# Accounting Grade 12 Paper 2 FS Prelim 2020 Memo > Grade 12 Accounting Paper 2 memorandum from the FS Prelim 2020, 10 pages. Read online or get the free PDF download, question paper linked when available. - Page: https://www.hlayiso.com/library/2020-fs-prelim-p2-memo/69f20652-9cb5-4b56-9da4-77702b5cf90a - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Document type: Memorandum - Year: 2020 - Exam period: FS Prelim - Paper: 2 - Curriculum: CAPS - Pages: 10 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 12](https://www.hlayiso.com/library/grade-12) › [Accounting](https://www.hlayiso.com/library/grade-12/accounting) › [Accounting Grade 12 Paper 2 FS Prelim 2020 Memo](https://www.hlayiso.com/library/2020-fs-prelim-p2-memo/69f20652-9cb5-4b56-9da4-77702b5cf90a) ## About this document Accounting · Grade 12 · FS Prelim · 2020. Memorandum, 10 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 Downloaded from hlayiso.com education Department of Education FREE STATE PROVINCE PREPARATORY EXAMINATION GRADE 12 ACCOUNTING P2 SEPTEMBER 2020 MARKING GUIDELINES MARKS: 150 MARKING PRINCIPLES: 1. fy FY PN oN DO 12. 13 Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item (no foreign item penalty for misplaced item). No double penalty applied. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item. Full marks for correct answer. If the answer is incorrect, mark the workings provided. 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). 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. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates. This memorandum is not for public distribution, as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions Where penalties are applied, the marks for that section of the question cannot be a final negative. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark. Operation means Check operation. One part correct means Operation & one part correct. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part. In such cases, do not award the method mark. Indicate by way of & Be aware that some candidates provide valid alternatives beyond the memorandum. Codes: f = foreign item; p = placement/presentation. These marking guidelines consists of 10 pages. Copyright reserved Please turn over ### Page 2 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam QUESTION 1: RECONCILIATIONS 1.1 Indicate whether the following statements are TRUE or FALSE. Write only True or False next to the question number. 1.1.1 False  1.1.2 True  1.1.3 True  3 1.2 Analyse the transactions according to the columns provided in ANSWER SHEET. Show amounts only for the Cash Journals and the Reconciliation Statement and an indicate a 'No entry' in an X. Cash Journals Bank Reconciliation No entry No. Statement CRJ CPJ Debit Credit E.g. 750 A X B 8 500  C 2 640  D 400  400  400  900  E #OR #OR 8 750 7 850 F 1 430  # both for 2 marks 9 1.3 DEBTORS COLLECTION SCHEDULE AND AGE ANALYSIS: 1.3.1 Why is the preparation of a debtor’s collection schedule and debtors age analysis important internal control measures? Debtors collection schedule:  • Project anticipated receipts from debtors. • Ensure debtors keep to credit terms. • Act immediately if debtors do not comply. Debtors age analysis:  • Effective method of controlling length of overdue periods so that appropriate action can be taken, such as interest/legal action. • Identify possible bad debts and send timeous notices. 4 Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam 1.3.2 Calculate the percentage of debtor's accounts that comply with the credit terms. 72 048 + 48 032 120 080 OR 480 320 600 400  600 400 = 80% = 20%  100% - 80% =20% 3 1.3.3 Explain TWO measures to prevent losses due to bad debts in the future. Any TWO measures   Screening of debtor must be very strict. Credit limits must fit the profile. Verify all information submitted./Run credit check. Ask for 3 months’ bank statements to check the available income after all other commitments. 4 Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam CREDITORS' RECONCILIATION: 1.4.1 Although Future Traders offers credit terms of 60 days, Generations Suppliers prefers to settle their account within 30 days during certain months. Provide TWO points to indicate that it is not a good decision. Any TWO points   • Keep money as long as possible in own bank account to earn interest. • First collect money from debtors to pay creditors. • If no early payment discount is offered. • Pay as late as possible, but avoid unnecessary interest 2 charged. 1.4.2 CREDITORS LEDGER OF STATEMENT FROM GENERATION FUTURE TRADERS SUPPLIERS 21 130 32 600 13 300 – 11 200 A + 2 100  B + 300  C - 500  (3 035 + 3 035) D + 6 070  - 7 000 one mark; -700 one mark E - 7 700  27 000 * 27 000 * Operation one part correct. Both figures 10 TOTAL MARKS 35 Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam QUESTION 2: INVENTORY VALUATION & VAT 2.1 INVENTORY VALUATION: 2.1.1 Calculate the value of the closing stock of Longlast AA 6- pack units on 31 October 2019. 