MINISTRY OF EDUCATION

NAMIBIA SENIOR SECONDARY CERTIFICATE

ACCOUNTING
SPECIMEN PAPERS 1 - 2 AND MARK
SCHEMES
ORDINARY LEVEL
GRADES 11 – 12

THESE PAPERS AND MARK SCHEMES SERVE TO

EXEMPLIFY THE SPECIFICATIONS IN THE LOCALISED
NSSC ACCOUNTING ORDINARY LEVEL SYLLABUS

2006
Ministry of Education
National Institute for Educational Development (NIED)
Private Bag 2034
Okahandja
Namibia

© Copyright NIED, Ministry of Education, 2005

NSSCO Accounting Specimen Paper Booklet Grades 11 - 12

ISBN: 99916-69-77-9

Printed by NIED

Publication date: 2005

 TABLE OF CONTENTS

Paper 1: Specimen Paper ..........................................................................................................1

Paper 1: Mark Scheme ............................................................................................................13

Paper 2: Specimen Paper ........................................................................................................21

Paper 2: Mark Scheme ............................................................................................................34

 MINISTRY OF EDUCATION

Namibia Senior Secondary Certificate (NSSC)

ACCOUNTING: ORDINARY LEVEL

PAPER 1
SPECIMEN PAPER

TIME: 1 hour 30 minutes

INSTRUCTIONS TO CANDIDATES

Write your name, centre number and candidate number in the spaces at the top of this page.

Answer all questions.

Write your answers in the spaces provided on the question paper.

INFORMATION FOR CANDIDATES

The number of marks is given in brackets [ ] at the end of each question or part question.

You may use a calculator.

Where layouts are to be completed, you may not need all the lines for your answer.

1
1 (a) State the accounting equation.

………………………………………………………………………………
[1]
(b) Give one example of a current asset.

………………………………………………………………………………
[1]
(c) How is the current ratio calculated?

………………………………………………………………………………
…………………………………………………………………………........
[1]

(d) For each of the three items place one tick (√) in the correct box.

Capital expenditure Revenue expenditure

1. Cost of new motor vehicle

2. Cost of painting business
logo on new motor vehicle
3. Cost of fuel for new motor
vehicle
[3]

(e) Explain the term close corporation.

…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
[2]

(f) A debtor owed N$1 000. A cash discount of 2.5 % is allowed if payment is
made by the end of the month. The debtor paid in time and claimed the
discount. How much did the debtor pay?

…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
……………………….…………………………………………………….…
[2]

2
(g) Complete the following table to show the different terms used by trading
businesses and non-trading organisations.
Term used by trading business Term used by non-trading organisation

1. Net loss 1.

2. Profit and Loss account 2.

3. Cash Book 3.
[3]

(h) The following information relates to Lydia’s business for the year ended
31 December 2004

1 January 2004 31 December 2004

N$ N$
Stock 4 000 6 000

Sales for the year 62 000

Purchases for the year 46 000

Calculate.

(i) Cost of sales

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[4]
(ii) Rate of stock turn.

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[3]

3
(i) What is the difference between bad debts and provision for doubtful
debts?

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[2]

(j) Fred is a carpenter. What method of depreciation would you advise

him to use for low value assets such as spanners, screwdrivers etc.?

…………………………………………………………………………
…………………………………………………………………………
[1]

(k) A business provides the following information for the year ended 31
March 2004

1 April 2003 31 March 2004

N$ N$
Total debtors 4 000 5 000

During the year ended 31 March 2004:

Cheques received from debtors amounted to N$12 000
Cash sales amounted to N$7 000

Calculate the total sales for the year ended 31 March 2004.

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[6]

(l) State one reason for preparing departmental accounts.

…………………………………………………………………………
…………………………………………………………………………
[1]

4
 (m) Complete the following table to show the source of information for the items
appearing in a Creditors Control account.

Item appearing in Creditors Control account Source of information

1. Credit purchases 1.

2. Discount received 2.
[2]

Total [32]

2. (a) Explain why it is not possible to have a credit balance on a cash account.

