Subject: Accounting Grade: 12 (Matric) Focus: Financial Accounting, Managerial Accounting, and Managing Resources
Introduction
Grade 12 Accounting is not just about balancing the books; it’s about interpreting financial information to make business decisions. The exam is split into two papers, each testing different skills.
This guide breaks down the curriculum based on the Examination Guidelines, showing you exactly what to focus on.
Paper 1: Financial Reporting & Evaluation (150 Marks)
This paper focuses on the “Big Picture” of a company’s finances. It deals with reporting to shareholders and the public.
1. Statement of Comprehensive Income (Income Statement)
You must be able to prepare this from a Trial Balance and adjustments.
- Adjustments: Depreciation, Bad Debts, Accrued Income/Expenses, Prepaid Expenses/Income Received in Advance.
- Tax: Calculate the correct income tax (SARS).
2. Statement of Financial Position (Balance Sheet)
This shows the company’s health at a specific date.
- Equity: Share Capital + Retained Income.
- Liabilities: Non-current (Loans) vs. Current (Trade Payables, SARS, Dividends Payable).
- Assets: Non-current (Fixed Assets) vs. Current (Inventory, Trade Receivables, Cash).
3. Cash Flow Statement
This is a guaranteed question. You need to calculate:
- Operating Activities: Cash generated from operations.
- Investing Activities: Buying/selling fixed assets.
- Financing Activities: Loans, shares, and dividends.
4. Analysis and Interpretation of Financial Statements
This is where the “distinction” marks are. You need to calculate and interpret ratios.
- Profitability: % Gross profit on sales, % Net profit on sales.
- Liquidity: Current ratio, Acid-test ratio.
- Solvency: Solvency ratio (Total Assets : Total Liabilities).
- Risk/Gearing: Debt-equity ratio.
- Return: % Return on shareholders’ equity (ROSHE), Earnings per share (EPS).
5. Corporate Governance
- Audit Report: Understand the difference between Unqualified (Clean), Qualified, and Disclaimer opinions.
- Ethics: Be ready to discuss ethical dilemmas (e.g., conflict of interest, insider trading).
Paper 2: Managerial Accounting & Internal Control (150 Marks)
This paper focuses on the internal running of a business.
1. Manufacturing (Cost Accounting)
You need to calculate the cost of making a product.
- Production Cost Statement: Direct Material + Direct Labour + Factory Overhead = Total Manufacturing Cost.
- Unit Costs: Calculate cost per unit to determine the selling price.
- Break-Even Point:
2. VAT (Value Added Tax)
- Calculations: Calculate VAT output, input, and the amount payable/refundable to SARS.
- Concepts: Zero-rated items vs. Exempt items.
3. Reconciliations
You must be able to find errors and fix them.
- Bank Reconciliation: Compare the Bank Statement with the Cash Journals.
- Creditors Reconciliation: Compare the Creditor’s Statement with the Creditors Ledger.
4. Budgets
- Cash Budget: Predict future cash inflows and outflows.
- Projected Income Statement: Predict future profit.
- Analysis: Compare “Budgeted” figures vs. “Actual” figures and explain variances.
5. Inventory Valuation
- Methods: FIFO (First-In-First-Out), Weighted Average, Specific Identification.
- Calculations: Calculate the value of closing stock and Cost of Sales.
My Top Tips for Distinction
1. Master the “Analysis” Questions Many students can do the calculations but fail the “comment” questions.
- Format: “The ratio increased from X% to Y%. This is good/bad because…”
- Comparison: Always compare current year figures to last year’s figures or industry averages.
2. Know Your Ratios by Heart Paper 1 relies heavily on ratios. Memorize the formulas for ROSHE, EPS, DPS, and NAV. If you know the formula, you get the marks.
3. Time Management Accounting papers are long.
- Practice Speed: Do past papers under timed conditions.
- Move On: If a Balance Sheet doesn’t balance, don’t spend 20 minutes looking for the error. Move to the next question. You only lose 1-2 marks for the error, but you lose 20 marks if you don’t finish the paper.
Conclusion
Accounting requires accuracy and logic. Treat every adjustment like a puzzle piece. If you master the Cash Flow Statement and Ratios, you are well on your way to a distinction.
Good luck with your Matric Finals!