Downloaded from Stanmorephysics.

com

NATIONAL
SENIOR CERTIFICATE

GRADE 12

ACCOUNTING

COMMON TEST

JUNE 2020

PAPER TWO

MARKS: 150

TIME: 2 HOURS

This question paper consists of 14 pages and an answer booklet of 9 pages.

Accounting Paper Two 2 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

1. Answer ALL the questions.

2. A special ANSWER BOOK is provided in which to answer ALL the questions.
3. Show workings in order to achieve part-marks.
4. You may use a non-programmable calculator.
5. You may use a dark pencil or blue/black ink to answer the questions.
6. Where applicable, show all calculations to ONE decimal point.
7. Write neatly and legibly.
8. Use the information and table below as a guide when answering the question. Try NOT
to deviate from it.

QUESTION 1: 40 Marks; 32 Minutes

Topic of the question This question integrates:
Bank Reconciliation
Reconciliations Creditors Reconciliation
Debtors age analysis
Internal control

QUESTION 2: 30 Marks; 24 Minutes

Topic of the question This question integrates:
Inventory valuation: weighted average, FIFO
Inventory Valuations Internal control
Problem-solving

QUESTION 3: 50 Marks; 40 Minutes

Topic of the question This question integrates:
Direct material cost
Factory overheads
Production Cost Statement
Manufacturing
Analysis and interpretation
Break-even point
Internal control

QUESTION 4: 30 Marks; 24 Minutes

Topic of the question This question integrates:
Fixed assets
Fixed Assets and Internal Control Asset disposal Account
Internal control

Copyright reserved Please turn over

Accounting Paper Two 3 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

QUESTION 1 RECONCILIATIONS (40 Marks; 32 Minutes)

1.1 BANK RECONCILIATION
You are presented with information relating to Jozini Book shop for
February 2020.

REQUIRED:
1.1.1 Show the entries that must be recorded in the Cash Journals by
completing the table provided in the ANSWER BOOK. (8)
1.1.2 Prepare the Bank Reconciliation Statement on 29 February 2020. (9)
1.1.3 As the internal auditor you are not happy with the manner in which cash
is being controlled in this business. Identify ONE problem and provide a
figure to support your answer.
Give advice on how this problem can be avoided in future. (2)
INFORMATION:
A. Information from the Bank Reconciliation Statement on
31 January 2020.

Favourable balance as per Bank Statement 30 000

Outstanding deposit Dated 30 January 2020 37 500
Outstanding cheques: No.111 ( dated 1 August 2019) 4 700
No.267 ( dated 27 January 2020) 8 000
No.321 ( dated 15 February 2020) 13 000
Favourable balance as per Bank Account in the ledger 41 800

B. Provisional totals in the Cash Journals on 29 February 2020:

• CRJ R107 200
• CPJ R121 160
C. A comparison of the February 2020 Bank Statement with the Bank
Reconciliation Statement on 31 January 2020 revealed the following:
• Only cheque No. 267 and the deposit of R37 500 appeared on the
Bank Statement for February 2020.
• Cheque No. 111 was issued to the MGM Club in payment of the
owners membership fees. The club no longer exists.

Copyright reserved Please turn over

Accounting Paper Two 4 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

D. A comparison of the February 2020 Bank Statement with the Cash

Journals for February 2020 revealed the following:
• Bank charges of R960 on the Bank Statement were not recorded in the
relevant journal.
• A dishonoured cheque for R6 680 appeared on the Bank Statement. This
cheque was received from Mkhize, a debtor, in settlement of his account
of R7 370.
• Interest of R520 credited on the Bank Statement was not recorded in the
Journals.
• Cheque No. 421 issued to a creditor appeared correctly on the Bank
Statement as R8 940. This was recorded as R9 840 in the Cash
Payment Journal.
• A debit order of R1 200 for the monthly insurance appeared twice on the
Bank Statement in error, but no entry has been made in the Journals.
E. The February 2020 Cash Receipts Journal reflected the following
outstanding deposits:
• R25 000 on 6 February 2020
• R17 000 on 27 February 2020
F. Cheques from the February 2020 Cash Payments Journal not yet
presented for payment:
• No. 531 for R6 500 (dated 23 February 2020)
• No. 561 for R8 100 (dated 25 February 2020)
G. The Bank Statement reflected a favourable balance of R9 520 on
29 February 2020.

