Cambridge AS & A Level Accounting 9706/12 is the May/June 2026 Paper 1 (Multiple Choice), variant 2. It is an AS component with 30 questions worth one mark each, and it lasts 1 hour. Every question is compulsory and the paper covers the whole of the AS content, from the prudence principle to cost-volume-profit analysis. The biggest single area was costing with eight questions, and half of the 30 questions needed a calculation. This guide gives the official answer for every question, the topic it tested and the working for each calculation. The paper and its mark scheme are free on the Tutopiya Learning Portal.

For an overview of all four 9706 papers from this series, see A Level Accounting 9706 May/June 2026 past papers: what came up and how it was marked.

9706/12 at a glance

Syllabus area	Questions	Number of questions
Principles and users of accounting information	1, 2, 21	3
Double entry and non-current assets	3–6	4
Verification and control	7–11	5
Adjustments and correcting profit	12–16	5
Partnerships and limited companies	17–20	4
Ratios	22	1
Costing	23–30	8
Total		30

Each correct answer scores one mark, so the total is 30. Answers go on a separate multiple choice answer sheet in soft pencil, and rough working can be done on the question paper.

Answer key and topic for every question

Question	What it tested	Answer
1	Advantages of operating as a limited company	C
2	Principle behind valuing inventory at the lower of cost and net realisable value	D
3	Balances in a trial balance that already contains gross profit	C
4	Revenue expenditure on a new delivery van	B
5	Double entry for a part exchange of a motor vehicle	D
6	Correcting profit after the sale of a non-current asset	A
7	Benefits of verification and reconciliation procedures	B
8	Opening balance on a suspense account	D
9	Change to the cash book balance before a bank reconciliation	C
10	Debit entry in a sales ledger control account	A
11	Purchases ledger control account balance before corrections	A
12	Allowance for irrecoverable debts transfer to profit or loss	B
13	Corrected profit after three errors	B
14	Items recorded in the trading section	D
15	Profit and closing capital after private fuel was charged to the business	C
16	Opening capital from closing balances and a loss	C
17	A provision of the Partnership Act 1890	B
18	Partner’s current account with a loan and no agreement	B
19	Item with no effect on total equity	A
20	Cash raised by a rights issue after a bonus issue	D
21	Correct statements about users of accounting information	C
22	Formula for non-current asset turnover	B
23	Total wages for a job with overtime at a premium	C
24	Product best suited to job costing	A
25	Cost per table in a batch	B
26	Overhead absorption rate per labour hour	A
27	When marginal and absorption costing profits are equal	D
28	Which statement is not a break-even assumption	D
29	Absorption against marginal costing profit with closing inventory	A
30	Correct statement about cost-volume-profit analysis	D

What the paper tested, topic by topic

Principles and users (Questions 1, 2 and 21)

• Limited companies (Question 1): the advantages were that dividends are discretionary and the company has a separate legal identity. Limited companies do have to publish financial statements, and limited liability, not unlimited, is the advantage.
• Prudence (Question 2): valuing inventory at the lower of cost and net realisable value avoids overstating assets and profit.
• Users (Question 21): employees care about profitability and liquidity, and suppliers find trade payables turnover useful because it shows how quickly they are likely to be paid. A higher profit margin does not guarantee higher dividends, and managers do compare their results with similar businesses.

Double entry and non-current assets (Questions 3–6)

• Trial balance with gross profit (Question 3): if gross profit is already in the trial balance, the trading account has been prepared. So closing inventory appears, and capital is still the opening figure.
• Revenue expenditure (Question 4): insurance $1000 + repairs and servicing $3000 + fuel $10 000 = $14 000. Painting the logo ($5000) is part of getting the van ready for use, so it is capital expenditure. Adding it gives the $19 000 distractor.
• Part exchange (Question 5): debit motor vehicles at cost and credit the disposal account with the part-exchange value of the old vehicle.
• Disposal error (Question 6): depreciation is (25 000 − 5000) ÷ 4 = $5000, so the carrying value at the year end is $20 000. Sold for $15 000, that is a $5000 loss. Remove the $15 000 wrongly added to revenue and deduct the loss: 65 000 − 15 000 − 5000 = $45 000.