…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………..………….…
[2]

(b) Mark Mogambi is a sole trader. On 1 May 2004 the debit balances brought
forward in his Cash Book were

N$
Cash 100
Bank 2 050

Mark’s transactions for the month of May 2004 included the following.

May 4 Received and banked a cheque from David Tan in settlement of

the amount owing of N$300, after the deduction of a cash
discount of 2 %.
10 Paid Susan Balbo the amount owing to her, N$560, by cheque,
after deducting a cash discount of 2,5 %.
14 John Kioki paid his account, N$90, by cheque. This cheque was
immediately deposited in the bank.
23 Purchased a motor vehicle, N$4 100, and paid by cheque.
25 John Kioki’s cheque was dishonoured and was returned by the
bank.
28 Cash sales for the month N$ 1 150.
30 Paid all the cash into the bank except N$50.

5
 REQUIRED:

Enter the above transactions in Mark’s Cash Book on the opposite page.
Balance the cash and bank columns at 31 May 2004 and bring down the
balances on
1 June 2004.
[12]

(c) Mark decided to delegate some of the bookkeeping to an office junior.

(i) Explain where the small cash transactions could be recorded and how
the total spent on each main type of expense could be shown.

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[2]

(ii) Explain a system for recording small cash payments that would allow
Mark to be able to monitor the amount spent each month.

…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
[2]

Total [18]

6
 Mark Mogambi
Cash Book

Discount Discount
Date Details Allowed Cash Bank Date Details Received Cash Bank

N$ N$ N$ N$ N$ N$

7
3. Study the invoice below and answer the questions which follow.

FC BUILDERS

INVOICE No. 1234

76 Bach street Date: 8 November 2004

Westside Valley
WINDHOEK

Description Quantity Price Amount

N$ N$

Bags of cement 30 bags 40.00 per bag (i)

Bricks 150 bricks 2.00 per brick 300.00

Total goods (ii)

10 % Trade discount (iii)

Invoice Total (iv)

CA Building Supplies
WINDHOEK

(a) Calculate the missing amounts at (i) to (iv) on the invoice and enter these in the boxes
above.

[4]

(b) In the books of CA Building Supplies make the entries necessary to record the above
invoice in the ledger accounts shown below.

(i) Purchases account

..........................................................................................................................................
..........................................................................................................................................

8
 (ii) FC Builders

..........................................................................................................................................
..........................................................................................................................................
[2]

(c) State and explain two reasons why FC Builders should send a monthly statement of
account to CA Building Supplies.

(i) ..............................................................................................................................
..............................................................................................................................

(ii) ..............................................................................................................................
..............................................................................................................................
[4]
Total [10]

4. Motte and Baili are in partnership.

Their partnership agreement provides that

1. interest on capital is allowed at 10 % per annum,
2. interest on drawings is charged at 10 % per annum, calculated on the balances of
the Drawings accounts at the end of the financial year,
3. Baili receives a salary of N$15 000 a year,
4. Remaining profits are shared:
Motte three quarters (¾)
Baili one quarter (¼)

The financial year end of the partnership is 30 September. On 30 September 2004,

balances in the partnership’s books included
N$
Profit and Loss Account (net profit for year) 32 000
Capital accounts: Motte 50 000
Baili 30 000
Drawings accounts: Motte 20 000
Baili 10 000

9
REQUIRED:

(a) Prepare the partnership’s Profit and Loss Appropriation Account for the year ended
30 September 2004.

Motte and Baili

Profit and Loss Appropriation Account for the year ended 30 September 2004

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
[14]

(b) Explain why it was important for Motte and Baili to draw up a partnership agreement
before they started in business.

…………………………………………………………………………………………
………………………………..……………………………………………………….
[2]

(c) Explain the difference between Capital accounts and Current accounts in a
partnership.

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
[4]

Total [20]

10
5. Caroline Wilson makes up her annual accounts to 31 March. Her Trial Balance at
31 March 2004 showed the shortage on the debit side of N$210. This difference was
posted to a Suspense account.

The following errors were then discovered.

