# Accounting Grade 12 Paper 1 NSC November 2020 Memo (English) > Grade 12 Accounting Paper 1 memorandum from the NSC November Exam 2020 (English), 9 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-p1-nov-2020-memo-eng-2/6f0faf53-3e18-48a0-a741-382ab78ab6c8 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Document type: Memorandum - Year: 2020 - Exam period: NSC November Exam - Paper: 1 - Curriculum: CAPS - Pages: 9 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 NSC November 2020 Memo (English)](https://www.hlayiso.com/library/accounting-p1-nov-2020-memo-eng-2/6f0faf53-3e18-48a0-a741-382ab78ab6c8) ## About this document Accounting · Grade 12 · NSC November Exam · 2020. Memorandum, 9 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 NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING P1 NOVEMBER 2020(2) MARKING GUIDELINES 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 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. This memorandum 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 memo. 11. In calculations, do not award marks for workings if numerator & 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. These marking guidelines consist of 9 pages. Copyright reserved Please turn over ### Page 2 Downloaded from hlayiso.com Accounting/P1 2 DBE/November 2020(2) NSC – Marking Guidelines QUESTION 1 1.1.1 (i) Calculate: Carrying value of the vehicle on hand on 1 March 2020 Workings Answer 460 000 – 396 750 63 250 2 (ii) Calculate: Depreciation on vehicles for the year Workings Answer 25 500 two marks 25 500 + 63 249 (510 000 x 15% x 4/12)  one part correct two marks two marks 460 000 x 15% = 69 000; CV is 63 250. Depreciation is therefore 63 250 – R1,00 = 63 249  88 749  one part correct 5 (iii) Calculate: Carrying value of equipment sold Workings Answer Choose one line 360 000 – 285 000 -41 080 2 marks 33 920  one part correct 75 000  – 36 600  – 4 480  OR: 75 000  – (36 600  + 4 480 ) OR: 360 000 – 285 000 – 41 080 [ one mark] ] two marks -360 000 + 285 000 + 41 080 4 1.1.2 Calculate: Profit/Loss on the sale of equipment Workings Answer See (iii) above 40 000 – 33 920 If 40 000 - (iii) No part marks OR 6 080  – 40 000 + 75 000 – 41 080 2 1.2 Calculate: Trading stock deficit Workings Answer 18 two marks    (280 – 262) x 4 050 R72 900# 280 one mark 262 one mark 4 050 one mark # if x 4 050 (280 x 4 050) – (262 x 4 050) 1 134 000 1 061 100 4 NOTE: The relevant figures calculated above must be transferred to the Income Statement. Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com Accounting/P1 3 DBE/November 2020(2) NSC – Marking Guidelines 1.3 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2021 ignore brackets – check if operation is correct # also award from bottom up if COS calc is done *one part correct Sales 15 325 200 – 648 000 OR (6 966 000 X 1,2) + 6 966 000 – 648 000 14 677 200 *# 6 966 000 x 2,2 Cost of sales (6 966 000) Gross profit 6 966 000 x 1,2 S – COS 7 711 200  8 359 200 – 648 000 three marks if not awarded for sales 5 Other income Operation 175 000 * Profit on sale of asset* see 1.1.2 (loss will be in operating expenses) 6 080  Rent income 173 000+ 9 000  – 14 000  OR 182 000 – 14 000 OR 173 000 – 5 000 OR 182 000 X 12/13 168 000 * two marks two marks one mark three marks two marks two marks Provision for bad debts adjustment 7 030 – 6 110 920 * Gross operating profit Operation 10 GP + OI 7 886 200  Operating expenses Operation (6 286 200) * Salaries and wages 1 468 120 Depreciation 31 281 + 88 749  see 1.1.1 (ii) 120 030 * Trading stock deficit see 1.2 72 900  Directors' fees 3 330 000 + 180 000  or x 39/37 3 510 000 * 3 330 000 x 2/37 or 90 000 x 39 Alternative: 3 330 000 + 135 918 (OR x 51/49) = 3 465 918 Audit fees 91 000 + 39 000 OR 91 000 / 0,7 OR x100/70 130 000 * 91 000 + (91 000 x 30/70) Repairs 476 000 + 9 000 if final figure is 476 000 OR 9 000 one mark 485 000 * Bad debts 19 200 + 800 if final figure is 19 200 OR 800 one mark 20 000 * two marks one mark two marks 2 160 19 200 8 640 Advertising 25 680 + 2 400– 240 (2 400 x8) + (2 160 x4) 27 840 * OR: (2 400 X 12) – (240 X 4) Sundry expenses 452 310 Operating profit accept