CUnit

U H
NA 3E RPPractice
I TP T3 R2A1C T I C E E X A M —
SExam—suggested
UGGESTED SOLUTIONS

solutions
Question 1
Question 1
1.1
1.1
Cash Payments Journal
Date Details Chq Bank Discount Creditors Stock GST Sundries
No. Revenue
Aug 25 Subtotals 12 000 100 9 900 1 500 220 1 200

26 Stock 2 385 330 300 30

control

31 Frankston 2 386 490 10 500

Furniture
31 Totals 12 820 110 10 400 1 800 250 1 200

Purchases Journal
Date Creditor Inv. No. Amount GST Total
Creditors
Aug 20 Subtotals 9 000 900 9 900

21 Office Designs 2 299 700 70 770

26 Frankston Furniture 1 218 400 40 440

31 Totals 10 100 1 010 11 110

4 marks
1.2
1.2
General Ledger
Creditors Control a/c

Date Cross reference $ Date Cross reference $

Aug 31 Bank/Discount 10 400 Aug 1 Balance 8 000

revenue
Aug 31 Stock control/GST 11 110
clearing

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual 185

Stock Control a/c

Date Cross reference $ Date Cross reference $

Aug 1 Balance 38 700

31 Creditors control 10 100

31 Bank 1 800

GST Clearing a/c

Date Cross reference $ Date Cross reference $

Aug 31 Creditors control 1 010 Aug 1 Balance 500

6 marks
1.3

Creditors Subsidiary Ledger

Creditor—Frankston Furniture a/c

Date Cross reference $ Date Cross reference $

Aug 31 Bank/Discount Aug 1 Balance 800

revenue 500
Balance 740 26 Stock control/GST
clearing 440
1 240 1 240

Sep 1 Balance 740

4 marks
1.4
First advantage: bulky detail is removed from the general ledger as numerous accounts
are removed and are replaced by one single account; that is, the control account.
Second advantage: internal control is improved as the subsidiary ledger can be checked
against the control account via a schedule, thus reducing errors and the likelihood of
fraud.
2 marks

Question 2

2.1
The balance represents the historical cost of the furniture; that is, the original price paid
for the asset at the time it was purchased.
1 mark

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
186 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual

Question 3

Question
3.1 3
3.1 Increase Decrease No Effect
Assets
√
Liabilities
√

Owner’s equity
√
3 marks
3.2
3.2
Accounting principle: Accounting entity principle
1 mark

Question 4
Question 4
4.1
4.1
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

May 31 Drawings 70

Stock control 70

3 marks
4.2
4.2
Revenue and expense accounts are closed off at the end of the reporting period so that
they are not included again in the subsequent period’s results. This complies with the
qualitative characteristic of relevance, as the revenue and expense items are only reported
in the period in which they occurred.
2 marks

Question 5

5.1
Source document: Sales invoice
5.2
Name of journal: Credit sales journal
1 + 1 = 2 marks

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
5.1
Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual 187
5.2

5.3
[Tony, please PDF the following table and insert in InDesign]
Bank 3 100
5.3
Sales/GST 3 300 Bal 600

3 700 3 700

Cash received $ 3 100

2 marks

5.4
5.4
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jun 30 P&L summary 1 600

Wages expense 1 600

2 marks
Question 6
Question 6
6.1
6.1
General Ledger
Cost of Sales a/c

Date Account $ Date Account $

May 31 Stock control 16 000

Stock Control a/c

Date Account $ Date Account $

May 31 Cost of sales 16 000

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
188 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual

Sales a/c
Question 6
Date Account $ Date Account $
6.1
May 31 Debtors control 33 200

Debtors Control a/c

Date Account $ Date Account $

May 31 Sales/GST 36 520

GST Clearing a/c

Date Account $ Date Account $

31 May Debtors control 3 320

5 marks
6.2
6.2
6.2 Journal
General
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

May 31 Sales 1 800

GST clearing 180

Debtors control 1 980

Painters Plus 1 980

Correction of error

53 marks
6.3
6.3
6.3
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jun 5 Electricity 300

