Accounting 9706/03 Oct Nov 2006 | Cambridge AS Level Past Papers With Mark Scheme

1. Cash flow statements and financial classifications: Items included under 'Returns on investments and servicing of finance', calculation of preference dividends for cash flow, and effects of asset revaluation on total assets.
2. Share capital and conversion calculations: Determination of new ordinary shares from convertible loan stock, debenture stock conversion impacts, and effects of partner settlements in business acquisition.
3. Goodwill valuation and accounting policies: Calculation of goodwill during acquisition, application of FRS 18 policies (accruals, consistency), and identification of mandatory policies in published accounts.
4. Profit and loss adjustments and EPS calculation: Disclosure requirements for debenture loans, calculation of profit and loss account balance after adjustments, and determination of earnings per share (EPS).
5. Budgeting and variance analysis: Preparation of production and sales budgets, identification of variances (material usage and price), and evaluation of production efficiency and cost control.
6. Capital investment appraisal and IRR calculation: Evaluation of projects using payback method, calculation of internal rate of return (IRR) based on discounted cash flows, and comparison of profitability and risk in capital investment decisions.