ACCOUNTING PAPER 2 GRADE 12 MEMORANDUM - NSC EXAMS PAST PAPERS AND MEMOS SEPTEMBER 2020 PREPARATORY EXAMINATIONS

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ACCOUNTING PAPER 2
GRADE 12
NATIONAL SENIOR CERTIFICATE EXAMINATIONS
SEPTEMBER 2020

MARKING PRINCIPLES:

  1. Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item (no penalty for misplaced item). No double penalty applied.
  2. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item.
  3. Full marks for correct answer. If answer incorrect, mark the workings provided.
  4. If a pre-adjustment figure is shown as a final figure, allocate the part-mark for the working for that figure (not the method mark for the answer). Note: if figures are stipulated in memo for components of workings, these do not carry the method mark for final answer as well.
  5. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. If no + or – sign or bracket is provided, assume that the figure is positive.
  6. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates.
  7. Where penalties are applied, the marks for that section of the question cannot be a final negative.
  8. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer.
  9. Operation means 'check operation'. 'One part correct' means operation and one part correct. Note: check operation must be +, -, x, ÷, or per memo.
  10. In calculations, do not award marks for workings if numerator & denominator are swapped – this also applies to ratios.
  11. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part. Indicate with a x.
  12. Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one comment could contain different aspects.
  13. Codes: f = foreign item; p = placement/presentation.

QUESTION 1

1.1 BANK RECONCILIATION

 BANK RECONCILIATION STATEMENT ON 31 JULY 2020   
   Debit   Credit 
 Balance according to Bank Statement      ✓ 3 600 
 Outstanding deposit    ✓ 15 200
 Outstanding cheques    
 No. 231  ✓ 2 020   
 No. 235  ✓ 1 570  
 Incorrect entry on Bank Statement  ✓✓ 3 800   
 Balance according to Bank Account  ✓ 11 410  
    18 800  ✓ 18 800 
 8 

-1 Foreign entries (max. 2) both totals

1.2 DEBTORS’ AGE ANALYSIS

1.2.1

 How does the preparation of the Debtors’ Age Analysis assist in the control of debtors? 
 It shows which debtors do not keep to their credit terms. ✓ Action can then be taken to encourage them to pay. ✓ Bad debts can be kept to a minimum. ✓
 3 

 

1.2.2

 How much is owed by the debtors on 31 May 2020? 
 4 250 + 970 + 3 500 + 3 075 + 9 635 = 21 430 ✓✓
 2 

 

1.2.3

 Which debtor would you gladly give a credit reference?  
 H. Hastie ✓✓
 2 


1.2.4

 Which debtor would be ‘handed over’, and what does this mean? 
 P. Platsak.✓ This means the account will be handed over to an
attorney ✓ who will contact the debtor and give him a certain time to pay
the account. If the debtor does not pay the account, he can be sued. ✓
 3 


1.3 CREDITORS’ RECONCILIATION
1.3.1

 What is the purpose of reconciling the balance on the Creditors’ Control Account with the total of the Creditors’ List from the
Creditors’ Ledger? State TWO points.
TWO valid points✓✓ ✓✓
The reconciliation of the balance on the Creditors’ Control Account and the
total of the Creditors’ List is a means of internal control to ensure that no
errors have been made so that the creditor is paid the correct amount and
the correct amount of discount is received.
  • It will assist the business in detecting errors/omissions in their books.
  • It will show errors/omissions in the statement received.
  • Detect fraudulent activities and take action.
 4 


1.3.2

 Record the errors and omissions in the given table and calculate the correct balance and total.
  Creditors’ Control Account  Creditors’ List
Preliminary balance/total R74 715 R32 595
A      900✓
B  3 720✓  3 720 ✓
C     (720 − 270)    (450)✓✓
D     (16 400 × 2)  (32 800)✓✓  
E    43✓    43✓
F     8 870✓
Correct balance/total
*One part correct		   45 678✓*  45 678✓*
 12 

