Accounting 9706/03 Oct Nov 2004 | Cambridge AS Level Past Papers With Mark Scheme

1. Capital expenditure and asset disposal: Recording purchase and sale of tangible assets in cash flow statements, impact of asset exchanges on financial reporting, and adjustments for book value discrepancies.
2. Income and Expenditure adjustments: Calculation of cash flow effects from depreciation, prepayments, accruals, and subscription adjustments in a club’s financial statements.
3. Business acquisition and goodwill: Calculation of goodwill arising from business acquisition, determination of premium per share in part settlement, and effects on shareholder funds.
4. Dividend policies and financial ratios: Analysis of dividend and interest cover ratios, calculation of price earnings (P/E) ratio, and implications of convertible loan stock issuance on gearing and return on capital employed.
5. Process costing and variance analysis: Cost allocation for materials in multiple processes, calculation of normal output costs, treatment of abnormal losses, and decision-making based on contribution per unit of limited materials.
6. Budget preparation and investment selection: Identification of non-incorporable figures in budgeted profit and loss accounts, preparation of forecast financial statements for going concern assessment, and project selection based on net present value (NPV) for capital investment.