Financial information and decisions: past paper questions
Real questions on financial information and decisions
The newest 20 of 56 written questions. Open one to see it on the real paper.
- 0986/11 · May/June 2026 · Q2a[2]
Define ‘non-current assets’.
See it on the paper → - 0986/21 · May/June 2026 · Q1b[12]
(b) Consider the advantages and disadvantages of the following three sources of finance Ashanti could use for the new equipment. Which source should she use? Justify your answer. * owners’ savings * — bank loan * — leasing OWNETS’ SAVINGS ..........
See it on the paper → - 0986/11 · October/November 2025 · Q2b[2]
Identify one non-current asset and one current liability. Non-current asset: Current liability:
See it on the paper → - 0986/11 · October/November 2025 · Q2c[4]
Outline two ways the information in Table 2.1 might be useful to CPW. Way 1: Way 2:
See it on the paper → - 0986/11 · October/November 2025 · Q2d[6]
Explain two factors CPW should consider when deciding on a source of finance for the new vehicles. Factor 1: Explanation: Factor 2: Explanation:
See it on the paper → - 0986/21 · October/November 2025 · Q3a[8]
Explain two reasons why working capital is important to LB. Reason 1: Explanation: Reason 2: Explanation:
See it on the paper → - 0986/11 · May/June 2025 · Q3c[4]
Identify four reasons why a cash flow forecast might be useful to a business. Reason 1: Reason 2: Reason 3: Reason 4:
See it on the paper → - 0986/11 · May/June 2025 · Q4e[6]
Do you think the advantages of using retained profits to fund business expansion are greater than the disadvantages? Justify your answer.
See it on the paper → - 0986/12 · May/June 2025 · Q2a[2]
Define ‘profit’.
See it on the paper → - 0986/12 · May/June 2025 · Q2b[2]
Identify two expenses a business might have. Expense 1: Expense 2:
See it on the paper → - 0986/12 · May/June 2025 · Q2c[4]
Outline two possible reasons why FLD’s gross profit is decreasing. Reason 1: Reason 2:
See it on the paper → - 0986/12 · May/June 2025 · Q3e[6]
Do you think a bank loan is the best source of start-up capital for a new business? Justify your answer.
See it on the paper → - 0986/21 · May/June 2025 · Q3a[8]
Explain two advantages and two disadvantages to a business of using a bank loan as a source of finance. Advantage 1: Advantage 2: Disadvantage 1: Disadvantage 2:
See it on the paper → - 0986/21 · May/June 2025 · Q4a[8]
Explain one effect on PF of the increase in each of the two taxes outlined in Appendix 2. Tax on people’s income: Explanation: Tax on profit made by businesses: Explanation:
See it on the paper → - 0986/21 · May/June 2025 · Q4b[12]
Using Appendix 3 and other information, consider PF’s financial position in 2025 and forecast financial position in 2026. Do you think Philip’s sister should invest in PF? Justify your answer using suitable calculations. 2025: 2026 (forecast): Recommendation:
See it on the paper → - 0986/22 · May/June 2025 · Q4b[12]
Using Appendix 3 and other information, consider the extracts from the income statements for the two companies in country P. Which company should TSE take over? Justify your answer using suitable calculations. Company A: Company B: Recommendation:
See it on the paper → - 0986/11 · October/November 2024 · Q2c[4]
Outline one advantage and one disadvantage to Mitchell of using microfinance as a source of finance. Advantage: Disadvantage:
See it on the paper → - 0986/11 · October/November 2024 · Q3a[2]
Define ‘capital employed’.
See it on the paper → - 0986/11 · October/November 2024 · Q3b[2]
Calculate JTA’s return on capital employed (ROCE). Show your working. Working: Final
See it on the paper → - 0986/21 · October/November 2024 · Q4a[8]
Explain two reasons why CC might need finance. Reason 1: Explanation: Reason 2: Explanation:
See it on the paper →
What examiners said
Candidates found this to be the most challenging part (c) question on the examination paper. The strongest answers recognised the importance of a cashflow forecast for planning and in loan applications. A common error made by many candidates was to state that the cashflow forecast would help to calculate profit or loss. Some candidates had clearly confused a cashflow forecast with an income statem...
— Examiner report, May/June 2025, 0986/11 Q3(c) (Cambridge)
Many candidates did not fully understand this topic area. A noticeable number of candidates did not answer this question. The strongest answers recognised that a lack of profit may lead to a delay in expansion but had the advantage of not needing to be repaid. Even the strongest candidates struggled to produce an evaluative answer to this question. Weaker answers confused profit with cashflow and...
— Examiner report, May/June 2025, 0986/11 Q4(e) (Cambridge)
Most candidates understood that profit was the difference between revenue and costs. Better answers were able to provide a precise definition. Some answers lacked precision by referring to costs rather than total costs. Other common mistakes included confusing the term with revenue or gross profit. Some answers missed the total cost element by just subtracting expenses from revenue.
— Examiner report, May/June 2025, 0986/12 Q2(a) (Cambridge)
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