Accounting For A Trading Business #1

Identify the transaction that matches the general journal entry shown.

• Purchased equipment $1100 incl. GST

• Purchased supplies $1100 incl. GST on credit

• Purchased supplies $1100 incl. GST cash

• Purchased supplies $1000 incl. GST cash

Identify the expense below that does not have GST

• Electricity

• Interest Expense

• Insurance

• Advertising

Calculate the correct values for Electricity and Bank.

• Electricity $2000 and Bank $2200

• Electricity $2200 and Bank $2400

• Electricity $20 and Bank $220

• Electricity $2200 and Bank $2000

All of the following statements are correct, except for?

• Businesses can claim back GST on any purchases of supplies and equipment

• Businesses owe the ATO GST collected on service fees

• GST Clearing can either be an asset or a liability

• GST Clearing is always a liability

The entry on May 15 was posted in error. It should have been for insurance, not wages. Identify the entry needed to correct this error.

• Dr Insurance $3000, Dr GST Clearing $300 & Cr Wages $3300

• Dr Insurance $3300 & Cr Wages $3300

• Dr Wages $3300 & Cr Insurance $3300

• Dr Bank $3300 & Cr Wages $3300

All of the following statements are correct, except for?

• Service businesses purchase supplies

• Trading businesses purchase inventories

• Service businesses earn trading revenue

• Trading businesses earn sales

Purchased supplies on credit from XZE Supplies $4400 incl. GST. Calculate the value of GST.

• $40

• $400

• $440

• $444

Given the GST Clearing Ledger account shown, calculate the amount paid for Electricity excluding GST.

• $50

• $500

• $550

• $555

Given the GST Clearing Ledger account shown, calculate the amount paid for Supplies including GST.

• $15

• $165

• $1500

• $1650

Given the GST Clearing Ledger account shown, calculate the amount paid for Supplies excluding GST.

• $10

• $110

• $1000

• $1100