Q: Which formula correctly calculates the net amount payable after a 2% discount is applied to a purchase of $$2,000 (excluding GST) with 200 $$GST, after a $400 return (including GST)?

$$2,200 - 400 - 0.02$$ \times ($$2,200 - 400$$)$

Q: Which of the following is the correct formula for calculating GST from a GST-inclusive price?

$$\text{GST} = \frac{\text{GST-inclusive price}}{11}$$

Question 1

On March 3, Seasonal Cards purchased inventory for $2,270 (including GST) on credit under terms 2/10, n/eom and FOB delivery point. What is the correct journal entry for this transaction?

Accepted Answer

Debit Inventory $$2,064; Debit GST clearing 206$$; Credit Accounts Payable $2,270

Question 2

On March 7, $420 of defective goods purchased on March 3 were returned. What is the correct journal entry?

Accepted Answer

Debit Accounts Payable $$420; Credit Inventory 382$$; Credit GST clearing $38

Question 3

On March 9, a freight bill of $70 (including GST) was paid for the March 3 purchase. What is the correct journal entry?

Accepted Answer

Debit Inventory $$64; Debit GST clearing 6$$; Credit Cash $70

Question 4

On March 10, inventory was sold on credit for $$4,385 (including GST), terms 2/15, n/30. The cost of goods sold was 1$$,850 (net of GST). What is the correct journal entry for the sale?

Accepted Answer

Debit Accounts Receivable $$4,385; Credit Sales Revenue 3$$,986; Credit GST clearing $399

Question 5

What is the correct journal entry for the cost of goods sold on March 10?

Accepted Answer

Debit Cost of Goods Sold $$1,850; Credit Inventory 1$$,850

Question 6

On March 12, the amount owed on the March 3 purchase was paid, less the return and the discount. What is the amount paid?

Accepted Answer

$1,812.40

Question 7

How is the purchase discount on the March 12 payment calculated?

Accepted Answer

2% of the amount after returns, excluding GST

Question 8

On March 16, a sales allowance of $350 (including GST) was granted on the March 10 sale. What is the correct journal entry?

Accepted Answer

Debit Sales Allowances $$318; Debit GST clearing 32$$; Credit Accounts Receivable $350

Question 9

On March 23, cash was received from the March 10 customer in full settlement, less the allowance and the discount. What is the amount of cash received?

Accepted Answer

$3,960.30

Question 10

Which of the following best describes the effect of a purchase return on the GST clearing account?

Accepted Answer

It decreases the GST clearing account

Question 11

If a company purchases inventory for $1,100 (including GST) and the GST rate is 10%, what is the amount to be debited to the GST clearing account?

Accepted Answer

$100

Question 12

Which formula correctly calculates the net amount payable after a 2% discount is applied to a purchase of $$2,000 (excluding GST) with 200 $$GST, after a $400 return (including GST)?

Accepted Answer

$$2,200 - 400 - 0.02$$ 	imes ($$2,200 - 400$$)$

Question 13

Which of the following is the correct formula for calculating GST from a GST-inclusive price?

Accepted Answer

$$	ext{GST} = \frac{	ext{GST-inclusive price}}{11}$$

Question 14

A company sells goods for $5,500 (including GST) on credit. If the GST rate is 10%, what is the amount credited to Sales Revenue?

Accepted Answer

$5,000

Question 15

If a customer pays within the discount period for a sale of $2,200 (including GST) with terms 2/10, n/30, and no allowances, what is the amount of cash received?

Accepted Answer

$2,156

Step-by-Step Guidance for Journalising March Transactions (Seasonal Cards)

Study Guide - Practice Questions

Study Guide - Flashcards