GST Collected on Sales Is Accumulated in a Liability Account

question 38

Multiple Choice

GST collected on sales is accumulated in a liability account called GST collections and GST paid on purchases is accumulated in an account with a debit balance called GST outlays. What type of account is GST outlays?

• A) Asset
• B) Expense
• C) Contra income
• D) Contra liability

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Definitions:

Acquisition

The process of acquiring control of another company by purchase or exchange of stock.

Combining Firms

The process of two or more companies joining together to form a single business entity, often to achieve strategic objectives or enhance market share.

Horizontal Merger

The combination of two or more companies that operate in the same industry and are at the same stage in the production process.

Market Share

The segment of a market dominated by a specific company or product.