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SUMMARY Chapter 1 Introduction to business

accounting and the role of professional skills


At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter with a brief summary of the key points relating to the
answers. Use your thinking skills to expand on these key points to
develop more complete answers to the questions and to determine what
other questions you have that might lead you to learn more about the
issues.
1 Why is it necessary to have an understanding of business before trying
to learn about accounting?
Accounting involves identifying, measuring, recording, summarising
and communicating economic information about a business for
decision making. It focuses on the resources and activities of
businesses. Therefore, you need to understand businesses and the
business environment in which they exist before trying to learn how
to account for their resources and activities.
2 What factors are causing the business environment to change?
The business environment is dynamic and is becoming increasingly
complex. More information is being generated than ever before, and
this information is available to more people than ever before.
Technology is advancing rapidly, affecting not only the products we
use but also the way the products are manufactured and the way
business is conducted. Business activities and economies are
becoming globalised, the number of regulations is escalating,
business transactions are becoming more complex and new forms of
business are emerging.
3 How does someone become a successful businessperson in a complex
business environment?
The successful businessperson must be willing and able to adapt to
change. Because of the dynamic and complex business
environment, the successful businessperson must be able to take
change in their stride, be devoted to lifelong learning, be open to
other viewpoints, be tolerant of differences, be willing to take
educated and thoughtful risks, be able to anticipate environmental
trends and identify the potential problems and opportunities
associated with these trends, and be ready to abandon old plans and
change course in light of new information.

4 What is private enterprise, and what forms does it take?


Businesses in the private enterprise system produce goods and
services for a profit. These businesses can be service, merchandising
or manufacturing businesses. Entrepreneurs, or individuals, invest
money in businesses so that the businesses can acquire resources,
such as inventory, buildings and equipment. The businesses then
use these resources to earn a profit.
5 What are the three most common forms of business organisations and
their basic characteristics?
The three most common forms of business organisation are: (1) the
sole proprietorship, owned by one individual; (2) the partnership,
owned by two or more individuals (partners); and (3) the company
(or corporation), incorporated as a separate legal entity and owned
by numerous shareholders who hold shares in the company. The
owner of a sole proprietorship and the partners in a partnership
generally have unlimited personal liability for any debts incurred by
the business. Sole proprietorships and partnerships have a limited
life, as the business will cease to exist if there is a change in
partners or owners.
6 What types of regulations do businesses face?
The activities of businesses must be regulated because these
activities affect not only themselves but other businesses, the
economy and the environment too. All businesses, regardless of
type, size or complexity, must contend with regulatory issues.
Numerous laws and authorities regulate businesses on issues
ranging from environmental protection to taxes. Each local
government area, state and country has its own regulations. Owners
of businesses must learn and comply with the regulations issued by
the different levels of government where the businesses are located
and in the areas where they conduct business.
7 What information does the accounting system provide to support
management activities?
Accounting information helps people inside and outside businesses
make decisions. It supports management activities by providing
managers with quantitative information about their business to aid
them in planning, operating and evaluating the business activities.
Accounting information supports external decision making by
providing people outside of the business such as investors,
creditors, stockbrokers, financial analysts, bankers, suppliers, labour
unions, customers and governments with f inancial statements
containing economic information about the performance of the
business. Managers strive to make their business successful through
setting and achieving the goals of their business, making decisions

