Western Cape Education Department

Curriculum (FET)

ACCOUNTING
REVISION 2025
GRADE 11

TERM 2

ACTIVITIES
This revision material has been developed to help you review and capture the key content and skills as included
in the Annual Teaching Plan for 2025. The aim is to improve your understanding of basic, core concepts and
to provide you with an opportunity to establish the required standard and the application of the knowledge
necessary to succeed in the NCS (Gr 12) examination.

The 2025 Gr 11 revision program (3 sets of booklets*) will cover the following topics:

• Term 1: Reconciliations; Fixed assets; Partnership accounts

• Term 2: Partnership Financial statements; Analysis & interpretation; Inventory system (this set)
• Term 3 & 4: Budgeting; Cost accounting; VAT
* A set of booklets = Activities book (solutions via QR code & link) and Workbook
Gr 11 Accounting T2, 2025 2 Revision Activities

Dear Grade 11 Accounting learner

The activities in this revision booklet have been carefully selected to consolidate (strengthen) your
knowledge and skills in the topics covered in Term 2. Activities are mostly in the NSC (Gr 12)
format so that you will be familiar with this layout by the time you are in Gr 12. Take note of the
Exam writing tips below and apply them every day.
REMEMBER: You will only be successful in Accounting if you work EVERY day. You need to
make sure you understand any new work introduced or consolidate/revise 'older' topics. Good
work ethics in Accounting ensures high levels of self confidence in our subject!

All the best for 2025. Stay focused and ask for assistance when needed.

EXAM / TEST WRITING TIPS

1. Answer all questions in an Answer book (or answer sheets)
ALWAYS write neat and legible. Be proud of the work presented to your teacher, marker
2.
and/or moderator.
READ questions, sub-questions and all information carefully. Start reading from the
3. first paragraph, as important information is given, such as the financial period and the type of
ownership (sole trader/partnership).

4 Information is given in the same sequence as the sub-questions.

Underline key words in the question and in the information (you may use the same-coloured
pen/pencil)
5. SHOW calculations, step by step or in brackets where applicable. Part marks may be earned for
applyng the correct process (+, -, x, ÷) or using the applicable amounts in your calculations
(sometimes from a previous answer).

6. Always use your OWN calculator -

the same calculator that you use at home when you study

INDEX Page no
PARTNERSHIPS - financial statement formats 3-4
Statement of Comprehensive Income 5-7

Statement of Financial Position 8 -10

PARTNERSHIPS - unique financial indicators 11 - 12

Analysis and Interpretation 12 - 17

INVENTORY SYSTEMS 18 -20

 Gr 11 Accounting T2, 2025 3 Revision Activities

PARTNERSHIPS - FINANCIAL STATEMENTS

GAAP principles | financial year | year-end adjustments | accrued expenses | accrued income
prepaid expenses | income received in advance | depreciation | trading stock deficit | provision for
Basic
bad debts | interest on capital | profit sharing | primary division of profit | final division of profit |
concepts
gross profit | net profit | assets | liabilities | non-current assets | non-current liabilities | current
assets | current liabilities | partner's equity | total owners' equity | retained income

FORMAT/LAYOUT:

STATEMENT OF COMPREHENSIVE INCOME (Income Statement)

Statement of Comprehensive Income for the year ended ...
Sales (- Debtors allowances) SOME 'BASIC' ADJUSTMENTS
(less) Cost of sales ( ) ▪ ALWAYS ADD: Accrued income; Accrued expenses
Gross Profit 'A' ▪ ALWAYS SUBTRACT: Prepaid expenses; Income received in advance
Other operating income 'B' ▪ Goods returned by debtors: Add selling price to Debtors allowance and
subtract from Debtors control in the Statement of Financial Position
… … (Balance sheet); the Cost of these goods to be subtracted from COS and
… … add to Trading stock (in Statement of Financial Position (Balance sheet).
Gross operating income 'A+B' ▪ Subtract: Consumable stores on hand from total in the trial balance
Operating expenses ( ) 'C' ▪ Trading stock deficit/surplus: Look out for adjustments affecting
inventory
… …
▪ Depreciation: Vehicles and Equipment - know the different methods to
… …
calculate depreciation for the year.
Operating profit '(A+B) -C'
▪ Bad debt recovered: INCOME received from a debtor who was
(add) Interest income previously written off. Include as income.
Profit before Interest expense ▪ Bad debts: look out for adjustments affecting debtors before calculating
(less) Interest expense ( ) the Provision for bad debts

Net Profit for the year ▪ Provision for bad debts adjustment: bigger than the balance given
(Expense); smaller than balance given (Income)
▪ Fund Contributions to UIF/Medical aid/Pension funds must be ADDED
to Salaries and wages
▪ Insurance: Use amount in the adjustment (outside the accounting
period) and DEDUCT from Insurance
▪ Rent income/expense: note the increase /decrease in rent during the
year before calculating the total rent for the year. The difference between
total rent and the trial balance amount will be the rent accrued/prepaid/
received in advance. The total (adjusted) rent will appear in the SOI.

