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S A M P L E
ACCOUNTINGWritten examination
Day Date Reading time: *.** to *.** (15 minutes) Writing time: *.** to *.** (2 hours)
QUESTION BOOK
Structure of bookNumber of questions
Number of questions to be answered
Number of marks
11 11 100
• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpeners,rulersandonescientificcalculator.
• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.
Materials supplied• Questionbookof14pages• Answerbookof19pages
Instructions• Writeyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook.• Answerallquestionsintheanswerbook.• AllwrittenresponsesmustbeinEnglish.
At the end of the examination• Youmaykeepthisquestionbook.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2019
Version2–May2021
Victorian Certificate of Education Year
ACCOUNTINGQB(SAMPLE) 2 Version2–May2021
Question 1–continued
Question 1 (17marks)Harryoperateshisstore,FairtoYou,inNorthside.Thebusinessspecialisesinsellingjewelleryproducedoverseasbybusinessesthatpayfairwages.FairtoYouusestheFirstIn,FirstOut(FIFO)inventorycostassignmentmethod.Harryhasonlyasmallnumberofsuppliersandoperatesanindividualaccountforeachsupplier.Harryhasprovidedthefollowingsourcedocuments.
Rosie’s Jewellery18 Bracelet St
Melbourne Vic 3000
Invoice:RR99Date:1Dec.2019Credit terms:2/7,n/30
Charge to: FairtoYou
Product details Qty Unit price ($)
Total ($)
Bracelets–blue 100 4 400
Bracelets–orange 100 4 400
Subtotal 800
GST 80
Total 880
Finn’s Couriers Tax InvoiceDate: 1 Dec.2019Receipt: 118
Sale to: FairtoYou
Details $
Deliveryof200bracelets 200
GST 20
Total 220
InstructionsAnswerallquestionsintheanswerbookprovided.
Version2–May2021 3 ACCOUNTINGQB(SAMPLE)
TURN OVER
Thesellingpriceofeachbraceletis$16(plusGST).EachbraceletpurchasedcomesinagiftboxthatcostsRosie’sJewellery$2(plusGST)perbox.FairtoYouisofferingallcustomerstheopportunitytohavetheirnameengravedontheirbraceletfor$4(plusGST)perbracelet.
a. Calculate thecostpriceofonebluebracelet. 1mark
b. RecordthesourcedocumentsprovidedintheGeneralJournalofFairtoYou. Narrationsarenotrequired. 4marks
c. RecordthepurchaseofthebluebraceletsintheInventoryCard. 1mark
d. Harryhadbeenconvincedbythesuppliertotrytheorangebraceletswiththeshipmentof 1December,buttheyhavenotbeenasuccess.On31December2019,thesellingpriceoftheorangebraceletsisreducedto$5each(plusGST)becauseFairtoYouhasnotsoldanyoftheorangebracelets.Thebusinesswillincludefreeengravingoneachorangebracelet,whichnormallycoststhebusiness$2perbracelet.
Recordthejournalentryrequiredfortheorangebraceletson31December2019intheGeneralJournalofFairtoYou(Memo18).
Anarrationisrequired. 3marks
e. DuringDecember,HarrytrialledusingtheIdentifiedCostinventorycostassignmentmethodinadditiontotheFIFOinventorycostassignmentmethod.Thefollowinggraphswerepreparedattheendofthemonth.
$72000$100000
$71000$100000
Identified Cost,December 2019
FIFO,December 2019 Key
SalesCost of Sales
Explainhowthegraphsabovecanshowdifferentresultswhileusingthesametransactions. 4marks
f. Harryhasbeenapproachedbyanewsupplierwhohasofferedtosellhimsimilarjewelleryataround75%ofhiscurrentcostpriceandwhohasalsoofferedhim60-daypaymentterms.AsFairtoYouhasbeenhavingsignificantcashflowissuesrecently,whichhasmadeitdifficulttopayemployeesontime,Harryisconsideringusingthenewsupplierforsomeofhisinventorypurchases.Asthemajorityofthisbusinessinventorywillstillcomefrombusinessespayingfairwages,hedoesnotbelievethatheneedstohighlightthechangeininventorytohiscustomers.
