Cambridge AS & A Level Accounting 9706/22 is the May/June 2026 Paper 2 (Fundamentals of Accounting), variant 2. It is an AS component worth 90 marks, it lasts 1 hour 45 minutes, and all four questions are compulsory. Questions 1 and 4 carry 30 marks each and Questions 2 and 3 carry 15. The biggest single part is the 12-mark statement of profit or loss in Question 1(d), and most of its marks can be earned with your own figures from earlier parts. This guide goes through every part, with the final figures and key workings from the official mark scheme. 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.

9706/22 at a glance

The rubric is: answer all questions.

Question	Business and topics	Marks
1	Airport Transfers (sole trader, incomplete records): total revenue, cash stolen, disposal of a vehicle, statement of profit or loss, advise on a computerised system	30
2	Naila (retailer): cost of sales and purchases, trade payables turnover, trading section, advise on dropping slow-selling items	15
3	J Limited: revised profit, retained earnings after a bonus issue, statement of financial position	15
4	Y Limited (food manufacturer): overhead apportionment, absorption rates, over-absorption, pricing an order, advise on a special order, AVCO, JIT	30
Total		90

Question-by-question walkthrough

The mark scheme uses a few abbreviations throughout. OF (own figure) means the mark is given if you use your own figure from an earlier part correctly. W marks a working. CF (correct figure) means the figure must be right with no extraneous items. Row means every figure in the row must be correct for the mark, and a curly bracket means one mark covers several figures. Marks for figures also depend on the correct sign or direction.

Question 1: Airport Transfers (30 marks)

Zahir runs a taxi service to and from airports and keeps incomplete records. Credit customers get 30 days, and those who pay within 20 days get a 2.5% cash discount.

• 1(a) Total revenue (7 marks): $66 210. Credit sales are worked from the movement in what customers owe: closing balance $8320, less opening balance $4940, plus receipts $47 580, plus discounts allowed $305, plus the irrecoverable debt written off $145, which gives $51 410. Add cash receipts of $14 800. One mark went on each of the six figures and one (OF) on the total. The discount is the step to watch: one-quarter of credit receipts, $11 895, was paid within 20 days, and that was 97.5% of the amount owed, so the discount is 2.5/97.5 × $11 895 = $305. A trade receivables account laid out as a T-account earned the same marks.
• 1(b) Cash stolen (3 marks): $360. Cash in was $11 800 + $80 = $11 880 and cash out was $5800 + $1050 + $4320 = $11 170, so the balance should have risen by $710 (1 mark). It actually rose by $350 (1 mark), so $360 was stolen (1 mark).
• 1(c) Disposal of vehicle A (3 marks): $1900 profit. Vehicle A cost $32 000 on 1 January 2023. Two full years at 20% plus nine months of 2025 is $6400 + $6400 + $4800 = $17 600, leaving a carrying value of $14 400 (1 mark). Proceeds of $16 300 give a $1900 gain (1 mark), and a separate mark went on stating that it is a profit.
• 1(d) Statement of profit or loss (12 marks): profit $9230. Income: revenue $66 210 (OF from 1(a)), irrecoverable debt recovered $80 and the $1900 gain (OF), a total of $68 190. Expenses came to $58 960:

Expense	$	Working
Irrecoverable debt	145
Discounts allowed	305
Wages of office assistant	5800
Depreciation of equipment	380
Depreciation of motor vehicles	13 900	A $4800, B $7200 (20% × $36 000), C $1900 (20% × ¼ × $38 000)
Cash stolen	360	OF from 1(b)
General expenses	12 370	$11 320 by bank + $1050 in cash
Rent	5690	$6200 less $510 prepaid
Wages of drivers	20 010	$18 860 + $1150 owing

One mark went on each of the three income figures and on every expense except the office assistant’s wages, which makes 11, and the twelfth went on the profit of $9230 (OF). Vehicle C was bought on 1 October, so it gets three months’ depreciation; vehicle B gets a full year.

• 1(e) Advise on a computerised accounting system (5 marks): up to 2 marks for advantages, up to 2 for disadvantages and 1 for a decision supported with a comment. Advantages credited included reminders that reduce late payments, fewer irrecoverable debts, better credit control and tracking of customers, better liquidity and profits, faster processing, automatic reports and documents such as invoices and statements, fewer errors, extra features like payroll and inventory control, more secure and up-to-date records, and help with auditing and fraud prevention. Disadvantages included no guarantee that customers will respond to reminders, the cost of equipment, software and maintenance, training, hacking and virus risks, system crashes and lost data, and staff resistance.

Question 2: Naila (15 marks)

Naila is a retailer who sells only for cash and buys only on credit. For 2024 the question gave revenue of $240 000, a gross margin of 40%, inventory turnover of 8 times, opening and closing inventory and closing trade payables.