1. The Purchases Journal had been under cast by N$450.

2. The sale of office equipment had been posted to the sales account, N$250.
3. N$640 received from C. Tjiurutue, a debtor, was correctly entered in the Cash
Book, but had been wrongly posted to the Debtors Ledger as N$460.
4. Discount allowed of N$60 had been entered in the Cash Book, but was not
posted in the customer’s account.
5. Machinery was purchased on credit from Katima Engineering for N$2 500,
but no entry had been made in Caroline’s books.

REQUIRED:

(a) Prepare the entries in Caroline’s General Journal to correct the above errors.
Narratives are not required.

General Journal of Caroline Wilson

Dr Cr
N$ N$

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
[10]

11
(b) Write up the Suspense Account to show the required amendments. Start with the
balance arising from the difference in the Trial Balance.

Suspense Account

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
[4]

(c) For each error (1 – 5) show how the net profit will be affected when the errors are
corrected. Insert the amount in the appropriate column. The first one has been
completed as an example. Calculate the corrected net profit.

Statement of corrected net profit

Increase Decrease No effect
N$ N$ N$ N$
Net profit before corrections 34 540
1. 450
2.
3.
4.
5.
Totals
Corrected net profit
[6]
Total [20]

12
 MINISTRY OF EDUCATION

Namibia Senior Secondary Certificate (NSSC)

ACCOUNTING: ORDINARY LEVEL

PAPER 1
MARK SCHEME

1. (a) Assets = Owner’s equity + Liabilities [1]

(Or other acceptable formula)

(b) Stock, Debtor, Bank, Cash, Prepaid expenses, Accrued income, etc. [1]

(c) Current assets

Current liabilities [1]

(d) (1) Capital

(2) Capital
(3) Revenue [3]

(e) Form of business for smaller businesses (1) a less complex and more easily
administered legal entity (1) [2]

(f) Amount due 1 000

Less: 2½ % 25 (1)
Total paid 975 (1) O/F [2]

(g) 1. Deficit
2. Income and Expenditure Account
3. Receipts and Payments Account [3]

(h) (i) Opening Stock 4 000 (1)

Add: Purchases 46 000 (1)
50 000
Less: Closing Stock 6 000 (1)
Cost of sales 44 000 (1) [4]

(ii) 44 000 (1) O/F

(6 000 + 4 000) ÷ 2 (1)

= 8,8 times (1) O/F [3]

(i) Bad debts: When an account is written off as irrecoverable. (1)

Provision for doubtful debts: A business estimates an amount which will be lost
because of bad debts. (1) [2]

(j) Revaluation method [1]

13
 (k) Receipts from debtors 12 000 (1)
Add: Debtors (31 March) 5 000 (1)
17 000
Less: Debtors (1 April) 4 000 (1)
Credit sales 13 000 (1)
Add: Cash sales 7 000 (1)
Total sales for the year ended 20 000 (1) [6]

(l) To see how profitable each department is;

To assist in decision making on closing departments.
Remedial steps can be taken to remedy poor performance.
(Or any acceptable reason) [1]

(m) 1. Purchases Journal (1)

2. Cash Book (1) [2]
Total [32]

2. (a) A credit balance indicates overdrawn, and it is not possible to take out more cash
than came in. [2]

(b) See Cash Book. [12]

(c) (i) Using a Petty Cash Book (1) with analysis columns for expenses occurring
most frequently. (1) [2]

(ii) Using the imprest system (1) under which the petty cashier is reimbursed
with the amount spent, so the chief cashier knows exactly how much was
spent each month. (1) [2]
Total [18]

14
(b)

Mark Mogambi
Cash Book
Discount Discount
Date Details Allowed Cash Bank Date Details Received Cash Bank

N$ N$ N$ N$ N$ N$
2004 2004
May 1 Balances b/d (1) 100 2 050 May 10 Susan Balbo (1) 14 546

4 David Tan (1) 6 294 23 Motor vehicle (1) 4 100

John Kiok (1) 90
14 John Kioki (1) 90 25 (dis. cheque)

28 Sales (1) 1 150 30 Bank (1) 1 200

30 Cash (1) 1 200 31 Balance c/d 50

31 Balance c/d 1 102

6 1 250 4 736 14 1 250 4 736

June 1 Balance b/d (1) 50 June 1 Balance b/d (1) 1 102

O/F

Totalling of discount columns (1) [12]

