Accounting

Complete Brookfield Retail Ltd's statement of changes in equity for the twelve months to 31 December 2024.

Prepare a revised statement of profit or loss for Brookfield Retail Ltd for the twelve months to 31 December 2024. Set out separately how you arriv...

Explanation 15 marks

Paper 2 (AS)

Corvale plc wholesales garden and landscaping equipment · Fundamentals of accounting (Q1)

3 Q

Advise the directors of Corvale plc which of the two options to adopt, supporting your recommendation with a discussion of the benefits and drawbac...

Prepare an extract from the statement of financial position of Corvale plc at 31 December 2025 showing the equity section and the liabilities secti...

Prepare the statement of profit or loss of Corvale plc for the year ended 31 December 2025, showing your workings for revenue, cost of sales, distr...

Explanation 14 marks

Paper 2 (AS)

Delroy runs a parcel delivery service called Harbour Couriers · Fundamentals of accounting (Q1)

5 Q

Calculate how much cash has been stolen from Harbour Couriers.

Calculate the profit or loss on the sale of Van P.

Advise Delroy whether he should move the business's records onto a computerised accounting system. Support your advice by weighing up the advantage...

Calculate the total revenue earned by Harbour Couriers for the twelve months to 31 December 2025.

Prepare Harbour Couriers' statement of profit or loss for the twelve months to 31 December 2025.

Explanation 12 marks

Paper 3 (A Level)

Deneice and Farrell ran Ashvale Joinery · Financial accounting (Q1)

6 Q

Suggest one benefit Kestrel Timber plc could gain by taking over Ashvale Joinery.

Prepare the bank account that Ashvale Joinery would draw up under option 1, recording every entry made in winding the business up.

Prepare the realisation account for Ashvale Joinery, taking option 1 as the basis.

Assess the two acquisition terms offered to Deneice and Farrell and recommend which of them they ought to accept. Deal with financial matters and w...

Discuss the view put forward by the director of Kestrel Timber plc. Your discussion should name the international accounting standard (IAS) that go...

Calculate, under option 1, the sum each partner would take out of the partnership in cash or would have to pay into it.

Paper 4 (A Level)

Denholm · Standard costing

6 Q

Calculate the labour rate variance for May.

Calculate the labour efficiency variance for May.

Explain why the fixed overhead volume variance has arisen.

Prepare a flexible budget statement for May which ends with the budgeted profit for the month.

Prepare a statement which reconciles the flexible budget profit for May with the profit actually earned.

Advise the directors of Denholm Ltd whether they should abandon the standard costing system. Justify your answer.

Paper 2 (AS)

Devi and Osman are in partnership as Fernway Supplies · Fundamentals of accounting (Q1)

6 Q

Calculate the effect on the annual profit of the business of taking Option A.

Calculate the effect on the annual profit of the business of taking Option B.

Prepare the current account of each partner for the year ended 31 August 2025. Dates are not needed.

Prepare the section of the partnership's statement of financial position at 31 August 2025 headed equity and liabilities.

Advise Devi and Osman which of the two options to take. Support your recommendation by weighing up the benefits and the drawbacks of each of them.

Prepare the partnership's statement of profit or loss for the year ended 31 August 2025.

Paper 2 (AS)

Halbern plc manufactures commercial refrigeration units · Fundamentals of accounting (Q1)

4 Q

Advise the directors of Halbern plc which option they should choose to finance the redemption of the debentures. Justify your choice by considering...

Calculate the profit of Halbern plc for the year to 30 September 2025 as it ought to have been stated.

Using the information above, set out the statement of changes in equity of Halbern plc for the year to 30 September 2025, showing every column and ...

Draw up the statement of financial position of Halbern plc as it stood at 30 September 2025, using international format.

Paper 3 (A Level)

Halbury plc designs and assembles metering instruments for laboratorie · Financial accounting (Q1)

6 Q

The retained earnings account carries an entry of $40 000 headed ordinary share capital. State the reason for that entry.

The research and development account shows $35 600 taken out to the statement of profit or loss. Explain the reason for dealing with that sum in th...

The remaining $52 800 was left in the research and development account as a balance carried down. Explain the reason for dealing with that sum in t...

One director wants the board to declare a dividend next year. Advise the directors of Halbury plc on that proposal, giving reasons for the view you...

