NATIONAL

SENIOR CERTIFICATE

GRADE 11
NOVEMBER 2013
ACCOUNTING
MARKING GUIDELINE
(MEMORANDUM)

MARKS: 300

GENERAL PRINCIPLES:

1. Where calculations are required, award full marks for the final answer. If the answer is incorrect,
mark the workings provided. If the working amount is shown as a final answer, award the relevant
marks allocated for workings (Income statement), and not the method mark for the answer.

2. Method marks are denoted by .

 For calculations and final totals, at least one part of the workings must be correct for the method
mark to be earned. For totals – inspect operation and reasonableness of answer before
awarding the mark.
 In cases where answers of previous questions must be used (carried forward answers), check
the transfer.
 Unless otherwise indicated, the positive or negative effect of any figure must be considered to
award the mark. If no sign (+/-) or bracket is provided, assume that the figure is positive.

3. For questions requiring explanations and comments (2 marks or more), award part-marks.
A good comment will normally mention and explain a point. Beware of different ways to say the
same thing. Note that the marking guideline only offer suggested answers – read and try to make
sense of what the learner is attempting to convey, and award marks accordingly.

4. Where penalties are applied (such as foreign items, misplaced items, omitted details, etc.), the
marks for that section cannot be a negative. Penalties will be indicated next to the relevant
questions where applicable. Where foreign items are included in any calculation, full marks cannot
be awarded.

5. Educators are advised to work through the question paper and compare with this guideline, before
marking. If adjustments are necessary, do so within the framework of the mark allocation.

This memorandum consists of 14 pages.

2 ACCOUNTING (NOVEMBER 2013)

QUESTION 1

RECONCILIATIONS (50 marks; 30 minutes)

1.1 Bank Reconciliation

1.1.1

CASH RECEIPTS JOURNAL OF BLITZ TRADERS – MARCH 2013

DOC SUNDRY DETAILS OF SUNDRY
DAY DETAILS BANK
NO. AMOUNTS ACCOUNTS

31 Total 22 250
1 500 
1812 B. Chop 1 500 Drawings

180 
V12 XY Services 180 Maintenance

5 600 
B/S S. Jackson 5 600 Rent Income

75 
Northmead Bank 75 Interest Income

29 605 1 mark for amount and detail in each line.

-1 for details omitted Total >2 250 to earn mark 10

CASH PAYMENTS JOURNAL OF BLITZ TRADERS – MARCH 2013

DOC SUNDRY DETAILS OF SUNDRY
DAY NAME OF PAYEE BANK
NO. AMOUNTS ACCOUNTS

31 Total 15 500
5 000 
V13 Cash 5 000 Sales

620 
S/O ASD Insurers 620 Insurance

A. Skelm 830
B/S 830 Debtors Control 
(Cheque R/D) 
Northmead Bank
415
415 Bank Charges 
* (35 + 132 + 248)
22 365 1 mark for amount and detail in each line.

Total > 15 500 to earn mark
-1 for details omitted
* method mark for any ONE of (35 + 132 + 248) included. 10

GENERAL LEDGER OF BLITZ TRADERS

BANK (B6)
2013 29 605 2013 1 670
31 Total Receipts  (CRJ) 1 Balance b/d
Mar  Mar 
2013 22 365
31 Total Payments  (CPJ)
Mar 
5 570
Balance c/d

29 605 29 605
2013 5 570
1 Balance b/d
Apr 

-1 (on each side) for dates and details incorrect or omitted

7
(NOVEMBER 2013) ACCOUNTING 3

BANK RECONCILIATION STATEMENT ON 31 MARCH 2013 DR CR

Balance as per bank account 5 570 

Deposits not yet recorded 6 250 

Outstanding cheques No. 1848 6 660 

No. 1857 2 320 

No. 1860 (balancing figure) 750 

Balance as per Bank Statement 9 050 

Accept any other acceptable formats (e.g. single column) 15 300 15 300  8

1.1.5 Suggest TWO ways in which the internal controls of the business can be
improved so that situations like the missing R5 000 can be prevented.

