Cambridge A2 Level Accounting 9706 (eBook)

Exam Study Guide 2026

Azhar Ul Haque Sario (Autor)

eBook Download: EPUB

2026
208 Seiten
Azhar Sario Hungary (Verlag)
978-3-384-79035-4 (ISBN)

Infos

Master the future of finance with the ultimate study companion for the 2026 Cambridge A2 Level Accounting exams.

 

This book is a complete, deep-dive guide for the A2 Level syllabus. It covers every major topic you need for the exam. You will learn about Financial Accounting in detail. It explains the complex rules of Goodwill and how to value a business. You will master Partnership changes like admission and retirement. It teaches you about Manufacturing Accounts and factory profit. It breaks down Limited Company financial statements under modern standards. You will understand Auditing and the role of stewards. It also covers Cost and Management Accounting thoroughly. You will learn Activity Based Costing and cost drivers. It explains Standard Costing and variance analysis. It covers Budgeting and Investment Appraisal techniques. The book uses simple English. It is easy to read and digest. It is designed for your success in 2026.

 

This guide offers specific value that older textbooks cannot match. It brings accounting into the modern era of 2026. It focuses on the new landscapes of AI and sustainability. It explains how digital tools change auditing and financial reporting. It uses real-world examples like 'GreenGrid Technologies' and 'EcoDrone' to make concepts stick. It moves beyond basic math to teach you analysis. It explains the new IFRS standards and the shadow of IFRS 18. This is not just a list of rules; it is a strategic guide. It gives you the competitive edge by explaining the 'why' behind the numbers. It bridges the gap between theory and the real world.

 

Dive deep into the mechanics of business mergers and acquisitions. Understand the critical difference between purchased and inherent goodwill. Learn how to handle mid-year partnership changes with precision. The book breaks down complex journal entries for you. It simplifies the 'Garner vs. Murray' rule for insolvency. It makes club accounting easy, moving from receipts to the 'Accumulated Fund'. You will learn to account for life memberships and donations correctly.

 

Discover the secrets of manufacturing accounts and unrealized profit. Learn to handle the 'Make or Buy' decision with confidence. It teaches you to analyze financial ratios like a pro. You will learn to read a Statement of Cash Flows and Equity. The management accounting section is equally powerful. It explains Activity Based Costing (ABC) and how it fixes traditional errors. You will learn about cost pools and drivers. It covers Standard Costing in depth, updating it for the volatile markets of 2026. You will learn to calculate material, labor, and overhead variances. It explains the 'domino effect' of business decisions. You will master Budgeting, including Zero-Based and flexible budgets. It covers Investment Appraisal techniques like NPV and IRR to maximize wealth.

 

The book is written by Azhar ul Haque Sario, an experienced author and data scientist. He brings a wealth of knowledge from his ACCA and MBA background. The content is authentic and freshly produced. It is designed to be your personal tutor.

 

Copyright Disclaimer: This book is an independent publication by Azhar ul Haque Sario. It is not affiliated with, endorsed by, or connected to Cambridge Assessment International Education or the board. All trademarks are the property of their respective owners. This work is independently produced under nominative fair use for educational purposes.

Textauszug

Business acquisition and merger

 

Module 1: The Nature and Strategic Purpose of Mergers

 

In the dynamic business landscape of 2026, the concepts of "acquisition" and "merger" have evolved from simple expansion tactics to critical survival and optimization strategies. To understand the accounting, we must first understand the entity.

1.1 Defining the New Business Entity

 

A merger typically involves two or more distinct entities agreeing to move forward as a single new company. It is a "marriage of equals." Conversely, an acquisition (or takeover) is when one entity (the acquirer) purchases a controlling interest in another (the acquiree).

 

From an accounting perspective, the substance is often the same: assets and liabilities are transferred, and ownership structures change.

1.2 The Strategic "Why"

 

Why do businesses in 2026 merge? The drivers have shifted toward technological integration and sustainability.

 

Synergy Realization: This is the "1 + 1 = 3" effect.

 

Operational Synergy: A manufacturing sole trader merging with a logistics partnership to streamline the supply chain, reducing costs by eliminating duplicate warehousing.

 

Financial Synergy: A small tech start-up (sole trader) merging with a large Limited Company to access cheaper capital markets.

 

Market Dominance & Diversification:

 

Horizontal Integration: Buying a competitor to increase market share (e.g., two local bakeries merging).

 

Vertical Integration: Buying a supplier (backward) or a retailer (forward) to secure supply chains—critical in the volatile resource markets of the mid-2020s.

 

Access to Intangibles: Often, a Limited Company acquires a partnership not for its machinery, but for its Goodwill—its customer list, reputation, or proprietary data algorithms.

 

Module 2: Accounting for Mergers and Acquisitions (Journal Entries)

 

The core of A Level Accounting lies in the mechanics: closing the old books and opening the new ones. We operate under the Purchase Method (often aligned with IFRS 3 Business Combinations).

2.1 Scenario A: Merger of Two Sole Traders to Form a Partnership

 

Imagine two sole traders, Liam (running a digital marketing freelance business) and Noah (a web designer), deciding to merge into a partnership called "LN Creative."

