VCE Accounting Question Thread!

[smile+energy]

We expect the benefits of a term deposit to last longer than a year, therefore we classify it as a non-current asset.

Thanks, Zealous

[Jason12]

How do you record drawings in the analysing chart and general ledger?

[p.taaa]

How do you record drawings in the analysing chart and general ledger?

Drawings is classified as negative drawings account. So recording will be opposite to a standard OE account.
So if you were to record a drawings, then it will be a debit entry, with either a bank cross-reference (if cash drawings), or stock control cross reference (if stock drawings).

[anna.xo]

How do I record a cash payment to creditors in the General ledger and creditors ledger ?

[abcdqdxD]

Drawings is classified as negative drawings account. So recording will be opposite to a standard OE account.
So if you were to record a drawings, then it will be a debit entry, with either a bank cross-reference (if cash drawings), or stock control cross reference (if stock drawings).

I think u meant drawings is a -OE account

[Jason12]

When wages are paid why does the wage expense go up instead of down

[Eugenet17]

When wages are paid why does the wage expense go up instead of down

When wages are paid it is an expense, hence your expenses increase.

Question, will I ever be asked whether a business should value something at it's historical cost or it's agreed value? I know why one is used over the other (Relevance etc) but how do i judge if one is better in a situation?

[Kuroyuki]

When wages are paid it is an expense, hence your expenses increase.

Question, will I ever be asked whether a business should value something at it's historical cost or it's agreed value? I know why one is used over the other (Relevance etc) but how do i judge if one is better in a situation?

Well they do ask that question quite a lot. Relevance vs Reliability discussion questions are quite popular. Usually if they are asking it you usually are meant to argue Agreed value. But anyway just think did the business purchase the asset by itself, if so you value at the historical cost. If not its agreed value.
Please correct me if I' m wrong, its been a while.

[Eugenet17]

Well they do ask that question quite a lot. Relevance vs Reliability discussion questions are quite popular. Usually if they are asking it you usually are meant to argue Agreed value. But anyway just think did the business purchase the asset by itself, if so you value at the historical cost. If not its agreed value.
Please correct me if I' m wrong, its been a while.

Haha, right after I posted that I came across one of these questions.

The question asks to discuss the owner's argument to value a computer at the price she paid instead of the agreed value by referring to two accounting principles. So do i just talk about Entity to support the use of an agreed value, and then historical cost to support her argument?

[p.taaa]

Yep so all you need to write is, 'the historical cost usually dictates that items should be valued at original purchase price, but as the Entity principle assumes that there is no source documents that verify the purchase of the NCA by the owner, as owner and business are seen as separate entitiy, then the price paid by the owner cannot be used"
then go on and talk about the use of agreed value and what it represents

[Eugenet17]

Thanks!

'A debt of $350 owed by B.Quick that had been written off was recorded in the ledger account of B.Quack', do I still record in the General Ledger column even though Debtors Control doesnt change?

[IT_Failure]

Thanks!

'A debt of $350 owed by B.Quick that had been written off was recorded in the ledger account of B.Quack', do I still record in the General Ledger column even though Debtors Control doesnt change?

I'm assuming you mean the subsidiary Debtor "B.Quick" has had $350 written off to Bad Debts expense. If this is the case then "Debtors Control"'s balance must be reduced by $350 also (cross reference Bad Debts). If an individual debtor's balance changes, debtors control will also change by the same amount.

[smile+energy]

Hi, guys
Yesterday I learned the debtors turnover, including the definition, formula and it's negative effects on a business. But the Cambridge doesnt give the details on what causes the DTO decreases or increase, can any one explain it for me? That will be great, thanks in advance. 

[Kuroyuki]

Hi, guys
Yesterday I learned the debtors turnover, including the definition, formula and it's negative effects on a business. But the Cambridge doesnt give the details on what causes the DTO decreases or increase, can any one explain it for me? That will be great, thanks in advance. 

Hmm is what you are looking for on page  467 in the textbook?
That should give you a bunch of reasons for why DTO can speed up.
And you kinda do the opposite for why DTO can slow down
like the business has not been promptly invoicing so debtors are not immediately aware of their debt and the repayment date. Also the business may not have done sufficient credit checks, resulting in a lot more unreliable debtors that do not pay on time.
something like that

[smile+energy]

Hmm is what you are looking for on page  467 in the textbook?
That should give you a bunch of reasons for why DTO can speed up.
And you kinda do the opposite for why DTO can slow down
like the business has not been promptly invoicing so debtors are not immediately aware of their debt and the repayment date. Also the business may not have done sufficient credit checks, resulting in a lot more unreliable debtors that do not pay on time.
something like that

Sorry, I couldn't find the info from textbook