Two separate points  

Division of duties; rotation of duties; check documentation regularly; request bank notification
of deposits (SMS); senior management doing banking themselves; set times for deposits
(daily – mornings)

1.1.6 Provide ONE advantage of making payments via the Internet.

 (one valid point)

Quick and easy; can be done at any time(outside office hours); no handling of cash/cheques;
Do not have to wait for cheque to be presented; less bank charges. 2

1.2 Creditors’ Reconciliation

1.2.1 CREDITORS RECONCILIATION ON 31 MARCH 2013
DR CR
BALANCE AS PER STATEMENT 27 440
360
Statement undercast

Award 1 marks 980
Returns posted on wrong side (490 + 490) each for R490 
600
Discount received not taken into account

760
Trade discount omitted

Accept single column presentation (Credit amounts must be in brackets) 25 460
No marks for statements. (learners can have any appropriate descriptions)  9

50
4 ACCOUNTING (NOVEMBER 2013)

QUESTION 2

FINANCIAL STATEMENTS AND PARTNERSHIPS (100 marks; 60 minutes)

2.1.1 GENERAL LEDGER OF STAR TRADERS

ASSET DISPOSAL ACCOUNT
2013 2013 Accumulated Depreciation 3 375
28 Equipment 5 500 28
on Equipment 
Feb Feb 
875 3 000
Profit on sale of asset  Bank 
 
6 375 6 375
Acc Depr on Equipment
5 500 – 2 125 = 3 375
Details must be complete to score marks.

8
2.1.2 Notes to the Balance Sheet
TANGIBLE/FIXED ASSETS VEHICLES EQUIPMENT
Cost (1 March 2012) 176 500  60 200 
Accumulated Depreciation (1 March 2012) (79 200)  (22 200) 

CARRYING VALUE (1 March 2012) 97 300  38 000 

Movements:
Additions at cost 7 600 

Disposal at carrying value (2 125) 

Depreciation (Equipment: 5 700 + 285) (26 475)  (5 985) 

3 marks

CARRYING VALUE (28 February 2013) 70 825  37 490 

Cost (28 February 2013) 176 500  62 300 

(105 675)  
Accumulated Depreciation (28/02/13) (79 200 +26 475)
(24 810) 20
Inspect totals if brackets not inserted.

TRADE AND OTHER RECEIVABLES

Trade Debtors (1 170 x 100/5) 23 400 
Provision for Bad Debts must be negative (1 170) 
Net Trade Debtors (This total may not be included) 22 230
Accrued Income (71 500/11) check Rent Income adjustment 6 500 
Prepaid expenses (280 x 2) check Insurance adjustment 560 
29 290 
Check the transfer of amounts from the Income Statement. 6
(NOVEMBER 2013) ACCOUNTING 5

2.1.3 Star Traders

Income Statement for the year ended 28 February 2013
Turnover /Sales (323 320  – 3 320 ) 320 000 Or 2 marks

Cost of Sales (192 000) 

GROSS PROFIT 128 000 

Other Income 81 445 
Rent Income (71 500  + 6 500 ) 78 000  
Discount Received 2 420 
Profit on sale of asset refer asset disposal account (2.1.1) 875 
Provision for bad Debts Adjustment (1 320 – 1 170 ) 150  

Gross Income 209 445 

Operating Expenses (148 990)
Bank Charges 4 560
Sundry Expenses 22 460
Bad Debts 1 220 
Employers Contributions (salaries and wages) 2 800 
Insurance (3 920  – 560 ) 3 360  
Telephone (6 410  + 480 ) 6 890 Or 2 marks

Salaries and wages (56 000  + 4 460  + 2 340 ) 62 800  

Consumable Stores (7 350  – 2 150 ) 5 200 Or 2 marks

Stationery 5 330 
Trading Stock deficit (27 550 – 25 640 ) 1 910  
Depreciation Total from Asset Note (2.1.2) 32 460 
Operating Profit 60 455 
Interest Income 3 110 
Net Profit before Interest expense 63 565 
Interest expense (970) 
Net Profit for the year 62 595 
Inspect all totals for operations

Interest misplaced must be marked wrong.

