VCE Accounting Exam - 08/11/19 - Discussion/Questions/Solutions

[soneo5two2]

Would u lose marks if you put it all in the one entry? I feel like you shouldn't cos they were both paid for with cash, so the entries would all be the same.

Our teachers told us to separate the transactions if they have separate source documents so I believe it should be split to get full marks. Combining would likely lose one or two marks... 

[Lupewholes]

Anyone got answers for the bda question 4

These are not the actual answers, just what I put down. Completely unsure if they are correct or not
30/4 Advertising                       2500
        Prepaid Advertising                  2500
30/4 Wages                              2000
        Wages Owing                           2000
30/4 Accrued Interest Revenue 300
        Interest Revenue                      300
30/4 Dep of Vehicles                3750
        Acc Dep of Vehicles                  3750

The rent BDA really tripped me up, as I was clueless on what to do for it, or if it was even supposed to be included, so I ended up choosing to ignore it, as with the mark up dot point. The question was worth 10 marks, and I'm pretty sure all the stuff I put down isn't enough for 10 so you probably had to do something with the rent.

[Shutieai]

The point about mark up being 100% was a red herring right? We don't have to do anything with that point (BDA question 4)?

[Lupewholes]

The point about mark up being 100% was a red herring right? We don't have to do anything with that point (BDA question 4)?

Yeah definitely, we were already informed of the Cost of Sales and Sales Revenue so there were no possible entries for that.

[EMMB]

So what is actually going to happen with the WCR, QAR question, are they going to give everyone the marks or like what were you meant to say?

[Shutieai]

So what is actually going to happen with the WCR, QAR question, are they going to give everyone the marks or like what were you meant to say?

I really think they have to remove the question, I have talked to my teacher and other students and we all agree it makes no sense. Will be very interesting what VCAA will do with this error.

[1d0tkn0w]

These are not the actual answers, just what I put down. Completely unsure if they are correct or not
30/4 Advertising                       2500
        Prepaid Advertising                  2500
30/4 Wages                              2000
        Wages Owing                           2000
30/4 Accrued Interest Revenue 300
        Interest Revenue                      300
30/4 Dep of Vehicles                3750
        Acc Dep of Vehicles                  3750

The rent BDA really tripped me up, as I was clueless on what to do for it, or if it was even supposed to be included, so I ended up choosing to ignore it, as with the mark up dot point. The question was worth 10 marks, and I'm pretty sure all the stuff I put down isn't enough for 10 so you probably had to do something with the rent.

Are you sure that the accrued interest revenue should be divided by two? (from 600 for one month to 300 for half of it or do you just assume it's for the whole month?)

[EMMB]

Are you sure that the accrued interest revenue should be divided by two? (from 600 for one month to 300 for half of it or do you just assume it's for the whole month?)

My teacher said you work it out at 1/24 times the annual value, so you would assume it is 300.

[1d0tkn0w]

My teacher said you work it out at 1/24 times the annual value, so you would assume it is 300.

Pretty sure our teacher always told us to round the date to the nearest month though and I guess recording the transaction for the whole month is more relevant than omitting it completely

[Seamus Wong]

These are not the actual answers, just what I put down. Completely unsure if they are correct or not
30/4 Advertising                       2500
        Prepaid Advertising                  2500
30/4 Wages                              2000
        Wages Owing                           2000
30/4 Accrued Interest Revenue 300
        Interest Revenue                      300
30/4 Dep of Vehicles                3750
        Acc Dep of Vehicles                  3750

The rent BDA really tripped me up, as I was clueless on what to do for it, or if it was even supposed to be included, so I ended up choosing to ignore it, as with the mark up dot point. The question was worth 10 marks, and I'm pretty sure all the stuff I put down isn't enough for 10 so you probably had to do something with the rent.

They pay rent at the end of each month for the following month. So you would have to record:

Prepaid Rent Expense (debit) 5500
GST Clearing (debit) 550
Bank (credit) 6050

AND you would have to record the accrued rent expense for the June period:
Rent Expense (debit) 5500
Accrued Rent Expense (credit) 5500

[Seamus Wong]

Pretty sure our teacher always told us to round the date to the nearest month though and I guess recording the transaction for the whole month is more relevant than omitting it completely

It is not more relevant. You earned 15 days of revenue. So you record 15 days of revenue, not 30. I wrote that and my teacher said that it was right.

[Lupewholes]

They pay rent at the end of each month for the following month. So you would have to record:

Prepaid Rent Expense (debit) 5500
GST Clearing (debit) 550
Bank (credit) 6050

AND you would have to record the accrued rent expense for the June period:
Rent Expense (debit) 5500
Accrued Rent Expense (credit) 5500

Ah I see, the first entry is for July's rent and then the second is the missing rent for June. Definitely lost a couple marks there.

[Seamus Wong]

Ah I see, the first entry is for July's rent and then the second is the missing rent for June. Definitely lost a couple marks there.

I mean, that is just what made sense to me. I have never seen a question like that before so I could be wrong, but that just seemed to be the most logical thing to do.

[Lupewholes]

I really think they have to remove the question, I have talked to my teacher and other students and we all agree it makes no sense. Will be very interesting what VCAA will do with this error.

Could you assume that the inventory write-down earlier in the question was due to a lack of sales, therefore it was taking longer for the inventory to be sold so the cost of goods sold would decrease more than the average inventory, leading to a slower Inventory Turnover. The inventory write-down would then lead to the Working Capital Ratio decreasing, but not the Quick Asset Ratio.

The QAR being higher than the WCR is still just completely wrong, but it doesn't really effect the overall question.

And Seamus, pretty confident you're spot on with your answer. The logic is very sound.

[Seamus Wong]

Could you assume that the inventory write-down earlier in the question was due to a lack of sales, therefore it was taking longer for the inventory to be sold so the cost of goods sold would decrease more than the average inventory, leading to a slower Inventory Turnover. The inventory write-down would then lead to the Working Capital Ratio decreasing, but not the Quick Asset Ratio.

The QAR being higher than the WCR is still just completely wrong, but it doesn't really effect the overall question.

Yeah I think that is what they wanted you to realise with that question