VCE Accounting Question Thread!

[zuleika]

Why is GST refund not counted in revenue?

[viralcricstar]

Why is GST refund not counted in revenue?

It is not counted as revenue because:
Imagine you pay 100 gst in a year but receive only 90. This might be due to less revenue through sales or service. The 10 gst becomes gst receivable. When you receive those 10 bucks, your gst balance is 0 which is why any type of gst is not revenue for a business

[Yueni]

Why is GST refund not counted in revenue?

GST does not meet the definition of revenue as defined in your course outline.

1. Is an inflow of economic benefit that increases assets or decreases liabilities (Yes)

2. Increases OE (No, we Dr Cash and Cr GST receivable when we receive the refund, no affect on OE)

3. Is not a contribution from an owner (Yes)

It does not meet criteria 2, and thus is not a revenue.

[johnhalo]

Hello,

Is the insurance in this question a period cost or an other expense?

In my opinion, it should be an other expense because it relates to insurance whilst the stock is on the business floor. However, the answers say period cost (maybe because this question is from 2009?)

Any help is appreciated.

[Cornrow Kenny]

Hello,

Is the insurance in this question a period cost or an other expense?

In my opinion, it should be an other expense because it relates to insurance whilst the stock is on the business floor. However, the answers say period cost (maybe because this question is from 2009?)

Any help is appreciated.

What is the question? Doesn't it usually ask you if something is a product v period cost? In which case Insurance would be period.

[johnhalo]

What is the question? Doesn't it usually ask you if something is a product v period cost? In which case Insurance would be period.

The question is 'How would you classify insurance of stock?'
I think it should be an Other Expense because it is not involved in getting the stock into a condition and location ready for sale (the stock is already on the shop floor)

[Cornrow Kenny]

The question is 'How would you classify insurance of stock?'
I think it should be an Other Expense because it is not involved in getting the stock into a condition and location ready for sale (the stock is already on the shop floor)

Yes that is correct - it is an Other Expense, not Cost of Goods Sold.

However I think you were getting confused earlier - the opposite of a Period Cost is a Product Cost. And insurance would be Period in this case, however on the income statement it would be classified under Other Expenses. Depends what the question is specifically asking for.

[johnhalo]

Yes that is correct - it is an Other Expense, not Cost of Goods Sold.

However I think you were getting confused earlier - the opposite of a Period Cost is a Product Cost. And insurance would be Period in this case, however on the income statement it would be classified under Other Expenses. Depends what the question is specifically asking for.

But don't they describe two different things? Period/Product Costing have to do with getting stock ready for sale (they both have that in their definition) whereas Other Expenses are expenses involved in selling?

I'm slightly confused now :/

[Cornrow Kenny]

But don't they describe two different things? Period/Product Costing have to do with getting stock ready for sale (they both have that in their definition) whereas Other Expenses are expenses involved in selling?

I'm slightly confused now :/

Yeah that's what I'm saying, they are separate.

Insurance can be classified as a period cost or other expense.

In this case they list a number of costs associated with stock, so they are assuming you to state whether insurance is product or period, not COGS or Other Expense. Hope that makes sense!

[johnhalo]

Yeah that's what I'm saying, they are separate.

Insurance can be classified as a period cost or other expense.

In this case they list a number of costs associated with stock, so they are assuming you to state whether insurance is product or period, not COGS or Other Expense. Hope that makes sense!

That clears it up - thanks

[Guideme]

Why is no GST recognised when a deposit is provided to our business? In other words when we record prepaid sales in the CRJ why dont we record the GST?

Also referring to thew elements of reports explain why Prepaid sales must not be reported as revenues ?

[Yueni]

Why is no GST recognised when a deposit is provided to our business? In other words when we record prepaid sales in the CRJ why dont we record the GST?

Also referring to thew elements of reports explain why Prepaid sales must not be reported as revenues ?

1. A transaction has not occurred.

2. Elements you need to consider are assets and revenue. It meets the definition of an asset, but does not meet the definition of a revenue (does not increase OE).

[jrogers]

Accouting is the process of summarizing and interpreting the financial data for the use of external and internal users. for more details about accounting http://www.solutioninn.com/what-is-the-purpose-of-accounting-how-does-accounting-accomplish

[jrogers]

Accouting is the process of summarizing and interpreting the financial data for the use of external and internal users. for more details about accounting http://www.solutioninn.com/what-is-the-purpose-of-accounting-how-does-accounting-accomplish

[plsbegentle]

For budgeting, do we have to include dates when reconstructing ledger accounts such as debtors control, because from past sac papers, none of them include dates?

Thanks in advance