negative depending on figures in this column 22 GOI – OE 1 600 000  Interest income 25 000  Profit before interest expense Operation OP + INT 1 625 000  Interest expense Profit before interest expense – NPbT (75 000)  Accept a positive balancing figure Net profit before tax 1 054 000 + Income tax NP + IT 1 550 000  1 054 000 x 100 / 68 two marks Income tax for the year 1 054 000 x 32/68 (496 000)  If balancing figure, award one mark Net profit after tax 6 1 054 000 43 -1 foreign items i.e. B/S items (max -2); for misplaced items, award marks for workings only (not the final answer) TOTAL MARKS 60 Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com Accounting/P1 4 DBE/November 2020(2) NSC – Marking Guidelines QUESTION 2 2.1 2.1.1 Directors' report  2.1.2 Internal  2.1.3 Limited  3 2.2 USANDA LIMITED 2.2.1 Calculate: Income tax paid Workings Answer (1 777 000 – 1 243 900) one mark 69 300  + 533 100 – 19 800  R582 600  one part correct Alternative presentations: Mark ONE alternative only 19 800 69 300 – 69 300 – 533 100 + 19 800 582 600 533 100 (69 300) + (533 100) + 19 800 4 Calculate: Dividends paid Workings Answer 495 000 two marks 247 500  + (835 000  – 340 000 ) Alternative presentations: Mark ONE alternative only R742 500  one part correct – 247 500 – 835 000 + 340 000 340 000 247 500 (247 500) + (835 000) + 340 000 742 500 835 000 4 *one part correct # correct use of bracket or not to earn the method mark on answer 2.2.2 CASH EFFECTS OF FINANCING ACTIVITIES (2 652 500) * Proceeds from shares issued 335 000 one mark x R7,00 one mark 9 555 000 + 2 345 000 – 11 220 000  OR Be aware of different methods e.g. T-acc or reversed signs 680 000 *# –9 555 000 – 2 345 000 + 11 220 000 Note: The 50 000 is not used in this calculation because the R680 000 is the balancing figure in the OSC note 3 182 500 one mark if no bracket Funds used to repurchase shares 335 000 x R9,50 (3 182 500)  Change in loan 2 080 000 – 1 930 000 or 270 000 – 420 000 (150 000) *# (2 080 000 – 420 000 + 270 000) 35 000 x 12 11 NET CHANGE IN CASH AND CASH EQUIVALENTS 56 000 * Cash (opening balance) 154 700 – 90 000 must not be bracketed 64 700  Cash (closing balance) 120 700  4 Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com Accounting/P1 5 DBE/November 2020(2) NSC – Marking Guidelines 2.2.3 Calculate financial indicators for the year ended 28 February 2021: # Note: 100 does not count as ‘one part correct’ for the method mark % operating profit on sales Workings Answer one part correct 2 262 100 x 100 12,7%# accept 12,7 two marks 17 800 000 1 accept 13 two marks Expressed as a % (sign not necessary) 2 Acid-test ratio Workings Answer (659 500 – 276 500) two marks one part correct or (262 300 + 120 700) two marks 0,6 :1 383 000 : 611 900 Do not accept 1 : 1 as x : 1; not 0,6 on its own Accept 0,63 : 1 4 % return on average shareholders' equity (ROSHE) Workings Answer 1 243 900  x 100 one part correct ½  (11 985 000 + 9 891 400)  11,4%# 21 876 400 one mark Accept 11,37% or 11% 10 938 200 two marks Expressed as a % (sign not necessary) Not 0,114 4 Dividend payout rate (%) Workings Answer 30 cents or R0,3 + 20 cents or R0,2; one mark each (assume R or c if no signs) 67,6% # Must be consistent with calculation one part correct 50 cents  x 100 or 74 cents  1 67,1% one mark OR R835 000 x 100 (2021 Total dividend) Accept 67% / 68% R1 243 900 1 (2021 NPaTax) two marks Expressed as a % (sign not necessary) Not 0,676 4 TOTAL MARKS 40 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com Accounting/P1 6 DBE/November 2020(2) NSC – Marking Guidelines QUESTION 3 3.1 3.1.1 C 3.1.2 E 3.1.3 B 3.1.4 A 4 3.2 SCI-FI GEEKS LTD If candidates give more required number of indicators, -1 for any inappropriate one (max -1) in Q3.2 3.2.1 The directors are satisfied with the improvement in the current ratio and the acid-test ratio. Explain why you would disagree with them. Quote TWO financial indicators in your response. Financial indicators   Figures   Explanation  part marks for incomplete, partial or unclear answer  The stock holding period increased (from 32 days) to 102 days (or 70 days)  Average debtors' collection period increased (from 31 days) to 46 days (15 days)  Current ratio increased (from 1,1 :1) to 2,4 : 1 / by 1,3 : 1  Acid-test ratio increased (from 0,4 : 1) to 1 : 1 / by 0,6 : 1 Any ONE valid explanation; part marks for incomplete / unclear explanation  Too much liquid assets (cash) tied up in stock reflects that there is an over-investment in stock / the difference in current & acid-test rations reflects stock piling.  