VCE Accounting Question Thread!

[Maz]

Hey- I've always had trouble with balance day adjustments...i was wandering if any of you guys had any notes or a good website i could use? my book either isn't explaining it well or  i'm just not getting it...
thankyou sooo much in advance 

[The Usual Student]

Hey- I've always had trouble with balance day adjustments...i was wandering if any of you guys had any notes or a good website i could use? my book either isn't explaining it well or  i'm just not getting it...
thankyou sooo much in advance 

Shoot us some questions specifically about BDA and we should be able to explain them. I generally don't use external resources for Accoutning because i find a lot of the stuff online is VASTLY different to the VCE/WACE course. Sorry
If you need someone to explain the whole BDA topic, i can do that.

[Maz]

Shoot us some questions specifically about BDA and we should be able to explain them. I generally don't use external resources for Accoutning because i find a lot of the stuff online is VASTLY different to the VCE/WACE course. Sorry
If you need someone to explain the whole BDA topic, i can do that.

yeah i will definitely- when i have questions...it's just that i did 1&2 accounting last year and BDA was my only downfall- unfortunately it was a pretty big drop (oh no)
If you want/have time to explain the whole BDA topic i would absolutely love that? please
Thankyou so much though

[The Usual Student]

yeah i will definitely- when i have questions...it's just that i did 1&2 accounting last year and BDA was my only downfall- unfortunately it was a pretty big drop (oh no)
If you want/have time to explain the whole BDA topic i would absolutely love that? please
Thankyou so much though

Haha ok I will write up a short summary in my free period tomorrow

[Maz]

Haha ok I will write up a short summary in my free period tomorrow

thankyou so much human 

[The Usual Student]

yeah i will definitely- when i have questions...it's just that i did 1&2 accounting last year and BDA was my only downfall- unfortunately it was a pretty big drop (oh no)
If you want/have time to explain the whole BDA topic i would absolutely love that? please
Thankyou so much though

Ok so here it is - KEEP IN MIND I HAVEN'T REVISED THIS IN OVER 3 MONTHS. So please don't use my exact wording but hopefully this will clarify the idea.
BALANCE DAY ADJUSTMENTS - BDA
Balance day is the day we create our reports for a reporting period, so balance day adjustments are adjustments we make in order to ensure our information is 1) relevant and to also satisfy the 2) reporting period principle

In essence, there are a few special instances in which accountants may not pick up on certain things.

FOR EXAMPLE
We may pay for advertising in advanced ( prepaid advertising asset )  for the next 3 months, however 2 weeks of advertising means we used or consumed 2 weeks worth of it. So we must "adjust" our records accordingly so that we report the correct figure next Report period.
Another example is, depreciation. Our NCA will slowly be used up and hence we must allocate a price to it that represent its actual worth. So we must adjust our records on balance day so we have an accurate figure that represents the actual value of that NCA.
   
Hopefully you are catching on to this recurring theme of "adjusting" for things that are not picked up the first time round when we do our reporting.

The concept of accrual accounting also helps us understand how we can miss certain transactions or events, since it broadens the definition of "revenue" and "expense" so that we recognize it once the economic benefit is consumed or the inflow of economic benefit occurs.

So a lot of expenses and revenue are missed because it is commonly thought that we don't actually receive the revenue until the cash is in our hands, when in actuality it is when the inflow of economic benefit occurs!

TLDR ( sorry for the tangents ) BDA'S are simply adjustements we make on balance day, these adjustements are commonly employed to recognize revenue or expenses following the accrual accounting version of expense and revenue. So making sure things like : Prepaid expenses, depreiciation of NCA and ect are recorded and reported.

Hahaha hope that helps a bit

[Maz]

Ok so here it is - KEEP IN MIND I HAVEN'T REVISED THIS IN OVER 3 MONTHS. So please don't use my exact wording but hopefully this will clarify the idea.
BALANCE DAY ADJUSTMENTS - BDA
Balance day is the day we create our reports for a reporting period, so balance day adjustments are adjustments we make in order to ensure our information is 1) relevant and to also satisfy the 2) reporting period principle

In essence, there are a few special instances in which accountants may not pick up on certain things.

FOR EXAMPLE
We may pay for advertising in advanced ( prepaid advertising asset )  for the next 3 months, however 2 weeks of advertising means we used or consumed 2 weeks worth of it. So we must "adjust" our records accordingly so that we report the correct figure next Report period.
Another example is, depreciation. Our NCA will slowly be used up and hence we must allocate a price to it that represent its actual worth. So we must adjust our records on balance day so we have an accurate figure that represents the actual value of that NCA.
   
Hopefully you are catching on to this recurring theme of "adjusting" for things that are not picked up the first time round when we do our reporting.

The concept of accrual accounting also helps us understand how we can miss certain transactions or events, since it broadens the definition of "revenue" and "expense" so that we recognize it once the economic benefit is consumed or the inflow of economic benefit occurs.

