Accounting 9706/01 Oct Nov 2007 | Cambridge AS Level Past Papers With Mark Scheme

1. Adjustments for accruals and prepayments: Calculation of rent and rates for receipt and payment account, impact of not adjusting for prepayments on net profit and owner's capital.
2. Depreciation and asset management: Determination of depreciation charge, purpose of depreciation to apply matching principle, and implications of treating low-value items as revenue expenditure under materiality.
3. Partnership profit sharing and purchases calculation: Allocation of profits between partners based on capital contributions, calculation of total purchases from turnover and stock levels, and impact on profit margins.
4. Manufacturing account and inventory valuation: Inclusion of raw materials, carriage inwards, and stock in manufacturing accounts, valuation of damaged stock, and adjustments for overvalued stock on reserves.
5. Share capital transactions and liquidity ratios: Effects of issuing shares and debentures on net assets, calculation of return on shareholders' funds, and actions to increase liquidity ratio through asset management.
6. Break-even analysis and production costs: Calculation of break-even point, contribution per unit, impact of changes in fixed and variable costs, and determination of sales revenue needed to break even based on production data.