and committing the resources of the business to the achievement of


these goals. Planning provides the organisation and direction for the
other activities. Operating involves gathering the necessary
resources and employees and implementing the plans. Evaluating
measures the actual progress against standards or benchmarks so
that problems can be corrected.
8 How does accounting provide support and information to people making
decisions who are external to the business?
So that external users can understand the meaning of accounting
information, businesses follow agreedupon principles in their
external reports. These Generally Accepted Accounting Principles
(GAAP) are the standards or rules that businesses must follow. A
business may publish its income statement, balance sheet and cash
flow statement (and statement of changes in owners equity), along
with other related financial accounting information, in its annual
report. This report must present a true and accurate record of the
activities of the business to enable informed decisions to be made
by interested parties, particularly external parties.
9 What roles do ethics and sustainability play in the business
environment?
Since the world is a complex place, where issues are not always
clear, decisions must be made in an ethical context with the best
available information. Accounting information can be relied on only if
it is generated in an ethical environment. Many groups have
established codes of ethics. Adopting an ethical approach to
business will also increase the business chances of sustainability.
Sustainability refers not only to environmental green aspects of the
business but also to planning for survival and growth using an
effective business plan.
10 What skills do accountants of the 21st century require?
Besides being willing to change, businesspeople can develop skills
that better prepare them for problem solving and decision making in
this environment. Businesspeople can become broadly proficient in
all forms of communication: speaking, writing, listening, reading and
teamwork (working cooperatively with others). Businesspeople can
also develop their interpersonal skills and personal management
skills. These skills include the ability to lead and influence others, to
motivate others, to withstand and resolve conflict and to organise
and delegate tasks, and the ability to prioritise and manage their
own tasks. Judgement skills are another type of skill that
businesspeople can develop. Beyond these skills, an ability to think
critically and apply knowledge and skills to problems in order to

make decisions
environment.

is

needed

in

rapidly

changing

business

11 How can people learn to think critically?


People can learn to think critically first by learning new forms and
techniques of thinking and then by practising these techniques to
improve their decision-making skills. An awareness of their current
thinking patterns helps people recognise their strengths and
weaknesses; this knowledge gives them a starting point for
modifying and improving their thinking performance.
12 How can critical thinking help people make better business decisions?
The ideas generated by innovative thinking provide the raw
materials of the decision-making process. Critical thinking helps
decision makers analyse decision alternatives for faulty logic,
unsupported assumptions and emotional appeal. Furthermore, it
helps decision makers evaluate the relevance of evidence used to
support decision alternatives, the credibility of the sources of
evidence, and the consistency of the evidence with the decision
alternatives it supports. Finally, critical thinking helps decision
makers be sure that all relevant information, all points of view and
all workable solutions have been considered.
13 What are the logical stages in problem solving and decision making?
Many business problems are difficult and complicated. A systematic
approach is necessary to organise the problem and to decide on a
solution to the problem. The four stages in problem solving and
decision making are: (1) recognise the problem, (2) identify
alternatives, (3) evaluate the alternatives and (4) make the decision.
The accounting information system plays a big part in the business
decision-making process.

SUMMARY Chapter 2 Developing a business plan: Costvolume-profit analysis.


At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter, with a brief summary of the key points relating to the
answers. Use your creative and critical thinking skills to expand on these
key points to develop more complete answers to the questions and to
determine what other questions you have that might lead you to learn
more about the issues.
1 Since the future is uncertain and circumstances are likely to change,
why should a business bother to plan?
A business plan helps the owners or managers of a business to
organise the business; serves as a benchmark against which they
can evaluate actual business performance; and helps the business to
obtain financing. The business plan consists of a description of the
business, a marketing plan, a description of the business
operations, and a financial plan. Accounting information contributes
to the planning process by providing information for CVP analysis
and by including in the financial plan the effects that estimated

revenues, variable costs and fixed costs have on the business


profits.
2 What should a business include in its business plan?
A business plan should include a description of the business, a
marketing plan, a description of the operations of the business, an
environmental management plan and a financial plan. The
description should include information about the organisation of the
business, its products or services, its current and potential
customers, its objectives, where it is located, and where it conducts
business. The marketing plan shows how the business will make
sales and how it will influence and respond to market conditions. The
business operations section includes a description of the
relationships between the business, its suppliers and its customers,
as well as a description of how the business will develop, service,
protect and support its products or services. The financial plan
identifies the business capital requirements and sources of capital,
and describes the business projected financial performance.
3 How does accounting information contribute to the planning process?
Accountants determine how revenues, variable costs and fixed costs
affect profits based on their observations of how costs behave and on
their estimates of future revenues and costs. By observing cost behaviour
patterns, accountants are able to classify the costs as fixed or variable,
and then to use this classification to predict the amounts of the costs at
different activity levels. Accounting information, then, can help decision
makers evaluate alternative plans by using CVP analysis to show the
profit effect of each plan. CVP analysis is a tool that helps managers
think critically about the different aspects of each plan.
4 What must decision makers be able to predict in order to estimate profit
at a given sales volume?
To estimate profit at a given sales volume, decision makers must be
able to predict the products selling price, the costs that the business
will incur, and the behaviour of those costs (whether they are fixed
or variable costs). The fixed costs will not change because of sales
volume, but the variable costs will change directly with changes in
sales volume.
5 How can decision makers predict the sales volume necessary for
estimated revenues to cover estimated costs?
To predict the sales volume necessary for estimated revenues to
cover estimated costs, decision makers must rearrange the profit
equation into the break-even equation. Using what they know about
the products selling price and the behaviour of the business costs,

