VCE Accounting Question Thread!

[Damoz.G]

Say you have a prepaid sales revenue being fulfilled on the 30th may but the balance day of the business is on the 30th june. would you record this in the general journal on the 30th of may or the balance day of the business?
Also do you only balance accounts on balance day between periods or are you meant to balance each month?
Last question: If a debtor pays back half of its debt within discount terms would they receive a discount?

No, you would recognise it when it occurs, so on May 30. Like when a Deposit is made, and is then converted into a Sale, the rest of the Sale is recorded in the Sales Journal, but the Deposit (Prepaid Sales Revenue) which is a Liability would be removed by recognising it as a Sale.
DR: Prepaid Sales Revenue
CR: Sales Revenue

Balancing Accounts are only done at the end of a Reporting Period. If Reports are prepared monthly, then you would Balance the Accounts each month, but if its not monthly, then you don't.

Full payment must be made for a Discount.

[sin0001]

Say you have a prepaid sales revenue being fulfilled on the 30th may but the balance day of the business is on the 30th june. would you record this in the general journal on the 30th of may or the balance day of the business?
Also do you only balance accounts on balance day between periods or are you meant to balance each month?
Last question: If a debtor pays back half of its debt within discount terms would they receive a discount?

Not entirely sure about your first question, so I'll wait for others to answer.
2nd question: No, you are only supposed to POST transactions to the ledger accounts monthly, but you only balance at the end of the reporting period/balance day
3rd: Yes, the discount will be applicable on ANY payment made by the debtor within the discount terms offered Only on full repayment
Edit: See the post below. Thanks Damoz

[Damoz.G]

Not entirely sure about your first question, so I'll wait for others to answer.
2nd question: No, you are only supposed to POST transactions to the ledger accounts monthly, but you only balance at the end of the reporting period/balance day
3rd: Yes, the discount will be applicable on ANY payment made by the debtor within the discount terms offered

Sorry, but for the third Question as I mentioned before, full payment must be made for a Discount.

This is from the Cambridge Textbook, and I've highlighted it for you:

[noone29]

May seem a bit noobish, but when establishing a double-entry accounting system, in the General Journal, do we put down the 'Bank' figure? On some exams/exercises, I've seen them put it in the general journal, on some it is done in the Cash Receipts journal.

Any clarification will help!

Thanks!

[Damoz.G]

May seem a bit noobish, but when establishing a double-entry accounting system, in the General Journal, do we put down the 'Bank' figure? On some exams/exercises, I've seen them put it in the general journal, on some it is done in the Cash Receipts journal.

Any clarification will help!

Thanks!

I think you are getting confused by the establishing of Double-Entry Accounting and the opening of a business with Double-Entry Accounting.

If a business is just switching from Single-Entry to Double-Entry Accounting, the Cash at Bank must be reported in the General Journal. But this Entry and correcting entries are the only 2 times that Bank is even mentioned in the General Journal.

[sin0001]

Only in the CRJ I believe

I thought it's recorded in the General Journal when you change to a double-entry system, as this is not an inflow of cash, but just recording cash that's already there.
Isn't it recorded in the CRJ only when you commence your business?

[TimmyC]

I thought it's recorded in the General Journal when you change to a double-entry system, as this is not an inflow of cash, but just recording cash that's already there.
Isn't it recorded in the CRJ only when you commence your business?

yes, sorry haha :p

[noone29]

I think you are getting confused by the establishing of Double-Entry Accounting and the opening of a business with Double-Entry Accounting.

If a business is just switching from Single-Entry to Double-Entry Accounting, the Cash at Bank must be reported in the General Journal. But this Entry and correcting entries are the only 2 times that Bank is even mentioned in the General Journal.

So if they are about to commence the business, it should be recorded in the CRJ? And if it's an overdraft, it should be in the general journal, right?

EDIT: Instead of making a new post, I'll ask it on this one. Sorry to bombard you guys with questions, but Stock gains, what cost price if they are two items? The first item or the last one?

[Damoz.G]

So if they are about to commence the business, it should be recorded in the CRJ? And if it's an overdraft, it should be in the general journal, right?

EDIT: Instead of making a new post, I'll ask it on this one. Sorry to bombard you guys with questions, but Stock gains, what cost price if they are two items? The first item or the last one?

Well if your commencing a business, the Owner usually contributes some Cash, so yes the Capital Contribution of Cash is recorded in the Cash Receipts Journal. If the business is getting an overdraft, you don't record it in the General Journal unless its actually been used.

For Stock Gains, you use the lowest cost price of stock still on hand. Which cost price first and second is irrelevant. Just use the lower of the unit cost prices on hand.

[noone29]

Well if your commencing a business, the Owner usually contributes some Cash, so yes the Capital Contribution of Cash is recorded in the Cash Receipts Journal. If the business is getting an overdraft, you don't record it in the General Journal unless its actually been used.

For Stock Gains, you use the lowest cost price of stock still on hand. Which cost price first and second is irrelevant. Just use the lower of the unit cost prices on hand.

Dude, you are saving me so many marks on the exam, thanks heaps mate!

So stock loss would be the highest cost, right?

[Damoz.G]

Dude, you are saving me so many marks on the exam, thanks heaps mate!

So stock loss would be the highest cost, right?

No worries. 

Yup, highest cost price of stock still on hand. Its to support Conservatism.

[Mafioso]

If a business is just switching from Single-Entry to Double-Entry Accounting, the Cash at Bank must be reported in the General Journal. But this Entry and correcting entries are the only 2 times that Bank is even mentioned in the General Journal.

Could you please tell me how exactly this switch between the methods is reported in the general journal?

Also, how many types of 'Other revenue' (Income Statement) are there? I can only think of:
- discount revenue
- rent revenue
- interest revenue
- revenue on disposal of asset

Anything I'm missing?

[massachusetts8]

Well if your commencing a business, the Owner usually contributes some Cash, so yes the Capital Contribution of Cash is recorded in the Cash Receipts Journal. If the business is getting an overdraft, you don't record it in the General Journal unless its actually been used.

For Stock Gains, you use the lowest cost price of stock still on hand. Which cost price first and second is irrelevant. Just use the lower of the unit cost prices on hand.

So if we were asked to explain using the Conservatism principle why the Stock Gain is recorded at the lowest cost price on hand would the explanation be...
Conservatism states that gains should only be recognised when certain so that assets are not understated (I.e. Stock Control) and revenues are not understated (Stock Gain) ?

[noone29]

No worries. 

Yup, highest cost price of stock still on hand. Its to support Conservatism.

Thanks heaps man!

[noone29]

So if we were asked to explain using the Conservatism principle why the Stock Gain is recorded at the lowest cost price on hand would the explanation be...
Conservatism states that gains should only be recognised when certain so that assets are not understated (I.e. Stock Control) and revenues are not understated (Stock Gain) ?

I'm pretty sure it's so they are not overstated, but Damoz will clear it up!