Question
Gordon Enterprise Ltd. is registered for GST. In May, Gordon collected $10,200 of GST from its customers while it paid $7,600 of GST on its
Gordon Enterprise Ltd. is registered for GST. In May, Gordon collected $10,200 of GST from its customers while it paid $7,600 of GST on its purchases. Which of the following is true?
Gordons financial position is not affected as GST is a flow through tax which will require Gordon to pay the net balance of $2,600 to the CRA | ||
Gordons financial position is $10,200 higher due to collecting GST on its purchases | ||
Gordons financial position is $7,600 lower due to paying GST on its purchases | ||
Gordons financial position is $2,600 higher due to net impact of collecting and paying GST |
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