State, for each of the three delivery vehicles, its recoverable amount and the impairment loss (if any) to be recognised at 30 September 2025.

Prepare, in the form required by IAS 1, the statement of profit or loss of Halbury plc covering the twelve months to 30 September 2025.

Paper 3 (A Level)

Harbourside Rowing Club keeps its records on a receipts and payments basis · Financial accounting (Q1)

5 Q

Give two ways in which the financial statements prepared by a club differ from those prepared by a business that trades for profit.

Referring to an accounting concept, explain how Harbourside Rowing Club should deal with the life membership fees in its financial statements, foll...

Draw up the statement of profit or loss of the club's café for the year to 31 December 2025.

Draw up the part of the club's statement of financial position at 31 December 2025 that shows the accumulated fund and the liabilities.

Draw up the income and expenditure account of Harbourside Rowing Club for the year to 31 December 2025.

Paper 4 (A Level)

Harlow Kitchenware (HKL) · Activity based costing and pricing

5 Q

The marketing director now suggests that HKL should deliver both products direct to customers' homes with its own vans. The service would add to ov...

The marketing director now suggests that HKL should deliver both products direct to customers' homes with its own vans. The service would add to ov...

Explain two reasons why a manufacturer might decide to introduce activity based costing (ABC).

HKL then checks the prices found in (b) against those of its main competitor. The Core's price is the same as the competitor's, but the Signature's...

Using activity based costing, calculate the budgeted selling price per unit of the Core and of the Signature.

Explanation 11 marks

Paper 4 (A Level)

Kestrel Beverages (KBL) · Investment appraisal

6 Q

Calculate the net present value (NPV) of buying the new canning machine.

Calculate the net present value (NPV) of upgrading the existing machine.

Calculate the internal rate of return (IRR) of buying the new canning machine. Give your answer to two decimal places.

Calculate the internal rate of return (IRR) of upgrading the existing machine. Give your answer to two decimal places.

A director now puts two further points to the board. In her view the project should be judged on the accounting rate of return (ARR) rather than on...

Evaluation 6 marks

Advise the directors of KBL which of the two machines to choose if they go ahead with Product K. Justify your answer.

Paper 3 (A Level)

Marisol runs a workshop that manufactures glazed ceramic tableware · Financial accounting (Q1)

5 Q

Marisol passes her finished output to the trading section at more than it cost her workshop to make. Explain two benefits she obtains by measuring ...

Marisol's bookkeeper has entered the closing balance on the provision for unrealised profit among the liabilities. Explain where that balance inste...

Calculate the rate of factory profit applied by Marisol in the year ended 30 September 2025.

Discuss the factors Marisol should weigh up before she replies to the events company. Build your answer around two different routes by which the or...

Calculate the profit for the year ended 30 September 2025, beginning with the gross profit reported in the trading section.

Paper 4 (A Level)

Marlow Lanterns (MLL) · Purchases and cash budgets

4 Q

State two disadvantages to a business of using just in time (JIT) inventory management.

Prepare the purchases budget, in dollars ($), for MLL for each of the months April, May and June.

Advise the directors whether or not the marketing campaign should be dropped. Justify your answer.

Prepare the cash budget for MLL for each of the months April, May and June.

Explanation 12 marks

Paper 4 (A Level)

Ovington Ceramics (OCL) · Budgeting

6 Q

State two benefits to Ovington Ceramics Ltd of preparing a cash budget.

State two benefits to Ovington Ceramics Ltd of preparing a production budget.

Prepare Ovington Ceramics Ltd's production budget, expressed in units, covering July, August and September individually.

Calculate, for each of July, August and September, the payments to be made to the clay suppliers.

Prepare the cash budget for Ovington Ceramics Ltd for each of the months of July, August and September.

Advise the directors of Ovington Ceramics Ltd which use of the expected cash surplus they should choose. Justify your answer.

Paper 3 (A Level)

Tessaly Limited builds bicycles in its own works · Financial accounting (Q1)

4 Q

Explain, with reference to an accounting concept, how the unrealised profit is treated in the statement of financial position of Tessaly Limited at...

Advise the directors whether or not to accept the proposal. Justify your answer.

Prepare the statement of profit or loss of Tessaly Limited for the year ended 31 March 2026.

