# Accounting Grade 12 P1 Gauteng Mock 2020 QP (Eng) > Grade 12 Accounting Paper 1 question paper from the Gauteng Mock Exam 2020 (English), 13 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/grade-12-nsc-accounting-p1-english-2020-preparatory-question-paper/a22a39a6-4db1-44d3-8349-7687c12234bf - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Language: English - Document type: Question paper - Year: 2020 - Exam period: Gauteng Mock Exam - 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 P1 Gauteng Mock 2020 QP (Eng)](https://www.hlayiso.com/library/grade-12-nsc-accounting-p1-english-2020-preparatory-question-paper/a22a39a6-4db1-44d3-8349-7687c12234bf) ## About this document Accounting · Grade 12 · Gauteng Mock Exam · 2020 · English. Question paper, 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 GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION 2020 10711 ACCOUNTING PAPER 1 TIME: 2 hours MARKS: 150 12 pages + formula sheet P.T.O. ### Page 2 Downloaded from hlayiso.com ACCOUNTING 2 (Paper 1) 10711/20 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 the questions. 3. Show ALL workings in order to earn part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or blue / black ink to answer the questions. 6. Where applicable, show all calculations to ONE decimal point. 7. Write neatly and legibly. P.T.O. ### Page 3 Downloaded from hlayiso.com ACCOUNTING 3 (Paper 1) 10711/20 8. Use the information in the table as a guide when answering the question paper. Try NOT to deviate from it. QUESTION 1: 50 marks; 40 minutes Topic: This question integrates: Financial accounting Concepts and Financial Concepts Statements Income Statement, Notes and Balance sheet. QUESTION 2: 50 marks; 40 minutes Topic: This question integrates: Financial accounting Cash Flow Statement Concepts Notes to balance sheet Calculations to the cash flow statement Cash flow statement QUESTION 3: 50 marks; 40 minutes Topic: This question integrates: Financial Accounting Interpretation of Information Financial indicators and audit report Analysis of interpretation and audit report Managing resources Internal control P.T.O. ### Page 4 Downloaded from hlayiso.com ACCOUNTING 4 (Paper 1) 10711/20 QUESTION 1: CONCEPTS AND FINANCIAL STATEMENTS (50 marks: 40 minutes) 1.1 Choose the correct word from COLUMN B to match the description in COLUMN A. Write only the letter (A – E) next to the question number (1.1.1 to 1.1.4) in the ANSWER BOOK. COLUMN A COLUMN B 1.1.1 Guidelines for the preparation of financial A Memorandum of statements to ensure consistency. Incorporation 1.1.2 Sets out the rights, duties and B IFRS responsibilities of shareholders and directors. 1.1.3 The total number of shares that a company C Matching concept can issue. 1.1.4 Revenue generated during an accounting D Authorised share capital period should be matched to expenses during the same period. E Going concern concept (4) 1.2 TWO-WAY LIMITED You are provided with the information relating to Two-Way Ltd, for the year ended 29 February 2020. REQUIRED: 1.2.1 Refer to INFORMATION E and calculate the correct net profit after tax. (12) 1.2.2 Prepare the following note to the balance sheet for the financial year ended 29 February 2020. • Trade and other receivables (9) 1.2.3 Prepare the Balance Sheet (Statement of Financial Position) of Two-Way Ltd as at 29 February 2020. (Where notes are not required, show your workings in brackets in order to earn part marks) (25) P.T.O. ### Page 5 Downloaded from hlayiso.com ACCOUNTING 5 (Paper 1) 10711/20 INFORMATION: A. The following figures were extracted from the accounting records at the end of the financial year on 29 February 2020. Ordinary share capital ? Retained income (29 February 2020) 805 140 Fixed assets (at carrying value on 29 February 2020) 5 180 652 Loan: Canara Bank (29 February 2020) 622 800 Fixed deposit: Fargo Bank (1 March 2019) 504 000 Bank (Dr) ? Creditors’ control ? Debtors’ control 64 800 Inventory 757 800 Provision for bad debts 3 420 SARS: Income tax (Provisional tax payments) 524 520 B. Share Capital • The company has an authorised share capital of 1 000 000 shares. • 60% of the authorised share capital was issued at the beginning of the financial year. • On 31 March 2019, the directors issued an additional 200 000 shares. • On 31 December 2019, the directors decided to buy back 100 000 shares from the estate of the deceased shareholder. • The Net Asset value per share on 29 February 2020 is 8,80 cents. C. Dividends • An interim dividend of 45 cents per share was declared and paid on 1 August 2019. The new shareholders qualified for the interim dividend. • A final dividend of 81 cents per share was declared on 29 February 2020. The shareholder whose shares were bought back are not entitled to the final dividend. D. The loan statement received from Canara bank showed the following: Opening balance (01/03/19) R 846 000 Repayment during the year (interest included) 223 200 Closing balance (29/02/20) 709 200 • Provide for interest on loan. • The capital repayment of the loan will remain the same as the previous financial year. P.T.O. ### Page 6 Downloaded from hlayiso.com ACCOUNTING 6 (Paper 1) 10711/20 E. The net profit was R1 810 404 before the following adjustments were taken into consideration. • Interest on fixed deposit is earned at 10% per annum and is not capitalised. No interest has been received. 