Copyright reserved Please turn over

Accounting Paper Two 5 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

1.2 CREDITORS RECONCILIATION

Pinetown Stores buys goods on credit from Kwamashu Suppliers.
REQUIRED:
1.2.1 Use the table provided to indicate the changes that must be made:
• In the creditor’s ledger account of Kwamashu Suppliers in the
books of Pinetown Stores. (5)
• In the statement of account. (6)
1.2.2 Explain how the creditor’s reconciliation statement can assist the
business in terms of their internal control. State TWO points. (4)
INFORMATION:
A. The account of Kwamashu Suppliers in the Creditors Ledger of Pinetown
Stores had a balance of R38 100 on 31 May 2020.
The statement of account received from Kwamashu Suppliers showed a
balance of R40 800 on 25 May 2020.
B. An investigation revealed the following errors and omissions:

(i) Invoice 458 for R4 100 appeared only in the Creditors Ledger. It was
for goods that Pinetown Stores bought from another supplier, Umlazi
Suppliers.

(ii) Invoice 431 for R5 300 was recorded correctly on the statement of
account. It appeared as R3 500 in the Creditors Ledger.

(iii) Invoice 463 for R22 000 was erroneously shown by Kwamashu
Suppliers in the statement of account. An investigation revealed that
it was for goods supplied to another business. Kwamashu Suppliers
will rectify this error on the next statement of account.

(iv) Discount of R900 was shown correctly on the statement of account.

Pinetown Stores had in error overstated this amount by R400 in the
Creditors Ledger.

(v) Merchandise returned by Pinetown Stores, R1 800, was in error

recorded as an invoice on the statement of account.

(vi) Merchandise, R21 000, was purchased on credit from Kwamashu

Suppliers after the closing date of the statement of account. The entry
appeared only in the Creditors Ledger.

Copyright reserved Please turn over

Accounting Paper Two 6 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

1.3 DEBTORS’ AGE ANALYSIS

You are provided with the debtors Age Analysis of Skhumbuzo traders on
29 February 2020.

REQUIRED:

Identify TWO different problems shown by the Age Analysis and quote evidence
from the question to support your answer. In each case suggest an internal
control measures to correct the problem. (6)

INFORMATION:

DEBTORS’ AGE ANALYSIS ON 29 FEBRUARY 2020

Credit policy: debtors will be given 30 days in which to settle their debts.
NAME CREDIT TOTAL CURRENT 30 60 60
LIMIT MONTH DAYS DAYS DAYS +
Mathonsi R5 000 R2 100 R1 000 R 500 R 600
Shabalala R3 500 R4 200 R1 200 R1 800 R1 200
Mbuli R1 500 R2 004 R 704 R1 300
Sangweni R1 500 R1 500 R1 000 R 500
Ndinisa R2 000 R 700 R 700
10 504 R1 700 R2 404 R4 700 R1 700
100% 16% 23% 45% 16%

40

Copyright reserved Please turn over

Accounting Paper Two 7 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

QUESTION 2 INVENTORY VALUATIONS (30 Marks; 24 Minutes)

2.1 INVENTORY VALUATION

Umlazi shop uses the periodic stock system and the weighted-average method
to value stock of jackets. Philani Luthuli owns the business.

REQUIRED:

2.1.1 Explain the difference between the perpetual stock system and the
periodic stock system. (2)

2.1.2 Calculate the value of the stock on hand on 31 May 2020 using the
weighted-average method. (8)

2.1.3 Calculate the stock holding period (in days) for jackets using
weighted-average method. (5)

2.1.4 Philani is considering a change in the method of valuing stock.

• Calculate the value of closing stock using the FIFO method. (5)

Give ONE reason in favour of and ONE reason against changing to the
FIFO method. (4)

INFORMATION:

Records of jackets for the year ended 31 May 2020:

UNITS UNIT TOTAL

PRICE
Opening stock (1 June 2019) 300 R180 R54 000
Purchases 4 700 R895 000
June 2019 2 500 R203.60 R509 000
September 2019 1 400 R170 R238 000
December 2019 800 R185 R148 000
Subtotal 5 000 R949 000
Goods returned 200
(from December purchases)
Sales (Profit mark-up is 60% on cost) 3 600 R304 R1 094 400
Closing stock (31 May 2020) 1 200

Copyright reserved Please turn over

Accounting Paper Two 8 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

2.2 INTERNAL CONTROL

NM Computers sells one brand of computers. The owner, Nozipho has three
branches in different shopping centres.

