Accounting 9706/03 May June 2003 | Cambridge AS Level Past Papers With Mark Scheme

1. Investment appraisal and accounting rate of return: Calculation of accounting rate of return (ARR) for a project based on initial outlay, estimated disposal proceeds, and additional working capital.
2. Share capital and premium adjustments: Impact of share issuance and preference shares redemption on Share Premium account and Profit and Loss Account, and calculation of market value for issued shares.
3. Liquidation and asset distribution: Distribution of remaining assets in a company liquidation among ordinary shares, preference shares, and loan stock, considering their respective priorities.
4. Goodwill valuation in business acquisition: Calculation of goodwill based on agreed values of fixed assets, net current assets, and long-term loans in the acquired business.
5. Cash flow and financial position: Classification of debentures in balance sheet based on maturity, material event disclosure as notes to accounts, and identification of changes shown in a cash flow statement.
6. Gearing ratio and financial leverage: Impact of different financing options on gearing, consideration of long-term finance sources, and evaluation of rights issue versus bonus issue in reducing gearing.
7. Sensitivity analysis and product profitability: Application of sensitivity analysis in pricing decisions, order of priority in product manufacturing based on material shortages, and contribution analysis in make-or-buy decisions.
8. Budgetary control and variance analysis: Calculation of sales price and labour rate variances, impact of turnover on year-end debtors, and advantages of using budgetary control systems in managing performance and making financial decisions.