Question 8 (Note: Although this question is based on the Skate 'n' Surf business the accounts, amounts and transactions involved may differ between...

Question 8

(Note: Although this question is based on the Skate 'n' Surf business the accounts, amounts and transactions involved may differ between questions. Please read each question separately.)

Skate 'n' Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader.

The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employee's wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis.

The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting.

Accounting records

The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier.

Chart of accounts

The chart of accounts for Skate 'n' Surf contains the accounts and account numbers below.