the decision makers can determine the contribution margin per unit
of product by subtracting the estimated variable costs per unit from
the products estimated selling price. Then they can substitute the
contribution margin and the estimated fixed costs into the equation
and solve for the necessary sales volume.
6 How can decision makers predict the sales volume necessary to achieve
a target profit?
Predicting the sales volume necessary to achieve a target profit is
not very different from predicting the sales volume necessary for
estimated revenues to cover estimated costs. The only difference is
that the decision makers must modify the break-even equation by
adding the desired profit to the estimated fixed costs. Then, after
substituting the contribution margin and the estimated fixed costs
plus the desired profit into the equation, they can solve for the
necessary sales volume.
7 How can decision makers use accounting information to evaluate
alternative plans?
Decision makers can determine how changes in costs and revenues
affect the business profit. Based on accounting information alone,
the alternative that leads to the highest profit will be the best
solution. However, decision makers should also consider the nonfinancial effects that their decisions may have.

SUMMARY Chapter 3 Developing a business plan:


Budgeting
At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter, with a brief summary of the key points relating to the
answers. Use your creative and critical thinking skills to expand on these
key points to develop more complete answers to the questions and to

determine what other questions you have that might lead you to learn
more about the issues.
1 How does a budget contribute to helping a business achieve its goals?
A budget helps a business by giving a financial description of the
activities planned by the business to help it achieve its goals. It also
helps by adding order to the planning process, by providing an
opportunity to recognise and avoid potential operating problems, by
quantifying plans and by creating a benchmark for evaluating the
business performance.
2 Do the activities of a business have a logical order that drives the
organisation of a budget?
Yes, the operating activities of the business make up what is called
the business operating cycle. A business operating cycle is the
average time it takes the business to use cash to buy goods and
services, to sell these goods to or perform services for customers,
and to collect cash from these customers. The order of activities,
and the cash receipts and payments associated with these activities,
influence how a business organises its budget.
3 What is the structure of the budgeting process, and how does a
business begin that process?
The master budget is the overall structure used for the financial
description of a business plans. It consists of a set of budgets
describing planned business activities, the cash receipts or
payments that should result from these activities, and the business
projected financial statements (what the financial statements should
look like if the planned activities occur). The budgeting process
begins with the sales budget because product or service sales affect
all other business activities. By gathering various types of
information, such as past sales data, knowledge about customer
needs, industry trends, economic forecasts and new technological
developments, a business estimates the amount of inventory (or
employee time) to be sold (used) in each budget period. Cash
collections from sales are planned by examining the business creditgranting policies. Cash payments for expenses are planned by
examining the business payment policies.
4 What are the similarities and differences between a retail business
master budget and a service business master budget?
For a retail business, the master budget usually includes a sales
budget, a purchases budget, a selling expenses budget, a general
and administrative expenses budget, a cash budget and a projected
income statement (some businesses may also include a projected

balance sheet). A service business does not have a purchases


budget, and it usually has one operating expenses budget.
5 After a business begins the budgeting process, is there a strategy it can
use to complete the budget?
Yes. For example, a retail business follows a strategy similar to the
following. After budgeting sales, the business plans the amount and
timing of inventory purchases. To budget purchases, the business
examines the costs associated with inventory purchases and storage
as well as the costs of not carrying enough inventory. It also
considers its policy on required inventory levels. After budgeting
purchases, the business plans the cash payments for inventory
purchases by reviewing its payment agreements with suppliers. To
budget expenses, the business must first determine the behaviours
of these expenses. It budgets fixed expenses by evaluating previous
fixed expenses and then adjusting them (if necessary) according to
the plans for the coming time period. It budgets variable expenses
by first observing what activity causes these expenses to vary and
then calculating the total expenses by multiplying the cost per unit
of activity by the budgeted activity level. For a retail business, the
activity level is usually sales. The business budgets the cash
payments for these expenses by reviewing the business policy on
the payment of expenses. The information for developing the cash
budget comes from the other previously prepared budgets, as does
the information for creating the projected income statement.
6 How can a manager use a budget to evaluate a business performance
and then use the results of that evaluation to influence the business
plans?
A manager uses a master budget to evaluate a business
performance by comparing the information in the various budgets
with the results that occur after the planned activities are
implemented. The manager identifies the differences between
budgeted and actual results, and learns about the causes of these
differences by asking questions and investigating further. Based on
these investigations, a manager may adjust the business activities
and plans, as well as its future budgets.

