GRADE 8 ECONOMIC MANAGEMENT SCIENCES

YEAR-END EXAMINATION
21 NOVEMBER 2011 MARKS: 140

EXAMINER: MS. R BOUWER TIME: 2 hours

MODERATOR: MRS. U DUROW

Name: _____________________________ Class: _________

INSTRUCTIONS:
1. This paper consists of 11 pages.
2. Please check that your question paper is complete.
3. Read the questions carefully.
4. Answer the questions in the space provided on this question paper.
5. It is in your interest to write legibly and present your work neatly.
6. You may NOT use green or red ink. You may use a pencil, but please use a soft, dark
pencil.
7. Try to keep to the time allocation suggested below.

MARKS
APPROX
TOPIC MARKS ACHIEVE
TIME
D
1. Multiple Choice 20 10 min
2. True or False 10 10 min
3. Human Resources 8 10 min
4. Forms of Ownership 10 10 min
5. Source Documents 10 10 min
6. Inflation 25 15 min
7. Trade Unions 25 15 min
8. Savings and Investments 10 10 min
9. Accounting – Ledger 10 15 min
10. Accounting - Journals 12 15 min
TOTAL 140 120 min
QUESTION 1 – Multiple Choice

Page 1 of 11
1.1. The Tax year in SA runs from ________ to _________
A 1 March - 28 February
B 1 January – 31 December A
C 1 April – 31 March
D None of the above

1.2. The Euro is the currency used in which of the following countries?
A United States of America
B Great Britian / United Kingdom D
C Canada
D Germany

1.3. The current exchange rate for the R / $ is approximately?

A R 7,98
B R 0,0633 A
C R 15,81
D R 12,49

1.4. Which of the following form part of the concept of Owners Equity?
(i) Capital
(ii) Inventory
(iii) Income
(iv) Drawings
(v) Expenses

Choose the correct combination

A. All of the above
B. i, ii, iii and iv D
C. ii, iii, and iv
D. i, iii, iv and v

1.5. The double entry principle refers to the fact that:

A. Financial statements should be as simple as possible, but items which are important to
the reader of the statements should be highlighted and disclosed separately
B. Every financial transaction has a double sided effect
C. The income must be matched with the expenses that were incurred in generating that
income
B
D. None of the above

1.6. The __________________ is that part of the cheque left in the cheque book used to
complete the Cash Payments Journal.
A cheque counterfoil
B receipt
C invoice A
D None of the above
1.7. A disadvantage of a Current Account would be:
A The convenience of withdrawing money from an ATM as and when required
B The ability to write out cheques to pay for regular monthly expenses
C The low interest rate earned
D None of the above C

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1.8. This form of ownership has a minimum of 2 owners __________
A sole proprietorship.
B close corporation.
C partnership. C
D private company.

1.9. Which of the following businesses would be considered a service business?

A. Sunset Beauty – toiletry shop
B. Stationery Bizarre
C. Lesego’s Hair Salon C
D. Step Ahead Shoe Store - Fourways

1.10. If Ms. Bramley paid ONE months’ rent of R 4 500 plus a deposit equivalent to ONE
months’ rent. What is the value of the cheque she must write? ______
A. R 4 500
B. R 9 000
B
C. R 9 500
D. None of the above are correct
(10 x 2 = 20)

QUESTION 2 – True OR False

State whether the following statements are true or false:

2.1.When private companies want to raise capital or get more capital they advertise
shares in a prospectus. __TRUE___

2.2. An owner of a Close Corporation is called a shareholder. __ FALSE__

2.3. The CPI is often referred to as “Customer inflation at the

mmmfactory gate”. __ FALSE __

2.4.An increase in household disposable income is one of the causes of Supply Pull
inflation. __ FALSE _

2.5.“Take-home pay” is another term for Net Salary. ___ TRUE __

2.6. NUM was one of South Africa’s first (and biggest) Trade Union Alliances.
__ FALSE __

2.7.The Basic Conditions of Employment Act, 1997 stipulates that it is a criminal offence to
employ a child of less than 15 years of age. ___ TRUE __

