U1 AOS 2 GST and The Accounting Equation

Question 1

What does GST stand for?

Answer 1

Goods and Services Tax

Question 2

True or False: GST is a consumption tax levied on the supply of goods and services.

Answer 2

True

Question 3

Fill in the blank: The accounting equation is Assets = Liabilities + _____

Answer 3

Equity

Question 4

Which of the following is affected by GST transactions? A) Assets B) Liabilities C) Equity D) All of the above

Answer 4

D) All of the above

Question 5

Short answer: How does GST impact the accounting equation?

Answer 5

GST affects the accounting equation by increasing either assets or liabilities, depending on whether it is collected or paid.

Question 6

What is the total cost of the inventory purchase, including GST?

Answer 6

$400 plus GST (assuming GST is 10%, total cost is $440).

Question 7

True or False: A cash purchase of inventory increases both assets and liabilities.

Answer 7

False. It increases assets (inventory) and decreases assets (cash).

Question 8

What is the impact on the accounting equation when inventory is purchased for cash?

Answer 8

Assets increase by inventory amount and decrease by cash amount, keeping the equation balanced.

Question 9

Multiple Choice: When inventory worth $550 including GST is purchased with cash, which accounts are affected? A) Assets only B) Assets and Liabilities C) Assets and Equity

Answer 9

A) Assets and Liabilities

Question 10

Fill in the blank: The standard GST rate in Australia is _____%.

Answer 10

10

Question 11

If a product costs $200 and the GST rate is 10%, what is the total cost including GST?

Answer 11

$220

Question 12

What is the formula to calculate GST from a given price?

Answer 12

GST = Price × GST Rate