VCE Accounting Question Thread!

[upandgo]

Actually guys don't worry about the question...can u guys please help with this one instead?
what sort of regulations are there covering the preparation of financial reports?

- prepared frequently (no later than a year)
- using figures pertaining to the current reporting period and not from previous periods
- all amounts in the financial reports must be verifiable by a source document (except depreciation)
- including transactions relevant to the business and not the owner's transactions
- compiling reports in a manner that is unambiguous and easily understandable

a few i could think of (not 100% sure if these are regulations but they are requirements) .

 in your answer, you can also add that failing to comply with these regulations will violate certain accounting principles and qualitative characteristics, ie. including transactions irrelevant to the business' activities in financial reports will prevent the owner + business from being treated as separate and distinct entities, and will thus breach the entity principle.

[The Usual Student]

it is a weird question
TA-TL is owners equity
but the entity principle is 'the dealings of the business is independent to the dealing of the the owner(s)...so how does that relate to equity and assets minus liabilities?

then entity principle establishes the business as a separate entity to the firm, it is a bit more broad then your definition but still works with your one. The business can only owe a certain amount to the owner (OE) ... if we distinguish the firm from the business in the first place. So I guess that is my justification.

[Maz]

then entity principle establishes the business as a separate entity to the firm, it is a bit more broad then your definition but still works with your one. The business can only owe a certain amount to the owner (OE) ... if we distinguish the firm from the business in the first place. So I guess that is my justification.

right yeah i get you know haha...yeah i reckon thats right

- prepared frequently (no later than a year)
- using figures pertaining to the current reporting period and not from previous periods
- all amounts in the financial reports must be verifiable by a source document (except depreciation)
- including transactions relevant to the business and not the owner's transactions
- compiling reports in a manner that is unambiguous and easily understandable

a few i could think of (not 100% sure if these are regulations but they are requirements) .

 in your answer, you can also add that failing to comply with these regulations will violate certain accounting principles and qualitative characteristics, ie. including transactions irrelevant to the business' activities in financial reports will prevent the owner + business from being treated as separate and distinct entities, and will thus breach the entity principle.

Thankyou so so much 

[The Usual Student]

accounting principle: historical cost
explanation: assets and liabilities will be reported in the balance sheet at their original purchase price, as these values are verifiable by a source document. the market value, on the other hand, represents what a potential buyer is prepared to pay for the
assets.

hope that helps 

hey since you have done accounting already, I am going to assume that answer is correct and mine isnt. Can you explain how you dealt with the TA-TL aspect of the question cause that is what confuses me. Essentially I interpreted it as " why shouldn't market value be used as a value for Owner's equity" and I don't fully understand how your answer answered that.
Thanks!!!

[7ayed]

I do not understand general ledgers in chapter 3 in the Cambridge VCE Accounting Textbook Third Edition Units 3,4.
Why are the ledger entries sometimes flipped when putting it into the general ledger?
Like the names and the debits and credits being flipped in a general ledger.

Can someone explain all this to me from basics?

Appreciate it

[Cornrow Kenny]

I do not understand general ledgers in chapter 3 in the Cambridge VCE Accounting Textbook Third Edition Units 3,4.
Why are the ledger entries sometimes flipped when putting it into the general ledger?
Like the names and the debits and credits being flipped in a general ledger.

Can someone explain all this to me from basics?

Appreciate it

One reason the names are flipped (this is called Cross-Referencing) is it makes it really easy to see what caused each entry in a transaction. Eg if I just wrote Bank in a Debit Entry in the Bank Ledger, I won't know what caused the increase in bank without looking through all my other ledgers - was it Sales, or a Capital Contribution etc? Using the cross reference accounting method, we can quickly see what transaction occurred.