NOTE: Ensure that you 'place' income and expense items correctly. Marks are deducted
for incorrect 'placement' even if the amount of the item is correct (e.g. the provision for bad
debts adjustment (increased) should be 'placed' under Expenses).

NOTES for Interest Income and Interest Expenses should be included in a Statement of
Comprehensive Income.
 Gr 11 Accounting T2, 2025 4 Revision Activities

FORMAT/LAYOUT: STATEMENT OF FINANCIAL POSITION (Balance Sheet)

Name of the business
STATEMENT OF FINANCIAL POSITION AS AT .......
ASSETS
NON-CURRENT ASSETS
Fixed assets 3
Financial assets: Fixed deposits: ABC Bank
Long term loan to a partner: P. Partner
CURRENT ASSETS
Inventories 4
Trade and other receivables 5
Cash and cash equivalents (incl. the current portion of the Loan to Partner) 6
TOTAL ASSETS

EQUITY AND LIABILITIES

PARTNERS' EQUITY (or OWNERS' EQUITY)
Capital 7
Current accounts 8
NON-CURRENT LIABILITIES
Mortgage loan: ABC Bank
Long term Loan from partner: P Partner
CURRENT LIABILITIES
Trade and other payables 9
Bank overdraft*
Current portion of mortgage loan (can be included in Note 9)

TOTAL EQUITY AND LIABILITIES

FORMAT/LAYOUT: NOTES TO FINANCIAL STATEMENTS (UNIQUE TO PARTNERSHIPS)

7. CAPITAL Partner A Partner B Total
Balance at the beginning of year
Net profit (loss) for the year
Additional capital contributed

Decrease in capital contribution ( ) ( ) ( )

Balance at the end of year

8. CURRENT ACCOUNTS Partner A Partner B Total

Net profit as per Statement of Comprehensive Income
Partners' salaries (1)
Interest on capital (2)
Partners' bonuses (3)
Primary distribution of profit (Tot of 1,2 and 3)
Final distribution of profit
Drawings for the year ( ) ( ) ( )
Undrawn profits (retained income) for the year
Balance at the beginning of year
(may be used as the starting figure at the top of this note)
Balance at the end of year
 Gr 11 Accounting T2, 2025 5 Revision Activities

ACTIVITY 1 (Concepts)
Choose the correct word in COLUMN B to match the description in COLUMN A. Write only the letter (A – E)
next to the question number (1.1 – 1.5) in the Workbook.
COLUMN A COLUMN B
1.1 A contract between a minimum of two people, whereby they
combine assets and skills with the aim of earning a profit and A Unlimited liability
sharing the profits.
1.2 An anonymous person who is not known to the public and does
not take an active role in the business B Ethical Principles

1.3 If the partnership does not have sufficient funds in order to settle
the debts, the partners' personal assets will be used to settle the C Owner’s equity
debts of the business.
1.4 The total of the Capital accounts and the Current accounts of all
the partners at the end of the year D Silent partner

1.5 Objectivity, trust and integrity Partnership

E (5)
agreement

ACTIVITY 2 (Statement of Comprehensive Income, Notes) (83 marks; 65 minutes)

The information was extracted from the records of JJ Stores on 28 February 2023, the end of the current
financial year. The partners are Ms Jozi and Mr Jay.
REQUIRED
2.1 Prepare the Statement of Comprehensive Income for the year ended on
28 February 2023. (35)
NOTE: Some amounts are provided in the Workbook. Show all workings in brackets.

2.2 Complete the Notes to the Statement of Financial Position:

• Capital (8)
• Current accounts (32)
2.3 Jozi is not happy with the manner in which Jay is handling his investment in the business.
• Provide TWO reasons to justify why she feels this way. In each case provide relevant
(4)
figures to support your comments.
• Propose TWO practical suggestions that the partnership can use to address the concern
(4)
expressed by Jozi

INFORMATION
A. Extracts from the financial records:
Capital: Jozi (1 March 2022) R240 000
Capital: Jay (1 March 2022) 360 000
Drawings: Jozi 26 409
Drawings: Jay 57 403
Current account: Jozi (1 March 2022) (Cr) 22 360
Current account: Jay (1 March 2022) (Dr) 10 100
Sales 998 400
Cost of sales 665 600
Net profit (as per Profit and Loss account) 311 133
Gr 11 Accounting T2, 2025 6 Revision Activities

B. Extract of Pre-adjustment amounts from the General Ledger on 28 February 2023:

Loan: Kudu Bank ?
Fixed deposit: Bok Bank (9% p.a.) 120 000
Debtors control 68 720
Provision for bad debts (1 March 2022) 3 936
Trading stock 134 840
Rent income 117 250
Insurance 21 455
Packing material 23 100
Water and electricity 25 320
Interest income 8 100
Sundry expenses ?

