Accounting 9706/02 May June 2008 | Cambridge AS Level Past Papers With Mark Scheme

1. Trading and profit and loss account preparation: Calculation of gross profit, net profit, and provision for depreciation and doubtful debts for Amah Retto's financials, including adjustments for prepaid and accrued expenses.
2. Balance sheet formulation and financial ratios: Preparation of balance sheet, calculation of current and liquid ratios, rate of stock turnover, and profit margins for Amah Retto.
3. Error correction in profit and loss account: Adjustment of Marie Motiwala’s financials for incorrect capital recording, sales returns, depreciation, bank interest, and stock valuation to reflect accurate profit or loss.
4. Sales ledger control account and reconciliation: Preparation of sales ledger control account for JR, handling of dishonoured cheques, offset of reciprocal balances, and write-off of bad debts.
5. Decision-making in production and cost management: Calculation of original unit contribution, financial impact of outsourcing, leasing new machinery, and introducing evening shifts for Dixon's Tableworks.
6. Financial statement analysis and recommendation: Preparation of detailed financial statements for Dixon's Tableworks' options, comparison of profits or losses, and evaluation of the best option based on cost-benefit analysis.