VCE Accounting 2024

This page walks through the 2024 VCE Accounting examination, the last paper set on the previous study design. It maps every part of all eight questions with the average mark from the VCAA examination report, works six exam-style questions based on the paper's heaviest and hardest parts (with every figure recalculated), and lists the specific errors the report described.

How to use this page

• Questions are from the 2024 VCE Accounting examination, copyright Victorian Curriculum and Assessment Authority (VCAA). The paper is listed on the VCAA Accounting examinations page. Each question is summarised here, not reproduced; open the official examination PDF for the inventory card, the data tables, the depreciation graph and the answer book formats.
• Answers and guidance are our own responses, written to the marking guidance in the 2024 VCE Accounting external assessment report (Word document), not copied from VCAA's sample answers. Averages quoted as "average 1.6 of 4" come from the report's mark tables.
• Study design. This paper was set on the previous VCE Accounting study design (accredited 2019 to 2024); the current design applies from 2025. Every topic this paper examines (FIFO and identified cost, product and period costs, the Cash Flow Statement, budgeted reports, Cash Flow Cover and the other liquidity indicators, balance day adjustments, the Allowance for Doubtful Debts, qualitative characteristics, depreciation methods and disposal of a non-current asset) is still in the current Units 3 and 4 key knowledge, and the financial indicator formulas are unchanged, so the whole paper is useful practice. Three differences touch this paper: the allowance for doubtful debts and writing off bad debts (Question 6) moved from Unit 4 to Unit 3; the current design adds explicit rules that GST applies to a cash disposal of a non-current asset but not to a trade-in, which is the treatment Question 8a required; and the current list of business documents no longer names cheque butts (Question 8 pays for the new van by cheque), so treat that payment like an EFT payment. The distinction between cash and profit, tested in Question 3c, is key knowledge in both designs.

Structure and timing

The paper was 100 marks in 2 hours of writing time, plus 15 minutes reading time, with a scientific calculator. There was no multiple choice and no section split: eight compulsory questions, each built on a short case study, answered in a separate Answer Book that supplied the ledger, journal and report formats.

That is 1.2 minutes per mark. A sensible plan: Question 1 about 8 minutes, Question 2 about 19, Question 3 about 14, Question 4 about 12, Question 5 about 14, Question 6 about 22, Question 7 about 11 and Question 8 about 19. Use reading time to find the traps the report named: the credit note in Question 1, the cash sale (not a trade-in) in Question 8, and the opening balances in Question 6. The report noted that most students finished; skipped parts reflected gaps in topic knowledge, not time.

What this paper assessed

Averages are from the report's mark distribution tables.

Question 1: Blozzo Bazaar (7 marks). An identified cost inventory card for the Extreme Hero costume, sold at a 100% mark-up.

• 1a (1 mark) Identify the transaction behind the 5 February entry (invoice XV43): a credit purchase of 12 costumes at 155 dollars each (plus GST). Average 0.7 of 1.
• 1b (3 marks) Record the 7 February entry (credit note 234) in the General Journal: a sales return of 2 costumes. Average 1.9 of 3.
• 1c (3 marks) Justify using FIFO for cheap accessories and identified cost for expensive items. Average 1.5 of 3.

Question 2: Me4Camping (16 marks). A three-year table (sales, sales returns, Gross Profit Margin, Net Profit, Inventory Turnover, customer satisfaction) after the owner switched to a cheaper, lower-quality supplier but kept the Me4 brand.

• 2a (6 marks) Discuss the impact of the change, including financial and ethical considerations. Average 3.5 of 6; 25% scored at least 5.
• 2b (4 marks) General Journal entries for a 70 000 dollar credit purchase of inventory from New Zealand and a 3 000 dollar delivery treated as a period cost. Average 2.9 of 4.
• 2c (3 marks) Explain why the delivery was a period cost, not a product cost. Average 1.8 of 3.
• 2d (3 marks) Explain the effect on Net Profit of treating the delivery as a period cost when not all the inventory had been sold. Average 1.4 of 3.

Question 3: Cowpers Carpets (12 marks). Quarterly reporting; loans and Capital at 30 June and 30 September 2024, Net Profit, cash and inventory drawings, a new loan.

• 3a (3 marks) Prepare the Capital ledger to find the owner's cash contribution. Average 1.6 of 3.
• 3b (5 marks) Prepare the Financing Activities section of the Cash Flow Statement. Average 3.1 of 5; 50% scored at least 4.
• 3c (4 marks) Explain two reasons why Net Cash Flow from Operating Activities (82 000 dollars) exceeded Net Profit (60 000 dollars). Average 1.6 of 4; 38% scored 0.

Question 4: FZ Pool Supplies (10 marks). 2024 figures and owner's expectations for 2025.

• 4a (7 marks) Prepare the Budgeted Income Statement for the year ending 30 June 2025. Average 4.6 of 7; only 15% scored full marks.
• 4b (3 marks) Explain how the business should use the budget during the year. Average 1.6 of 3.

Question 5: Patio (12 marks). Falling Cash Flow Cover, Quick Asset Ratio and a slowing Accounts Receivable Turnover over three quarters.

• 5a (2 marks) Explain why Cash Flow Cover is an important liquidity indicator. Average 1.0 of 2; 37% scored 0.
• 5b (4 marks) Describe two problems a business with poor liquidity may face. Average 2.5 of 4.
• 5c (3 marks) Recommend one of four options to improve liquidity and maintain performance, and justify it. Average 2.2 of 3.
• 5d (3 marks) Select the option least likely to do so, and justify it. Average 2.2 of 3.

Question 6: PA Sound (18 marks). Monthly reporting; opening Accrued Wages and Allowance for Doubtful Debts, October transactions including a customer deposit.

