Accounting 9706/01 May June 2003 | Cambridge AS Level Past Papers With Mark Scheme

1. Sales volume and profit calculation: Determination of units sold based on selling price, variable costs, and fixed costs, and analysis of net profit from operations.
2. Debtor management and doubtful debts provision: Recording of bad debts, calculation of provision for doubtful debts, and impact on financial statements for year-end adjustments.
3. Asset depreciation and valuation: Calculation of depreciation using reducing balance method, determination of capitalized costs for shop purchase, and evaluation of costs for asset additions and improvements.
4. Partnership changes and goodwill adjustments: Treatment of incoming partner’s contribution for goodwill, allocation of increased capital accounts, and changes in profit-sharing ratios among partners.
5. Inventory and cost of goods sold (COGS): FIFO inventory valuation, calculation of gross profit, and analysis of impact on financial statements based on sales and purchase activities.
6. Financial ratios and liquidity management: Calculation of current and acid test ratios, creditors’ payment period, stock turnover, and strategies for improving liquidity through changes in debtors, stock, and fixed assets.