# Accounting Grade 12 P1 Eastern Cape Mock 2023 Memo (English) > Grade 12 Accounting Paper 1 memorandum from the Eastern Cape Mock Exam 2023 (English), 11 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-p1-gr12-memo-september-2023-english/969683c3-c7a9-412e-bd72-1465ee3c56b1 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Language: English - Document type: Memorandum - Year: 2023 - Exam period: Eastern Cape Mock Exam - Paper: 1 - Curriculum: CAPS - Pages: 11 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 P1 Eastern Cape Mock 2023 Memo (English)](https://www.hlayiso.com/library/accounting-p1-gr12-memo-september-2023-english/969683c3-c7a9-412e-bd72-1465ee3c56b1) ## About this document Accounting · Grade 12 · Eastern Cape Mock Exam · 2023 · English. Memorandum, 11 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Matching paper and memo - [ACCOUNTING P1 GR12 QP SEPT 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-qp-sept-2023-english/86b103e1-05b3-4ddd-9077-02c461ae7d17) — QP · 2023 · Eng ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 NATIONAL SENIOR CERTIFICATE GRADE 12 SEPTEMBER 2023 ACCOUNTING P2 MARKING GUIDELINE MARKS: 150 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. Full marks for correct answer. If answer incorrect, mark the workings provided. 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 marking guideline 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. This marking guideline is not for public distribution; as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions. 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. 10. Operation means 'check operation'. 'One part correct' means operation and one part correct. Note: check operation must be +, -, x, ÷, or per marking guideline. 11. In calculations, do not award marks for workings if numerator and denominator are swapped – this also applies to ratios. 12. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part. Indicate with a . 13. Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one comment could contain different aspects. 14. Codes: f = foreign item; p = placement/presentation. This marking guideline consists of 11 pages. ### Page 2 2 ACCOUNTING P1 (EC/SEPTEMBER 2023) QUESTION 1 1.1 1.1.1 False  1.1.2 True  1.1.3 True  3 1.2.1 Calculate: The value of closing stock. WORKINGS ANSWER (50 x 90) 35 000  + 4 500  39 500  one part correct 4 1.2.2 Calculate the correct net profit after tax for the year ended 30 June 2023. Indicate ‘+’ for increase and ‘–’ for decrease at each adjusted amount. -‘ WORKINGS ANSWER Incorrect Net Profit before tax 3 551 841 Profit/loss on sale of equipment  (360 000 – 359 999)  43 000 ✓ – 1 ✓✓ + 42 999 * Provision for bad debts adjustment (28 500 – 25 300) - 3 200  Insurance (40 800 ÷ 2) + 20 400 ✓✓ Rent income  11 680 ✓✓ x 3 ✓ - 35 040 * Interest on loan  (45 000 x 12) two marks  3 755 000 ✓ + 540 000 ✓✓ – 3 985 000 ✓ - 310 000 * Income tax 914 600 ✓ + 65 500 ✓ - 980 100 ✓ Correct Net Profit after tax operation 2 286 900  21 *one part correct Accept brackets for negative amounts; assume positive if no signs or brackets used . Copyright reserved Please turn over ### Page 3 (EC/SEPTEMBER 2023) ACCOUNTING P1 3 1.2.3 STATEMENT OF FINANCIAL POSITION ON 30 JUNE 2023 ASSETS NON-CURRENT ASSETS TA - CA 9 093 500  Fixed assets 7 711 501 – 1 see 1.2.2 7 711 500 ✓ Financial assets balancing figure 1 382 000  4 CURRENT ASSETS operation 3 105 800  Inventories 2 024 500 ✓ + 39 500  see 1.2.1 above 2 064 000 * Trade and other receivables Tfer Pbd. Insurance 942 460 + 11 000 ✓ – 28 500 ✓ + 20 400  945 360 * Cash and cash equivalents 53 440 + 43 000 96 440 ✓* TOTAL ASSETS see TE and L 12 199 300 * 11 EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY 616 500 ÷ 45c (1 370 000 x 4,2) ✓✓ 5 754 000 * Ordinary share capital SHE – RI 4 859 000  Retained income 895 000 4 NON-CURRENT LIABILITIES 3 455 000 Mortgage loan one mark one m/mark (540 000 – 310 000 see 1.2.2) 230 000 one mark and one m/mark + 70 000 one mark 3 755 000 ✓ – 300 000 ✓✓ 3 455 000 * 5 CURRENT LIABILITIES operation 2 990 300  Trade and other payables Tfer Rent 1 962 260 + 11 000 ✓ + 35 040  2 008 300 * Current portion of loan# see loan above 300 000  8 SARS Income tax# 65 500 ✓ Shareholders for dividends# 616 500 ✓ # Inspect if any of # are included in T and OP; award total marks applicable TOTAL EQUITY AND LIABILITIES SHE + NCL + CL 12 199 300  32 -1 F foreign items max -2 -1 P presentation (max -2 if no appropriate details) *one part correct TOTAL MARKS 60 Copyright reserved Please turn over ### Page 4 4 ACCOUNTING P1 (EC/SEPTEMBER 2023) QUESTION 2 2.1 2.1.1 Gearing  2.1.2 Liquidity  2.1.3 Solvency  3 2.2 TUMBA LTD 2.2.1 ORDINARY SHARE CAPITAL NOTE Shares in issue at the beginning of the 1 470 000 ✓ 4 704 000 year 2 022 000  300 000 Shares issued during the year operation (5 852 000 ÷ 1 540 000) (230 000) Repurchase of shares at R3,80 ✓✓ (874 000)  two accuracy marks