VCE Accounting 2016 Written examination Examination specifications Overall conditions The examination will be sat at a time and date to be set annually by the Victorian Curriculum and Assessment Authority. VCAA examination rules will apply. Details of these rules are published annually in the VCE and VCAL Administrative Handbook. There will be 15 minutes reading time and 2 hours writing time. The examination will be marked by a panel appointed by the VCAA. The examination will contribute 50 per cent to the Study Score. Content The VCE Accounting Study Design 2016 is the document for the development of the examination. The study design includes the Characteristics of the Study (pages 12 16). Questions will be based on the key knowledge and key skills that underpin the outcomes in Units 3 and 4. Students will be required to apply the knowledge and skills of the accounting processes undertaken in Units 3 and 4. Students will not be required to use information and communications technology (ICT) in the examination. Students will not be required to undertake calculations relating to financial indicators in the examination; however, the underpinning knowledge, interpretation and analysis associated with these indicators are examinable. Students will not be required to prepare graphical representations in the examination; however, the explanation and interpretation of graphical representations are examinable. Format The examination will consist of a series of short answer and extended response questions. These may include a variety of item types, including scenarios, questions with multiple parts, short answer questions and extended response questions. All questions in the examination will be compulsory. The total marks for the examination will be 100. The examination will be in the form of a question book and an answer book. Approved materials and equipment normal stationery requirements (pens, pencils, highlighters, erasers, sharpeners and rulers) one scientific calculator Advice During the 2016 accreditation period for the VCE Accounting Study Design, examinations will be prepared according to the examination specifications above. The examination will assess a representative sample of the key knowledge and key skills from Unit 3 and Unit 4. VICTORIAN CURRICULUM AND ASSESSMENT AUTHORITY 2012 July 2012
The following sample examination is intended to demonstrate the format and type of questions that teachers and students can expect on the end-of-year Accounting examination. Teachers and students should be aware of the Characteristics of the Study, including accounting principles and qualitative characteristics, as described on pages 12 16 of the study design. The VCAA does not publish answers for sample examinations. The following documents should be referred to in relation to the VCE Accounting examination. VCE Accounting Study Design 2016 VCE Accounting Assessment Handbook 2016 VCAA Bulletin VCE, VCAL and VET It is recommended that students write in pencil when answering questions that involve calculations. VCE Acounting (Specifications and sample) July 2012 2
Victorian Certificate of Education Year ACCOUNTING Written examination Day Reading time: *.** ** to *.** ** (15 minutes) Writing time: *.** ** to *.** ** (2 hours) Number of questions QUESTION BOOK Structure of book Number of questions to be answered Number of marks SAMPLE 11 11 100 Students are permitted to bring into the examination room: pens, pencils, highlighters, erasers, sharpeners, rulers and one scientific calculator. Students are NOT permitted to bring into the examination room: blank sheets of paper and/or white out liquid/tape. Materials supplied Question book of 10 pages. Answer book of 17 pages. Instructions Write your student number in the space provided on the front page of the answer book. Answer all questions in the answer book. All written responses must be in English. At the end of the examination You may keep this question book. Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room. VICTORIAN CURRICULUM AND ASSESSMENT AUTHORITY 2012 July 2012
