Victorian Certificate of Education
2020
ACCOUNTING
Written examination
Friday 20 November 2020
Reading time: 3.00 pm to 3.15 pm (15 minutes)
Writing time: 3.15 pm to 5.15 pm (2 hours)
QUESTION BOOK
Structure of book
Number of Number of questions Number of
questions to be answered marks
10 10 100
• 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
correction fluid/tape.
Materials supplied
• Question book of 9 pages
• Answer book of 22 pages
Instructions
• Write your student number in the space provided on the front cover 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 2020
,2020 ACCOUNTING EXAM QB 2
Instructions
Answer all questions in the answer book provided.
Question 1 (12 marks)
EyeWear sells sunglasses to retail stores around Victoria. The sunglasses are purchased and sold in
boxes of 25. The business uses the First In, First Out (FIFO) cost assignment method for recording
inventory. The business has provided the following information for March 2020.
1 March Opening inventory:
• 70 boxes at $400 each (plus GST)
• 30 boxes at $450 each (plus GST)
5 March Credit sale of 14 boxes for $600 each (plus GST)
19 March Cash purchase of five boxes for $420 each (plus GST)
20 March Cash sale of 70 boxes for $600 each (plus GST)
28 March Credit purchase of 30 boxes for $400 each (plus GST)
31 March Closing inventory as per physical stocktake: 53 boxes
Additional information
• Certified UV labels are provided to EyeWear at a cost of $15 (plus GST) per box of
sunglasses.
• The owner advises that as new models of sunglasses for the new season become available,
the sunglasses on hand will be reduced to sell at $400 (plus GST) per box. Free delivery to
retail stores will also be included at a total cost of $200 (plus GST) to EyeWear
(Memo 41).
a. Calculate the total cost of the closing inventory at 31 March 2020 as per the physical
stocktake. 3 marks
b. Calculate the total value of the inventory at 31 March 2020 after applying the lower of cost
and net realisable value inventory valuation method. 2 marks
c. Record the necessary entries for 31 March 2020 in the General Journal.
Narrations are not required. 4 marks
d. On 1 April 2020, EyeWear donated four boxes of sunglasses to a local school.
Explain how this donation meets the definition of one accounting element. 3 marks
, 3 2020 ACCOUNTING EXAM QB
Question 2 (4 marks)
Kitchen Central received the following document.
Wood n Set
Tax invoice
Invoice No: W58
Date: 24/04/2020
To: Kitchen Central
Description Quantity Unit price Subtotal
Handcarved plates set 8 $500 $4 000
GST $400
Total amount due $4 400
Terms: 3/7, n/30
a. Describe the transaction that led to this document. 2 marks
b. On 30 April 2020, Kitchen Central settled the account with Wood n Set.
Record the entry to settle the account on 30 April 2020 in the General Journal.
A narration is not required. 2 marks
Question 3 (6 marks)
The accountant for Music Times has supplied the following information.
2018 2019 2020
Gross Profit Margin 60% 64% 68%
Net Profit Margin 33% 33% 31%
The owner of Music Times states that as sales have remained constant over the three-year period,
this shows that the business has achieved favourable profitability.
Using the information provided, discuss whether the owner’s statement is justified.
TURN OVER
, 2020 ACCOUNTING EXAM QB 4
Question 4 (10 marks)
Mayfair Furniture reports on a monthly basis. Wages are paid on the last Friday of each month. On
Tuesday 30 June 2020, wages owing to employees totalled $1 200.
a. Record the balance day adjustment required on 30 June 2020 in the General Journal.
A narration is not required. 1 mark
b. With reference to one accounting assumption, explain why this balance day adjustment is
necessary. 3 marks
c. Wages of $13 800 were paid on Friday 31 July 2020 (Chq. 234).
Record this payment in the General Journal.
A narration is not required. 3 marks
d. Mayfair Furniture has recently purchased furniture for use in its office administration area at a
cost of $10 000 (plus GST). The owner has suggested that this furniture should be recorded as
inventory because it might be sold at a later date. The accountant has stated that recording it in
this way would be a breach of faithful representation.
