GST Trading Business Quiz

What is the primary purpose of the General Journal in accounting?

• To summarise financial statements

• To record all financial transactions in chronological order

• To prepare the balance sheet

• To calculate GST

When recording a sales transaction with GST in the General Journal, which accounts are typically affected?

• Sales, Accounts Receivable, GST Collected, Cost of Sales, Inventory

• Sales, Accounts Payable, GST Paid, Cost of Sales

• Purchases, Accounts Receivable, GST Collected, Cost of Sales, Inventory

• Sales, Cash, GST Paid, Cost of Sales

What is the GST rate currently applicable in Australia?

• 5%

• 10%

• 15%

• 20%

If a business sells goods worth $1,100 including GST, what is the amount of GST collected?

• $90.91

• $100

• $90

• $110

How should an error in a previously recorded journal entry be corrected?

• By erasing the incorrect entry

• By creating a new entry to reverse the incorrect one and then recording the correct entry

• By ignoring the error

• By adjusting the balance sheet

A new Cabby tray top for a single cab utility car costing $7700 (including GST) was incorrectly

recorded as a repair instead of being capitalised. How would you correct this error.

• Debit Vehicles $7700

  Credit Repairs $7700

• Debit Repairs $7700

  Credit Vehicles $7700

• Debit Vehicles $7000

  Debit GST paid $700

  Credit Repairs $7700

• Debit Vehicles $7000

  Credit Repairs $7000

What is the correct journal entry for a cash sale of $550 including GST, with a cost price of $300?

• Debit Cash $550,

  Credit Sales $500

  Credit GST Collected $50

  Debit Cost of Goods Sold 300

  Credit Inventories 300

• Debit Cash 550

Which account is debited when a business purchases inventory on credit including GST?

• Inventory

• Accounts Payable

• GST Paid

• Cash

What is the effect of GST on the cost of goods sold for a trading business?

• Increases the cost of goods sold

• Decreases the cost of goods sold

• No effect on the cost of goods sold

• Doubles the cost of goods sold

How is GST on sales recorded in the General Journal?

• As a debit to GST Collected

• As a credit to GST Collected

• As a debit to GST Paid

• As a credit to GST Paid