2.8.The current company tax rate in South Africa is 29 % of profits. __ TRUE __

2.9.A cash receipt is one of the source documents of the Creditors Journal.
__ FALSE _

2.10. Full time employees work flexi-time and are paid by the hour. __ FALSE _

(10 x 1 =10)
QUESTION 3 – Human Resources

Page 3 of 11
3.1. Salaried staff at Dainfern College receive a number of benefits in addition to their basic
salary. List any FOUR of the benefits received by staff. (4)
 Medical Aid  UIF
 Pension Fund  13th Cheque

3.2. Choose TWO of the above benefits and give a brief description of each

(4)

QUESTION 4 – Forms of Ownership

Complete this table by contrasting a Partnership and a Public Company:

Partnership Public Company

2 Minimum of 7 shareholders
Number of owners:

Official ending of the business

None Ltd
name:

Continuity of the business: Limited to the lifespan of the Unlimited lifespan

partners
Partners are jointly and Limited liability to the amount
Liability for debts of the severally liable for the debts of invested
business: the firm

Legal formation Memorandum of Association

requirements: Partnership articles Articles of Association

(10)
QUESTION 5 – Source Documents

5.1. Complete the following Source Document on the question paper using the information
provided:

D. Morkel deposited R150 000 into her business Music 4 Africa as her capital contribution
on 1 May 2011. The business issued her receipt 012 which was signed by you, her
bookkeeper. (5)
MUSIC 4 AFRICA RECEIPT
No: 012 Date: 01/05/11
Received D. Morkel
Page 4 of 11
 from:
The amount One hundred and fifty rand only (words and
of: figures must R 150 000----------
match)
.

For: Capital
With The bookeeper’s signature
Thanks:

5.2. Answer the following questions based on the source documents below:
DATE: STANDARD BANK OF SOUTH AFRICA
MOOIRIVER
TO: DATE:
YYYY – MM - DD
Or Bearer
FOR: PAY:

AMOUNT: THE SUM OF:

;
BALANCE
:
TANDI’S DAIRY LTD

87
87 006315 19630414 01
a) Name the Drawer of this cheque? Tandi’s Dairy_____________________ (1)

b) Name the Drawee? Standard Bank_____________________________________(1)

c) Identify one thing which is recorded on the cheque counterfoil and not on

the cheque? The reason for the payment______________________________ (1)

d) State the cheque number for this cheque 87_____________________ (1)

e) Give ONE reason why the Bank would refuse to process a cheque.
Not signed (1)
QUESTION 6 - Inflation

Read the following article and answer the questions that follow:

Why fast foods are bucking economic trends

According to Statistics South Africa (Stats SA), the income generated on food and drink overall is down
2,7% from last year. Restaurants and coffee shops have been the hardest hit – their sales are down by
6,5%. But fast food and take-away outlets have seen an increase in sales of a surprising 11,2%. Bars have
also seen income increase by 6,7%.

Market analysts believe that it is usual to see fast foods and take-aways show healthy growth when

Page 5 of 11
consumers come under financial pressure. This is because consumers trade down from their usual
restaurant-eating habits to favour take-aways, which are cheaper. Restaurants and coffee shop can expect
better consumer support once the market turns.

The good news is that the economic tide seems to be turning and the entire industry can look forward to
better consumer support in the coming year. This upward trend will be supported by the FIFA World Cup
in the middle of the year. Overseas visitors are bound to make use of favourable exchange rates to
support both restaurants and fast food outlets alike.

