Accounting Grade 11 P1 Eastern Cape November 2025 QP (Eng)

NATIONAL SENIOR CERTIFICATE GRADE 11 NOVEMBER 2025 ACCOUNTING P1 MARKS: 150 TIME: 2 hours This question paper consists of 11 pages, a formula sheet and an 8-page answer book.

2 ACCOUNTING P1 (EC/NOVEMBER 2025) 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 questions. 3. A Financial Indicator Formula Sheet is attached at the end of this question paper. 4. Show ALL workings to earn part-marks. 5. You may use a non-programmable calculator. 6. You may use a dark pencil or blue/black ink to answer questions. 7. Where applicable, show ALL calculations to ONE decimal point. 8. Write neatly and legibly. 9. Use the information on the table below as a guide when answering the question paper. Try NOT to deviate from it. TIME QUESTION TOPIC MARKS (minutes) Concepts and Statement of 1 55 45 Comprehensive Income Statement of Financial Position and 2 50 40 Notes to Financial Statements Financial Indicators and Interpretation of 3 35 25 Financial Statements 4 Business ethics and GAAP principles 10 10 TOTAL 150 120 Copyright reserved Please turn over

(EC/NOVEMBER 2025) ACCOUNTING P1 3 QUESTION 1: CONCEPTS AND STATEMENT OF COMPREHENSIVE INCOME (55 marks; 45 minutes) 1.1 Fill in the missing word(s). Write only the word(s) next to the question numbers (1.1.1 to 1.1.4) in the ANSWER BOOK. 1.1.1 … is a set of principles according to which financial statements are prepared. 1.1.2 … is an imputed expense. 1.1.3 … is the remaining value of an asset after it has been fully depreciated. 1.1.4 The … principle states that all income earned and expenses incurred, must be shown in the same financial period. (4) 1.2 The following information relates to the financial records of Lee-way Traders. Their financial year ends on 30 June each year. REQUIRED: Refer to information B (i) and calculate the following: 1.2.1 Profit or loss on the sale of the vehicle. (5) 1.2.2 Total depreciation on vehicles for the year ended 30 June 2025. (6) 1.3 Prepare the Statement of Comprehensive Income for the year ended 30 June 2025. (40) Copyright reserved Please turn over

4 ACCOUNTING P1 (EC/NOVEMBER 2025) INFORMATION: A. List of some of the balances and totals of Lee-way Traders on 30 June 2025. R Loan 1 455 000 Trading stock 264 000 Vehicles 580 000 Equipment 450 000 Accumulated depreciation on vehicles (1/07/2024) 210 000 Accumulated depreciation on equipment 168 000 Fixed deposit: Amandla Bank (8,5%) 180 000 Provision for bad debts (1/07/2024) 9 296 Debtors control 168 100 Sales 8 230 200 Cost of sales ? Salaries and wages 512 500 Water and electricity 16 500 Bad debts 7 100 Rent income 98 800 Insurance 89 600 Bad debts recovered 5 100 Repairs 11 600 Consumable stores 18 000 Interest on fixed deposit 4 000 Interest on loan ? Sundry expenses 174 500 B. Adjustments and additional information: (i) On 28 February 2025, an old vehicle was traded-in for R98 000 for a new one costing R180 000. The vehicle was originally bought for R220 000 and its carrying value on 1 July 2024 amounted to R126 000. No entry was made in the books for this transaction. NOTE: Depreciation is calculated at 20% p.a. on diminished balance method. (ii) Total depreciation on equipment totaling R89 400 must still be brought into account. (iii) A credit note for R2 200, issued to a debtor, A. Smuts, for totally damaged goods in transit, was not recorded. Goods are marked-up at 120% on cost. (iv) Several debtors had overdue accounts. The business decided to write off their accounts to the value of R3 080. Provision for bad debts must then be adjusted to 5% of debtors. Copyright reserved Please turn over

(EC/NOVEMBER 2025) ACCOUNTING P1 5 (v) An amount of R3 800 paid for repairs done on the buildings was erroneously debited to land and buildings. (vi) Unused property was rented out on 1 September 2024. The tenant paid rent in advance for July and August because she was going on holiday. NOTE: Rent was decreased by R400 per month from January 2025. (vii) An annual insurance premium was paid to Ecco insurers on 1 October 2024. An increase of 10% was effected from 1 February as per the signed agreement. (viii) A water and electricity bill of R405, for June 2025 was received, but not paid yet. (ix) A new employee who joined the business on 1 June 2025 was left out of the Salaries Journal. Deductions calculated at 18% of his salary amounted to R3 600. The business contributes a total of R2 200 on behalf of this employee to the UIF and Pension Fund. (x) Physical stock count on 30 June 2025 revealed the following: ● Trading stock on hand, R259 500. ● Consumable stores to the value of R13 250 were used during the year. (xi) An additional fixed deposit of R60 000 was placed at Amandla Bank half-way through the year. This transaction was properly recorded. Provide for outstanding interest. 55 Copyright reserved Please turn over

