VCE Accounting Question Thread!

[flyhighx]

Explain why GST is not included in the cost price of stock?

[sin0001]

Because GST is not actually an expense to the business, as the business will receive a GST refund from the ATO

[abcdqdxD]

GST is not a future economic benefit to the entity

think about it this way:

value of stock control - represents future economic benefit expected from selling the stock within 12 months etc.etc.

however, the GST figure does not represent a future economic benefit to the firm hence must not be included in the valuation of stock

[unfamila]

a $1396 payment to a creditor with a discount revenue of $154, was incorrectly recored as a receipt from debtor  $1396 with 154$ discount expense.

State effect on accounting equation if this error wasnt fixed

[CH3ezEC4KE]

Not sure if has been answered, however, how would you put 8 opening balances into a compound general journal?

[Drunk]

It'd be worthwhile to identify each effect the transactions make on the accounting equation. The $1396 should have decreased assets (cash) by $1396 and liabilities (creditors control) by $1396, while the discount would decrease liabilities (creditors control) by $154 and increase revenue (discount revenue) by $154. Overall, assets should have decreased by $1396, liabilities should have decreased by $1550 and OE increase by $154.

The incorrect recording would increase assets (cash) by $1396 and decrease assets (debtors control) by $1396 and the discount would decrease assets (debtors control) by $154 and increase expenses (discount expense) by $154. Overall, assets have decreased by $154 and OE decrease by $154.

So assets are overstated by $1242, liabilities are overstated by $1550 and OE understated by $308

I haven't done accounting in quite a while btw!!

[unfamila]

thanks

[TimmyC]

Only got 80% for my first SAC.. am I doomed for a good SS haha? Rank 3 atm

[abcdqdxD]

Only got 80% for my first SAC.. am I doomed for a good SS haha? Rank 3 atm

Depends on strength and size of your cohort.. but i think you're on track for a 40+

[TimmyC]

There's 11 people and the top 4-5 are quite strong I believe

[abcdqdxD]

There's 11 people and the top 4-5 are quite strong I believe

Hmm I'm not familiar with small cohorts. I know for a fact that there were 50 people in my cohort and there were 7 40+'s.. so maybe aim to be in top 3 out of 11?

[cullen6]

"A business owner has collected GST of $500 during the month. As the business has experienced an inflow of resources, the owner intends to report the $500 as revenue for the month. Is this correct accounting treatment? Explain your answer fully"

No accounting for a week and my minds got blank... help?

[abcdqdxD]

"A business owner has collected GST of $500 during the month. As the business has experienced an inflow of resources, the owner intends to report the $500 as revenue for the month. Is this correct accounting treatment? Explain your answer fully"

No accounting for a week and my minds got blank... help?

$500 GST received from customers is not a revenue as it does not increase owner's equity, but rather, it is a current liability since GST collected must be repaid to the ATO in the form of a GST Settlement

[dreambig]

Why is rent paid in advance an asset?

[BoredSatan]

Why is rent paid in advance an asset?

There is a future economic benefit in the form that the business can use the premises in the future without having to pay more rent.