-1 for foreign entries (any balance sheet accounts) Max -2 35
6 ACCOUNTING (NOVEMBER 2013)

2.2.1 Calculate the missing amounts on the table provided (denoted by A to G).
YOGA YASH TOTAL
Partners salaries 64 800 46 200 111 000
Interest on Capital A: 15 750
7 500

Bonus E: 5 600
-

Total primary distribution B: 80 550 D: 59 300 C: 139 850
  
Share in the remaining profit F: 8 580 G: 6 240
14 820
Ratio :11: 8  
Net profit for the year ? ? 154 670 10

2.2.2 Calculate the following financial indicators:

(a) Debt/Equity Ratio

94 840  : 534 580 

0,17 : 1 
Accept 0,2 : 1
3
(b) Percentage return earned by Yoga. (Use the average equity)


  (7 650)  

5
`
2.2.3 Yoga feels that the business is in a sound liquidity position. Explain why you
think he feels this way. Quote TWO financial indicators (with figures) to
motivate your answer.

Name of indicator  
Quote figures  
Comment   (could be a general overall comment)

Current ratio: although it decreased from 2,5 : 1 to 1,7 : 1, it still indicated that there is
adequate short term assets to cover current liabilities.

Acid Test ratio: improved from 1,8 : 1 to 1,1 : 1. Suggests that the business was holding too
much stock in the previous year and was able to turn over stock more effectively in the current
year.

Debtors Collection Period: Improved from 42 days to 31 days. Debtors are paying close to
the 30 days normally allowed. Indicates an improvement in the collection policy and thereby
on cash management.

Any 2 ratios explained. -1 for each incorrect indicator (if more than 2 are quoted)
Do not accept Creditors payment period – although improved, the business takes too long to settle short term debts. 6
(NOVEMBER 2013) ACCOUNTING 7

2.2.4 Yash is not satisfied with her percentage return on equity compared to that of
Yoga’s. Give ONE possible reason why she feels this way. Quote figures to
motivate your response.

 reason explained  quoting figures

Yash manages her current account better (always reflecting a positive balance) R42 540
against R17 040.
Yoga had a big debit balance on his current account (R24 690). This accounts for a better
percentage return when calculating average equity.

Yoga also draws large amounts which also affects the current account balance. His drawings
is almost double that of Yash’s. (R47 400 compared to R24 200)

2.2.5 The business wants to expand their operations and have discussed extending
the existing building. This venture is expected to cost R200 000. By looking at
the financial statements and the indicators, suggest different ways in which
this project can be financed. (Two points)
Any two valid and separate points  

The partners have increased their capital contribution by R150 000

They increased the investment by R130 000 with an interest rate of only 11%
They repaid a large portion of the loan thereby improving the debt/equity ratio.
Their interest on loan is only 12% but the return on capital employed is 28%.
Their business can borrow more money at 12% p.a. interest and this would result in positive
gearing.
4

100
8 ACCOUNTING (NOVEMBER 2013)

QUESTION 3

CASH BUDGETS (40 marks; 24 minutes)

3.1 Calculate the percentage of goods sold on credit during February 2013.
Percentage:
 

63 000 
4

3.2 Cash expected from debtors during March 2013:

MONTHS CREDIT SALES WORKINGS MARCH 2013
January 75 200 X 15% 11 280 
February 50 400 X 30% 15 120 
March 78 400 X 50% X 95%  37 240 

CASH FROM DEBTORS 63 640  8

3.3 CASH BUDGET FOR MARCH 2013

RECEIPTS MARCH 2013
Cash Sales 19 600
Transfer from
Cash from Debtors 63 640  Note above
Interest on Fixed Deposit 2 400 
Rent Income (36 000 ÷ 12 x 115/100 ) or 3 000 x 1,15 3 450 
Capital contribution 40 000 

TOTAL RECEIPTS inspection 129 090 

PAYMENTS 7

Payments to creditors (12 600 + 50 400) x 100/140  45 000 

Drawings 1 500 
Operating expenses 18 000
Salaries 24 000  + (24 000 x 80%) 43 200 
Equipment purchased 96 000/12 8 000 
Bank charges 500
Maintenance of buildings 2 000 

TOTAL PAYMENTS inspection 118 200 

SURPLUS/(SHORTFALL) inspect operation 10 890 
Bank (Opening Balance) (6 000) 
BANK (Closing balance) inspect operation 4 890  20
-1 Foreign entries (max -2) any non-cash item 13
(NOVEMBER 2013) ACCOUNTING 9

3.4 The business intends to employ two additional shop assistants in April 2013, at
the same salary of the existing employees. In your opinion, is this a wise
decision? Motivate your answer by making use of figures from the information.

