Exam guide

Paper structure

• All questions are compulsory on every paper. There is no choice of questions.
• Paper 1 follows a fixed order. Roughly items 1–22 cover financial accounting: the accounting cycle, non-current assets, reconciliations, sole trader, partnership and company accounts, then ratios. Items 23–30 cover costing: labour and materials, absorption costing, marginal costing and CVP.
• Paper 2 has had the same shape in every session since 2022: Q1 is 30 marks (financial statements), Q2 and Q3 are 15 marks each (shorter AS financial topics) and Q4 is 30 marks (a costing case).
• Papers 3 and 4 use an insert with source material (Source A, B, C). Each question is a 25-mark case study that ends with an "Advise…" or "Discuss…" evaluation.
• The big change came in 2023. The old 150-mark Paper 3 was split into a financial Paper 3 and a new costing Paper 4. This moved budgeting, standard costing, investment appraisal and ABC into a separate one-hour paper.

Topic weights

These figures cover variant 2 of every paper from 2022 May/June to 2026 May/June: 34 papers and 2255 marks. They show how much of the total assessment each topic took up. P1 = MCQ, P2 = AS structured, P3/P4 = A Level.

Biggest topics on each paper:

• Paper 1: Reconciliation and verification 17%, marginal costing/CVP 13%, sole-trader adjustments 9%, absorption costing 9%, then ratios, non-current assets, companies and the accounting cycle at about 8% each.
• Paper 2: Limited companies 23%, marginal costing/CVP 20%, absorption costing 13%, ratios 11%, reconciliations 9%, incomplete records 8%.
• Paper 3: Business purchase/merger 18%, clubs 15%, IAS adjustments 13%, ratios 10%, manufacturing 10%, cash flows 9%.
• Paper 4 (2023–2026): Budgeting 31%, standard costing 26%, investment appraisal 21%, ABC 15%.

Bankers

These come up in almost every session:

• A 30-mark costing question as P2 Q4. It has appeared in all 9 sessions. Six were marginal costing and CVP (break-even, margin of safety, target profit, then a two-option decision). Three were absorption costing (allocation, apportionment, reapportionment, absorption rates, under- or over-absorption, pricing a job). Always finish with a 7-mark "Advise the directors" decision.
• A 30-mark final accounts question as P2 Q1. It has appeared in all 9 sessions. Five were a limited company, with a statement of profit or loss, a statement of changes in equity, bonus or rights issues and dividends. Three were a sole trader working from incomplete records (2024 May/June, 2024 Oct/Nov, 2026 May/June) and one was a partnership (2022 May/June).
• Reconciliation and verification. It is in every Paper 1, with 3–8 items (usually 5 or more): bank reconciliation, sales or purchases ledger control accounts, and errors with the suspense account. It was also a 15-mark P2 question in 5 of 9 sessions.
• Ratios. Ratio questions appear in every session somewhere. They include trade receivables and payables days, inventory turnover, ROCE, current and acid test ratios, gearing, and investment ratios such as EPS, P/E, dividend cover and dividend yield.
• Partnership appropriation and current accounts. Every Paper 1 has 1–3 items (usually 2) on interest on capital and drawings, salaries, Partnership Act rules and goodwill on a change of partners.
• Non-current assets. Every Paper 1 has depreciation, disposal, part-exchange or revaluation items. They are also a frequent 15-mark P2 question.
• Paper 3 rotation. Each Paper 3 has three of these: clubs and societies (5 of 9 sessions), business purchase or partnership takeover by a company (6 of 9), and company accounts with IAS adjustments or a statement of cash flows (8 of 9).
• Paper 4 rotation. Each Paper 4 takes two of four topics. Budgeting (cash, production, purchases and receivables budgets) appeared in 5 of 7 sessions. Standard costing variances appeared in 4 of 7. Investment appraisal and ABC appeared in 3 of 7 each.