Using the information about Tessaly Limited, prepare its manufacturing account for the twelve months to 31 March 2026.

Explanation 11 marks

Paper 2 (AS)

Adaeze owns Okonjo Wholesale · Fundamentals of accounting (Q2)

4 Q

Calculate what the balances in the sales ledger should have added up to at 31 March 2025.

Calculate the balance that the sales ledger control account should show at 31 March 2025.

Explain two benefits to Okonjo Wholesale of maintaining control accounts.

Draw up the purchases ledger control account of Okonjo Wholesale for the month of March 2025, bringing down the balance at the end of the month.

Paper 3 (A Level)

Brennock plc net assets, ratios and gearing after a bonus issue · Financial accounting (Q2)

9 Q

Calculate, to two decimal places, the price/earnings ratio of Brennock plc at 31 March 2026.

State the formula for the non-current asset turnover ratio.

Explain why the non-current asset turnover ratio is useful.

Calculate the retained earnings of Brennock plc at 31 March 2026.

Calculate, to two decimal places, the return on capital employed of Brennock plc for the year ended 31 March 2026.

Calculate, to two decimal places, the earnings per share of Brennock plc at 31 March 2026.

Calculate, to two decimal places, the gearing ratio of Brennock plc at 31 March 2025 and at 31 March 2026.

Calculate the total net assets of Brennock plc at 31 March 2026.

Advise the directors whether or not to fund the project with a further bank loan. Justify your answer.

Paper 3 (A Level)

Corvane plc distributes office furniture · Financial accounting (Q2)

3 Q

Give two ways in which a statement of cash flows is useful.

Recommend which option the directors of Corvane plc should take up, giving reasons for your recommendation.

Using the format required by IAS 7, prepare Corvane plc's statement of cash flows for the year to 31 March 2026.

Explanation 18 marks

Paper 2 (AS)

Delia Merrow owns Merrow Tiles · Fundamentals of accounting (Q2)

3 Q

State the accounting concept that governs whether this asset may be brought into the statement of financial position.

Calculate the revised profit for the year ended 30 June 2025.

For each of the four matters, name the accounting concept that has been set aside and describe what that concept requires.

Paper 2 (AS)

Farida owns a commercial printing business called Ashcombe Print · Fundamentals of accounting (Q2)

3 Q

Explain why a cash book shows money held at the bank as a debit balance, and why a bank statement shows an overdraft as a debit balance too.

Prepare a bank reconciliation statement for Ashcombe Print at 31 January 2025.

Prepare the updated bank columns of Ashcombe Print's cash book at 31 January 2025. Dates are not needed.

Paper 4 (A Level)

Fenwick Joinery (FJL) · Flexible budgets and variances

7 Q

Explain the purpose that a flexible budget statement serves for a business.

Calculate the fixed overhead expenditure variance for March.

Prepare Fenwick Joinery Ltd's fixed budget for March, including in it the budgeted profit.

Calculate the fixed overhead volume variance for March.

Explain the likely causes of the adverse total direct labour cost variance for March.

Explain the likely causes of the adverse total direct material cost variance for March.

Advise the directors of Fenwick Joinery Ltd on whether the change to the overseas supplier should go ahead. Justify your answer.

Paper 4 (A Level)

Halcyon Lighting (HLL) · Absorption costing and ABC

4 Q

State the steps a manufacturing business would follow to put activity based costing (ABC) into operation.

Calculate the unit selling price of the Studio and of the Atrium when overheads are assigned by the existing direct labour hour method. Give each p...

Calculate the unit selling price of the Studio and of the Atrium when overheads are assigned using activity based costing (ABC). Give each price to...

Advise the directors of HLL whether to adopt ABC when setting the coming year's costs and prices. Justify your answer.

Paper 4 (A Level)

Harcourt Instruments (HIL) · Absorption costing, ABC and pricing

4 Q

State two benefits and two drawbacks of adopting activity based costing (ABC).

Calculate the production cost per unit of each product if absorption costing is used.

Advise the directors whether or not they should accept Rhona's suggestion. Justify your answer.

Calculate, for T1 and for T2, by how much the production overhead per unit would change if HIL adopted ABC, and say for each product whether its ov...