15
3. (a) (i) N$1 200 (1)
(ii) N$1 500 (1) O/F
(iii) N$150 (1) O/F
(iv) N$1 350 (1) O/F [4]

(b) (i) Purchases account

2004
Nov. 8 F.C. Builders 1 350 (1) O/F

(ii) FC Builders account

2004
Nov. 8 Purchases 1 350 (1) O/F

(Running balance format is also acceptable) [2]

(c) (i) To remind the customer of the amount due. (2)

(ii) The customer can also check the statement against his records to
ensure that no errors have been made by either the business or
suppliers. (2) [4]

Total [10]

16
4. (a) Motte and Baili
Profit and Loss Appropriation Account for the year ended 30 September 2004

N$ N$ N$ N$
Interest on capital Net profit 32 000 (1)
Motte 5 000 (2) Interest on drawings
Baili 3 000 (2) Motte 2 000 (2)
Salary – Baili 15 000 (1) Baili 1 000 (2) 3 000

Balance of profits:
Motte ¾ 9 000 (2) O/F
Baili ¼ 3 000 (2) O/F 12 000
35 000 35 000

[14]

OR vertical layout also acceptable

N$ N$
Net profit b/d 32 000 (1)

Interest on drawings
Motte 2 000 (2)
Baili 1 000 (2) 3 000
35 000
Interest on capital
Motte 5 000 (2)
Baili 3 000 (2)
8 000
Salary, Baili 15 000 (1) 23 000
12 000
Balance (share) of profits
Motte ¾ 9 000 (2) O/F
Baili ¼ 3 000 (2) O/F 12 000

[14]

(b) Eliminate any confusion and misunderstandings which may arise. [2]

(c) Capital accounts has to do with the actual capital introduced into the business
plus any further capital invested or any permanent decrease in the capital . (2)

Current accounts has to do with the amount to which partners become entitled
and amounts with which they are charged are entered. (2) [4]

[20]

17
5. (a) General Journal

Dr Cr

N$ N$

1. Purchases 450 (1)

Suspense 450 (1)

2. Sales 250 (1)

Office Equipment 250 (1)

3. Suspense 180 (1)

C. Tjiurutue 180 (1)

4. Suspense 60 (1)
Debtor/customer 60 (1)

5. Machinery 2 500 (1)

Katima Engineering 2 500 (1)

[10]

(b) Suspense Account

Trial Balance balance 210 (1) Purchase 450 (1)

C. Tjiurutue 180 (1)
Debtor/customer 60 (1) ___
450 450

(Running balance format also acceptable) [4]

(c) Statement of corrected Net Profit

Increase Decrease No effect
N$ N$ N$ N$
Net profit before corrections 34 540
1. 450
2. 250 (1)
3. 180 (1)
4. 60 (1)
5. 2 500 (1)
Totals 700 2 640 700
(1) O/F
Corrected Net Profit 33 840 (2) C/F

[6]
Total [20]

18
 ASSESSMENT OBJECTIVES GRID
NSSCO – PAPER 1

Marks
Syllabus
Question Topic Total Skill
Reference
A (60) B (20) C (20) D (0)

1 (a) Accounting equation T1 U1 1

(b) Example current
asset T1 U1 1
(c) Current ratio T4 U1 1
(d) Capital and Revenue T4 U4 3
(e) Close corporations T2 U4 2
(f) Cash discount
(g) Non-profit making
organisations T1 U2 2
(h) Final accounts T4 U3 3
(i) Cost of sales T2 U1 4
(j) Ratios T4 U1 3
(k) Bad debts &
provision T2 U2 2
(l) Depreciation T2 U2 1
(m) Incomplete records T3 U2 6
(n) Departmental
accounts T2 U1 1
(o) Control accounts T1 U3 2
32 29 - 3 -

2 (a) Theory on Cash

Book T1 U2 2
(b) Cash Book T1 U2 10 2
(c) (i) Theory Petty
Cash Book T1 U2 2
(ii) Theory Petty
Cash Book T1 U2 2
18 12 6 - -

