Accounting 9706/03 May June 2007 | Cambridge AS Level Past Papers With Mark Scheme

1. Cash flow and capital expenditure: Impact of debtor increases on net cash inflow, calculation of cash inflow/outflow from plant and machinery transactions, and representation in cash flow statements.
2. Share capital and reserves management: Calculation of profit and loss account balance post-share buyback, balance sheet effects of cash redemption of shares, and the necessary ordinary shares issued for preference share redemption.
3. Business valuation and goodwill: Determination of share premium account entries during business acquisition, issuance of debentures maintaining interest income, and calculation of shares received for business sale based on goodwill and net asset valuation.
4. Director’s report and post-balance sheet events: Disclosure requirements for director’s remuneration, classification of adjusting events like debtor insolvency, and effects on financial statements.
5. Cost management and limiting factors: Identification of principal limiting factors in production, profit maximization by adjusting course fees, and selection of products for manufacture based on resource constraints.
6. Investment appraisal and financial decision-making: Calculation of internal rate of return (IRR), net present value (NPV) analysis, interpretation of discount cash flows for capital investment viability, and implications of gearing changes on financial stability.