Does that make sense? (That's not a model answer, but it is just my simple way of putting it)

[7ayed]

One reason the names are flipped (this is called Cross-Referencing) is it makes it really easy to see what caused each entry in a transaction. Eg if I just wrote Bank in a Debit Entry in the Bank Ledger, I won't know what caused the increase in bank without looking through all my other ledgers - was it Sales, or a Capital Contribution etc? Using the cross reference accounting method, we can quickly see what transaction occurred.

Does that make sense? (That's not a model answer, but it is just my simple way of putting it)

Thanks I hadn't done the chapter 3 exercises, once I checked through the answers it made sense.

[upandgo]

hey since you have done accounting already, I am going to assume that answer is correct and mine isnt. Can you explain how you dealt with the TA-TL aspect of the question cause that is what confuses me. Essentially I interpreted it as " why shouldn't market value be used as a value for Owner's equity" and I don't fully understand how your answer answered that.
Thanks!!!

because TA-TL gives us capital (which belongs to the owner), it's not a representative figure of how much the business is actually worth (market value). the balance sheet doesnt provide market valuations of assets - in the interests of Reliability, assets and liabilities are shown at their historical costs, an amount that is readily verifiable and free from bias. but because there is no source document that specifically verifies market value, we cannot use it as a value for owners equity. doing so would contravene the historical cost principle (we wouldn't be using figures verifiable by a source document) and the reliability characteristic (as we cannot verify the amount, the balance sheet would be subject to bias and inaccuracy).

hopefully that helps  i remember finding this question in the accounting textbook and the worked solutions also mentioned historical cost

[7ayed]

Can someone please explain mark-up? If selling price is $900 and cost price is $600..
Worked example please, thanks.

[Maz]

Can someone please explain mark-up? If selling price is $900 and cost price is $600..
Worked example please, thanks.

Mark-up is the difference between the cost and selling price
so the selling price was 900...minus the cost price of 600= $300 mark-up

[upandgo]

Can someone please explain mark-up? If selling price is $900 and cost price is $600..
Worked example please, thanks.

mark-up is calculated by using the mark up formula  mark up = (sales price / cost price) -1

like mq123 said, mark-up is basically the difference between the business' cost price and selling price. however, we cannot simply calculate it by deducting sales price from cost price.

EXAMPLE: if i sold a car at $47500 per unit, and purchased it from my supplier (the cost price) at $19000, what would my mark up be?

by using the mark up formula:

(sales price / cost price) -1

(47500/19000) -1
= 2.5-1
= 1.5 x 100 (the 'x 100' isnt part of the formula, but we cant leave our answer at 1.5)
= 150%

so if we followed the same procedure for your question,

(sales price / cost price) -1
= (900/600) -1
= 1.5 -1
= 0.5 x 100
= 50% mark up  hope that helps!

[Maz]

mark-up is calculated by using the mark up formula  mark up = (sales price / cost price) -1

like mq123 said, mark-up is basically the difference between the business' cost price and selling price. however, we cannot simply calculate it by deducting sales price from cost price.

EXAMPLE: if i sold a car at $47500 per unit, and purchased it from my supplier (the cost price) at $19000, what would my mark up be?

by using the mark up formula:

(sales price / cost price) -1

(47500/19000) -1
= 2.5-1
= 1.5 x 100 (the 'x 100' isnt part of the formula, but we cant leave our answer at 1.5)
= 150%

so if we followed the same procedure for your question,

(sales price / cost price) -1
= (900/600) -1
= 1.5 -1
= 0.5 x 100
= 50% mark up  hope that helps!

yeah so thats how to get it in a percentage...if you want it as a monetery value...you just deduct it

[upandgo]

yeah so thats how to get it in a percentage...if you want it as a monetery value...you just deduct it

yep true (im pretty sure), wasnt sure if they were asking for mark up in % or $  sorry about that

[Maz]

hi humans 
i am doing an assignment on CSD and CSR...could someone please help me out with this one?

List and discuss three costs that public companies may incur when they report on CSR targets and achievements. 

thankyou

[val265]

Hi
Can someone please give me tips to know all the  different cross references for the different ledger accounts?