VCE Accounting Question Thread!

[Tragesty]

Everyone I've talked to doesn't seem to have a set format - hell Neville Box (chief assessor) said they aren't sure how they'll mark them yet. Another lecturer said to talk bout everything you know.

I'd start by explaining what the question asks (e.g discuss control accounts and subsidiary ledgers, explain what these are) followed by advantages/pros of what needs to be discussed, and then negatives/cons.

My approach, not sure if it's the best way, hope someone else can reply with their preferred way of tackling discussion questions.

[Nima2703]

Everyone I've talked to doesn't seem to have a set format - hell Neville Box (chief assessor) said they aren't sure how they'll mark them yet. Another lecturer said to talk bout everything you know.

I'd start by explaining what the question asks (e.g discuss control accounts and subsidiary ledgers, explain what these are) followed by advantages/pros of what needs to be discussed, and then negatives/cons.

My approach, not sure if it's the best way, hope someone else can reply with their preferred way of tackling discussion questions.

Discuss requires you to explain advantages and disadvantages. For a six mark question: "Discuss why the use of Control accounts and subsidiary ledgers helps preparation of reports"

Using control accounts and subsidiary ledgers bring many benefits to a business. Subsidiary ledgers provide information regarding each individual debtor, creditor, or stock item. This can help chase bad debts or overdue payments, and recognize fast and slow moving lines of stock. Control accounts provide a summary of individual ledgers which removes unnecessary bulk from the balance sheet. Therefore, understandability is assisted, as the balance sheet is easier to comprehend. Relevance is also aided, as the total figure of accounts is relevant for decision making of the business. Control accounts may be used to reconcile with the subsidiary ledgers in order to identify recording errors, this improves the reliability of the records and reports of the business. However, acquiring additional ledger accounts requires additional bookkeeping and possibly extra staff hire, which consumes time and profit.

[splash.of.colour]

Ohh okay! Thankyou very much nima2703
But then how will we know if they have or haven't included gst? Should we assume they haven't included it? 

[Tragesty]

For items that require GST, they'll tell you if it does or does not include it. I've yet to come across items which have GST but we aren't told if it is or is not included.

[idontknow017]

I have a question about stock gain.

If you have:
4 units @ $10
6 units @ $15
Stock gain of 2 units.

Does it become:
6 units @ $10
6 units @ $15
or
4 units @ $10
6 units @ $15
2 units @ $10

[abcdqdxD]

6 units @ 10
6 units @ 15

Stock gains are recorded at the lowest cost price of stock currently on hand to satisfy Conservatism - prevent overstating assets.

Edit: There is no need to separate them - the balance must be shown for each cost price collectively.

[idontknow017]

6 units @ 10
6 units @ 15

Stock gains are recorded at the lowest cost price of stock currently on hand to satisfy Conservatism - prevent overstating assets.

Edit: There is no need to separate them - the balance must be shown for each cost price collectively.

Are you 100% sure? When my teacher marked my practise exam (one of the Engage ones) it had 3 different cost prices
e.g.
5 units @ $22
4 units @ $28
7 units @ $25
Stock gain of 2 units

My response was (same method as yours):
7 units @ $22
4 units @ $28
7 units @ $25

However, I was told it was:
5 units @ $22
4 units @ $28
7 units @ $25
2 units @ $22

[abcdqdxD]

6 units @ 10
6 units @ 15

Stock gains are recorded at the lowest cost price of stock currently on hand to satisfy Conservatism - prevent overstating assets.

Edit: There is no need to separate them - the balance must be shown for each cost price collectively.

Are you 100% sure? When my teacher marked my practise exam (one of the Engage ones) it had 3 different cost prices
e.g.
5 units @ $22
4 units @ $28
7 units @ $25
Stock gain of 2 units

My response was (same method as yours):
7 units @ $22
4 units @ $28
7 units @ $25

However, I was told it was:
5 units @ $22
4 units @ $28
7 units @ $25
2 units @ $22

Out of all the practice exams I've done (~15), I have not seen the solutions separate them.

[idontknow017]

I'll just hope it doesn't come up on the exam then :p

How about "Referring to one QC, explain why assets and liabilties are classified in the balance sheet."

I've always gone with something along the lines of "Relevance - it is more useful for decision-making as the owner can access his liquidity and identify if he can meet his short term debts."

But the answers usually say "Understandability - Reports should be prepared in a manner that makes it easy for the user to comprehend their meaning. Classifying Assets and Liabilities in the Balance Sheet allows users with little accounting knowledge to understand the basics of the report."

Doesn't it improve relevance more than understandability?

[Michelle94]

How many practice exams have people done???
and out of the 90 marks tomorrow, what are u hoping to get?

[splash.of.colour]

Question about sales discount,

the question has given a purchase invoice:
Date        Details                          QTY      Unit price      Total
    3/8          Pure wool suits               16          175             2800
                   Tailoring costs                                                  480
                  less sales discount                                               80
                  Sub total                                                       3200
                  plus GST                                                           320
                  Total                                                            $3520


should the sales discount reduce the cost of stock?
I didnt think so... so i recorded the unit cost price as $205 (suppliers price of $175 + product cost $30), but then how would i record the transaction in the purchases journal? is the sales discount recorded separately in the general journal or something?  or was i supposed to subtract it from the cost price of stock?

thanks

[Flying Emu]

Quick question about special journals

Where exactly are loans you receive recorded? Should they be recorded under cash receipts journal?

[sam.utute]

Quick question about special journals

Where exactly are loans you receive recorded? Should they be recorded under cash receipts journal?

Yep, Cash Receipts Journal.

[Flying Emu]

Yep, Cash Receipts Journal.

Under sundries yeah?

[sam.utute]

Yep, Cash Receipts Journal.

Under sundries yeah?

Yep. Unless there is a separate classification column for them (which there usually isn't).
Sundries