Paper 3 (A Level)

Investors study accounting ratios before committing their money · Financial accounting (Q2)

7 Q

Calculate the dividend per share, in dollars, for Company KL.

Suggest two further investment ratios that someone thinking of buying shares could look at, leaving aside dividend per share and dividend cover.

Explain how the investor's decision would be affected were Company KL to owe a long-term loan of $700 000 carrying interest at 10% a year, with Com...

Describe the kind of investor whom these ratios would steer towards Company KL instead of Company MR, and explain why.

Discuss whether a company's external auditors would have any use for the ratios drawn from its accounts.

Evaluation 4 marks

State two ways in which an external auditor differs from an internal auditor.

Advise the board of Company MR on whether ratio analysis is worth introducing as a means of judging how the business is performing. Give reasons fo...

Paper 3 (A Level)

Nadia and Oren have traded together for several years as a garden cent · Financial accounting (Q2)

4 Q

Discuss whether Nadia and Oren have gained from taking Priya into the business as a partner.

Calculate Priya's total income from the partnership for the six months ended 30 June 2025.

Evaluate whether or not Priya has gained by becoming a partner. Justify your answer.

Set out a table with three money columns, in this order: the six months ended 31 December 2024, the six months ended 30 June 2025, and the year end...

Explanation 10 marks

Paper 2 (AS)

Priya Nair reconciles her florist's bank account · Fundamentals of accounting (Q2)

4 Q

Identify two characteristics of making a payment by standing order.

Explain two reasons why it matters that a business can produce financial statements that are complete and accurate.

Prepare a bank reconciliation statement for Priya's business at 31 October 2025, starting from the overdrawn balance of $1 251 shown on the bank st...

Prepare Priya's cash book (bank columns), updated as at 31 October 2025.

Paper 2 (AS)

Priya runs a shop selling household goods · Fundamentals of accounting (Q2)

5 Q

Calculate Priya's cost of sales for the twelve months to 31 December 2024.

Calculate Priya's trade payables turnover in days for the twelve months to 31 December 2024. State the formula you use.

Calculate Priya's purchases for the twelve months to 31 December 2024.

Prepare the trading section of Priya's income statement (statement of profit or loss) covering the twelve months to 31 December 2025.

Advise Priya whether she should go ahead with her plan. Support your advice by weighing up the advantages and disadvantages of the plan.

Paper 4 (A Level)

Ternwick (TL) · Rent or buy - investment appraisal

6 Q

For the machine TL would buy, calculate the payback period, in years and months.

State three limitations of the net present value method of investment appraisal.

Calculate the net cash inflow from selling 8 000 units a year if TL keeps the rented machine, for Year 1.

For the machine TL would buy, calculate the net present value (NPV).

Calculate the net cash inflow from selling 8 000 units a year if TL buys the machine, for Year 1 and for Year 2.

Advise the directors whether TL should buy its own machine in place of the rented one. Justify your answer and support it with relevant calculations.

Paper 3 (A Level)

The Kelmore Rowing Club asks its annual members for a subscription of · Financial accounting (Q2)

4 Q

Calculate the club's accumulated fund as it stood on 31 December 2025.

A member has proposed a club shop. Advise the managing committee on whether to go ahead with it, giving reasons for the view you reach.

Using the two ledger accounts above, discuss what the movements in membership mean for the Kelmore Rowing Club and for the money it has to work with.

For the twelve months to 31 December 2025, prepare an income and expenditure account for the Kelmore Rowing Club.

Paper 4 (A Level)

Vale Cycles · Absorption costing and ABC

5 Q

State three conditions a business should satisfy before it adopts activity based costing (ABC).

Explain why the unit selling price of each model differs between the traditional method and ABC.

Using the traditional absorption method, calculate the unit selling price of the City and of the Trail. Give your answers to two decimal places.

Using activity based costing (ABC), calculate the unit selling price of the City and of the Trail. Give your answers to two decimal places.

Advise the directors of Vale Cycles Ltd whether they should adopt ABC for the coming year. Justify your answer.

Paper 3 (A Level)

Aldermere plc draws up its statement of cash flows each year in accord · Financial accounting (Q3)

6 Q

Explain why the operating activities section of a statement of cash flows begins from a figure for profit rather than from a figure for cash.

