Accounting: Discussion, Questions & Potential Solutions

[zenith101]

how many marks do you think you can afford to drop for a raw 45?

[MathMethodsGuru]

I feel like that was a relatively easy exam overall. 4 mark planning/control was annoying, honestly not sure about what you were meant to say for that other than setting targets and expenditure limits, identifying trends and preventing a net loss.

Interesting that there were no qualitative characteristics on the whole exam, and I was surprised that there was only 1 proper 6-marker.

Opening balance was $3800. I'm 90% sure we didn't have to include depreciation since 1. there were only 6 marks allocated to the question, and 2. it said to record general journal entries for the sale of the asset and purchase of the new one. You could technically say the depreciation is included in the sale of the asset but I highly doubt that we had to include that. VCAA generally don't do trick questions like that without explicitly stating it, and they already assigned 1 mark to that earlier, they wouldn't give us 1/2 more marks just for knowing "depreciation/acc. depn".

Sales returns was another wierd question, since it specifically stated it wanted an accounting element and the study design says "the elements of financial reports: assets, liabilities, owner’s equity, revenue and expenses", I don't think "negative revenue" would be valid since it's not really an accounting element, more of a variation on one. And even though it's not included with expenses in the Income Statement, it still meets the definition of an expense (decrease in asset, outflow of economic benefits (or you could say reduction in inflows)).

Sales return is a negative revenue. Just like drawings is a negative owner's equity.

[Felon_Melon]

For the prepaid advertising question, did anyone do anything to the $2400, like split it up or anything??

[crackleking]

I didn’t and just debuted a month worth of advertising expense at the end of the month. I could see how half is prepaid and expensed, maybe. I dunno though

[DoctorTwo]

That sales returns question is still getting me because it does exactly meet the definition of an expense and the study design says nothing about negative revenues. Although when you think about it if the question asked the same thing about accumulated depreciation, you wouldn’t be able to write anything other than negative asset. 🤷‍♂️

[Jim_Bob]

For the prepaid advertising question, did anyone do anything to the $2400, like split it up or anything??

All I did was $2400/3 which is 800 per month and cos we paid on the 15th we also consumed the advertising.
So i debtited the 2400 paid for advertising
Credited Advertising Expense for 800 with the closing balance.
But as that didnt total, i just assumed that the difference was that we consumed advertising from the previous reporting period, which is evident by the prepaid advertising opening balance

[jamesmctank]

i just realised my ''accounting principle'' was relevance fml such an easy question and ill be lucky to get 1 mark

[Ajakara]

For the advertising and prepaid thing, I ended up getting advertising expense as 4300 (only way the prepaid advertising expense ledger could have balanced with the closing balance of 1900 they told us in the Q). So my advertising expense was also 4300. Right?

[DoctorTwo]

For the advertising and prepaid thing, I ended up getting advertising expense as 4300 (only way the prepaid advertising expense ledger could have balanced with the closing balance of 1900 they told us in the Q). So my advertising expense was also 4300. Right?

Yep, that's what I got.

Also, can anyone guess what the mark allocation for 5a would look like? I'm pretty sure I did the prepaid sales revenue wrong and I want to see how many marks I'd lose.

[Jim_Bob]

Yep, that's what I got.

Yep same here but i just seperated the advertising expenses to indicate one was for the current reporting period and the other was for the amount that had been consumed from the previous reporting period

[Ajakara]

Shit don't think i split it, welp that's a mark gone

[Beatifique]

No qualitative characteristics, wtf?
Overall a pretty good exam imo, comparable to other years

[DoctorTwo]

Shit don't think i split it, welp that's a mark gone

I really don't think you had to split them. You would end up with two credits in the prepaid advertising expense ledger which say the exact same thing (advertising expense) but just with different amounts which add up to $4300 anyway. You shouldn't lose marks for splitting them, I think they'll treat them the same since all of the expense was incurred in September. I'd guess that the mark allocation is 1 mark for balancing the prepaid expense account, 1 mark for closing the expense account, 1 mark for the 4300 entry in the expense account, 1 mark for the 2400 entry in the asset account and 1 mark for the 4300/3500 and 800.

[ZNormal]

Yep same here but i just seperated the advertising expenses to indicate one was for the current reporting period and the other was for the amount that had been consumed from the previous reporting period

I didn't get how to do this because if the business reports monthly wouldn't the advertising expense from the previous reporting period already be included in the opening balance?

[Jim_Bob]

I didn't get how to do this because if the business reports monthly wouldn't the advertising expense from the previous reporting period already be included in the opening balance?

They had prepaid advertising last reporting period as it consumed (expensed) in this reporting period