accounting unit 1 AOS 2

Question 1

what is gst recievable?

Answer 1

GST received on sales creates a liability for the business, as it must remit this collected tax. If the business pays more GST on purchases than it collects on sales, it’s owed a refund by the tax authorities, known as GST receivable.

Question 2

what is gst payable?

Answer 2

GST paid to suppliers reduces that liability. GST payable is GST owed by the business to the ATO when the amount of GST the business has received on its fees is greater than the GST it has paid to its suppliers.

Question 3

role of source documents

Answer 3

Source documents provide both the evidence that a transaction has occurred and the details of the transaction itself (verifiable).
They ensure the reports are reliable and free from bias (faithful representation).

Question 4

evidence of cash transactions

Answer 4

When cash is received, the source document will be a cash receipt. When cash is paid, the source document will be a cheque butt, EFT document, ATM document or Bank Statement.

Question 5

cheque butt

Answer 5

A cheque butt is a source document used to verify cash payments. ( has the left over ripped off part )

Question 6

credit transactions

Answer 6

When a good or a service is purchased or sold on credit, the source document will be an invoice.

Question 7

credit note

Answer 7

A credit note is a document that evidences that there is a reduction in the amount owed by a customer.

Question 8

invoice

Answer 8

An invoice is a source document used to verify credit transactions.

Question 9

memo

Answer 9

A memo is a source document used to verify internal transactions.

Question 10

GST: Goods and Services Tax calculation template

Answer 10

GST Opening Balance
Plus GST received during the period (Cash or Credit)
Minus GST paid during the period (Cash or Credit)
= GST payable / receiveable

Question 11

why is there gst

Answer 11

The business that sells the good or service, and therefore accepts the GST charge, acts as a tax collector for the ATO.

Question 12

cash receipts and cash journals

Answer 12

Cash Receipts Journal (CRJ): records all cash inflow into the entity
Cash Payments Journal (CPJ): records all cash outflow from the entity

Question 13

special columns

Answer 13

Special Columns used in the journals depend on the needs of the business. Special columns are allocated to the most common transactions for that business.

Question 14

sundries column

Answer 14

All journals have a Sundries column for any and all transactions that are not placed in the special columns. Any items listed in the sundries column must be listed individually when the data is transferred to the Statement of Receipts and Payments.

Question 15

The purpose of the report is to therefore provide users with:

Answer 15

1. Cash flow for period of time
2. Cash position as at a certain date in time

Question 16

operating, investing, financing

Answer 16

Operating; cash flows related to day-to-day trading activities. add individual sundries here

Investing; cash flows related to the purchase of non-current assets. eg. furniture

Financing; cash flows related to changes in the financial structure of the firm. eg. OE and loan

Question 17

net increase ( decrease ) in cash position

Answer 17

• add all totals together to get the answer.
• add total from , net cash flow from operations, investing activities, and financing activities