Accounting Exam Discussion Thread

[student1122]

What did you write for question 2 because they asked for the items so I said sales return etc. But is that correct?

[redcracker]

for the question about the cost of sales entry, if i did the effect of the sales return on the two reports (assuming i got it correct) instead of just the effect of the cost of sales will i get 0/5 or only lose 1? im talking about question 2

[Franky3121]

i knew the for the net cash flows, but my numbers didnt add up, so i was kinda mad. It was only a 9 mark question as well, im definetly screwed

[student1122]

for the question about the cost of sales entry, if i did the effect of the sales return on the two reports (assuming i got it correct) instead of just the effect of the cost of sales will i get 0/5 or only lose 1? im talking about question 2

I did that too... They wouldn't give us The mark up for no reason

[chasej]

What did you write for question 2 because they asked for the items so I said sales return etc. But is that correct?

I can't remember the exact figures:

in the income statement sales returns increased by the value of the return
cost of sales decreased by value of stock inflow involved.
I also wrote net profit decreasedto fully explain (though that probably wasn't necessary to write)

in the balance sheet, stock control increase, GST clearing liabiity decreased, debtors control decreased and net profit hence owner's equity decreased.

(the accounting equation balanced for me following that formula with the correct figures so it is correct most likely).

--

for the question about the cost of sales entry, if i did the effect of the sales return on the two reports (assuming i got it correct) instead of just the effect of the cost of sales will i get 0/5 or only lose 1? im talking about question 2

I'm pretty sure you needed to explain the effect of the entire sales return. I may be wrong though. I'm pretty sure if you include more information than necessary they don't mark you down as you had the correct answer they were looking for regardless. You don't earn marks for the irrelevant information though.

[redcracker]

I'm pretty sure you needed to explain the effect of the entire sales return. I may be wrong though. I'm pretty sure if you include more information than necessary they don't mark you down as you had the correct answer they were looking for regardless. You don't earn marks for the irrelevant information though.

i did the entire effect of the sales return, is this what they wanted or did they just want the cost of sales part? if they only wanted the cost of sales part would i get full marks for doing the full sales return?

[chasej]

i did the entire effect of the sales return, is this what they wanted or did they just want the cost of sales part? if they only wanted the cost of sales part would i get full marks for doing the full sales return?

I'm pretty sure they wanted the full effect as they included the value of the mark-up.

I doubt they would take off marks for extra information, they would mark you off of what was relevant to the question.

A lot of students at the higher-end probably did the same thing also.

Also it was a 5 marker so I doubt they would have allocated 5 marks for something as simple as two effects on the reports for a relatively simple transaction. I really can't say for sure though.

[chasej]

Here is a copy of the exam http://jalbum.net/en/browse/user/album/1565419

[benclement28]

Hey what did you guys put as the principle for the bad debt question? i said reporting period, but i was tossing up between that and conservatism. What did you guys get/ the right answer?

[Valyria]

Hey what did you guys put as the principle for the bad debt question? i said reporting period, but i was tossing up between that and conservatism. What did you guys get/ the right answer?

I wrote conservatism; Firm must recognise losses when they occur (receipts from debtors that can no longer be collected) so that assets (stock control) aren't overstated, expenses aren't understated (bad debts) and owner's equity (net profit) isn't overstated.

I'm curious to how you linked bad debts to the reporting period principle. You can be awarded full marks if you made a proper and succinct link, there's not just one answer

[evogamerz]

Where are answerssssss

[marsbareater12]

I wrote conservatism; Firm must rwecognise losses when they occur (receipts from debtors that can no long be collected) so that assets (stock control) aren't overstated, expenses aren't understated (bad debts) and owner's equity isn't overstated (net profit).

I'm curious to how you linked bad debts to the reporting period principle. You can be awarded full marks if you made a proper and succinct link, there's not just one answer

Hahaha, whoops, I did reporting period as well, explained how bad debts fit the definition of an expense and then went on to say that expenses incurred must be compared against revenues earned in the reporting period to determine profit. Oops.

Slowly getting less and less confident with each reply I read...hoping for an a, fingers crossed.

[JWalks1127]

I think the question (question 2) "show the the cost of sales entry on the debit side of the account would affect items in the income statement and balance sheet" will  be heavily debated in the markers meeting. The question asked about the cost of sales ENTRY specifically. If we are being picky this ENTRY itself simply increases stock comtrol, decreases cost of sales. This entry itself has no effect on sales returns etc, but is rather just a part of that entire transaction. Therefore, because the question explicitly stated the effect of the ENTRY in stock control, it would be fair for one to assume that only this aspect of the sales return needed to be discussed. Although, the fact that 5 marks were allocated and mark up was provided suggests that the examiners were looking for the entire effect of the transaction not just the individual entry (which is what they asked). Any thoughts?

[benclement28]

Hahaha, whoops, I did reporting period as well, explained how bad debts fit the definition of an expense and then went on to say that expenses incurred must be compared against revenues earned in the reporting period to determine profit. Oops.

Slowly getting less and less confident with each reply I read...hoping for an a, fingers crossed.

I still think that reporting period could be right. yeah i spoke about how it is important all expenses need to be accounted for in the period they relate to best reflect profit for that period which can then assist the entities decision making.

[Jason12]

I think the question (question 2) "show the the cost of sales entry on the debit side of the account would affect items in the income statement and balance sheet" will  be heavily debated in the markers meeting. The question asked about the cost of sales ENTRY specifically. If we are being picky this ENTRY itself simply increases stock comtrol, decreases cost of sales. This entry itself has no effect on sales returns etc, but is rather just a part of that entire transaction. Therefore, because the question explicitly stated the effect of the ENTRY in stock control, it would be fair for one to assume that only this aspect of the sales return needed to be discussed. Although, the fact that 5 marks were allocated and mark up was provided suggests that the examiners were looking for the entire effect of the transaction not just the individual entry (which is what they asked). Any thoughts?

I said the effect only of the cost of sales entry in the stock control account. Cost of sales would decrease gross profit, net profit and increase cost of sales in the income statement. Stock control would also be credited so it would decrease value of stock control asset in balance sheet and decrease the total equities in the accounting equation.