Accounting 9706/03 May June 2006 | Cambridge AS Level Past Papers With Mark Scheme

1. Cash flow and financing activities: Identification of cash inflows and outflows, calculation of net cash inflow under financing, and effects of debenture redemption on profit and net current assets.
2. Share capital transactions and goodwill: Calculation of payment for goodwill in business acquisitions, impact of preference share buyback on balance sheet, and determination of shares issued for business purchases.
3. Financial disclosures and post-balance sheet events: Treatment of fire and debtor liquidation events in financial statements, required disclosures in directors' reports, and components of the statement of total recognised gains and losses.
4. Financial ratios and shareholder returns: Calculation of price/earnings (P/E) ratio, dividend yield, and effects of interest rate changes on interest cover, with implications for shareholder risk in different capital structures.
5. Overhead absorption and relevant costs: Identification of causes for over-absorption of overheads, calculation of relevant costs in business unit closures, and ranking of products for maximum profit based on limited resources.
6. Budget preparation and investment appraisal: Order of budget preparation, calculation of cash receipts for new business, cash-based break-even volume, and evaluation of investment projects using net present value (NPV) for optimal shareholder wealth maximization.