ATAR Notes: Forum
Archived Discussion => 2009 => Mid-year exams => Exam Discussion => Victoria => Accounting => Topic started by: taylor tay bags on June 09, 2009, 09:46:22 pm
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These are just some of the questions i wasn't 100% confident with, like some opinions on what you wrote and what i possibly did wrong.
1.2.2 Prepare the creditors schedule.
I'm pretty sure there was only 2 creditors, in calculating the subsidiary ledger we could take away that value from the creditors control balance to get the remaining Balance for the other creditor right?
1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument
I said this contains comparability as you can compare the balance from our creditors and their balance, this contains and in built double checking mechanism and holds comparability.
1.5.2 Prepare the Equities section of the Balance Sheet
Firstly i said, Oh ya this is owners equity, then i rubbed it all out and put current liabilities non current liabilities and owners equity and totaled them for equities.
1.5.3 Show how the Wages Expense account would appear in the General Ledger after the adjusting entries have been made
This was a difficult one as we were given the ending balance already (in the post-Trial Balance) (i think it was about 63,500) therefore i put accrued wages on the DR side at 1800 then i took the 1800 away from the 63,500 and knew that was a cash payment out of bank so put bank as cross reference on the Debit side and ended up having the 63,500 as a Profit/Loss summary CREDIT entry.
Looked like this
DR CR
1800 Accrued Wages 63,500 Profit and Loss summary
61,700 Bank
63,500 63,500
1.7 A credit sale that occurred in June has not been recorded State the effect of this omission on the profit and loss statement
Revenues:
Credit Sales: Understated
Net profit: overstated
Expenses:
Cost of sales Expense: understated
1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000
Really couldn't work this one out as we couldn't include capital contributions or loans, i said that a massive influx of debtors paying back may have occurred which doesn't effect profit and loss but effects cash flow. (operating)
2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value
I recorded the asset at 15,000 i wasn't thinking, I'm probably wrong :(
I said the qualitative characteristic was Relevance because it related to decision making.
Far out, just thinking about how stupid my response to this question is :(
2.4 Correct this entry 'Payment of electrical bill $250 and 25 gst was incorrectly recorded as wages
I debited 25 GST clearing, 250 Electricity and CR Wages 275
2.4.3 State and justify the accounting principle that requires the business to record stock taken by the owner for his personal use
since it said 'personal use' i said Entity and defined and linked that principle.
Anyone that answers all of them gets a cookie, don't think you have to answer all of them, just give an opinion or tell me what you wrote for 1 or 2 of them if you like.
Thanks.
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2.4 Correct this entry 'Payment of electrical bill $250 and 25 gst was incorrectly recorded as wages
Debit Electricity 250
Debit GST Clearing 25
Credit Wages 275
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1.2.2 Prepare the creditors schedule.
i think it equaled 7700 from memory
1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument
i said reliability - source document, free from bias, checking mechanism. reports more reliable
1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000
i said depreciation
not sure if its all right
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1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument
reliability -Compare their records the statement and idenfity any errors
1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank
Receipts from debtors could of been higher than credit sales meaning it would have a greater effect on cash flows than credit sales does on net profit
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Discount is an expense and is recorded in 'less other expenses' on the profit and loss statement and it also decreases cash outflow because money paid from creditors decreases.
(sorry thought you meant discount from creditors)
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Depreciation is an expense and is recorded in 'less other expenses' on the profit and loss statement and it also decreases cash outflow because money received from debtors decreases.
what?
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my bad, thought he meant discount expense :P
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Flaming, so you you wrote for question about making bank balance increase with a loss did you write the debtor received?
