Student Question - Owner withdrew goods from Business to value of $500.00

Goods withdrew by Owner would mean that the owner is taking stock right?
So this will have to credit the inventory account, and debit the owners equity, so it will debit the owners Capital account.
I presume that since the owner is withdrawing goods it will also mean that the owner needs to pay the GST (Goods and Services Tax) since he is the end consumer and will still need to pay tax.
Have I understood this right?
Thanks in advance!
Garage Office.
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sounds about right to me
.
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Steve wrote:

Thanks Steve.
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but wasn't there some kind of ruling that owners taking stuff is not business hence...
1) GST cannot be claimed on the initial purchase 2) GST is not charged on the drawing
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J wrote:

If that was true, owners could withdraw goods and sell them privately in the trading post and not have to collect GST... Well - that's my take. This is Australian Law mind you.
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I would suggest using a draw account so you can track the draws for that year easier than traversing through the Capital account.

Either cover it as a "sale" or just call it "use". Either way, the tax would be on the wholesale price of the goods taken.
--
Paul Thomas, CPA
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Paul Thomas, CPA wrote:

Thank you. Drawings makes sense to me.
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