VCE Accounting Question Thread!

[Lucho23]

Can someone please explain why in VCAA 2009 exam 2 question 2.2.2, the rent revenue in the budgeted income statement is $24000? I calculated it as $22000 since $2000 was accrued.

In general, do we add the accrued revenue to revenue recieved to calculate revenue earnt when reporting in the income statement?

Accrued Revenue is defined as: Revenue earned but not yet received.

As Revenue is defined under accrual accounting as inflows of economic benefits that have been earned in a reporting period (hence the need for balance day adjustments), this Accrued Rent Revenue is included as part of the Rent Revenue as it has been earned in December.

In the Cash Flow Statement, however, you would be correct as only 11 months worth ($22,000) of Rent has been received.

Hope this helps!

[TimmyC]

Can someone please explain why in VCAA 2009 exam 2 question 2.2.2, the rent revenue in the budgeted income statement is $24000? I calculated it as $22000 since $2000 was accrued.

In general, do we add the accrued revenue to revenue recieved to calculate revenue earnt when reporting in the income statement?

just finished that!!
Rent revenue is $2000 per months so 12x2000=$24000
the accrued amount is just the amount earned but not yet received

woops did not see that comment lol^

[Mafioso]

Thanks everyone!

[Colokid]

when posting in ledgers, it is ok to post in the debtors ledger credit sales/gst in one or do we record it separetly?

[Lucho23]

when posting in ledgers, it is ok to post in the debtors ledger credit sales/gst in one or do we record it separetly?

When posting at the end of a reporting period it's fine to post with one total as Sales/GST Clearing.

When you're reconstructing an account, it's probably easier to split the Sales and GST Clearing though.

But yes, in formal recording Sales/GST Clearing is fine.

[Damoz.G]

When posting at the end of a reporting period it's fine to post with one total as Sales/GST Clearing.

When you're reconstructing an account, it's probably easier to split the Sales and GST Clearing though.

But yes, in formal recording Sales/GST Clearing is fine.

Yup, agree with what your saying.

Easier to split for Reconstructions in case you need a figure from previous account.

[arthurjl]

Should we memorise all financial indicators? Or is it going to be given in the exam? :/

[Damoz.G]

Should we memorise all financial indicators? Or is it going to be given in the exam? :/

You won't need to calculate any of them, but you do however need to memorise the make up of all of them. They are not gonna be given to you.

[Kuroyuki]

Should we memorise all financial indicators? Or is it going to be given in the exam? :/

They are not given in the exam.
They are not going to test you, how to calculate working capital ratio.
But memorise and UNDERSTAND Them. In order to answer most analysis questions, you will have to understand how each indicator works.

[Mafioso]

Say I purchased 10 units of stock for $1000 with $100 for delivery expenses.

If the delivery expenses were $100 for the whole month (meaning that the business purchased more than the 10 units in the question stem), it would be classified as a period cost because we don't know the total amount of stock purchased so we cannot logically distribute the cost.

But what if I am told that the $100 delivery expense was for the 10 units alone? Do I classify it as a product cost since the $100 can be logically distributed to the 10 items? Or is delivery expenses always classified as a period cost regardless of whether it makes sense to distribute it to each stock item?

[FunkyAfrican]

I was asked to record the cash proceeds from a disposal of a van for $5,000 in the CRJ.
I added $500 GST and my bank value was $5,500.

But this is wrong and the answers have no gst on the sale.
Why would there be no gst on sale of a NCA?

[Kuroyuki]

I was asked to record the cash proceeds from a disposal of a van for $5,000 in the CRJ.
I added $500 GST and my bank value was $5,500.

But this is wrong and the answers have no gst on the sale.
Why would there be no gst on sale of a NCA?

Yeah its weird. There is no gst charged on the sale of non current assets. Only purchase. I don't really know why.

Say I purchased 10 units of stock for $1000 with $100 for delivery expenses.

If the delivery expenses were $100 for the whole month (meaning that the business purchased more than the 10 units in the question stem), it would be classified as a period cost because we don't know the total amount of stock purchased so we cannot logically distribute the cost.

But what if I am told that the $100 delivery expense was for the 10 units alone? Do I classify it as a product cost since the $100 can be logically distributed to the 10 items? Or is delivery expenses always classified as a period cost regardless of whether it makes sense to distribute it to each stock item?

If it can be allocated logically then allocate it. There is no rule saying delivery expenses or anything must be a period or product cost.

[Lucho23]

How does the Asset Turnover increase while the Net Profit Margin decreased and Return on Assets increased?

Thanks

[TimmyC]

How does the Asset Turnover increase while the Net Profit Margin decreased and Return on Assets increased?

Thanks

Maybe a reduction in average assets?

[Lucho23]

Maybe a reduction in average assets?

I don't think that's it because that means that Return on Assets would've increased.