AnalysetheethicalconsiderationsofHarry’sdecisionnottoinformhiscustomersofthechangeininventory. 4marks
ACCOUNTINGQB(SAMPLE) 4 Version2–May2021
Question 2 (18marks)Pip’sPlumbingisaplumbingsuppliesstorethathasrecentlysetupanonlinestore.Inordertopreparefortheincreaseindeliveries,thebusinessdecidedtodisposeofitsolddeliveryvanandpurchaseanewone.Thebusinesshadpurchaseditsolddeliveryvanon1September2016for$20000(plusGST).ThenewdeliveryvanwaspurchasedfromSmoothCarson31December2019for$46200(plusGST).Thepurchasepriceincludeddeliveryof$1000(plusGST)and12months’insuranceof$1200(plusGST).SmoothCarsagreedtoatrade-inof$8000fortheolddeliveryvan,withthebalancebeingpaidfromaloanreceivedfromTNSBank.Pip’sPlumbingpreparesitsaccountingreportsannuallyon31Decemberanddepreciatesitsassetsat20%perannumusingthereducingbalancemethod.
a. PreparetheGeneralJournalentriesrequiredon31December2019. Narrationsarenotrequired. 10marks
b. ExplaintheeffectontheaccountingequationifPip’sPlumbinghadnotdepreciatedtheolddeliveryvanfortheyearended31December2019. 3marks
c. ExplainwhyPip’sPlumbingwouldreportalossonthedisposalofthedeliveryvan. 2marks
d. Referringtoaqualitativecharacteristic,explainwhyPip’sPlumbingdepreciatesthedeliveryvan. 3marks
Version2–May2021 5 ACCOUNTINGQB(SAMPLE)
Question 3–continuedTURN OVER
Question 3 (15marks)AQSportzsellsawiderangeofequipmentforwatersports.Inventoryissoldforbothcashandcredit.ThefollowinginformationrelatestoAccountsReceivableforApril2019:• TheAccountsReceivablebalanceasat1April2019was$7800.• TheAccountsReceivablebalanceasat30April2019was$9500.• TheReceiptsfromAccountsReceivablewere$13400.• TheDiscountExpensewas$200.• TheDiscountRevenuewas$140.• TheAllowanceforDoubtfulDebtshadabalanceof$1400on1April2019.• $1200(plusGST)waswrittenoffasBadDebtsinApril.• TheAllowanceforDoubtfulDebtsis5%ofnetcreditsales.
a. Usingtheinformationabove,reconstructtheAccountsReceivableledgeraccountanddeterminetheCreditSalesforApril2019. 6marks
b. RecordtheGeneralJournalentryrequiredtopreparetheAllowanceforDoubtfulDebtsforMay2019(Memo67).
Anarrationisnotrequired. 3marks
c. ThefollowinggraphshowstheAccountsReceivableTurnover(indays)forAQSportzoverthesix-monthperiodfromDecember2018toMay2019.
Accounts Receivable Turnover (in days)
60
50
40
30
20
10
0December January February March April May
days
DescribethetrendintheAccountsReceivableTurnoverforAQSportzoverthesix-monthperiodfromDecember2018toMay2019. 2marks
ACCOUNTINGQB(SAMPLE) 6 Version2–May2021
d. AQSportzisconsideringthefollowingstrategiestoimproveitsAccountsReceivableTurnover:• Strategy 1–Sendingregularautomatedpaymentreminderstocustomers Theaccountingsoftwarethebusinesscurrentlyusesallowsittopayafeetohave
automatedreminderssentouttocustomersregularly.Thiswouldcost$240peryearandispredictedtoleadtoanimprovementof10dayspermonthintheAccountsReceivableTurnover.
• Strategy 2–Implementingasystemofcreditchecksforallnewcustomerswhowantcredit
Thisislikelytoincreaseofficeexpensesby$1200peryearanditislikelytodecreaseBadDebtsby25%,whileimprovingtheAccountsReceivableTurnoverby10%.