TOTAL MARKS   34

QUESTION 2

2.1 VAT CONCEPTS

2.1.1

Change the underlined parts in the following sentences to make the statements TRUE. Write the answer next to the question number. 
SARS / South African Revenue Service ✓

 

2.1.2

 Zero/0%
 2 

 

2.2 VAT CALCULATIONS

 Calculate the correct amount of VAT the business has to pay. Show ALL workings.  
43 820 ✓ + (1 413 ✓✓ + 2 790 ✓✓ + 756 ✓+ 112✓ ) – (6 818✓ + 184✓✓ )
                                          5 071 (6 marks)                        7 002 (3 marks) 
= 41 889✓✓One part correct
OR 43 820 + 1 413 + 2 790 + 756 + 112 – 6 818 – 184
OR – 43 820 – 1 413 – 2 790 – 756 – 112 + 6 818 + 184
VAT CONTROL
 6 818   43 820 
    184    1 413
 41 889     2 790
      756
      112
 48 891  48 891
 12 

 

2.3 INVENTORY VALUATION

2.3.1

 Calculate the following in respect of the ladies’ watches on 31 August 2020.
 (a) Value of closing stock
1 x 6 500    5 x 6 800     2 x 7 300    3 x 7 800
    6 500✓  + 34 000✓  + 14 600✓ + 23 400 ✓
= 78 500  ✓ One part correct (1 + 5 + 2 + 3 = 11 units) / 47 – 36 = 11 
 5 
 (b) Cost of sales
330 000 two marks
78 000✓  + 252 00✓ – 78 500✓  (see above)
= 251 500✓  One part correct
OR
440 125  x 100/175 = 251 500
(1 mark) (2 marks)   (1 mark) (1 w/w)
OR
71 500 (11 x 6 500)
68 000 (10 x 6 800)
73 000 (10 x 7 300)
39 000 (05 x 7 800)
251 500
 5 
 (c) Stock-holding period (in days) using average stock
78 250 2 marks see 2.3.1 (a)
½ (78 000✓ + 78 500✓)  x 365 = 113,6 days ✓ One part correct
      251 500✓ see 2.3.1 (b)                      Accept 114 days
 4 


2.3.2

 Calculate the following in respect of the men’s watches on 31 August 2020: 
 (a) Value of closing stock
          304 150 (3 marks)
32 300✓ + 259 900 ✓ + 11 950✓ 
                  95✓ + 675✓ 
770 (2 marks)
= 395
395 x 92 ✓ = 36 340 ✓ One part correct
 7 
 (b) Sales
(770 – 92) = 678 (units sold)  ✓✓ (2 or 0)
678 x R520 = 352 560✓ One part correct
 3 


2.3.3

 Explain why the business uses different methods to value each type of watch. State ONE valid point. 
 One valid point ✓✓
  • Ladies’ watches are sold at high prices. Small quantities are purchased.
  • Each item can be monitored individually.
  • The value changes continuously.
Men’s watches are sold at low prices. Large quantities are purchased.
The value of the watches are almost the same.
 2 


TOTAL MARKS 40

QUESTION 3

3.1 Indicate whether the following statements are TRUE or FALSE. Write only ‘true’ or ‘false’ next to the question numbers
 3.1.1 True ✓
3.1.2 False ✓

 2 


3.2.1 Note for Direct Material Costs

 Balance at the beginning of the year   210 000 
 Purchases (1 425 000 – 210 000 – 180 000)   1 035 000 ✓* 
 Railage on purchases    180 000✓✓ 
    1 425 000
 Balance at the end of the year (1 425 000 – 1 240 000)    (185 000) ✓*
   1 240 000✓

