Accounting for GST includes which of the following?
A)Crediting GST Payable to record GST paid on inventory for resale.
B)Crediting GST Receivable to record GST collected from customers.
C)Debiting GST Payable to record GST paid to suppliers.
D)Debiting GST Payable to record GST collected from customers.

Question

Quizplus · Accepted Answer

Crediting GST Payable is incorrect for recording GST paid on inventory for resale or GST collected from customers. Instead, GST paid on purchases (such as inventory for resale) is recorded by debiting GST Receivable, as it represents an amount recoverable from the tax authorities. GST collected from customers is credited to GST Payable, as it represents an amount owed to the tax authorities. Therefore, the correct option is C, which accurately describes debiting GST Payable to record GST paid to suppliers, aligning with the typical accounting treatment where increases in expenses or assets (like GST paid on purchases) are debited.

Accounting for GST Includes Which of the Following