Your questions answered.

[Albeno69]

I've seen a lot of different narration, some are really short and some are quite long.

What kind of narrations would be the most appropriate to use for Stock Gain/ Loss, Correcting Entries, Depreciation, Prepaid, Accrued, Drawings of Asset, Closing Entries etc.

i doubt we would have to do narrations.

Out of the one's you have mentioned, remember for stock loss or gain ALWAYS include the specific line of stock loss or gained, amount of stock in units loss or gained and then the memo. this is what our teacher has told us.

For Depreciation include the following to be on the safe side: period of depreciation, depreciation rate (p.a.), straight line method, item you are depreciation and the memo.

For the rest you can vary ur responses but for depreciation and stock loss or gain my teacher has told me to be quite detailed but short in the narration.

doubt they'll ask for narrations

i dont think they asked for narations since 07 in vcaa ones. may be wrong though

[Chavi]

Can someone explain 1.7 in last years exam. Why is stock gain understated

can someone else please re explain 1.7 in 09 VCAA

VCAA 2009 1.7:
This is a tricky question.

Take a look at the ledgers of the transaction was recorded:
DR Debtors control
CR GST clearing
CR Sales

and

DR Cost of Sales
CR Stock control

The only Revenue/expense items are Sales and Cost of sales. Not recording these would understate Sales (a sale has not been recorded) and understate Cost of Sales (Stock has been removed and sold)

Because the credit sale is unrecorded (and stock has been removed as cost of sales), the owner later in the period discovers a stock loss and records it. So Stock loss is now overstated.
However, there is no stock loss account (from previously in the question), only a stock gain. So stock gain would be understated (opposite of stock loss).
[also, they only provide room for only one expense account and 2 rev accounts in the answer booklet, so a 2nd revenue item i.e. stock gain was the only obvious answer]

[mojomojo]

In the Cash flow statement, when we record GST settlement to the ATO, do we write just GST Clearing? what about capital contribution?
And in the Balance for a bank overdraft, do we write bank or bank overdraft in the current liability section?

I've seen so many different versions

[davyp3]

can someone else please re explain 1.7 in 09 VCAA

[Chavi]

In the Cash flow statement, when we record GST settlement to the ATO, do we write just GST Clearing? what about capital contribution?
And in the Balance for a bank overdraft, do we write bank or bank overdraft in the current liability section?

I've seen so many different versions

My accounting teacher says just to write the name of the ledger, and under liabilities, just Bank (there is no bank overdraft ledger)

[Akirus]

In the Cash flow statement, when we record GST settlement to the ATO, do we write just GST Clearing? what about capital contribution?
And in the Balance for a bank overdraft, do we write bank or bank overdraft in the current liability section?

I've seen so many different versions

In the cash flow statement, for GST refunds, you write GST refund. Same for settlement. However, in the cash journals, it is "GST Clearing", recorded in the sundries column. Straight from Vicki Baron herself, apparently.

And what Chavi said: it's always bank, as that is the name of the account.

[mmmmm]

In the Cash flow statement, when we record GST settlement to the ATO, do we write just GST Clearing? what about capital contribution?
And in the Balance for a bank overdraft, do we write bank or bank overdraft in the current liability section?

I've seen so many different versions

In the cash flow statement, for GST refunds, you write GST refund. Same for settlement. However, in the cash journals, it is "GST Clearing", recorded in the sundries column.

My teacher said that you never write GST settlement or refund.  You always write GST clearing, even in CFS.

[Akirus]

Titles in Reports

"GST Refund (Sundries column CRJ)"

"GST Settlement (Sundries column CPJ)"


Straight from Vicki Baron's powerpoint presentation for correct headings. Take it as you will.

[Chavi]

Titles in Reports

"GST Refund (Sundries column CRJ)"

"GST Settlement (Sundries column CPJ)"


Straight from Vicki Baron's powerpoint presentation for correct headings. Take it as you will.

There seems to be some confusion of titles in different journals and ledgers.

For GST:
In the journals and Balance sheet, always use GST clearing.
For the cash flow statement, use GST received/collected and refund (for inflows) or GST paid/incurred and GST settlement for outflows.
Also, for the CFS, use Receipts from debtors, Payments to creditors, Purchase of Stock and Loan repayment, rather than ledger titles.

For everything other than the CFS you should be using the ledger names (from my Acc teacher who is also a VCAA marker)

[LFTM]

is it ok to use:
GST paid to ATO and GST received from ATO in the CFS?

[inspire]

do we need to know about sundry creditors?

[Chavi]

is it ok to use:
GST paid to ATO and GST received from ATO in the CFS?

I'd stick to the correct titles as specified in the examiners reports. Why add ATO to the title? Isn't obvious that GST is paid/received from the ATO?

do we need to know about sundry creditors?

It's unit 4, but if it does pop up in the mid year:
All transactions involving Sundry creditors are recorded in the GJ (for now).
The entry is:
DR NCA/CA
CR Sundry creditor - Imsellingtou
(don't record in the subsidiary)

-and they get their own ledger in the GL; reported as an individual CL in the balance sheet.

[Aqualim]

How about the title for Wages in the Cash Flow Statement, Would it just be Wages? Wages Paid? or Wages Expense?

[LFTM]

is it ok to use:
GST paid to ATO and GST received from ATO in the CFS?

I'd stick to the correct titles as specified in the examiners reports. Why add ATO to the title? Isn't obvious that GST is paid/received from the ATO?

do we need to know about sundry creditors?

It's unit 4, but if it does pop up in the mid year:
All transactions involving Sundry creditors are recorded in the GJ (for now).
The entry is:
DR NCA/CA
CR Sundry creditor - Imsellingtou
(don't record in the subsidiary)

-and they get their own ledger in the GL; reported as an individual CL in the balance sheet.

so what should i use in regard to a gst settlement or refund in the CFS?
edit:  so its GST settlement and GST refund in CFS?

[inspire]

from Tssm 2008 question 2.1

Annual Insurance of 1500(plus 150 gst) was paid in advanced 1 July 2009

The pre-adjusted trail balance shows prepaid insurance as DR: 1375

and its calculating the expense for the quarter ending 30 september 2009

i dont get it ><