So a lot of expenses and revenue are missed because it is commonly thought that we don't actually receive the revenue until the cash is in our hands, when in actuality it is when the inflow of economic benefit occurs!

TLDR ( sorry for the tangents ) BDA'S are simply adjustements we make on balance day, these adjustements are commonly employed to recognize revenue or expenses following the accrual accounting version of expense and revenue. So making sure things like : Prepaid expenses, depreiciation of NCA and ect are recorded and reported.

Hahaha hope that helps a bit

yeah- thank you...i just never get them right...hopefully practice will alleviate that problem thanks for the context info though

[Maz]

hey- I've got that BDA question
i have an answer for both but don't really understand it and was wandering if someone could please help?
1. Wages paid in july should be $8200. On 31 july 2019 accrued wages are predicted to be 150.
2. Electricity expense for july should be $3000. On 31 July 2019 accrued electricity should be $1000
on a cash budget- why does the electricity go as (3000-1000=2000) and wages as $8200? whats the difference between how you work out them?

Thankyou in advance 

[The Usual Student]

hey- I've got that BDA question
i have an answer for both but don't really understand it and was wandering if someone could please help?
1. Wages paid in july should be $8200. On 31 july 2019 accrued wages are predicted to be 150.
2. Electricity expense for july should be $3000. On 31 July 2019 accrued electricity should be $1000
on a cash budget- why does the electricity go as (3000-1000=2000) and wages as $8200? whats the difference between how you work out them?

Thankyou in advance 

So look at the key wording,
We know WAGES PAID ( WAGES PAID IN CASH) is 8200, this is pretty obvious since we get told it. Also add that to ACCRUED WAGES of 1000 and the TOTAL WAGE EXPENSE IS 9200
However the cash budget only includes the amount paid in cash of 8200
Now the ELECTRICITY EXPESNES  ( In other words : Electricy paid + electricty accrued) = 3000
but in the cash budget only ELECTRICITY paid in cash is included so we minus the electricity accrued from the overall electricity and we get 3000 - 1000 = 2000
and that value is put into our cahs budget

Make sure to look out for terms such as ; Expenses vs Accrued

[Maz]

So look at the key wording,
We know WAGES PAID ( WAGES PAID IN CASH) is 8200, this is pretty obvious since we get told it. Also add that to ACCRUED WAGES of 1000 and the TOTAL WAGE EXPENSE IS 9200
However the cash budget only includes the amount paid in cash of 8200
Now the ELECTRICITY EXPESNES  ( In other words : Electricy paid + electricty accrued) = 3000
but in the cash budget only ELECTRICITY paid in cash is included so we minus the electricity accrued from the overall electricity and we get 3000 - 1000 = 2000
and that value is put into our cahs budget

Make sure to look out for terms such as ; Expenses vs Accrued

Thankyou

[Maz]

hey
Can someone please clarify this for me?
Why are debtors included in the cash budget when the accrued stuff isnt? Isnt kinda the same thing...like money owed but not received? and it's not cash
Thankyou

[The Usual Student]

hey
Can someone please clarify this for me?
Why are debtors included in the cash budget when the accrued stuff isnt? Isnt kinda the same thing...like money owed but not received? and it's not cash
Thankyou

The criteria to be included in the cash budget you need to be cash based, as long as it is a cash inflow or outflow it will be in the cash budget. By debtors I assume you mean receipts from debtors? They are cash based transactions so they will be included ( the debtor control however will not be included since it is not cash based ). The accrued stuff by defintion is pretty much sutff you havent paid for so obviously if you have not paid for it, you cannot have it in your cash budget as it is not a cash based transaction.

But I have a feeling you know this already but are confused with the term "debtor" with the term " receipts from debtors" which is the actual money we get form our debtors to settle what they owe to us.

[Maz]

The criteria to be included in the cash budget you need to be cash based, as long as it is a cash inflow or outflow it will be in the cash budget. By debtors I assume you mean receipts from debtors? They are cash based transactions so they will be included ( the debtor control however will not be included since it is not cash based ). The accrued stuff by defintion is pretty much sutff you havent paid for so obviously if you have not paid for it, you cannot have it in your cash budget as it is not a cash based transaction.

But I have a feeling you know this already but are confused with the term "debtor" with the term " receipts from debtors" which is the actual money we get form our debtors to settle what they owe to us.

right- that makes sense , thank you 

[friedchromosome]

Does anyone know any good websites/youtubers for the theory aspect of the content. Also anyone i can buy notes off?

[The Usual Student]

Does anyone know any good websites/youtubers for the theory aspect of the content. Also anyone i can buy notes off?

https://www.youtube.com/watch?v=kJdKF0bNLhk&list=PL_w5nl2l8qjtzj4UbFWLs4DVILnjBn4Ni - pretty good theory
https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg - WAY BETTER IMO * HE teaches at trinity
Also for notes - search up sara doan ( 49 raw in 2015 ) she sells her notes for 20 bucks