# Accounting Grade 12 Paper 1 GAU June 2023 Memo > Grade 12 Accounting Paper 1 memorandum from the GAU June 2023, 13 pages. Read online or get the free PDF download, question paper linked when available. - Page: https://www.hlayiso.com/library/2023-gau-june-p1-memo/01232257-8ac9-4f91-9156-435c905ee983 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Document type: Memorandum - Year: 2023 - Exam period: GAU June - Paper: 1 - Curriculum: CAPS - Pages: 13 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 1 GAU June 2023 Memo](https://www.hlayiso.com/library/2023-gau-june-p1-memo/01232257-8ac9-4f91-9156-435c905ee983) ## About this document Accounting · Grade 12 · GAU June · 2023. Memorandum, 13 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 JUNE EXAMINATION GRADE12 2023 MARKING GUIDELINES 12 pages MARKING PRINCIPLES: 1. Unless otherwise stated in the marking guidelines, 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. Unless otherwise stated,give full marks for correct answer. If answer is incorrect, mark workings. 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. If candidates provide more that the required number of responses, inspect all responses to give benefit to the candidate. Penalties may be applied for fore7gn entries if candidates earn full marks on a question (max. -2 per Q). 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,marker must inspect reasonableness of the answer. 10. Operation means 'check operation'. 'One part correct' means operation and one art correct. Note: check operation must be+,-, x, +,or per memo. 11. In calculations, do not award marks for workings if numerator & denominator ar pped - this also applies to ratios. 12. In awarding method marks, ensure that candidates do not get full marks for an that is incorrect at least in part. Indicate with a IBJ. 13. Be aware of candidates w�o provide valid alternatives beyond the marking g . Note that one comment could contain different aspects. 14. Codes: f = foreign item; p = placemenVpresentation. ### Page 2 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 QUESTION 1 11 1.1.1 Current Asset ¥ 1.1.2 Net salary v 1.1.3 Risk and gearingY 3 1.2.1 | Calculate: Depreciation on vehicles WORKINGS ANSWER Vehicle 1: 15 000-1 =14999v uM Two marks Two marks (14 999 + 26 000) Vehicle 2: 312000 x 25 x 4 40 999 (Four marks) 1 100 12 =26000Vv M 4 1.2.2 | Calculate: Profit/Loss with sale of vehicle 2 WORKINGS ANSWER 249 600 V — 26 000 M see 1.2.1 13 600 MJ = 223 600 — 210 000 v one part correct One mark one mark — one m mark Profit OR Or 312 000 — 210000 —- 88 400 (Circle your choice) 62 400 + 26 000 Accept T- account 4 NOTE: The amounts calculated above must be transferred to Question 1.2.3, the Statement of Comprehensive Income. ### Page 3 Downloaded from hlayiso.com Downloaded from Sttarnmorephysics.co - COM nCCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 1.2.3 Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2023 ——" Sales law Cost of Sales Gross profit Other income Discount received 2 090 Rent income (165 600 — 25 300 vv) 140 300 MV Trading stock surplus (79 900 — 79 750) 150 v Bad Debt recovered (550 + 150) 700 vv 6 Gross operating income Operating expenses Salaries and wages 164 430 Audit fees 131 470 Stationary 17 630 Insurance (22 800 - 9 100 vv) 13 7004 Bank charges (5 770 + 140) 5 910¥ Directors’ fees Cee to t 24 000 ‘, yer 792 000 M1 Loss with sale of asset 13 600 4 Depreciation (40 999 M1 see 1.21+ 17 250 v) 58 249 4 Bad Debt 1 350 v Provision for bad debt adjustment (3500-3100) 13 400 v Operating profit Interest income | Profit before interest expense must be NPBT +E 1565 3104 Interest expense (1 300 + 63 360 V’) ignore brackets s2a{e4 660) w Net profit before tax must be NPAT + Tax Tina 500 650 Income tax Ignore brackets F (450 195) vv Net profit after tax 7 1 050 455 26 a SOR aim iaias 3 ### Page 4 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 