ACCNT EXAM QB (SAMPLE) 2 July 2012 Question 1 (2 marks) Define the term double entry accounting system. Question 2 (11 marks) Mark Brown owns and operates Mark s Mega Movers. He has provided his accountant with the following graph displaying details of his Non-Current Assets. He purchased them all on 1 July 2009. 45 000 40 000 Historical Cost 35 000 30 000 Depreciation 2009 10 25 000 Depreciation 2010 11 20000 15000 Depreciation 2011 12 10 000 Depreciation 2012 13 5 000 0 Construction Equipment Computer Equipment Tools and Equipment Fixtures and Fittings Accumulated Depreciation 30 June a. Using the graph, identify and justify the selection of the depreciation method used for the Construction Equipment Fixtures and Fittings. 4 marks b. Given that the Construction Equipment was depreciated using a rate of 30% per annum, calculate and show how the Construction Equipment would be reported in the Balance Sheet as at 30 June. 3 marks c. Mark stated we can change methods of depreciation next year if we want to. Using an accounting principle and a qualitative characteristic, explain whether this would be advisable. 4 marks Question 3 (15 marks) Courtney Hayles is the owner of Hayles Home Entertainment, a business that sells home entertainment products. At 1 June the business had the following debtors. $ J Simon 880 M Avis 2200 3080 Question 3 continued
July 2012 3 ACCNT EXAM QB (SAMPLE) Extracts of the Cash Receipts Journal and Sales Journal for June are provided below. Cash Receipts Journal Details Rec. No. Bank Disc. Exp. Debtors Cost of Sales Sales Sundries GST 1 June Sales 234 1320 800 1200 120 3 June J Simon 235 792 88 880 9 June GST Clearing 236 3600 3600 14 June Sales 237 1650 1000 1500 150 16 June S Slater 238 594 66 660 21 June M Avis 239 1000 1000 28 June Sales 240 1320 800 1200 120 Totals to date 10276 154 2540 2600 3 900 3 600 390 Sales Journal Debtor Invoice Number Cost of Sales Sales GST Debtors 4 June S Slater 123 400 600 60 660 10 June J Simon 124 600 900 90 990 19 June S Slater 125 300 450 45 495 22 June J Simon 126 200 300 30 330 Totals to date 1500 2250 225 2475 Additional information On 30 June, Courtney transferred $10 000 from her personal bank account to the business bank account (as noted on the Bank Statement). On 30 June, the business was advised that the amount outstanding for Debtor M Avis, should be written off (Memo 5). On 30 June, J Simon returned the goods he had purchased on 22 June, because they were faulty (CN 538). a. Record the additional information in the appropriate journals. Total the journals where appropriate. Narrations are not required. 5 marks b. Complete the Debtors Subsidiary Ledger for Debtor J Simon as it would appear after all journals have been posted for June. You are required to balance the account. 4 marks c. Many businesses use control accounts and subsidiary ledgers in their accounting systems. Discuss the benefits and limitations of using control accounts and subsidiary ledgers. 6 marks TURN OVER
ACCNT EXAM QB (SAMPLE) 4 July 2012 Question 4 (19 marks) Chris Laurence owns and operates Chrisso s Fitness Warehouse, a small business selling a variety of fitness equipment. Features of the business s accounting system include the following. The business sells to customers on both a cash and credit basis. Credit is offered to reliable customers at credit terms of 5/14, n/30. The perpetual method of stock recording and the FIFO cost assignment method are used. Stock is marked up at a rate of 50%. The business prepares financial reports at the end of each month. Chris has recorded all transactions into the relevant journals. A summary of these is provided. Cash Payments Journal (summary) Details Chq. No. Bank Disc. Rev. Creditors Stock Wages Sundries GST 30 June Totals to date 34 200 1 300 27 000 4 000 3 000 1 000 500 Sales Journal (summary) Debtor Invoice Number Cost of Sales Sales GST Debtors 30 June Totals to date 30 000 45 000 4 500 49 500 Purchases Journal (summary) Creditor Invoice Number Stock GST Creditors 30 June Totals to date 29 000 2 900 31 900 Cash Receipts Journal (summary) Details Rec. No. Bank Disc. Exp. Debtors Cost of Sales Sales Sundries GST 30 June Totals to date 39 300 700 18 000 12 000 20 000 2 000 At the end of the reporting period, Chris realised that the following documents had not been recorded. CFW Invoice CFW234 : 19 June Charge to: Rob s Gym Sale: 2 ZX7 Treadmills : 27 June CFW Memo 9 Instruction: 1 ZX7 Treadmill, at a cost of $1500, was used at a recent fitness expo and will now be used solely for advertising purposes. Amount GST Invoice $4200 $420 $4620 Receipt 105 CFW Terms: 5/14, n/30 : 28 June Details: Received payment in full from Rob s Gym for invoice CFW234. Question 4 continued