Justify the accountant’s statement. 3 marks
2020
ACCOUNTING
Written examination
Friday 20 November 2020
Reading time: 3.00 pm to 3.15 pm (15 minutes)
Writing time: 3.15 pm to 5.15 pm (2 hours)
QUESTION BOOK
Structure of book
Number of Number of questions Number of
questions to be answered marks
10 10 100
• 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
correction fluid/tape.
Materials supplied
• Question book of 9 pages
• Answer book of 22 pages
Instructions
• Write your student number in the space provided on the front cover 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 2020
,2020 ACCOUNTING EXAM QB 2
Instructions
Answer all questions in the answer book provided.
Question 1 (12 marks)
EyeWear sells sunglasses to retail stores around Victoria. The sunglasses are purchased and sold in
boxes of 25. The business uses the First In, First Out (FIFO) cost assignment method for recording
inventory. The business has provided the following information for March 2020.
1 March Opening inventory:
• 70 boxes at $400 each (plus GST)
• 30 boxes at $450 each (plus GST)
5 March Credit sale of 14 boxes for $600 each (plus GST)
19 March Cash purchase of five boxes for $420 each (plus GST)
20 March Cash sale of 70 boxes for $600 each (plus GST)
28 March Credit purchase of 30 boxes for $400 each (plus GST)
31 March Closing inventory as per physical stocktake: 53 boxes
Additional information
• Certified UV labels are provided to EyeWear at a cost of $15 (plus GST) per box of
sunglasses.
• The owner advises that as new models of sunglasses for the new season become available,
the sunglasses on hand will be reduced to sell at $400 (plus GST) per box. Free delivery to
retail stores will also be included at a total cost of $200 (plus GST) to EyeWear
(Memo 41).
a. Calculate the total cost of the closing inventory at 31 March 2020 as per the physical
stocktake. 3 marks
b. Calculate the total value of the inventory at 31 March 2020 after applying the lower of cost
and net realisable value inventory valuation method. 2 marks
c. Record the necessary entries for 31 March 2020 in the General Journal.
Narrations are not required. 4 marks
d. On 1 April 2020, EyeWear donated four boxes of sunglasses to a local school.
Explain how this donation meets the definition of one accounting element. 3 marks
, 3 2020 ACCOUNTING EXAM QB
Question 2 (4 marks)
Kitchen Central received the following document.
Wood n Set
Tax invoice
Invoice No: W58
Date: 24/04/2020
To: Kitchen Central
Description Quantity Unit price Subtotal
Handcarved plates set 8 $500 $4 000
GST $400
Total amount due $4 400
Terms: 3/7, n/30
a. Describe the transaction that led to this document. 2 marks
b. On 30 April 2020, Kitchen Central settled the account with Wood n Set.
Record the entry to settle the account on 30 April 2020 in the General Journal.
A narration is not required. 2 marks
Question 3 (6 marks)
The accountant for Music Times has supplied the following information.
2018 2019 2020
Gross Profit Margin 60% 64% 68%
Net Profit Margin 33% 33% 31%
The owner of Music Times states that as sales have remained constant over the three-year period,
this shows that the business has achieved favourable profitability.
Using the information provided, discuss whether the owner’s statement is justified.
TURN OVER
, 2020 ACCOUNTING EXAM QB 4
Question 4 (10 marks)
Mayfair Furniture reports on a monthly basis. Wages are paid on the last Friday of each month. On
Tuesday 30 June 2020, wages owing to employees totalled $1 200.
a. Record the balance day adjustment required on 30 June 2020 in the General Journal.
A narration is not required. 1 mark
b. With reference to one accounting assumption, explain why this balance day adjustment is
necessary. 3 marks
c. Wages of $13 800 were paid on Friday 31 July 2020 (Chq. 234).
Record this payment in the General Journal.
A narration is not required. 3 marks
d. Mayfair Furniture has recently purchased furniture for use in its office administration area at a
cost of $10 000 (plus GST). The owner has suggested that this furniture should be recorded as
inventory because it might be sold at a later date. The accountant has stated that recording it in
this way would be a breach of faithful representation.
Justify the accountant’s statement. 3 marks
