ISG-INTERNATIONAL
PRE-BOARD I EXAMINATION [2024-25]
CANDIDATE
NAME
CENTRE
NUMBER
CANDIDATE
NUMBER
CLASS – 12 A LEVEL
ACCOUNTING
9706/03
Paper 3 - Financial Accounting
27 Feb 2025
1 hour 30
minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
 Answer all questions.
 Use a dark blue pen.
 Write your name, centre number and candidate number in the boxes at the top of
the page.
 Write your answer to each question in the space provided.
 Do not use an erasable pen or correction fluid.
 You may use an HB pencil for any diagrams, graphs or rough working.
 You may use a calculator.
 International accounting terms and formats should be used as appropriate.
 You should show your workings.
INFORMATION
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The total mark for this paper is 75.
The number of marks for each question or part question is shown in brackets [ ].
The insert contains all of the sources referred to in the questions.
This document consists of 12 printed
pages.
2
1.
a)
Read Source A in the insert.
State two differences between a receipts and payments account and an income and expenditure
account.
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b) Prepare the café’s statement of profit or loss for the year ended 31 December 2023, showing
the value of stolen cash in the expenses section.
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Workings:
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c) Prepare the Club’s income and expenditure account for the year ended 31 December 2023.
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Workings:
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Additional information
The committee members want to improve the security of the club. They have two options.
Option 1 Installing a security system at a cost of $120000, followed by an annual
maintenance fee of $1000.
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Option 2 Recruiting a daytime security guard at an annual salary of $30000.
d) Advise the committee members which is the better option. Justify your answer.
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2.
Read Source B in the insert.
a) Prepare the manufacturing account for the year ended 31 December 2023.
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Additional information:
The profit for the year before office expenses and depreciation of office equipment
amounted to $ 289800.
b) Prepare a statement to calculate showing clearly the cost of sales, how much of this
amount was derived from:
i)
Importing
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ii) Manufacturing
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c) Calculate the profit for the year ended 31 December 2023.
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Additional information
A director is of the opinion that the profit for the year for 2023 can be improved by increasing the
rate of profit to 25%.
d) Explain the impact on the profit for the year for 2023 of increasing the rate of factory profit to
25% in 2023.
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Additional information
e)
G Limited is experiencing serious increases in costs of the imported goods and has increased
the selling price. Many high-income customers are complaining about these increased prices.
The directors are considering manufacturing home appliances for these customers to keep the
prices low and maintain their profits.
Advise the directors whether or not they should manufacture home appliances for the highincome customers to maintain the profits. Justify your answer.
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3.
Read Source C in the insert.
a) Identify and calculate for each potential investor the ratio for ABC plc which would particularly
interest him or her.
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b) Explain what the ratio you have calculated for each investor shows the investor.
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The five friends all have different criteria for their investment decision.
Jazgul is an ethical investor and is concerned that suppliers get their money in good time.
Jackson needs a good cash flow and seeks a high return in terms of cash in the short term.
Khan seeks capital growth
Madge wishes to be confident in a company’s ability to maintain earnings in the future.
Bernard is risk averse and wants to invest in a company which is on a sound financial footing.
REQUIRED
c)
Decide which is the most suitable investment for each investor.
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