Rarely tested

• Consignment and joint ventures. Only one question, in 2022 Oct/Nov under the old syllabus. It has not appeared since the 2023 change.
• Auditing and stewardship. Only short parts, in 2022 Oct/Nov and 2025 Oct/Nov: external versus internal auditors, unqualified reports and stewardship.
• Computerised accounting and data security. Small parts only, in 2024 Oct/Nov P1, 2025 May/June P2 and 2026 May/June P2.
• Flexible budgets as the main task: only 2024 Oct/Nov and 2025 Oct/Nov.
• IRR and payback. IRR appeared in 2022 May/June and 2024 Oct/Nov, and payback in 2025 May/June. NPV and ARR are far more common.
• Mergers of two sole traders into a partnership: once, in 2024 May/June. Takeovers of a partnership by a company are much more common.
• Research and development and intangibles: once, in 2025 Oct/Nov.
• Just-in-time inventory and FIFO/AVCO as written parts: only 2026 May/June, on P2 and P4. In Paper 1 they appear more often.

Trends

• Two A Level papers since 2023. Financial and costing work are now examined in separate, shorter papers. This makes it impossible to avoid either half of the A Level.
• More evaluation. About 16% of all written marks are "Advise…" tasks. Every Paper 4 has two 7-mark advise tasks, which is 28% of the paper. Every P2 has about 14 marks of advice, and P3 has 5–10 (since 2023).
• Paper 3 is shifting from statements to adjustments. Statements of cash flows came in 2023 and became a large task: 15–22 marks in 2023 May/June, 2023 Oct/Nov, 2025 Oct/Nov and 2026 May/June. IAS treatments (provisions, contingencies, impairment, prior-period adjustments, inventory at net realisable value) appear almost every year.
• Partnership changes now sit in Paper 3. Admission, retirement and goodwill came up in 2024 Oct/Nov and 2025 May/June. Partnerships taken over by a company came up in 2023 May/June, 2025 Oct/Nov and 2026 May/June.
• Sole traders are back in P2 Q1. 2024 May/June, 2024 Oct/Nov and 2026 May/June all used a sole trader, mostly from incomplete records. Expect either a company or a sole-trader case.
• Paper 4 has swung between pairs of topics. The 2023 May/June and 2025 May/June papers were both investment appraisal plus standard costing. Budgeting appeared in four of the last five sessions.
• Grade boundaries for the A Level papers are low. Paper 3 needed only about 42–47 out of 75 for an A, and Paper 4 about 31–36 out of 50. Full, clearly labelled answers earn a lot.

Question styles

• "Prepare…" carries about 35% of written marks. It covers statements of profit or loss, SOFP, SOCE, cash flow statements, club income and expenditure accounts, manufacturing accounts, ledger and control accounts, journals, budgets and reconciliation statements. Correct format, labels and dates earn marks.
• "Calculate…" carries about 17%: ratios to two decimal places with the formula, absorption rates, break-even, NPV and ARR, variances, and revised profit.
• "Advise…" carries about 16%. It is almost always 5–7 marks and asks you to "justify your answer". Marks come from points on both sides plus a clear decision. Non-financial factors count.
• "Explain", "State", "Discuss", "Identify", "Define" are short knowledge parts of 1–6 marks: concepts, uses and limitations of ratios, CVP or budgets, and reasons for variances.
• "Complete the table/statement…" gives a pro-forma, for example a variance reconciliation, overhead apportionment table or capital account statement.
• Paper 1 mixes number crunching (missing figures, depreciation, reconciled balances, break-even) with "which statements are correct (1, 2, 3, 4)" items and "effect on profit / assets" tables.
• Papers 3 and 4: read the insert source data first. Each case builds up to a decision.

Common mistakes

These come from the 2022 and 2023 examiner reports. No reports were in the set for later sessions.

