A-LEVEL ACCOUNTING 7127/2: Paper 2 Accounting for Analysis and Decision-making Report on the Examination

A-LEVEL ACCOUNTING 7127/2: Paper 2 Accounting for Analysis and Decision-making Report on the Examination This paper was generally done well by students. This is especially encouraging given that it is the first sitting of the new reformed A-level specification which includes both new topic areas and different skills expectations. There was a wide spread of outcomes with a good proportion of students achieving 50 raw marks or more out of the maximum 120 marks available. With it being the first sitting of a new specification, there was the inclusion of some new elements including the ethical framework in question 09 and investment ratios in question 17. Most other questions contained themes previously tested in the legacy paper ACCN4 and so pertained to management and cost accounting components. However, centres are to be reminded that there are some parts of the specification that can be tested in either paper and so this examination contained some more financial accounting themes previously seen only in ACCN3 at A2 level. Calculation tasks were broadly well attempted, with workings clearly shown in many instances. Students were also able to articulate the longer prose questions well, which is encouraging given that accounting students quite often favour the numerical and computational tasks. There was no evidence that students were overly time constrained with a majority of students appearing to have completed all tasks set. Questions 01 to 10 inclusive Multiple choice questions have been used to a lesser extent previously, but now form an integral part to the assessments for this specification. They are designed to test students’ very precise knowledge and understanding combined with some application of the content. Many of these questions were answered correctly by a high proportion of students. The best response rates were for question 09 on the fundamental principles of ethical behaviour and question 10 on the calculation of break-even quantity. The questions answered least well were 07 on cost classifications and 04 on break-even chart interpretation. Question 11 Most students demonstrated some knowledge of break-even analysis limitations. However, less effective responses just stated these drawbacks and in some cases were only able to offer one limitation. In contrast, the more effective responses were able to describe them, which meant they were able to access at least level 2 outcomes where understanding was evident. Question 12.1 Many students were able to manipulate discount factors to calculate present values and then a net present value. However, the cash flows used in this process were not always correct. The most common mistake was either not using depreciation to convert profit to cash flow or adjusting it incorrectly. There was also confusion in some instances about the treatment of the estimated residual value, with this either being omitted completely or adjusted against the original cost. Question 12.2 The payback period allowed for own figure cash flows from question 12.1 and on this basis, many students were able to at least identify the remaining cash flow to be recovered. However, some students calculated the payback period to be over 4 years and should have realised that this must be incorrect, given that the estimated life of the hi-tech machine was only 4 years.