GST TEST

Question 1

What is Inventory Recording System?

Answer 1

Business can choose to record inventory transactions using either the perpetual inventory system or periodic inventory system.

Question 2

What is Perpetual Inventory System?

Answer 2

Because it allows much greater control over inventory, the perpetual inventory system is generally recognised to be the best. This inventory system keeps an exact record of the number of items of each product that the business has on hand at any one time. Stocktakes are carried out at regular intervals to check for inventory loss through spoilage or theft.

Question 3

What is Periodic Inventory System?

Answer 3

The periodic inventory system is adopted by businesses that do not require a continuous updating of inventory balances after each transaction. It is the simpler system as it only updates the ending inventory balance in the general ledger when a physical inventory count is conducted.

Question 4

Features of Perpetual Inventory System?

Answer 4

1)Keeps exact record of the number of items
4)Profit and cost of sale can be calculated for every sale throug the computer programs.
5)Purpose for stocktake in this system is for inventory loss thorugh spoilage/theft.
6)

Question 5

Advantages of Perpetual Inventory System

Answer 5

1)Short term income statements can be prepaered as cost of sales is known at all times.
2) Possibility of running out of inveotry is redued as owner knows numbber of stock.
3) Fast and slow moving inventory lines can be easily indetified.

Question 6

Disadvantages of Perpetual Inventory System?

Answer 6

More expensive to set up than the periodic inventory system

Question 7

Taxable Supplies Requirements?

Answer 7

1For payment of some kind
2Made in the course of operating a business
3Connected with Australia

Question 8

GST Free Supplies meanign +exaples

Answer 8

they are not taxed. Most basic foods like read and milk, educational coruses, medical are exempt from GST

Question 9

Input Taxed Supplies+EXAMPLE

Answer 9

Sales of goods and service that dont include GST in price. but where GST credits can NOT be claimed on the good or service Most ommonly are fiancial supplies (such as lending money or provision of credit for a fee)

Question 10

What is ABN

Answer 10

Australian Business Number (ABN) is a number that businesses must use so that the Australian Tax Office (ATO) can identify them in all their dealings. A business must have an ABN to be able to register for the GST.

 

Question 11

Requirements for Business to register for GST?

Answer 11

A business only has to register for GST if it has an annual turnover of over $75,000 or more ($150,000 or more for non-profit organisations). If a business earns less than this amount, then the owner has a choice as to whether or not to register for the GST.

Question 12

What happens if bbusinnes doesnt register for GST?

Answer 12

If a business does not register for GST, it will still pay GST for any goods or services purchased for the business. The owner will not charge GST to their customers, so it will not lodge Business Activity Statements or collect GST on behalf of the government.

Question 13

What are taxable supplies

Answer 13

Taxable supplies are those goods and services that are subject to the GST.

Question 14

Requirements to be taxale supplies?

Answer 14

To be a taxable supply (that is, a sale that has GST in the price), it must be:

• for payment of some kind
• made in the course of operating a business
• connected with Australia

Question 15

Examples of taxable supplies

Answer 15

furniture, clothing, electricity, insurance, commercial rent, taxi fares, telephone costs and food eaten in a restaurant.

Question 16

What are GST Free supplies?

Answer 16

GST-free supplies are those that are not taxed. Most basic foods, some education courses and some medical, health and care products and services are exempt from GST.

Question 17

What are Input taxed supplies

Answer 17

Input taxed supplies are sales of goods and services that don’t include GST in the price. The most common input taxed sales are financial supplies (such as lending money

Question 18

Conditions to muast register for GST?

Answer 18

1/Business has turnover over 75k
2.nef w business is started and expected turnover is to reach the GST threshold (or more) in the first year of operation
3.If owner already in business and has reached GST threshold
4.* if a non-profit organisation has a GST turnover of $150,000 per year or more.
5) if the owner wants to claim fuel tax credits for their business or enterprise.

Answer 19

A business owner needs to register within 21 days of their GST turnover exceeding the relevant threshold.

Question 21

Tax Invocie must contain?

Answer 21

1. that the document is intended to be a tax invoice
2. the seller’s identity
3. the seller’s Australian Business Number (ABN)
4. the date the invoice was issued
5. a brief description of the items sold, including the quantity (if applicable) and the price
6. gst amount
7. if each sale includes gst

Question 22

What IS BAS and what does it do?

Answer 22

Reporting to the government is done each tax period (monthly, quarterly, half-yearly or yearly, as appropriate) using a Business Activity Statement (BAS). The BAS summarises the GST charged and collected, along with details of the input tax credits and other taxation matters for the tax period.