Accounting 9706/01 Oct Nov 2002 | Cambridge AS Level Past Papers With Mark Scheme

1. Asset classification and financial statement impact: Effects of incorrectly charging motor vehicle purchases to running costs on the balance sheet, including understated fixed assets and current assets.
2. Insurance accounting and adjustments: Calculation of insurance expense shown in the receipts and payments account, considering amounts owing and paid in advance.
3. Depreciation and asset disposal: Calculation of accumulated depreciation at the point of vehicle disposal and impact on financial statements.
4. Loss identification and theft impact: Calculation of amount stolen based on cash flow discrepancies, including beginning cash balance, sales, debtor changes, and expense payments.
5. Fixed asset identification and intangible assets: Classification of assets, distinguishing between tangible fixed assets (e.g., leasehold, machinery) and intangible assets (e.g., patents, goodwill).
6. Stock valuation adjustments: Corrected gross profit calculation considering errors in opening and closing stock valuations, and application of prudence in valuing damaged stock.
7. Partnership accounting and goodwill omission: Effects of not maintaining a goodwill account when admitting new partners, and the impact on capital accounts and partnership equity.
8. Profit and loss adjustments: Calculation of provision for unrealized profit on finished goods, adjustments for increased doubtful debts, and classification of profits in limited company financial statements.
9. Debtor collection and liquidity analysis: Calculation of debtor collection period, analysis of company liquidity trends over three years, and impact of stock turnover and creditor payment periods on working capital cycle.
10. Absorption costing and profitability analysis: Benefits of absorption costing in calculating total cost, analysis of fixed and variable costs in break-even charts, and contribution margin analysis for product profitability.