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2026 VCE Accounting exam: What to learn from last year's mistakes
Hi all, in preparation for the upcoming exam, here's what to learn from last year's mistakes.
These are the 2025 questions I would redo first.
Q8a: average 0.3/1; scored zero 74%; full marks 26%.
Q8d: average 0.6/2; scored zero 59%; full marks 19%.
Q8c: average 1.0/3; scored zero 42%; full marks 12%.
Q4d: average 1.2/3; scored zero 35%; full marks 17%.
Q6b: average 1.2/3; scored zero 43%; full marks 21%.
VCAA's figures are rounded. These are question averages, not study scores.
1. Q8a: Depreciation stops when the old van is traded in
Where students went wrong
Students calculated a full year or gave accumulated depreciation instead of this period’s depreciation expense.
What they should have done
The old van cost $40,000 excluding GST and was depreciated at 15% straight line. It was traded in on 31 December 2024, six months into the reporting year. Expense = $40,000 × 15% × 6/12 = $3,000. The $12,000 carrying value was not the base for straight-line depreciation.
2. Q8c: Separate the three vans before adding anything
Where students went wrong
Answers missed the continuing van or gave a full year’s depreciation to the van bought halfway through the year.
What they should have done
For the year ended 30 June 2025:
Traded-in van: $40,000 × 15% × 6/12 = $3,000.
Continuing van: ($90,000 − $40,000) × 15% = $7,500.
New van: $48,000 × 15% × 6/12 = $3,600.
Total depreciation expense = $14,100.
The report has a stray reference to December 2025 in its explanation. The exam asks for 30 June 2025, and the calculation above follows the exam.
3. Q8d: A trade-in allowance is not a cash receipt
Where students went wrong
Students treated the $10,000 allowance as cash coming in and the full purchase price as a separate cash payment. Others put the GST in investing activities.
What they should have done
New van excluding GST: $48,000. Less trade-in allowance: $10,000. Cash paid for the asset: $38,000, an investing outflow.
GST paid = $4,800, an operating outflow under the VCE treatment. Total cash leaving the bank = $42,800. The allowance reduces the payment; the business did not receive $10,000 cash from the trade-in.
4. Q4d: Explain why cash flow can exceed profit
Where students went wrong
Responses named cash and profit differences without explaining how they affected this comparison.
What they should have done
Collection from an existing account receivable increases this period’s operating cash inflow without creating this period’s sales revenue. Depreciation reduces this period’s profit without a current cash payment. Those are two different reasons operating cash flow can be higher than net profit. Use the relevant budget items to show the direction, not just the accounting definitions.
5. Q6b: More sales per dollar of assets does not guarantee higher ROA
Where students went wrong
Students saw higher sales and asset turnover and assumed profitability had improved. They did not explain the falling return on assets.
What they should have done
ROA depends on both asset turnover and net profit margin. If turnover rises but ROA falls, the margin has deteriorated enough to outweigh the turnover improvement. Explain that expenses are consuming a larger share of sales revenue. For example, higher delivery or wage costs can leave less profit from each sales dollar even while the assets generate more revenue.
Source: VCAA 2025 Accounting examination report: source. Averages and percentages above are VCAA's published, rounded figures; the explanations are my paraphrases.
Use the VCE Accounting hub and past papers and examiner reports alongside this.
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