6 ACCOUNTING P1 (EC/NOVEMBER 2025) QUESTION 2: STATEMENT OF FINANCIAL POSITION AND NOTES (50 marks; 45 minutes) Partners Osna and Long are owners of the business, Oslo Traders. You are provided with information for the year ended 28 February 2025. REQUIRED: 2.1 Complete the Trade and other Receivables note on 28 February 2025. (7) 2.2 Complete the Current Account note on 28 February 2025. (18) 2.3 Complete the Statement of Financial Position on 28 February 2025. (25) INFORMATION: A. Extract from the financial records on 28 February 2025. R Capital: Osna 450 000 Capital: Long 500 000 Current account: Osna (1 March 2024) 34 800 (Cr) Current account: Long (1 March 2024) 28 900 (Dr) Drawings: Osna 159 200 Drawings: Long 88 600 Fixed assets at carrying value 1 864 500 Loan: Otto Bank ? Trading stock 296 400 Debtors control 226 000 Cash float and petty cash 5 600 Savings account 140 000 Bank overdraft ? Provision for bad debts 7 000 Creditors control 119 800 Accrued expenses 6 900 SARS: PAYE 7 750 B. Partnership agreement stipulated the following: (i) The partners are entitled to 12% interest on their capitals. Osna increased his capital by contributing R150 000 cash on 1 September 2024. This transaction was recorded into the books. (ii) Partners are entitled to a salary of R360 000 per annum. It was decided, however, to increase Long’s salary by 15% per annum effective from 1 December 2024 because of increased administration duties. (iii) Partners receive their bonuses in December each year and they are entitled to a bonus equal to their December salary. (iv) Remaining profits or losses are shared between the partners using the ratio of their capital balances at the end of the year. Long received R85 800 as his secondary distribution. Copyright reserved Please turn over

(EC/NOVEMBER 2025) ACCOUNTING P1 7 C. Drawings: No entries were made in the books for a computer taken by partner Long on 28 February 2025. The following details were obtained from the Fixed Asset Register regarding the computer: • Cost price, R18 000 • Accumulated depreciation on 1 March 2024, R9 000. • Depreciation for the current year on this computer was R1 400. D. Additional information: (i) Debtors with credit balances of R3 800 must be transferred to the creditors ledger. (ii) Unused stationery to the value of R1 200 was revealed by a stock count on 28 February 2025. (iii) On 25 February 2025, stock with a cost price of R18 000 was stolen during a burglary at the warehouse. Insurance agreed to pay 80% of the claim to cover the loss. Terms and conditions of the insurance policy stipulate that insurance claims take 15 days to process from the day the claim was submitted. No entries were made in the books to record this transaction. (iv) R2 800 received from a debtor, A. Carl, whose debt was previously written off, was recorded in the debtors control column in the Cash Receipts Journal and posted as such. (v) The loan statement received from Otto Bank on 28 February 2025 reflected the following: Balance on 1 March 2024 808 600 Monthly repayments, including interest 19 200 Interest capitalised, during the year 96 000 Balance on 28 February 2025 ? The business plans to pay R60 000 off the loan balance during the next financial year. (vi) The current ratio was calculated as 2,5 : 1 on 28 February 2025. 50 Copyright reserved Please turn over

