Accounting Question Thread

[eeps]

Question:

I don't get Q. 1.1.2 of the Insight 2008 Unit 4 Exam.

One of the transactions which must be recorded, is where the business purchases 10 Jackets for $100, thus $10 each. My question is in the 'Balance'... which was originally (2*60=120) and (10*70=700). In the solutions they've added $10 (from the Jackets) to the $70, making it 10*80=800. I don't really get why they've done that... I've attached a image of the transaction and the suggested solution (stock card) to make it easier. The question is in relation to Inv. 255.

Cheers.

[lqzeng]

Question:

I don't get Q. 1.1.2 of the Insight 2008 Unit 4 Exam....

Hey,
If I'm not mistaken, the $10 for 10 units of $70 stock is for the FREIGHT of each item of stock (it can be logically applied as it is $100 for freight of 10 units) and is therefore added onto each unit of stock as a product cost.

[eeps]

LOL. oh yeah... what a stupid error! I fail.

Now it makes more sense...

Thanks!

[eeps]

Question:

Apart from physical safeguards, suggest one action the owner could take to reduce stock loss expense. (1 mark)

Cheers.

[z1m2v3]

by decreasing stock holdings, you are reducing the likelihood of stock loss due to damage, theft etc.

[eeps]

by decreasing stock holdings, you are reducing the likelihood of stock loss due to damage, theft etc.

Thanks!

[eeps]

Question:

Does anyone have any other negative consequences to having a too fast DTO (Debtors Turnover), besides that the fact that the business may giving out too much discount to debtors (thus, receiving less cash)? I'm trying to find the negative and positive consequences of having a too fast DTO, STO etc.

Thanks.

EDIT: I got it.

[eeps]

Another Question:

This was on the 2007 VCAA exam...

"State two possible reasons, apart from budget error, why actual cost of sales could be less than budgeted despite sales exceeding budget expectations." (2 marks)

My first reason was that the business found a cheaper supplier of stock, thus reducing COS. I can't really think of another one... :\ Does anyone have any other reason(s)?

Cheers.

[darcy42]

You could kinda work that one answer into two, like:
-Business changed suppliers in order to get a cheaper price for stock
-Supplier lowered their prices

or you could go the other way and say that the business might have increased its selling prices. So like, actual amount of sales might have been less than budgeted, so cost of sales is less than budgeted, however sales revenue is higher than expected due to the increase in selling prices.

sorry for crappy explanation haha

[_avO]

increase markup on sales price

buying in bulk thus cheaper cost

using product costing as opposed to period costing

[eeps]

You could kinda work that one answer into two, like:
-Business changed suppliers in order to get a cheaper price for stock
-Supplier lowered their prices

or you could go the other way and say that the business might have increased its selling prices. So like, actual amount of sales might have been less than budgeted, so cost of sales is less than budgeted, however sales revenue is higher than expected due to the increase in selling prices.

sorry for crappy explanation haha

increase markup on sales price

buying in bulk thus cheaper cost

using product costing as opposed to period costing

Thanks! very solid responses. LOL when someone else says it... it sounds so obvious.

[eeps]

I'm not attempting any TSSM paper... it's horrible. Their solutions are wrong and they miss questions in the answer booklet. :l and yet they're called "The Specialised School For Mathematics." - the irony.

They confuse me into thinking one way... which I then find out is wrong... I suggest no one do any TSSM papers in general as a heads up. LOL this just could be me... but that's the feeling I get doing their papers.

[eeps]

This is probably more of a left-field question... is there a positive consequence of having a slow DTO - Debtors Turnover?

Thanks.

[_avO]

No. Just no.

Nah idk actually this is a tough one

[eeps]

No. Just no.

Nah idk actually this is a tough one

haha? LOL. THANKS for that comment...