V Draw > Discussion Questions and Critical Thinking/Ethical Case 1. Explain how PST differs from GST/HST. 2. What is the normal balance of the Sales Discounts account? 3. What is a value-added tax? 4. (Tricky.) Why doesn't the purchase requisition generally mention GST/HST? 5. Explain why a retail business includes a column for PST in its sales journal, but does not include a similar column in its purchases journal. 6. What effect on the liability account "PST Payable" does a credit memorandum have? 7. State the differences between a cash receipts journal and a cash payments journal in regards to GST entries. Assume taxes are included, and give a brief comment on each difference. 8. When a seller issues a credit memorandum with both PST and GST included, what accounts are affected? 9. Sales discounts are taken on GST or PST amounts. Agree or disagree and say why. 10. In any given reporting period (assume a month), a successful business will always owe some GST or HST. Agree or disagree and explain your answer. 11. Why would a purchaser issue a debit memorandum? Would it include any PST? 12. Explain the relationship between a purchases journal and a cash payments journal with respect to the extra columnis) needed to account for taxes. 13. State why it is so important for firms to keep track of the GST/1IST that they pay each period.