13 consignment and joint venture accounts candidates

1.3 Consignment and Joint venture
accounts
Candidates should be able to distinguish between
consignments and joint ventures and the environment in
which they operate.
Candidates should be able to:
• prepare ledger accounts for consignment transactions,
including the calculation of closing inventory valuation
• prepare ledger accounts for joint ventures
• calculate the profit for joint ventures.
1.4 Computerised accounting
systems
Candidates should understand the need for and be able
to discuss the process of computerising the accounts of a
business.
Candidates should be able to:
• discuss the advantages and disadvantages of introducing
a computerised accounting system
• discuss the process of computerising the business
accounts
• discuss ways in which the integrity of the accounting
data can be ensured during the transfer to a
computerised accounting system.
(Candidates are not required to use ICT.)

Cambridge International AS and A Level Accounting 9706 syllabus Syllabus content
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1 Financial Accounting (A Level) continued
1.5 Analysis and communication of
accounting information
Candidates should understand the need for the analysis of
financial data to aid decision making by potential investors in
a business.
Candidates should be able to:
• calculate the following ratios:
– working capital cycle (in days)
– net working assets to revenue (sales)
– income gearing
– gearing
– earnings per share
– price earnings ratio
– dividend yield
– dividend cover
– dividend per share
(See the formulae in the ‘Summary of commonly used
ratios’ section.)
• analyse and evaluate the results of the ratios and draw
conclusions
• make appropriate recommendations to potential investors
on the basis of the analysis undertaken
• evaluate the interrelationships between ratios.
2 Cost and Management Accounting (A Level)
2.1 Activity based costing (ABC) Candidates should be able to understand and discuss the
application of activity based costing and identify and explain
its uses and limitations.
Candidates should be able to:
• use ABC to:
– apportion overheads
– calculate the total cost of a unit
– calculate the value of inventory
– demonstrate the effect of different methods of
overhead absorption on profit
• apply ABC costing techniques to make business
decisions and recommendations using supporting data.

Cambridge International AS and A Level Accounting 9706 syllabus Syllabus content
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2 Cost and Management Accounting (A Level) continued
2.2 Budgeting and budgetary control Candidates should understand the need for and benefits of a
budgetary control system to an organisation.
Candidates should be able to:
• discuss the advantages and disadvantages of a budgetary
control system to an organisation
• prepare the following budgets:
– sales
– production
– purchases
– labour
– trade receivables
– trade payables
– cash
– master budget
• recognise the effect of limiting factors on the preparation
of budgets
• prepare a flexed budget statement
•