WhichstrategyshouldAQSportzadopt?Justifyyouranswer. 4marks
Version2–May2021 7 ACCOUNTINGQB(SAMPLE)
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Question 4 (9marks)Walter’sWheelssellsbicycleparts.AtthebeginningofMay2019,itdecidedtosellbicyclepartsoncreditaswellasforcash.Accountsreceivableareexpectedtopaywithin30days.AnticipatedcreditsalesinMaywere$100000,buttheactualcreditsaleswereonly60%ofthatamount.ThistrendcontinuedforthemonthsofJuneandJuly,asshowninthegraphbelow.
Inventory TurnoverAccounts ReceivableTurnoverAccounts Payable Turnover
KeyTurnover ratios (in days)
80
70
60
50
40days
30
20
10
0May June July
a. Statethetrendineachofthethreefinancialindicatorsshowninthegraph. 3marks
b. ExplainhowperformanceincollectingoutstandingdebtsandinInventoryTurnovermayhaveanimpactonprofitabilityandliquidity. 4marks
c. ExplainhowthetrendinAccountsPayableTurnovermaybelinkedtothetrendintheothertwofinancialindicators. 2marks
ACCOUNTINGQB(SAMPLE) 8 Version2–May2021
Question 5 (5marks)FlexFurnituresellsdeskstoschools.NorthwestHighSchoolplacedanorderfor150desksat$60each(plusGST).Thedesksweresoldata50%mark-up.ThefollowingtransactionstookplaceinNovember2019:• 21November–NorthwestHighSchoolpaidadepositof$825(EFT86).• 24November–100desksweredeliveredtoNorthwestHighSchool(InvoiceFF6).
PreparetheGeneralJournalentriesrequiredtorecordthesetransactions.Narrationsarenotrequired.
Version2–May2021 9 ACCOUNTINGQB(SAMPLE)
TURN OVER
Question 6 (6marks)SwimUpsellsswimwearandaccessoriesinAustraliaandoverseas.Thebusinessplanstocarryoutananalysisofreportspreparedrecently.Thebusinessdisclosesthefollowing:• ThebusinessreportsonceayearinJune.• TheFIFOinventorycostassignmentmethodisusedtodetermineinventoryonhand;thebusinessis
awarethatusingtheIdentifiedCostinventorycostassignmentmethodwouldresultinadifferentamount.• Itisarelativelysmallbusiness.• Thebusinesshasrecentlycommencedsellinginventoryoncredit.Itdoesnotofferdiscounts,believingit
isenoughtosimplyoffergoodservice.• Anumberofnon-currentassetsarenew.Thebusinessusesthereducingbalancemethodofdepreciation.• Thebusinesshasrecentlymovedtoanewlocation.• TheAustraliandollarhasfluctuatedinvaluerecently.
DiscussthedifficultiesSwimUpmayexperiencewhenmeasuringitsperformanceagainstpastperformanceandbudgets,andagainstotherbusinessesinthesameindustry.
ACCOUNTINGQB(SAMPLE) 10 Version2–May2021
Question 7 (4marks)ABalanceSheetforabusinessisshownbelow.
Balance Sheet as at 31 May 2019
Assets
Bank 3100
AccountsReceivable 18 000
Inventory 24000
Machinery 60000
Total Assets 105100
Liabilities
Loan 45000
Owner’s Equity
Capital 60100
Total Equities 105100
Additional information• Theremaybedifficultyincollectingsomedebts.• Inventoryisanestimatebasedoncurrentmarketvalues.• Themachineryistwoyearsold.• Theloanwastakenoutseveralyearsago.
ApplythequalitativecharacteristicoffaithfulrepresentationtotheBalanceSheetandjustifyhowtwoitemsinthereportmayfailtoreachthisstandard.
Version2–May2021 11 ACCOUNTINGQB(SAMPLE)
TURN OVER
Question 8 (7marks)TMUTradersisunsureofthestateofliquidityofitsbusiness.TheoperatingsectionoftheBudgetedCashFlowStatementforthemonthending31May2019needstobeprepared.However,itdoesnothaveaccesstocashrecordsandcanonlyprovidethefollowingdetails:• Inventoryissoldforbothcashandcredit.TotalsalesforMay2019areexpectedtobe$60000(plus
GST),ofwhich60%areexpectedtobecash.40%ofcreditsalesarepaidinthesamemonthasthesaleandtheremainderispaidinthefollowingmonth.AttheendofApril,AccountsReceivablehadabalanceof$15000.
