财务会计入门英文版 PPT 5.pptVIP

LO 7: Overview of the GST Process GST is a domestic consumption, value-added tax. In general, most businesses Collect GST from customers when they sell their products; this amount is due the government--a current liability. Pay GST to suppliers for most assets and expenses; this amount may be claimed back from the government--a current receivable. In effect, the tax is levied on the value added by a business at each stage of the production and distribution chain. Because the final consumer cannot claim GST back from the government, the consumer winds up with the bill. GST rates: Australia: 10% New Zealand: 15% LO 7: The Goods and Services Tax LO 7: GST Example--using a 10% rate. LO 8: The NZ GST Math If the invoice is GST inclusive, then divide by 1.15 to get the non-GST portion of the invoice. Example: Suppose the cost of merchandise, GST exclusive, were $100. Then the GST add-on would be $15 (15% of $100), the total invoice would be $115, and the non-GST portion would be 115/1.15 = 100. LO 8: Accounting for GST 1. Purchasing merchandise: Retailer purchases a table on credit from manufacturer for $230 (GST inclusive). Merchandise Inventory 200 GST Clearing 30 Accounts Payable 230 LO 8: Accounting for GST 2. Selling inventory: Retailer sells table for cash $575 (GST inclusive). Cost of the table was $200. Cost of Goods Sold 200 Merchandise Inventory 200  Cash 575 GST Clearing 75 Sales 500  LO 8: Exceptions to the General Rule Businesses with turnover less than $60,000 need not be GST registered. Some goods and services are exempt, e.g., financial transactions, including loans, securities transactions, interest, dividends, and bank fees. Some activities are “zero-rated”, e.g., exports of goods and services. GST does not apply: to employees’ wages. to non-accrual-type