Although the business is making a profit, Nozipho is concerned about the

profitability of each branch. She investigated and presented the information
below, for April 2020 (one month).

REQUIRED:

Identify ONE different problem in relation to each branch. Quote relevant figures
to support your answer. In each case, offer Nozipho advice on how to solve the
problem. (6)

INFORMATION:

• The shops are open 7 days a week.

• Normal time is from 8:30 to 16:30, Mondays to Fridays (160 hours per
month).
• Overtime is from 16:30 to 18:30 Mondays to Fridays and 9:30 to 12:30 on
weekends (56 hours per month)
• Overtime salary rate is 1,5 times the normal rate.

INFORMATION GAMALAKHE MBALI JOZINI

MALL MALL MALL
Pearl Xolani Amanda
Salesperson (age)
(42 years) (27 years) (62 years)
Stock on hand – 1 April 2020 50 units 50 units 50 units
Selling price per computer. R4 200 R4 200 R4 200
Computers sold (before returns) 42 36 22
Returns by customers 5 12 1
Credit sales R54 600 R88 200 R21 000
Deposits from cash sales R79 800 R12 600 R67 200
Hours worked (normal time) 154 hours 117 hours 102 hours
Overtime hours 20 hours 52 hours 2 hours
Rent expense (per month) R6 000 R8 000 R5 500
30

Copyright reserved Please turn over

Accounting Paper Two 9 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

QUESTION 3 MANUFACTURING (50 Marks; 40 Minutes)

3.1 CONCEPTS
Choose the cost category for examples below. Write only the cost category
next to the question number (3.1.1- 3.1.4) in the ANSWER BOOK.

Selling and distribution cost; direct labour cost; administration cost;

factory overhead cost; direct material cost.

3.1.1 Electricity paid for factory buildings.

3.1.2 Salaries paid to the sales personnel
3.1.3 Cost of raw materials used in the production process
3.1.4 Sundry expenses paid for the office. (4 X 1) (4)
3.2 MSELENI MANUFACTURERS
You are provided with information relating to Mseleni Manufacturers for the year
ended 29 February 2020. The business produces one type of air conditioner.
REQUIRED:
3.2.1 Calculate the Direct Material Cost (7)
3.2.2 Calculate the Factory Overhead Cost (16)
3.2.3 Prepare the Production Cost Statement for the year ended 29
February 2020. (13)
INFORMATION:
A. The following balances appeared among others in the books of the
business:
29 February 2020 1 March 2019
Raw material stock R86 000 R180 000
Work-in-process stock ? R150 000
Finished good stock R170 000 R500 000
Indirect material: factory R18 000 R25 000
Administration cost R13 000 -

B. Summary of transactions:
Raw material purchased R400 000
Raw materials returned to suppliers R7 000
Carriage on raw materials paid R5 000
Total salaries and wages paid R350 000
Water and electricity paid R98 000
Factory indirect materials purchased R35 000
Factory sundry expenses paid R49 800
Rent expenses paid R56 500

Copyright reserved Please turn over

Accounting Paper Two 10 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

C. The salaries and wages amount is distributed as following:

• 50% to employees who work directly on the production process
• 20% to indirect labour
• 15% to administrative staff
• 15% to sales and distribution staff
The employer contributes 8% to the pension fund and 1% to the UIF on
behalf of each employee.
D. Water and electricity
• The water and electricity bill is shared among the factory, administration
and sales section in the ratio 4:3:1.
E. Indirect materials:
• Indirect materials costing R9 000 were transferred from the factory to the
administration office.
F. Rent expenses
• Rent amount for February 2020, R 5 500 will only be paid in March 2020.
• Rent is allocated according to floor area as follows:
Factory 1 200m², administration 100m² and selling and distribution 300m²
G Factory depreciation amounted to R32 000
H. Cost of sales was correctly calculated at R1 200 000.

