8.2 The GST Clearing account
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VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.
![© Michael Allison. Author’s permission required for external use.
 The GST transactions of the firm are posted to the GST ledger…
 From now on, GST transactions are going to be posted to the GST Clearing
ledger…
8.2 THE GST CLEARING ACCOUNT
GST [L]
GST Clearing [L]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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8.2 The GST Clearing account
- 2. © Michael Allison. Author’s permission required for external use.  The GST transactions of the firm are posted to the GST ledger…  From now on, GST transactions are going to be posted to the GST Clearing ledger… 8.2 THE GST CLEARING ACCOUNT GST [L] GST Clearing [L]
- 3. © Michael Allison. Author’s permission required for external use.  The GST Clearing account is always assumed to be a Liability… GST Clearing [L] 8.2 THE GST CLEARING ACCOUNT Debit Credit Liabilities ď‚Ż ď‚ Debit Credit Liabilities ď‚Ż ď‚ Debit Credit Liabilities ď‚Ż ď‚
- 4. © Michael Allison. Author’s permission required for external use.  How does a business know how much:  GST it has collected and charged  GST it has paid and been charged Special Journals Cash Receipts Journal Records all cash received by the firm Cash Payments Journal Records all cash paid by the firm Sales Journal Records all credit sales made by the firm Purchases Journal Records all credit purchases of stock 8.2 THE GST CLEARING ACCOUNT
- 5. © Michael Allison. Author’s permission required for external use. Cash Receipts Journal Date Details Receipt Number Bank Discount Expense Debtors Control Cost of Sales Sales Sundries GST Jan 31 Total receipts 10100 2000 4000 7000 900 700 Sales Journal Date Debtor Invoice Number Cost of Sales Sales GST Debtors Control Jan 31 Totals 2500 4000 400 4400 GST Liability [L] Collect/charge GST GST Liability ď‚ 700 400 $1,100 8.2 THE GST CLEARING ACCOUNT
- 6. © Michael Allison. Author’s permission required for external use. Cash Receipts Journal Date Details Receipt Number Bank Discount Expense Debtors Control Cost of Sales Sales Sundries GST Jan 31 Total receipts 10100 2000 4000 7000 900 700 Sales Journal Date Debtor Invoice Number Cost of Sales Sales GST Debtors Control Jan 31 Totals 2500 4000 400 4400 8.2 THE GST CLEARING ACCOUNT Cash at Bank [A] 31/1 GST clearing 700 GST Clearing [L] 31/1 Cash 700 31/1 Debtors control 400 Debtors Control [A] 31/1 GST clearing 400 Debit Credit Assets ď‚ ď‚Ż Debit Credit Assets ď‚ ď‚Ż Debit Credit Liabilities ď‚Ż ď‚ Cash Receipts Journal Date Details Receipt Number Bank Discount Expense Debtors Control Cost of Sales Sales Sundries GST Jan 31 Total receipts 10100 2000 4000 7000 900 700 GST Clearing [L] 31/1 Cash 700 31/1 Debtors control 400 Debit Credit Liabilities ď‚Ż ď‚ Cash at Bank [A] 31/1 GST clearing 700 Debit Credit Assets ď‚ ď‚Ż Sales Journal Date Debtor Invoice Number Cost of Sales Sales GST Debtors Control Jan 31 Totals 2500 4000 400 4400 GST Clearing [L] 31/1 Cash 700 31/1 Debtors control 400 Debtors Control [A] 31/1 GST clearing 400 Debit Credit Assets ď‚ ď‚Ż
- 7. © Michael Allison. Author’s permission required for external use. $1,100 GST Liability [L] GST Liability  Pay/charged GST Cash Payments Journal Date Details Cheque Number Bank Discount Revenue Creditors Control Stock Control Wages Sundries GST Jan 31 Totals 8300 100 2100 2000 3000 1000 300 Purchases Journal Date Creditor Invoice Number Stock Control GST Creditors Control Jan 31 Totals 5000 500 5500 300500 $300 8.2 THE GST CLEARING ACCOUNT