• 6a (9 marks) Complete the Wages, Unearned Sales Revenue and Allowance for Doubtful Debts ledgers at 31 October. Average 4.2 of 9; 15% scored 0 and 12% scored 9.
• 6b (6 marks) General Journal balance day adjustments at 31 October. Average 2.8 of 6; 30% scored 0.
• 6c (3 marks) Explain the doubtful debts adjustment with reference to one qualitative characteristic. Average 1.5 of 3.

Question 7: Screenz2U (9 marks). A graph of carrying value under straight-line and reducing-balance depreciation for 200 000 dollar equipment over 10 years.

• 7a (3 marks) Explain why depreciation differs each year but not over the asset's life. Average 1.5 of 3.
• 7b (2 marks) Explain what the 20 000 dollars at year 10 represents. Average 1.1 of 2.
• 7c (1 mark) Calculate the straight-line depreciation per year. Average 0.9 of 1.
• 7d (3 marks) Show the equipment in the Balance Sheet at the end of year 4 under reducing balance. Average 2.0 of 3.

Question 8: PetzSup Direct (16 marks). Cash sale of an old van, purchase of a new van, refrigeration fitted to it, and 12 months insurance.

• 8a (11 marks) General Journal entries for the disposal and the purchases. Average 6.1 of 11.
• 8b (5 marks) Classify the resulting items in the Cash Flow Statement (section and inflow or outflow). Average 3.1 of 5.

Worked practice questions (exam-style)

Common errors students made

• Question 1a: not saying the purchase was on credit, or not saying it was inventory.
• Question 1b: recording the sales return as a purchase return, calling it Sales rather than Sales Returns, getting the mark-up wrong, or reversing Inventory and Cost of Sales. The return is 2 costumes at a cost of 140 dollars, so the selling price is $2 \times 140 \times 2 = 560$ dollars plus 56 GST.
• Question 1c: defining FIFO and identified cost without justifying the choice, or arguing that FIFO is used for fresh food so the oldest stock is sold first.
• Question 2a: saying inventory turnover "increased" instead of "slower", and listing points without weighing positives and negatives.
• Question 2b: crediting Bank instead of Accounts Payable for the inventory, crediting Accounts Payable instead of Bank for the delivery, or calling the delivery Prepaid Delivery.
• Question 2c: defining a period cost without linking it to the three different product lines that made the delivery impossible to allocate logically.
• Question 2d: writing that Net Profit "decreased" rather than was lower, and not mentioning that some of the inventory was unsold, so as a product cost part of the delivery would have stayed in inventory.
• Question 3a: putting the cash and inventory drawings separately into Capital, cross-referencing the contribution to "Capital contribution" instead of Bank, and leaving off the totals.
• Question 3b: labelling Capital as "cash contribution" or "Bank", netting the loan received against the repayment, including inventory drawings as cash, and using the wrong title for Net Cash Flow from Financing Activities.
• Question 3c: not describing operating cash flows as day-to-day trading cash flows, not distinguishing cash from profit, and citing capital contributions or loans. Credit sales exceeding collections was not accepted, because it makes cash lower, not higher.
• Question 4a: poor report format, applying the mark-up wrongly to get Cost of Sales, miscalculating wages, ignoring the rent rise from 1 January 2025, and not recognising that 2024 depreciation covered only 4 months. Writing "Depreciation" instead of "Depreciation of Vehicle" also cost a mark.
• Question 4b: describing a review of past performance, or checking cash for buying assets, instead of using the budget during the year to set targets, control expenses and take corrective action.
• Question 5a: not saying that Cash Flow Cover compares operating cash flows with current liabilities, and not linking it to meeting short-term debts as they fall due.
• Question 5b: giving the same problem twice (not paying debts and not paying suppliers), or naming a problem without describing its consequence.
• Questions 5c and 5d: recommending without justifying, arguing about profitability rather than liquidity, and missing that raising the mark-up does little for liquidity when receivables are collected more slowly.
• Question 6a: missing that the 12 October payment cleared the accrued wages, balancing Wages instead of closing it, crediting Sales and GST Clearing on 25 October, ignoring the opening Allowance balance, and leaving out dates.
• Question 6b: recording the advertising payment instead of the adjustment, leaving adjustments out, and reversing entries.
• Question 6c: choosing Relevance without a supporting explanation, naming Faithful Representation without explaining why the allowance is needed, or citing an accounting assumption instead of a qualitative characteristic.
• Question 7a: saying depreciation differs by method without explaining why, and not linking the equal totals to the same cost, residual value and useful life.
• Question 7b: calling the 20 000 dollars the carrying value rather than the residual value at the end of the useful life, and not saying it is the future economic benefit still to be consumed.
• Question 7d: leaving out the Non-Current Assets heading and reversing Accumulated Depreciation and carrying value. The graph shows carrying value, so 79 621 is the carrying value and accumulated depreciation is 120 379.
• Question 8a: treating the cash sale as a trade-in, omitting GST on the sale, combining the new van, refrigeration and insurance in one entry, recording Insurance Expense instead of Prepaid Insurance Expense, and dropping "of Van" from account titles.
• Question 8b: reporting the profit on disposal as a cash flow, and classing the sale of the van as financing rather than investing.

How to use this paper

Sit the paper in 2 hours after 15 minutes of reading time, using the official Answer Book formats, then mark it against the report and compare your part marks with the averages above. Questions 3c, 5a, 2d and 6b were the lowest-scoring parts, so if time is short, drill those: cash versus profit, liquidity indicators, period cost effects on profit and balance day adjustments with opening balances. Redo the journal questions (1b, 2b, 6b, 8a) straight from the source documents until you can post each document as its own entry with the correct GST.