one part correct 1 540 000  Shares in issue at the end of the year 5 852 000 one part correct 6 2.2.2 Calculate: Income tax paid WORKINGS ANSWER (637 630 x 30/70) two marks 36 600 ✓ + 273 270 ✓✓ + 21 270 ✓ 331 140  one part correct OR: - 36 600 ✓ – 273 270 ✓✓ – 21 270 ✓ 5 Calculate: Dividends paid WORKINGS ANSWER 318 600 ✓ + 265 000 ✓ 583 600  one part correct OR: - 318 600 ✓ – 265 000 ✓ 3 Copyright reserved Please turn over ### Page 5 (EC/SEPTEMBER 2023) ACCOUNTING P1 5 2.2.3 Complete the following sections of the Cash Flow Statement. CASH EFFECTS FROM INVESTING ACTIVITIES (487 900)  operation Purchase of fixed assets (830 400)  Proceeds from the sale of fixed assets 4 094 900  + 413 000  – 830 400  – 3 830 000  152 500  one part correct Change in financial assets 190 000 7 NET CHANGE IN CASH AND CASH EQUIVALENTS 88 500 operation  Cash (balance at the beginning of the year) (31 900) ✓✓ 6 500 – 38 400 Cash (balance at the end of the year) 56 600 ✓ 4 2.2.4 Calculate: Acid-test ratio WORKINGS ANSWER 240 000 + 56 600 0,8 : 1  296 600 ✓✓ : 360 700 ✓ one part correct; in the form x : 1 Accept 0,82 : 1 4 Calculate: % return on average shareholders’ equity (ROSHE) WORKINGS ANSWER 637 630  x 100* ½ (6 062 000 + 5 124 800)  11,4%  one part correct 11 186 800 one mark % sign not necessary 5 593 400 two marks NOTE: * 100 is not one part correct Do not award marks if numerator and denominator are swapped 4 Copyright reserved Please turn over ### Page 6 6 ACCOUNTING P1 (EC/SEPTEMBER 2023) Calculate: Interim dividends per share WORKINGS ANSWER 318 600  x 100* 1 770 000  18 cents  one part correct; see 2.2.1 (1 470 000 + 300 000) Also accept R0,18 one m/mark one mark or 0,18 (if not x 100) NOTE: * 100 is not one part correct Do not award marks if numerator and denominator are swapped 4 TOTAL MARKS 40 Copyright reserved Please turn over ### Page 7 (EC/SEPTEMBER 2023) ACCOUNTING P1 7 QUESTION 3 3.1 The company’s total sales increased from 2022 to 2023 and the operating activities have been better controlled in 2023. Quote and explain TWO financial indicators with figures, which indicate better control of operating activities. Any TWO financial Indicators ✓ ✓ figures ✓ ✓ % operating expenses on sales decreased/improved (from 21,2%) to 17,3% % operating profit on sales increased/improved (from 16,5%) to 22,1% % net profit on sales increased/improved (from 13,9) to 17,2% * Mark-up % is a deliberate decision; ignore if mentioned Max -1 for superfluous additional financial indicators mentioned. 4 Quote and explain ONE relevant indicator with a figure, which directly contributed to the increase in sales. Financial indicator  figure  Mark-up % decreased (from 70%) to 55% 2 3.2 Identify TWO financial indicators with figures, which indicate an improvement in the liquidity of the company. TWO financial indicators with figures   Debtors’ collection period – 31 days Creditors payment period – 62 days 2 3.3 The directors decided to increase the loan at the beginning of 2023. Explain why you agree with their decision. Quote TWO financial indicators with trends. Financial indicators   Figures with trends   • Debt-equity ratio increased/deteriorated (from 0,3 : 1) to 0,4 : 1 (after the loan increased) • % return on average capital employed increased (improved) (from11,5%) to 12% Accept the following as a reason for agreement: • ROTCE of 12% is higher than the interest rate on loans of 10% (Note: should be a comparison between ROTCE and interest rate on loans to support positive gearing) Explanation:   NOTE: Be aware an explanation can be combined with the indicator, figures and trend. • Although the debt-equity ratio increased, the company is lowly geared / low risk / do not rely too much on borrowed capital • The company is positively geared / ROTCE is higher than the interest rate (10%) / make effective use of loan to generate profits 8 Copyright reserved Please turn over ### Page 8 8 ACCOUNTING P1 (EC/SEPTEMBER 2023) 3.4 Shareholders buy shares in companies as a short-term investment while others do it as a long-term investment. Explain how the change in the dividend pay-out policy affects the investment choices of each type of shareholder. Provide comparative figures. They will not be satisfied: Short-term • Expect high returns on their investment (company paid shareholders out 40% in 2023 compared to 80% in 2022). explanation  • Not interested in future expansion (company retained comparative figures  60% in 2023 compared to 20% in 2022 / 40% more (which is not acceptable for short-term investors) They will be satisfied: • Retaining 40% more is acceptable to long-term Long-term investors compared to 20% in 2022. shareholders explanation  • 60% of earnings are retained for future expansion / comparative figures  They can expect better returns in future due to higher retaining of profits 6 3.5 Shareholders are divided on the price paid for the re-purchase of shares. Provide ONE point in