VCE Accounting Question Thread!

[Damoz.G]

Could you please tell me how exactly this switch between the methods is reported in the general journal?

Also, how many types of 'Other revenue' (Income Statement) are there? I can only think of:
- discount revenue
- rent revenue
- interest revenue
- revenue on disposal of asset

Anything I'm missing?

Its reported depending on the classification of the item. So for all Assets, do you a Debit Entry with their name and the figure. Liabilities and Owner's Equity are Credit Entries. But be careful with Negative Assets, such as Accumulated Depreciation (Credit Entry), and Drawings (Debit Entry). Also need to remember to include individual Debtors and Creditors in the Subsidiary Ledger columns of the General Journal.

I think that your list of Other Revenue items are mainly the ones you need to know, but knowing VCAA, they may surprise you with other ones.

[Damoz.G]

So if we were asked to explain using the Conservatism principle why the Stock Gain is recorded at the lowest cost price on hand would the explanation be...
Conservatism states that gains should only be recognised when certain so that assets are not understated overstated (I.e. Stock Control) and revenues are not understated overstated (Stock Gain) ?

I'm pretty sure it's so they are not overstated, but Damoz will clear it up!

Yeah, everything in your explanation is correct, except as noone said its overstated for both Assets and Revenues, not understated.

[massachusetts8]

Yeah, everything in your explanation is correct, except as noone said its overstated for both Assets and Revenues, not understated.

Oh right yes that makes sense my bad. So you value stock gains at lowest cost price so assets and revenues are not overstated. Thanks guys!

[Damoz.G]

Oh right yes that makes sense my bad. So you value stock gains at lowest cost price so assets and revenues are not overstated. Thanks guys!

No worries. 

[sin0001]

No worries. 

Yup, highest cost price of stock still on hand. Its to support Conservatism.

Sorry to barge in, but Stock Losses are recorded using FIFO; attached the study design below:
(Although it also makes sense to use Conservatism)

[Colokid]

if anyone has done the neap 2013 trial exam, can you  please explain how to get the depreciation expense for question 2a?

thanks

[Damoz.G]

Sorry to barge in, but Stock Losses are recorded using FIFO; attached the study design below:
(Although it also makes sense to use Conservatism)

Oh yeah! Sorry. =/ Its been a while since I've touched Accounting. I planned on getting through Exams today, but I had to help a friend and I was helping out on here a lot as well.

I won't be on as much tomorrow guys, so ask Questions today!

[Damoz.G]

if anyone has done the neap 2013 trial exam, can you  please explain how to get the depreciation expense for question 2a?

thanks

Carrying Value = 42,000 - 10,500
                        = 31,500

25% x $31,500
= $7,875

[abcdqdxD]

Just incase anyone was confused about the discussion above, stock gains are recorded based on conservatism (that is, you take the cheapest line of stock as your cost price) and stock losses based on FIFO.

[Colokid]

Carrying Value = 42,000 - 10,500
                        = 31,500

25% x $31,500
= $7,875

how do you get the $10, 500?

[Damoz.G]

how do you get the $10, 500?

Trial Balance. 1st line.

Accumulated Depreciation - Motor Vehicle: CR $10,500

[Colokid]

Trial Balance. 1st line.

Accumulated Depreciation - Motor Vehicle: CR $10,500

haha i feel so stupid now, thanks damoz

also in the attachment below, it shows CPJ and CRJ entries , with the entries does it matter if you write accrued wages first instead of wages?

[Damoz.G]

haha i feel so stupid now, thanks damoz

also in the attachment below, it shows CPJ and CRJ entries , with the entries does it matter if you write accrued wages first instead of wages?

LOL! No worries.

Nah, it doesn't matter, as long as both lines are there and correct. However, you should put in the Accrued one first because of 2 reasons:
1. You already know the Accrued figure, so its easily transferable
2. So that you don't make any silly mistakes.

[Mafioso]

Can someone please explain why in VCAA 2009 exam 2 question 2.2.2, the rent revenue in the budgeted income statement is $24000? I calculated it as $22000 since $2000 was accrued.

In general, do we add the accrued revenue to revenue recieved to calculate revenue earnt when reporting in the income statement?

[unfamila]

Can someone please explain why in VCAA 2009 exam 2 question 2.2.2, the rent revenue in the budgeted income statement is $24000? I calculated it as $22000 since $2000 was accrued.

In general, do we add the accrued revenue to revenue recieved to calculate revenue earnt when reporting in the income statement?

Hey,  just did this!!!
 Any way although the rent is accrued it's still a revenue in the current reporting period...That's how i interpreted it anyway
 
EDIT:revenue not and expense