• 2(a)(i) Cost of sales (1 mark): 60% × $240 000 = $144 000.
• 2(a)(ii) Purchases (2 marks): cost of sales $144 000 (OF) + closing inventory $19 600 − opening inventory $16 400 = $147 200 (OF).
• 2(b) Trade payables turnover with the formula (2 marks): 1 mark for the formula, trade payables ÷ credit purchases × 365, and 1 (OF) for the answer: $14 400 ÷ $147 200 × 365 = 36 days.
• 2(c) Trading section for 2025 (5 marks): revenue rose by 20% to $288 000 (1 mark). At a 35% margin, gross profit is $100 800 and cost of sales $187 200. With turnover of 9 times, average inventory is $187 200 ÷ 9 = $20 800, so closing inventory is (2 × $20 800) − $19 600 = $22 000. Purchases are the balancing figure: $187 200 + $22 000 − $19 600 = $189 600. Marks went on revenue, purchases, closing inventory, cost of sales (OF) and gross profit (OF). Opening inventory for 2025 is the 2024 closing figure, $19 600.
• 2(d) Advise on dropping slow-selling items (5 marks): up to 3 marks for advantages, up to 3 for disadvantages, plus 1 for the decision with a comment, to a maximum of 5. For: faster inventory turnover, lower storage costs, less wastage or spoilage, better cash flow as goods sell faster, and the chance to attract new customers. Against: losing customers who buy those lines, those customers buying less of everything else, and lower profit from the lost sales.

Question 3: J Limited (15 marks)

The question gave J Limited’s balances after the draft profit had been worked out, then listed an unrecorded bonus issue and three year-end errors.

• 3(a) Revised profit (4 marks): $57 300. Start from the draft profit of $58 600. Add $400 for the allowance for irrecoverable debts, which went up by $300 when it should have gone down by $100 (1 mark). Add $10 000 of over-charged depreciation (1 mark): the carrying value of $160 000 is after a 20% charge, so the starting figure was $160 000 × 5/4 = $200 000 and the correct 15% charge is $30 000, not $40 000. Deduct tax of $11 700 (1 mark). The revised profit earned the fourth mark.
• 3(b) Retained earnings at 31 December 2025 (3 marks): $89 500. The 2-for-3 bonus issue on 1 800 000 shares of $0.25 creates 1 200 000 new shares worth $300 000. To leave reserves in their most flexible form, the share premium of $175 000 is used first and only the remaining $125 000 comes from retained earnings (1 mark). So $157 200 − $125 000 + $57 300 (OF) = $89 500 (OF).
• 3(c) Statement of financial position (8 marks): totals $1 040 300. Non-current assets are property at valuation $736 000 and plant and equipment at $170 000 (the $160 000 plus the $10 000 depreciation correction). Current assets are inventory $51 800, trade and other receivables $53 800 (the $53 400 plus the $400 allowance correction) and cash $28 700. Equity is share capital $750 000, the revaluation reserve $65 000 and retained earnings $89 500, which is $904 500. The 8% debentures of $90 000 are repayable in 2026, so they sit in current liabilities with trade payables of $34 100 and tax of $11 700. Marks went on plant and equipment, receivables, total assets (OF), share capital, retained earnings (OF), debentures, tax and total equity and liabilities (OF).

Question 4: Y Limited (30 marks)

Y Limited makes food products and uses absorption costing. It has two production departments (baking and packaging) and two service departments (stores and canteen).

• 4(a) Apportionment and reapportionment (7 marks): depreciation of machinery ($18 700) is shared by cost of machinery, power ($4800) by kWh and rent ($11 000) by floor area. That makes department totals of baking $37 120, packaging $16 448, stores $6072 and canteen $9360, which add back to $69 000. Stores is reapportioned first by issues (40:50:30), sending $2024 to baking, $2530 to packaging and $1518 to the canteen. The canteen’s new total of $10 878 then goes to the production departments by number of employees (21:9): $7615 to baking and $3263 to packaging. Final totals: baking $46 759, packaging $22 241. The three apportionment rows were one mark each and each needed all four figures right; the two reapportionment rows and the two final totals were marked OF.
• 4(b) Absorption rates (4 marks): baking $46 759 ÷ 5800 machine hours = $8.06 per machine hour; packaging $22 241 ÷ 820 labour hours = $27.12 per labour hour. Each rate was 1 mark (OF) and stating the basis was another. Baking uses many more machine hours than labour hours, and packaging the reverse, which is why the bases differ.
• 4(c) Two reasons for over-absorption (2 marks): actual overheads lower than budgeted, and actual production higher than budgeted.
• 4(d) Selling price of the order (6 marks): $680.98. Direct materials ($31.00) and direct labour in both departments ($97.75 and $40.25) total $169, which earned 1 mark together. Baking overheads are $8.06 × 9.5 machine hours = $76.57 and packaging overheads $27.12 × 3.5 labour hours = $94.92, both OF. Total cost is $340.49. A 50% gross margin means profit equals cost, so add $340.49 to reach $680.98. The last three figures were all OF. Using the 2.7 packaging machine hours instead of the 3.5 labour hours is the trap.
• 4(e) Advise on a special order (5 marks): the new customer wants 8% of a month’s output at a price that cuts the margin to 40%, while the factory is at full capacity but may fall to 96%. Calculations were not required. For (up to 3): using spare capacity if demand falls, helping keep direct labour, and the chance of future orders. Against (up to 3): letting down existing customers while at full capacity, regular customers asking for the same price, whether the workforce would work overtime and whether overtime costs would make the order unprofitable, the lower margin, and the forecast fall in demand being wrong. Plus 1 for the decision with a comment.
• 4(f) Two features of AVCO (2 marks): for example, a new average is calculated after each purchase, it smooths out changes in cost, identical items are valued the same whenever they were bought, and the value may not match any price actually paid.
• 4(g) One advantage and one disadvantage of JIT (4 marks): each is 1 mark for the point and 1 for its consequence. Advantages: less inventory held, so lower storage costs; less cash tied up; less theft or damage; reacting quickly to changes in tastes. Disadvantages: needing a reliable supply chain to avoid stock-outs; needing good operations management; being unable to meet unexpected orders; higher delivery and admin costs from more orders; and losing bulk discounts.