40% of the fixed deposit will mature on 30 June 2020. • Interest on the loan was also not taken into consideration. Interest on the loan is capitalised. • Provision for bad debts must be adjusted to 5% of the outstanding debtors. • Rent income received amounted to R94 608. It included the rent for March and April 2020. The rent was increased by 15% on 1 January 2020. • Trading stock, R25 200 was damaged by a storm during the year. The insurance company accepted the claim and will cover 70% of the claim. The insurance claim will be processed during May 2020. • Insurance included an annual policy of R15 120 paid on 1 August 2020. • Directors fees of R9 000 were still outstanding on 29 February 2020. • Income tax for the year amounted to R483 120. 50 P.T.O. ### Page 7 Downloaded from hlayiso.com ACCOUNTING 7 (Paper 1) 10711/20 QUESTION 2: CASH FLOW STATEMENT (50 marks; 40 minutes) 2.1 Indicate whether the following statements are TRUE or FALSE. Write only ‘true’ or ‘false’ next to the question numbers (2.1.1 to 2.1.3) in the ANSWER BOOK. (3) 2.1.1 If the loan amount increases from the previous year it is an outflow of cash 2.1.2 Repurchase of shares amount decreases Cash Flow from financing activities. 2.1.3 Increase in debtors does not form part of changes in working capital. 2.2 UHLAZO LTD The information relates to UHLAZO Ltd for financial year ended on 30 April 2020. REQUIRED: 2.2.1 Prepare the following notes to the Balance Sheet: • Ordinary Share Capital (11) • Retained Income (13) 2.2.2 Calculate the following figures for the Cash Flow Statement on 30 April 2020: • Taxation paid (4) • Dividends paid (3) • Loan repayment amount (2) • Net change in cash and cash equivalents (5) 2.2.3 Prepare the CASH FLOW OF INVESTING ACTIVITIES section of the Cash Flow Statement on 30 April 2020. (9) P.T.O. ### Page 8 Downloaded from hlayiso.com ACCOUNTING 8 (Paper 1) 10711/20 INFORMATION: A. Information extracted from the Income Statement on 30 April 2020: Interest expenses 45 900 Depreciation 26 900 Income tax (30% of Net Profit) 360 000 B. Information extracted from the Balance Sheet on 30 April: 30 April 2020 30 April 2019 Fixed assets (carrying value) 5 890 000 5 328 000 Fixed Deposit 210 000 ? Cash and cash equivalents 91 400 22 000 Shareholders’ equity 2 739 000 2 106 000 Ordinary share capital 1 815 000 1 500 000 Retained income 924 000 606 000 Loan: Ivory Bank 135 000 246 000 Bank overdraft 0 35 600 SARS: Income tax 12 800 (Cr) 22 600 (Cr) Shareholders for dividends ? 220 500 C. Share capital information: Authorized share capital of 1 200 000 ordinary shares Issued share capital • On 1 May 2019, there were 480 000 shares in issue. • On 30 July 2019, additional shares were issued. • On 31 January 2020, 50 000 shares were repurchased and an amount of R220 000 was paid. D. An interim dividend of 21 cents per share was paid on 31 December 2019. The new shareholders were entitled to the interim dividends. A final dividend of 62 cents per share was declared on 30 April 2020. Only the shareholders registered on 30 April 2020 qualified for the final dividend. E. Net asset value per share after the above has been taken into account is 498 cents. F. Additional fixed assets were purchased during the financial year. An old vehicle was sold at book value during the financial year. G. One third of the fixed deposit matured on the 31 December 2019. 50 P.T.O. ### Page 9 Downloaded from hlayiso.com ACCOUNTING 9 (Paper 1) 10711/20 QUESTION 3: INTERPRETATION OF FINANCIAL STATEMENTS AND AUDIT REPORT (50 marks; 40 minutes) 3.1 AVIEE LTD Information was extracted from the financial records of Aviee Limited. The company is listed on the stock exchange. REQUIRED: 3.1.1 Calculate the following financial indicators on 31 August 2020. • Acid-test ratio (4) • Debt-equity ratio (3) • Return on average shareholders’ equity (5) 3.1.2 Comment on the dividend policy for 2020. Provide a calculation to support your answer. (5) 3.1.3 The directors decided to change the dividend policy in 2020. Give TWO reasons for this change. (4) 3.1.4 Comment on the gearing and degree of risk for 2020. Quote TWO relevant indicators in your comment. (6) 3.1.5 The shareholders are dissatisfied with the repurchase price of shares. Using the relevant indicators and figures, explain why they are dissatisfied. (3) P.T.O. ### Page 10 Downloaded from hlayiso.com ACCOUNTING 10 (Paper 1) 10711/20 INFORMATION: Extract from the financial statements on 31 August 2019 and 2020: 2020 2019 R R Fixed deposit: Sierra Bank 200 000 480 000 Loan: Max Bank 3 000 000 1 200 000 Current assets (including inventories) 2 273 400 2 492 800 Inventories 942 200 1 435 100 Current liabilities 1 024 000 1 511 000 Cash and cash equivalents 72 800 4 800 Bank overdraft 0 224 000 Shareholders’ equity 13 686 600 11 653 000 Shareholders for dividends 264 000 352 000 Net profit before tax 1 908 000 Income Tax 30% Financial indicators on 31 August: 2020 2019 Current ratio 2,2 : 1 1,6 : 1 Acid-test ratio ? 