VCE Accounting Question Thread!

[ech_93]

Another question; are "insurance on premises" and "registration and insurance - van" current assets or non-current assets?
I'm thinking non-current assets, but not completely sure...

[soopertaco]

i dont think they are even assets unless they are prepaid, in that case maybe you need to look for the time period for which they are valid?

[ech_93]

Oh yeah, that's embarrassing.
But, I did a balance sheet with those as assets and it worked :/

Unless that was just a fluke!

edit: yeah, thinking about it now, i don't think they are assets. How did the balance sheet even work then !?

edit2: finally worked it out!

[soopertaco]

haha ech_93 glad you worked it out

[SDPHD]

A small question.

The Interest Expense and Accrued Interest Expense of the following question would be $1875 as the interest per annum is $4500 which is $375 per month and as five months have passed since 1 Feb to 30 Jun, that equals $1875, right?

Is my reasoning logical or have I just made up garbage which just happens to conform to the right answer?

PS - The question is 1.3 from the 2010 VCAA Exam 1.

[123456k]

thats correct good job

[soopertaco]

dude that question is so wack haha
not meaning to sound like google but
did you mean according to one qualitative characteristic why are items in the balance sheet classified?

[123456k]

lol clearly this guy knows his stuff and is trying to fool around. don't wory about that question as it is most likely understandabilty which is a qualitative characteristic. i don't think a accounting principle can be applied.

[soopertaco]

Yeah he did well in making a seemingly coherent sentence in one of his other posts fusing all the principles together. i just wish he'd use it for good rather than to be obnoxious. but yeah i remember boxy talking about that question on sunday

[ShortBlackChick]

I'm doing a prac exam, and there's a question:

According to one Accounting Element, why are Balance Sheets classified?

Can i just ask, by element, do you mean like assets, liabilities, OE, revenue and expenses???
Or element as if in, Principles???
I mean i got that it didnt make sense, but just to clarify what an element is
LOL

[123456k]

elements - assets, liabilities, OE, revenue and expenses

[soopertaco]

are depreciable value and historical cost the same thing?

[sam.utute]

Depreciable value takes into account the asset's residual value. Historical cost is just the asset's purchase price (cost of an asset will take into account modifications etc.).

[soopertaco]

oh right so depreciable value is historical cost minus the residual value?
and historical cost is the purchase price of the asset + any costs involved in getting the asset into a state and location to earn revenue? or is that different?

[sam.utute]

Yep!

Just make sure you use the correct definition of cost of an asset.