C. The following adjustments were taken into account to calculate the net profit:
1. The annual stock take revealed the following stock on hand:
• Trading stock, R130 540
• Packing material unused, R3 600
2. Adjust the provision for bad debts to 5% of the net trade debtors
3. Interest on loan is capitalised. The loan statement received from Kudu Bank showed
the following:
Loan balance on 1 March 2022 R374 600
Repayments for the year (including interest) 86 400
Interest capitalised ?
Loan balance on 28 February 2023 327 000

4. The rent for March 2023 was received and deposited. Take into account that the rent
was increased by R875 from 1 December 2022.
5. Insurance includes the annual policy for R5 820 paid on 1 June 2022.
6. The water and electricity account for February 2023 was not yet paid, R2 150
7. Interest on fixed deposit is not capitalised. Interest for the last quarter of this financial
year was not yet received.
D. Transactions relevant to the partners:
1. Jozi took goods from stock for her personal use. The selling price was R9 590. Goods
are marked up by 75% on cost. Only the trading stock entry was processed.
2. Jay used the business’s money to settle his personal telephone account, R5 100
3. The partnership agreement clause for salaries provided for the following:
• Jozi R113 400 annually
• Jay R7 800 per month
NOTE: The partners were entitled to an annual increase of 10% effective on
1 December each year. The above allowances were not adjusted with this increase.
4. Interest on capital is calculated at 8% of the capital balances. On 1 June 2022, Jozi
increased her capital by R40 000 and Jay decreased his capital by R10 000. These
changes were not taken into account.
5. Jozi is entitled to a performance bonus equal to 3% of the total sales.
6. Partners share remaining profits or losses in the ratio of their capital balances at the
end of the year.
83
 Gr 11 Accounting T2, 2025 7 Revision Activities

ACTIVITY 3 (Statement of Comprehensive Income) (45 marks; 35 minutes)

The following information was taken from the records of Mondaze Traders, with partners Mona and
Daz. The financial year ended on 28 February 2023.
REQUIRED:
Complete the Statement of Comprehensive Income for the year ended 28 February 2023. (45)

INFORMATION:
A. Balances and totals on 28 February 2023 (unless otherwise indicated):
Buildings 963 000
Loan: First Bank 709 400
Fixed deposit: Win Bank (8,5% p.a.) 120 000
Trading stock 224 330
Debtors control 48 220
Provision for bad debts (1 March 2022) 1 420
Sales 852 000
Cost of sales (profit mark-up is 50% on cost) ?
Rent income 42 500
Commission income 19 440
Discount received 7 760
Interest on investment 7 650
Salary and wages 141 360
Consumable stores 9 370
Bad debts 3 980
Insurance 14 740
Repairs and maintenance 13 930
Lease of equipment 13 100
Sundry expenses 10 660

B. Additional adjustments not taken into account

• Outstanding debts totaling R3 220 must be written off and the provision for bad debts
must then be adjusted to 4% of debtors.

• The rent for February has not yet received. Take into account that the tenant was
granted R1 500 reduction in rent during November 2022 due to repairs being done to
the buildings.

• A fire insurance policy was entered into on 1 July 2022. The annual premium of
R7 020 was paid in full.

• The February 2023 loan statement showed an outstanding balance of R742 000.
Interest on loan is capitalised. A fixed instalment including interest is paid on 27 th of
each month.

• Interest on fixed deposit must be taken into account. The money was invested in
June 2021. Interest is not capitalised.

• The annual stock take revealed that R2 460 worth of stock was missing. Unused
consumable stores amounted to R880.

• Repairs to the building for R5 320 was posted in error to the Buildings account.
45
 Gr 11 Accounting T2, 2025 8 Revision Activities

ACTIVITY 4 (Statement of Financial Position; Notes) (65 marks; 55 minutes)

4.1 Choose the correct description from the list below to match the statement
Cash & cash equivalents Trade & other receivables Trade & other payables
Inventories Fixed assets Current Account Capital

4.1.1 Rates and taxes not paid for the last month of the financial year
4.1.2 Packing material on hand at the end of the financial year.
4.1.3 Fixed deposit matures within nine months of the end of the financial year
4.1.4 The repayment of the Loan to a partner is to be received in the next financial year
4.1.5 Interest earned by partners on their capital investment in their partnership 5

4.2 GOLDEN BROWN BAKERY

The information relates to Golden Brown Bakery, owned by partners Martin Gold and Mary Brown for the
financial year ended 28 February 2023.
REQUIRED
4.2.1 Prepare the following Notes to the Statement of Financial Position:
4.2.1.1 Current accounts (no total column required) (24)
4.2.1.2 Trade and other payables (6)
4.2.2 Complete the Statement of Financial Position as at 28 February 2023. (30)
INFORMATION
A Extract from the Post-Adjustment Trial Balance on 28 February 2023:
Capital: Gold 500 000
Capital: Brown 300 000
Current account: Gold (1/3/2022) 33 000
Current account: Brown (1/3/2022) (Dr) 15 400
Drawings: Gold 12 000
Drawings: Brown 10 000
Fixed (Tangible) assets at carrying value ?
Fixed deposit: Lama Bank (6% p.a) 225 000
Trading stock 146 900
Consumable stores on hand 3 870
Trade debtors 73 00
Trade creditors 65 000
Accrued Income / Income receivable* 10 490
Accrued expenses / Expenses payable* 3 100
Prepaid expenses 2 100
Income received in advance 8 250
Bank (Cr) 27 710
Cash float 3 500
Petty Cash 1 500
Loan: Mama Bank (15% p.a.) 480 000
Creditors for salaries 45 000
SARS (PAYE) 22 500
*Only use one of these alternative terms
 Gr 11 Accounting T2, 2025 9 Revision Activities