5 000 x R23.50 = 117 500  7 000 x R23 = 161 000  one part correct 1 500 x R22.50 = 33 750  one part correct 13 500 312 250  one part correct 6 2.1.2 Calculate the average stock-holding period, given the cost of sales amounted to R483 750 for the year ended 31 October 2019. 352 250 Two marks 176 125 Three marks ½ (40 000 + 312 250  ) 365 483 750  X 1 = 132,9 (133) days  operation one part correct OR 4,4 months Comment on your findings above:  Too much working capital locked up in stock, can lead to cash flow problems. Possible stock losses in future, since batteries have a limited 6 shelf life. 2.1.3 The owner is concerned about the sales of Petcell AA 6-pack units, and considers to discontinue this product line: Calculate the value of the closing stock of Petcell AA 6-pack units. 148 200 Two marks (28 000  + 120 200 ) x 1 850 (800 + 3 000)  39 Four marks = R72 150 operation one part correct and must be x by 1 850 5 Calculate the cost of sales of the Petcell AA 6-pack units. (28 000 + 120 200) both for one mark 148 200  – 72 150  = 76 050  operation one part correct 3 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam Calculate the stock turnover rate for the year. 76 050  see above ½ (28 000  + 72 150  see above) 50 075 three marks = 1,5 times per year  operation one part correct 5 2.1.4 Give TWO reasons why the owner must discontinue the sales of Petcell AA 6-pack units. Any TWO reasons   The Petcell batteries are more expensive in comparison with the Longlast, customers prefer cheaper batteries even if the quality is not the same. Sales far too low 1 950 compared to 23 500. Stock turnover rate of 1.5 time is to low, approximately 240 days. see 2.2.3 above Possible stock losses in future, since batteries have a limited shelf life. see 2.2.3 above 4 2.2 VAT 2.2.1 Calculate the VAT amount payable/receivable to SARS. 142 800  184 680  5 520  9 240  2 340  252  43 512 43 512  operation one part correct OR Choose the line 184 680 – 142 800 + 9 240 – 5 520 – 2 340 + 252 = 43 512 – 184 680 + 142 800 – 9 240 + 5 520 + 2 340 – 252 = 43 512 9 2.2.2 Give ONE reason why the auditor would not be satisfied with this explanation. Unethical.  He should not go along with the owner's request. They make use of the invoice basis to record VAT, so it has to be recorded and paid.  2 TOTAL MARKS 40 Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam QUESTION 3: MANUFACTURING 3.1 SOS MANUFACTURERS Calculate and complete the following on 30 September 2019: 3.1.1 Direct materials issued to the factory for the year. 54 700 + 1 135 000 – 4 700+ 3 500 – 3 800– 69 700  = R1 115 000  operation one part correct R53 080 -1 foreign 7 3.1.2 The production cost of finished goods for the year. Cost of Sales = 6 282 375 x 100/250 = 2 512 950 Finishing goods 2 512 950 + 79 500 – 100 450  100 450 2 512 950 2 492 000 79 500 R2 492 000  operation one part correct 5 3.1.3 Factory Overheads Cost Note for the year. Indirect Materials (14 100 + 250 400 – 2 730) x 1/5  52 354 * 104 160 two marks 37 200 * Insurance (121 520x 12/14) – 66 960  Rent (171 500x 60/35) 294 000 * Indirect Labour (312 800 + 6 352 +3 128) 322 280 * 705 834  Operation one part correct 13 Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam 3.1.4 Complete the Production Cost Statement for the year. Direct Materials see 3.1.1 1 115 000  Direct Labour 790 000  Prime cost DMC + DLC 1 905 000  Factory Overheads see 3.1.3 705 834  2 610 834 Work-in-Progress beginning of year 65 050  2 675 884 Work-in-Progress end of year balancing figure (183 884)  Total cost of production of finished 2 492 000  goods see 3.1.2 7 3.2 H2O is a small manufacturing business that produces plastic water bottles. 3.2.1 Calculate the break-even point for H2O on 29 February 2020. 795 900  18,85 – 11,75 7,10 two marks 112 098,59/112 099 units  4 3.2.2 Explain why Wally should be concerned about the profitability and sustainability of the business. Give TWO points with figures to support your answer. Points   Figures   • They did not produce and sell enough products to break even; 112 099 vs 110 500; they needed an extra 1 599 units to break even; making a loss by 1 599 units. • Produced and sold 12 500 more units. • BEP went up by 34 099 units. 4 TOTAL MARKS 40 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam QUESTION 4: CASH BUDGETS 4.1 Explain why a business needs to prepare a Cash Budget every year. Any valid answer ✓✓ To plan for future receipts and payments in order to ensure that they have enough cash. Calculate the bank balance. Prioritising – taking corrective measures from previous deviations. 2 Do not accept income and expenses 4.2 Calculate the expected receipts from debtors for November 2019. 