ATAR Notes: Forum
Archived Discussion => 2009 => Mid-year exams => Exam Discussion => Victoria => Accounting => Topic started by: monokekie on June 09, 2009, 06:10:07 pm
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sorry bout double posting this but,
i still wonder. why wouldn't stock gain be understated. if the credit sale is recorded, there would be less stock in the firm's stock control account, the stock gain would be higher.
If the credit sale is not recorded, there would be more stock in the firm's stock control account, the stock gain would be lower, thus understating the stock gain???
and why wouldn't the opening balance be zero. since it is clearly stated on the question that owner contributed 20000 to commence business on 1 Jan, wouldn't it be a cash receipts which should be included in the cash flow statement instead of opening balance?
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Transactions for the credit sale of stock:
Debtors Control
Sales
GST Clearing
Cost of Sales
Stock Control
Seeing that GST, Debtors and Stock are not included in the Profit and Loss Statement,
this means that:
Cost of Sales would be UNDERstated
Credit Sales would also be UNDERSTATED
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Yeah I didn't understand where stock gain came from :S
I hope you're right, it's what I wrote too!
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but sales usually include cost of sales?
stock control is thus affected,
thus stock count at the very end of the reporting period would recognise less stock gain?
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I don't know.
Stock control would show a higher value of stock. Physical stock take would mean there is a lower value of stock on shelves due to the stock going out in the omitted credit sale.
Which is why I said cost of sales would be less and sales would be less :(
I'm so sad now, I still don't get why it would be stock gain :(
Do you reckon I could get 2 of the 3 marks?
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i tihkn they are syaing that
cost of sales decreases stock
if you omit that, your are overstating stock as it should decrease
i'm not sure, i jsut wrote what phanphy said
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yeah you probably would
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its also a 3 mark question, so 1 mark for one entry if stock gain is included.
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there's a new saying now, guys,
someone said that Net profit would be another revenue item........ :S
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It cant be because
net profit = revenue - expenses
if you understand what i'm trying to say, lol.
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lol, i understandd.... but the way she say it makes you believe her rofl, myfriend, she is very good at debating...
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haha
what else did she put down?
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she put down zero for opening entry....
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highly doubt that, cos then u could therefore also mention gross profit, adjusted GP etc.
It specifically said revenue and expense accounts im pretty sure
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haha
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So whats the concept behind this "stock gain" theory?
Apparently i put Credit Sales (Understated) and Cost of Sales (Understated), i understand that its a 3 marks question, but in a credit sales, stock gain isnt involved right?
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just imagine i had 1000 left in the strock control account, i made a credit sale with cost of sales 200 but didnt record in my stock card it would say 1000 but i actually have 800 left, so when i do a physical stocktake it would say stock loss. but the trial balance had a stock gain which would mean its understated due to fact its actually a stock loss which would increase stock gain.
i hope that makes sense
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that makes perfect sense
damn lost the marks
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but i thought this way,
you did a stock count with 800 stock on hand, stock card says 400, there are 400 stock gain.
(but if a credit sale of stock cost 100 is omitted, stock becomes overstated.)
so, the stock should be 300, stock gain should be 500.
stock gain should be 500, but only recorded as 400, isn't it understated?
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Actually yeah, stock gain.
Explains why it was 3 marks
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Hey, $20000 or 0 for bank balance (For CFS)?
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Hey, $20000 or 0 for bank balance (For CFS)?
i duno i wrote $20 000 but i think it should be 0
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Hey, $20000 or 0 for bank balance (For CFS)?
i duno i wrote $20 000 but i think it should be 0
same
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but i thought this way,
you did a stock count with 800 stock on hand, stock card says 400, there are 400 stock gain.
(but if a credit sale of stock cost 100 is omitted, stock becomes overstated.)
so, the stock should be 300, stock gain should be 500.
stock gain should be 500, but only recorded as 400, isn't it understated?
yer i agree with you actually, it should be understated
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fmllll
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im quite sure bank balance is zero. think about it, the business starts with $0. also the $20000 contribution is included in the $30000 sundries
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it is stock gain.
let consider this fact - what possible two entries can fit in revenues?
we accept credit sales (or sales) is one. net profit, gross profit and adjusted gross profit dont belong (ie. the are revs - exps)
logically stock gain is the only one the fits, unless you want to try your luck as discount rev..
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im quite sure bank balance is zero. think about it, the business starts with $0. also the $20000 contribution is included in the $30000 sundries
Hm..but if they contribute 20,000 on 1/1, bank balance on the 1/1 = 20,000
CFS asks for the balance as at 1/1, which is 20,000
thats what i hope it is anyway!
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Any guesses at the A+ cut off?
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82/90
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Any guesses at the A+ cut off?
i'd say around 80?
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yeh net profit would be incorrect
i hate that revenues q. who would hav thought of stock gain :(
opening balance is probably 0, if u wrote 20,000 you would be double counting the capital coz u recorded capital for 30,000 and that would include the 20,000.
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yeh net profit would be incorrect
i hate that revenues q. who would hav thought of stock gain :(
opening balance is probably 0, if u wrote 20,000 you would be double counting the capital coz u recorded capital for 30,000 and that would include the 20,000.
I'm pretty sure it is 0 aswell, because under the Cash receipts journal it said "note..the capital contribution consists of two different contributions by the owner during the Reporting Period."
Why else would they have noted that?
Oh well, i wrote 20, 000 :(