1.3 Consignment and Joint venture accountsCandidates 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 systemsCandidates 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 notrequired to use ICT.)
Cambridge International AS and A Level Accounting 9706 syllabusSyllabus content 22Back to contents page1 Financial Accounting (A Level) continued1.5 Analysis and communication of accounting informationCandidates 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 syllabusSyllabus content 23Back to contents page2 Cost and Management Accounting (A Level) continued2.2 Budgeting and budgetary controlCandidates 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•