Mr. Titus Von Jr.
Dec 25, 2024
When to use GST Collected and GST Credits Received?
I’m a Year 11 student studying accounting, and I've been grasping the concepts we've covered so far. However, I'm starting to have difficulty with GST accounts. I would like to clarify when to use GST credits received and when to use GST collected. Specifically, do we apply GST collected when a sale is made, or do we use GST credits received for this purpose?
2 Answers
Yes, you use GST collected when something is sold, as you are collecting GST on behalf of the government (i.e the GST is included in your selling price). GST credits received refers to the GST credits you are entitled to claim back from the ATO from the payments you have made for inventory and other expenses/outgoings in the course of business.
It’s not really a refund – it is used to offset any GST collected. E.g. sales $11,000; purchases $5,500 – you will have to pay $500 GST to the ATO ($1,000 received less $500 paid). So you can see that in this situation the ATO is in fact receiving some GST. If a business is registered for GST but keeps getting refunds, it means the business is doing very badly as their outgoings are greater than their incomings.
Related Questions
Question 1 (Yes/No Worth 1 point): Another expression for "it is raining" is "Está nublado." (Yes/No) Question 3 (Fill-i...
What does CSS stand for: Cybernet Slash Support or Cybernet Software Systems? I came across a company located in T. Naga...
I need assistance with an Algebra 2 problem. The question states that the variable ( r ) varies directly with ( s ) and...
I hope this message finds you well. I have a few questions regarding Frank Garza’s Jockey School. I want to clarify that...
I'm in 12th grade, and I have my physics board exam tomorrow. How can I effectively cover the entire course material in...
A rescue pilot needs to drop a survival kit while flying at an altitude of 2,000.0 meters with a forward velocity of 100...
Hi everyone, I’m trying to make a decision between enrolling my child in a preschool or a Montessori program. He’s curr...
What is the hybridization of the phosphorus atom in PCl3? Additionally, could you please provide an explanation of the s...
I just got hired for a part-time sales job at Home Depot, and I have my orientation tomorrow. I've never had a job where...
What view in a presentation program allows you to display your slides in full-screen mode?