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100+ Free NSC Accounting Practice Questions

Pass your National Senior Certificate (NSC) Accounting - Grade 12 (CAPS) exam on the first try — instant access, no signup required.

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When a company repurchases (buys back) some of its own shares, this transaction is recorded by:

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B
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Key Facts: NSC Accounting Exam

NSC Accounting is examined in two 150-mark, 2-hour papers (300 marks total): Paper 1 on financial reporting and Paper 2 on managerial accounting and internal control, reported on the NSC 7-level scale.

Sample NSC Accounting Practice Questions

Try these sample questions to test your NSC Accounting exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In NSC Accounting, a company's financial statements are prepared in accordance with which framework?
A.GAAP and IFRS
B.Only the Income Tax Act
C.Only the Companies Act of 1973
D.Cash-basis accounting only
Explanation: Grade 12 Accounting requires company financial statements to comply with Generally Accepted Accounting Practice (GAAP) and International Financial Reporting Standards (IFRS). These provide the rules for recognition, measurement and disclosure.
2Which GAAP concept requires that expenses be recorded in the same period as the income they helped to earn?
A.Historical cost
B.Matching concept
C.Going concern
D.Prudence
Explanation: The matching concept states that income and the expenses incurred to earn that income must be recognised in the same accounting period. This is why adjustments such as accrued expenses and income received in advance are made at year-end.
3In double-entry accounting, an increase in an asset account is recorded as a:
A.Credit entry
B.Debit entry
C.Both a debit and a credit to the same account
D.Contra entry to equity only
Explanation: Assets have a debit balance, so an increase in an asset is recorded on the debit side. The corresponding credit is recorded in another account to keep the accounting equation in balance.
4The Memorandum of Incorporation (MOI) of a company sets out the:
A.Daily petty cash limit
B.Rights, responsibilities and rules governing the company and its directors and shareholders
C.VAT registration number only
D.Monthly bank reconciliation procedure
Explanation: Under the Companies Act 71 of 2008, the Memorandum of Incorporation is the founding document that establishes the rights, responsibilities and rules governing a company, its directors and its shareholders.
5In a company, the persons who own shares and contribute the share capital are called the:
A.Directors
B.Auditors
C.Shareholders
D.Creditors
Explanation: Shareholders are the owners of a company who purchase shares and contribute the share capital. They are entitled to dividends and vote at the Annual General Meeting.
6A company issues 50 000 ordinary shares at R8 each. By how much does the Ordinary Share Capital account increase?
A.R400 000
B.R50 000
C.R8 000
D.R58 000
Explanation: Share capital raised equals number of shares multiplied by the issue price: 50 000 x R8 = R400 000. The full proceeds of a no-par-value share issue are credited to Ordinary Share Capital.
7In the financial statements of a company, the term 'Statement of Comprehensive Income' is the GAAP/IFRS name for the:
A.Balance Sheet
B.Income Statement
C.Cash Flow Statement
D.Trial Balance
Explanation: The Statement of Comprehensive Income is the IFRS-aligned name for what was traditionally called the Income Statement. It reports income and expenses to determine net profit for the period.
8A company has sales of R900 000 and cost of sales of R540 000. What is the gross profit?
A.R1 440 000
B.R360 000
C.R540 000
D.R900 000
Explanation: Gross profit equals Sales minus Cost of sales: R900 000 - R540 000 = R360 000. Gross profit is the profit made on trading before other income and operating expenses are taken into account.
9Where in the Statement of Comprehensive Income is 'Income tax' deducted?
A.From Gross profit to get operating profit
B.From Net profit before tax to get net profit after tax
C.From Sales to get cost of sales
D.It is not shown in the Statement of Comprehensive Income
Explanation: Income tax is deducted from Net profit before tax to arrive at Net profit after tax for the year. This after-tax profit is the amount transferred to retained income.
10In the Statement of Financial Position of a company, Shareholders' equity is made up mainly of:
A.Ordinary share capital and retained income
B.Trade and other payables
C.Fixed assets and inventories
D.Loans and bank overdraft
Explanation: Shareholders' equity comprises Ordinary share capital (amounts contributed by shareholders) plus Retained income (accumulated profits not yet distributed). This represents the owners' interest in the company.

About the NSC Accounting Exam

NSC Accounting is the Grade 12 exit-level subject set under the Curriculum and Assessment Policy Statement (CAPS) by South Africa's Department of Basic Education and quality-assured by Umalusi. It is examined externally in two papers, each 150 marks and 2 hours, for a total of 300 marks. Paper 1 (Financial Reporting and Evaluation) covers company concepts, ledger accounts, the Statement of Comprehensive Income, the Statement of Financial Position with notes, the Cash Flow Statement, analysis and interpretation of financial statements, and corporate governance. Paper 2 (Managerial Accounting, Internal Auditing and Control) covers VAT, reconciliations, cost accounting (manufacturing), budgeting, inventory valuation and internal control. School-Based Assessment contributes 25% and the final examination 75% of the promotion mark.

