ATAR Notes: Forum
VCE Stuff => VCE Business Studies => VCE Subjects + Help => VCE Accounting => Topic started by: Uberjew on November 09, 2013, 05:15:30 pm
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Hey guys, I have done a quite a few practice/past exams now and I have noticed that there are some exams where you are asked to close Revenue accounts to the P&L Summary account and there are Sales Returns in the question.
One exam, the CPAP 2013 Trial Exam 1, apart from not closing Stock Gain to P&L, it does not do a Credit Entry for Sales Return. Shouldn't this be required to be counted when closing Revenue accounts? It is included in the Income Statement which is required for calculating profit, and since everything in accounting is to do with double-checking, shouldn't closing Revenue and Expense accounts have the same ending value closed to the Capital as the total at the end of the Income Statement?
The only possible excuse I can think of is saying that Sales Return is a "negative" revenue, not a revenue, so it is not closed with other revenue accounts, but this then results in a different value being closed to Capital in the GJ then the Net Profit/Loss amount in the Income Statement.
How would you guys go about it? To credit or not to credit (sales returns), that is the question.
Thanks
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Separate entry in the General Journal.
* DR: P/L Summary
* CR: Sales Returns
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Separate entry in the General Journal.
* DR: P/L Summary
* CR: Sales Returns
Hmmn okay while this does make sense, it would seem incredibly inefficient to do this, plus I've never seen it done before so without a source I find it hard to comprehend why it's not just credited when closing revenue accounts. Where have you been taught this?
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Hmmn okay while this does make sense, it would seem incredibly inefficient to do this, plus I've never seen it done before so without a source I find it hard to comprehend why it's not just credited when closing revenue accounts. Where have you been taught this?
I haven't come across a question yet where its necessary to do this either. However, remember that its a NEGATIVE Revenue, so it can't go with the closing of the Revenue Accounts. Its not an Expense either.
So it has to go as a separate entry. I asked my teacher this (Who is also an assessor).
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Alrite so according to neville box (chief assessor)
it should be done like this
Sales 5000 Dr
Sales returns 2500 Cr
Pl summary 2500 Cr
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Alrite so according to neville box (chief assessor)
it should be done like this
Sales 5000 Dr
Sales returns 2500 Cr
Pl summary 2500 Cr
Thanks.
Did you e-mail him?
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Thanks.
Did you e-mail him?
I got a friend to haha. Too lazy to do it myself.
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Damn not sure what to do, both sides make compelling arguments, and while I am leaning towards taking The Box(tm)'s approach, I haven't seen it in any exam solutions so I am still unsure on what to do :(
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Well nothing has been explicitly been explained to us in the Textbooks, and Neville Box hasn't published anything through a VCAA Bulletin.
Both Entries mean the exact same thing, and they shouldn't penalise you for it if you did one method over the other.