3 (a) Missing amounts on

document T1 U2 4
(b) Ledger accounts T1 U2 2
(c) Theory on State-
ments of account T1 U2 4
10 6 - 4 -

19
 ASSESSMENT OBJECTIVES GRID
NSSCO – PAPER 1 (continued)

Question Topic Syllabus Marks

Reference Total Skill
A (60) B (20) C (20) D (0)

4 (a) Partnership appro-

priation account 14
(b) Theory 2
(c) Theory T2 U3 4
20 14 - 6 -

5 (a) Journal entries T1 U3 10

(b) Suspense T1 U3 4
(c) Correcting statement T2 U2 6
20 - 14 6 -
Total 100 61 20 19 -

ACKNOWLEDGEMENTS: CIE

1. (5) November 98 – 1 (d)

(6) November 96 – 1 (m)
(27) June 2002 – 3 (c)

5 (c) (i) (ii) – May/June 2001 P2 5 (c) (i) (ii)

20
 MINISTRY OF EDUCATION

Namibia Senior Secondary Certificate (NSSC)

ACCOUNTING: ORDINARY LEVEL

PAPER 2
SPECIMEN PAPER

TIME: 2 hours

INSTRUCTIONS TO CANDIDATES

Write your name, Centre number and candidate number in the spaces at the top of this page.

Answer all questions

Write your answers in the spaces provided on the question paper.

INFORMATION FOR CANDIDATES

The number of marks is given in brackets [ ] at the end of each question or part question.

You may use a calculator.

Where layouts are to be completed, you may not need all the lines for your answer.

21
 QUESTION 1

P. Fredericks’ Cash Book at 31 May 2005 showed a debit balance in the bank column of N$1
512, but the Bank Statement at the same date showed a credit balance of N$31.

After comparing the Cash Book with the Bank Statement, the following differences were
noted.

(i) An amount of N$171 paid into the bank does not appear on the Bank Statement.
(ii) Bank interest N$130 (in respect of an earlier overdraft) was charged by the bank, but
was not entered in the Cash Book.
(iii) Cheques issued for N$1 280 were not presented for payment.
(iv) A cheque for N$1 400 which was received from S. Gqwede was returned unpaid by
the bank. No entries have been made by Fredericks to deal with this item. Record
this dishonoured cheque.
(v) N$1 560 paid into the bank was entered in the Cash Book as N$1 500.
(vi) The bank made a standing order payment for insurance of N$1 240 which was not
recorded by Fredericks.
(vii) B. Nghama paid N$120 by credit transfer into Fredericks’ bank account. Fredericks
has not yet record this in his Cash Book.

REQUIRED:

(a) Make additional entries to update Fredericks’ Cash Book. Calculate the new Cash
Book Balance on 31 May 2005.

P. FREDERICKS
CASH BOOK- MAY 2005 CB 5
Doc Date Details Amount Doc Date Details Amount
N$ N$

[7]

22
(b) Prepare a statement to show why the corrected Cash Book balance still does not agree
with that of the Bank Statement.

BANK RECONCILIATION STATEMENT AT 31 MAY 2005

[7]
Total [14]

QUESTION 2

Herman Wagner provided the following information at the end of his financial year on
31 August 2004.

N$
Debtors 13 400
Creditors 12 600
Accrued expenses 190
Prepaid expenses 350
Loan to employee 1 000
Cash 150
Bank overdraft 5 110
Stock 15 600

23
REQUIRED:

(a) Calculate Herman’s working capital on 31 August 2004.

[5]

(b) State and explain three ways in which Herman could improve his working capital.

1.

2.

3.

[6]

24
(c) Herman provided the following additional information.
N$
Credit sales for the year ended 31 August 2004 78 500
Credit purchases for the year ended 31 August 2004 90 000

(i) For the year ended 31 August 2004, calculate the collection period for debtors

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________
[2]

(ii) For the year ended 31 August 2004, calculate the payment period for creditors

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________
[2]

(iii) Explain how the collection period for debtors and the payment period for
creditors will have affected Herman’s liquidity during the year ended 31 August
2004.

