How many VCAA Accounting questions cover Extension of recording and reporting?

AusGrader has 66 VCAA Accounting questions on Extension of recording and reporting, all with instant AI grading and detailed marking feedback.

VCAA (VCE) Accounting — Extension of recording and reporting Questions & Answers | AusGrader

Q3

2020

QCAA

1 mark

Q3

1 mark

Statement of Cash Flows (extract)

Cash flows from financing activities	Previous year ＄	Current year ＄
Inflows
Proceeds from loans and borrowings	25 000	75 000
Capital contributions	5 000	0
Outflows
Payment of drawings	(2 750)	(10 000)
Repayment of loans and borrowings	(10 000)	(25 000)
Net cash provided by financing activities	17 250	40 000

Based on the data, the financial stability of the business has

A

weakened, as there was an increase in debt finance.

B

remained consistent, as the business has increased its payments to suppliers.

C

strengthened, as the net cash provided from financing activities has increased.

D

improved, as the owner did not contribute any further capital in the current year.

Q9

2023

QCAA

1 mark

Q9

1 mark

The following information is provided for a business.


Cash flows from operating activities	＄634 000
Cash inflows from investing activities	＄425 000
Cash inflows from financing activities	＄50 000

For this business, the greatest increase in the cash generating power ratio would be caused by a

A

＄500 000 loan from a bank.

B

＄485 000 increase in net profit.

C

＄320 000 increase in cash sales.

Correct Answer

The cash generating power ratio is calculated as $\frac{\text{Cash Flow from Operations}}{\text{Total Cash Inflows}}$ . Cash sales directly increase the numerator (operations) and the denominator; mathematically, adding the same positive value to both the numerator and denominator of a fraction less than 1 increases the value of the fraction.

D

＄324 000 injection from the sale of a building.

Q13

2022

QCAA

10 marks

Q13

10 marks

Read Case study 2 (Stimulus 9–10) in the stimulus book.

Analyse and evaluate the performance of the company to propose two recommendations to improve the profitability of the company.

Gross profit (＄50.86 m to ＄36.59 m) and net profit (＄78.13 m to ＄25.11 m) decreased from 2021. The gross margin dropped from 56.79 in 2021 above the industry benchmark of 48.43 to 40.07 in 2022, below the industry benchmark of 47.28. Net profit ratios for both years are consistently above the industry benchmarks of 22.85 and 21.65.
Cost of sales as a percentage of sales has increased by 19.45 percentage points, therefore gross profit has decreased by $14.27 m or 16.72 percentage points. Changing suppliers should be considered to reduce these costs or reduce the amount of stock kept on hand.
Sales have increased by 1% in 2022 yet the cost of these sales has increased by 46% since 2021. Considering increasing sales prices could recoup some costs. Other revenue has increased since 2021 and it may be profitable to increase these items.
Effective management of most expenses resulted in consistent or decreasing costs. The revaluation of investment properties with gains of ＄63.49 m in 2021 and ＄13.46 m in 2022 overinflated the net profit figures, particularly in 2021. This explains the positive comparison with industry benchmarks. Without the revaluation, the net profit ratios would be 16.34% (2021) and 12.76% (2022), both below the industry benchmarks.
Employee expenses decreased by ＄3.77 m, indicating a reduction in staff or movement from casual to permanent positions.
Marketing and administrative expenses have halved, indicating a reduction in spending or change of suppliers.
The profitability of the Motel Company could improve by changing purchasing policies (suppliers and quantities) and increasing selling prices.

Marking Criteria

Analysis

Marking Bands

Descriptor	Marks
Provides a detailed analysis of the scenario; supports this analysis with relevant financial data and information from the stimuli	5
Provides an analysis of the scenario; refers to relevant financial data and information from the stimuli	4
Explains the scenario; refers to financial data or information from the stimuli	3
Makes a statement about the scenario; refers to financial data or information from the stimuli	2
Makes a statement about the scenario	1
Does not satisfy any of the descriptors above.	0

Recommendations

Marking Bands

Descriptor	Marks
Provides valid and justified decisions, assessing strengths and limitations; proposes two valid recommendations; supports these two recommendations with relevant financial data and information	5
Provides valid decisions; proposes two valid recommendations; supports these recommendations with financial data and information	4
Proposes a valid recommendation; supports this recommendation with financial data or information	3
States a recommendation	2
Infers a recommendation	1
Does not satisfy any of the descriptors above.	0

Q12

2022

QCAA

17 marks

Q12a

8 marks

Read Case study 1 (Stimulus 6–8) in the stimulus book.

