HiLo Running Store Is Not Registered for GST

question 16

Multiple Choice

HiLo Running Store is not registered for GST.Which of the following statements is INCORRECT?

• A)The firm will charge a flat rate of GST on all goods sold.
• B)The firm will not be able to claim a refund from the ATO on GST paid to suppliers.
• C)Journal entries for sales and purchases will not include a GST Clearing account.
• D)Purchases of inventory will be recorded at the 'gross' amount,that is,the amount including GST.

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Definitions:

Financial Statement

Formal records of the financial activities and position of a business, person, or other entity, which include the balance sheet, income statement, and cash flow statement.

Income Statement

A report detailing a business's earnings, expenditures, and overall profit or loss for a certain timeframe.

Balance Sheet

A financial briefing that condenses the assets, liabilities, and equity shares of a business at a designated point in time.

Revenues and Expenses

The income generated from normal business operations and the costs incurred to generate that income.