VCE Accounting Question Thread!

[dreambig]

Hey guys I'm a bit confused, can taking stock out for advertising be regarded as drawings?

[abcdqdxD]

Hey guys I'm a bit confused, can taking stock out for advertising be regarded as drawings?

Nope, if stock is taken out for advertising purposes then it must be recorded as advertising expense for reasons I've previously mentioned.

[dreambig]

Omg im so sorry, I didnt even realised i made the same mistake as another question a few days ago. Thanks for clarifying again!!

[abcdqdxD]

Omg im so sorry, I didnt even realised i made the same mistake as another question a few days ago. Thanks for clarifying again!!

haha no problem! feel free to ask any questions!!

[dreambig]

So taking out stock for private use is drawings but taking out stock for advertising is an expense? Is this correct? :/

[abcdqdxD]

yep thats correct!

[dreambig]

Thanks
One more question: the Cash Receipts Journal record cash inflows but lets say I go to the shops and purchase something, I will usually receive a receipt for my purchase/payment, then how come the journal that records cash inflows is called Cash Receipts Journal as opposed to something else?

[abcdqdxD]

Thanks
One more question: the Cash Receipts Journal record cash inflows but lets say I go to the shops and purchase something, I will usually receive a receipt for my purchase/payment, then how come the journal that records cash inflows is called Cash Receipts Journal as opposed to something else?

When firms make a sale, they record the transaction in a cash receipt. The customer gets the original copy, and the firm keeps a duplicate for its records.

EDIT: I've just thought of another way of looking at it. Think of "receipt" as "receiving", so you have gained something, and in this case it's cash

[dreambig]

Ohhhh I get it now Thank you so so much!!!!!!!

[sin0001]

Do we have to record something in the general ledgers when a business submits a quote to supply their stock (sale)?

And how do we formally balance revenue/expense/OE accounts in the general ledger? (Do we use the same process of balancing Assets/Liability accounts?)

[abcdqdxD]

Do we have to record something in the general ledgers when a business submits a quote to supply their stock (sale)?

And how do we formally balance revenue/expense/OE accounts in the general ledger? (Do we use the same process of balancing Assets/Liability accounts?)

A quote is not a transaction, so we do not record anything.

To answer your second question, revenue and expense accounts are 'closed' to the profit and loss summary account. They are not balanced because revenue and expense accounts are not carried over to the next reporting period. Keep in mind that our revenues and expenses must be relevant to the CURRENT reporting period.
It is probably a bit difficult to explain this process here, but if you're using the Cambridge textbook, you'll find it in chapter 9. But for now, you shouldn't worry about it too much, you'll learn it near the end of unit 3

[sin0001]

Thanks abcd!
Never knew replies would be this quick on an Accounting thread

[abcdqd]

Thanks abcd!

oi that's me

[sin0001]

why do you two have similiar usernames? lol

[abcdqdxD]

why do you two have similiar usernames? lol

I'm his stalker