Suggest two ways in which Aldermere plc could raise finance without anything appearing under financing activities in its statement of cash flows.

State two reasons why professional competence and due care matter when the financial statements of Aldermere plc are drawn up.

The directors of Aldermere plc draw up its financial statements and its auditor examines them. State the main way in which their duties differ.

Using the information above, calculate the profit from operations of Aldermere plc for the twelve months to 30 April 2026.

Explain the effect each of the six actions would have on the statement of cash flows for the year ending 30 April 2027, naming the section or secti...

Explanation 12 marks

Paper 3 (A Level)

Kelburn plc owns and runs a chain of veterinary clinics · Financial accounting (Q3)

6 Q

Calculate, to two decimal places, the dividend per share for the year ended 31 March 2025.

Calculate, to two decimal places, the dividend cover for the year ended 31 March 2025.

Calculate, to two decimal places, the gearing ratio at 31 March 2025.

Calculate the profit from operations expected for the year ending 31 March 2026 assuming the new non-current assets are bought.

The board raised the $180 000 by taking the bank loan in preference to issuing further shares. Assess, from the standpoint of Kelburn plc's ordinar...

Calculate, to two decimal places, the dividend cover for the year ending 31 March 2026 and the gearing ratio at 31 March 2026 under each of the two...

Explanation 14 marks

Paper 2 (AS)

Kestrel Foods Ltd processes and packs frozen vegetables · Fundamentals of accounting (Q3)

4 Q

Calculate the balance on the provision for depreciation account for machinery at 31 December 2024.

Explain, by reference to one accounting concept, why Kestrel Foods Ltd should not move every category of non-current asset onto the straight-line m...

Prepare the journal entry recording the revaluation of Kestrel Foods Ltd's freehold property. A narrative is not needed.

Prepare the disposal account for Machine A.

Paper 2 (AS)

Kestrel Foods plc packs and sells dried fruit · Fundamentals of accounting (Q3)

3 Q

Calculate how many ordinary shares were in issue on 1 January 2025.

State three matters the directors should take into account when they settle how large the final dividend is to be.

Prepare the share premium account and the retained earnings account for the year ended 31 December 2025, bringing down the balance on each.

Explanation 10 marks

Paper 3 (A Level)

Linmore plc sells sports equipment · Financial accounting (Q3)

4 Q

State three fundamental principles of ethics that accountants must follow.

Explain how matter 2 should be accounted for. Refer to the relevant International Accounting Standard (IAS) and give calculations where appropriate.

Explain how matter 3 should be accounted for. Refer to the relevant International Accounting Standard (IAS) and give calculations where appropriate.

Prepare the revised statement of financial position of Linmore plc at 31 December 2025, after taking matters 1 to 4 into account.

Explanation 14 marks

Paper 2 (AS)

M Limited corrects its draft figures after a bonus issue · Fundamentals of accounting (Q3)

3 Q

Calculate M Limited's retained earnings at 31 December 2025.

Calculate M Limited's corrected profit for the year ended 31 December 2025.

Prepare M Limited's statement of financial position at 31 December 2025.

Paper 3 (A Level)

Priya and Tomas sold their partnership to Hollin Interiors Limited · Financial accounting (Q3)

6 Q

Work out the balance on each partner's capital account just before Hollin Interiors Limited acquired the business.

Work out the purchase consideration that Hollin Interiors Limited must pay.

Work out the profit or loss on realisation and how much of it goes to each partner.

Show the journal entry Hollin Interiors Limited would make to record its acquisition of the partnership business on 31 December 2025.

Write up the partners' capital accounts in columnar form, closing them by the final payments made through the partnership bank account.

Recommend whether the directors should agree to Owen's conditions, giving reasons for your recommendation.

Paper 3 (A Level)

Talgarth plc manufactures water-treatment equipment · Financial accounting (Q3)

3 Q

Name the international accounting standard (IAS) that governs the treatment of research and development expenditure.

Name two assets, apart from capitalised development costs, that a company could report under intangible assets in its statement of financial position.

Prepare, for the year ended 31 December 2025, the statement of cash flows of Talgarth plc, applying IAS 7. Your answer must also show the amortisat...

Explanation 22 marks

Paper 2 (AS)

The directors of Trestwick Limited · Fundamentals of accounting (Q3)

5 Q

Calculate the value of the inventory held by Trestwick Limited at 30 June 2025.

