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 correct account name is GST Clearing which is a current liability account used to track the GST collected from customers until it is remitted to the tax office. The amount reported on the balance sheet as at 31 December will be $20 000, as this is the amount of GST collected but not yet paid to the tax office. Therefore, the correct answer is B) GST clearing $20 000.

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