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________
[3]
Total [18]

25
QUESTION 3

P. Wilkons started a business trading under the name of Highway Station on 1 January 2003
and purchased two machines for N$6 000 each paying by cheque. She decided to depreciate
the machines at the end of each year at the rate of 20 % per annum on their net book value at
the beginning of that year and to record the depreciation in a separate Provision for
Depreciation of Machinery Account.

On 31 December 2004, after allowing for the second year’s depreciation, she sold one of the
machines for N$3000 which she paid into the bank, and bought a new machine for N$8 000
on credit from Atlas Machines.

REQUIRED:

(a) The Provision for Depreciation of Machinery Account for each of the years ending 31
December 2003 and 2004.

PROVISION FOR DEPRECIATION OF MACHINERY

[7]

26
(b) The Machinery Disposal Account.

MACHINERY DISPOSAL ACCOUNT

[5]
(c) Explain how the accounting concept of prudence is observed when P. Wilkons
provides for the depreciation of her machinery.

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________
[4]
Total [16]

27
QUESTION 4

The following Trial balance has been extracted from the books of B. Utaara at 31 August
2004.

Dr Cr
N$ N$
Capital 60 000
Cash at bank 10 100
Cash in hand 1 515
Debtors 20 500
Creditors 13 100
Stock (1 September 2003) 31 000
Sales 312 000
Purchases 235 000
Carriage outwards 1 200
Purchases returns 300
Wages and salaries 32 500
Insurance 4 800
Rent received 600
Drawings 16 400
Motor vehicles at cost 18 000
Provision for doubtful debts 515
Provision for depreciation of Motor Vehicles 3 000
Machinery at cost 16 000 _______
389 515 389 515

1. At 31 August 2004
stock amounted to N$7 500;
insurance prepaid amounted N$220;
the provision for doubtful debts is to be adjusted to 5 % of debtors.
2. Depreciation for the year to 31 August 2004 is to be provided as follows
machinery at 20 % on cost;
motor vehicles at 20 % using the diminishing balance.

28
REQUIRED:

(a) Select the relevant figures and prepare the Income Statement of B. Utaara for the year
ended 31 August 2004.

B. UTAARA
INCOME STATEMENT FOR THE YEAR ENDED 31 AUGUST 2004
N$ N$ N$

[18]

29
(b) Using your answer to (a) calculate:

(i) Gross profit as a percentage of sales

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________
[2]

(ii) Net profit as a percentage of sales

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________
[2]

(c) State and explain three ways in which Utaara could improve her gross profit
percentage on sales.

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________
[6]
Total [28]

30
QUESTION 5

Easy Rite manufactures one kind of item. On 31 December 2004 the following information
is available:
N$
Wages : Factory direct 48 600
Factory indirect 5 500
Office 3 900
Sales 98 000
Stocks at 1 January 2004: Finished goods 7 800
Work in progress 3 500
Raw materials 5 000
Purchases of raw material 50 000
Purchases of finished goods 2 000
Carriage inwards on raw material 2 100
Factory fuel and power 13 750
General office expenses 4 700
Factory rent 10 000

Additional information:

1. The annual rent amounts to N$12 000. Rent payable by the company for the factory
is outstanding for the last two months.

2. Factory fuel and power paid in advance on 31 December 2004 amounts to N$1 050.

3. Depreciation for the year to 31 December 2004 amounted to:

Factory Machinery N$6 000
Office equipment N$2 000

4. Stocks at 31 December 2004 were:

Finished goods N$8 700
Work in progress N$1 600
Raw material N$6 300

REQUIRED:

(a) Select the relevant figures and prepare the Manufacturing Account for the year ended
31 December 2004. (Clearly indicate the prime cost and cost of production.)

31
 EASY RITE MANUFACTURERS
MANUFACTURING ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004

[17]

32
(b) 125 000 Items have been completed during 2004. Calculate the unit cost.

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________
[2]

(c) Name the account to which the total of production cost of goods completed is
transferred from the Manufacturing account.

_____________________________________________________________________
[1]

(d) Suggest two reasons why each of the following would be interested in the final
accounts of Easy Rite Manufacturers.