 

Step-by-Step Accounting Process:

 

Revaluation in Individual Books: Before merging, assets must be restated to their Fair Value (agreed value), not their carrying amount (historical cost less depreciation). This ensures neither partner is disadvantaged.

 

 

 

Closing the Sole Trader’s Books:

 

Assets are credited (removed).

 

Liabilities are debited (removed).

 

The difference (Capital) is transferred to the new entity.

 

Journal Entries (In Liam’s Books):

Date      Particulars      Debit ($)      Credit ($)

Step 1      Revaluation Account      X      

Asset (Increase in value)            X

(Being recording of increase in asset value)            

Step 2      Realisation/Capital Account            

Assets (at book value)            X

Liabilities (at book value)      X      

(Closing assets and liabilities)            

Step 3      New Partnership Account (LN Creative)      X      

Capital Account (Final Balance)            X

(Transferring net capital claim to the new firm)            

 

In the New Partnership Books (LN Creative): The new firm records the assets and liabilities at the agreed fair values.

Date      Particulars      Debit ($)      Credit ($)

Opening      Non-Current Assets (Fair Value)      X      

Current Assets (Fair Value)      X      

Goodwill (if purchased/agreed)      X      

Liabilities (Agreed Value)            X

Capital - Liam            X

Capital - Noah            X

(Recording initial capital introduction upon merger)

 

      

2.2 Scenario B: Sole Trader Merging with an Existing Partnership

 

Suppose Sarah (sole trader) merges her consultancy into an existing partnership of Ava & Ben.

 

Key Consideration: The existing partnership (Ava & Ben) must typically revalue their own assets first to ensure their capital accounts reflect current worth before Sarah joins. This often involves creating a Revaluation Account in the partnership books.

 

Entries in the Partnership Books:

 

Revaluation: Adjust existing assets to fair value. Gain/Loss goes to Ava and Ben's Capital Accounts (in old profit-sharing ratio).

 

Acquisition of Sarah:

 

Dr Assets (Sarah's business at Fair Value)

 

Cr Liabilities (Sarah's business)

 

Cr Capital - Sarah (The residual value)

 

Example: If Sarah brings net assets worth $50,000, her capital account is credited $50,000. If she is given a capital credit of $60,000, the extra $10,000 is Goodwill that she brings to the firm.

2.3 Scenario C: Acquisition by a Limited Company

 

This is the most complex scenario. Omega Ltd acquires the business of Delta Traders (Sole Trader).

 

The Purchase Consideration (PC): Omega Ltd pays for the business. This payment can be in:

 

Cash/Bank

 

Ordinary Shares in Omega Ltd (at market premium)

 

Debentures (Loan notes)

 

Entries in Omega Ltd (The Acquirer):

Date      Particulars      Debit ($)      Credit ($)

1      Business Purchase Account      X      

Liquidator of Delta Traders            X

(Being purchase consideration due)            

2      Assets (Individual accounts)      X      

Goodwill (Balancing Figure)      X      

Liabilities (Taken over)            X

Business Purchase Account            X

(Incorporating assets and liabilities acquired)            

3      Liquidator of Delta Traders      X      

Bank            X

Share Capital (Nominal Value)            X

Share Premium (Excess over nominal)            X

Debentures            X

(Discharge of purchase consideration)            

 

Note regarding 2026 Standards: Emphasis is placed on the Share Premium. If Omega Ltd issues a $1 share at a value of $2.50, $1.00 goes to Share Capital and $1.50 to Share Premium.

Module 3: Valuation of Goodwill

 

In 2026, Goodwill remains an "intangible asset with an indefinite useful life." It is strictly defined as the excess of the cost of acquisition over the fair value of identifiable net assets acquired.

 

 

3.1 The Formula

 

The golden formula for A Level Accounting is:

Goodwill=Purchase Consideration−Fair Value of Net Identifiable Assets

 

Where:

Net Assets=Total Assets (at Fair Value)−Total Liabilities (at Fair Value)

3.2 Calculating Purchase Consideration

 

The Purchase Consideration (PC) is the total "price tag." It is not just the cash paid.

 

Example Calculation: Target: Alpha Traders. Acquirer: Beta Plc.

 

Terms of Acquisition:

 

Beta Plc takes over assets worth $200,000 and liabilities of $40,000.

 

Beta pays $50,000 cash.

 

Beta issues 100,000 shares (Nominal value $0.50) with a market value of $1.20 each.

 

Step 1: Calculate Purchase Consideration (PC)

 

Cash:...

Produkt-Details

• Erscheint lt. Verlag: 1.1.2026
• Reihe/Serie: Cambridge A Level Courses
• Sprache: englisch
• Themenwelt: Sachbuch/Ratgeber ► Freizeit / Hobby ► Sammeln / Sammlerkataloge
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management
• Schlagworte: Budgeting and Control Systems • Cambridge A Level Accounting 9706 • Financial and Management Accounting • International accounting standards • Investment Appraisal Techniques • Partnership and Corporate Accounts • Standard Costing and Variance
• ISBN-10: 3-384-79035-9 / 3384790359
• ISBN-13: 978-3-384-79035-4 / 9783384790354