Accounting for GST includes
A) crediting GST Payable to record GST paid on inventory for resale.
B) crediting GST Receivable to record GST collected from customers.
C) debiting GST Receivable to record GST paid to suppliers.
D) debiting GST Payable to record GST collected from customers.

Question

Quizplus · Accepted Answer

Crediting GST Receivable to record GST collected from customers is incorrect because when GST is collected from customers, it increases the liability to the government, hence GST Payable should be credited. A and D are incorrect because they describe the opposite of the correct accounting treatment for GST transactions. C is correct because when GST is paid to suppliers, it represents an amount that can potentially be recovered from the government, thus increasing GST Receivable.

Accounting for GST Includes