1. Investors

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

2. The bank manager

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________
[4]
Total [24]

33
 MINISTRY OF EDUCATION

Namibia Senior Secondary Certificate (NSSC)

ACCOUNTING: ORDINARY LEVEL

PAPER 2
MARK SCHEME

QUESTION 1

(a) CASH BOOK OF P. FREDERICKS – MAY 2005 CB 5

Doc Date Details Amount Doc Date Details Amount
31 Balance 1 512 31 Interest on bank
overdraft 130 (1)
Correction of error/ 60 (2) S. Gqwede (R/D) 1 400 (1)
Deposit omitted
G. Keith 120 (1) S/o Insurance 1 240 (1)
Balance 1 078 (1)
2 770 2 770
June 1 Balance 1 078
[7]

(b) BANK RECONCILIATION STATEMENT AT 31 MAY 2005

Balance per Cash Book (overdraft) (1) (1 078) (1)OF
Plus: unpresented cheques (1) 1 280 (1)
202
Less: outstanding deposits (1) 171 (1)
Balance as per Bank Statement 31 (1)
OR
(b) BANK RECONCILIATION STATEMENT AT 31 MAY 2005
Balance as per Bank Statement 31 (1)
Plus: outstanding deposits (1) 171 (1)
202
Less: unpresented cheques (1) 1 280 (1)
Balance per Cash Book (overdraft) (1) (1 078) (1)OF
[7]
Total [14]

34
QUESTION 2

(a) Working capital at 31 August 2004

N$ N$
Debtors 13 400
Prepaid expenses 350
Loan to employee 1 000
Cash 150
Stock 15 600 30 500

Creditors 12 600
Accrued expenses 190
Bank overdraft 5 110 17 900
12 600 (1 )OF

Any two correct items of current assets 2 x (1)

Any two correct items of current liabilities 2 x (1) [5]

(b) Ways to improve working capital:

Introduction of further capital
Reduction in owner’s drawings
Obtaining long-term loans
Disposal of surplus fixed assets

Or other suitable points

(1) for basic statement and (1) for development
Any three points up to (2) each [6]

(c) (i) Collection period for debtors

13 400 x 365 = 62,30 days = 63 days [2]
78 500 1

(ii) Payment period for creditors

12 600 x 365 = 51,1 days = 52 days [2]
90 000 1

(iii) Effect on liquidity position –

Herman pays creditors approximately 10 days before debtors pay him.
(1) OF

Explanation of the fact that payments to creditors will have to be financed from
existing resources until the amounts are received from debtors. (2) OF
Total [18]

35
QUESTION 3

(a) PROVISION FOR DEPRECIATION OF MACHINERY

Day Details Amount Day Details Amount
2004 2003
Dec 31 Machinery Dec 31 Depreciation 2 400 (2)
Disposal Account
2 160 (2) 2004
Dec 31 Depreciation 1 920 (2)
Balance 2 160 (1)
4 320 4 320
2005
Jan 1 Balance 2 160
[7]
OR

(a) PROVISION FOR DEPRECIATION OF MACHINERY

Date Details Debit Credit Balance
2003 Dec 31 Depreciation 2400 (2) 2400
2004 Dec 31 Depreciation 1920 (2) 4 320
Machinery Disposal Account 2 160 (2) 2 160 (1)
[7]

(b) MACHINERY DISPOSAL ACCOUNT

Day Details Amount Day Details Amount
2004 2004
Dec 31 Machinery Dec 31 Provision for
Account 6 000 (1) Depreciation of
Machinery 2 160 (1)OF
Bank 3 000 (1)
Profit and Loss
Account (Loss) 840 (1)OF
(2)CF
6 000 6 000
[5]
OR
(b) MACHINERY DISPOSAL ACCOUNT
Date Details Debit Credit Balance
2004 Dec 31 Machinery Account 6 000 (1) 6 000
Provision for Depreciation of Machinery 2 160 (1)OF 3 840
Bank 3 000 (1) 840
Profit and Loss Account (Loss) 840 (1)OF -
(2)CF
[5]

36
(c) Prudence is observed:
- by not overstating profits, (1) as depreciation shown as cost and so gives more
realistic profit/loss (1)
- by not ignoring fall in asset values (1), as depreciation is deducted from asset to
give more realistic NBV. (1)
[4]
Total [16]