Copyright reserved Please turn over

Accounting Paper Two 11 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

3.3 MAMMA’S BAKERY

The following information was extracted from the books of Mamma’s Bakery for
the year ended on 29 February 2020. The bakery is owned by Alwande Mbatha.

REQUIRED:

3.3.1 Calculate the Break-even point for 2020. (4)

3.3.2 Explain why the owner should be concerned about the break-even point.
Provide TWO points. (4)

3.3.3 Provide ONE reason for the decrease in the Direct Material Cost. (2)

INFORMATION:

Fixed and variable cost 2020 2019

Total Per unit Per unit
Variable costs: Direct Materials R91 500 R7.50 R8.00
: Direct Labour R73 200 R6.00 R5.70
: Selling & Distribution R42 700 R3.50 R3.40
R207 400 R17.00 R17.10

Fixed costs : Factory overheads R63 440 R5.20 R4.70

: Administration R34 160 R2.80 R2.50
R97 600 R8.00 R7.20

Break-even point ? 7 795

Units produced 12 200 11 800
Selling price (per unit) R25 R25

50

Copyright reserved Please turn over

Accounting Paper Two 12 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

QUESTION 4 FIXED ASSETS AND INTERNAL CONTROL (30 Marks; 24 Minutes)

4.1 FIXED ASSETS

The following information relates to the fixed/tangible assets of Babanango

limited for the year ended 31 May 2020.

REQUIRED:

4.1.1 Calculate the amounts indicated by (i)-(iii). Show the workings in the
space provided in the ANSWER BOOK. (11)

4.1.2 Prepare the Asset disposal Account for the computer sold on
30 September 2019. (9)

INFORMATION:

A. Information from the financial statements for the year ended

31 May 2020.

FIXED/TANGIBLE ASSETS LAND AND VEHICLES EQUIPMENT

BUILDINGS
Carrying value on 1June 2019 2 500 000 82 000 51 840
Cost 2 500 000 552 000 90 000
Accumulated depreciation 0 (470 000) (38 160)
Movement
Additions (i) 850 000
Disposals at carrying value 0 0
Depreciation 0 (ii)
Carrying value on 31 May 2020 3 200 000 (iii)
Cost 3 200 000
Accumulated depreciation 0

B. The business has three computers; all three computers were purchased
on 1 December 2016 for R30 000 each.

A computer was sold for R6 128 cash to Razz traders on

30 September 2019.

C. The new vehicle was purchased on 31 August 2019.

D. The business provides for depreciation on its fixed assets as follows:

• On vehicles at 15% p.a. on cost

• On equipment at 20% p.a. on the diminishing balance method.

Copyright reserved Please turn over

Accounting Paper Two 13 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

4.2 INTERNAL CONTROL

You are the internal auditor of Juba supermarket. The owner has asked you to
investigate the control of trolleys and baskets used in the business.

4.2.1 Explain how the Fixed Assets Register will assist you in your duties as
internal auditor. Provide ONE point. (2)

4.2.2 The stock of trolleys and baskets is classified as a fixed asset. Give
ONE suitable reason for this. (2)

4.2.3 The owner has received numerous complaints from his customers
about the trolleys and baskets. On a busy day the business often has
up to 510 customers in the shop at the same time.

Identify and explain THREE major problems (with figures) relating to

the control of the trolleys and baskets. In EACH case, provide a valid,
practical solution to improve the control over these assets. (6)

INFORMATION:

The following information refers to the trolleys and baskets of the

business:

TROLLEYS BASKETS
Number of units on hand on 1 May 2019 170 150
Additional units purchased during the financial year
at R2 100 each for the trolleys and R300 each for the 115 40
baskets.
Number of damaged units written off during the
financial year. 25 80
Number of units on hand as per physical count on 30
April 2020 230 110
Repair and maintenance cost for units during the
financial year. R1 080 R10 200
Number of trolley controllers 3 -
Salary per trolley controller R1 200 -
30

TOTAL MARKS: 150

Copyright reserved Please turn over

Accounting Paper Two 14 Mid-Year Exam
Downloaded from
2020 Stanmorephysics.com
NSC

GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET

Gross profit X 100 Gross profit X 100 Net profit before tax X 100
Sales 1 Cost of sales 1 Sales 1

