Yr 11 ACC Unit 2 Topic 1

Explain the difference between taxable supplies, GST-free supplies and input-taxed supplies.

Answer explanation

Taxable supplies are subject to GST, GST-free supplies have no GST but input tax credits can be claimed, while input-taxed supplies do not have GST but no input tax credits can be claimed.

Why are control accounts and subsidiary ledgers used to control accounts receivable, accounts payable and inventories?

Answer explanation

Control accounts and subsidiary ledgers are used to maintain detailed records and provide a cross-reference to ensure accuracy and control over accounts receivable, accounts payable, and inventories.

What is the impact of not implementing internal controls for credit accounts and inventories?

Answer explanation

Not implementing internal controls for credit accounts and inventories can lead to increased risk of fraud, errors, and mismanagement, resulting in financial losses and damage to the company's reputation.

Explain the computerised accounting processes used to determine costs of goods sold and value of stock on hand.

Answer explanation

Computerised accounting processes use software to track sales, purchases, and inventory levels to calculate costs of goods sold and value of stock on hand accurately and efficiently.

Explain the implications of GST on the recording of transactions in a business.

Answer explanation

GST impacts the recording of transactions by requiring businesses to accurately track and report taxes collected and paid. It involves proper classification of transactions, adjustment of prices, and compliance with GST regulations.

Explain the impact of credit transactions on the accounting process.

Answer explanation

Credit transactions impact the accounting process by increasing liabilities and decreasing assets, requiring accurate recording to maintain balance in financial statements.

Explain the interrelationships between subsidiary ledgers, the general ledger and control accounts.

Answer explanation

Subsidiary ledgers contain detailed information, which is summarized in the general ledger through control accounts. Control accounts in the general ledger provide a summary of the balances in the subsidiary ledgers, ensuring accuracy and consistency between the two sets of accounts.