Stats SA also revealed that in October last year inflation had fallen below the targeted 6% mark for the
first time in more than two years. This is good news for consumers, but just how long this trend will last
once factors such as the electricity price hikes come into play, remains to be seen.
(Succeed – April 2010)

Questions:
6.1. According to Statistics SA, by what % did the income generated from the food and drink
industry decrease, from 2009 t0 2010? (1)
2.7%

6.2. Which part of the food and drink industry was the hardest hit? (1)
Restaurants and Coffee shops

6.3. Which parts of the industry saw an increase in sales and by how much? (4)
Fast food & take aways up by 11.2%
Bars up by 6.7%

6.4. What was the reason for this increase? (2)

Fast foods and take aways usually show healthy growth when there is financial
pressure because consumers rather go for the cheaper option

6.5. Do you think that the South African economy benefitted from the 2010 World
Cup Soccer? Motivate your answer. (5)
Yes/No
Motivation – 2 good points each
e.g. tourists→ foreign money→ economic growth etc

6.6. Stats SA also revealed that in October of 2009, ‘ inflation had fallen below the target …’
a) Define inflation. (2)
Inflation is sustained and continued increase in the general prices of goods and
services

b) Briefly explain demand-pull inflation. (4)

This is when the demand for products is so high that their prices are pulled up
By the actions of consumers
When the demand for goods & services is greater than the suppliers are willing or
able to produce

c) Name and describe 3 consequences of inflation (6)

 Reduction in purchasing power, the buying power of money is less

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  Standard of living may decrease

 Decrease in value of savings and the value of money

QUESTION 7 – TRADE UNIONS

Read the following article and answer the questions that follow:

THIGH-HIGH IN RUBBISH AS MUNICIPAL STRIKE TALKS FALTER

Johannesburg commuters, school-children and motorists have had to navigate gutters overflowing with
rotting refuse and piles of thigh-high rubbish on the seventh day of the municipal workers’ strike.

Talks between the SA Municipal Workers’ Union and employer grouping the SA Local Government
Association were deadlocked. The union said it had been fighting low wages and the use of expensive
lawyers in internal disciplinary hearings for seven years. The association yesterday bowed to pressure to
raise pay and dispense with lawyers, but the parties disagree on how many years back-pay should be
given. Union spokesman Tahir Sema said the union was prepared to settle for two years of back-pay.

There have been more reports that striking workers are intimidating their non-striking colleagues. Jack
Bloom the DA’s Gauteng health spokesman, visited a clinic in Bezuidenhout Valley yesterday morning
only to find it closed.

In Durban and Cape Town, the effects of the strike were said to be minimal. Durban municipal manager
Michael Sutcliffe said only 8% of council workers were on strike.

“Though some services have been partially affected by the strike, the contingency plans the municipality
has prepared ensure that critical services continue. But people should expect some disruption to services
due to intimidation of non-striking workers,” he said.

There has been no picketing or marches in KwaZulu-Natal since Friday. Durban mayor Obed Mlaba
condemned last week’s trashing and vandalism in the city centre during a mass march.

Taken from www.timeslive.co.za

7.1. Which strike is being referred to in the article? (1)

National Municipal Strike

7.2. Which union is representing these workers? (1)

SA Municipal Workers Union

7.3. Who is the union’s spokesman? (1)

Tahir Sema

7.4. Outline 3 functions of a Trade Union. (6)

 Improve standard of educational training of its members
 Represent workers in the collective bargaining process
 Improve productivity of workers – Improve conditions of service
 Settle disagreements and differences between employers and workers
 Any 3 x 

Page 7 of 11
7.5. Why were these workers striking? (1)
About low wages

7.6. What is the difference between a strike and a “go slow”? (4)
 A strike is a collective refusal to work by employees until demands
are met
 A go slow is when employees work but at a much slower pace,
which affect productivity

7.7. The article states “there has been no picketing since Friday.
What do they mean by picketing? (2)
 Picketing is a form of protest outside the work place e.g. toy-toying

7.8. Give 2 effects that strikes have on the economy? (4)

 They cause disruption and sometimes disruption to public property
 It lowers productivity, loss of sales, decrease in economic growth
Any 2 valid points

7.9. Why was the Employment Equity Act passed? (2)

 To eliminate unfair discrimination and to correct the imbalances of
the past

7.10. What do the following abbreviations stand for?

a) UIF (1)
Unemployment insurance fund

b) BEE (1)
Black economic empowerment

7.11. Which Act states all the working conditions of employment? (1)
Basic conditions of employment act
QUESTION 8 – SAVINGS AND INVESTMENTS
8.1. Calculate the Simple and Compound Interest for the following two scenarios, and comment
on which is the better interest to receive on your savings? (10)

You save R 8 000 at 12% p.a. interest for 1 year.