1.2.4 Statement of financial position (balance sheet) on 28 February 2023 ASSETS NON-CURRENT ASSETS (115 000 — 17 250) one mark, must see both 1907 751M 14 Fixed assets (1810 000 v + 97 750 V+ 1v) Fixed Deposit CURRENT ASSETS Inventory 79 900 v Trade and other receivables (71 829 + 150 V —3 500 V+ 1350 ¥+ 9 100M + 1500 VY) 80 429 MJ Cash and Cash equivalents TOTAL ASSETS same as Total equity and Liabilities 2111660M]8 EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY 120c x 1 200 000 1 440 000 vv Ordinary share capital 1 320 000 Retained income SHE - OSC 120000 M4] 3 NON-CURRENT LIABILITIES 316 800 116 460 one mark- 63 oo a Loan: Pride Bank (369 600 v— 52 800 v'™/) 316.800 306 240 + 63 360 must see both for 1 mark 4 CURRENT LIABILITIES 354 860 Trade and other payables & 680 or 25 300 or 1 350 or 24 oy 67 330 MM Shareholders for dividends 44 500 v Current portion of loan see NCL 52 800 MJ SARS Income tax (450 195 see is — 350 145) 100 050 Mv Bank overdraft (90 040 + 140 ) 90 180 v TOTAL EQUITY AND LIABILITIES 2111 660M Jg 28 SOR gdurtens prceecs 4 ### Page 5 Downloaded from Stanmore vs MARKING GUIDELINES Downloaded from hlayiso.com ICS. COM AGCOUNTING (PAPER 1) IGR12 0623 QUESTION 2 2.1 2.1.1 False V 2.1.2 False Vv 2.1.3 True ¥ 3 2.2 BENFORCE LTD. 2.2.1 Ordinary Share Capital Ordinary shares on 1 March 2022 4 4725000 4 900 000 150 000 v | Shares issued on 1 May 2022 @ R6,30 each 945 000 v 378 000 Shares repurchased @ R5,40 v v average price me ec on (70 000) ° © Remco I napa rm a 5 670 000 /1 050 000 ose 980 000 v | Ordinary shares on 28 February 2023 5 292 000 KS 7 2.2.2 | Calculate income tax paid. (1 900 000 - 1 330 000) 9 200 v— 570 000 V— 8 400 Y= 569 200 M One part correct or 570 000 + 8 400 — 9 200 = 569 200 Also accept alternative calculations like ledger account 4 ### Page 6 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 Calculate net change in cash and cash equivalents. Bottom up OR Top down 16 000 | v (116 960) | o@mmethod (100 960) | YY 16 000 | ne mark (116 960) | 4 (100 960) | one mark 16 000 116 960 100 960 5 Cash beginning of year 16000 v Cash end of the year (9 040 — 110 000) (100 960) vv Net change in cash and cash equivalents (116 960) 4 eee Indicate whether this is a net inflow or Y of cash by circling your choice. SOR or pone 6 ### Page 7 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 22:3 : . wage (1 590 600)or Cash effects of investing activities 908 400) wi Purchase-of Fixed asset (property) (1 400 000) v Fixed assets sold/purchased (if negative, could add with 1400 000 as one figure) 340 600 (2 690 000 v + 1 400 000 v — 4 010 500 v — 420 100 v) Fixed deposit matured/redeemed (700 000 — 550 000) 150 000 vv 8 2.2.4 | Calculate the percentage operating profit on sales Workings Answer 450000 v , 100 16,1% H oo oe 3 Calculate the current ratio Workings | Answer 0,9:1 4 584 440 v: 620 500 v Calculate the stock turnover rate Workings Answer 1 860 000 v 5,6 timesiM| Y% (322 000 + 345 000) v ; 333 500 one mark ### Page 8 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 2.3 | List the TWO most significant decisions that the directors made during the year. Quote figures from the Cash Flow Statement in each case. Any twa:Bfthe following decisions. Two marks each. Must include figures. vv Oy peipartimarks e Fixed assets purchased for R4 858 000 e Loans were raised for R2 600 000 e Shares were issued for R980 000 4 40 SOR aurea rovnce 8 ### Page 9 Downloaded from hlayiso.com Downloaded from Sttanmorephysics.co MARKING GUIDELINES | ACCOUNTING QUESTION 3 3.1.1 IGR12 0623 Explain.why the liquidity of Lemi Ltd. are better than those of Dobi Ltd. Quote-EHREE financial indicators to support your answer. = Current ratio of Lemi is 1,9 : 1 (and of Dobi is 5,7:1). Lemi has enough current assets to cover its current liabilities whereas Dobi Ltd is holding too much of his funds in the form of