Cambridge International AS & A Level * 6 1 1 7 5 6 7 0 0 2 * ACCOUNTING 9706/33 Paper 3 Financial Accounting October/November 2023 1 hour 30 minutes You must answer on the question paper. You will need: Insert (enclosed) INSTRUCTIONS ● Answer all questions. ● Use a black or 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. ● Do not write on any bar codes. ● 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 ● 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 has 12 pages. Any blank pages are indicated. DC (PQ) 312026/2 © UCLES 2023 [Turn over

Cambridge International AS & A Level
* 6 1 1 7 5 6 7 0 0 2 *
ACCOUNTING 9706/33
Paper 3 Financial Accounting October/November 2023
1 hour 30 minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
● Answer all questions.
● Use a black or 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.
● Do not write on any bar codes.
● 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
● 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 has 12 pages. Any blank pages are indicated.
DC (PQ) 312026/2
© UCLES 2023 [Turn over

2 1 Read Source A in the insert. (a) Complete the following table by calculating the required values for each category of property, plant and equipment at 30 June 2022 . Use the space provided to show your workings. Cost Accumulated Carrying depreciation value $ $ $ Premises Machinery Motor vehicles Total 620 000 Workings: Premises Machinery Motor vehicles [9] © UCLES 2023 9706/33/O/N/23

2
1 Read Source A in the insert.
(a) Complete the following table by calculating the required values for each category of property,
plant and equipment at 30 June 2022 . Use the space provided to show your workings.
Cost Accumulated Carrying
depreciation value
$ $ $
Premises
Machinery
Motor vehicles
Total 620 000
Workings:
Premises
Machinery
Motor vehicles
[9]
© UCLES 2023 9706/33/O/N/23

3 (b) Prepare the schedule of non-current assets to use as a note to the financial statements for the year ended 30 June 2023 . Use the space provided for workings on page 4 to show your workings. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... [Turn over © UCLES 2023 9706/33/O/N/23

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(b) Prepare the schedule of non-current assets to use as a note to the financial statements for
the year ended 30 June 2023 . Use the space provided for workings on page 4 to show your
workings.
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© UCLES 2023 9706/33/O/N/23 [Turn over

4 Workings: [14] Additional information K plc’s accountant had faced additional challenges in preparing the financial statements for the year ended 30 June 2023. Some of the ledger accounts for the non-current assets had been accidentally deleted from the computerised accounting system by a junior member of staff. (c) State one implication of this for each of: (i) the directors ........................................................................................................................................... ..................................................................................................................................... [1] (ii) the auditors. ........................................................................................................................................... ..................................................................................................................................... [1] [Total: 25] © UCLES 2023 9706/33/O/N/23

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Workings:
[14]
Additional information
K plc’s accountant had faced additional challenges in preparing the financial statements for the
year ended 30 June 2023. Some of the ledger accounts for the non-current assets had been
accidentally deleted from the computerised accounting system by a junior member of staff.
(c) State one implication of this for each of:
(i) the directors
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..................................................................................................................................... [1]
(ii) the auditors.
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[Total: 25]
© UCLES 2023 9706/33/O/N/23

5 2 Read Source B in the insert. (a) Calculate: (i) the profit from the sale of refreshments for the year ended 31 December 2022 ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [4] (ii) the value of life membership fees to be included in the income and expenditure account for the year ended 31 December 2022. ........................................................................................................................................... ..................................................................................................................................... [1] (b) Prepare the subscriptions account for the year ended 31 December 2022. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Turn over © UCLES 2023 9706/33/O/N/23

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2 Read Source B in the insert.
(a) Calculate:
(i) the profit from the sale of refreshments for the year ended 31 December 2022
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(ii) the value of life membership fees to be included in the income and expenditure account
for the year ended 31 December 2022.
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(b) Prepare the subscriptions account for the year ended 31 December 2022.
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© UCLES 2023 9706/33/O/N/23 [Turn over

6 Additional information The deficit for the year was calculated as $1540. The managing committee was concerned about the financial performance of the club. (c) Discuss the effect the following suggestions might have on both the bank overdraft and the deficit. (i) Reducing the level of inventory held ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [4] (ii) Encouraging more members to become life members ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [4] (d) Suggest two other ways in which the financial performance of the club could be improved. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ................................................................................................................................................... [2] © UCLES 2023 9706/33/O/N/23