Verification and control (Questions 7–11)

• Reconciliations (Question 7): they check arithmetical accuracy and give management information. They reduce, but cannot eliminate, the risk of fraud, and they detect errors rather than prevent them.
• Suspense account (Question 8): the sales undercast needs a debit of $23 600 to suspense. The $9100 of returns to a supplier was debited to sales returns instead of credited to purchases returns, so correcting it needs a further $18 200 (credit sales returns $9100 and credit purchases returns $9100), also debited to suspense. The stationery posted to advertising does not affect the trial balance. Total debit to suspense is 23 600 + 18 200 = $41 800, so the opening balance was a $41 800 credit.
• Cash book (Question 9): only the cheque recorded at $60 instead of $80 changes the cash book, a $20 decrease. The unpresented cheque and the bank’s own error go on the reconciliation statement.
• Sales ledger control (Question 10): interest charged on overdue customer accounts increases what customers owe, so it is a debit. Irrecoverable debts and returns are credits, and cash sales do not go in the account at all.
• Purchases ledger control (Question 11): the ledger total falls by the contra not yet posted: 39 500 − 1300 = $38 200, the corrected figure. In the control account, the purchases journal undercast adds $850 and the discounts received undercast takes off $200. So the control balance before correction was 38 200 − 850 + 200 = $37 550.

Adjustments and correcting profit (Questions 12–16)

• Allowance for irrecoverable debts (Question 12): the closing allowance is 2% × $180 000 = $3600. The opening balance was $4500, so the allowance falls by $900. The account is debited with $900, with the matching credit increasing profit. The $7100 written off goes through the irrecoverable debts account, not the allowance.
• Corrected profit (Question 13): commission credited to rent received does not change profit. Unrecorded bank charges reduce it by $1600. The wages payment was credited instead of debited, so expenses are understated by twice the amount, $4000. 134 000 − 1600 − 4000 = $128 400.
• Trading section (Question 14): sales returns are deducted from revenue and goods taken for own use are deducted from purchases. Carriage outwards is an expense and discounts received are income, both below gross profit.
• Private fuel (Question 15): removing the $1930 from expenses raises profit to 12 650 + 1930 = $14 580. The same amount becomes drawings, so closing capital is unchanged at $52 780.
• Opening capital (Question 16): assets are 78 000 + 64 000 + 21 000 + 11 900 = $174 900 and liabilities are 25 700 + 15 200 = $40 900, so closing capital is $134 000. Adding back the loss of $4900 gives opening capital of $138 900.

Partnerships and limited companies (Questions 17–20)

• Partnership Act 1890 (Question 17): without an agreement, partners share profits and losses equally. They get no salary, no interest on capital and pay no interest on drawings.
• Jay’s current account (Question 18): with no agreement, Jay’s loan earns interest at 5%: $800 on $16 000. Jay’s share of profit is 36 600 ÷ 3 = $12 200. Starting from the $2800 debit: −2800 + 800 + 12 200 − 6500 = $3700 credit.
• Total equity (Question 19): a bonus issue moves reserves into share capital, so total equity does not change. Dividends paid reduce it, and a rights issue and an upward revaluation increase it.
• Bonus then rights issue (Question 20): $400 000 of $0.50 shares is 800 000 shares. The 1-for-4 bonus issue adds 200 000, making 1 000 000, and raises no cash. The 1-for-2 rights issue is 500 000 shares at $0.65 ($0.50 + $0.15 premium), raising $325 000. Forgetting the premium gives the $250 000 distractor.

Ratios (Question 22)

• Non-current asset turnover: net revenue ÷ total net book value of non-current assets.

Costing (Questions 23–30)

• Overtime wages (Question 23): each worker works 10 hours a day for 7 days, 70 hours a week. Basic pay is 40 × $25 = $1000 and the 30 extra hours are paid at $35 ($25 + 40%), which is $1050, so each worker earns $2050 a week. Eight workers for two weeks: 2050 × 8 × 2 = $32 800.
• Job costing (Question 24): aeroplanes are built to each customer’s specification, so each one is a separate job. Medicines, newspapers and paint are made in batches or by continuous processes.
• Batch cost (Question 25): labour is 7500 + 20 000 + 5500 = $33 000, so overheads are 20% × 33 000 = $6600. Total cost is 8000 + 33 000 + 6600 = $47 600 for 1000 tables, or $47.60 each. The labour hours are not needed.
• Absorption rate (Question 26): use budgeted figures: 136 000 ÷ 10 568 = $12.87 per labour hour. The actual figures are there as distractors.
• Equal profits (Question 27): marginal and absorption costing profits are the same when production equals sales, because no fixed overhead is carried forward in inventory.
• Break-even assumptions (Question 28): fixed costs are assumed constant in total. Fixed cost per unit falls as output rises, so D is not an assumption.
• Absorption against marginal (Question 29): 200 units are left in closing inventory. Fixed cost per unit produced is 30 000 ÷ 1200 = $25, so absorption costing carries $5000 of fixed overhead into inventory and its profit is $5000 higher. For reference, marginal costing profit is $15 000 (contribution of $45 000 on 1000 units, less $30 000 of fixed costs) and absorption profit is $20 000.
• CVP analysis (Question 30): it assumes costs and prices stay fixed in the short run, so it suits short-term decisions.