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Flaming, so you you wrote for question about making bank balance increase with a loss did you write the debtor received?
yer receipts from debtors could have been higher than credit sales
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oh shit, did the question require to give a example that affects cash and profit?
i jsut said something about depreciation on equipment
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1.2.2 Prepare the creditors schedule.
i think it equaled 7700 from memory
1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument
i said reliability - source document, free from bias, checking mechanism. reports more reliable
1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000
i said depreciation
not sure if its all right
Yeah got the same as you (Y)
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2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value
i said relevance as well, there was a similar question in checkpoins
i said something about it is more useful for decison making stuff like that
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2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value
i said relevance as well, there was a similar question in checkpoins
i said something about it is more useful for decison making stuff like that
yep it was relevance, since it was revalued by his accountant, that is the most recent and therefore the most relevent figure.
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Flaming, what do you rkn about this question?
1.5.3 Show how the Wages Expense account would appear in the General Ledger after the adjusting entries have been made
This was a difficult one as we were given the ending balance already (in the post-Trial Balance) (i think it was about 63,200) therefore i put accrued wages on the DR side at 1800 then i took the 1800 away from the 63,200 and knew that was a cash payment out of bank so put bank as cross reference on the Debit side and ended up having the 63,200 as a Profit/Loss summary CREDIT entry.
Looked like this
DR CR
1800 Accrued Wages 63,200 Profit and Loss summary
61,400 Bank
63,200 63,200
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thats what i had
edit: it was 63200-1800 for wages and yeah i think thats what i had
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Flaming, what do you rkn about this question?
1.5.3 Show how the Wages Expense account would appear in the General Ledger after the adjusting entries have been made
This was a difficult one as we were given the ending balance already (in the post-Trial Balance) (i think it was about 63,500) therefore i put accrued wages on the DR side at 1800 then i took the 1800 away from the 63,500 and knew that was a cash payment out of bank so put bank as cross reference on the Debit side and ended up having the 63,500 as a Profit/Loss summary CREDIT entry.
Looked like this
DR CR
1800 Accrued Wages 63,500 Profit and Loss summary
61,700 Bank
63,500 63,500
that is correct
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What about this one?
2.4.3 State and justify the accounting principle that requires the business to record stock taken by the owner for his personal use
since it said 'personal use' i said Entity and defined and linked that principle.
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thats right
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Awesome, might just pull of a decent result then.
Edit: And last one
(Thanks a lot Flaming and Nb ;))
1.7 A credit sale that occurred in June has not been recorded State the effect of this omission on the profit and loss statement
Revenues:
Credit Sales: Understated
Net profit: overstated
Expenses:
Cost of sales Expense: understated
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alot of people is saying stock gain
i tihnk the credit and cost of sales is right
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i had stock gain as well
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i didnt lol i only had two entires haha hopefully i gte 2/3
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
depreciation was $125 as it purchased on the 1st of June
Not sure about rent lots of ppl saying different things but i wrote 4000 as he pays 3 months in advance not for 3 months.
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
depreciation was $125 as it purchased on the 1st of June
Not sure about rent lots of ppl saying different things but i wrote 4000 as he pays 3 months in advance not for 3 months.
But the question says Rent is paid 3 months in advance. Three Payments of 4,000 where made in January, March and June
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
depreciation was $125 as it purchased on the 1st of June
Not sure about rent lots of ppl saying different things but i wrote 4000 as he pays 3 months in advance not for 3 months.
But the question says Rent is paid 3 months in advance. Three Payments of 4,000 where made in January, March and June
if he paid in January and its paid 3 months in advance, wouldnt it mean it would start at march?
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
depreciation was $125 as it purchased on the 1st of June
Not sure about rent lots of ppl saying different things but i wrote 4000 as he pays 3 months in advance not for 3 months.
But the question says Rent is paid 3 months in advance. Three Payments of 4,000 where made in January, March and June
if he paid in January and its paid 3 months in advance, wouldnt it mean it would start at march?
Point taken, Too Shay!
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Those adjusting entry's just wanna know if it's what you guys did..
First one was the electricity bill
I debited Electricity 250 and Gst cleaing 25 and credited Wages 275
Depreciation was obvious/Accum dep (18,000-3000)/10 = 1500/2 (6 month reporting period) = 750 Expense and accumulated DEP on CR side
We then recorded a drawings that was forgotten of 1,100 + 100 gst OH FUCK I JUST REALISED I FORGOT TO DEDUCT GST WOWWW FML
Selling price was irrelevant.