• No workings. Marks can be given for correct workings, but a wrong final figure on its own earns nothing.
• Weak presentation. Abbreviated or missing labels, missing Debit/Credit headings in journals, wrong narratives in ledger accounts, and missing dates or periods.
• Answers that are too thin. One- or two-word answers to "explain" or "describe" tasks. For example, naming the consistency concept without saying why it matters from year to year.
• One-sided advice. Giving only points for a proposal, or not reaching a clear decision.
• Wrong figures in ratios. Using total sales instead of credit sales for receivables days, using profit after interest for ROCE, and not knowing the formula for non-current asset turnover.
• Getting debits and credits backwards in control accounts, disposal accounts and business purchase accounts. Goodwill or share premium left out when a company takes over a partnership. Share capital and share premium not split in the acquiring company's journal.
• Revaluation journals that ignore the accumulated depreciation.
• Wrong months in budgets. Cash budgets put credit receipts or payments in the wrong month, and cash discounts are missed. Students also give the advantages of budgeting in general when the question asks about a cash budget specifically.
• Statements of cash flows. Profit from operations not reconstructed correctly, interim and final dividends missed, purchases of non-current assets left out, and bonus issues treated as cash.
• Marginal costing decisions. Ranking products by profit instead of contribution per unit of the scarce resource, and not treating a sales commission as a variable cost.
• Overheads. Mixing up under-absorption and over-absorption, and not stating the basis for an absorption rate (labour hours or machine hours).
• Paper 1 traps. Reading the wrong accounting year, deducting interest on capital before appropriation, and forgetting returns when working out purchases.

Grade thresholds

Raw marks needed for grade A and grade E on the variant 2 components, plus the overall AS (SY) and A Level (AY) thresholds. The overall figures are weighted marks: out of 170 or 340 in 2022, and out of 125 or 250 from 2023.

How to read this: an A on Paper 2 usually needs about 52–63 out of 90 (58–70%). An A on Papers 3 and 4 needs only about 56–72%, and an E sits near 25–30%. Oct/Nov boundaries for Paper 2 tend to be a few marks lower than May/June.

Revision priorities for Oct/Nov 2026 and 2027

1. P2 Q4 costing (30 marks). Practise both marginal costing (break-even, margin of safety, target profit, special orders and two-option decisions, limiting factors) and absorption costing (apportionment, reapportionment, absorption rates, under- or over-absorption, job pricing). 2026 May/June was absorption costing, so a marginal costing / CVP case is the likelier next one. Prepare for both.
2. P2 Q1 final accounts (30 marks). Practise a company statement of profit or loss, SOCE and SOFP with bonus and rights issues, dividends and corrections to retained earnings. Also do a sole-trader case from incomplete records, including working out stolen cash or inventory.
3. Reconciliations (P1 and P2 15-markers). Bank reconciliation, control accounts with contras and irrecoverable debts, and the suspense account with correction journals. These are guaranteed Paper 1 marks.
4. Ratios with formulas at AS and A Level, plus written interpretation and limitations. Investment ratios (EPS, P/E, dividend cover and yield, gearing, income gearing) are needed for P3.
5. Paper 3 big three. Club accounts with a trading section, life membership and the accumulated fund. A partnership taken over by a company: realisation account, capital accounts and the buying company's journal and SOFP. The statement of cash flows (IAS 7). Then IAS adjustments (IAS 2, 8, 10, 16, 36, 37) and manufacturing accounts with provision for unrealised profit. Manufacturing has not appeared since 2025 May/June, and partnership changes not since 2024 Oct/Nov and 2025 May/June.
6. Paper 4: all four topics. Cash and functional budgets, and standard costing variances with a reconciliation statement, are the most frequent. Investment appraisal (NPV, IRR, ARR, payback) has been missing from the last two sessions. ABC appeared in 2026 May/June.
7. Evaluation technique. For every "Advise" task, give two or three points for and against with figures from the question, then a clear decision. This is worth 14 marks on Paper 4 and around 14 on Paper 2.
8. Low-weight but quick marks. Accounting concepts (prudence, matching, consistency, realisation), Partnership Act rules, users of accounts, CVP assumptions, and JIT and FIFO/AVCO.