VCE Accounting Question Thread!

[Hodgeyhodgey]

What qualitative characteristic applies and why when we talk about classifications in the cash flow statement (or the balance sheet for that matter)?

Just wondering because my teacher told us to prepare for a question like this for our next sac. I think I remember a while ago that someone answered with relevance, but another said that neville box argued the answer was understandability? Either way, I figure both could be acceptable with the appropriate explanation.

Thanks guys!

[luffy]

What qualitative characteristic applies and why when we talk about classifications in the cash flow statement (or the balance sheet for that matter)?

Just wondering because my teacher told us to prepare for a question like this for our next sac. I think I remember a while ago that someone answered with relevance, but another said that neville box argued the answer was understandability? Either way, I figure both could be acceptable with the appropriate explanation.

Thanks guys!

After a huge dispute between examiners, they actually concluded that in order to gain the entire marks of the question, you needed to state understandability because it was the most appropriate answer. (Refer to VCAA 2007 mid-year exam).

Therefore, for any questions about classification, it makes it easier to comprehend the meaning of the reports, and thus is associated with understandability.

[Hodgeyhodgey]

What qualitative characteristic applies and why when we talk about classifications in the cash flow statement (or the balance sheet for that matter)?

Just wondering because my teacher told us to prepare for a question like this for our next sac. I think I remember a while ago that someone answered with relevance, but another said that neville box argued the answer was understandability? Either way, I figure both could be acceptable with the appropriate explanation.

Thanks guys!

After a huge dispute between examiners, they actually concluded that in order to gain the entire marks of the question, you needed to state understandability because it was the most appropriate answer. (Refer to VCAA 2007 mid-year exam).

Therefore, for any questions about classification, it makes it easier to comprehend the meaning of the reports, and thus is associated with understandability.

Reading through the assessor's report now, understandability makes a lot more sense than relevance.

[nacho]

Yes but from 1/1/2011 - 1/3/2011 is the depreciation calculated at $416.67 per month and then from 1/3/2011 onwards it becomes $500? Therefore would the answer be:

Jan: $416.66
Feb: $416.66
Mar: $500
Apr: $500
May: $500
Jun: $500

= $2,833.32

A certain god of accounting says that because of 'relevance', you would not do this

[sam.utute]

Actually, you would. I just realised its for 2 months, not two days. -.-

FAIL...

[luffy]

What qualitative characteristic applies and why when we talk about classifications in the cash flow statement (or the balance sheet for that matter)?

Just wondering because my teacher told us to prepare for a question like this for our next sac. I think I remember a while ago that someone answered with relevance, but another said that neville box argued the answer was understandability? Either way, I figure both could be acceptable with the appropriate explanation.

Thanks guys!

After a huge dispute between examiners, they actually concluded that in order to gain the entire marks of the question, you needed to state understandability because it was the most appropriate answer. (Refer to VCAA 2007 mid-year exam).

Therefore, for any questions about classification, it makes it easier to comprehend the meaning of the reports, and thus is associated with understandability.

Reading through the assessor's report now, understandability makes a lot more sense than relevance.

Just thought I would mention this:
- My teacher, who is an examiner, stated that when Neville Box, the chief examiner, was going through that question, due to huge disputes amongst the examiners, they had a vote for the most appropriate answer. Apparently, the difference in the vote came down to one examiner. Therefore, obviously "Understandability" was not the "clear" favourite.

[nacho]

Are very specific narrations required?
For example, is:
"Memo 47 - Debt is written off as irrecoverable" adequate,
or does it need to be:
"80% of John O’Brien’s debt has
been deemed irrecoverable and is
to be written off (Memo 47)"

in particular, are key words like "Adjusting entry" required?
Eg.
Adjusting entry to lower stock
control to physical stocktake value
or
Memo 48 - physical stocktake revealed stock loss

Obviously the former is better, but just wondering if the latter is sufficient

thanks

[sam.utute]

More than sufficient. To be perfectly honest, the examiners are looking for the source document, and will usually glance over your actual narration. Do whatever is faster/easier.
Both methods are more than adequate.

[Hodgeyhodgey]

From what I've seen most exam questions typically don't ask for a narration, but it's still handy to memorise model answers.

I'd go with something like "Adjusting entry for stock loss as revealed by physical stocktake (Memo 13)" as an example, just to be sure.

[nacho]

OKAY,
desperato question.
very confused in fact.
For a long time i've been thinking that there could be a deficiency in the question provided, however, seeing that this has appeared in both cambridge and TSFX, im a little bit unsure of myself.


when given a pre-adjustment trial balance
like if there is a drawings figure of, say, $15000.
How do we fill out the ledger account for drawings?
do we just assume it's stock, and not bank? Or vice versa? Or are we actually supposed to be told like in 'additional information' to come to a definitive conclusion.
(also, the fact that the business has a positive bank balance or a bank deficit, doesn't make a difference right?)

Okay and another question.
sometimes it'll say that "Pat paid $5000 in wages on february the 8th. Record this in teh Cash payments Journal" Or something along those lines, and it also gives that there are wages owing (accrued wages)
But i swear they will not tell you how much wages are owing, nor will they tell you the rate at which you pay wages.
is there way to figure out the wages accrued wages figures? Or am i misreading something..

thanks
(sorry i cant give examples, when i do questions and ifnd them, i shall)

[soopertaco]

i can't really say for sure but that does raise a question!
IF in the additional info in a previous part of the q it says the owner withdrew 'x' amount of stock say $1500 during the period and also in the pre-adjustment trial balance there was drawings of say $2000... do we assume that 1500 is already part of the $2000 or should we add that amount of drawings to the $2000 when posted in the capital a/c in the general ledger??
awesome question i've never though about this until now.

and for the second question... the business will not always have accrued wages? maybe this is the problem, you're looking for something that is truly not there. But they should give you the accrued amount, if not they should at least get you to determine the amount in a previous part of the question, i doubt they'd leave you in the dark like that

[ech_93]

What does "commission- on sales" mean?
I'm doing a profit and loss statement, but I'm not sure what to classify it as!?

thanks!

[ech_93]

Anyone?
Sorry, but I  need to finish it tonight.

[marr]

I think it's a bonus given to employees for selling a certain amount of stock. I'd classify it as an expense.

[ech_93]

Thanks heaps marr!!