Accounting 9706/02 Oct Nov 2006 | Cambridge AS Level Past Papers With Mark Scheme

1. Partnership adjustments and asset revaluation: Calculation of Goodwill and Revaluation accounts for Frank, Ernest, and Devious, capital account adjustments, and preparation of balance sheet post-restructuring.
2. Balance sheet preparation and financial ratios: Preparation of Delboi’s balance sheet, calculation of net current assets, and computation of financial ratios including net profit ratio, current ratio, acid test ratio, and return on capital employed.
3. Detection of theft and gross profit analysis: Calculation of the value of stolen goods by comparing gross profit ratios, identification of discrepancies in financial statements, and evaluation of internal controls.
4. Contribution/Sales analysis and break-even calculation: Interpretation of a Contribution/Sales chart for Larry Ltd, calculation of break-even point in units and sales value, margin of safety analysis, and preparation of a break-even chart for the subsequent year.
5. Profit forecasting and cost management: Calculation of anticipated profit with increased production, analysis of the impact of fixed cost changes, and use of break-even analysis for financial planning.
6. Break-even assumptions and limitations: Identification of assumptions underlying break-even charts, understanding their impact on business decision-making, and evaluation of the limitations of such financial models.