PASS ACTIVITIES

Facilitator: Nicholas
Year: 2019
Semester 2 — week: 8
Unit of Study: ACCT1006
References: Lecture slides week 7, Previous PASS materials
Disclaimer: Please don't take PASS materials to your lecturer/tutor! “What happens in PASS stays in PASS…”

PROPOSED AGENDA LEARNING OUTCOMES

1. Welcome (5 mins) 1. Understand how to address accounting ethics.
2. Activity 1: Revision (25 mins) 2. Revise for midsemester exam.
3. Activity 2: Ethics (25 mins)
4. Close (5 mins)

DID YOU KNOW…PASS has its own Facebook page and WeChat group! Search PASS
University of Sydney, and ‘like’ us on Facebook, or search USYDPASS or scan the QR
Code for WeChat, to receive updates and important information from the PASS Team.

Let’s first look at the bigger picture!

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
Revision #1 – Closing Entries

Complete the closing entries for Tesco Grocer on the 30 June 2016, using information from their P&L
statement extract below. (Hint: what inventory system are we using?)

Tesco Grocer
Statement of Profit or Loss (extract)
for the year ended 30 June 2016
Sales Revenue
Gross sales revenue 520 000
Less: sales returns and allowances 30 000
Net sales 490 000
Cost of Sales
Inventory, 1 July 2015 340 000
Purchases 410 000
Less: purchase returns and allowances 40 000
Net purchases 370 000
Add: Freight-in 10 000
Cost of Goods Purchased 380 000
Cost of Goods Available for Sale 720 000
Inventory, 30 June 2016 410 000
Cost of Sales 310 000
Gross Profit 180 000

Date Accounts/Narration Dr Cr

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
Revision #2 – FIFO, LIFO and Moving Average Cost
Kardashian Kites is considering whether to apply the FIFO, LIFO or average cost costing to its perpetual
inventory system.

5th September – sold 200 kites

19th September – sold 300 kites

Cost of Goods Available for Sale

Date
Narration Units Unit Cost ($) Total Cost ($)
1/9/17
Opening balance 240 80 19,200

Purchase 300 87 26,100

7/9/17

18/9/17 Purchase 380 97 36,860

28/9/17
Purchase 250 100 25,000

107,160
1,170

a) Calculate the COS and ending inventory by applying the FIFO, Moving Average Cost and LIFO
methods.
b) Journalise the sales entry on the 19th September under each of the systems, assume goods are sold at a
mark up of 150% (assume sales made on account)

1) FIFO

Date Purchase Sale Balance

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
 2) Moving average cost

Date Purchase Sale Balance

3) LIFO

Date Purchase Sale Balance

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
Revision #3 – GAAP and Conceptual Framework

1. “If we have accounting standards, we don’t need an extra document called the ‘Conceptual
Framework’ as it shouldn’t include anything that is not already prescribed by the standards”. Respond
to this statement with reference to the purpose of the Conceptual Framework and its contents.

2. You are an accountant for All Phones. You find a record for ‘Dr Inventory Write Down Cr Inventory’ on
the last day of the month for their Samsung Galaxy Note 7 phones (with problems of exploding on
planes), with no relating sales return. A fellow accountant says this violates the cost principle, and we
should correct this entry before submitting our financial statements. Do you agree? Explain why,
referring to accounting principles.

Activity 2: Ethics - Concepts

1. Match up the five Fundamental Principles in the APES 110 Code of Ethics for Professional Accountants, to
their definitions below:

Principle Definition
Integrity A: to maintain a knowledge and skill level to ensure work for
clients and employers are at the highest standard in
accordance with new updates to standards.
Objectivity B: to comply with relevant laws and regulations, and avoid
actions which discredit the profession.
Professional Competence C: to not allow bias, conflict of interest or peer-pressure
and Due Care override professional judgements
Confidentiality D: be straight-forward and honest in all relationships
Professional Behaviour E: to be respectful of privy information

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
Activity 2: Ethics - Problems

1. You are a graduate accountant for a car manufacturer. As you prepare the financial statements for the
2017-18 financial year, you realise that the accountant last year, Bob, (who is now your boss) recorded approx.
$120 million worth of seat-belts as inventory. However, it is believed a batch of these seatbelts (approx. $30
million) were faulty, rumoured to have injured some passengers, and may take the lives of many more. You
think that these seatbelts should be written down since they should not be sold anymore. Despite being
extremely nervous to confront him, you ask Bob whether you should complete this write-down. Bob tells you,
‘nah don’t mention them all – it’s more important that we keep this quiet, as this could start law-suits and we
don’t need those contingent liabilities on our statements – no need to freak out the investors over nothing
right?’ What should you do?

a) Who are the stakeholders in this situation?

b) What are the ethical issues involved?

c) What is the best course of action?

Close
What is one thing you have learnt this week and one thing you need to revise?

Next Week: Non-current assets! – Good luck with your exam!

DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.
DISCLAIMER: PASS materials (e.g., activities/ questions/practice quizzes) have been developed by the PASS team using a range of
resources. Unlike lecture and tutorial materials, the content has not been developed in collaboration with lecturers and it does not have
the status of “formal course content”. Rather, it is based on common questions from students and your facilitator’s experiences. PASS
materials are only intended for PASS sessions and are not to be taken to lecturers or tutors. PASS material is not necessarily representative of
assessable/examinable content but does provide opportunities to deepen and apply your learning in specific unit of studies. For specific
advice on examinable content ALWAYS consult with your lecturers. The PASS team do not know what is on exams and cannot comment
on assessable materials at any time. It is not ethical for PASS facilitators to share their knowledge of the exams they have sat in the past, to
advantage PASS participants against people who do not come to PASS. The PASS management team have instructed PASS facilitators
not to provide such information at anytime.