July 2012 5 ACCNT EXAM QB (SAMPLE) a. Explain what is meant by the FIFO cost assignment method. b. Update and total the relevant journals with the information contained in the above documents. Narrations are not required. c. Explain why the stock referred to in Memo 9 should be treated as an expense. 2 marks 5 marks 2 marks Following a physical count of the Model ZX7 Treadmills at 30 June, Chris prepared the following memo. : 30 June CFW Memo 10 Details: A physical stocktake showed 1 ZX7 Treadmill on hand. Chris provided the following Stock Card for the ZX7 Treadmill. Stock Item: ZX7 Treadmill Location: E4 Supplier: Treadies Cost Assignment Method: FIFO Details IN OUT BALANCE Qty Cost Total Qty Cost Total Qty Cost Total 1 June Balance 8 1 300 10 400 8 June Inv. CFW230 4 1 300 5 200 4 1 300 5 200 12 June Rec. 103 3 1 300 3 900 1 1 300 1 300 18 June Inv. ZX42 4 1500 6000 1 4 1300 1500 1300 6000 d. Complete the Stock Card for ZX7 Treadmills with all relevant transactions up to and including 30 June. 3 marks e. Prepare the General Journal entry to record the necessary adjusting entry for stock at 30 June. A narration is required. 3 marks f. Calculate the Adjusted Gross Profit on the sale of ZX7 Treadmills for the month of June. 4 marks TURN OVER
ACCNT EXAM QB (SAMPLE) 6 July 2012 Question 5 (5 marks) a. Define net realisable value (NRV). 2 marks b. Explain the effects on the financial reports if a business fails to recognise NRV when valuing its stock. 3 marks Question 6 (18 marks) Tim owns and operates a tool shop, Tim s Tools. He has provided you with the following budgeted information from the cash journals for the year 1 July to 30 June 2014. Cash Receipts Journal Bank 311 200 Discount Expense 1 700 Debtors 180 900 Cost of Sales 60000 Sales 120000 GST 12000 Cash Payments Journal Bank 159500 Discount Revenue 1 500 Creditors 45000 Stock 24000 Wages 53000 Sundries Drawings 6000 Expenses 15000 Fixtures and Fittings 3 000 Customs Duties 2000 Prepaid Rent Expense 8000 Accrued Wages 2000 GST 3000 Additional information (expected for year) Bank balance at 1 July was $26 800 Credit Sales 50% greater than Cash Sales Stock marked up by 100% Stock Loss to be 3% of total sales Sales Returns to be 5% of total sales Accrued interest of $200 relating to a term deposit Wages owing 30 June 2014 estimated to be $3100 Balance in Prepaid Rent expense will be $1000 as at 30 June 2014 a. Prepare a Budgeted Income Statement for the year ending 30 June 2014. b. Prepare a Budgeted Cash Flow Statement for the year ending 30 June 2014. 9 marks 6 marks Tim is pleased with the level of expected profit and cash indicated by the budgets; however, he is concerned that these results will not be achieved in 12 months time. c. Explain how Tim could use these budgets to monitor his progress. 3 marks
July 2012 7 ACCNT EXAM QB (SAMPLE) Question 7 (4 marks) A business owner has stated, I am not sure I want to make a profit this year. Last year I made a loss but my bank balance increased by $8900 despite having no new loans or capital contributions. Explain, giving two examples, how this could occur. Question 8 (8 marks) On 1 October, Gen Domestics traded in its old delivery van for a new delivery van from Club Motors. The old delivery van was purchased at the beginning of 2007 for $28 000 and had a carrying value at 1 October of $3500. Details of the purchase and trade-in for the new delivery van are documented in the invoice below. Club Motors 1 October Invoice no. 79 Sold to Gen Domestics DESCRIPTION $ Delivery Van 42000 plus GST 4200 46200 Less trade-in 2000 TOTAL PRICE 44 200 Terms: Net 30 days a. Show how the following accounts will appear in the General Ledger after all entries have been posted. Delivery Van Accumulated Depreciation Delivery Van Disposal of Delivery Van You are not required to balance the accounts. 6 marks b. Explain, using the information from Gen Domestics, why the profit or loss on disposal of the van occurred. 2 marks TURN OVER