High stock volumes create security problems  Stock can easily become obsolete due to advancements in technology (can’t be sold)  The business has relaxed / neglected its collection policies / lockdown during Covid-19 and this impacts on the debtors / stock / cash flow of the business. 6 3.2.2 Comment on the dividend per share over the two years. Quote figures. ONE valid comment  Figures  The DPS dropped from 90 cents to 72 cents / by 18 cents / by 20% 2 Explain the change in the dividend payout rate. Quote figures. Explanation  Figures  The dividend pay-out rate increased from 69% (90/130) to 136,5% or 72/58 (accept 124,1%) / or a 97,8% increase from the previous year Give a reason for this change. ONE valid point  part marks for incomplete, partial or unclear answer  Directors attempted to please the shareholders for the low profitability  Compensation for using funds retained in previous financial years.  No plans for growth / expansions (no need to retain additional funds) 4 A shareholder felt that they should be satisfied with the dividends they received as it is better than last year. Explain why you agree with him. Quote figures. Explanation with a comparison to another factor apart from the payout rate  Any valid figure  Responses for 3 marks:  The drop in the market price from 540 cents to 410 cents (reflects a dividend yield DPS/MP of 17,7% this year compared to 16,7% last year) / If the policy was maintained at 69% of EPS, they would have received 40 cents. Example of responses for two marks:  EPS dropped from 130c to 58c (by 72 cents / 55%) but DPS dropped from 90c to 72c (by 18 cents / 20%)  The dividend pay-out rate increased from 69% (90/130) to 136,5% or 72/58 (accept 124,1%) / or a 97,8% increase from the previous year. Example of responses for one mark:  The dividend pay-out rate increased. 3 Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com Accounting/P1 7 DBE/November 2020(2) NSC – Marking Guidelines 3.2.3 Comment on the risk and gearing for both years. Quote TWO financial indicators (with figures).   Debt/equity ratio increased (from 0,3 : 1) to 0,4: 1 (or by 0,1 : 1)   ROTCE decreased (from 39%) to 23,2% (or 15,8%) Any valid comment on the above  part marks for incomplete, partial or unclear answers  Increased borrowing not effectively used to increase / improve profitability.  Although still positively geared (ROTCE exceeds interest rate), the drop in profitability / downward trend is a concern.  Although there is low financial risk, the company is more reliant on own capital. 6 3.2.4 Existing shareholders are dissatisfied that the new shares issued on 1 April 2020 were sold to the CEO, Ida Shark. Give TWO reasons why you consider their feelings to be justified. Quote figures. Candidates must provide two reasons, which may be embedded in one explanation. Any two different reasons:   part marks for incomplete, partial or unclear answers  Ethical reasons e.g. This is a very low price and the CEO is exercising undue influence over the issue price / receiving preferential treatment / against the Companies Act or King Code / lack of transparency  Market-related reasons e.g. the company is losing out on additional funding as shares could have been sold at a price in that range, or on the stock exchange Relevant figures (any two):   The selling price of these shares (250 000) is 150 cents each (R375 000 in total) / market price of 410c exceeds NAV of 332c. 6 3.2.5 The Cash Flow Statement reflected a positive change in R980 000. Provide TWO points why this should still be a concern to directors. Quote figures. TWO points   Figures   Expected responses for one mark each, figures one mark each:  Cash flow from operating activities is negative R148 080  Additional shares issued, R375 000  Financing activities increased by R1 026 500  Large increase in loan, R651 500 / high interest payment R232 000  Very high payment for dividends, R925 000  Cash from investing activities, R101 580 4 TOTAL MARKS 35 Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com Accounting/P1 8 DBE/November 2020(2) NSC – Marking Guidelines QUESTION 4 4.1 Explain why a qualified audit report is not a good reflection of a company. Provide TWO points. TWO points   part marks for incomplete, partial or unclear answers  Certain information on financial statements are not clear / missing.  