current assets which may not result in a return for the business. = Acid-test ratio of Lemi is 0,9 : 1 (compared to Dobi’s of 3,5 : 1). Even if Lemi is not able to sell all of its trading stock they should still be able to cover the short term debt. Dobi is holding much of its current assets in the form of trading stock (stock piling). = Period for which enough stock is on hand for Lemi is 60 days (and for Dobi it is double (120 days/4 months)). Lemi has enough stock for 2 months which is sufficient. Dobi is holding stock for too long, stock can become obsolete, or even a risk of theft. = Debtors are paying Lemi Ltd. much sooner than the debtors of Dobi is paying them. Debtors’ collection period (for Dobi is 59 days) whereas Lemi is collecting from their debtors within 26 days. 9 Which company uses more loans? In each case, quote a financial indicator to support your answer. Lemi Ltd. v Debt/equity ratio v 21:1” Explain whether this is a good idea or not. Quote a financial indicator to support your answer. It is not a good idea. ¥ Return on Capital Employed (ROTCE) v for Lemi is 9,4% which means that the return he is earning is lower than the interest he is paying on the loan, 10,5%/(negative gearing) ” 6 ### Page 10 Downloaded from hlayiso.com Downloaded from Sttanmorephysics.co MARKING GUIDELINES | ACCOUNTING 3.1.3 GR12 0623} The market price of the shares of Dobi Ltd. is doing much better than that of Lemi Ltd. Explain, quoting TWO financial indicators to support the opinion. Market;price of Dobi Ltd. is 905 cents which is higher than the Net Asset-Value (NAV) of 755 cents OR market price is 150 cents higher than the Net Asset Value. Dobi Ltd. is thus able to fetch a price higher than the value of the shares in the books of the company. Market price of Lemi Ltd. is 740 cents which is lower than the Net Asset Value (NAV) of 775 cents OR market price is 35 cents lower than the Net Asset Value (NAV). The market price of Dobi is 905 cents compared to Lemi’s market price of 740 cents/The market price of Dobi is 165 cents higher than that of Lemi. Dobi Ltd has a better percentage return, earnings, and dividends than Lemi Ltd. Explain, by quoting THREE financial indicators to support this "Fras = % returns on capital of Dobi is higher (9,5%) than that of Lemi (5,5%) and it is higher that the interest rate on fixed deposit of 6,8% = EPS for Dobi is 720 cents whereas Lemi is only earning 179 cents per share./EPS of Dobi is 541 cents higher than that of Lemi. = DPS for Dobi is 650 cents whereas for Lemi it is only 182 cents per share./DPS for Dobi is 468 cents higher than that of Lemi. OR For six marks (Two marks per yield per company, two marks for explanation) = The dividend yield of Dobi is 90,2% compared to Lemi’s of 101%. Although Lemi’s is higher, it means that retained income is used to pay for dividends and this will have a negative impact on future growth of the company. OR Dobi’s earnings per share = 720 and dividends per share-650. Retained 70 cent/share in business for capital growth emi earnings per share = 179 and dividends per share 182. Retained income is used to pay for dividends and this will have a negative impact on future growth of company. (3 cent/share more dividends than earnings per share.) SOR autem reownce 10 ### Page 11 Downloaded from hlayiso.com Downloaded from anmore, ‘SICS.CO! ‘ ACCOUNTING MARKING GUIDELINES (PAPER 1) GR12 0623 3.2 | Comment on the audit reports of Dobi Ltd. and Lemi Ltd. In each case, explain how the report will affect Mary's decision concerning the shares;she wishes to purchase in the company. Dobi-Etd. received an unqualified report which means that Mary can rely on the financial information in the financial statements in order to make a decision about purchasing the shares. This company received a disclaimer audit report. This means that Mary cannot rely fully on the financial statements in making a decision about investing in this company. 