Salary per person = 24 000 ÷ 4 = 6 000

R6 000 x 2 = R12 000 (needed to employ two people) 

March surplus is only R6 640 ; therefore the business will not be able to afford this. 

2 marks for calculation; 1 mark to quote supporting figure; 1 mark for comment.

3.5 Compare the actual figures for February 2013 against the budgeted amounts for
March 2013. (Refer to point 14 of the information provided)

Advise the owner on what he could do to improve the internal controls of any
TWO items on the list. You do not need to quote any figures.

Rent Income: poor collection policy; over budgeted; investigate reasons. Adjust budget or
implement rules for the tenant.

Maintenance: under budgeted / possible the extra money spent in February will reduce the
expense in the future / investigate and budget appropriately in the future.

Drawings: taking advantage of being the owner / need to stick to budget arrangement to
exercise good cash management.

  any two valid suggestions

4

40
10 ACCOUNTING (NOVEMBER 2013)

QUESTION 4

CLUBS (30 marks; 18 minutes)

4.1.1 Calculate the total amount that is due by all members in respect of membership
fees, for this financial year. (Income and expenditure amount)

(108 – 3) x 60  = 6 300 
12 x (5 x 7)  = 420 
15 x (5 x 4)  = 300 
Accuracy mark for the whole statement
Method mark if one part of the calculation is correct
7 020 

4.1.2 GENERAL LEDGER OF CITY SPORTS CLUB

MEMBERSHIP FEES ACCOUNT
2012 480 2012 Income Received in 900
1 Accrued Income 1
Jan  Jan Advance 
Income Received in 360 6 420
Dec 31 Dec 31 Bank balancing figure
Advance (6 x 60)  
7 020 Membership fees written 180
Income and expenditure
 off (480 – 240 – 60) 
Refer 4.1 60
Repairs/Maintenance 

Accrued Income (5 x 60)
300

7 860 7 860
-1 for details omitted/incorrect (Max -2). Accept recognisable abbreviations.

4.2 12

STATEMENT OF RECEIPTS AND PAYMENTS STATEMENT OF INCOME AND EXPENDITURE

NO. – 31 DECEMBER 2012 – 31 DECEMBER 2012
RECEIPTS PAYMENTS INCOME EXPENDITURE
E.g. 800 600
1 9 900  3 900 
2 3 000  1 800 
3 1 400  300 
4 8 944  3 090  3 354  or
5 590 – 2 500 8 944 – 5 590
8 944 (1 mark) 5 590
5 350 
Refreshment is not normally shown separately.
Therefore only 1 mark for calculation of 8 944 if profit is
not shown 11

30
(NOVEMBER 2013) ACCOUNTING 11

QUESTION 5

COSTING (MANUFACTURING CONCERNS) (35 marks; 21 minutes)

5.1 Place a cross (X) under the appropriate category for each of the items listed
below.

FACTORY ADMINISTRATION SELLING AND

ITEM PRIME COST
OVERHEADS COSTS DISTRIBUTION
5.1.1 Indirect materials X 
5.1.2 Advertising X 
5.1.3 Direct Labour X 
5.1.4 Factory Rent X 
5.1.5 Office Stationery X  5

5.2.1 Calculate:
a) The total fixed cost. b) The total variable cost.
(775 x 40%)
(775 x 60%)
1 250 + 310 + 460 + 200 520 + 555 + 465
= 2 220   (if one part above is correct)
= 1 540   (if one part above is correct)
(2) (2) 4

5.2.2 Explain the concept “breakeven”.

It is the number of units that must be produced and sold to cover the total costs
(where income = expenses); where the business is not making a profit or loss. It shows the
level of sales that is required; it assists with determining mark-up percentages and in assessing
whether production of this product is a viable venture.

 (award part marks for partial answers)

2

5.2.3 Calculate the selling price at the breakeven point.

Will Julius be satisfied with this break-even selling price? Explain.
No. 
*1 540/40 = 38,50 (variable cost per unit) He will not be satisfied with R94 per bag,
 because he will not make a profit (will only cover
costs.)

This price shows a profit mark-up of 144% on
 cost which is very high.
He must assess the market (and competitors) to
determine if he would be able to sell these bags
at a higher price in order to show some profit;
perhaps at flea markets and at tourist attractions.
Breakeven selling price is R94. 
 valid explanation

Response could be in line with learners’ incorrect calculation.

