Accounting 9706/02 May June 2009 | Cambridge AS Level Past Papers With Mark Scheme

1. Sole trader financial performance: Preparation of trading and profit and loss account for Suhail, analysis of asset and liability changes, and calculation of profitability and liquidity ratios for performance comparison.
2. Provision for doubtful debts and bad debt recovery: Creation of provision for doubtful debts account, differentiation between bad debt and doubtful debt treatments, and recording of bad debts recovered in Jeremiah’s ledger.
3. Inventory valuation adjustments: Explanation of mark-up versus margin, preparation of corrected stock valuation statement for Lari, and adjustments for obsolete, damaged, or sale or return stock.
4. Break-even analysis and profit calculation: Calculation of break-even point, contribution per unit, margin of safety for Alberta Limited, and profit analysis based on product range extension.
5. Product range expansion and community impact: Analysis of maximum profit from producing plates, cups, and saucers, implications of increased fixed costs, and assessment of local community impacts from product diversification.
6. Manufacturing cost structure and decision-making: Evaluation of direct and variable costs, impact of production shifts on overheads, and strategic considerations for introducing new products to maximize profitability.