Simple Interest Compound Interest i.e. A=P(1+r/100)n
8 000 x 12/100 
8 000 (1 + 12/100)1 
= 960  =8 000 (1.12)1
= 8 960
Interest = 960 
You save R 125 000 for 3 years at an interest rate of 15 %
Simple Interest Compound Interest i.e. A=P(1+r/100)n

Page 8 of 11
 125 000 x 15/100 x 3 
125 000 (1 + 15/100)3 
= 56 250  =125 000 (1.15)3
= 190 109,38 – 125 000
Interest = 65 109,38

Comment: Compound interest  because your interest from the years before is
added to the principle amount and is growing annually 

QUESTION 9 – Accounting (Ledgers)

Ms. Dube opened her interior decorating business called Yebo Creations.

Required: Using the information below extracted from the CPJ and CRJ for the first
month of operation, record the information in the General Ledger. Use the
Capital, Bank and Wages accounts only. Balance the Bank account.

CRJ – Total of the Bank Column = R 145 000

Total of the Current Income Column = R 45 000
Sundry Account = R 100 000 for Capital

CPJ – Total of the Bank column = R 37 000

Total of the Wages column = R 14 500
Total of the Consumable Stores column = 10 500
Total of the Sundry accounts column = R12 000
(10)

General Ledger of Yebo Creations

Balance Sheet Section
DR B1. Capital CR
Jan 1 Bank  CRJ 100 000

2
DR B2. Bank CR
Jan 31 Total CRJ  145 000 Jan 31 Total CPJ  37 000
Receipts  Payments
Balance b/d 108 000
145 000 145 000
Feb 1 Balance c/d  108 000
6

Page 9 of 11
 Nominal Section
DR N4. Wages CR
Jan 31 Bank  CPJ  14 500
2

QUESTION 10 – Accounting (Journals)

Take a careful look at the two Journals on the next page and fill in the missing information
represented by the letters A to I in the space below – Dainfern Dealers uses a profit mark-up
of 40%. (12)

A Dainfern Dealers
B R 5 600
C R 4 000
D Day
E R 5 040
F R 5 040
G R 5 040
H R 13 580
I Telkom
J R 3 978
K Stationery
L R 320

rks

Page 10 of 11
QUESTION 10 – Accounting Journals (12)
Cash Receipts Journal of _________ A ________ – August 2011
Doc D Details Analysis of Bank Sales Cost of Sundry A/c Details Amount
Receipts Sales
100 1 Mr. S. West 25 000   Capital 25 000
CRR Sales 5 600 B 5 600 C    
CRR 12 Prefect Properties 6 300 6 300  Rent Income 6 300 
CRR 18 Sales E F G  3 600  
CRR 29 Sales 2 940 2 940 2 940  2 100   
        44 800 H 9 700  31 300

Cash Payments Journal of Dainfern Dealers – August 2011

Doc D Name of Payee Bank K Material Sundry A/c Details Fol Amount
Costs
001 5 Makro 900   900     
002 8 Local City Council 250    Trading licence   250
003 10 Hoover 550    Equipment   550
004 12 Minit Print 150 150       
005 13 Waltons 275 275       
006 16 I 365    Telephone   365
007 18 Makro 790   790     
008 20 SA Post Office Ltd 148    Drawings B2 148
009 23 Local Metro Council 550    Water & electricity   230
           Rates & Taxes   L
      J 425 1 690    1 863

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