8 ACCOUNTING P1 (EC/NOVEMBER 2025) QUESTION 3: FINANCIAL INDICATORS; ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS (35 marks; 25 minutes) You are provided with information relating to Asiya Clothing Boutique for the year ended 31 December 2025, together with comparative figures for 2024. The business is owned by two partners, Asmal and Yamiz. REQUIRED: 3.1 Below is a list of concepts that answer questions on the interpretation of financial statements. Choose the concept that answers QUESTION 3.1.1 to QUESTION 3.1.4. Liquidity, return on equity, gearing, solvency, operating efficiency 3.1.1 Is the business a good investment to the partners? 3.1.2 Does the business have control over its income and expenses? 3.1.3 To what extent is the business financed by loans? 3.1.4 Can a business pay off all its debts comfortably? (4) 3.2 Calculate the following financial indicators for the year ended 31 December 2025. Show ALL calculations. 3.2.1 Operating expenses on sales (3) 3.2.2 Acid-test ratio (4) 3.2.3 Stock turn-over rate (5) 3.3 In all the questions below, you should: Quote the financial indicators, figures and trends. 3.3.1 Profitability Comment on whether the decision taken by the partners regarding the mark-up % achieved, benefited the business or not. Quote figures. (2) 3.3.2 Liquidity Comment on the stock-holding period of the business and its average debtors’ collection period. Suggest ways in which these can be improved in future. (6) 3.3.3 Risk and gearing Partner Asmal is of the opinion that it was beneficial to the business to pay the loan during the year. • Comment on how this decision has affected the risk of the business. Quote ONE financial indicator. (3) • Besides paying off the loan, what other avenues can partners explore that will impact positively on the financial risk of the business? State TWO points. (4) Copyright reserved Please turn over

(EC/NOVEMBER 2025) ACCOUNTING P1 9 3.3.4 Return on owners’ equity Should partner Yamiz be satisfied with the returns he is getting from the partnership? Comment and quote ONE financial indicator. (4) INFORMATION: A. Extract from the Statement of Comprehensive Income 2025 2024 Sales 1 760 000 1 410 000 Gross profit 660 000 528 750 Operating expenses 334 400 296 100 Operating profit 385 100 360 000 Net profit for the year 325 600 318 400 B. Extract from the Statement of Financial Position 2025 2024 Non-current assets 2 334 000 2 140 000 Current assets Inventories 304 000 256 000 Trade and other receivables 236 000 196 400 Cash and cash equivalents 165 600 209 000 Partners’ Equity 651 200 626 800 Non-current liabilities 395 000 490 000 Current liabilities 596 000 401 200 C. Financial indicators 2025 2024 Operating expenses on sales ? 21% Mark-up % achieved 60% 70% Current ratio 2,1 : 1 2,2 : 1 Acid-test ratio ? 1,0 :1 Stock turn-over rate ? 5,4 times Debt equity ratio 0,6 : 1 0,7 : 1 Stockholding period 94 days 68 days Average debtors collection period 45 days 32 days Average creditors payment period 40 days 40 days Return on partners equity 51% 49,8% Return earned by partner Asmal 26% 29,4% Return earned by partner Yamiz 25% 20,4% Interest rate on loans 13,5% 13,5% Interest rate on fixed deposit 12,5% 11,5% 35 Copyright reserved Please turn over

10 ACCOUNTING P1 (EC/NOVEMBER 2025) QUESTION 4: BUSINESS ETHICS AND GAAP PRINCIPLES (10 marks; 10 minutes) Jose and Roman are partners in the business called Joeman Traders. They started their business three years ago which sells and repairs laptops. They agreed and drafted business ethics and a code of conduct that should be followed by all members. Roman has recently got into a business deal with a new supplier from North West who promised to get him better deals on laptops and consumables provided he agrees to some terms and conditions. Terms and conditions included the following: The business must agree to order goods at no less than R100 000 each month but only 50% of this must be recorded in business books. The rest will be sold and the proceeds will be split between Roman and the supplier. Roman will also get an incentive of R10 000 each month from the supplier. Roman also took a laptop for his daughter but he did not record this transaction in the books of the business, and did not tell his partner Jose about it. 4.1 Explain what is meant by the term ‘business ethics’. (2) 4.2 Which GAAP principle did Roman contravene when he took a laptop from the business, but did not record this transaction? Briefly explain this principle to support your answer. (2) 4.3 Explain what concerns should Jose have when he finds out about his partner’s actions. State THREE points. (6) 10 TOTAL: 150 Copyright reserved Please turn over

(EC/NOVEMBER 2025) ACCOUNTING P1 11 GRADE 11 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit x 100 Gross profit x 100 Net profit x 100 Sales 1 Cost of sales 1 Sales 1 Operating expenses x 100 Operating profit x 100 Sales 1 Sales 1 Total earnings by partner x 100 Net profit x 100 Partner’s average equity 1 Average owners’ equity 1 Current assets : Current liabilities (Current assets – Inventories) : Current liabilities (Trade and other receivables + Cash and cash equivalents) : Current liabilities Average debtors x 365 Average creditors x 365 Credit sales 1 Credit purchases 1 Cost of sales . Average inventories x 365 or 12 Average inventories Cost of sales 1 1 Non-current liabilities : Owners’ equity Total Assets : Total liabilities Copyright reserved Please turn over