There is insufficient audit evidence for significant items; Auditors cannot verify certain information.  Lack of internal controls; possible negligence or colluding.  Negative impact in the future; consequences on the image / share price due to decreased demand for shares (from potential shareholders)  Existing shareholders might decide to sell their shares 4 4.2 Explain why it is important for a company to include non-executive as well as executive directors on the Board of Directors. TWO points   part marks for incomplete, partial or unclear answers  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 would 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). 4 4.3 According to the Companies Act, 2008 (Act 11 of 2008), a company must have a Remunerations Committee. Explain the role/responsibility of this committee and give a reason why this committee is necessary. EXPLANATION:  Note: Mark for explanation could be embedded in the reason Review all salaries, bonuses and other earnings To prevent directors from paying themselves too much They must approve, and give advice on the proposals re fees, bonuses etc. REASON:  part marks for incomplete, partial or unclear answers  To ensure fairness / transparency in the payment of fees/salaries  To prevent fraud / corruption / wastage  Detect mismanagement or fraudulent activities  They can compare the remuneration / earnings against financial information of other companies in the industry / fairness to workers 3 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com Accounting/P1 9 DBE/November 2020(2) NSC – Marking Guidelines 4.4 Directors engage with clients on a regular basis in an effort to negotiate contracts and to increase sales and services. Explain why there should be a company policy for all gifts, donations or favours received by the directors from clients to be declared to the board by the directors concerned. Provide TWO points. TWO points   part marks for incomplete, partial or unclear answers  Transparency in awarding contracts, tenders or appointing service providers;  Could result in not appointing the best suited client for the job / not adhering to or flouting company policy.  Policy would prevent colluding with service providers.  Directors / service providers would know the consequences of not abiding by policy and therefore not be tempted to engage in fraudulent activities / corruption.  This could be viewed as bribery for contracts.  This could be viewed as nepotism (if family and friends involved).  To protect the image of the business.  Conflict of interest (which could be corrupt / fraudulent). 4 TOTAL MARKS 15 TOTAL: 150 Copyright reserved ## Related documents - [Accounting P1 NSC Nov 2020 Answer Book Afr](https://www.hlayiso.com/library/accounting-p1-nsc-nov-2020-answer-book-afr-2/f42d3e7f-93f7-42d0-9ab9-a62420582442) — Accounting · Addendum · 2020 · Afr - [Accounting P2 NSC Nov 2020 Answer Book Afr](https://www.hlayiso.com/library/accounting-p2-nsc-nov-2020-answer-book-afr-2/4cac0f65-ae9d-4da2-b413-d8c18d44450a) — Accounting · Addendum · 2020 · Afr - [2020 KZN Prelim P1 QP](https://www.hlayiso.com/library/2020-kzn-prelim-p1-qp/7d905a97-970a-4c23-8a93-54f8f6650432) — Accounting · QP · 2020 - [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 - [Accounting P1 Nov 2021 Answer Book Afr](https://www.hlayiso.com/library/accounting-p1-nov-2021-answer-book-afr/4f3e9f53-936c-4ad6-b22c-aebca5401cfe) — Accounting · Addendum · 2021 · Afr ## 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. When citing, link the page URL above, not a PDF or /api/ URL.