ACCNT EXAM QB (SAMPLE) 8 July 2012 Question 9 (6 marks) A business owner is concerned that her business s cash flow and liquidity are deteriorating, so her accountant has provided some information regarding the business s short-term financial position. Indicator 2010 2011 2012 Working Capital Ratio 2.15:1 2.25:1 2.79:1 Quick Asset Ratio 1.42:1 1.05:1 0.79:1 Creditors Turnover 17 days 16 days 15 days Stock Turnover 58 days 79 days 98 days Debtors Turnover 47 days 44 days 42 days The business s credit terms have been 2/14, n/30 since 2009. Suppliers credit terms are all n/30. a. Explain how it is possible that the Working Capital Ratio trend is favourable while the Quick Asset Ratio trend is unfavourable. 2 marks b. Suggest two types of information, other than financial indicators, that could be useful to the business owner in analysing the performance of her business. 2 marks c. State two strategies, excluding additional advertising, that the business owner could implement to improve the Stock Turnover (that is, reduce Stock Turnover days) without affecting the Gross Profit margin. 2 marks
July 2012 9 ACCNT EXAM QB (SAMPLE) Question 10 (8 marks) Belinda Brown commenced business on 1 January under the name of Bubble Baths. Her accountant provided the following Pre-adjustment Trial Balance at 30 June. Bubble Baths Pre-adjustment Trial Balance as at 30 June Account Debit Credit Capital 26 800 Cash at Bank 12 360 Cost of Sales 76 000 Creditors 63 000 Debtors 34 000 Discount Expense 480 Discount Revenue 800 Drawings 32 800 Freight Inward 1 000 GST Clearing 20 Interest Expense 2 400 Loan 42 000 Prepaid Advertising Expense 1 800 Prepaid Sales Revenue 1 000 Sales 152 000 Shop Fittings 2 000 Stock 77 500 Vehicle 46 000 Wages Expense 24 000 297 980 297 980 The accountant noted the following. The Prepaid Advertising Expense relates to six advertisements (one per month for six months) in Beautiful Bathrooms magazine, commencing June. Wages incurred for the six-month period are $25 000. Prepaid Sales Revenue represents a deposit on a custom-made bath, which was delivered to the customer on 30 June. a. Prepare General Journal entries to record these adjustments at 30 June. Narrations are not required. 6 marks b. Explain the relationship between the Going Concern principle and the need for balance day adjustments. 2 marks TURN OVER
ACCNT EXAM QB (SAMPLE) 10 July 2012 Question 11 (4 marks) Buckles and Belts has provided the following information, which was extracted from the Cash Flow Statement Variance Report for the month ended 31 October. Budgeted Actual Variance Fav/Unfav Cash Sale of Vehicle 6 000 7 500 1 500 F Receipts from Debtors 95 000 90 000 5 000 U Loan (9 000) (8 000) 1 000 F Interest 300 375 75 U a. Referring to the extract above, state whether the interest is a cash inflow or cash outflow. Explain your answer. 2 marks b. Explain how Buckles and Belts could use the information contained in the extract from the Cash Flow Statement Variance Report. 2 marks END OF QUESTION BOOK
Victorian Certificate of Education Year SUPERVISOR TO ATTACH PROCESSING LABEL HERE STUDENT NUMBER Letter Figures Words ACCOUNTING Written examination Day Reading time: *.** ** to *.** ** (15 minutes) Writing time: *.** ** to *.** ** (2 hours) ANSWER BOOK Instructions A question book is provided with this answer book. Answer all questions in the spaces provided in this book. Write your student number in the space provided above on this page. Refer to Instructions on the front cover of the question book. Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room. VICTORIAN CURRICULUM AND ASSESSMENT AUTHORITY 2012 July 2012