- 8. © Michael Allison. Author’s permission required for external use. Cash Payments Journal Date Details Cheque Number Bank Discount Revenue Creditors Control Stock Control Wages Sundries GST Jan 31 Totals 8300 100 2100 2000 3000 1000 300 Purchases Journal Date Creditor Invoice Number Stock Control GST Creditors Control Jan 31 Totals 5000 500 5500 8.2 THE GST CLEARING ACCOUNT Debit Credit Liabilities ď‚Ż ď‚ Cash at Bank [A] 31/1 GST clearing 700 31/1 GST clearing 300 Debit Credit Assets ď‚ ď‚Ż GST Clearing [L] 31/1 Cash 300 31/1 Cash 700 31/1 Creditors control 500 31/1 Debtors control 400 Creditors Control [L] 31/1 GST clearing 400 31/1 GST clearing 500 Debit Credit Liabilities ď‚Ż ď‚ Cash Payments Journal Date Details Cheque Number Bank Discount Revenue Creditors Control Stock Control Wages Sundries GST Jan 31 Totals 8300 100 2100 2000 3000 1000 300 Debit Credit Liabilities ď‚Ż ď‚ GST Clearing [L] 31/1 Cash 300 31/1 Cash 700 31/1 Creditors control 500 31/1 Debtors control 400 Cash at Bank [A] 31/1 GST clearing 700 31/1 GST clearing 300 Debit Credit Assets ď‚ ď‚Ż Purchases Journal Date Creditor Invoice Number Stock Control GST Creditors Control Jan 31 Totals 5000 500 5500 Creditors Control [L] 31/1 GST clearing 400 31/1 GST clearing 500 Debit Credit Liabilities ď‚Ż ď‚ GST Clearing [L] 31/1 Cash 300 31/1 Cash 700 31/1 Creditors control 500 31/1 Debtors control 400
- 9. © Michael Allison. Author’s permission required for external use.  Does this firm have a GST Asset or Liability? GST Clearing [L] 31 Jan Cash 300 31 Jan Cash 700 31 Jan Creditors control 500 31 Jan Debtors control 400 GST Clearing [L] 31 Jan Cash 300 31 Jan Cash 700 31 Jan Creditors control 500 31 Jan Debtors control 400 1100 GST Clearing [L] 31 Jan Cash 300 31 Jan Cash 700 31 Jan Creditors control 500 31 Jan Debtors control 400 1100 1100 GST Clearing [L] 31 Jan Cash 300 31 Jan Cash 700 31 Jan Creditors control 500 31 Jan Debtors control 400 31 Jan Balance 300 1100 1100 GST Clearing [L] 31 Jan Cash 300 31 Jan Cash 700 31 Jan Creditors control 500 31 Jan Debtors control 400 31 Jan Balance 300 1100 1100 1 Feb Balance 300 Balance Sheet as at 31 December 2015 Current Assets $ $ Current Liabilities $ $ GST Liability 400 Balance Sheet as at 31 December 2015 Current Assets $ $ Current Liabilities $ $ GST Clearing 300 Business Government $300 Listed as “GST Clearing” in the Balance Sheet, not “GST Liability” 8.2 THE GST CLEARING ACCOUNT
- 10. © Michael Allison. Author’s permission required for external use.  Does this firm have a GST Asset or Liability? GST Clearing [L] 31 Jan Cash 1000 31 Jan Cash 600 31 Jan Creditors control 400 31 Jan Debtors control 300 Balance Sheet as at 31 December 2015 Current Assets $ $ Current Liabilities $ $ GST Clearing 300 GST Clearing [L] 31 Jan Cash 1000 31 Jan Cash 600 31 Jan Creditors control 400 31 Jan Debtors control 300 1400 GST Clearing [L] 31 Jan Cash 1000 31 Jan Cash 600 31 Jan Creditors control 400 31 Jan Debtors control 300 1400 1400 GST Clearing [L] 31 Jan Cash 1000 31 Jan Cash 600 31 Jan Creditors control 400 31 Jan Debtors control 300 31 Jan Balance 500 1400 1400 GST Clearing [L] 31 Jan Cash 1000 31 Jan Cash 600 31 Jan Creditors control 400 31 Jan Debtors control 300 31 Jan Balance 500 1400 1400 1 Feb Balance 500 Balance Sheet as at 31 December 2015 Current Assets $ $ Current Liabilities $ $ GST Clearing 500 GST Clearing 300 Listed as “GST Clearing” in the Balance Sheet, not “GST Asset” Business Government $500 8.2 THE GST CLEARING ACCOUNT
- 11. © Michael Allison. Author’s permission required for external use. GST Clearing [L] Cash Receipts Journal Sales Journal Cash Payments Journal Purchases Journal 8.2 THE GST CLEARING ACCOUNT Debit Credit Liabilities ď‚Ż ď‚
- 12. © Michael Allison. Author’s permission required for external use. TASK In-class Homework Ex8.1 X Ex8.2 X Ex8.3 X Ex8.4 X Ex8.5 X Ex8.6 X Ex8.7 X