Net profit after tax X 100 Operating expenses X 100 Operating profit X 100
Sales 1 Sales 1 Sales 1

Total assets : Total liabilities Current assets : Current liabilities

Average trading stock X 365

(Current assets – Inventories) : Current liabilities
Cost of sales 1

(Trade and other receivables + Cash and cash equivalents) : Current liabilities

Average debtors X 365 Cost of sales

Credit sales 1 Average trading stock

Trading stock X 365 Average creditors X 365 Average creditors X 365

Cost of sales 1 Credit purchases 1 Cost of sales 1

Net profit after tax X 100

Long-term liabilities : Shareholders’ equity
Number of issued shares 1

Net income after tax X 100

Average shareholders’ equity 1

Net income after tax + Interest on loans X 100

Average Shareholders’ equity + Average Long-term liabilities 1

Shareholders’ equity X 100 Dividends for the year X 100 Dividends per share X 100
Number of issued shares 1 Number of issued shares 1 Earnings per share 1

Copyright reserved Please turn over

 Downloaded from Stanmorephysics.com

ACCOUNTING

ANSWER BOOK

JUNE 2020

PAPER TWO

PREPARATORY EXAMINATION
NATIONAL
SENIOR CERTIFICATE

GRADE 12
GRADE 10
Name:__________________________________________________ Grade:_______
MOD BY THE MOD BY THE MOD BY THE
QUESTION MARKS
SCHOOL CLUSTER PROVINCE
1
2
3
4
TOTAL

N.B. This answer book consists of 9 pages.

Copyright Reserved Please turn over

Accounting paper one 1 JUNE COMMON TEST 2020

Downloaded from Stanmorephysics.com

QUESTION 1
NSC

1.1.1 CASH RECEIPTS JOURNAL CASH PAYMENT JOURNAL

107 200 121 160

1.1.2 Bank reconciliation statement on 29 February 2020.

1.1.3 As the internal auditor you are not happy with the manner in which cash is being
controlled in this business. Identify ONE problem and provide a figure to support
your answer.
Give advice on how this problem can be avoided in future.
Problem Advice

2
Copyright Reserved Please turn over
Accounting Paper One 2 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
1.2.1 Creditors ledger Creditors reconciliation statement
38 100 40 800
(i)
(ii)
(iii) -
(iv)
(v)
(vi)

11

1.2.2 Explain how the creditor’s reconciliation statement can assist the business in
terms of their internal control measures. State TWO points.

1.3 Identification of TWO different problems, Internal control measure to correct

with evidence from the question each problem

Problem 1

Problem 2

TOTAL MARKS

40
Copyright reserved Please turn over
Accounting Paper One 3 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 2

2.1.1 Explain the difference between the perpetual stock system and the
periodic stock system.
Perpetual stock system Periodic stock system

2.1.2 Calculate the value of the stock on hand on 31 May 2020 using the
weighted-average method.

2.1.3 Calculate the stock holding period (in days) for calculators using
weighted-average method.

Copyright reserved Please turn over

Accounting Paper One 4 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
2.1.4 Calculate the value of closing stock using the FIFO method.

Give ONE reason in favour of changing to the FIFO method

2
Give ONE reason against changing to the FIFO method.

2.2 Identify ONE different problem in relation to each branch. Quote relevant
figures to support your answer.
In each case, offer Nozipho advice on how to solve the problem.
BRANCH Problem and Figures Advice

GAMALAKHE
MALL

MBALI
MALL

JOZINI
MALL

TOTAL MARKS

30
QUESTION 3
Copyright reserved Please turn over
Accounting Paper One 5 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com

3.1
3.1.1
3.1.2
3.1.3
3.1.4 4

3.2.1 Calculate the Direct Material Cost

3.2.2 Calculate the Factory Overhead Cost

Depreciation 32 000
Sundry expenses (85 600 – 2 600) x 60/100 49 800

16

3.2.3 Production cost statement for the year ended 29 February 2020.

13

3.3.1 Calculate the Break-even point for 2020.

Copyright reserved Please turn over
Accounting Paper One 6 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com

3.3.2 Explain why the owner should be concerned about the break-even point.
Provide TWO points.

3.3.3 Provide one reason for the decrease in the Direct Material Cost.

TOTAL MARKS

50

Copyright reserved Please turn over

Accounting Paper One 7 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 4

4.1.1 CALCULATIONS ANSWER

(i)

(ii)

(iii)

11

4.1.2 General Ledger

Asset Disposal

4.2.1 Explain how the Fixed Assets Register will assist you in your duties as
internal auditor. Provide ONE point.

Copyright reserved Please turn over

Accounting Paper One 8 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
4.2.2 The stock of trolleys and baskets is classified as a fixed asset. Give ONE
suitable reason for this.