Where the marks are on 9706/12

• Costing carried 8 of the 30 marks, the largest single block, and four of those eight (23, 25, 26 and 29) were calculations.
• Verification, control and adjustments carried 10 marks between them. Each of these questions turns on knowing which side of which account an entry goes.
• Fifteen questions needed arithmetic: 4, 6, 8, 9, 11, 12, 13, 15, 16, 18, 20, 23, 25, 26 and 29. That is half the paper, so practise doing the double entry in your head or in rough working quickly.
• Errors and corrections came up in five questions (6, 8, 11, 13 and 15). The trap each time was an entry on the wrong side, which doubles the effect.
• Only Question 22 tested a ratio, and it was a formula, not a calculation.

How to self-mark 9706/12

1. Check each answer against the key above or the official mark scheme. Count one mark per correct letter.
2. Tag every wrong answer by topic, using the at-a-glance table, to see which area is costing the most.
3. Tag it by reason too: knowledge (for example, the Partnership Act rules in Question 17), misread (missing “not” in Question 28 or “beginning” in Question 16) or calculation (an entry on the wrong side in Question 8 or 13, or using actual instead of budgeted figures in Question 26).
4. Redo every calculation you got wrong by writing the T-account or the working out in full before choosing a letter.
5. Revise knowledge gaps first, then practise the error-correction and costing calculations until each takes under two minutes.

Sit 9706/12 as a timed mock

You have 60 minutes for 30 questions, two minutes each. Work in two passes: answer the recall questions first, mark any calculation that needs several steps, then come back to them.

Block	Questions	Time
Principles, double entry and non-current assets	1–6	10 minutes
Verification and control	7–11	11 minutes
Adjustments and correcting profit	12–16	10 minutes
Partnerships, companies, users and ratios	17–22	10 minutes
Costing	23–30	14 minutes
Second pass and check the answer sheet	–	5 minutes

The verification block is long for its size because the suspense account and control account questions each need careful working.

Other May/June 2026 9706 papers

• 9706 Paper 22 (Fundamentals of Accounting)
• 9706 Paper 32 (Financial Accounting)
• 9706 Paper 42 (Cost and Management Accounting)

Practise and download

• Download 9706/12 and its mark scheme on the Learning Portal →
• All 9706 May/June 2026 papers: overview and marking patterns
• Try a free A Level Accounting quiz

Need help with a 9706 topic? Book a free trial lesson with an A Level Accounting tutor →

Frequently asked questions

What topics were on 9706 Paper 12 May/June 2026? +

The AS content. Principles and users had 3 questions, double entry and non-current assets 4, verification and control 5, adjustments and correcting profit 5, partnerships and companies 4, ratios 1 and costing 8.

How many marks is 9706/12 and how long is it? +

It has 30 multiple choice questions, one mark each, for a total of 30 marks. You have 1 hour and you may use a calculator.

Is 9706/12 an AS or A Level paper? +

It is Paper 1, an AS Level component. AS candidates sit it with Paper 2, and full A Level candidates sit it as well as Papers 3 and 4.

What was the answer to the suspense account question on 9706/12? +

D, a $41 800 credit balance. The sales undercast needs a $23 600 debit to suspense, and the purchases returns wrongly debited to sales returns needs another $18 200 (2 × $9100). A $41 800 debit clears the account, so it must have started as a $41 800 credit.

How many questions on 9706/12 2026 needed a calculation? +

Fifteen: Questions 4, 6, 8, 9, 11, 12, 13, 15, 16, 18, 20, 23, 25, 26 and 29. Most are short, but the suspense account, purchases ledger control account and overtime wages questions take several steps.

Where can I download 9706/12 May/June 2026 and its mark scheme? +

Both are free to download and print on the Tutopiya Learning Portal, on the Cambridge AS & A Level Accounting 9706 past papers page.

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