The 2024 VCE Accounting examination followed a familiar structure, but the Examiner’s Report makes it clear that many students lost marks for reasons that had little to do with time pressure or difficulty. Most students finished the paper, yet performance varied significantly across questions because of misreading, imprecise terminology, and weak justification.
The paper assessed the full breadth of the Study Design and required students to move repeatedly between interpretation, calculation, recording, and explanation. The Examiner’s Report emphasised that inaccurate responses were most often caused by misunderstanding the task rather than lack of content knowledge .
What follows is a detailed unpacking of several questions that were particularly revealing.
Question 1(b): General Journal entries from an inventory card
This question required students to record a sales return using information from an inventory card. Although inventory cards are heavily practised, this question produced a wide range of responses.
The task required students to recognise that the transaction was a sales return, not a purchase return, and that it therefore affected both revenue and cost of sales. Students were awarded separate marks for the Sales Returns and GST Clearing entries, the Accounts Receivable entry, and the Inventory and Cost of Sales entries.
High-scoring responses clearly showed that the student understood the dual impact of a sales return. They reversed the revenue side of the original sale and also reversed the cost of goods sold using the correct cost derived from the inventory card.
The Examiner’s Report noted common errors such as recording the transaction as a purchase return, referring to Sales Returns as Sales, reversing Inventory and Cost of Sales, and incorrectly calculating mark-up . These errors show that students were relying on pattern recognition rather than thinking through the transaction itself.
Question 1(c): Justifying cost-assignment methods
This was one of the most instructive theory questions in the exam. Students were asked to explain why the business used FIFO for low-cost inventory and Identified Cost for high-cost inventory.
Lower-scoring responses defined FIFO and Identified Cost correctly but did not justify their use. The Examiner’s Report was explicit that definitions alone were insufficient. Full marks required justification linked to accuracy, cost-effectiveness, and the nature of the inventory.
High-scoring responses explained that Identified Cost allows precise tracking of high-value items, improving accuracy of cost of sales and inventory valuation, but is time-consuming and expensive. FIFO was justified for low-cost, fast-moving inventory where the benefit of precision does not outweigh the administrative cost .
This question clearly separated students who understood accounting decisions from those who had memorised terminology.
Question 2(a): Financial and ethical implications of changing suppliers
This was the only extended discussion question in the exam and was one of the most discriminating. Only a quarter of students scored five or more marks.
The question required students to discuss both financial and ethical implications of a supplier change, using the information provided. High-scoring responses integrated financial indicators, such as changes in profit margins and inventory turnover, with ethical considerations including product quality, customer trust, and brand reputation.
The Examiner’s Report highlighted that correct terminology mattered. For example, inventory turnover should be described as slower or faster, not increasing or decreasing. Students who used incorrect terminology were capped even when their reasoning was otherwise sound .
Lower-scoring responses tended to list points rather than discuss them, or focused only on profitability without addressing ethics.
Question 2(c) and 2(d): Product costs versus period costs
These two questions worked together and exposed a very common weakness.
In Question 2(c), students were asked to explain why delivery costs were treated as a period cost rather than a product cost. High-scoring responses explained that the delivery cost could not be logically allocated across multiple types of inventory, and therefore could not be included in product cost.
Lower-scoring responses defined period cost but failed to connect the definition to the scenario. The Examiner’s Report emphasised that explanation requires application, not definition .
Question 2(d) then required students to explain the effect on Net Profit of treating delivery as a period cost. Full-mark responses explained that Net Profit would be lower, because the entire delivery cost was recognised as an expense even though not all inventory had been sold. Students who simply stated that Net Profit decreased without explanation were capped.
Question 3(a): Capital Ledger account
This question tested whether students understood how drawings are closed and transferred.
Many students incorrectly recorded cash and inventory drawings directly in the Capital Ledger, rather than transferring the Drawings balance. Others used incorrect cross-references or failed to include totals.
The Examiner’s Report noted that students appeared unprepared for posting transfer entries and that many could not distinguish between recording a transaction and closing an account.
This question exposed whether students understood ledger mechanics conceptually rather than procedurally.
Question 3(c): Net Cash Flow from Operating Activities versus Net Profit
This was one of the highest-loss questions in the exam. Students were asked to explain two reasons why Net Cash Flow from Operating Activities could be higher than Net Profit.
High-scoring responses distinguished clearly between profit and cash, referred to non-cash expenses such as depreciation or inventory write-downs, and explained how collections from accounts receivable could exceed credit sales.
Lower-scoring responses failed to make the distinction between cash and profit, referred to financing activities such as loans, or provided only one valid explanation .
This question reinforced the Examiner’s repeated concern that students rely on rote responses rather than understanding operating cash flows.
Question 7(a) and 7(b): Depreciation concepts
These questions tested whether students understood depreciation as allocation of cost, not valuation.
In Question 7(a), high-scoring responses explained that depreciation expense differs each year depending on the method, but that total depreciation over the asset’s life is the same because cost, residual value and useful life are unchanged.
Question 7(b) then required students to identify that a figure on a graph represented residual value, not carrying value. Many students misidentified the amount or failed to explain what residual value represented.
The Examiner’s Report noted that students often know depreciation formulas but struggle to explain what depreciation figures actually mean.
Question 8(a): Disposal and purchase of a non-current asset
This was one of the most complex recording questions and involved multiple source documents.
Students were required to record the disposal of a van, recognise GST correctly, record the profit on disposal, and then record the purchase of a new van, modifications, and prepaid insurance as separate entries.
Common errors included treating the transaction as a trade-in, omitting GST on disposal, combining entries from separate source documents, and recording prepaid insurance as an expense.
The Examiner’s Report stressed that each source document requires its own General Journal entry and that narrations help students avoid combining transactions incorrectly .
What the 2024 exam ultimately rewarded
The 2024 VCE Accounting exam rewarded students who:
- read questions carefully and used reading time effectively
- applied accounting terminology precisely
- justified decisions rather than defining concepts
- understood the purpose behind accounting treatments
Most marks were lost not through difficult content, but through misinterpretation, weak explanation, and procedural thinking.
How ATAR STAR uses the 2024 exam
ATAR STAR uses detailed analysis of exams like the 2024 paper to show students exactly how VCAA differentiates responses. This benefits students who are already strong and students who are struggling, because the errors identified here are systemic rather than individual.
Understanding how these questions work is one of the most reliable ways to improve Accounting exam performance.