*1 part must be correct; -1 Foreign items; Max. 1

3.2.2 : Production Cost Statement on 29 February 2020

 Direct material    1 240 000
  ✓Direct Labour (724 160 x 0,5)✓     362 080 ✓ *
 ✓Prime cost     DL + DM  1 602 080✓  
✓ Factory overhead costs (1 920 000 – 1 602 080)     317 920 ✓ ✓  
Total manufacturing costs  1 920 000
Work-in-process at the beginning of the year 
                         (2 010 000 – 1 920 000)		    90 000 
   2 010 000
Work-in-process at the end of the year   (90,000)
Cost of production of finished goods  (96 000×R20)   1 920  000                                                                                        000
 15 

 

3.2.3 Income statement for the year ended 29 February 2020

 Sales   3 804 000  ✓ 
 Cost of sales   (1 902 000)  ✓ ✓ 
 Gross profit  1 902 000  ✓ 
 Administrtion costs (571 100 + 181 040)   (752 140)  ✓ 
 Selling and distribution costs  (594 860)  ✓ ✓ 
 Net profit   555 000  ✓ ✓ 
 11 


3.3 COST ACCOUNTING

3.3.1

 Calculate the break-even point for the year ended 31 August 2020.
    736 000✓    = 61 333 or 61 334  One part correct
  (28✓ – 16✓)
 4 


3.3.2

 Should the business be satisfied with the number of units that they produced and sold during the current financial year? Explain. Quote figures. 
 Yes/No ✓
Reason with figures ✓✓
Reasons for Yes
The business sold (64 000 – 61 334) 2 666 units more than the breakeven point.
Reasons for No
The business sold (78 000 – 60 000) 18 000 more than the break-even
point in the previous financial year.
Production decreased from 78 000 – 64 000
 3

3.3.3

 Give TWO possible reasons for the increase in the direct material
 cost per unit in the current financial year. 
 Any TWO suitable reasons ✓✓ ✓✓
  • Due to the effects of inflation, price of raw materials increased
  • Storage costs
  • Raw material obtained from new suppliers
  • Increase in wastage
  • Increase in carriage 
 4 


3.3.4

 Tyler, the owner, suggests that in order to improve financial results in the new financial year, the quantity of cereal per box must be reduced by 10% but the selling price must remain the same. Give TWO valid reasons why he should not do this.

Any TWO valid reasons ✓✓ ✓✓

  • It is not ethical and would lead to a decrease in the customers once
    this information becomes public knowledge.
  • This is deliberate product shrinkage to gain higher profits. Could lead
    to legal action against the business.
  • Product may be removed from the shelves if the contents of the product
    do not correspond with the information on the package. 
 4 

 

TOTAL MARKS 50

QUESTION 4

4.1 Choose the correct description in COLUMN B to match the concept in COLUMN A. Write only the letter (A–E) next to the question numbers (4.1.1–4.1.4).
4.1.1 C ✓
4.1.2 D ✓
4.1.3 A ✓
4.1.4 B ✓

 4 



4.2.1 GENERAL LEDGER OF SHARKS LTD ASSET DISPOSAL

 2020 Aug   31   Equipment   1 200 000   2020 Aug   31   Accumulated depreciation on equipmen✓t   630 000✓✓✓ 
     Profit on sale ✓   30 000✓       Creditors'   control ✓  600 000Creditors'   control ✓
       1230000            1 230 000
 10 


4.2.2 Fixed Assets

 

   Land and Buildings    Equipment 
 Carrying value at the beginning of the year    4 050 250  660 000
 Cost   4 050 250  1 200 00
 Accumulated depreciation         0  (540 000)
Movements:    
Additions    1 500 000✓
Disposals (660 000 – 90 000)  ( 1 462 500)✓✓  (570 000)✓✓
Depreciation          0  (202 500) ✓✓
Carrying value at the end of the year   2 587 750✓  1 387 500✓
Cost  2 587 750  1 500 000✓
Accumulated depreciation        0  (112 500)✓
 12 

TOTAL MARKS 26

TOTAL: 150

Last modified on Friday, 18 February 2022 07:23
Published in Grade 12 September 2020 Preparatory Examinations

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