Accounting 9706/01 Oct Nov 2003 | Cambridge AS Level Past Papers With Mark Scheme

1. Break-even analysis and profit targets: Calculation of units required to achieve a specific net profit considering fixed and variable costs, and assessment of profitability based on cost structure.
2. Rental income adjustments and financial reporting: Determination of correct rental income figure for financial statements, incorporating rents received in advance, owed rents, and written-off rents.
3. Depreciation and asset disposal: Profit or loss calculation on asset disposal using reducing balance depreciation, and reconciliation of fixed asset additions based on net book value changes and depreciation charges.
4. Revaluation and accounting principles: Accounting entries for revaluation of freehold land and buildings, application of prudence in stock valuation, and consistency in depreciation methods to ensure comparability over time.
5. Financial ratios and liquidity analysis: Calculation of quick (acid test) ratio, determination of debtors for current ratio maintenance, and analysis of liquidity improvement through debtor payments and asset sales.
6. Prime cost components and overhead absorption: Identification of prime cost elements, calculation of under-absorbed overheads using budgeted versus actual labour hours, and assessment of break-even levels for product profitability.