Calculate the revenue earned by Trestwick Limited in the year to 30 June 2025.

Identify two ways, apart from holding less inventory, in which Trestwick Limited could shorten its inventory turnover period.

Calculate the value of the inventory held by Trestwick Limited at 1 July 2023.

Calculate inventory turnover, in days, for the year to 30 June 2024 and for the year to 30 June 2025. Give each answer to the nearest whole day.

Paper 2 (AS)

Tomas Varga corrects errors and a suspense account · Fundamentals of accounting (Q3)

3 Q

Calculate the balance left on the suspense account once errors 1 to 4 have been corrected, stating clearly whether it is a debit or a credit balance.

Calculate Tomas's revised profit or loss for the year ended 31 March 2026 after errors 1 to 4 have been corrected.

Prepare the journal entries needed to correct errors 1 to 4. Narratives are not required.

Paper 2 (AS)

Brayton Glassware Ltd makes glass jars and bottles · Fundamentals of accounting (Q4)

8 Q

Calculate the profit or loss the overseas order would produce.

Explain the main principle on which just in time (JIT) inventory control rests.

Calculate the amount by which overheads in the finishing department were over-absorbed or under-absorbed for the year ending 31 March 2026.

Marginal costing and absorption costing differ in how they treat costs and in what they are used for. Explain two of those differences.

Show the reapportionment of the two service departments' overheads, ending with the total overhead of each production department.

Calculate the overhead absorption rate for the moulding department and for the finishing department, to two decimal places, stating in each case th...

Calculate the price at which the order should be sold.

Advise the directors whether the order from the overseas buyer should be accepted. Support your advice by weighing the benefits of taking it agains...

Paper 2 (AS)

Kestrel Tools Limited runs two factories · Fundamentals of accounting (Q4)

6 Q

Calculate the total overhead each product would absorb if the budget for May 2026 is achieved.

Using the direct labour hour method, calculate the overhead absorbed by one unit of the Alba and by one unit of the Corva. Give each answer to two ...

Calculate the profit the second factory earns in a month under its present arrangements.

Calculate the selling price Kestrel Tools Limited should quote for the whole of the customer's order.

Set out a marginal costing statement covering one month at the second factory on the basis that the overseas supplier is used.

Advise the directors of Kestrel Tools Limited on whether to source their direct materials from the overseas supplier. Weigh up the money side and t...

Paper 2 (AS)

Northgate Manufacturing Ltd runs two factories in country N · Fundamentals of accounting (Q4)

5 Q

Explain why September's profit under marginal costing differs from the profit calculated under absorption costing.

Prepare an absorption costing statement showing the first factory's profit for September 2024.

Calculate the total profit for one month if the directors choose Option A.

Prepare a marginal costing statement showing the total profit for one month if the directors choose Option B.

The directors must settle on one of the two options. Recommend the option you would adopt, weighing the money involved alongside the wider consider...

Paper 2 (AS)

Tavira Limited uses marginal costing at two factories · Fundamentals of accounting (Q4)

7 Q

For the first factory, calculate the monthly profit.

Calculate the budgeted profit or loss of the second factory for October 2026 if option B is adopted.

State three limitations of break-even analysis.

For the first factory, calculate the break-even point in units.

Calculate by how many units the monthly break-even point would change if the directors' quality improvements went ahead.

Advise the directors of Tavira Limited which of the two options to adopt for October 2026, supporting your recommendation with the benefits and dra...

Calculate the budgeted profit or loss of the second factory for October 2026 if option A is adopted.

Paper 2 (AS)

Z Limited manufactures plastic household goods · Fundamentals of accounting (Q4)

7 Q

Give two reasons why the finishing department's overheads might have been over-absorbed.

Give two features of the AVCO method of valuing inventory.

Calculate, correct to two decimal places, an overhead absorption rate for each production department.

Explain one advantage and one disadvantage to Z Limited of managing inventory using the JIT system.

Advise the directors whether they should take on the new customer's order. Support your advice by weighing up the advantages and disadvantages of a...

Calculate the price Z Limited should charge for the order.

Prepare the overhead analysis for August 2026, showing the apportionment of overheads to all four departments and the reapportionment of the servic...