4.2.3 Identify and explain THREE major problems (with figures) relating to the
control of the trolleys and baskets. In EACH case, provide a valid, practical
solution to improve the control over these assets.
PROBLEM WITH FIGURES PRACTICAL SOLUTION TO
IMPROVE INTERNAL CONTROL

TOTAL MARKS

30

Copyright reserved Please turn over

 Downloaded from Stanmorephysics.com

ACCOUNTING

MARKING GUIDELINE
JUNE 2020
PAPER TWO

NATIONAL
SENIOR CERTIFICATE

GRADE 12
MARKS: 150
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 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 the final figure, award one mark. Not the method mark for the answer.
Note: if figures are stipulated in memo for components of workings, these do not carry the method for final
answer.
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. This memorandum is not for public distribution, as certain items might imply incorrect treatment. The
adjustments made are due to nuances in a certain question.
8. Where penalties are applied, the marks for that section of the question cannot be a final negative.
9. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer
before awarding the mark.
10. Operation’ means ‘Check operation’. ‘One part correct’ means ‘Operation & one part correct’. Note: check
operation must be +,-,x,÷, or per candidates operation.
11. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect, indicate
with a . Note: do not award marks for workings if numerator and denominator are swapped-this also applies
to ratios.
12. Be aware of candidates who provide valid alternatives beyond the marking guideline.
13. Codes: f=foreign item; p=placement.
This memorandum consists of 9 pages
Accounting Paper Two 2 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 1

1.1.1 CASH RECEIPTS JOURNAL CASH PAYMENT JOURNAL

107 200 121 160
4 700  960 
520  6 680 
900  1 200  or 9840 CRJ
8940 CPJ
Both one mark

Operation Operation

113 320  130 000  8

Or 122 260 Or 138 940

1.1.2 Bank reconciliation statement on 29 February 2020.

Debit Credit
Credit balance as per bank statement 9 520 9 520 
Credit outstanding deposit 25 000 25 000 
Credit outstanding deposit 17 000 17 000 
Credit amount wrongly debited 1 200 1 200 
Debit outstanding cheques
No. 321 (13 000) 13 000 
531 (6 500) 6 500 
561 (8 100) 8 100 
Debit balance as per bank account 25 120* 25 120  Balancing figure

Operation for both totals  52 720 52 720 9

*two method marks for balancing figure

1.1.3 As the internal auditor you are not happy with the manner in which cash is
being controlled in this business. Identify ONE problem and provide a figure
to support your answer. Give advice on how this problem can be avoided in
future.
Problem Advice
Outstanding deposit of R25 000 Create a policy for regular or daily depositing.
on 6 February 2020.  
Accept any relevant answer related to the deposit of R25 000

Copyright reserved Please turn over

Accounting Paper Two 3 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
1.2.1 Creditors ledger Creditors reconciliation
statement
38 100 40 800
(i) - 4 100 
(ii) + 1 800 
(iii) - 22 000 
(iv) + 400 
(v) -1 800 - 1 800 or – (3 600)
(vi) + 21 000
Operation for both totals 

36 200 36 200 11

1.2.2 Explain how the creditor’s reconciliation statement can assist the
business in terms of their internal control measures. State TWO points.

