ACCY111 Lecture 13 PDF

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Lecture 13 Slides...

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ACCY111 Week 13 Dr Stephanie Perkiss– Subject Coordinator

Preparing for Final Exams

Acceptable forms of Identification in Final Exams • UOW Student Card – ensure the back is signed • UOW College Student Card - ensure the back is signed • Australian Driver’s Licence • Passport

Calculators in Final Exams • Only calculators with the ‘UOW Approved Calculator’ label are permitted in exams. • Labels will not be issued at exam venues. • Need a label??? Visit the Uni Shop or Student Central.

Food and Drink in Exams Water

Lollies

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Cold or room temperature water only.

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Water must be in a clear (see-through), plastic bottle with a lid.

Only lollies are permitted in exam venues.

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Any writing or labels on the bottle must be removed.

Only lollies without wrapper are permitted.

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Lollies need to be placed in a clear ziplock bag.

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Reduce Stress in Exams • Only bring items to the exam venue that are permitted for your exam. • NO calculator covers permitted in exam venues. • Arrive 30 minutes early. • Show ID at the exam entry. • No items in pockets. • Remove labels off drink bottles, erasers, lollies etc • Check your Section and Seat Number before your exam. • No bags are permitted in the Sports Hub. Leave your bag in Building 41 Room 104.

Final Exam Timetable Your final exam timetable will be released on SOLS. Check your timetable before the exam and take note of your venue, authorised materials, section and seat number. Please check your timetable carefully, as extra time will not be given for failure to arrive at the correct time and place. To find out when your exam timetable will be released go to the Key Dates page on the UOW website.

For more information visit the Exams webpage: uow.edu.au/student/exams

Best of luck with your upcoming exams.

Review Lecture

FINAL EXAM - Details • • • • • • • • • •

3 Hours 7 Questions worth a total of 100 marks Weighted 60% of total grades You must PASS the final to PASS the subject ALL questions must be answered NO multiple choice in the final exam Questions are worth different marks (budget your time accordingly) You must bring a UOW approved calculator (this must be issued with a sticker on the back of it). Dictionaries are NOT permitted in the exam room. Watches are NOT permitted in the exam room.

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Paper comprises: • •

6 technical / calculation questions – a couple have an analysis / short answer component included. 1 discussion / short answer questions

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Final Exam Information •

The Vinnari and Laine (2017) journal article will NOT be examined in the final exam.

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GST will NOT be examined. Reversing entries will NOT be examined.

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ALL other aspects of the subject are examinable.

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No templates will be given.

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Exam Technique • • • •

Answer each question on a new page Clearly label the number of the question you are answering, and which part, e.g. Q3 a) etc. Make sure the examiner can read your writing! Show ALL workings (if you do the right thing with the wrong number you may still get marks for understanding of process).

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Weeks 1 - Decision Making & the conceptual framework Chapter 1 & 10 • Users of accounting information • Elements of accounting; and their relationship Equity = Assets – Liability Revenue – Expenses = Profit

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Weeks 1 - Decision Making & the conceptual framework • •

The conceptual framework Qualitative characteristics of financial statements -– Fundamental: relevance, faithful representation, economic substance – Enhancing: comparability, consistency, verifiability, timeliness, understandability

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Accounting principles, e.g. entity concept etc.

Document title

Weeks 2 - Financial Statements for Decision Making Chapter 2 • The accounting equation: assets = liabilities + equity • Know each of the elements and common accounts in reporting. • Common financial statements: – Balance sheet (multiple formats) – Income Statement – Statement of Changes in Equity

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Useful Revision weeks 2 • • •

Exercise 2.1 and 2.2 Problem 2.20 DAXIL (Know your debits and credits!)

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Week 3 Recording Transactions Chapter 3 • Recording transactions – Source documents: tax invoice, purchase order, cash register receipts, credit card slips, – Identifying account categories: all the different accounts – The accounting cycle – recognise transactions, journal, ledger, trial balance, financial statements (this is simplified). – The accounting equation must remain in balance! (double-entry)

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Week 3 Recording Transactions Week 3 Lecture problem  Owner invested cash to the business  Purchased equipment for cash / credit  Paid XX expenses in the business  Revenue received – in case / on account / in advanced  Owner withdraw cash for personal reasons

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Useful Revision week 3 • •

Exercise 3.5 Problem 3.18

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Weeks 4 and 5 Adjusting the accounts Chapter 4 • Adjusting entries for deferrals – deferrals are expenses paid in advance (prepaid expenses) or revenue (unearned revenues) • Adjusting entries for accruals – accruals are expenses not yet paid for (accrued expenses) or revenue earned but not yet received in the form of cash (accrued revenues • Adjusted trial balance • You will NOT be asked to construct a 10 column worksheet, but need to know how to use/the elements of a worksheet

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Example of deferrals 1. You paid for one-year of insurance on 1 January 2016. The annual premium was $12,000. The policy expires on 31-12-2016. 1/1/16 Prepaid Insurance 12,000 Cash 12,000 Your accounting year ends on 30-6-2016: 30/6/16 Insurance Expense 6,000 Prepaid Insurance 6,000 Similar case/type of adjustment for recording depreciation

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Example of deferrals Ticketek received $20,000 revenue in advance for concerts on 1 January 2016. 1/1/16 Cash 20000 Unearned Revenue 20000 By the 30-6-2016 they had earned half of the revenue: 30/6/16 Unearned Revenue 10,000 Revenue 10,000