Prepare a fully classified Statement of Profit or Loss for the years ended 30 June 2021 and 2022.

	2022			2021
Particulars	$	$	$	$	$	$

Statement of Profit or Loss for year ended 30 June

	2022			2021
	$	$	$	$	$	$
Sales			74 880			62 400
Less Cost of Sales			22 464			18 720
Gross Profit			52 416			43 680

Less Other Expenses
Selling Expenses
Fuel - Delivery Vehicle	1 500			1 250
Hire - Delivery Vehicle	6 000	7 500		6 000	7 250

Administrative Expenses
Depreciation - Equipment	1 245			1 205
Depreciation - Office	24			24
Electricity expense	1 600			1 600
Insurance expense	1 750			1 600
Lease expense - shed	3 600			3 600
Telephone expense	1 200	9 419		1 200	9 229

Finance Expenses
Interest expense		200	17 119		500	16 979
Net Profit			35 297			26 701

Marking Criteria

Recording Revenue and Expenses

Marking Bands

Descriptor	Marks
Correctly records as revenue and expenses for at least 10 accounts	5
Correctly records as revenue and expenses for 9 accounts	4
Correctly records as revenue and expenses for 8 accounts	3
Correctly records as revenue and expenses for 5 accounts	2
Correctly records as revenue and expenses for 3 accounts	1
None of the above	0

Execution

Descriptor	Marks
Correctly determines gross and net profit figures	1
Uses correct classifications	1
Correctly classifies accounts	1

Q12b

9 marks

Stimulus 6 identifies a goal-oriented problem for the business.

Using Stimulus 6–8 and your response to Q12a), justify your advice to Kurt.

Profitability ratios will be used in providing advice:
The gross profit (GP) ratio (70% for each year) and the net profit (NP) ratio for the two years are 43% (2021) and 47% (2022).

Assumptions:

constant expenses of the business
constant sales and cost of sales so the GP ratio will not be affected
ongoing costs, e.g. maintenance, insurance, registration, depreciation of both options are similar.

Loan repayments total ＄38 940 over the five years (＄7 788 per year) including interest of ＄8 940 over the 5 years (＄1 788 per year).
Over the five years, lease payments (＄18 000) for the shed and vehicle hire costs (＄30 000) would be incurred.
The vehicle is a depreciable non-current asset, but its lifespan could mean the need to acquire another vehicle in the near future.
The annual cash outflow is ＄9 600 for both shed lease and vehicle rental. Purchasing the shed would increase the cash outflow to ＄13 788 and purchasing the vehicle would increase the cash outflow to ＄11 388 annually. The vehicle purchase assists short-term cash flow.
Expenses would decrease by ＄1 812 per year if the shed is purchased and by ＄4 212 if the van is purchased. Both options produce a positive effect on NP ratio bringing it to 49% with shed purchase or 52% with van purchase.
Purchasing the shed provides an appreciating asset with the potential for access to future funding for the purchase of a delivery vehicle. Kurt will maintain his goal with this option.

Marking Criteria

Descriptor	Marks
Provides one or more plausible assumptions that underlie the options	1
Identifies the relevant profitability ratio: gross profit ratio	1
Identifies the relevant profitability ratio: net profit ratio	1
Calculates the GP and NP ratios for 2021 and 2022 accurately	1
Uses financial data to support the viability of one option	1
Uses financial data to support the viability of a second option	1
Explains a plausible effect on profitability for one option	1
Explains a plausible effect on profitability for a second option	1
Provides plausible advice	1

Q11

2021

QCAA

22 marks

Q11

Read Case study 1 (Stimulus 1–4) in the stimulus book.

Q11a

7 marks

Record the additional balance day adjustments in the general journal. Narrations are not required.