Any TWO relevant answers   Part mark for incomplete / unclear reason
• 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 against it.
4

1.3 Identification of TWO different problems, Internal control measure to

with evidence from the question correct each problem
Identify problem  Any valid advice 
Mention evidence 
Problem Problem: • Do not sell on credit to
1 Certain debtors are exceeding debtors who are likely to
their credit limits exceed their limits.
Evidence: • Ensure that they settle
• Shabalala exceeds by R700 previous month’s debt
• Mbuli exceeds by R504 before buying on credit.
Problem Problem: • Charge interest on overdue
2 Most of the debtors accounts.
are paying over periods longer • Offer discount for early
30 days payment.
Evidence: • Consider legal action
61% or R6 400 are taking longer against problem debtors
39% within 30 days Shabalala
and sangweni
6

TOTAL
MARKS

40

Copyright reserved Please turn over

Accounting Paper Two 4 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 2

2.1.1 Explain the difference between the perpetual stock system and the
periodic stock system.

Any valid difference with comparison 

Part mark incomplete/one- system only explanation

Perpetual stock system Periodic stock system
Cost of sales calculated at point of Cost of sales calculated at end of
sale. financial period.
Stock value can be determined at any Stock value determined / identified by
time from records. stock count.
Cost of sales account used Purchases account used
Stock bought regarded as an asset Stock bought regarded as an expense 2

2.1.2 Calculate the value of the stock on hand on 31 May 2020 using the
weighted-average method.
949 000 – 37 000 
5 000  - 200 
operation one part correct
R190  X 1 200 
operation one part correct 8
R 228 000  Closing stock

2.1.3 Calculate the stock holding period (in days) for calculators using
weighted-average method.

½(54 000  + 228 000 ) x 365

684 000  1
5
75 days  operation one part correct

Copyright reserved Please turn over

Accounting Paper Two 5 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
2.1.4 Calculate the value of closing stock using the FIFO method.

(800 -200) 600 x 185 = 111 000 

600 x 170 = 102 000 
= 213 000  closing stock (FIFO) operation one part correct 5

Give ONE reason in favour of changing to the FIFO method

Any valid reason  Part mark for incomplete / unclear reason
• Gross profit will be lower because closing stock would be lower.
• Easy to count or identify jackets individually. 2
• Value of jackets is continuously changing and valued at more recent
prices.
Give ONE reason against changing to the FIFO method.
Any valid reason  Part mark for incomplete / unclear reason
• No need to change as profit will be the same in the long-term.
• Unethical to manipulate the profit by changing the method of stock
valuation.
• Tax would decreased in first year as result of decreased profit.
• The change would affect comparisons across financial years. 2

2.2 Identify ONE different problem in relation to each branch. Quote relevant
figures to support your answer. In each case, offer Nozipho advice on how
to solve the problem.
BRANCH Problem and Figures   Advice   
Missing cash, R21 000 (24 cash Regular internal audit for
GAMALAKHE
sales = R100 800, but only sales and deposits /
MALL
R79 800 deposited) separation of duties

Returns too high, 12 computers. Purchase quality computers /

make sure sales assistant
MBALI knows product specifications.
MALL Only worked 73% of normal time Time sheet for normal time
(117/160) and choose to cash in Set targets/ minimise
on the overtime 93% (52 hours) overtime.

Very low sales volume, 42% Provide Han with sales

JOZINI (21/50) computers. assistant/ set sales targets
MALL
6

TOTAL MARKS

30

Copyright reserved Please turn over

Accounting Paper Two 6 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 3

3.1
3.1.1 Factory overhead cost
3.1.2 Selling and distribution cost 
3.1.3 Direct material cost 
3.1.4 Administration cost 4

3.2.1 Calculate the Direct Material Cost

Opening stock 180 000 
Purchases (400 000 – 7 000 ) 393 000 
Carriage on purchases 5 000 
Less closing stock (86 000) 

Operation one part correct 492 000  7

3.2.2 Calculate the Factory Overhead Cost

Depreciation 32 000
Sundry expenses (85 600 – 2 600) x 60/100 49 800
Indirect material (25 000 + 35 000 – 9 000– 18 000) 33 000 
One part correct
Indirect labour 70 000 + 6300 76 300 
One part correct

Rent expenses (56 500 + 5 500) 1 200/1 600 46 500 

One part correct
Water and electricity (98 000) 4/8 49 000 

Operation one part correct 286 600  16

3.2.3 Production cost statement for the year ended 29 February 2020.
Direct material See 3.2.1 492 000 
Direct labour (175 000 + 15 750) 190 750 
Prime cost Operation 682 750 
Factory overheads See 3.2.2 286 600 
Production cost Operation 969 350 
Work-in-process at the beginning 150 000 
1 119 350
Work-in-process at the end Operation one part correct (1 119 350 – 870 000) (249 350) 
Production cost of finished goods
13
(1 200 000 + 170 000 – 500 000) 870 000 

Copyright reserved Please turn over

Accounting Paper Two 7 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
3.3.1 Calculate the Break-even point for 2017.

