VCE Accounting Question Thread!

[snowisawesome]

Well for me, i averaged 93% in first semester and then 97% in second semester on fairly reasonable sacs but then choked the exam and got around 80-85% and got 38 raw. My mate averaged the same but he got around high 80% for the exam and got 40 raw. he was rank 4 and i was rank 3. just goes to show the exam matters most and that choking the exam can really hit hard. probs focus on not dropping alot of marks like i did in the first semester and ur gud for a 40. my dm's are open if u need any help with accounting coz i did around 40 prac exams and choked the final exam 0.0

Thanks
Do you know why in the general ledger the stock control account (asset)
1.Has the stock control on the debit side
2. Calls it creditors control
3. Has cost of sales on the credit side even though it's an expense?
Thanks

[dan0038]

Thanks
Do you know why in the general ledger the stock control account (asset)
1.Has the stock control on the debit side
2. Calls it creditors control
3. Has cost of sales on the credit side even though it's an expense?
Thanks

these questions are pretty bland and i seem to be missing context 0.0.
1. The stock control debit side i understand u are probably referring to the opening balance which is always on the debit side at the opening balance/final balance will have to always be positive (or else wat will the business sell...)
2. No clue wat ur trying to ask here....
3. The increase in the expense statement is true but when cross referencing in the stock control account, you are losing stock in the sale and so the stock control account is credited with cross reference to the cost of sales account (the cost of sales account will have a debit entry with a cross reference to stock control). Later u will see that cost of sales will also be on the debit side of a stock control account when u do sales returns in unit 4

[snowisawesome]

Does anyone know if advertising expense is an asset or an expense?

[dan0038]

advertising expense is an expense as it fits definition of an expense (outflow of economic benefits that decreases assets (prepaid advertising) and decreases owner's equity (net profit) ).

[snowisawesome]

Can someone please explain the difference between overstated, understated, and no effect, and provide an example of each of these 3 situations?
Thanks

[Jigsaw]

Overstated - too much is being reported
Understated - too little is being reported
No effect - self explanatory.

These are usually used in questions where you are asked to describe the effects of a transaction, particularly when it has been omitted.

Eg- "Explain the effects of not recording a credit purchase of stock for $440 including GST."

From this example, Assets will be understated 400 and liabilities will be also be understated 400 (understated 440 creditors control and overstated 40 GST clearing).

Hope this helps

[snowisawesome]

Overstated - too much is being reported
Understated - too little is being reported
No effect - self explanatory.

These are usually used in questions where you are asked to describe the effects of a transaction, particularly when it has been omitted.

Eg- "Explain the effects of not recording a credit purchase of stock for $440 including GST."

From this example, Assets will be understated 400 and liabilities will be also be understated 400 (understated 440 creditors control and overstated 40 GST clearing).

Hope this helps

But wouldn't the liabilities be overstated if you didn't record a credit purchase of stock?

[Jigsaw]

But wouldn't the liabilities be overstated if you didn't record a credit purchase of stock?

No, they would be understated because you haven't accounted for:

- an increase in amount owing to creditors (440)
- a decrease in GST liability (40)

Which overall means that liabilities is understated 400.

[snowisawesome]

No, they would be understated because you haven't accounted for:

- an increase in amount owing to creditors (440)
- a decrease in GST liability (40)

Which overall means that liabilities is understated 400.

Thanks
Just wondering is it possible to think of it as understated because liability means you owe something and when you purchase stock you owe something, so if you didn't record owing something, it's understated?

[recess]

Hi I'm having trouble on getting the dates right for the general ledger balance accounts I know you put the last date of the month for posting, but then sometimes you put the 1st date of the month for "Balance" and sometimes you put the last date for "balance". Why is that?

Thanks

[snowisawesome]

Travis milton owns terrific tellies. On 25 march 2015, he received a letter from a solicitor stating that one of the firm's debtors
 (Ian solvent) was declaring bankruptcy and would only be able to pay 20c of every dollar owed (memo 52). Thee letter was accompanied by a cheque from Ian Solvent for which Travis issued Rec. 31. on 1 March 2015, total debtors owed $19,500 with $2000 of that amount owed by Ian Solvent.
Can someone please explain why the effect on the accounting equation if a bad debt was not recorded is
Assets: Overstated (Debtors Control)  1600
Liabilities: No effect
Owner's equity: Overstated (No Bad Debts expense would overstate Net Profit) 1600

Thanks
Also, would telephone charges be an expense?

[skrt skrt]

Hey AN, I have a upcoming sac for Cash Payments, Cash receipts, Credit Purchases and Credit Sales and I was just wondering if anyone had any exercises that they could post up.

Thank you

[omcgil15]

Hi I'm having trouble on getting the dates right for the general ledger balance accounts I know you put the last date of the month for posting, but then sometimes you put the 1st date of the month for "Balance" and sometimes you put the last date for "balance". Why is that?

Thanks

The first date of the month is used when it is an opening balance (i.e. a balance carried forward from the previous month, e.g. debtors control)
The last date of the month is used the account is being balanced at the end of the month (the difference between the debit and credit sides of the account)

Travis milton owns terrific tellies. On 25 march 2015, he received a letter from a solicitor stating that one of the firm's debtors
 (Ian solvent) was declaring bankruptcy and would only be able to pay 20c of every dollar owed (memo 52). Thee letter was accompanied by a cheque from Ian Solvent for which Travis issued Rec. 31. on 1 March 2015, total debtors owed $19,500 with $2000 of that amount owed by Ian Solvent.
Can someone please explain why the effect on the accounting equation if a bad debt was not recorded is
Assets: Overstated (Debtors Control)  1600
Liabilities: No effect
Owner's equity: Overstated (No Bad Debts expense would overstate Net Profit) 1600

Thanks
Also, would telephone charges be an expense?

The best way to do these questions is to consider the effect if the transaction was recorded.
For the bad debt component:
Assets: Decrease by $1600 in the form of debtors control (80 cents in every dollar is written off)
Liabilities: No effect
Owners Equity: Decrease by $1600 via a lower net profit.
Using the fact that overstated = increase and understated = decrease;
Reverse the asset and owners equity effects to get assets and OE overstated by $1600 each.

Telephone charges would be an expense yes

[emmykatexo]

Hey guys, how do you access attachments on forum posts?

[m2121]

Don't quite understand this question. Is someone able to explain this fully in response to this question?? Explain the effect on net profit of using the FIFO cost assignment method at a time when suppliers’ prices are falling.