B. Additional information
1. R75 000 of the fixed deposit will mature on 30 June 2023
2. R60 000 of the capital portion of the loan will be paid during the next financial year.
3. Brown took trading stock for personal use. The price on the goods reflected R6 900.
The mark-up is 50% on cost. No entry was made in respect of this.
4. Brown increased his capital by R80 000 halfway during the financial year. This has
been recorded properly.
5. The partnership agreement provides for:
• Gold receives a salary of R11 000 per month and an annual bonus of R12 000.
• Brown’s annual salary is R108 000.
• Partners are entitled to 10% interest on their capital investment.
• Remaining profit and losses are shared between Gold and Brown in the ratio 3:2
6. The net profit for the year after all the adjustments had been processed was R400 000.

65

ACTIVITY 5 (Statement of Financial Position; Notes) (30 marks; 25 minutes)

The following information was taken from the books of Beatles Traders. The business is owned by
partners John Lennon and Paul McCartney.
REQUIRED:
5.1 Complete the NOTES to the financial statements for the year ended 28 February 2023:
• Fixed Assets (Vehicles column only) (7)
• Trade and other receivables (7)
5.2 Complete the ASSETS section of Statement of Financial Position of Beatles Traders
on 28 February 2023. (12)
Where notes are NOT required, show calculations in brackets.
5.3 Study the figures given for Equipment in the Fixed Assets Note in the ANSWER BOOK.
Explain the reason for the carrying value of R1 on 1 March 2022. (2)

5.4 John wants to sell the old equipment as it is no longer needed. Paul has suggested
donating the old equipment to a local charity. Give ONE reason why you would support
Paul’s suggestion. (2)
Gr 11 Accounting T2, 2025 10 Revision Activities

INFORMATION:
A. BALANCES ON 1 MARCH 2022:
Vehicles R 580 000
Equipment 80 000
Accumulated depreciation on vehicles 224 000
Accumulated depreciation on equipment 79 999
B. BALANCES ON 28 FEBRUARY 2023:
Fixed deposit: Starr Bank (9% p.a.) 200 000
Trading stock 155 400
Debtors’ control 78 000
Provision for bad debts 3 500
Bank (unfavourable) 14 000
Cash float 5 000
Income received in advance 4 500
Accrued expenses / Expenses payable 1 800
Prepaid expenses 3 400

C. ADDITIONAL INFORMATION:
1. A vehicle was sold for cash on 28 February 2023 and was properly recorded:
• Cost price, R150 000
• Accumulated depreciation on the date of sale (28 February 2023) amounted
to R41 625
• Selling price, R90 000
Vehicles are depreciated at 15% on the diminished balance. Total depreciation on
vehicles for the year amounted to R53 400.
Equipment is depreciated at 20% on cost.
2. The statement received from Starr Bank showed interest received for February 2023
that has not yet been recorded by Beatles Traders. Interest is capitalised. R80 000 of
the fixed deposit will mature on 30 November 2023.
3. A physical stock count revealed the following closing inventories on hand
on 28 February 2023:
• Trading stock R155 400
• Packing material R3 600
Note:
On 28 February 2023, the day after the physical stocktaking, trading stock with a cost
price of R50 000 was stolen during a robbery. The insurance company agreed to pay
out 80% of the claim during March 2023.
4. The provision for bad debts must be adjusted to 5% of debtors.
30
Gr 11 Accounting T2, 2025 11 Revision Activities

PARTNERSHIPS - FINANCIAL INDICATORS

Gross profit on cost of sales | Net profit on sales | Operating expenses on sales | Operating profit
on sales | Current ratio | Acid test ratio | Stock turnover rate | Stock holding period | Average
Basic
debtors’ collection period | Average creditors’ payment period Debt equity ratio (risk & gearing) |
concepts
Return on each partners’ equity | Return on average owner's equity | Return on total capital employed
(ROTCE)

Financial statements are analysed to find answers to certain questions.

Structure your comments with these 'questions' (given below) in mind
(The / refers to Exam Paper 1 and/or Exam Paper 2)
QUESTION TERM FINANCIAL INDICATOR FORMULA / Comment
% Gross profit on sales / GP/
Sales x 100 = … %
How profitable is the
business; how well
Profitability % Gross profit on CoS / GP/
CoS x 100 = … %
does it control its
and % Operating profit on sales / OP/ x 100 = … %
expenses and how Sales
operating
effective is the % Operating expenses on sales
business in its
efficiency OE/
Sales x 100 = … %
/
operation?
% Net income on sales / NI/
Sales x 100 = … %

Current ratio  CA : CL
(CA - Inventory) : CL OR
Acid test ratio 
(Debtors + Cash) : CL
Cost of Sales = ...times
Stock turnover rate / Ave. Trading Stock
Can the business The higher this number, the faster assets
repay its short-term can be turned into cash
debts; is the Ave Stock x 12 (365)
operating capital Liquidity Stock holding period / Cost of Sales 1 (1)
being handled = ... months (days)
efficiently? Cash flow
problems? Ave Debtors x 365 = .... days
Debtors collection period / Credit Sales 1
The aim is 30 days
Ave Creditors x 365 = ... days
Credit Purchases 1
Creditors payment period /
• Good, if it takes longer to repay creditors
• Negotiate for 90 days to avoid interest

