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5 Cards in this Set
- Front
- Back
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What is GST?
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A 10% tax levied by the federal government on most purchases of goods (excluding fresh food) and services.
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GST Liability
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If GST on sales > GST on purchases = GST Clearing will have a credit balance, and be reported as a current liability. The business will be required to make a payment to the ATO called a GST settlement.
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GST Asset
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If GST on purchases > GST on sales = GST Clearing account will be a current asset with a debit balance, and the business will be due a GST refund from the ATO.
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GST Clearing account
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GST (Received) on cash sales
GST (Charged to debtors) on credit sales GST (Paid) on cash purchases GST (Charged by creditors) on credit purchases |
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Source Documents
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Provides both the evidence that a transaction has occurred, and details the transaction itself. Ensures the reports are Reliable or free from error and bias.
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