GST accounting content

GST

Is a flat rate of 10% that is added to the price of most good and services in Australia

Business Activity Statement (BAS)

Is a form submitted to the Australian Taxation Office (ATO) by registered business entities to report their tax obligation

How often to businesses lodge a BAS

Monthly, quarterly or yearly (typically quarterly)

Taxable supplies

A broad term which refers to any good or service to which GST is charged e.g. clothes, TVs, plumbing services

GST free supplies

Refers to the products in which consumers do not pay additional GST tax, however the supplier can claim tax on the supply e.g. fresh food (fruits and veggies), health services (medical consultations), water supply

Input Tax Supplies

Goods and services which do not have GST included in the price, and sellers cannot claim back GST e.g. financial supplies (bank fees, shares, interest) and residential supplies

Purpose of a trial balance

Help check that all the debits and credits in the general ledger are equal and to assist in the preparation of the businesses financial statement

Errors detected by trial balance

If any debit or credit entry was omitted. A transposing error occurred. The amount was recorded incorrectly. The debit and credits in the trial balance were totalled incorrectly

Errors NOT detected by trial balance

The amount was recorded incorrectly in both accounts. The transaction was recorded more than once. The transaction was left out completely. The transaction was recorded in the wrong account