Can the business Owners’ equity or Net assets

Solvency Total assets : Total liabilities
repay its debt? (sustainability/continuity) 
Net profit x 100
% Return on ave. partners’ equity Ave. Owners' (Partners) equity
 Compare this % with alternative
investments, e.g. fixed deposit interest %
Partner salary + Int on capital + Bonus
Do the + Share of profit (deduct a share in a
Amount earned by each partner loss)
owners/partners earn
Return on  This amount represents the net profit portion
a good return on
invesmtent earned by each partner. [include any other
their capital invested
additional remuneration]
in the business?
Amount earned by a partner x 100
% Return earned by each partner The partner's ave equity 1

Compare this % to other partners' % return
and to % interest on other investments
 Gr 11 Accounting T2, 2025 12 Revision Activities

FINANCIAL
QUESTION TERM FORMULA
INDICATOR
LT Liabilities : OE = (…. : 1)
OE = Partners' capital + Current accounts

- Creditworthiness = ability to obtain loans.

- High risk/low creditworthiness = 0,5 : 1 to
Debt : Equity ratio  1 : 1 (opt to contribute capital)
To what extent is the - Low risk /high creditworthiness = 0,1 : 1
to 0,4 : 1 (can borrow more)
business funded by
- Compare this ratio before and after a
borrowed capital, and to
change in loans to show the change in
what degree does it affect Risk / risk levels
the financial risk? Gearing Net Profit & Interest on loan x 100
Can the business borrow Ave. capital employed 1
more money?
Is it worth it? - Capital employed = OE + LT loans
Return on total capital - Compare to % interest on loans
employed (ROTCE)  - Higher = high gearing; loans are used to
expand and make more profit.
- Lower = low gearing; loans not used
effectively to earn profits. May not be able
to repay loans with interest.

BASELINE ACTIVITY 1
Classify the given financial indicators in the table below (see the example completed in the table):
(NOTE: Some indicators may appear in more than one column)
Operating profit on sales Ave creditors’ payment period
Return on average owner's equity Current ratio
Gross profit on cost of sales Net profit on sales
Acid test ratio Stock turnover rate
Operating expenses on sales Ave Debtors’ collection period
Stock holding period Return on each partners’ equity
Debt equity ratio (gearing) Return on total capital employed (ROTCE)

Profitability Liquidity Solvency Return Risk

Gross profit on Sales

BASELINE ACTIVITY 2

Match the questions in Column B with the category in Column A. Write only the correct letter from Column B
next to the category in Column A.
Column A Column B
A Can the business pay off its current or immediate debts
2.1 Profitability
comfortably?
B Are the owners (partners) earning a good return on their
2.2 Solvency
investment in their business?
C To what extent is the business financed by loans in
2.3 Liquidity
comparison to own capital?
D Is the business efficient in its normal operating activities? In
2.4 Return other words, are they able to make a profit and how well are
they controlling their expenses?
2.5 Financial risk / gearing E Can the business pay off all its debts comfortably?
 Gr 11 Accounting T2, 2025 13 Revision Activities

ACTIVITY 1 (Statement of Financial Position with Financial indicators)

You are provided with extracts of the financial statements of Mkuni Stores owned by S. and J. Mkuni.
Mkuni Stores sell a range of hardware items to the public. 90% of sales are on credit and all purchases
are on credit.
REQUIRED:
1.1 Complete the Statement of Financial Position of Mkuni Stores given in the Answer Book
on 31 August 2023.
1.2 Answer the following questions:
S. Mkuni is concerned about the difference in returns between what she and J. Mkuni are
earning.
1.2.1 Discuss ONE possible reason for the difference.
1.2.2 Do you think S. Mkuni's concern is justified?
1.3 Calculate the following:
1.3.1 Debtors’ collection period (on closing balances)
1.3.2 Creditors’ payment period (on closing balances)
1.4 Comment on the liquidity of the business. Use figures /ratios to support your opinion.

INFORMATION:
A. The current ratio for 2019 is 2,5 : 1
B. Sales for 2023 amounted to R1 152 000. A mark-up percentage of 50% on cost was
maintained throughout the year
C. The stock turnover rate for 2023 was 8 times and was constant throughout the year
D. On 1 September 2022 the business had a bank overdraft of R50 000 and no other cash
reserves. During the year ended 31 August 2023 the bank increased by R60 000.
E. The net profit for the year ended 31 August 2023 amounted to R126 000
F. The return on average partners’ equity amounted to 28% with S. Mkuni earning a return of
12% and J. Mkuni 39%
G. The debt : equity ratio amounted to 0,15 : 1

ACTIVITY 2 (Financial indicators and internal control) (40 marks; 35 minutes)