Capital 300

2 marks
Question 7
Question 7
7.1
7.1
For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual 189

Question 7
Question 7
7.1
7.1
Stock card
Stock item: IMB Executive Supplier: IMB Electronics

Date Details IN OUT BAL

Jun 14 Invoice 365 10 900 9 000 4 850 3 400

10 900 9 000
18 Invoice 1324 4 850 3 400
2 900 1 800 8 900 7 200
23
Memo 12 1 900 900 7 900 6 300
30
Memo 13 1 900 900 6 900 5 400
3 marks

7.2
7.2
7.2
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jun 30 Stock loss 900

Stock control 900

2 marks
7.3
7.3
7.3
1 Oversupply by a supplier—whereby the number of units delivered is greater than
that stated on the invoice provided.
2 Stocktaking error—whereby a section of inventory was accidentally counted twice;
that is, stock was double counted.
2 marks
7.4
7.4
7.4
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jul 4 Advertising 1 050

Stock control 1 050

Donation of stock to local school

(Memo 14)
3 marks

Question
Question 8
8 For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
8.1
8.1
190 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual

Question 8

8.1

General Ledger
Prepaid Advertising Expense a/c
Date Cross reference $ Date Cross reference $

Mar 1 Bank 9 000 Jun 30 Advertising expense 6 000

Balance 3 000

9 000 9 000

Jul 1 Balance 3 000

3 marks

8.2
8.2
8.2
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jun 30 P&L summary 6 000

Advertising expense 6 000

3 marks
8.3
8.3
8.3
Prepaid advertising represents a future economic benefit under the control of the
business entity. Until it is used up it should be reported as an asset. Once used, it should
be treated as an expense. Until this occurs the business is still receiving an economic
benefit; therefore it is an asset.
2 marks

Question 9
Question
Question 9
9
9.1
9.1
9.1
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jun 30 Depreciation of vehicle 5 250

Accumulated depreciation of 5 250

vehicle
3 marks
9.2
9.2
For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual 191

9.2
Non-current assets:
Vehicle 33 500
Less Accumulated depreciation 11 813
21 687
3 marks
9.3
As non-current assets are used to generate economic benefits for a business, the cost of
such assets should be written off as expenses over the life of the assets. This is required by
the qualitative characteristic of relevance, which demands that all revenues and expense
for a reporting period be recognised.
2 marks

Question 10

10.1

General Ledger
Wages Expense a/c
Date Cross reference $ Date Cross reference $

Bank 28 400

Mar 31 Accrued wages 340 Mar 31 P&L summary 28 740

expense
28 740 28 740

Apr 30 Bank 240

4 marks
10.2

Accounts Debit or Credit $

Accrued wages expense Debit 340

Wages expense Debit 240

Cash at bank Credit 580

3 marks

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia
192 Unit 3 Practice Exam VCE Accounting Units 3 and 4 Solutions Manual

Question 11
Question 11
11.1
11.1
General Journal
Date Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Jan 1 Vehicle 25 000

Computer 5 000

Capital 30 000

3 marks
11.2
11.2
Cash flows from operating activities:
Cash sales $4 000 and insert in InDesign]
[Tony, please PDF the following equation
Collections from debtors 800
GST received 400
Insurance (500)
Wages (400)
Interest expense (50)
GST paid (50)
Net cash provided by operating activities 4 200
6 marks
11.3
11.3 First reason: Credit sales may have exceeded cash collections from debtors.
Second reason: Some expenses may have been paid in advance (prepaid expenses).
2 marks
11.4
It should not be treated as an expense unless it has all been used up or expired during the
11.4 reporting period. If it remains prepaid, it represents an asset and it should only treated as
an expense once sacrificed, as expenses are losses of economic benefits.
2 marks

For use in conjuntion with: VCE Accounting Units 3 and 4, fourth edition
© Neville Box 2006, published by Macmillan Education Australia