Question 1

a. The transaction is a sales return of inventory with a cost price of $500 and a selling price of $1 000 (plus GST)
1 mark for sales return
1 mark for explanation

b. The transaction on 18 December 2021 is a credit sale. It will result in an increase in assets of $5 700 due to accounts
receivable increasing by $10 450 and inventory decreasing by $4 750. Liabilities will increase by $950 of GST clearing
and owners equity will increase by $4 750.
1 mark for impact on assets
1 mark for impact on liabilities
1 mark for impact on owners equity

c.
Question 2

a.

b.

Account Payable – Aust Imports

Date Cross-reference Amount Date Cross-reference Amount
Mar. 13 Bank/Discount Revenue 6 450 Mar. 1 Balance 12 500
19 Inventory/GST Clearing 550 15 Inventory/GST Clearing 9 900

c.

A statement of account provides an external checking device on the accuracy of the Accounts Payable ledger account for Aust
Imports. The ledger account should have exactly the same entries as the Statement of Account. Thus, when the two records are
compared any errors or omissions can be identified and rectified, thus ensuring Faithful Representation. Any discrepancies
identified can also be followed up with the supplier, Aust Imports.

Question 3

GST Clearing
Date Cross-reference Amount Date Cross-reference Amount
9 July Bank 130 1 July Balance 650
20 Accounts Receivable 30 6 Bank 420
22 Accounts Payable 560 15 Accounts Receivable 270
23 Accounts Payable 400
31 Bank 650