Macmillan accounting VCE units 1 and 2 PDF

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Macmillan accounting VCE units 1 and 2 Macmillan accounting VCE units 1 and 2Macmillan accounting VCE units 1 and 2Macmillan accounting VCE units 1 and 2...

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MACMILLAN ACCOUNTING VCE UNITS 1 & 2

Chapter 1 Check Your Understanding questions Check Your Understanding 1.1 1

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Once you get a job and start earning an income you will pay tax, pay bills, save and borrow money. Keeping financial records is an important part of managing these tasks and accounting will provide a system to do so. The basic steps include collecting financial data, recording that financial data, reporting the financial information derived from financial data, analysing those reports and making decisions based on those reports and analysis. If a person has accounting information then decisions made will be based on accurate data and are more likely to be good decisions. If a person doesn’t have accurate information, then there is an increased chance of poor decision-making.

Check Your Understanding 1.2 1

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Revenue is the inflow of economic resources when it sells goods or provides services. An example is the money received from the sale of inventory by a business. Expenses are the loss of economic resources that were under the control of the business when revenue was earned. An example is the cash paid in wages to employees. Profit is calculated by deducting expenses from revenue. Inventory, Shop Fittings, Computer

Check Your Understanding 1.3 1

Profit = Sales – Expenses $268,200,000 = $5,630,000,000 – Expenses Expenses = $5,630,000,000 - $268,200,000 Expenses = $5,361,800,000

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Total assets – Total liabilities = Owner’s equity $2,452,300,000 – $1,598,800,000 = $853,500,000

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There are a number of reasons students could refer to: •

•

The business has adapted to changing times – this is seen through the change in product lines sold. The move to Blue-Ray and DVDs and away from cassettes and vinyl records supports this JB Hi-Fi also sells quality products cheaply – using a low mark-up and hoping a high volume of sales will generate the profit they make

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Chapter 1 exercise solutions 1 Company research a

See below: 2018

2017

Total assets

$2,491.7m

$2,459.8m

Total liabilities

$1,544.1m

$1,606.3m

$947.6m

$853.5m

$6,854.3m

$5,628.0m

Net profit before tax

$334.5m

$259.2m

Net profit after tax

$233.2m

$172.4m

193

185

Owner's equity Sales

Total number of stores

b

The data provided suggests that JB Hi-Fi has performed better in 2018 compared to 2018. In terms of growth the business has increased the number of stores it operates by 8. This has seen the business increase its sales by over $1,100m leading to an increase in profit before and after tax. Increased profits seem to have been used to purchase additional assets (evidenced by the increase in store numbers) and decrease the debts of the business (as seen by the reduced Liabilities of the business). This has allowed the business to retain some of the profits in the business, leading to an increase in Owner’s Equity.

2 Research on the banking sector NAB ($) 2017

CBA ($) 2018

ANZ ($) 2017

WESTPAC ($) 2017

Total assets

$788,325m

$975,165m

$797,379m

$851,875m

Total liabilities

$737,008m

$907,305m

$745,531m

$790,533m

Owner's equity

$51,317m

$67,860m

$51,848m

$61,342m

Net profit before tax

$8,661m

$13,420m

$8,297m

$11,515m

Net profit after tax

$5,288m

$9,394m

$6,234m

$7,997m

a b c d

CBA CBA CBA, Westpac, NAB, ANZ All 4 banks (known as The Big 4) make significant profit and have a significant amount of assets. They also pay a significant amount of tax to the government as shown by the difference between before and after tax profit figures. The Commonwealth Bank (which is Australia’s oldest bank) made the most profit and has the highest value of assets. The volume of assets, liabilities and profit suggest there is a great need for accounting services to keep track of these items.

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