SUMMARY Chapter 4 The Accounting System: Concepts


and applications.
At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter, with a brief summary of the key points relating to the
answers. Use your creative and critical thinking skills to expand on these
key points to develop more complete answers to the questions and to
determine what other questions you have that might lead you to learn
more about the issues.
1 Why do managers, investors, creditors and others need information
about a business operations?
Internal and external users need information about a business
operations to evaluate alternatives. For instance, a manager needs
this information to decide which alternative best helps the business
meet its goals of remaining solvent and earning a satisfactory profit.
A banker also needs this information to decide the conditions for
granting a loan.
2 What are the basic concepts and terms that help identify the activities a
business accounting system records?
The basic concepts and terms that help identify the activities that a
business accounting system records are the entity concept (each
business is separate from its owners), transactions (exchanges
between a business and another entity), source documents
(business records as evidence of transactions), the monetary unit
concept (transactions are recorded in monetary terms) and the
historical cost concept (transactions are recorded based on dollars
exchanged).
3 What do users need to know about the accounting equation for a
business?
Users need to understand the accounting equation: Assets
Liabilities Owners Equity. They need to know that assets are a
business economic resources, liabilities are a business debts, and
owners equity is the owners current investment in the assets of the
company.

4 Why are at least two effects of each transaction recorded in a business


accounting system?
A business accounting system is designed so that two effects of
each transaction are recorded in order to maintain the equality of
the accounting equation. Under the dual effect of transactions,
recording a transaction involves at least two changes in the assets,
liabilities and owners equity of a business.
5 What are revenues and expenses, and how is the accounting equation
expanded to record these items?
Revenues are the amounts earned by a business charging customers
for goods or services provided during an accounting period.
Expenses are the costs of providing the goods or services during the
period. Net income is the excess of revenues over expenses for the
period. The accounting equation is expanded as follows to record
revenues and expenses: Assets Liabilities [Owners Capital
(Revenues Expenses)].
6 What are the accounting principles and concepts related to net income?
The accounting principles and concepts related to net income are
the accounting period, earning and recording revenues, the
matching principle, and accrual accounting. The accounting period is
the time span used by a business to report its net income. A
business records revenues during the accounting period in which
they are earned and collectible. The matching principle states that a
business matches the total expenses of an accounting period against
the total revenues of the period to determine its net income. Accrual
accounting means that a business records its revenues and
expenses in the accounting period in which it provides goods or
services, regardless of whether it receives or pays cash.
7 Why are adjustment entries necessary at the end of a financial period?
End-of-period adjustments are necessary to record any expenses
that a business has incurred (or any revenues that the business has
earned) during the accounting period but that it has not yet
recorded. Adjustments ensure that these expenses (and revenues)
are included in the business net income calculation.

SUMMARY Chapter 6 Managing and Reporting Working Capital


At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter with a brief summary of the key points relating to the
answers. Use your creative and critical thinking skills to expand on these
key points to develop more complete answers to the questions and to
determine what other questions you have that might lead you to learn
more about the issues.
1 What is working capital, and why is its management important?
Working capital is current assets minus current liabilities. A business
needs to manage its working capital so that it keeps an appropriate
balance between having enough to conduct its operations and to
handle unexpected needs, and having too much so that profitability
is reduced.
2 How can managers control cash receipts in a business?
Managers can control cash receipts by requiring the proper use of a
cash register, separating the duties of receiving and processing
collections of accounts receivable, and depositing receipts every day.
3 How can managers control cash payments in a business?
Managers can control cash payments by paying all bills by cheque,
paying only for approved purchases supported by source documents,
and immediately stamping paid on the supporting documents after
payment.