support of and ONE point against the price paid for shares. Quote ONE financial indicator with figures for each point. Compare repurchase price to the market value In support of the price paid Although 100c (R1) more than the market price was paid, Reason  Indicator with figure  the market price shows an upward trend from 2022 /  increased by 170c (R1,70). Compare repurchase price to the market value Against the price paid The market price should have been paid and not the (R1) Reason  extra. Indicator with figure   4 Copyright reserved Please turn over ### Page 9 (EC/SEPTEMBER 2023) ACCOUNTING P1 9 3.6 The directors of the company decided to issue an additional 50 000 shares in the new financial year. Calculate the minimum number of shares S. Lucus must buy to become a majority shareholder. WORKINGS ANSWER (650 000 x 50%) + 1 325 001  – 288 000  37 000   one part correct OR (650 000 x 51%) OR 331 500 – 288 000 two marks two marks 43 500 one method mark 5 Mention TWO points why S. Lucus wants to become a majority shareholder. Any TWO valid points   part marks for incomplete / partial / unclear responses • To influence strategic decisions • To influence business operations • Sees potential in the company and wants to be part of the future growth. 4 TOTAL MARKS 35 Copyright reserved Please turn over ### Page 10 10 ACCOUNTING P1 (EC/SEPTEMBER 2023) QUESTION 4 4.1 Audit reports Which type of audit report will discourage shareholders to buy shares in a company? Disclaimer of opinion  1 Provide TWO reasons why shareholders will not be interested to buy shares in such a company. Any TWO valid reasons   part marks for partial / incomplete / unclear responses • It gives a bad image to the company. • Possibilities of corruption, investors do not want to lose their money. • Directors of this company are not trustworthy. • Good ethics are not maintained over company finances 4 4.2 Explain why a company’s financial statements have to be audited by independent auditors. Provide TWO points. Any TWO valid and different points  An explanation must refer to or imply independent auditors, to earn full marks part marks for partial / incomplete / unclear responses • Help companies to comply with regulations and reporting requirements as required by the Companies Act / by law. • Gives a company credibility as it allows the potential investors to trust the accuracy of the results. • Company managers can use the results of the audit to continually improve internal processes. • To protect shareholders from possible fraud and improprieties. 4 Copyright reserved Please turn over ### Page 11 (EC/SEPTEMBER 2023) ACCOUNTING P1 11 4.3 Concern over the kind of relationship between a director, Chief Financial Officer (CFO) and the independent auditor. As a shareholder, why would you be concerned by this kind of relationship? Explain THREE points (one for each person involved). Any THREE valid, but different points (1 per person involved)  part marks for partial / incomplete / unclear responses • Is appointed by the shareholders to run the company not to have fun with external auditors. • No transparency, possibilities of Company’s Act Director  manipulation. • Money laundering, nepotism and fraud is possible. • Expected to meet board of directors, not CFO and independent auditor. • Possibility of mismanagement of company funds. • This might affect financial smooth running of the Chief Financial company. Officer  • Possibilities of corruption. • Possibilities of inflated financial statements. • Temptations to use company funds is possible. • Manipulation of unbiased opinion is possible. • Manipulation of the company’s Act. Independent • Possibility of losing audit licence for any wrong doings. auditor  • Suppose to meet shareholders not the director. • Public image of independent auditors is being ruined. 6 TOTAL MARKS 15 TOTAL: 150 Copyright reserved Please turn over ## 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 P2 QP GR12 SEPT 2023 English](https://www.hlayiso.com/library/accounting-p2-qp-gr12-sept-2023-english/eb464289-6949-44e1-9c80-4e527d6a3926) — Accounting · QP · 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 2021 English D REV](https://www.hlayiso.com/library/accounting-p1-gr12-qp-sept-2021-english-d-rev/bd359bc3-aaa6-4466-a680-12cf6f56610f) — Accounting · QP · 2021 · Eng - [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 GR12 MEMO SEPT2018 English](https://www.hlayiso.com/library/accounting-gr12-memo-sept2018-english/5bfe8f07-1121-4aad-8146-327c580e81de) — Accounting · Memo · 2018 · Eng ## 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 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 - [Accounting P2 (English ) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p2-english-june-2025-answer-book-1/73bffe7c-1c96-49bd-af78-abb8db8c6618) — 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. When citing, link the page URL above, not a PDF or /api/ URL.