VCE Accounting Question Thread!

[flyhighx]

Hi
Are there any tips on balance day adjustments for revenues and disposal of non-current assets?
I have my sac this tuesday and I'm struggling with BDA
thanks

[abcdqdxD]

highlight dates, draw a timeline if you need to

[Damoz.G]

Hi
Are there any tips on balance day adjustments for revenues and disposal of non-current assets?
I have my sac this tuesday and I'm struggling with BDA
thanks

Adding to abcdqdxD's two tips (Which are very useful), use your fingers when counting the months for Prepaid or Accrued. It may sound odd, but if it gets you those marks, then who cares what other people think. e.g. If your calculating from Feb to June, you would say 4 months. EXCEPT, you have to include Feb as well, so it would be 5 months consumed or left (Depending on Prepaid or Accrued).

Read the information a few times. It's time consuming, but if you get the answers, then that's the main point. Reading it once will DEFINITELY NOT be enough. Bare minimum two times, otherwise you are guaranteed to have missed or forgotten a key piece of vital information.

[sin0001]

When we have to record the entries for the cash sale of a NCA in the General Journal, supposing it results in a profit, why do we have to debit 'Disposal of NCA' & credit 'Profit on Disposal of NCA' accounts, isn't the entry  in the Cash Receipt Journal enough?
Might be a stupid question but I haven't done Accounting in a while, so I'm forgetting basics :/
Cheers

[abcdqd]

Remember that cash isn't always profit. We still have to close off the revenue to the Profit and Loss summary account at the end of the period, so a "Profit on Disposal of NCA" is needed. The transaction involving the cash received is recorded by: debit Bank, credit Disposal of NCA. Recording all of these entries ensures that the "Disposal of NCA" account is balanced.

[Kuroyuki]

When we have to record the entries for the cash sale of a NCA in the General Journal, supposing it results in a profit, why do we have to debit 'Disposal of NCA' & credit 'Profit on Disposal of NCA' accounts, isn't the entry  in the Cash Receipt Journal enough?
Might be a stupid question but I haven't done Accounting in a while, so I'm forgetting basics :/
Cheers

The business might recieve a cash receipt of 20000 for the NCA. However not all of it is revenue. The entry in the GJ is to record the revenue not the cash received that has already been done. Sorry for the rushed response. Hope it helps
Beaten lol

[sin0001]

Thanks guys!
Another question- What is the use of the 'Disposal of NCA' ledger account? I'm confused at why the proceedings from the sale of a NCA are credited from this ledger account in a trade-in of a NCA... any particular reason why you can't debit this?

[abcdqdxD]

Thanks guys!
Another question- What is the use of the 'Disposal of NCA' ledger account? I'm confused at why the proceedings from the sale of a NCA are credited from this ledger account in a trade-in of a NCA... any particular reason why you can't debit this?

Disposal of NCA account is pretty much used as a dumping ground in the double entry recording process. By using this account, it allows us to debit/credit the (other) appropriate accounts that are affected by the sale of NCA.

its similar to how the profit or loss summary account is used as a dumping ground as well (I say that because the ledger itself has little significance but simply exists to facilitate the calculation of the profit figure for the period)

[sin0001]

Is the Disposal of NCA account an Asset, a Liability or an Owner's Equity legdger account? It's balance is not carried forward to the next reporting period, so I guess we can rule out A or L...

[TimmyC]

Is the Disposal of NCA account an Asset, a Liability or an Owner's Equity legdger account? It's balance is not carried forward to the next reporting period, so I guess we can rule out A or L...

I think its the same as a P+L summary account, just there to close off accounts.

[TazzyGirl]

I'm going pretty well in Accounting this year (yr 11) and my average is 85%, which I'm happy with, but I feel like I can go better than this...I just always butcher part of the theory. I've tried to remember this, rote learn and I try to see how the concepts work...but I seem to always forget and mess it up during the test, which prevents me from getting above 90% ...so what are some ways to study the theory section of unit 2 Accounting?

[talib]

need help with vcaa exam 2 2012  the first question about stock control. and 1c as well can anyone help plz 

[Damoz.G]

need help with vcaa exam 2 2012  the first question about stock control. and 1c as well can anyone help plz 

So Question 1a and c?

I'll do it now.

[Damoz.G]

1.   a.


On November 15, the business made a sale of 3 Units at $500 each. This means that the total Invoice was $1500 + $150 = $1650

However, on November 18, the Debtor (Lyall’s Imports) returned 1 Leather Chair (due to damage). Therefore:
•   Sales Returns – It is a negative Revenue, and since we have “lost” the sale of 1 Chair, we do a Debit entry.
•   GST Clearing – Because the Leather Chair has been returned, we no longer owe that GST incurred from the Sale to the ATO. Therefore, we do a Debit entry to GST Clearing to reduce our Liability owed to the ATO.
•   Debtors Control – When Debtors Control decreases, we do a Credit entry. This is because our Debtors Control balance has reduced. The Debtor doesn’t owe us the money anymore, since we now have the Stock back in our business again.
•   Debtors - Lyall’s Imports (Subsidiary) – The Debtor doesn’t owe us the $550 from the Stock anymore, because they have returned it, and thus received a Credit Note for the return of Stock. 
•   Stock Control – When Stock Control increases, we do a Debit. Thus, we have now received the Stock again from the Sale, so our Stock Control balance increases.
•   Cost of Sales – Do a Credit Entry because the Expense created at the time of the Sale, is now removed. Therefore to reduce an Expense, we do a Credit entry.

Given that the Mark-Up is 100%, we can convert this into simply 1.
     Sales         = Cost of Sales           
1 + Mark-Up


1.   c.
               

Now we switch businesses, and look from the perspective of Lyall’s Imports paying off their debt.

So how much does Lyall’s Imports owe Modern Seating as at November 26? Well, 2 Leather Chairs plus GST. Therefore, $1000 + $100 = $1,100 (Insert this figure straight away in the Creditors Control column, because this is how much we are reducing our Creditors Control by).

We are given the Credit Terms of 2/14, n/30. This means that if the business pays its debt within 14 days, that they will receive a 2% discount, otherwise they must repay the full amount back within 30 days.

Looking at the dates, Layall’s Imports paid back their debt owed by 11 days (which follows the credit terms of receving a discount). Therefore, calculate 2% of the total invoice owed ($1100), and you will get $22. Then obviously the left over amount ($1078), is the amount that Lyall’s Imports actually paid back to Modern Seating.

[sin0001]

Have a few exam questions:

• When we are reporting Wages expense in the income statement/cash flow statement, should we break it up into Wages expense/Accrued Wages expense/Prepaid Wages expense or will a single figure for Wages suffice?
• Q3 of Practice Exam 1 from the ATARNotes study guide: I understand why the labelling cost is immaterial and thus, a period cost. But why isn't the Prepaid Insurance included as a product cost? The transaction is only for one line of stock, so I thought it can be assigned to each unit
• For Q4 of this exam, the answers have only reffered to profitability from the owner's perspective, but is it also valid to mention that the business might not be earning discount revenue from its creditors, so it's less profitable in this sense. Also the question asks for the 'movement of Debt Ratio', I've just mentioned the scenario where it increases, do I have to also talk about it decreasing?
• For Q8c, when explaining how Prepaid expenses are current assets, is it acceptable to say that economic benefits inflows are expected in the form of 'reduction in the expense payable'?

Thanks!