You are provided with information relating to Jet Setters, a clothing store owned by Mr Jetson and Mrs
Trendy on 28 February 2023.
REQUIRED:
2.1 Calculate the following financial indicators on 28 February 2023.
2.1.1 Operating expenses on turnover (3)
2.1.2 Acid test ratio (4)
2.1.3 % Return on average owners’ equity (7)
2.1.4 Stock turnover rate (5)
2.2 Comment on the liquidity position for 2023. Quote THREE relevant financial indicators (actual
ratios or figures) to support your answer.
(8)
2.3 The owners are not satisfied with the rate at which the stock is being sold. Explain why they
feel this way by quoting a relevant financial indicator to support your explanation.
(4)
2.4 Discuss THREE reasons why a business should not have too much stock. (6)
2.5 Will the owners of this business be satisfied with the return on equity? Explain by quoting a
financial indicator to support your opinion. (3)
 Gr 11 Accounting T2, 2025 14 Revision Activities

INFORMATION
A. Extract from the Post Closing Trial Balance 2023 2022
Capital: Incredible 900 000 1 050 000
Capital: Trendy 540 000 540 000
Current account: Incredible 138 150 108 000
Current account: Trendy (36 000) (17 100)
Trading stock 480 000 450 000
Debtors’ control 126 000 90 000
Bank - 108 000
Creditors control 216 000 171 000
Bank overdraft 360 000 -

B. Extract from Statement of Comprehensive Income 2023 2022

Sales 2 700 000 2 430 000
Cost of sales 1 080 000 1 080 000
Gross profit 1 620 000 1 350 000
Operating expenses 972 000 720 000
Net profit 648 000 630 000

C. Financial indicators 2023 2022

Net profit on sales 24% 25,9%
Operating expenses on turnover ? 29,6%
Current ratio 1,1 : 1 3,4 : 1
Acid test ratio ? 1,2 : 1
Stock turnover rate ? 3,9 times
Debtors’ collection period 48,7 days 40 days
% Return on average owners’ equity ? 44%

ACTIVITY 3 (Analysis & Interpretation) (40 marks, 30 minutes)

The information relates to Tamthan Electronics, owned by partners Tammy and Thando. Their financial
year ends annualy on 28 February.

REQUIRED:
Study the information and answer the questions which follow. In support of your answers, you
have to quote figures and/or the actual financial indicator(s) (ratios/percentages) where
appropriate. (40)

INFORMATION
Extracts from the ledger on 28 February 2023.

CAPITAL: THANDO
2022
Mar. 1 Balance b/d 900 000
Aug.31 Bank 800 000
1 700 000
 Gr 11 Accounting T2, 2025 15 Revision Activities

CURRENT ACCOUNT: THANDO

2023 2022
Feb. 28 Drawings: Thando 77 000 Mar 1 Balance b/d 40 000
2023
Balance c/d 90 000 Feb.28 Salary: Thando 70 000
Interest on Capital 48 000
Appropriation acc 9 000
167 000 167 000
2023
Mar. 1 Balance b/d 90 000

Extract from the Statement of Financial Position on 28 February

2023 2022
Fixed assets 3 052 000 2 270 000
Investments 150 000 180 000
Current assets 850 000 720 000
TOTAL ASSETS 4 052 000 3 170 000
Owners’ equity 2 732 000 2 330 000
Non-current liabilities (14% p.a.) 1 000 000 600 000
Current liabilities 320 000 240 000
TOTAL EQUITY & LIABILITIES 4 052 000 3 170 000

Amounts obtained from the financial statements

2023 2022
Sales (40% on credit) R3 100 000 R4 200 000
Cost of sales 1 820 000 2 640 000
Operating profit 365 800 600 600
Net profit 269 000 520 000
Capital – Tammy 1 000 000 1 400 000
Capital – Thando 1 700 000 900 000
Current Account – Tammy (58 000) (10 000)
Current Account – Thando 90 000 40 000
Trading stock 180 000 440 000
Trade debtors 410 000 230 000
Trade creditors 245 000 184 000

Financial indicators calculated from the financial statements

2023 2022
Operating profit as a % of sales 11,8% 14,3%
Net profit as a % of sales 8,6% 12,2%
Current ratio 2,6:1 3,0:1
Acid-test ratio 2,1:1 1,2:1
Stock turnover rate 5,9 7,0
Debtors' average collection period ? 54 days
Creditors average payment period 23 days 25 days
Solvency ratio ? 3,88:1
Debt/Equity ratio ? 0,26:1
Return on total capital employed 10,1% 11,2%
% return on average equity 12,9% 17,1%
% return earned by Tammy 14,7% 16,6%
% return earned by Thando ? 17,3%
 Gr 11 Accounting T2, 2025 16 Revision Activities

