GST THEORY Flashcards
What defines inventory according to AASB102?
Inventory includes assets for resale, partly finished products, and supplies for manufacturing or service provision.
What are the two types of inventory recording systems?
Perpetual inventory system and periodic inventory system.
How does the perpetual inventory system function?
It keeps a continuous record of inventory, updated with each transaction, helping prevent inventory shortages.
What is the main feature of the periodic inventory system?
Inventory is only updated in the general ledger after a physical count, not continuously.
What are the main advantages of the perpetual inventory system?
Allows for short-term income statements, reduces inventory shortages, and helps identify fast- and slow-moving items.
What is a disadvantage of the perpetual inventory system?
It’s more expensive to set up than the periodic system.
What is an Australian Business Number (ABN) used for?
To identify a business with the Australian Tax Office (ATO) in all transactions.
What is the GST rate, and who ultimately pays it?
10%, ultimately paid by consumers.
When must a business register for GST?
If its turnover exceeds $75,000 (or $150,000 for non-profits).
What’s the difference between GST-inclusive and GST-exclusive prices?
GST-inclusive includes GST in the ticket price, while GST-exclusive adds GST on top of the listed price.
What are taxable supplies?
Goods or services that include GST, are for payment, business-related, and connected to Australia.
What are examples of GST-free supplies?
Basic food, some education and medical services, and certain exports.
What are input taxed supplies?
Goods and services exempt from GST, where no input tax credits are claimed, like financial services and residential rent.
When must a business register for GST aside from the turnover requirement?
f providing taxi/ride services or wishing to claim fuel tax credits.
When must a business register if its turnover exceeds the GST threshold?
Within 21 days.