• DrawingsforMayareanticipatedtobe$9000,ofwhich$3000willbeforcash.• AninsurancepolicyisdueinMayfor$1200(plusGST)cash.• Otherexpensesareestimatedtobe$16200(plusGST),includingdepreciationof$3400.• Aloanfor$4200wastakenoutinFebruary2019.Itistoberepaidinequalinstalmentsoversixmonths
commencingMarch2019.Theinterestof$210isdueinAugust.• AccountsPayableisanticipatedtoincreaseby$2000from30Aprilto31Mayaftercreditpurchasesof
$30000(plusGST).CostofSalesis50%ofsales.• On30ApriltheGSTbalancewas$6100.ThiswillbesettledinMay.
PreparetheoperatingsectionoftheBudgetedCashFlowStatementforthemonthending31May2019.
ACCOUNTINGQB(SAMPLE) 12 Version2–May2021
Question 9 (7marks)AbusinessprovidesanextractofitsGSTClearingledgeraccount.Notethatnonon-currentassetswerepurchasedbythebusinessduringthistime.
GST Clearing (extract)
Date 2019
Cross-reference Amount Date 2019
Cross-reference Amount
Jan.2 Bank 5630 Jan.1 Balance 2300
3 AccountsPayable 200 5 AccountsReceivable 7650
a. DescribethetransactionsthathaveledtoeachoftheentriesintheextractoftheGSTClearingledgeraccount. 4marks
b. UsingthedataintheextractoftheGSTClearingledgeraccount,explainwhythisbusinessshouldbeconcernedaboutitsliquidityafterthestartofthemonthifthisistypicalofhowitconductsitsoperations. 3marks
Version2–May2021 13 ACCOUNTINGQB(SAMPLE)
TURN OVER
Question 10 (5marks)DapperDress-Upssellscostumesandaccessories.ThefollowinginformationhasbeenprovidedforJune2019:
• AccountsPayable $19000• AccountsReceivable $31000• AdvertisingExpense $30000• CostofSales $100000• DiscountExpense $320• DiscountRevenue $400• Inventory $110000• ProfitonSaleofEquipment $1200• Sales $200000• InventoryGain $500• Wages $50000
Usingtheinformationprovided,preparetheclosingentriesintheGeneralJournaltocloseallrevenueandexpenseaccountsandtoclosetheProfitandLossSummaryaccount.Narrationsarenotrequired.
ACCOUNTINGQB(SAMPLE) 14 Version2–May2021
Question 11 (7marks)Toassistinorganisingthereportsforabusiness,theownerhaspreparedtheledgeraccounts.
Adjusted Trial Balance as at 30 June 2019
Account Debit Credit
AccountsPayable 2400
AccountsReceivable 5820
Advertising 3600
Bank 4500
Capital 18150
CostofSales 1640
GSTClearing 1630
Inventory 17300
LoanZYXBank 12000
PrepaidRent(3months) 600
Sales 3280
ShopFittings 10 000
Wages 3000
41 960 41 960
ThroughoutJuly,thefollowingtransactionsoccurred:• 5July CashsalesplusGST $3400• 25July CreditsalesplusGST $3700• 9July CashpurchasesofinventoryplusGST $5300• 10July CreditpurchasesofinventoryplusGST $7200
Additional information• 7July–ThebusinesspaidtheJunebalancewithinthetermsofferedandreceivedadiscountof
$92.• 15July–ThebusinessreceivedhalfoftheamountowingfromJunefromAccountsReceivable.• Thebusinessappliesa100%mark-uponcosttoinventory.