Business 1
General Journal (extract)

Date	Particulars	Ref	Debit ＄	Credit ＄

Business 1
General Journal (extract)

Date	Particulars	Debit $	Credit $
2021
30 June	Interest expense	250
	Accrued expense		250
	(Interest payable for 1 month)
	Rent revenue	10 500
	Unearned revenue		10 500
	(Rent received in advance for 7 months)
	Prepaid expense	660
	Telephone expense		660
	(Prepayment for telephone for 3 months)

Marking Criteria

Identification of Accounts

Marking Bands

Descriptor	Marks
Correctly identifies all 6 accounts affected by transactions	4
Correctly identifies 4 accounts affected by transactions	3
Correctly identifies 2 accounts affected by transactions	2
Correctly identifies 1 account affected by transactions	1
None of the above	0

Recording Amounts

Marking Bands

Descriptor	Marks
Correctly records amounts for all 3 adjustment entries	3
Correctly records amounts for 2 adjustment entries	2
Correctly records amounts for 1 adjustment entry	1
None of the above	0

Q11b

4 marks

Calculate the adjusted net profit as at 30 June 2021.


Net profit	$55 000
Less Accrued interest expense	$250
Less Unearned rent revenue	$10 500
Add Prepaid telephone expense	$660
Adjusted net profit	$44 910

Marking Criteria

Adjustments

Marking Bands

Descriptor	Marks
Correctly adds or subtracts from net profit for all 3 accounts	3
Correctly adds or subtracts from net profit for 2 accounts	2
Correctly adds or subtracts from net profit for 1 account	1
None of the above	0

Calculation

Descriptor	Marks
Correctly calculates adjusted net profit	1

Q11c

11 marks

Prepare a fully classified Statement of Financial Position, showing working capital.

Business 1
Statement of Financial Position as at 30 June 2021

Particulars	＄	＄	＄	＄

Business 1
Statement of Financial Position as at 30 June 2021

	$	$	$	$
Current assets
Accounts receivable control		75 000
Inventories control		35 800
Prepaid expense		660	111 460
Less Current liabilities
Bank overdraft		3 000
Accounts payable control		50 000
GST clearing		4 000
Accrued expense		250
Unearned revenue		10 500
Fixed-term loan (due 31 December 2021)		50 000	117 750
WORKING CAPITAL				(6 290)
Add Non-current assets
Property, plant and equipment
Motor vehicle	80 000
Less Accumulated depreciation — motor vehicle	12 000	68 000
Land and buildings		250 000	318 000
Investments
Debentures			18 000
Intangibles
Goodwill		25 000
Patents	15 000
Less Accumulated amortisation — patents	3 000	12 000	37 000	373 000
Less Non-current liabilities
Mortgage on land and buildings				160 000
NET ASSETS				206 710
Represented by Owner’s equity
Capital		203 800
Add Net profit		44 910	248 710
Less Drawings			42 000	206 710

Marking Criteria

Classification

Marking Bands

Descriptor	Marks
Correctly lists accounts within the main headings of classifications for all 5 sections	5
Correctly lists accounts within the main headings of classifications for 4 sections	4
Correctly lists accounts within the main headings of classifications for 3 sections	3
Correctly lists accounts within the main headings of classifications for 2 sections	2
Correctly lists accounts within the main headings of classifications for 1 section	1
None of the above	0

Adjustments

Marking Bands

Descriptor	Marks
Correctly incorporates adjustments to prepaid expenses, accrued expenses and unearned revenue for all 3 accounts	3
Correctly incorporates adjustments to prepaid expenses, accrued expenses and unearned revenue for 2 accounts	2
Correctly incorporates adjustments to prepaid expenses, accrued expenses and unearned revenue for 1 account	1
None of the above	0

Calculations

Descriptor	Marks
Correctly calculates working capital	1
Correctly calculates net assets	1
Correctly calculates owner’s equity	1

VCAA Accounting Extension of recording and reporting

Analysis

Recommendations

Recording Revenue and Expenses

Execution

Identification of Accounts

Recording Amounts

Adjustments

Calculation

Classification

Adjustments

Calculations

Frequently Asked Questions

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