VCE Accounting Practice Questions
The 64 practice questions inside the VCE Accounting Mastery Pack, grouped by area of study. Every question comes with a full worked solution.
- Recording Financial Data
- Multiple choice × 12
- record × 2
- explain × 1
- discuss × 1
- Reporting Financial Information
- Multiple choice × 12
- Prepare × 1
- Explain × 1
- Analyse × 1
- Prepare and explain × 1
- Balance-Day Adjustments and Budgeting
- Multiple choice × 12
- Record × 1
- Report × 1
- Analyse × 1
- Explain × 1
- Analysis, Interpretation and Ethics
- Multiple choice × 12
- calculate and evaluate × 1
- explain × 1
- discuss × 1
- justify × 1
Question 1 (10 marks)
Sportfirst Melbourne is a sporting-goods retailer owned by Mia Tran. The business is registered for GST, uses the perpetual inventory system and records credit transactions in specialised journals. On 3 June 2025 Mia received the following source document.
| TAX INVOICE 4471 Alpine Footwear Pty Ltd (ABN 55 004 112 900) | |
|---|---|
| To: Sportfirst Melbourne Date: 3 June 2025 Terms: 30 days | |
| 50 pairs Trailblazer running shoes @ $80 | $4 000 |
| GST 10% | $400 |
| Total payable | $4 400 |
On 6 June 2025 Mia issued Receipt 812 for a cash sale of 20 pairs of these running shoes for $2 200 (including GST). The 20 pairs had cost the business $65 each.
a. Record the 3 June credit purchase in the Purchases Journal and the 6 June cash sale (both the sale and the cost of sales) in the Cash Receipts Journal of Sportfirst Melbourne. (6 marks)
b. Explain why the GST on the 3 June purchase is recorded as a debit to the GST Clearing account, with reference to one accounting assumption or qualitative characteristic. (4 marks)
Show the worked answer
Answer: Worked solution
a. Purchases Journal
| Date | Supplier / Doc | Creditors Control | Inventory | GST Clearing |
|---|---|---|---|---|
| 3 Jun | Alpine Footwear (Inv 4471) | 4 400 | 4 000 | 400 |
General-ledger effect: Dr Inventory 4 000, Dr GST Clearing 400, Cr Creditors Control 4 400.
Cash Receipts Journal (6 June, Rec 812)
| Date | Details | Bank | Sales | Cost of Sales | GST Clearing |
|---|---|---|---|---|---|
| 6 Jun | Cash sale (Rec 812) | 2 200 | 2 000 | 1 300 | 200 |
Working — sale: $2 200 ÷ 1.1 = $2 000 net sales; GST = $2 200 − $2 000 = $200. Cost of sales: 20 × $65 = $1 300 (Dr Cost of Sales 1 300, Cr Inventory 1 300).
Double-entry check: Dr Bank 2 200 = Cr Sales 2 000 + Cr GST Clearing 200. Separately Dr Cost of Sales 1 300 = Cr Inventory 1 300. Both entries balance.
b. The $400 GST paid to Alpine Footwear is a debit to GST Clearing because it is not an expense of the business — it is GST the business has paid on a purchase that it is entitled to claim back from the ATO, so it represents a reduction in the amount the business owes the ATO (or a receivable from the ATO). Recording it separately rather than adding it to the cost of inventory reflects faithful representation: the reported cost of inventory ($4 000) shows the true economic cost to the business, and the GST Clearing balance faithfully shows the net GST position. Under the entity assumption, GST is collected and paid on behalf of the ATO and is kept distinct from the owner's trading results, so it must not inflate the reported cost of the goods.
20 full-length practice exams with worked solutions, 20 revision notes, 64 practice questions and 200 flashcards.
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