025: $11 000 (1)

Year ended 31 July 2026: $11 000 (1)

[3]

(a)(ii) Reducing-balance [3]

25% × $50 000; 25% × ($50 000 − $12 500)

Year ended 31 July 2025: $12 500 (1)

Year ended 31 July 2026: $9 375 (1)

[3]

(b) Higher profit, 2025 [1]

Straight-line method ($11 000 < $12 500) (1)

[1]

(c) SoFP extract [3]

Vincent
Extract of statement of financial position as at 31 July 2026

	$	$
Non-current assets
Cleaning equipment, at cost	50 000
Less: Accumulated depreciation (11 000 × 2)	22 000	28 000

Accept the net book value shown in a single column.

[3]

[Total Q3: 10]

4

2026 Paper 1 Answer Scheme

Question 4 — Accounting information system and source documents [11]

(a) Order of processing [4]

Source documents → Journal → Ledger → Trial balance → Financial statements

1 mark per box in the correct position.

[4]

(b) Type of transaction [4]

	Source document	Type of transaction
2	Invoice	Credit sale / credit purchase of goods
3	Receipt	Receipt of money
4	Credit note	Return of goods / correcting an overcharge
5	Debit note	Correcting an undercharge

1 mark per correct row.

[4]

(c) Accounting theory [1]

Objectivity theory (1)

[1]

(d) Double entry, bank loan [2]

Debited	Credited
Cash at bank	Loan from bank (long-term borrowings)

[2]

[Total Q4: 11] — [Paper 1 Total: 40]