Random Accounting Revision Questions

[costargh]

Nah, actually you were correct. You use the memo to record the transaction of an asset contribution to the business

So the memo is what makes that transaction reliable?

Assessment Report says:
"A second issue for students was the valuation of the Computer Equipment. The correct valuation was $2500, as this was the value of the asset to the business."

Exambusters says:
"The equipment should be recorded at its current, or fair, value as historical cost would be seen as out of date or irrelevant."

[AppleXY]

Well to actually record it happened, yeah. But in terms of calculation, it's very unreliable. Therefore, your conflict is a correct way of saying it good job.

relevance takes precedence over reliability. exambusters is correct

[gta007]

Anyone got any practice exams they want to share?

Need to do a few more before Wednesday. Got to get my hands on those accredited ones. Anyone have a password for the COMPAK/VCTA site. 

And anyone who has the Accounting Checkpoints 2008 book, could you please kindly tell me the third word of Question 7 on page 61. Cheers

[Noblesse]

And anyone who has the Accounting Checkpoints 2008 book, could you please kindly tell me the third word of Question 7 on page 61. Cheers

Dear me, these adjusted trial balances can get quite tricky!

[gta007]

I might have to go and readjust them. Thanks for the help. 

[elaine]

And anyone who has the Accounting Checkpoints 2008 book, could you please kindly tell me the third word of Question 7 on page 61. Cheers

Dear me, these adjusted trial balances can get quite tricky!

lol wink wink nudge nudge
you guys are dodgy haha

[sheepz]

this is from the insight 2007 prac exam...

'state the effect on the balance sheet at 7 May of not recording the drawing of stock from the business'

there was a stock take on 7 May itself...

wouldn't this have no effect on the balance sheet overall since the amount withdrew would have been recognised as a stock loss and thus reduce owner's equity and assets (stock control) anyway? i remember seeing that as the answer in year 11 to a similar ques but this time round the answer says that assets and OE would be overstated... which is right?

[elaine]

this is from the insight 2007 prac exam...

'state the effect on the balance sheet at 7 May of not recording the drawing of stock from the business'

there was a stock take on 7 May itself...

wouldn't this have no effect on the balance sheet overall since the amount withdrew would have been recognised as a stock loss and thus reduce owner's equity and assets (stock control) anyway? i remember seeing that as the answer in year 11 to a similar ques but this time round the answer says that assets and OE would be overstated... which is right?

ohhh yeah, that was in our SAC!
oh crap i did the whole overstated thing, i totally forgot about the fact that the stock loss would recognise the loss of stock anyway. good pick up
hmm dilemma dilemma

[costargh]

Huh. Me and elaine just did the insight 2007 exam.... i dont remember that question!!! what number

[costargh]

Ok you just made it a generic question...

Ok well I can see where your coming from... but I would still say overstated 390 for assets and oe... because it says...

'state the effect on the balance sheet at 7 May of not recording the drawing of stock from the business'

so if we didnt record that transaction... straight away after what wood be the effect... doing that transaction and then doing a physical stock take cant happen at the same time... thats why it says... the effect of NOT recording the drawings of stock... that effect is overstating assets and OE... and then later on on the day the stock loss reduces assets and oe back to where they should be... i hope that makes sense.

[elaine]

Huh. Me and elaine just did the insight 2007 exam.... i dont remember that question!!! what number

1.3.5- so it's not just the number that's wrong

[sheepz]

hmm ok yeah i'll clarify that with my teacher... i really hope they don't ask things that can have like 2 answers like this >.<

[costargh]

Its like if the owner withdrew stock in the middle of a period.
The period was Jan 1 - Jan 31

And on the 16th the owner withdrew stock....
They usually give you all this information prior to asking the 'Required' questions....

soo if they're asking what the affect will be if the owner didnt record this transaction... it wood have to be overstating assets and oe by the same amount... because its referring to that point in time. The recording of a stock loss is a separate transaction and thus shoodnt affect the abscence of recording drawings...

that shood clear it up