Mountessa sells soft drinks to Bev Averages, a pub, on 10 September 2010 for $3,600 (GST...

 

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Mountessa sells soft drinks to Bev Averages, a pub, on 10 September 2010 for $3,600 (GST inclusive) and issues a tax invoice on the same day. Bev Averages pays Mountessa on 10 October 2010. Discuss how Mountessa and Bev Averages will account for GST to the IRD under the different alternatives: (a) Mountessa uses the invoice basis whereas Bev Averages uses the payments basis. (b) Mountessa uses the payments basis and Bev Averages uses the hybrid basis. Mountessa sells soft drinks to Bev Averages, a pub, on 10 September 2010 for $3,600 (GST inclusive) and issues a tax invoice on the same day. Bev Averages pays Mountessa on 10 October 2010. Discuss how Mountessa and Bev Averages will account for GST to the IRD under the different alternatives: (a) Mountessa uses the invoice basis whereas Bev Averages uses the payments basis. (b) Mountessa uses the payments basis and Bev Averages uses the hybrid basis.

Answer rating: 100% (QA)

Under the invoice basis method Mountessa will account for the GST on the sale of the soft drinks in the tax period in which the tax invoice was issued ... View the full answer