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Prepared by: Kerry Canty, Faculty of Education, Monash University

Quick tests for VCE Accounting Unit 3

Supplement to Compak Issue 1, February 2007, pages 1619

Quick test 1 1

Name: _________________________________

Explain the meaning of the term current liability. Use an example in your explanation.

2 marks 2 Angus owns and manages Dog Treatz, a business that sells a range of dog food and clothing for pampered pooches. The business has borrowed $15 000 from Fast Finance, agreeing to repay $500 per month. Show how this loan would appear on the Balance Sheet of Dog Treatz prepared at 31 March 2007.

2 marks 3 Record the following transactions in the ledgers provided. February 1: Owner contributed a Computer System worth $5000 to the business. February 2: Purchase of Display Equipment for $9900* on credit from Retro Refits (*$900 GST is included in this total). February 3: A payment of $880, including $80 GST, has been incorrectly recorded in the Office Expenses account instead of in the Wages Expense account. (The GST has been correctly recorded.) Capital a/c Debit Date

Date

Cross reference

Cross reference

Credit

Date

Cross reference

Computer System a/c Debit Date Cross reference

Credit

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Date

Cross reference

Display Equipment a/c Debit Date

Cross reference

Credit

Date

Cross reference

CreditorRetro Refits a/c Debit Date Cross reference GST Clearing a/c Debit Date Cross reference

Credit

Date

Cross reference

Credit

Date

Cross reference

Office Expense a/c Debit Date Cross reference Wages Expense a/c Debit Date Cross reference

Credit

Date

Cross reference

Credit 2 + 3 + 2 = 7 marks

Outline the accounting principle that supports the separation of the owners personal financial affairs from the records of the business.

1 mark 5 1 2 2 marks Total: 14 marks Other than by the business making a profit, identify and explain two possible reasons for a change in owners equity over one accounting period.

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Quick test 2 1

Name: _________________________________

Distinguish between an asset and an expense, using the example of stock to explain your answer.

3 marks 2 Dog Treatz uses FIFO to record all changes in stock. 2.1 Identify what the initials FIFO stand for.

2.2 Explain how the FIFO method of stock recording operates.

2.3 Identify the journal(s) in which the information established on the stock card will be used. Information Journals that require this information

1 + 2 + 2 = 5 marks

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Record the following transactions on the stock card provided.

March 1: Balance of Item 501 (EverSafe Filing Cabinets), 50 units purchased at $60 each March 8: Sold 30 units of item 501 for $120 each to Office Supplies, Invoice #3132 March 12: Purchased 50 units of item 501 for $65 each, Invoice #X5454 March 20: Sold 30 units of item 501 for $120 each to OfficeWorks, Invoice #3133 March 26: Donated 1 unit of 501 to local charity to use as a raffle prize. Memo 25 Item: EverSafe Filing Cabinetsitem 501 Supplier: QK Timber Date 2007 Details Qty IN $ Total Qty Min. number: Costing method: FIFO OUT $ Total BALANCE Qty $ Total

5 marks 4 Calculate: cost of sales for item 501 for March 2007

the sales revenue realised from item 501 for March 2007

the gross profit from item 501 for March 2007

3 marks 5 Explain how use of a stock card can improve a businesss management of stock.

2 marks Total: 18 marks

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Quick test 3 Name: _________________________________ . The special journals completed for Dog Treatz for March 2007 are summarised below. Purchases Journal Date Creditor 2007 Mar. 31 Totals Sales Journal Date Debtor 2007 Mar. 31 Totals Cash Receipts Journal Date Details Rec. 2007 no. Mar. 31 Totals Invoice no. Stock 18 200 GST 1 820 Total Creditors 19 820

Invoice no.

Cost of Sales 12 100

Sales 23 500

GST 2 350

Total Debtors 25 850

Bank

32 16 500 200 * Sundries consist of a loan of $3000 and interest revenue of $200.

Disc. Exp. 150

Debtors

Cost of Sales 5 400

Sales 11 500

GST 1 150

Sundries 3 200*

Cash Payments Journal Date Details Ch. Bank Disc. Creditors Wages Office Sales GST Sundries 2007 No. Rev. Exp. Expenses Mar. Totals 26 220 100 17 200 2 400 2 000 1 200 320 3 200** 31 ** Sundries consist of a loan repayment $400, interest expense $200, drawings $1400 and a payment to the Australian Tax Office $1200the GST owing from February 2007. 1 Post the relevant information from the special journals to complete the general ledger accounts listed below. Opening balances at 1 March 2007 were: Date Cash at Bank $9500 D Cost of Saleszero balance Creditors Control $17 200 Cr Debtors Control $21 000 Dr GST Clearing $1200 Cr Sales Revenuezero balance Stock Control $10 000 Dr Cross reference Cash at Bank a/c Debit Date Cross reference Credit

