During December, General Stores made total sales of $200 000 and collected a further 10% GST on this amount. The GST will be sent to the tax office at the end of the quarter. What is the account name and amount of the current liability that will be reported on the balance sheet as at 31 December?

Question

Quizplus · Accepted Answer

The GST collected on sales is a liability until it is paid to the tax office. The correct account name for this liability is "GST Clearing," and the amount is $20,000, which is 10% of the $200,000 sales.

During December, General Stores Made Total Sales of $200 000