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Additional information
The deficit for the year was calculated as $1540.
The managing committee was concerned about the financial performance of the club.
(c) Discuss the effect the following suggestions might have on both the bank overdraft and the
deficit.
(i) Reducing the level of inventory held
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(ii) Encouraging more members to become life members
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(d) Suggest two other ways in which the financial performance of the club could be improved.
1 ................................................................................................................................................
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2 ................................................................................................................................................
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[2]
© UCLES 2023 9706/33/O/N/23

7 Additional information The treasurer, Sabrina, has only held that position since 1 January 2022, when the previous treasurer, Joe, left the area. There were rumours that Joe had left taking some of the club’s money with him. Sabrina is now suggesting that the club’s financial statements for the year ended 31 December 2022 should be audited. (e) Advise the managing committee whether or not the financial statements should be audited. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 25] [Turn over © UCLES 2023 9706/33/O/N/23

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Additional information
The treasurer, Sabrina, has only held that position since 1 January 2022, when the previous
treasurer, Joe, left the area. There were rumours that Joe had left taking some of the club’s money
with him.
Sabrina is now suggesting that the club’s financial statements for the year ended 31 December 2022
should be audited.
(e) Advise the managing committee whether or not the financial statements should be audited.
Justify your answer.
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[Total: 25]
© UCLES 2023 9706/33/O/N/23 [Turn over

8 3 Read Source C in the insert. (a) Explain: (i) what is measured by the working capital cycle. The formula is not required. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] (ii) why a retail business is likely to have a shorter working capital cycle than a manufacturing business. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] (b) Calculate the working capital cycle for HT Limited using the forecast information. Assume a year of 365 days. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [8] © UCLES 2023 9706/33/O/N/23

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3 Read Source C in the insert.
(a) Explain:
(i) what is measured by the working capital cycle. The formula is not required.
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(ii) why a retail business is likely to have a shorter working capital cycle than a manufacturing
business.
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(b) Calculate the working capital cycle for HT Limited using the forecast information. Assume a
year of 365 days.
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© UCLES 2023 9706/33/O/N/23

9 (c) Calculate to one decimal place the net working assets to revenue ratio using the forecast information. Use the closing inventory value. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [2] Additional information The directors are concerned that the working capital cycle is too long. They believe that if they improve the credit control procedures of the business immediately then the value of trade receivables on 31 December 2024 could be considerably lower than in the forecast information. Sales would be unaffected. (d) Calculate the reduction in the value of trade receivables on 31 December 2024 which would cause the working capital cycle to fall by eight days. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [4] (e) Explain how this reduction would affect the net working assets to revenue ratio. No calculations are required. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [2] [Turn over © UCLES 2023 9706/33/O/N/23

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(c) Calculate to one decimal place the net working assets to revenue ratio using the forecast
information. Use the closing inventory value.
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Additional information
The directors are concerned that the working capital cycle is too long. They believe that if they
improve the credit control procedures of the business immediately then the value of trade
receivables on 31 December 2024 could be considerably lower than in the forecast information.
Sales would be unaffected.
(d) Calculate the reduction in the value of trade receivables on 31 December 2024 which would
cause the working capital cycle to fall by eight days.
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(e) Explain how this reduction would affect the net working assets to revenue ratio. No calculations
are required.
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© UCLES 2023 9706/33/O/N/23 [Turn over

10 Additional information The directors want to reduce the working capital cycle and the net working assets to revenue (sales) ratio each year for several years to come. (f) Advise the directors whether or not they should try to reduce these ratios each year. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 25] © UCLES 2023 9706/33/O/N/23

10
Additional information
The directors want to reduce the working capital cycle and the net working assets to revenue
(sales) ratio each year for several years to come.
(f) Advise the directors whether or not they should try to reduce these ratios each year. Justify
your answer.
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[Total: 25]
© UCLES 2023 9706/33/O/N/23

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© UCLES 2023 9706/33/O/N/23

12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cambridgeinternational.org after the live examination series. Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge. © UCLES 2023 9706/33/O/N/23

12
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.
© UCLES 2023 9706/33/O/N/23

9706_w23_qp_33