A bit thick on how to handle GST

[alistair clethero]

Folks

Can anybody explain to me the following on GST ? I've read some previous
emails and i think i'm on the right track but i'm no accountant...
This is simplified since i guess i would be using expense and income
accounts somewhere.

I purchase widgets for $1000 plus GST tax  at 10% of $100, then

my bank gets CREDITED, which is an ASSET account - the credit sends the
balance down by $1100
my INVENTORY account gets DEBITED, which is an ASSET account - the debit
sends the balance up by $1000
my GST PAID account gets DEBITED, which is an ASSET account - the debit
sends the balance up by $100

so i spent $1100, and the value of my assets has increased by $1100.

Is this right? Is GST really an ASSET? To the business it has no real
value unless the GST paid can be passed on to others if the goods are
resold? So therefore if goods are resold it's an asset? If not it's
a...?

I sell widgets for $1000 plus GST tax  at 10% of $100, then

my bank gets DEBITED, which is an ASSET account - the debit sends the
balance up by $1100
my INVENTORY account gets CREDITED, which is an ASSET account - the
credit sends the balance down by $1000
my GST COLLECTED account gets CREDITED, which is a LIABILITY account -
the credit sends the balance down by $100

Appreciate any thoughts on the above, I'm afraid I'm not hot on
accounting, even with a book.


regards

al