4 3.3 | Calculate the number of shares that Mary must buy to become the majority shareholder of Dobi Ltd. Workings Answer 1250 000 _ 625 000 (50% of the shares) 625 000 v — 605 000 v = 20 000 shares + 1 (Accept + 100) 20 001 shares = 20 001 shares (Accept 20 100) OR OR 1250 000 51% = 637 500 shares ao eae snares 637 500 — 605 000 = 32 500 shares 3 one mark one mark OR 51% - 48.4% = 2.6% x 1 250 000 35 ### Page 12 Downloaded from hlayiso.com Downloaded from Sttanmorephysics.co MARKING GUIDELINES | ACCOUNTING QUESTION 4: 4.1 4.2 4.3 44 IGR12 0623 What is insider trading? Explain in your own words. “7 phiarks for unclearparaly corect answer The ilfegal practice of trading on the stock exchange to one’s own advantage through having access to confidential information How does good corporate governance benefit the company? 7-7 part marks for uncear/partially correct answer Helps the company to regulate risk and reduce the opportunity for corruption. What is the role and responsibilities of the remunerations committee? Explain briefly. “part mars for unclearpartaly correct answer. Any one ofthe following answers: Review salaries, bonuses, and other earnings. To prevent directors from paying themselves very high salaries. They must approve and give advice on the proposed fees, bonuses etc. There are seven primary characteristics of good governance. Name any TWO characteristics. “Any wo ofthe folowing answers: Social responsibility Transparency Accountability Responsible management Discipline Independence Fairness ### Page 13 Downloaded from hlayiso.com Downloaded from Sttanmorephysics.co MARKING GUIDELINES | ACCOUNTING GR12 0623} 4.5 | Briefly explain why it is important for a company to include non-executive as well as executive directors on the board of directors. vv Executive directors are involved with internal functioning (operations) of the company/hands-on/decisions may be based on a/narrow view. Non-executive directors have a wider perspective of the business environment, and act in the best interest of the company. The non-executive directors would exercise a watch-dog role; keep executive directors in check. More regular inputs than an internal auditor or other directors. Their inputs should be unbiased and independent. They share accountability with the other directors/more people have the interests of the company in mind. Executive directors would be more vigilant and professional in their duties/not tempted to engage in unethical activities. The more directors there are, the more opinions will be generated, which could benefit the company. The non-executive directors can be paid less than the other directors (because they do not work permanently in the company). 10 13 ## Related documents - [ACCOUNTING P1 GR12 MEMO JUNE 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-memo-june-2023-english/b15a4456-2317-4298-9022-fc735fdc6214) — Accounting · Memo · 2023 · Eng - [ACCOUNTING P1 GR12 AB JUNE 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-ab-june-2023-english/bd3063b8-4a97-4989-8498-a76ffb82e60a) — Accounting · QP · 2023 · Eng - [ACCOUNTING P1 GR12 QP SEPT 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-qp-sept-2023-english/86b103e1-05b3-4ddd-9077-02c461ae7d17) — Accounting · QP · 2023 · Eng - [Accounting P1 Nov 2023 Answer Book Eng](https://www.hlayiso.com/library/accounting-p1-nov-2023-answer-book-eng/aaeb9a41-12fe-49c2-9ba7-37693926cbd5) — Accounting · Addendum · 2023 · Eng - [Accounting P1 Nov 2023 Eng](https://www.hlayiso.com/library/accounting-p1-nov-2023-eng/4c9e315d-40c3-4d80-9775-322ef8d07061) — Accounting · QP · 2023 · Eng - [2023 MP Prelim P2 Memo](https://www.hlayiso.com/library/2023-mp-prelim-p2-memo/8339757f-4c69-4fe5-a4b9-9b18e18257ca) — Accounting · Memo · 2023 ## 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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