UsetheinformationabovetocompletethefollowingledgeraccountsforJuly:• Inventory• AccountsPayable• PrepaidRentExpense
END OF QUESTION BOOK
S A M P L E
Instructions
• Aquestionbookisprovidedwiththisanswerbook.• Answerallquestionsinthespacesprovidedinthisbook.• Writeyourstudent numberinthespaceprovidedaboveonthispage.• RefertoInstructionsonthefrontcoverofthequestionbook.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2019
Version2–May2021
ACCOUNTINGWritten examination
Day Date Reading time: *.** to *.** (15 minutes) Writing time: *.** to *.** (2 hours)
ANSWER BOOK
SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education Year
STUDENT NUMBER
Letter
ACCOUNTINGAB(SAMPLE) 2 Version2–May2021
ThIS pAGE IS BlANK
Version2–May2021 3 ACCOUNTINGAB(SAMPLE)
TURN OVER
ThIS pAGE IS BlANK
ACCOUNTINGAB(SAMPLE) 4 Version2–May2021
Question 1 –continued
Question 1 (17marks)a. 1mark
Working space
Cost price of one blue bracelet $
b. 4marksFair to YouGeneral Journal
Date 2019
Details Debit Credit
c. 1markInventory Card
Item: Blue braceletSupplier: Rosie’s Jewellery
Cost Assignment Method: FIFO
Date 2019
Document IN OUT BAlANCE
Qty Cost Total Qty Cost Total Qty Cost Total
1Dec. Balance 204
45
8020
Version2–May2021 5 ACCOUNTINGAB(SAMPLE)
Question 1 –continuedTURN OVER
d. 3marks
Working space
Fair to YouGeneral Journal
Date 2019
Details Debit Credit
e. 4marks
Explanation
ACCOUNTINGAB(SAMPLE) 6 Version2–May2021
f. 4marks
Analysis
Version2–May2021 7 ACCOUNTINGAB(SAMPLE)
TURN OVER
CONTINUES OVER pAGE
ACCOUNTINGAB(SAMPLE) 8 Version2–May2021
Question 2 –continued
Question 2 (18marks)a. 10marks
Working space
pip’s plumbingGeneral Journal
Date 2019
Details Debit Credit
Version2–May2021 9 ACCOUNTINGAB(SAMPLE)
TURN OVER
b. 3marks
Explanation
c. 2marks
Explanation
d. 3marks
Qualitative characteristic
Explanation
ACCOUNTINGAB(SAMPLE) 10 Version2–May2021
Question 3 –continued
Question 3 (15marks)a. 6marks
Accounts Receivable
Date 2019
Cross-reference Amount Date 2019
Cross-reference Amount
Credit Sales for April 2019 $
b. 3marks
Working space
AQ SportzGeneral Journal
Date 2019
Details Debit Credit
c. 2marks
Description
Version2–May2021 11 ACCOUNTINGAB(SAMPLE)
TURN OVER
d. 4marks
Working space
Strategy
Justification
ACCOUNTINGAB(SAMPLE) 12 Version2–May2021
Question 4 –continued
Question 4 (9marks)a. 3marks
b. 4marks
Explanation
Version2–May2021 13 ACCOUNTINGAB(SAMPLE)
TURN OVER
c. 2marks
Explanation
Question 5 (5marks)Flex FurnitureGeneral Journal
Date 2019
Details Debit Credit
ACCOUNTINGAB(SAMPLE) 14 Version2–May2021
Question 6 (6marks)
Discussion
Version2–May2021 15 ACCOUNTINGAB(SAMPLE)
TURN OVER
Question 7 (4marks)
Item 1
Item 2
ACCOUNTINGAB(SAMPLE) 16 Version2–May2021
Question 8 (7marks)
Working space
TMU TradersBudgeted Cash Flow Statement (extract) for the month ending 31 May 2019
$ $
Budgeted Cash Flows from Operating Activities
Version2–May2021 17 ACCOUNTINGAB(SAMPLE)
TURN OVER
Question 9 (7marks)a. 4marks
1 January
2 January
3 January
5 January
b. 3marks
Explanation
ACCOUNTINGAB(SAMPLE) 18 Version2–May2021
Question 10 (5marks)Dapper Dress-UpsGeneral Journal
Date 2019
Details Debit Credit
Version2–May2021 19 ACCOUNTINGAB(SAMPLE)
Question 11 (7marks)Inventory
Date 2019
Details Amount Date 2019
Details Amount
Accounts payable
Date 2019
Details Amount Date 2019
Details Amount
prepaid Rent Expense
Date 2019
Details Amount Date 2019
Details Amount
END OF ANSWER BOOK