Accounting 9706/01 May June 2004 | Cambridge AS Level Past Papers With Mark Scheme

1. Capital versus revenue expenditure: Identification of capital expenditures, impact on business assets and profit, and correction of capital expenditure treated as revenue.
2. Depreciation and asset management: Calculation of depreciation using the straight-line method, impact of incorrect depreciation rates on financial statements, and journal entries for part-exchanged vehicles.
3. Provisions and adjustments: Maintenance of provision for doubtful debts, adjustments for incorrect bad debt provisions, and reconciliation of cash book balance with bank statement using unpresented cheques and standing orders.
4. Profit and loss analysis: Calculation of net profit using capital account balances, identification of effects of errors in revenue and capital expenditure on net assets, and analysis of subscription income for clubs.
5. Share capital and reserves: Impact of rights and bonus issues on share capital, calculation of gross and net profit margins, and adjustments for stock overvaluation on profit and reserves.
6. Cost and profit analysis: Calculation of prime cost, evaluation of working capital ratio improvements, determination of fixed costs in break-even analysis, and assessment of factors influencing overhead absorption rates and contribution margins.