Questions

100 scored questions

Time Limit

Two papers of 2 hours each (300 marks total)

Passing Score

Reported on the NSC 7-level scale (Level 1: 0-29% to Level 7: 80-100%); subject pass usually 30%-40%, with Level 4 (50%+) needed for a Bachelor's pass.

Exam Fee

No separate subject fee for full-time public-school candidates; private/part-time candidates pay provincial registration fees (a few hundred rand per subject). (Department of Basic Education (DBE) and Provincial Education Departments; certified by Umalusi.)

NSC Accounting Exam Content Outline

30%

Companies - concepts, ledgers and financial statements

Company concepts, GAAP/IFRS, unique ledger accounts, Statement of Comprehensive Income, Statement of Financial Position and notes.

18%

Analysis and interpretation of financial statements

Profitability, liquidity, solvency, returns, NAV, EPS, dividends and gearing; published statements and audit reports.

9%

Cash Flow Statement

Operating, investing and financing activities and the reconciliation of profit to cash from operations.

12%

Cost accounting (manufacturing)

Production Cost Statement, cost elements, unit costs and break-even analysis.

9%

Inventory valuation

FIFO, weighted average and specific identification; perpetual system and lower of cost and NRV.

9%

Budgeting

Cash budgets, debtors' collection schedules and projected income statements.

7%

Fixed/tangible assets

Cost, depreciation, carrying value, disposal and the asset note.

7%

Reconciliations

Bank reconciliation, creditors' reconciliation and debtors' age analysis.

5%

Value-Added Tax (VAT)

VAT at 15%, input and output VAT, zero-rated supplies and SARS settlements.

4%

Ethics and internal control/corporate governance

Ethical conduct, division of duties, internal and external audit and the King Code.

How to Pass the NSC Accounting Exam

What You Need to Know

  • Passing score: Reported on the NSC 7-level scale (Level 1: 0-29% to Level 7: 80-100%); subject pass usually 30%-40%, with Level 4 (50%+) needed for a Bachelor's pass.
  • Exam length: 100 questions
  • Time limit: Two papers of 2 hours each (300 marks total)
  • Exam fee: No separate subject fee for full-time public-school candidates; private/part-time candidates pay provincial registration fees (a few hundred rand per subject).

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

NSC Accounting Study Tips from Top Performers

1Work through DBE past papers and exemplars under timed conditions to master the 150-mark, 2-hour format of each paper.
2Learn the financial-indicator formulas and, crucially, practise interpreting them in words, since the exam awards marks for commenting and giving advice.
3Set out company financial statements (Statement of Comprehensive Income, Statement of Financial Position and notes) repeatedly until the layout is automatic.
4Practise cost accounting and break-even and budgeting calculations separately, as these Paper 2 topics carry significant marks.
5Always show your workings; in the real exam method marks are awarded even when the final answer is wrong.
6Integrate ethics and internal control into every topic, as these are examined across both papers.

Frequently Asked Questions

How is NSC Accounting examined?

It is examined externally in two papers, each 150 marks and 2 hours, for a total of 300 marks. Paper 1 covers Financial Reporting and Evaluation; Paper 2 covers Managerial Accounting, Internal Auditing and Control.

Who sets and certifies the NSC Accounting exam?

The exam is set under CAPS by the Department of Basic Education and administered by Provincial Education Departments. Umalusi quality-assures the assessment and certifies the National Senior Certificate.

What is the South African VAT rate tested in Accounting?

The standard VAT rate is 15% (increased from 14% in April 2018). Learners calculate input VAT, output VAT and amounts owed to or by SARS, and identify zero-rated supplies such as brown bread and maize meal.

How is NSC Accounting graded?

Marks are reported on the NSC seven-level scale, from Level 1 (0-29%, Not Achieved) to Level 7 (80-100%, Outstanding). Level 4 (50-59%) is generally needed for a Bachelor's-degree pass in the subject.

Which financial indicators must I know?

Key indicators include gross and net profit percentages, current and acid-test ratios, solvency ratio, stock turnover rate, debtors' collection and creditors' payment periods, ROSHE, ROCE, net asset value, earnings per share and the debt-equity (gearing) ratio.

Is the real NSC Accounting exam multiple choice?

No. The real papers use structured ledger, financial-statement, calculation and interpretation questions answered in special answer books. This free practice set uses multiple-choice questions to help you revise concepts quickly.