97 600 
25 – 17 
8 two marks)

12 200 units  operation one part correct 4

3.3.2 Explain why the owner should be concerned about the break-even point.
Provide TWO points.
Any two valid point   Part mark for incomplete / unclear point
Number of units produced is 12 200 same as the break-even point of 12 200.
Which means the business is making no profit or loss.

Although the number of units produced increased from 11 800 to 12 200 still no
profits were realised because fixed costs also increased.

3.3.3 Provide one reason for the decrease in the Direct Material Cost.
Any valid explanation  Part mark for incomplete / unclear explanation
• There was less wastage of raw material during production.
• More efficiency during the production process.
• Sourcing out cheaper suppliers.
• Buying in bulk to negotiate discounts.
2

TOTAL MARKS

50

Copyright reserved Please turn over

Accounting Paper Two 8 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
QUESTION 4

4.1.1 CALCULATIONS ANSWER

(i) 3 200 000 – 2 500 000 Two or nothing 700 000 

 
(ii) 850 000 x 15/100 x 9/12 = 95 625  177 624 

82 000 – 1 = 81 999  Operation one part correct

Operation one part correct

(iii) 82 000 + 850 000 – 177 624 754 376  11

4.1.2
Asset Disposal
2019 30 Vehicle 30 000 2019 30 Accumulated depreciation 13 872
Sept Sept (12 720 + 1 152) Operation one
part correct
Bank 6 128
Loss on sale of an asset 10 000
30 000 Operation one part correct 30 000 9

4.2.1 Explain how the Fixed Assets Register will assist you in your duties as
internal auditor. Provide ONE point.

Any valid point  Part mark for incomplete / unclear point

• Physical count should agree with register.
• The internal audit has to verify the physical presence of items listed in the fixed
assets register.
• The internal auditor will be able to follow the lifespan of the item of fixed asset
and make recommendations for timeous replacements.
• Calculations of depreciation amounts can be checked.
2

4.2.2 The stock of trolleys and baskets is classified as a fixed asset. Give ONE
suitable reason for this.

Any valid point  Part mark for incomplete / unclear point

• A trolley/basket is expected to have a lifespan of more than twelve months
• The trolleys/basket are not part of trading stock 2

Copyright reserved Please turn over

Accounting Paper Two 9 Mid-Year Exam 2020
DownloadedNSC from Stanmorephysics.com
4.2.3 Identify and explain THREE major problems (with figures) relating to the control
of the trolleys and baskets. In EACH case, provide a valid, practical solution to
improve the control over these assets.
PROBLEM WITH FIGURES PRACTICAL SOLUTION TO
IMPROVE INTERNAL CONTROL
Problem and a figure    Solution relating to the problem   
(Do not accept improvement of control as a
solution.)
30 trolleys were stolen (170 + 115 – All trolleys used should be returned to the
25 – 230). / R63 000 lost on this theft business. / Can introduce a fee for the return of
(30 x R2 100). a trolley. / Secure trolleys when not in use.
A large amount of R10 200 has been Before doing repairs to baskets, consider
spent on repairs of baskets. / whether it would be more cost-effective to
Instead of repairing baskets, 34 new replace old baskets with newer ones.
baskets could have been bought.
Number of trolley controllers are too Save salary for two trolley controllers and buy
many (3), 230 trolleys can be new trolleys (13 or 14) or buy new baskets
controlled by one person and save (98)
(2 400x120) 28 800 for salaries.
On a busy day there is not enough Buy more baskets as they are easier to control
trolleys and baskets. For the 510 and cheaper to replace (R250).
customers there are only 230
trolleys and 110 baskets (total
3340/short of 170).
25 damaged trolleys were written Monitor usage of trolleys to ensure that
off. (Cost of replacement R27 000). customers do not abuse them. 6

TOTAL MARKS

30

Copyright reserved Please turn over