AS Accounting 9706 Tips – How to get an A*


AS Accounting 9706 Tips


  • You have 60 minutes of 30 MCQs. 2 minutes for each.
  • First only attempt those questions which you are 100% sure of and skip others.
  • Read the MCQ carefully, because CIE likes to play around.
  • Now spend time on these questions.
  • If you are stuck try to eliminate the most obvious wrong answer.
  • 5-6 questions are theoretical, at least read them thrice.
  • Sometimes it’s best to use the answer to check if it’s wrong or right.
  • If you see something in the answer choice which you haven’t heard of (that can never be the answer). Please don’t leave it blank. Take an educated guess. There is no negative marking.


  • You have 90 minutes for 90 marks.
  • Always attempt the question which you know the best out of 4 first. This will give you confidence and save time. You will end up spending time and getting it wrong if you do the toughest one first.
  • Don’t panic, usually in every paper one question is tricky. Do it at last.
  • You won’t get any award if you balance the balance sheet. If the balance sheet is off by a large amount, that doesn’t mean everything is wrong, might be a single big figure which you have missed. DON’T WASTE YOUR TIME.
  • Remember you don’t have to get 90 on 90. Go for the maximum.


Things you need to take into consideration for AS Accounting 9706

Financial Accounting

  • Written down value or net book value means after depreciation.
  • Only assets and expenses and drawings have debit balances, all the other things in the world will have a credit balance.
  • Sales invoice would mean good sold on credit.
  • If bad debt is inside the trial balance then it means that it has already been subtracted from the Trade Receivables
  • Everything outside the Trial Balance has to come TWICE.
  • Provision for depreciation is a Contra Asset Account. It is NOT AN EXPENSE since its balance is brought down.
  • All the balance c/d go to the Balance Sheet
  • All the expenses and incomes are in the Income Statement
  • Revenue = Sales.
  • If NOTHING is specified about the policy of Depreciation, then you account for it MONTHLY. Every Asset has an Opening Debit balance and Closing Credit balance.
  • Every Liability has an Opening Credit balance and closing Debit balance.
  • The Amount of Loan interest strain owing and not paid (which was to be paid this year) comes in the Current Liabilities.
  • Departmental Account If given with prepayment any expenses, then we SHOULD FIRST ADJUST the accruals and prepayments, and then divide them into % of EACH department.
  • Control Account is not part of the double entry. It is THE THIRD ENTRY.
  • List price is the price WITHOUT deducting TRADE DISCOUNT.
  • Set off always reduces the Control Account!
  • Credit Notes received * Purchases Returns Credit Notes sent * Sales Returns
  • BAD DEBTS recovered comes on the debit side of the Sales Ledger Control Account (S.L.C.A) and even on the credit side.
  • Whenever you receive a cheque from BANK marked ‘REFER TO DRAWER’ then it is CHEQUE DISHONOURED
  • FIX NET PROFIT: In the Journal, if the account doesn’t go on the balance sheet, then if something is being CREDITED it will INCREASE N.P, or if it DEBITED, then it will DECREASE N.P.
  • To find the opening balance in the Suspense LEAVE THE FIRST two lines empty.
  • The amount of stationery used goes in the Profit and Loss as an expense.
  • Sundry Expense means miscellaneous expenses.
  • Whatever goes in the Income statement is REVENUE EXPENDITURE.
  • Whatever goes in the 8ALANCE SHEET is CAPITAL EXPENDITURE
  • CAPITAL OWNED (Sole trader) = Assets – Liabilities.
  • CAPITAL EMPLOYED (COMPANY) = OSC + PSC + RESERVES (share premium. Retain profits, all reserves) + Long Term Liabilities.
  • REFUND FROM Supplier is recorded on the Credit side of the Purchase Ledger Control Account. In closing Assets, you write the Bet Book Value (N.B.V)
  • If they ask you to make a STATEMENT TO find Profit or Loss, then just make that financed by (Opening capital + Net Profit (x) + Capital Introduced – Drawings = Capital at end)
  • If they say make final accounts, then make Income Statement and Statement of financial position. Closing Stock has a direct relation to profit. If the closing stock is overstated, profit will be overstated.
  • The opening stock has an inverse relation with profit. If the opening stock is overstated, profit will be understated.
  • Goods sent on sale or return basis should not be counted as sale unless accepted by the customer. In fact they should be included in the stock.
  • If no account is wrong, like there is an error in the list of debtors then we only correct it through suspense account (it’s only one entry, e.g. Debit: Suspense, Credit: -)
  • We only double the amount if it is written on the wrong side of the account.
  • If we find purchases/sales through control account we will still have to subtract returns Unpresented cheques are payment by us.
  • Uncredited cheques are receipts by us (also called LODGMENTS).
  • If you can’t find the average inventory, use closing figure instead of instead of average.
  • If nothing is specified, we can assume all sales and purchases are on credit basis.
  • Provision for bad debt is a separate account. We can record the provision in debtors account, net debtors mean after deducting provision.
  • We only take the change in provision in the Income statement Cashbook is both a daybook and a ledger.
  • We only record credit sales and purchases in the Sales and Purchase Daybook, cash and bank transactions are in the cashbook.
  • If a daybook is overcast only that amount will be wrong. E.g. if Sales daybook is undercast, this means only the Sales account is wrong.
  • If profit is given inside the trial balance, the stock should be closing stock (because we don’t need the opening stock).
  • Similarly, if depreciation for the year is inside the trial balance, the provision for depreciation would already include this year’s depreciation.
  • Gross profit ratio will not change because of sales volume (number of units), but net profit ratio will increase.
  • Net Assets = Assets – Liabilities, but in some cases, CIE uses Net Assets as Capital Employed which is Assets – Current Liabilities.
  • Sale or Purchase is recorded when the goods are accepted not when the invoice is sent or the payment is made.
  • If only net book values are available Depreciation for the year = Opening Net Book Value + Purchase of Asset – Sale of Asset (Nbv) – Closing Net book value.
  • In most question they don’t mention depreciation, that doesn’t mean there is no depreciation, use the above formula to determine. (Don’t forget the depreciation like idiots).
  • Cash banked will come on the debit side of bank and credit side of the cash account.
  • The loan is as long term liability unless payable within one year. If nothing is written, assume long term.
  • POOP is for expenses.
  • OPPO is for incomes.
  • Net realizable value = current selling price – any expenses (repairs)
  • We always ignore replacement cost in stock valuation.
  • Perpetual methods are those where we make a table.
  • Markup is on cost (cost is 100)
  • Margin is on sales (Sales is 100)


