VCE Accounting Question Thread!

[kk.08]

Going concern states that
-the business is assumed to be continuous and its records should be kept on that basis.
-this allows the recording of transactions that have an effect on the future (such as depreciation, prepaid revenue/expenses etc)
-also assets and revenue can be distinguished

Thanks! If you don't mind, could you explain  how going concern helps distinguish between assets and expenses? I saw it in the Acc study design and could not connect the two ideas together!

[BoredSatan]

Thanks! If you don't mind, could you explain  how going concern helps distinguish between assets and expenses? I saw it in the Acc study design and could not connect the two ideas together!

Because the business' life is assumed to be infinite therefore we are able to classify a prepaid expense as an asset as we know that the business will exist in the future/next reporting period in order to consume that part of the asset. Therefore we can separate the prepaid expense into segments depending on how much we have consumed in the reporting period.

[Eugenet17]

For questions like these:
Prepaid Sales Revenue relates to an amount paid as a deposit on an antique dining table and chairs. The stock had a selling price of $23,000 with a cost price of $14,375. This stock was delivered on 30 June 2013 and Invoice AA132 was raised.

Are we supposed to assume that that $23,000 is the value PLUS GST even though it isn't specified? The answers assumed that it was 23000 + 2300(GST) but I thought that we didn't have to if the question doesn't specify.

[abcdqdxD]

For questions like these:
Prepaid Sales Revenue relates to an amount paid as a deposit on an antique dining table and chairs. The stock had a selling price of $23,000 with a cost price of $14,375. This stock was delivered on 30 June 2013 and Invoice AA132 was raised.

Are we supposed to assume that that $23,000 is the value PLUS GST even though it isn't specified? The answers assumed that it was 23000 + 2300(GST) but I thought that we didn't have to if the question doesn't specify.

Yeah it would be 23000+GST, VCAA will make it explicit though.

It's clear that 23000 can't be a GST inclusive figure. You can check this by dividing by 11 and see if you get a whole number.

[ermelinde]

Hope everyone's going well with revision!

Could anybody please explain this question from 2008 Unit 3 VCAA Exam 1? I've attached a pic of it below. I don't understand where the $5000 accrued wages from October went.

[Zealous]

Hope everyone's going well with revision!

Could anybody please explain this question from 2008 Unit 3 VCAA Exam 1? I've attached a pic of it below. I don't understand where the $5000 accrued wages from October went.

Looks like they've got a 3 month reporting period (quarter), so only the first payment on the 15th of October would go towards accrued wages - the other payments would go directly to wages expense. If the reporting period is 3 months, you don't need to adjust for accrued wages at the end of October and November.

Then at the end of the 3 month reporting period on balance day, there would be an adjustment for the $5000 accrued from December which would be paid off in January (next year).

[ermelinde]

Thanks so much! The entire question is somewhat contradictory since there was a previous part that implied the reporting period was for a year, and a part after that changed to quarters...

I will assume that they're using quarterly periods here though, so that clarifies it plenty.

[Zues]

if there is a decreasing trend in the net profit margin (graphically). can someone outline some factors that may be to contribute to this trend?

thanks

[more_vanilla]

I'm averaging low 80s in my practice exams and would like to increase this to at least a high 80s. I correct all my exams and type up all my mistakes so I don't know why I'm still making so many errors - they're usually little marks here and there that all add up

Its kind of late but...any tips?

[Zealous]

if there is a decreasing trend in the net profit margin (graphically). can someone outline some factors that may be to contribute to this trend?

thanks

There's heaps of things which could cause that. Think about the income statement and the sort of items which fit there, what will increase net profit and what will decrease net profit? So a decrease in net profit margin could be due to increased cost price of stock, poor expense control, decreased markup (constant cost price), maybe the business decreased their advertising (reducing expenses) but that impacted their sales proportionally more? even the business purchasing a new non-current assets which caused a large amount of depreciation (compared to previous periods) can decrease the amount of each sales dollar retained as net profit compared to previous periods. These sort of responses may accompany data of a business so base your answers off the question and data given and since it says "may" you can be a little creative (and less generic).

I'm averaging low 80s in my practice exams and would like to increase this to at least a high 80s. I correct all my exams and type up all my mistakes so I don't know why I'm still making so many errors - they're usually little marks here and there that all add up

Its kind of late but...any tips?

Well, you type up all of your mistakes - have you been reviewing them frequently? Reading through them and applying what you've learnt to new practice exams? I recommend compiling all of your most common mistakes into a word document, printing it out and briefly reading it before you do a practice exam. If you know all your stuff but it's just silly mistakes holding you back then I think that could help.

[kk.08]

Because the business' life is assumed to be infinite therefore we are able to classify a prepaid expense as an asset as we know that the business will exist in the future/next reporting period in order to consume that part of the asset. Therefore we can separate the prepaid expense into segments depending on how much we have consumed in the reporting period.

Thanks! That actually came up in a practice paper I did today

Also, does anyone know if we need to know how to calculate the depreciation percentage rate?

[more_vanilla]

Well, you type up all of your mistakes - have you been reviewing them frequently? Reading through them and applying what you've learnt to new practice exams? I recommend compiling all of your most common mistakes into a word document, printing it out and briefly reading it before you do a practice exam. If you know all your stuff but it's just silly mistakes holding you back then I think that could help.

Yeah thanks. I probably wasn't reviewing my notes enough (because there's just so much to go through T_T)

I'll try that today and hope for the best on Monday haha

[BoredSatan]

Thanks! That actually came up in a practice paper I did today

Also, does anyone know if we need to know how to calculate the depreciation percentage rate?

depends if you're talking about the straight line or reducing balanced method

Straight line method: depreciation expense (per annum) / historical cost x 100
Reducing Balance Method: Don't need to know how to calculate

[BigWhale112]

heyy
could you guys help me with a couple of questions i have?
1) if i were to get a question such as "Discuss the changes in profitability of the business between 2012 and 2011" or "Explain the trend in the Working Capital Ratio", do i have to explicitly define the terms profitability and working capital ratio before answering the question
2) for a budgeted report do we have to include GST Settlement/GST Refund in the budgeted cash flow statement?
for example if at 31 Dec 2012 there was a GST liability of 1480, do we have to include this amount  in the budgeted cash flow statement for the year ended 21 Dec 2013?
thankyou in advance 

[lisax3]

On reporting day (30th of june) if it is found that a transaction such as a cash payment that occurred earlier for example on the 16th on june has not been recorded. Do we record it in the cash payment on the day it occurred (16th of june) or the day the transaction was found 30th of june?