QUESTION 4

(a) B. UTAARA
INCOME STATEMENT FOR THE YEAR ENDED 31 AUGUST 2004
N$ N$
Sales 312 000 (1)
Less: Cost of Sales 260 700
Opening Stock (01-09-03) 31 000 (1)
Plus: Purchases 235 000 (1)
Less: Purchases returns 300 (1) 243 700
Plus: Carriage Inwards 2 500 (1)
268 200
Less: Closing Stock (31-08-04) 7 500 (1)
Gross Profit 51 300 (1)OF
Plus: Other Income 600 (1)
Rent Received 600 _______
Gross Income 51 900 (1)OF
Less: Expenses 44 990
Carriage Outwards 1 200 (1)
Wages and Salaries 32 500 (1)
Insurance (4 800 – 220) 4 580 (2)
Provision for doubtful debts 510 (2)
Depreciation: Machinery 3 200 (1)
Motor vehicles 3 000 (2) 6 200
Net Profit 6 910 (1)OF
[18]
(b) (i) 51 300 (1) x 100 = 16,4 % (1)
312 000 1 [2]

(ii) 6 910 (1) x 100 = 2,2 % (1) [2]

312 000

(c) Looking for cheaper suppliers.

Increasing selling prices.
Increasing advertising and sales promotion.
Changing the proportions of the different types of goods sold.
Any other suitable suggestions. Any 3 x 2 marks [6]
Total [28]

37
QUESTION 5

(a) EASY RITE MANUFACTURERS

MANUFACTURING ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004
N$ N$
Cost of material consumed:
Opening stock of Raw material (1 January 2004) 5 000 (1)
Purchases 50 000 (1)
Carriage inwards 2 100 (1)
57 100
Less: Closing stock of Raw material
(31 December 2004) 6 300 (1)
50 800
Plus: Direct Wages 48 600 (1)
Prime Cost (1) 99 400 (1)OF
Plus: Factory Overheads
Wages 5 500 (1)
Fuel and Power (13 750 – 1 050) 12 700 (2)
Rent (10 000 + 2 000) 12 000 (2)
Depreciation: Machinery 6 000 (1) 36 200
135 600
Plus: Opening stock of Work in progress
(1 January 2004) 3 500 (1)
139 100
Less: Closing stock of Work in progress
(31 December 2004) 1 600 (1)
Production cost of Goods Completed (1) 137 500 (1) OF
[17]
OR Horizontal presentation acceptable.

(b) 137 500 (1)OF = N$1,10 (1)

125 000 [2]

(c) Trading Account [1]

(d) 1. Investors
Risky investment

Profitability of company
Assessment of past performance Maximum 2 x (1) [2]

2. Ensure any loan/overdraft can be repaid

Ensure interest can be paid when due
Determine conditions and terms of lending Maximum 2 x (1) [2]
Allow for other suitable answers.
Total: [24]

38
 ASSESSMENT OBJECTIVES GRID

QUESTION PAPER: NSSCO ACCOUNTING PAPER 2

Question Topic Syllabus Marks

References Total Skill
A B C D
(20) (50) (20) (10)

1 (a) Supplementary Cash Book T1 U1 7 5 2

(b) Bank reconciliation Statement T1 U1 7 7
14 5 9

2 (a) Working Capital calculation T4 U1 5 5

(b) Working Capital Theory 6 6
(c) (i) Debtors collection period 4 4
Creditors collection period
(ii) Theory – effect on liquidity 3 3
18 5 4 9

3 (a) Depreciation T2 U2 7 5 2
(b) Asset Disposal 5 5
(c) Ways of improving gross profit % 4 4
16 5 7 4

4 (a) Income Statement T2 U1 & U2 18 18

(b) Profitability ratios – calculations 4 4
(c) Theory – improving profitability 6 6
28 4 18 6

5 (a) Manufacturing Account T3 U1 17 17

(b) Unit cost – calculation 2 2
(c) Theory – Manufacturing Account 1 1
(d) Theory – Importance of
Manufacturing account 4 4
24 1 19 4
TOTALS 100 20 53 18 9

39
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