QUESTIONS:
3.1 Solvency:
3.1.1 Calculate the solvency ratio for 2023. (3)
3.1.2 Comment on this ratio. Is this business likely to experience a solvency problem?
Briefly explain. (3)
3.2 Gearing and profitability:
3.2.1 Calculate the debt/equity ratio for 2023. (3)
3.2.2 Thando is not happy with the debt/equity ratio and feels that it is negatively affecting
the performance of the business. State TWO points (financial indicators) to support
his opinion. (4)
3.3 Returns and equity:
3.3.1 Calculate Thando’s % return on average equity. (4)
3.3.2 Thando believes his return is unsatisfactory and that Tammy is taking advantage
of her senior position in the partnership. State TWO points to support Thando’s
opinion. (6)
3.4 Liquidity:
3.4.1 Calculate the average debtors’ collection period for 2023. (5)
3.4.2 Customers are complaining that the business seldom stocks the products they
would like to buy. Explain, stating TWO points. Quote figures and financial
indicators to proof the customers' complaints. (4)
3.4.3 The partners disagree about the liquidity situation.
▪ Tammy is not worried about the liquidity situation for the immediate future.
▪ Thando feels that there is danger signs for the long-term sustainability of the
business as far as liquidity and cash flow are concerned.
State TWO points to support Tammy’s opinion and TWO points to support Thando’s
opinion. (8)
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ACTIVITY 4 (Analysis & Interpretation) (20 marks, 25 minutes)

Lion Traders is a business owned by partners Sheru and Shakeelah. The financial year ends on
30 June each year.
REQUIRED:
4.1 Calculate and comment on the percentage return earned on by Sheru. (Use average
owner’s equity).
(6)
4.2 The partners are satisfied that the liquidity of the business has improved over the past year.
Identify and comment on TWO liquidity indicators which support their opinion. Quote the
relevant financial indicators/figures/trends. (6)
4.3 Calculate the Debt/Equity ratio on 30 June 2023. (4)
4.4 The partners have planned extensions to the building to the value of R100 000. Partner Sheru
suggested they take an additional loan to finance the extensions. Do you agree with this
suggestion? Give TWO points. Quote appropriate financial indicators with figures to
substantiate your answer. (4)

INFORMATION:
A. Details of partners’ Capital contributions on 30 June 2023:
CAPITAL ACCOUNTS SHERU SHAKEELAH TOTAL
Balance: beginning of year 800 000 640 000 1 240 000
Additional capital contributed 200 000 - 100 000
Decrease in capital - (40 000) (40 000)
Balance: end of year 1 000 000 600 000 1 300 000
Gr 11 Accounting T2, 2025 17 Revision Activities

B. Extract from the partners Current Accounts on 30 June 2023

CURRENT ACCOUNTS SHERU SHAKEELAH TOTAL
Net Profit for the year 320 000 380 000 700 000
Primary distribution 300 000 340 000 640 000
Final distribution of profit 20 000 40 000 60 000
Drawings for the year (222 000) (302 000) (524 000)
Retained income for the year 98 000 78 000 176 000
Balance: beginning of year 34 000 (28 800) 5 200
Balance: end of year 132 000 49 200 181 200

C. Financial indicators on 30 June:

2023 2022
Current ratio 2,8 : 1 2,1 : 1
Acid-test ratio 0,7 : 1 1,1 : 1
Stock holding period 75 days 90 days
Average debtors’ collection period 45 days 40 days
Average creditors payment period 55 days 70 days
Debt/equity ratio ? 0,5 : 1
Return on total equity 53% 45%
Return on earnings: Sheru ?
Return on earnings: Shakeelah 30,2%
Return on total capital employed (ROTCE) 40% 38%

D. Loan from Gudu Bank:

• The loan statement received from Gudu Bank shows an outstanding balance
of R450 000.
• The interest rate on the loan is fixed at 14% p.a.
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 Gr 11 Accounting T2, 2025 18 Revision Activities

INVENTORY SYSTEMS
Basic Perpetual or continuous inventory system | periodic inventory system | opening stock | closing stock
concepts physical stock take | cost of sales | purchases | mark-up% | carriage on purchases | trading stock
account

ACTIVITY 1 (Inventory systems) (33 marks; 20 minutes)

Mandisa Stores is a retail business that buys and sells sporting gear and clothing. Mandisa
applies a 50% mark-up on all her products.
REQUIRED
1.1 How does the periodic system differ from the perpetual system? Identify TWO aspects. (4)
1.2 Calculate the cost of sales for the period ending 29 February 2024. (15)
1.3 Calculate the gross profit for the year. (5)
1.4 Mark-up %:
1.4.1 Calculate the actual mark-up achieved. (3)
1.4.2 Supply TWO reasons why Mandisa did not achieve their intended mark-up. (4)
1.5 Mandisa is concerned about the high transport costs she has to pay on stock purchases
(2)
(see Carriage on purchases). Is there a way you can think of to solve this problem? Explain.
INFORMATION
A Extract from the General Ledger on 29 February 2024, the end of the financial year.
Opening stock R320 000
Purchases (cash) 710 000
Purchases (credit) 240 000
Sales (cash) 1 024 500
Sales (credit) 850 000
Debtors' allowances 42 000
Carriage on purchases 162 000
Customs duty 56 000

B Additional information (not taken into account)

1. A soccer kit was donated to a local school. The cost of the kit is R2 900.
2. A debtor returned merchandise which he bought earlier for R3 000 (cost, R1 500)

C An invoice received on 25 February 2024 from Vula Wholesalers has not been recorded.
Details are:
Total purchases R 34 200
Less 10% trade discount (3 420)
30 780
Add Transport costs 1 800
TOTAL R 32 580