Date

Cross reference

Cost of Sales a/c Debit Date Cross reference

Credit

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Date

Cross reference

Creditors Control a/c Debit Date Cross reference

Credit

Date

Cross reference

Debtors Control a/c Debit Date Cross reference

Credit

Date

Cross reference

GST Clearing a/c Debit Date Cross reference

Credit

Date

Cross reference

Sales Revenue a/c Debit Date Cross reference Stock Control a/c Debit Date Cross reference

Credit

Date

Cross reference

Credit

10 marks 2 Explain why a business would complete a trial balance before starting to prepare accounting reports.

2 marks 3 Identify the source documents that would provide the data for the following journals. Source document Journal Purchases Journal Sales Journal Source document

Journal Cash Receipts Journal Cash Payments Journal

4 marks

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Balance the following account at 30 June 2007. Cross reference Balance Creditors Control Cash at Bank GST Clearing a/c Debit Date Cross reference 2007 950 June 25 Cash at Bank 5 000 30 Debtors Control 1 300 30 Cash at Bank Credit 950 6 000 4 800

Date 2007 June 1 30

3 marks 5 Identify the report on which the balance of this account would appear at 30 June 2007.

1 mark Total: 20 marks

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Quick test 4

Name: _________________________________

Klai owns a business called Art Supplies. The Debtors Subsidiary Ledgers showed the following balances at 1 April 2007. Debtors Northern College City College $ 3 500 7 500 $11 000

The following journals are part of the accounting records prepared for the month ending 31 May 2007. Sales Journal Date Debtor 2007 Apr. 7 City College 12 Northern College 24 Westview Secondary School Invoice Y105 Y106 Y108 Cost of Sales 1 100 3 800 1 300 6 200 Disc. Exp. 100 Sales 2 500 6 000 2 900 11 400 GST 250 600 290 1 140 Total Debtors 2 750 6 600 3 190 12 540 GST 160 290 460 910 Sundries

Cash Receipts Journal Date Details 2007 Apr. 2 Cash Sale 3 Northern College 10 Cash Sale 16 City College 27 Cash Sale

Rec. no. 201 202 203 204 205

Bank 1 760 3 400 3 190 5 000 5 060 18 410

Debtors

Cost of Sales 900 1 700

Sales 1 600 2 900 4 600 9 100

3 500 5 000

100

8 500

2 200 4 800

Prepare and balance the Debtors Control account for April 2007. 4 marks Cross reference Debtors Control a/c Debit Date Cross reference Credit

Date

Prepare the Debtors Subsidiary Ledger accounts for April 2007. Cross reference DebtorNorthern College: a/c Debit Date Cross reference Credit

Date

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Date

Cross reference

DebtorCity College a/c Debit Date Cross reference

Credit

6 marks 3 Prepare a Debtors Schedule for Art Supplies at 31 April 2007. Art Supplies Debtors schedule at .........................

2 marks 4 Identify and explain two reasons for maintaining a subsidiary ledger for debtors.

Reason 1 Reason 2 2 marks Total: 14 marks

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Quick test 5

Name: _________________________________

Art Supplies purchased a van to use for deliveries of larger orders on 1 January 2007. The van cost $33 500 and the business planned to keep it for five years. It is estimated the van would be worth $8500 at the time of disposal. 1 Calculate the deprecation expense that would be included in the reports prepared at 30 June 2007.

3 marks 2 Show how the van would appear in the balance sheet prepared for Art Supplies at 30 June 2008.

3 marks 3 Art Supplies booked a series of advertisements in a monthly magazine. On 1 April the business paid $12 000 for six consecutive monthly advertisements starting in the May edition. Show the ledger accounts for Prepaid Advertising Expense and Advertising Expense at 30 June 2007 before the closing of the ledger. Date Cross reference Prepaid Advertising Expense a/c Debit Date Cross reference Credit

Date

Cross reference

Advertising Expense a/c Debit Date Cross reference

Credit

3 marks 4 Art Supplies paid wages of $2200 on 28 June 2007 and wages of $410 were earned by staff on 2930 June 2007. Prepare the General Journal entry to show the adjustment to wages required at 30 June 2007. A narration is required. General Journal Date Particulars 2007 General Ledger Debit Credit Subsidiary Ledger Debit Credit

3 marks
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Explain the effect on the Balance Sheet if the adjusting entry in question 4 was NOT made.

2 marks Total: 14 marks

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