Drawings 1000 and stock control 1000 (1100 in my case FML :()
3 payments of rent i also stuffed up, someone help clarrify, there is 12,000 left in prepaid account. he pays 4,000 were made in january march and june.. ALL OF THESE ARE IN THE REPORTING PERIOD therefore i went 4,000X3 = 12,000 rent expense.
depreciation was $125 as it purchased on the 1st of June
Not sure about rent lots of ppl saying different things but i wrote 4000 as he pays 3 months in advance not for 3 months.
But the question says Rent is paid 3 months in advance. Three Payments of 4,000 where made in January, March and June
if he paid in January and its paid 3 months in advance, wouldnt it mean it would start at march?
Point taken, Too Shay!
i'm not too sure tho, the wording is very confusing
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true it says rent is paid three months in advance
not for three months
idk its 1am lol
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2.1 is right, if no-one answered lol.
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
I love you so much, i was panicking until 2:30am and awake in bed in the morning till 11:30am.
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
discount expense has no effect, because it decreaes receipts from debtors as well as profit
i wrote receipts from debtors could of been higher than credit sales
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
Farkkkk serious?
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I swear in past exams they talk about the sale/purchase of a NCA having a different effect on cash than profit.
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is stating an example for question 1.8 worth only one mark?
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is stating an example for question 1.8 worth only one mark?
I'd say:
1 mark for explaining the difference between net profit and cash.
1 mark for stating an example.
1 mark for correctly explaining the example given as to how it followed the scenario.
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is stating an example for question 1.8 worth only one mark?
I'd say:
1 mark for explaining the difference between net profit and cash.
1 mark for stating an example.
1 mark for correctly explaining the example given as to how it followed the scenario.
Actually:
2 marks for showing that you UNDERSTAND that Cash does not = Profit
1 mark for example that illustrates this
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
What about wages expense and accrued wages?1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
Farkkkk serious?
What about the difference between wages expense and accrued wages?
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
discount expense has no effect, because it decreaes receipts from debtors as well as profit
i wrote receipts from debtors could of been higher than credit sales
hang on, i think you do get marks for discount expense since it is assumed to happen BEFORE the actual cash is received? ie. you reduce the amount payable -> then receive later?
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1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
What about wages expense and accrued wages?1.2.2: Creditors, 2 figures were given to you, 1 you had to calculate just previously, making 3 creditors in total.
1.4: I dare say they'll accept a few answers here if you argue your case strongly enough, most likely reliability for the reasons you've stated.
1.5.2: Correct, making sure you included drawings, net profit and accrued wages plus others entries.
1.5.3: Correct, but if people used the full wages amount as the bank credit they'll only lose 1 mark i'm pretty sure
1.7. Sales: Understated
Stock gain: overstated
Cost of sales: understated
1.8: I talked about the owner selling a NCA such as a vehicle, if you explained why cash is different to profit you'll still get 2 marks though
2.1: you're completely correct here
2.4: correct
2.4.3: correct
you can't talk about the sale of a NCA until unit 4 because the sale of a NCA will earn some form a revenue that we learn about in unit 4. the only possible answers were expenses that weren't cash outflows and thus decreased profit but not cash i.e. stock loss, depreciation of a NCA or discount expense...
Farkkkk serious?
What about the difference between wages expense and accrued wages?
you would need to show that wages exp is more than wages paid due to accrued wages
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i mean state that.. since figures weren't given
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i mean state that.. since figures weren't given
Yea they were. They were both given in the post-adjusted trial balance.
