Accounting 9706/03 May June 2008 | Cambridge AS Level Past Papers With Mark Scheme

1. Cash flow from operating activities and financial adjustments: Calculation of net cash flow incorporating net profit, depreciation, loss on asset sale, and changes in working capital.
2. Share capital and conversion transactions: Impact of convertible loan stock conversion on share capital and premium, preference share redemption implications for capital redemption reserve fund, and calculation of goodwill in business transfer.
3. Gearing and loan presentation: Presentation of loan and debenture liabilities in balance sheets, implications of raising loans for fixed asset purchases on asset use ratio and gearing, and strategies to reduce gearing through equity financing.
4. Financial ratios and shareholder earnings: Calculation of price-earnings ratio, determination of earnings for earnings per share calculation, and impact of dividend timing on retained profit.
5. Budgeting and variance analysis: Preparation of flexible budgets, calculation of variances for direct materials and labour, and determination of actual overhead expenditure from under-recovery data.
6. Investment appraisal and net present value (NPV) analysis: Evaluation of investment projects using NPV, consideration of depreciation in capital investment appraisals, and calculation of accounting rate of return for project profitability assessment.