The 2024 VCE Accounting exam was not conceptually harder than previous years, but it was more exacting in how it required students to apply familiar ideas. The Examiner’s Report makes it clear that many students lost marks not because they lacked knowledge, but because they failed to align their responses precisely with what each question was assessing.
Several questions in the paper are particularly revealing. When unpacked carefully, they show how the VCAA uses small design choices to discriminate between procedural fluency and genuine accounting understanding.
Question 1(b): sales return recorded from an inventory card
This question required students to prepare a General Journal entry for a sales return, using information from an inventory card that applied FIFO.
At face value, this is a standard task. Inventory cards are practised extensively, and sales returns are familiar. Yet the Examiner’s Report noted a wide spread of responses, with many students losing marks unnecessarily.
What the question was really testing
This question was not testing FIFO calculations in isolation. It was testing whether students understood that a sales return has two separate effects:
- it reverses revenue
- it reverses the cost of goods sold and returns inventory to stock
Students who treated the task as a single-step journal entry missed this entirely.
What high-scoring responses did
High-scoring responses:
- correctly identified the transaction as a sales return, not a purchase return
- debited Sales Returns and GST Clearing and credited Accounts Receivable for the selling price
- debited Inventory and credited Cost of Sales using the FIFO cost from the inventory card
These students showed that they understood the economic substance of the return, not just the format of a journal entry.
Where marks were lost
The Examiner’s Report highlighted several recurring errors:
- recording the transaction as a purchase return
- reversing Inventory and Cost of Sales
- using selling price rather than cost price for inventory
- incorrect account titles, such as using Sales instead of Sales Returns
Each of these errors reflects pattern-based thinking rather than interpretation.
Question 1(c): justifying FIFO and Identified Cost
This was a short theory question that proved highly discriminating.
Students were asked to explain why FIFO was used for low-cost items and Identified Cost for high-cost items. Definitions alone were insufficient.
What the question was really testing
This question assessed whether students understood cost-assignment as a decision, not a rule. It required students to consider:
- accuracy versus cost-effectiveness
- administrative burden
- the nature of the inventory
What high-scoring responses did
Strong responses explained that:
- Identified Cost provides precise valuation for high-value items, making the extra administrative effort worthwhile
- FIFO is appropriate for low-cost, fast-moving inventory where precision is less critical and efficiency is prioritised
These responses justified the methods using reasoning grounded in accounting objectives.
Where marks were lost
Many students simply defined FIFO and Identified Cost without justification. Others explained one method but not the other. The Examiner’s Report explicitly stated that explanation without justification was capped.
Question 2(a): discussing financial and ethical implications
This was one of the most discriminating questions in the paper, with relatively few students achieving high marks.
Students were asked to discuss both financial and ethical implications of changing suppliers.
What the question was really testing
This question tested students’ ability to:
- integrate financial analysis with ethical reasoning
- use accounting terminology precisely
- construct a balanced discussion rather than a list
What high-scoring responses did
High-scoring responses:
- referred to financial indicators such as profit margins and inventory turnover
- explained how cheaper suppliers might improve profitability but risk quality or brand reputation
- considered stakeholder impacts, including customers and long-term business sustainability
Crucially, these responses discussed both sides and avoided absolute conclusions.
Where marks were lost
The Examiner’s Report noted that many students:
- focused only on financial outcomes
- listed points without discussion
- used incorrect terminology, such as saying inventory turnover “increased” rather than “was faster”
Incorrect terminology alone capped otherwise reasonable responses.
Question 2(c) and 2(d): product costs versus period costs
These linked questions exposed a very common conceptual weakness.
Question 2(c) asked why delivery costs were treated as a period cost rather than a product cost.
What the question was really testing
This was testing whether students understood allocability, not definitions. The key idea was whether the cost could be logically attributed to individual units of inventory.
What high-scoring responses did
Strong responses explained that delivery costs related to multiple types of inventory and therefore could not be reliably allocated to individual units. As a result, they were treated as a period cost.
Where marks were lost
Weaker responses defined product and period costs but did not apply the explanation to the scenario.
Question 2(d) then asked students to explain the effect on Net Profit.
Students who simply stated that Net Profit decreased were capped. High-scoring responses explained that the entire delivery cost was expensed immediately, reducing Net Profit even though not all inventory had been sold.
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.
What the question was really testing
This question tested:
- understanding of accrual accounting
- recognition of non-cash expenses
- correct classification of operating activities
What high-scoring responses did
Strong responses explained that:
- Net Profit includes non-cash expenses such as depreciation or inventory write-downs
- cash received from customers may exceed credit sales due to collection of receivables
These responses clearly distinguished between profit and cash.
Where marks were lost
Common errors included:
- referring to loans or asset sales
- confusing operating and financing activities
- providing only one valid reason
These errors indicate rote learning rather than conceptual understanding.
Question 8(a): disposal and purchase of a non-current asset
This was one of the most complex recording questions in the exam.
Students were required to:
- record disposal of a van
- account for GST
- recognise profit on disposal
- record purchase, modifications, and prepaid insurance as separate transactions
What the question was really testing
This question tested whether students could:
- interpret multiple source documents
- separate transactions correctly
- avoid combining entries incorrectly
Where marks were lost
The Examiner’s Report noted frequent errors such as:
- treating the disposal as a trade-in
- omitting GST
- combining multiple transactions into one journal entry
- expensing prepaid insurance
These errors arose from students rushing and not treating each document as a separate event.
What these questions collectively show
The 2024 exam rewarded students who:
- slowed down and interpreted transactions carefully
- justified decisions rather than defining concepts
- used accounting terminology precisely
- understood accounting as a system, not a checklist
Marks were rarely lost on difficult calculations. They were lost on interpretation, explanation, and judgement.
How ATAR STAR uses this analysis
ATAR STAR uses detailed question-level unpacking like this to show students exactly how VCAA differentiates performance. This benefits students who are already strong and students who feel stuck, because the issues exposed here are structural, not personal.