• Subject Name : Accounting and Finance

Error in BAS Lodged

Teacher : An amount of $ 22000 that relates to purchase of machinery has been incorrectly recorded in purchases account. I am afraid that this error will affect the Business Activity Statement for this quarter. Do you think this will affect the amount of GST payable by us?

Me: So it appears from what you have told- that this amount related to purchase of machinery should have been recorded in Machinery Account, as it is not related to purchase of stock but for an item that is of capital nature. This is definitely a posting error, but there is a way to deal with it in the BAS. Also, don’t worry about the GST payable, because this will not affect the net GST amount payable by us but will definitely have an impact on amounts to be disclosed on BAS labels G10 and G11 which are for capital purchases and non- capital purchases respectively.

Teacher- Okay, so what exactly do I need to take care of while preparing BAS?

Me- The amount of $22000 should be reported at label G10 and the remaining amount after deducting $22000 from $286000 should only be reported at label G11. This is all that needs to be done to correct this error in BAS.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Accounting and Finance Assignment Help

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