Award marks accordingly 7
12 ACCOUNTING (NOVEMBER 2013)

5.3 GENERAL LEDGER OF TARGET PRODUCTS

BALANCE SHEET ACCOUNTS

WORK IN PROCESS STOCK (B8)

2012 2013 Finished Goods Stock  145 600
Mar
1 Balance 10 200 Feb
28
Balancing figure 
2013
Feb
28 Direct material cost  38 420 Balance 14 000
Direct labour cost 65 480
45 500
Factory Overheads 
159 600 159 600
2013
Mar
1 Balance 14 000

5
FINISHED GOODS STOCK (B9)
2012 2013
Cost of Sales  *134 600
Mar
1 Balance 0 Feb
28

2013
Work-in-process stock  145 600 11 000
Feb
28

Balance 
Can be calculated
(18 200 – 16 825) x 8

145 600 145 600

2013 11 000 Unit cost = 145 600 ÷ 18 200 = 8
Mar
1 Balance  16 825 x 8 (cost of sales)

7
FINAL ACCOUNTS
TRADING ACCOUNT
2013 134 600 2013 168 250
Feb
28 Cost of Sales  Feb
28 Sales 
Profit and Loss  33 650

168 250 168 250
Gross Profit = *Cost of sales x 25% *Cost of sales x 125% (Sales amount)

Could calculate Gross Profit (in which case the Sales amount would be the balancing figure)
or the sales amount could be calculated (in which case the Gross Profit would be the balancing figure) 5
Allocate the 2 accuracy marks to the one calculated by the learner.

35
(NOVEMBER 2013) ACCOUNTING 13

QUESTION 6

VAT AND STOCK SYSTEMS (45 marks; 27 minutes)

6.1.1 Indicate whether the following statements are True or False.

(a) False 
Accept (F) or (T)
(b) False 
(c) True 
(d) True 
8

6.1.2
(a) According to the information above, calculate the amount of VAT that City
Cleaning Services will need to pay to SARS on 25th August 2013.
(Show all calculations – do not show the final answer only.)

VAT paid (Input VAT): 896 + 77 + 175 + 406 + 5 432 = 6 986

     

VAT received (Output VAT): 8 666 + 882 = 9 548

  

Due to SARS (9 548 – 6 986) = 2 562 

Learners could use ledger accounts – award marks accordingly

13
(b) As a registered accountant, you noticed that the owner, P. Mandla, inflated the
cleaning materials account by R5 000.
 Express your feelings about Mandla’s action, and explain what steps you
would take.

Mandla is attempting to defraud SARS by paying less VAT (inflating the VAT input)
It is unethical.
 for explaining Mandla’s action (unethical)

Would inform him of this and the consequences (fines/penalties etc.).

Would request that he reverse this entry and reflect the correct amount due to SARS.
Also to protect my professional integrity (belonging to a professional body with a code of
conduct).
 For stating you action (inform and correct)
4
14 ACCOUNTING (NOVEMBER 2013)

6.2.1
GENERAL LEDGER OF JUBILEE STORES
PURCHASES ACCOUNT (N4)
2013 2013 1 440
30 Balance/total 684 240 30 Donation 
Sep Sep 
9 550
Creditors Control  Drawings 2 000

Creditors Allowances 10 350
680 000
Trading Account 

693 790 693 790

Mark details and amounts together

6.2.2 Calculate the Gross profit earned by the business.

(You may construct the Trading Account to calculate this amount)
Or
Sales – Debtors Allowances
(915 000 – 24 170) = 890 830  Trading Account
Opening St 211 900 Sales 890 830
Purchases 680 000 Closing Stock 255 000
Opening Stock + Purchases + Carriage on Purchases – Closing Stock Carriage 9 930
211 900 + 680 000 + 9 930 – 255 000 = 646 830 Gross Profit 244 000
   
Gross Profit: 890 830 – 646 830 = 244 000 
Allocate the marks to the account 8

6.2.3 Calculate the Gross profit percentage achieved.

 

6.2.4 Provide ONE suitable reason why the 50% mark-up on cost was not achieved.

Discounts given on cash sales / clearance sales of old, obsolete stock / mark downs

 one valid point

45

TOTAL: 300