180 000 ✓x 100/75✓ x 25% = R60 000 ✓ x 95/100✓ = R57 000  OR 60 000 three marks – 3 000 one mark = 57 000 one method OR R180 000 one mark x 25/75 two marks x 95% one mark = 57 000 one method mark 5 4.3 Calculate the amounts indicated by A–D in the Cash Budget. A R94 100 ✓ B A + 5 000 = 99 100  C (143 500) + 380 000 = 236 500  D (143 500) + 99 100 = (44 400)  must be in brackets 4 4.4 The rent income increased by 9% on 1 November 2019. Calculate the rent income amount for October 2019. 10 464✓ ÷ 1,09 ✓ = R9 600 one part correct OR 10 646 - 864 = R9 600 3 4.5 In your opinion, is Rain’s capital contribution in November sufficient to support this business venture? Give ONE reason to support your answer. Reason Yes/No  Explanation  Part marks can be awarded. No, his capital contribution is not sufficient to support this business venture. Although his bank account is showing a surplus in November, in December his payments exceed his receipts. Refer to 4.3 (B and D) above and mark according to the candidates answer. 3 Copyright reserved Please turn over ### Page 10 Downloaded from hlayiso.com FS/September 2020 Grade 12 Prep. Exam 4.6 Calculate the percentage increase granted to the employees on 1 November 2019. 2 160✓/108 000 ✓ x 100 = 2%  one part correct 3 In your opinion, will the employees be satisfied with this increase? Briefly explain. Yes/No✓ Any valid explanation ✓✓ No, the increase is lower than the inflation rate/the business can rather give a higher increase than investing money in a fixed deposit. Yes, the business bank account is in overdraft, they can be glad to get an increase. 3 4.7 As the internal auditor you discover that the actual motor vehicle expenses for December 2019 were R9 600. Give TWO points that you would include in your internal auditors' report to Rian. TWO valid points ✓✓ ✓✓ • The actual expenses exceed the budgeted amount – overspent. • Maybe unexpected increase in fuel prices and maintenance cost. • The use of the vehicles needs to be investigated in order to ensure that the vehicles are used responsibly (no abuse). • Rian needs to ensure that the vehicles are serviced regularly in order to avoid unexpected repairs. 4 4.8 Calculate the interest payable to Wesrand Bank in December 2019. 240 000 ✓ x 85% ✓ = 204 000 x 11/100 x 1/12 ✓ = R1 870  one part correct 5 Calculate the monthly repayments of the capital portion of the loan to Wesrand. 204 000  / 48 months ✓ = R4 250  one part correct see above 3 TOTAL MARKS 35 TOTAL: 150 Copyright reserved ## Related documents - [2020 FS Prelim P2 QP](https://www.hlayiso.com/library/2020-fs-prelim-p2-qp/f66a906e-8a2e-4240-912b-36ffdeca9056) — Accounting · QP · 2020 - [ACCOUNTING P2 GR12 MEMO SEPT 2020 English](https://www.hlayiso.com/library/accounting-p2-gr12-memo-sept-2020-english/b6d54b19-200a-4cbf-aaad-8df18fd74e19) — Accounting · Memo · 2020 · Eng - [ACCOUNTING P2 GR12 ANSWERBOOK SEPT2020 English](https://www.hlayiso.com/library/accounting-p2-gr12-answerbook-sept2020-english/7c7795c6-891d-43ba-bdd7-60bcccc8c166) — Accounting · Addendum · 2020 · Eng - [ACCOUNTING P2 GR12 QP SEPT2020 English](https://www.hlayiso.com/library/accounting-p2-gr12-qp-sept2020-english/f03e0db8-e54a-430c-a3c1-424aaa129fde) — Accounting · QP · 2020 · Eng - [Grade 12 NSC Accounting P2 (Afrikaans) 2020 Preparatory Question Paper](https://www.hlayiso.com/library/grade-12-nsc-accounting-p2-afrikaans-2020-preparatory-question-paper/813d0ccb-dfb0-4caa-917e-f4fad84da119) — Accounting · QP · 2020 · Afr - [KZN 2020 June P2 QP](https://www.hlayiso.com/library/kzn-2020-june-p2-qp/aebab627-a5be-4328-8b2b-aee3f80cce83) — Accounting · QP · 2020 ## More from Grade 12 Accounting - [Accounting](https://www.hlayiso.com/library/accounting/8f42a6a4-9593-4d36-86b1-d890dd1bb1bf) — Guide - [ACCOUNTING P1 GR12 AB JCT ENG D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-ab-jct-eng-d-watermark/77ae8297-53f7-47b3-8e29-57bd38f30483) — Addendum · 2025 · Eng - [ACCOUNTING P1 GR12 QP JCT 2025 AFR D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-qp-jct-2025-afr-d-watermark/c6a5692b-3cb0-464b-bb82-67d6ce83bfdd) — QP · 2025 · Afr - [ACCOUNTING P1 GR12 QP JCT 2025 ENG D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-qp-jct-2025-eng-d-watermark/84d92eb0-f5bd-4442-bb6d-c55cdc52e25d) — QP · 2025 · Eng - [ACCOUNTING P2 QP GR12 JCT 2025 ENG D watermark](https://www.hlayiso.com/library/accounting-p2-qp-gr12-jct-2025-eng-d-watermark/13425f71-aba6-4328-b084-d9b108884315) — QP · 2025 · Eng - [Accounting P1 (English) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p1-english-june-2025-answer-book/7e96e433-56f8-43a1-9a38-c68c465746dd) — Addendum · 2025 · Eng ## Collection - [Grade 12 past papers](https://www.hlayiso.com/grade-12/past-papers) --- Hlayiso: free CAPS and IEB past papers, memos, notes and study guides for South African learners. 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