  • Cost center means departments.
  • If a business doesn’t split overheads into different departments, they will only have one Overhead absorption rate for the whole factory (also called blanket OAR).
  • Absorption costing means total costing. It is used to calculate total cost.
  • We only use OAR to calculate the overheads for a unit/job/order/batch.
  • OAR can be calculated on any basis like machine hours, labor hours, unit, labor cost (direct wages), material cost etc.
  • If no basis is given use either labor hours or machine hours depends on what is more (intensity).
  • Absorbed Overheads = OAR x Actual Activity.
  • Over absorbed means Absorbed are more than actual overheads Under absorbed means Absorbed are less than actual overheads.
  • Usually, if the actual activity is above budget, we will OVER ABSORB If the actual activity is below budget, we will UNDER ABSORB Total cost is the cost of Production + the non-production cost.
  • Stocks can only include production cost. In absorption costing, we use total production cost whereas in marginal we use only variable production cost.
  • Marginal costing is about decision making.
  • Decisions are based on contribution, not profits. It is assumed that fixed cost will still be incurred.
  • (contribution/unit x $ of units) – Fixed Cost = Profit.
  • The lower breakeven point is better. Higher margin of safety is better.
  • Positive contribution product or department should never be closed down.
  • Positive contribution product should be accepted under idle capacity.
  • When deciding on if v.-e should buy from outside or not, we only consider variable production cost (ignore Variable Selling cost)
  • Only change the fixed cost if the question tells you to.
  • Only make Profit Statement on absorption if the question says so. Otherwise always marginal. Profit + Fixed Cost = Total Contribution.
  • If a firm makes a single product, the profit-volume chart will be Profit against units.
  • If a firm makes multiple products. Profit Volume chart will be Profit against Sales Revenue (Total Sales).
  • Direct Labour per hour = Wage rate per hour.
  • Normal level of activity is budgeted level of activity. Fixed production Overheads/unit is calculated using this.
  • In calculating contribution per unit we need direct labor per unit.
  • Note: Under absorbed is added to Cost and Over absorbed is subtracted. We only have to do this in absorption statement.


    • I think it means that everything outside of the trail balance has dual effect to it like a debit and a credit….


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