03 9706 32 MS Prov Rma
03 9706 32 MS Prov Rma
03 9706 32 MS Prov Rma
ACCOUNTING 9706/32
Maximum Mark : 75
9706/32_ 2023 Feb/March 2023
These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.
the specific content of the mark scheme or the generic level descriptors for the question
the specific skills defined in the mark scheme or in the generic level descriptors for the question
the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is
given for valid answers which go beyond the scope of the syllabus and mark scheme, referring to
your Team Leader as appropriate
marks are awarded when candidates clearly demonstrate what they know and can do
marks are not deducted for errors
marks are not deducted for omissions
answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.
Rules must be applied consistently, e.g. in situations where candidates have not followed instructions
or in the application of generic level descriptors.
Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.
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a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark
scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are correct
c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended
writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …).
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check for evidence it is understood and not
used wrongly.)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities
f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being
tested. This applies equally to ‘mirror statements’ (i.e. polluted/not polluted).
g DO NOT require spellings to be correct, unless this is part of the test. However spellings of syllabus terms must allow for clear and
unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion)
3 Calculation questions:
The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the
mark for each answer
If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will
be given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.
4 Annotation:
For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no
direct relationship between ticks and marks. Ticks have no defined meaning for levels of response marking.
For levels of response marking, the level awarded should be annotated on the script.
Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners
who marked that paper.
03_9706_32_Mar 2023
ANNOTATIONS
The following annotations are used in marking this paper and should be used by examiners.
REP Repeat
A An extraneous figure
N0 No working shown
AE Attempts evaluation
R1 Required item 1
R2 Required item 2
OF Own figure
EVAL Evaluation
Highlight Highlight
03_9706_32_Mar 2023
OF = own figure. The answer will be marked correct if a candidate has correctly used their own figure from a
previous part or calculation.
W = working. The working for a figure is given below. Where the figure has more than one mark associated
with it, the working will show where individual marks are to be awarded.
CF = correct figure. The figure has to be correct i.e. no extraneous items have been included in the calculation
Extraneous item = an item that should not have been included in a calculation, including indirect expenses
such as salaries in calculation of gross profit when there is one OF mark for gross profit’
Curly brackets, }, are used to show where one mark is given for more than one figure. If the figures are not
adjacent, each is marked with a curly bracket and a symbol e.g. }*
row = all figures in the row must be correct for this mark to be awarded
Accept other valid responses. This statement indicates that marks may be awarded for answers that are not
listed in the mark scheme but are equally
valid.
03_9706_32_Mar 2023
The transfer price can benchmark with the price at which goods could be bought from external suppliers. (1) This
provides relevant information to the business to make decision whether goods should be produced by the business or
bought from external suppliers. (1)
This allows responsibility accounting in the business. (1) The manufacturing department is treated as a profit centre so
that costs have to be controlled. (1)
1b Prepare the provision for unrealised profit account for the year ended 31 December 2022. 2
W1 $26 400x20/120=$4400
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1c Prepare the manufacturing account for the year ended 31 December 2022. 6
1d Prepare the statement of profit or loss or the year ended 31 December 2022. 8
1e Advise the sales manager whether or not J Limited should accept the sales order. Justify your answer and 5
support your answer with relevant calculations.
Calculations ( max 2)
The effective gross profit margin is 47.33% ($443 000 OF/$936 000). (1)
From the order, J Limited can get an increase in profit of ($40 000x47.33%-$9 500) =$9 432.(1)
Agree ( max 1)
J Limited will get an increase in profit (1)
J Limited can have the opportunity to expand the business in a new market. (1)
Disagree ( max 1)
However, entering a new market may be risky, i.e. political reason, foreign currency issue (1)
There may be an increase in other administrative costs (1)
price/earnings ratio
dividend yield
gearing ratio
2bi Analyse the performance of X plc, comparing the results with the industry average in respect of: 4
X plc has a better PE ratio (18.61) than the industry average (16) (1)
This would indicate that the investors have more confidence in the company (1)
It may indicate that the share price of X plc has been overvalued compared to the share price of other companies (1)
It also means that investors are willing to pay a higher share price in the expectation of future earnings growth (1)
2bii Analyse the performance of X plc, comparing the results with the industry average in respect of: 4
gearing ratio
X plc has a lower gearing ratio (9.49%) than the industry average (25%) (1)
A low-geared business is perceived as low risk (1)
Low risk means that X plc can be expected to remain in business. (1)
Low risk also means that low fixed interest is paid, meaning more residual profit available for distribution. (1)
Max 4
Accept other valid responses.
Accept OF comments
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2c Advise whether or not the directors should propose a final dividend for 2022. Justify your answer. 5
Disagree (max 2)
Accept OF comments
Accept other valid responses
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3ai Explain, with reference to the relevant International Accounting Standards, the appropriate accounting treatments 5
for the items in:
3aii Explain, with reference to the relevant International Accounting Standards, the appropriate accounting treatments 4
for the items in:
information 5.
$
Draft retained earnings 86 000
Proposed dividend 20 000 (1)
Repairing $8000x6/48 (1 000) }
Depreciation overcharged $8 000x20% 1 600 }(1)
Revaluation loss 35 000 (1)
Impairment loss (3 800) (1)OF
Provision for compensation (9 000) (1)
Adjusted retained earnings 128 800 (1) OF
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Current assets
Inventories 42 000
Trade receivables 225 000
Other receivables ($6000+$7000) 13 000 (1)
Cash and cash equivalents 74 000
354 000
Total assets 768 800
Equity
Ordinary share capital ($1 shares) 400 000
Share premium 35 000
Revaluation reserve ($60 000-$35 000) 25 000 (1)
Retained earnings 128 800
588 800
Current liabilities
Trade payables 152 000
Other payables W2 28 000 (2)
180 000
Total equity and liabilities 768 800
03_9706_32_Mar 2023
Max 3
Accept other valid responses.