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Study Design- accrued expenses

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elaine:
I'm a bit confused about this aspect of the study design:

– accrued expenses (GST to be recorded at time of payment);

So does that mean in the Cash Payments journal, instead of recording one figure in the sundries column, I have to split it up as GST and sundries?

I think my neap or textbook only puts one figure for payment of accrued expenses, there isn't anything in the GST column.

and anyone else getting jittery about the exam?

clinton_09:

--- Quote from: elaine98 on May 22, 2008, 10:01:35 pm ---I'm a bit confused about this aspect of the study design:

– accrued expenses (GST to be recorded at time of payment);

So does that mean in the Cash Payments journal, instead of recording one figure in the sundries column, I have to split it up as GST and sundries?

I think my neap or textbook only puts one figure for payment of accrued expenses, there isn't anything in the GST column.

and anyone else getting jittery about the exam?

--- End quote ---

jittery about the exam is exactly how i'm feeling im not confident at all. Oh well just gotta keep trying

elaine:
hey guys can someone explain this to me?

At the 31st of March, Linday still owed a power & light account of $484, including GST of $44.

Lindy paid the power & light on the 5th April 2009. State the ledgers and the amounts that would be debited and credited as a result of this transaction.
The answer is:

Ledger
Accrued power & light  440 DR
GST Clearing               44 DR
Bank                           484 CR

I'm really confused. Why is GST in there? In all of my practice questions i've done, i haven't seen any GST recognised

costargh:
Thats because most of the questions we are given are expenses which are not related to GST like wages and insurance (they don't incur the GST).

All this is saying is that if the expense we are dealing with includes GST, you have to break it up so that you recognise that GST is part of the answer... so it says "GST to be recorded at time of payment".

Im guessing this means that you don't recognise the GST in any balance day adjustments because it hasnt been paid yet so if you did a BDA for an expense with GST you would do it as normal, but when you actually record the transaction in the cash payments journal you have to seperate it so that you indicate the ammount that corresponds to the expense, the ammount corresponding to bank and the ammount correspnding to GST.

BUT NOW IM CONFUSED BECAUSE IM NOT SURE IF YOU WOULD INDICATE THE 484 AS THE ACCRUED POWER AND LIGHT OR 440 .... shit now im confused lol

elaine:
i've emailed my teacher about so hopefully he gets back to me soon

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