Where the marks are on 9706/22

Type of task	Parts	Marks
Calculations	1(a), 1(b), 1(c), 2(a), 2(b), 3(a), 3(b), 4(b), 4(d)	35
Statements and tables	1(d), 2(c), 3(c), 4(a)	32
Advise	1(e), 2(d), 4(e)	15
State and explain	4(c), 4(f), 4(g)	8
Total		90

• Calculations and statements carried 67 of the 90 marks. Accurate workings, clearly labelled, are where most of the paper is won or lost.
• The three advise parts were worth 5 marks each and shared the same structure: points for, points against, and a decision with a comment.
• Own figure marks run through every long question. Revenue, the gain on disposal and the stolen cash all fed into 1(d); purchases fed into 2(b); revised profit fed into 3(b) and 3(c); and the 4(a) totals fed into 4(b) and 4(d).

How to self-mark 9706/22 with the mark scheme

1. Mark the figures, not just the totals. The scheme gives a mark per figure, so check each line of your working against it. If your final answer is wrong, look through the workings for the marks you did earn.
2. Apply OF honestly. If an earlier figure was wrong but you used it correctly with a complete method, give yourself the OF marks. If a step is missing, there is nothing for OF to attach to.
3. Check “row” and bracketed marks strictly. In 4(a), a row with one wrong department figure scores nothing. In 4(d), the $169 mark needs all three direct cost figures.
4. Check signs and labels. A gain written without “profit” loses a mark in 1(c), and a rate without its basis loses one in 4(b).
5. For the advise parts, count your points on each side, cap each side at the scheme’s maximum (2 in 1(e), 3 in 2(d) and 4(e)), and give the decision mark only if it comes with a reason.
6. For 4(g), give 1 mark for each point and 1 more only if you explained its effect.
7. Log each lost mark as a method error, an arithmetic slip, a missing item in a statement or a one-sided argument, and practise that skill next.

Sit 9706/22 as a timed mock

The paper allows 105 minutes for 90 marks, a little over a minute per mark. A workable plan:

Block	Marks	Time
Question 1: Airport Transfers	30	35 minutes
Question 2: Naila	15	17 minutes
Question 3: J Limited	15	17 minutes
Question 4: Y Limited	30	33 minutes
Check workings, signs and labels	–	3 minutes

Within Question 1, give the 12-mark statement of profit or loss about 14 minutes and set out a separate working for each adjusted expense. Within Question 4, the overhead table takes the longest; keep each reapportionment ratio written beside the row.

Other May/June 2026 9706 papers

• 9706 Paper 12 (Multiple Choice)
• 9706 Paper 32 (Financial Accounting)
• 9706 Paper 42 (Cost and Management Accounting)

Practise and download

• Download 9706/22 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

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Frequently asked questions

What topics were on 9706 Paper 22 May/June 2026? +

Four compulsory questions: incomplete records and a statement of profit or loss for a taxi business, ratios and a trading section for a retailer, a company's revised profit, retained earnings after a bonus issue and statement of financial position, and overhead apportionment and job pricing for a food manufacturer.

How many marks is 9706/22 and how long is it? +

It is out of 90 marks and lasts 1 hour 45 minutes. Questions 1 and 4 are worth 30 marks each and Questions 2 and 3 are worth 15 each. You may use a calculator.

What was the profit for the year on 9706/22 Question 1? +

$9230. Income was $68 190 (revenue of $66 210, an irrecoverable debt recovered of $80 and a $1900 gain on disposal) and expenses were $58 960. The profit was an own figure mark, so it could still be earned after an earlier slip.

How was the cash discount worked out in 9706/22 Question 1(a)? +

One-quarter of the $47 580 received from credit customers, $11 895, came from customers who took the 2.5% discount. That was 97.5% of what they owed, so the discount was 2.5/97.5 × $11 895 = $305.

What were the overhead absorption rates on 9706/22 Question 4? +

$8.06 per machine hour for baking ($46 759 ÷ 5800) and $27.12 per labour hour for packaging ($22 241 ÷ 820). One mark went on each rate and one on stating the basis.

Where can I download 9706/22 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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