VCE Accounting Question Thread!

[Jason12]

why is accumulated depreciation debited when a disposal of the asset is occuring?

When doing a disposal of assets do the accumulated depreciation and non-current assets have to have an opening balance?

[anna.xo]

What do I need in the exam to get 45+
I get around 90 in practice exams :/

How are you even getting 90 ? Like I'm struggling to even get 70 ffs

[Jason12]

How are you even getting 90 ? Like I'm struggling to even get 70 ffs

In my experience, it's usually silly mistakes like forgetting to include an entry or getting the cross-reference wrong that can cause a 70%. In one practice exam, I got a 70% but I realized that around 15 marks were lost just on easy things

[anna.xo]

In my experience, it's usually silly mistakes like forgetting to include an entry or getting the cross-reference wrong that can cause a 70%. In one practice exam, I got a 70% but I realized that around 15 marks were lost just on easy things

Thanks man..
Way to trivialise my marks

[kk.08]

Lyalls Imports bought 3 chairs for $500 each plus GST. Since they returned one, the balance now owing is 2 chairs (2x550)

The questions states the CPJ from Lyalls imports POV: 1100 Creditors control 22 Discount Revenue (0.02 x 1100 as stated) and therefore 1078 bank (1100-22)

Oh, just realised that I forgot to take the sales return into consideration so I didn't deduct the amount for one chair. Thanks!!

[TheWackyCheese]

you NEVER write accrued wages in the income statement. If they are wages that are accrued for the current reporting period (so you incurred this expense but you have not paid it yet) then you include it in your wages expense. But if it is from the previous reporting period then it is not included.

If a firm has incurred wages expense for a reporting period and haven't paid, an accrued wages (current liability) account is created. However, through the underlying principles of accrual accounting, revenue earned must be matched with expenses incurred in a given reporting period and so the wages the firm hasn't paid increases wages expense for the reporting period. When the firm pays after the reporting period, only their bank balance and accrued wages decrease since expenses was recognised in the previous reporting period. Thus you'll never see 'accrued wages' in an income statement but the 'wages expense' may include a portion of wages that hasn't been paid.

Thanks for the responses guys it cleared it up for me. My teacher mentioned accrued wages and income statement at one stage and I found the question.
The business had paid Wages of $51720.
Furthermore, Wages of $2300 were owing at the end of the period.
Therefore the income statement should say "Wages: $54020"

[ermelinde]

Hi, could anyone please clear up the concept of prepaid expense for me?

Say for example, a business has a yearly reporting period. If the question specifies that the business pays for example, rent, in advance for the next month, and this is within the same reporting period, is this reported as "Prepaid Rent" or "Rent" in the Cash Flow Statement?

[kk.08]

Hi, could anyone please clear up the concept of prepaid expense for me?

Say for example, a business has a yearly reporting period. If the question specifies that the business pays for example, rent, in advance for the next month, and this is within the same reporting period, is this reported as "Prepaid Rent" or "Rent" in the Cash Flow Statement?

I'm not entirely sure myself so someone correct me if I'm wrong...

I'd assume that it'd only be considered prepaid if the current reporting period's rent expense was paid for in the previous reporting period. Because although the rent has been paid one month in advance in the same period, at the end of the year it will all add up to the same expense.

But let's say the rent expense was prepaid in early December 2014 for the next month (January 2015) and the reporting period ended December 31st  2014. Then that amount would be considered prepaid in 2015 and as a result the rent expense will be reduced.

[Jason12]

Thanks man..
Way to trivialise my marks

sorry I meant it more along the lines of that you already know the main concepts its probably just small things that are stopping you from getting 90%

[Jason12]

Is GST refund recorded on the credit side and GST settlement on the right? If so then what does the debit and credit side mean for GST clearing?

[Valyria]

Is GST refund recorded on the credit side and GST settlement on the right? If so then what does the debit and credit side mean for GST clearing?

GST refund is on the credit side and GST settlement is on the debit site. There's several transactions that occur in the GST clearing account, I'd recommend looking at the account reconstruction for a complete set of the transactions.

[kk.08]

Could someone help me out with this question, I don't have the answers

A trading firm increased its cost of goods sold from $80 000 in 2014 to $88 000 in 2015. The owner of the business claims that this indicates an increase in stock turnover of 10%. Is this necessarily correct? Explain your answer.

Thanks

[Coralista]

Could someone help me out with this question, I don't have the answers

A trading firm increased its cost of goods sold from $80 000 in 2014 to $88 000 in 2015. The owner of the business claims that this indicates an increase in stock turnover of 10%. Is this necessarily correct? Explain your answer.

Thanks

Not necessarily, think about what other reasons could cause an increase in cost of goods sold (such as an increase in the cost price of individual items of stock (supplier's price))
Also, an increase in stock turnover could be due to reducing stock levels, getting rid of slow moving lines of stock etc

[kk.08]

Not necessarily, think about what other reasons could cause an increase in cost of goods sold (such as an increase in the cost price of individual items of stock (supplier's price))
Also, an increase in stock turnover could be due to reducing stock levels, getting rid of slow moving lines of stock etc

Yeah I thought it was something along those lines just wasn't too sure haha, thanks heaps!

[kk.08]

Sudden thought, do we need to know how to calculate age analysis of debtors and if so how exactly is it done?

Thanks