The Correct Entry to Record the Purchase of a Motor

Multiple Choice

The correct entry to record the purchase of a motor vehicle for $25 000 cash, plus 10% GST is which of the following?

A) Debit motor vehicles $27 500; credit bank $27 500
B) Debit motor vehicles $25 000; debit GST outlays $2500; credit bank $27 500
C) Debit motor vehicles $27 500; credit bank $25 000; credit GST collected $2500
D) Debit motor vehicles $22 500; debit GST outlays $2500; credit bank $25 000