D According to a stock-count done on 29 February 2024 stock on hand was valued at

R210 000 (cost price) (after taking information A, B and C above into account)
E After the stock take was completed R3 400 (cost) had to be returned to the supplier due to
poor quality. A debit note had been issued for this amount.
F Mandisa, the owner, also remembered that she had taken some stock R1 400 home for her
children after the stock take was completed. She forgot to inform the bookkeeper.
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 Gr 11 Accounting T2, 2025 19 Revision Activities

ACTIVITY 2 (Inventory calculations) (40 marks; 30 minutes)

Barby Sweets uses the periodic inventory system. Her financial year ended on 30 June 2024.
REQUIRED
2.1 Calculate the total net purchases. (13)
2.2 Calculate the gross profit for the year. (17)
2.3 Calculate the mark-up%. (4)
2.4 Explain why Barby uses the periodic system for her business. Provide TWO reasons. (4)
2.5 Barby is considering changing to the perpetual system in the next financial year. What
main point should she consider before making her final decision? (2)

INFORMATION
A Information available on 30 June 2024.
Opening stock (1 July 2023) R8 900
Purchases for cash 18 760
Purchases for credit 28 880
Cash sales (including credit card sales) 54 000
Credit sales 22 000
Debtors' allowances 1 540
Returns to suppliers 2 980
Customs duty 1 550
Carriage on sales 410
Carriage on purchases 970

B Additional information and adjustments (to be taken into account)

1. Damaged stock returned by customers R210 was not recorded.

2. During the year sweets (cost $360) were imported from the USA. The customs
duty calculated at 20% on these goods was not recorded. Use the exchange rate
of $1 = R15,00
3. Sweets to the value of R460 (cost price) were taken from the shop and used in a
sales promotion at the local shopping mall.

4. Sweets originally purchased for R1 100 were damaged as a result of a heatwave.

The insurers covered 80% of the loss.

5. Barby forgot to inform her bookkeeper that she had taken sweets, cost R250 for
her own use during June 2024 after the stock take was done.

6. The closing stock as per physical stock-take on 30 June 2024 was valued at
R8 550. Only adjustment no 5 (above) was not taken into account when this figure
was determined.
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 Gr 11 Accounting T2, 2025 20 Revision Activities

ACTIVITY 3 (Inventory: perpetual system) (30 marks; 25 minutes)

3.1 INTERPRETATION OF A LEDGER ACCOUNT
The information below relates to Kandy Sweets Stores on 30 June 2023, the end of their financial year.
They use the perpetual inventory system. Sandy Kandy is the owner.
REQUIRED
Study the Trading Stock account below and answer the questions in the ANSWER BOOK. (22)
INFORMATION
GENERAL LEDGER OF KANDY SWEETS STORES
Statement of Financial Position accounts section
Dr TRADING STOCK (B6) Cr
2023 2023
June
1 Balance b/d 90 500 June
30 Cost of sales CRJ 181 000
30 Bank* CPJ 310 000 [B} DJ 195 000
[A] CJ 240 300 Creditors Control CAJ 25 300
Petty Cash PCJ 350 Drawings GJ 15 000
Donation GJ 25 500
Balance c/o 199 350
641 150 641 150
2023
July
1 Balance b/d 199 350
*This amount included carriage on stock purchased, R18 000.
3.1.1 Supply the missing details [A] and [B] (2)
3.1.2 Total sales for the financial year were R601 600. Kandy Sweets uses a fixed mark-up
percentage on on their products. Calculate the mark-up percentage. (4)
3.1.3 Sandy is concerned about the high transport costs she has to pay on stock purchases.
Explain how she can solve this problem? (2)
3.1.4 Sandy has become aware of the donation of stock 'for the first time when she studied the
account above. Investigation revealed that regular stock donations of between R1 000
and R1 500 are being made. She has not authorised any of these donations.
Recommend TWO internal controls she could introduce to prevent similar transactions
from happening. (4)
3.1.5 A physical stock-take was conducted on 30 June 2023. The stock count revealed an
amount of R189 850 on hand.
(a) Provide the double entry with the amount to record the shortfall. (3)
(b) In the past stock shortages have occurred but were not as large as this one. Give
TWO different suggestions on how Sandy can reduce the stock shortages in future. (4)
3.1.6 Calculate the estimated time in days it will take to sell the closing stock of R189 850. (3)

3.2 PROBLEM SOLVING

FanC Fashions sells a wide range of fashion accessories to the public at a mark-up of 150%. After
the recent stock-taking the accountant has been presented with the following figures for 3 months
ended on 31 July 2023.
ITEMS Stock figures as per Stock figures as per Cost price per Period for which
accounting records physical stocktaking unit stock is on hand
Woollen scarves 55 42 R70 35 days
Woollen gloves 182 182 R48 62 days
Woollen beanies 45 44 R24 8 days
REQUIRED
3.2.1 Identify TWO areas of concern relating to the stock figures of FanC Fashions. Quote the
figures to support your concerns. (4)

Suggest TWO measures that should be introduced to improve the profitability of the
3.2.2 (4)
business.
30