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Example of an accrual It is the close of business on 30-6-2016, the end of your financial year. Your last journal entry to record Wages Expense was on 23-6-2016. Your employee wages accrued from that date until the close of business on 30-62016 were $750,000. The adjusting entry on 30-6-2016 will be: Wages Expense750,000

Wages Payable

750,000

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Useful revision weeks 4 and 5 • •

Exercise 4.5 Exercise 4.12

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Week 6 - Completing the Accounting Chapter 5 • • • •

Closing entries: Just need to get the balance in revenues, expenses, profit and loss accounts back to zero to start the next year. Closing temporary accounts - Debit all revenue and gain accounts to get them to zero. Credit all expense accounts to get them to zero. In both cases, the other part of the entry is to the account “Profit and Loss Summary.” Close “Profit and Loss Summary” and “Drawings (and Dividends)” to the Owner’s Capital” account (or to “Retained Earnings” if it’s a private or public company). Post closing trial balance

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Useful revision week 6 • •

Exercise 5.5 Exercise 5.7

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Week 7 - Accounting for Retailing Chapter 6 • Income statement for a retailer: Revenue – Cost of Sales = Gross Profit. • Gross Profit– Other Expenses = Profit. • Freight can be EXW or DDP • Accounting for sales transactions – Sales returns and allowances Sales returns and allowances 50 Accounts receivable 50 – Sales with a discount allowed to customer Cash 98 Discount allowed 2 Accounts receivable 100 29

Week 7 - Accounting for Retailing Accounting for purchases and cost of sales  Periodic system (use the purchases account)  Perpetual system (use the inventory account) –

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Purchases Inventory / Purchases

100 Accounts Payable / Cash

Creditors pay within discount period Accounts Payable 100 Cash Discount Received

100

98 2

Remember also - Settlement discounts; purchase returns and allowances; freight charges; recording sales, note different depending on use of periodic or perpetual! 30

Useful revision week 7 • •

Exercise 6.2 Exercise 6.6

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Week 8 - Accounting Systems and internal controls Chapter 7 • •

Thinking of accounting as a system Internal Controls of accounting systems • Principles of good internal control (including subsidiary ledgers)

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Limitations of internal controls in an accounting system (identify and describe) (page 288)

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Week 8 - Accounting Systems and internal controls • •

Special journals = form of good internal controls Use and advantages of special journals – – – – –

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Sales journal Purchases Journal Cash Receipts Journal – used to record ALL receipts of cash Cash Payments Journal – used to record ALL payments of cash General Journal

Use of control accounts – Accounts receivable – Accounts payable 33

SALES JOURNAL • • • •

Records only credit sales of inventory Total posted to general ledger monthly – Acc. Rec. and Sales Detail by debtor posted to subsidiary ledger daily Advantages – Each transaction recorded on a single line – Entries do not require a narration – Posting efficiency achieved • “like” transactions are grouped, and postings reduced

SALES JOURNAL Date Jan. 5 15 25 31

Invo. No. 101 102 103

Account T. Ross D. Jones P. Hill

GENERAL LEDGER Accounts Receivable Jan.31 800

Amount $100 500 200 $800

A/R SUBSIDIARY LEDGER Jan. 5

Sales Jan.31

Post.Ref.

T. Ross 100

Jan. 15

D. Jones 500

Jan. 25

P. Hill 200

800

PURCHASES JOURNAL • • • • •

Records only credit purchases Can be used for items other than inventory Total posted to general ledger monthly Detail by debtor posted to subsidiary ledger daily Advantages – as for sales journal

PURCHASES JOURNAL Date. Jan. 1

Account

Post.Ref.

Amount

ABC Company

13 23 31

$300

Colt Ltd Dunn & Co.

GENERAL LEDGER

200 400 $900

A/P SUBSIDIARY LEDGER ABC Company

Accounts Payable Jan.31 Purchases Jan.31

900

900

Jan. 1

300

Jan. 13

200

Colt Ltd Dunn & Co Jan. 23

400

Useful revision weeks 8

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Problem 7.21 (a) Two more practice questions available on Moodle Exercise 7.11 & 7.12

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Week 9, 10 & 11 • Vinnari and Laine article (week 9 reading) WILL NOT be examined in the final. • Theoretical discussion

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– Social accounting – types? Tools? (week 9) – Corporations relationship to the Sustainable Development Goals (week 10 and 11) Resources – lecture slides/recordings/matieral and tutorial discussions

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Week 12 Analysis and interpretation of financial statements Chapter 19 • • • •

Percentage analysis Ratio analysis (Liquidity, solvency, profitability) – know WHAT each ratio will help analyse/show. Limitations of financial analysis Useful revision questions: – Exercise 19.5 – Exercise 19.6 – Problem 19.16

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Ratios you should know NO formula sheet will be given in the exam. • • • • • • •

Current ratio Quick ratio Inventory turnover/Days in inventory Receivables turnover Debt to equity ratio Profit margin Return on Assets

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HINTS FOR SUCCESS • Tutorial questions are very important, and should play a key part in your preparation – Remember practice, practice, practice • SHOW ALL YOUR WORKINGS • Manage the time well on your questions • Attempt all questions • Study groups can work well

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BE AWARE • • •

Check and recheck the exam timetable on your SOLS. Students who misread the exam timetable will not be offered another exam. Be aware of university policy re examinations

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GOOD LUCK! •

From the teaching team, thank-you for your hard work this session 

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