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July 2012 3 ACCNT EXAM AB (SAMPLE) Question 1 (2 marks) Definition Question 2 (11 marks) a. 4 marks Construction Equipment Method of depreciation Fixtures and Fittings Method of depreciation Justification b. 3 marks Calculation Mark s Mega Movers Balance Sheet (extract) as at 30 June Non-Current Assets $ $ Question 2 continued TURN OVER
ACCNT EXAM AB (SAMPLE) 4 July 2012 c. 4 marks Explanation Question 3 (15 marks) a. 5 marks Cash Receipts Journal Details Rec. No. Bank Disc. Exp. Debtors Cost of Sales Sales Sundries GST 1 June Sales 234 1320 800 1200 120 3 June J Simon 235 792 88 880 9 June GST Clearing 236 3600 3600 14 June Sales 237 1650 1000 1500 150 16 June S Slater 238 594 66 660 21 June M Avis 239 1000 1000 28 June Sales 240 1320 800 1200 120 Totals to date 10276 154 2540 2600 3900 3600 390 Question 3 continued
July 2012 5 ACCNT EXAM AB (SAMPLE) Sales Journal Debtor Invoice Number Cost of Sales Sales GST Debtors 4 June S Slater 123 400 600 60 660 10 June J Simon 124 600 900 90 990 19 June S Slater 125 300 450 45 495 22 June J Simon 126 200 300 30 330 Totals to date 1500 2250 225 2475 General Journal Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Question 3 continued TURN OVER
ACCNT EXAM AB (SAMPLE) 6 July 2012 b. 4 marks Debtor J Simon Cross-reference Amount Cross-reference Amount c. 6 marks Discussion
July 2012 7 ACCNT EXAM AB (SAMPLE) Question 4 (19 marks) a. 2 marks Explanation b. 5 marks Cash Payments Journal (summary) Details Chq. No. Bank Disc. Rev. Creditors Stock Wages Sundries GST 30 June Totals to date 34 200 1 300 27 000 4 000 3 000 1 000 500 Sales Journal (summary) Debtor Invoice Number Cost of Sales Sales GST Debtors 30 June Totals to date 30 000 45 000 4 500 49 500 Purchases Journal (summary) Creditor Invoice Number Stock GST Creditors 30 June Totals to date 29 000 2 900 31 900 Question 4 continued TURN OVER
ACCNT EXAM AB (SAMPLE) 8 July 2012 Cash Receipts Journal (summary) Details Rec. No. Bank Disc. Exp. Debtors Cost of Sales Sales Sundries GST 30 June Totals to date 39 300 700 18 000 12 000 20 000 2 000 General Journal Details General Ledger Subsidiary Ledger Debit Credit Debit Credit c. 2 marks Explanation Question 4 continued
July 2012 9 ACCNT EXAM AB (SAMPLE) d. 3 marks Stock Item: ZX7 Treadmill Location: E4 Supplier: Treadies Cost Assignment Method: FIFO Details IN OUT BALANCE Qty Cost Total Qty Cost Total Qty Cost Total 1 June Balance 8 1 300 10 400 8 June Inv. CFW230 4 1 300 5 200 4 1 300 5 200 12 June Rec. 103 3 1 300 3 900 1 1 300 1 300 18 June Inv. ZX42 4 1500 6000 1 4 1 300 1 500 1 300 6 000 e. 3 marks General Journal Details General Ledger Subsidiary Ledger Debit Credit Debit Credit f. 4 marks Calculation Adjusted Gross Profit $ TURN OVER
ACCNT EXAM AB (SAMPLE) 10 July 2012 Question 5 (5 marks) a. 2 marks Definition b. 3 marks Explanation
July 2012 11 ACCNT EXAM AB (SAMPLE) Question 6 (18 marks) a. 9 marks Tim s Tools Budgeted Income Statement for the year ending 30 June 2014 $ $ Question 6 continued TURN OVER
ACCNT EXAM AB (SAMPLE) 12 July 2012 b. 6 marks Tim s Tools Budgeted Cash Flow Statement for the year ending 30 June 2014 $ $ Question 6 continued
July 2012 13 ACCNT EXAM AB (SAMPLE) c. 3 marks Explanation Question 7 (4 marks) Explanation TURN OVER
ACCNT EXAM AB (SAMPLE) 14 July 2012 Question 8 (8 marks) a. 6 marks Delivery Van Cross-reference Amount Cross-reference Amount Accumulated Depreciation Delivery Van Cross-reference Amount Cross-reference Amount Disposal of Delivery Van Cross-reference Amount Cross-reference Amount b. 2 marks Explanation
July 2012 15 ACCNT EXAM AB (SAMPLE) Question 9 (6 marks) a. 2 marks Explanation b. 2 marks Other information 1 Other information 2 c. 2 marks Strategy 1 Strategy 2 TURN OVER
ACCNT EXAM AB (SAMPLE) 16 July 2012 Question 10 (8 marks) a. 6 marks General Journal Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ b. 2 marks Explanation
July 2012 17 ACCNT EXAM AB (SAMPLE) Question 11 (4 marks) a. 2 marks Cash Inflow or Cash Outflow Explanation b. 2 marks Explanation END OF ANSWER BOOK