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for the missing credit sales question... doesnt make sense to say net profit under the revenue heading since it isn't revenue. and by extentision, if you choose net profit, you might aswell choose gross profit and adjusted gross profit
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for the missing credit sales question... doesnt make sense to say net profit under the revenue heading since it isn't revenue. and by extentision, if you chose net profit, you might aswell chose gross profit and adjusted gross profit
Net Profit = Revenues - Expenses
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i'm not sure what you are supporting
do you mean by 'Net Profit = Revenues - Expenses' we can or cannot treat it as revenue?
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i'm not sure what you are supporting
do you mean by 'Net Profit = Revenues - Expenses' we can or cannot treat it as revenue?
we cant
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just a question, with 1.8 the cash v profit question, i said that the owner may have sold a non current asset resulting in an increase in cash balance but not profit.
is this right??
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That's possible but not relevant to unit 3. I'm pretty sure sales of NCA is unit 4?
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just a question, with 1.8 the cash v profit question, i said that the owner may have sold a non current asset resulting in an increase in cash balance but not profit.
is this right??
that example is fine, so long as you specified which non current asset was sold
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1.7 A credit sale that occurred in June has not been recorded State the effect of this omission on the profit and loss statement
Revenues:
Credit Sales: Understated
Net profit: overstated
Expenses:
Cost of sales Expense: understated
I would have put:
Credit Sales: understated
Net profit: understated
Revenue:
Credit Sales: understated
Expenses:
COS: understated
Stock Loss: overstated
Stock Loss is overstated, because when you do physical stocktake at the end of the reporting period, you would realise you have less stock than you actually do, and this would be recorded as Stock Loss. Since COS was understated earlier, the influence on Other Expenses total would be none.
However, Credit Sales was understated before, thus the net effect of net profit would be understated.
Technically, you would have a high bank balance than expected, so this should be recognised as a revenue item, resulting in Net profit = no effect, but this is beyond the scope of the course.
If I got some facts wrong, it could be because I haven't seen the exam.
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1.7 A credit sale that occurred in June has not been recorded State the effect of this omission on the profit and loss statement
Revenues:
Credit Sales: Understated
Net profit: overstated
Expenses:
Cost of sales Expense: understated
I would have put:
Credit Sales: understated
Net profit: understated
Revenue:
Credit Sales: understated
Expenses:
COS: understated
Stock Loss: overstated
Stock Loss is overstated, because when you do physical stocktake at the end of the reporting period, you would realise you have less stock than you actually do, and this would be recorded as Stock Loss. Since COS was understated earlier, the influence on Other Expenses total would be none.
However, Credit Sales was understated before, thus the net effect of net profit would be understated.
Technically, you would have a high bank balance than expected, so this should be recognised as a revenue item, resulting in Net profit = no effect, but this is beyond the scope of the course.
If I got some facts wrong, it could be because I haven't seen the exam.
there is only one row for expenses
i think the answer should be Stock Gain Understated due to fact stock loss is overstated
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well, if the question had a positive stock gain, you would be right.
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-with the creditors schedule there were 3 creditors
-for bell computing probably reliability and yeh u would have had to talk bout verifying the accuracy of the schedule against the statement of accounts
-with the equities section you had to show current and non current liabilities as well as owners equity
- with the ommision of a credit sale the second revenue was stock gain. i know i was like wtf i think it was overstated but im not too sure. net profit is not a revenue
-with the question where the owner stated they dont want to make a profit etc. i think the only acceptable answer was dep'n because normally you have to draw you example from the scenario, unfortunately i didnt think of it until i got outa the exam
-with that question where you had to record the stuff with the computer and all you were supposed to record it at market value and the characteristic was relevance
- ur other answers all seem right :)
-also i dont think too many ppl have realised this but with the last lot of BDA question when the owner withdrew stock back in may the correct entry is not to dr. drawing and cr. stock control
but rather dr. drawings and cr.stock loss as it would have been recognised as a stock loss at the end of the rp. unfortunately i thought of that in the exam but i thought you wouldnt record anything at all :( but u had cr. stock loss and dr.drawings
- and did anyone else put the balance in the cfs as 20,000? its 0 , realised after exams and that sucked.
anywhooo hope thats useful :)