VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.

1. 2.8
GST REFUNDS AND
LIABILITIES

2. Video of this presentation at…
YouTube Channel for VCE Accounting

3. © Michael Allison. Author’s permission required for external use.
 The firm will have a GST Liability when…
 Example:
> = GST LiabilityGST PaidGST Collected
GST collected during
month
GST paid during month
GST Liability [L]
$200
$300
$100 $600
$100
$50
$50
$400
$400$200$600
2.8 GST REFUNDS AND LIABILITIES

4. © Michael Allison. Author’s permission required for external use.
 The firm will then record a GST Liability under the Current Liabilities section of
the Balance Sheet…
Balance Sheet as at 31 December 2015
Current Assets $ $ Current Liabilities $ $
Non-Current Assets Non-Current Liabilities
Balance Sheet as at 31 December 2015
Current Assets $ $ Current Liabilities $ $
GST Liability 400
Non-Current Assets Non-Current Liabilities
2.8 GST REFUNDS AND LIABILITIES

5. © Michael Allison. Author’s permission required for external use.
GST Liability
Characteristic #1
• There is a present obligation
• The firm has an obligation to repay the government
the GST it owes
Characteristic #2
• Arising from past events
• The firm engaged in transactions including GST, e.g.
GST paid, GST received
Characteristic #3
• Resulting in an outflow of future economic benefits
• The firm will have to pay cash to the government
2.8 GST REFUNDS AND LIABILITIES

6. © Michael Allison. Author’s permission required for external use.
 The firm will have a GST Refund when…
 Example:
< = GST RefundGST PaidGST Collected
GST collected during
month
GST paid during month
GST Liability [L]
$200
$100
$300
$100$400$300
GST Refund $100
$100
$200
$100
2.8 GST REFUNDS AND LIABILITIES

7. © Michael Allison. Author’s permission required for external use.
 The firm will then record a GST Refund under the Current Assets section of the
Balance Sheet…
Balance Sheet as at 31 December 2015
Current Assets $ $ Current Liabilities $ $
Non-Current Assets Non-Current Liabilities
Balance Sheet as at 31 December 2015
Current Assets $ $ Current Liabilities $ $
GST Refund 100
Non-Current Assets Non-Current Liabilities
2.8 GST REFUNDS AND LIABILITIES

8. © Michael Allison. Author’s permission required for external use.
GST Refund
Characteristic #1
• A resource controlled by the entity
• The firm has a legal claim for a cash refund from the
government
Characteristic #2
• Arising from past events
• The firm engaged in transactions including GST, e.g.
GST paid, GST received
Characteristic #3
• From which future economic benefits will flow to the
entity
• The firm will receive cash from the government
2.8 GST REFUNDS AND LIABILITIES

9. © Michael Allison. Author’s permission required for external use.
TASK
In-class Homework
Ex2.4 X
SQ13 X
SQ14 X