0,7 : 1 Debt-equity ratio ? 0,1 : 1 Earnings per share 77 cents 87 cents Dividends per share 40 cents 80 cents Return on average shareholders’ equity ? 11,9% (ROSHE) Return on capital employed (ROTCE) 16,4% 15,3% Net asset value 778 cents 728 cents Interest rate on loans 13% 12% Market value on JSE 780 cents 725 cents Interest rate on fixed deposit 11% 11% Number of shares 880 000 ? Price at which shares were repurchased 800 cents 30 P.T.O. ### Page 11 Downloaded from hlayiso.com ACCOUNTING 11 (Paper 1) 10711/20 3.2 AUDIT REPORT You are provided with an extract from the audit report of the independent auditors of Ivory Limited. REQUIRED: 3.2.1 Briefly explain the role of an independent auditor. (2) 3.2.2 What type of report did Ivory Limited receive? Explain your answer. (3) 3.2.3 To whom is this audit report addressed? (1) 3.2.4 State TWO possible consequences for the independent auditor if he had NOT mentioned the donation in his report. (2) 3.2.5 State ONE consequence that this report could have on the company. (2) 3.2.6 How will this report affect the price of shares? (2) 3.2.7 Explain why the independent auditors mentioned IFRS in the audit report. (2) 3.2.8 The director cites the donation to the school as a Corporate Social Investment (CSI) initiative. (a) Explain the need for corporate social investment. (2) (b) What do you understand by the triple bottom line? (2) (c) Which component of the annually published financial statements should contain details of the donation to the Covid-19 Food Parcel Relief? (2) P.T.O. ### Page 12 Downloaded from hlayiso.com ACCOUNTING 12 (Paper 1) 10711/20 INFORMATION: EXTRACT FROM THE REPORT OF IVORY LIMITED Independent Auditors' Responsibility We have examined the annual financial statements set out on pages 31 to 53. Basis for Qualification of Opinion The donation of inventory for R350 000 made to the local Covid-19 Food Parcel Relief could not be authenticated, as no documentation existed for this expense. Subsequently, the inventory note is overstated and operating expenses stated in the Statement of Comprehensive Income has been understated as well. Audit Opinion Because of the significance of the matters described above, we have not been able to obtain sufficient audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements of Ivory Ltd for the year ended 31 July 2020. Seshohli & Chetty, Chartered Accountants (SA) 20 TOTAL: 150 END ### Page 13 Downloaded from hlayiso.com ACCOUNTING 13 (Paper 1) 10711/20 GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit x 100 Gross profit x 100 Sales 1 Cost of sales 1 Net profit before tax x 100 Net profit after tax x 100 Sales 1 Sales 1 Operating expenses x 100 Operating profit x 100 Sales 1 Sales 1 Total assets : Total liabilities Current assets : Current liabilities (Current assets – Inventories) : Current liabilities Non-current liabilities : Shareholders' equity (Trade & other receivables + Cash & cash equivalents) : Current liabilities Average trading stock x 365 Cost of sales Cost of sales 1 Average trading stock Average debtors x 365 Average creditors x 365 Credit sales 1 Cost of sales 1 Net income after tax x 100 Net income after tax x 100 Number of issued shares 1 Average shareholders' equity 1 (*See note below) Net income before tax + Interest on loans x 100 Average shareholders' equity + Average non-current liabilities 1 Shareholders' equity x 100 Dividends for the year x 100 Number of issued shares 1 Number of issued shares 1 Interim dividends x 100 Final dividends x 100 Number of issued shares 1 Number of issued shares 1 Dividends per share x 100 Dividends for the year x 100 Earnings per share 1 Net income after tax 1 Total fixed costs Selling price per unit – Variable costs per unit Note: * In this case, if there is a change in the number of issued shares during a financial year, the weighted average number of shares is used in practice. ## Related documents - [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 - [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 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 - [2020 KZN Prelim P1 QP](https://www.hlayiso.com/library/2020-kzn-prelim-p1-qp/7d905a97-970a-4c23-8a93-54f8f6650432) — Accounting · QP · 2020 - [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 ## 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 - [Acc P2 Memo ENg watermark](https://www.hlayiso.com/library/acc-p2-memo-eng-watermark/5c899e95-f3c2-4bf6-b539-ed8b1bcec50d) — Memo · 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 - [Accounting P1 (English) June 2025 Possible Answers](https://www.hlayiso.com/library/accounting-p1-english-june-2025-possible-answers/86671777-58f6-4c82-932c-4924bae022c0) — Memo · 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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