4 What is bank reconciliation, and what are the causes of the difference
between a business cash balance in its accounting records and its cash
balance on its bank statement?
A bank reconciliation is an analysis that a business uses to resolve
the difference between the cash balance in its accounting records
and the cash balance reported by the bank on its bank statement.
The causes of the difference are deposits in transit, outstanding
cheques, deposits made directly by the bank, charges made directly
by the bank and errors.
5 How can managers control accounts receivable in a business?
Managers can control accounts receivable by evaluating a
customers ability to pay before extending credit, monitoring the
accounts receivable balance of each customer, and monitoring the
total accounts receivable balance.
6 How can managers control inventory in a business?
Managers can control inventory by establishing policies for ordering
and accepting inventory, establishing physical controls over
inventory being held for sale, and taking a periodic physical count of
the inventory.
7 How can managers control accounts payable in a business?
Managers can control accounts payable by coordinating and
monitoring credit purchases, making payments at the appropriate
time, and monitoring the total accounts payable balance.

SUMMARY Chapter 7 The Income Statement: Content


and Use
At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter with a brief summary of the key points relating to the
answers. Use your thinking skills to expand on these key points to
develop more complete answers to the questions and to determine what
other questions you have that might lead you to learn more about the
issues.
1 Why is a business income statement important?
A business income statement is important because it summarises
the results (revenues, expenses and net income) of the business
operating activities for an accounting period. This information is
useful in the decision making of both internal and external users
because it helps to show how well the business management has
performed during the period and from period to period.
2 How are changes in a business income statement accounts recorded in
its accounting system?

Changes in a business balance sheet accounts are recorded in its


accounting system by creating a separate column for each asset,
liability and owners capital account. These accounts are called
permanent accounts because they are used for the life of the
business to record its balance sheet transactions. Changes in a
business income statement accounts are recorded in its accounting
system by creating a separate column under Owners Equity for
each revenue account and each expense account, while still
retaining the owners capital account column. A business uses these
revenue and expense accounts to record its net income transactions
for only one accounting period, so they are called temporary
accounts.
3 What are the parts of a retail business classified income statement,
and what do they contain?
The classified income statement of a retail business includes two
parts, an operating income section and other items section. The
operating income section includes revenues, cost of goods sold and
operating expenses subsections related to a business primary
operating activities. The other items section includes any revenues
or expenses that are not directly related to the business primary
operations.
4 What are inventory and cost of goods sold, and what inventory systems
may be used by a business?
Inventory is the merchandise a retail business is holding for resale.
Cost of goods sold is the cost to the business of the merchandise
that it sells during the accounting period. A business may use either
a perpetual inventory system or a periodic inventory system. A
perpetual inventory system keeps a continuous record of the cost of
inventory on hand and the cost of inventory sold and the cost of
goods sold. A periodic inventory system does not keep a continuous
record of the inventory on hand and sold, but uses a physical count
to determine the inventory on hand at the end of the accounting
period and cost of goods sold.
5 What are the main concerns of external decision makers when they use
a business income statement to evaluate its performance?
When external decision makers use a business income statement to
evaluate its performance, they are concerned about the business
risk, operating capability and financial flexibility. Risk is uncertainty
about the future earnings potential of the business. Operating
capability refers to the business ability to continue a given level of
operations. Financial flexibility refers to the business ability to adapt
to change.

6 What type of analysis is used by external decision makers to evaluate a


business profitability?
Ratio analysis is used by external users to evaluate a business
profitability. Ratio analysis involves calculations in which an item on
the business financial statements is divided by another related item.
The ratios are compared with the business ratios in previous periods
or with other businesses ratios. The ratios used to evaluate a
business profitability include the profit margin (net income divided
by net sales) and the gross profit percentage (gross profit divided by
net sales).
7 What is a statement of comprehensive income?
A statement of comprehensive income is effectively the income
statement plus all other comprehensive income. According to
paragraph 7 of AASB 101, Other comprehensive income comprises
items of income and expense (including reclassification adjustments)
that are not recognised in profit or loss as required or permitted by
other Australian Accounting Standards.

SUMMARY Chapter 8 The Balance Sheet: Content, use


and analysis:
At the beginning of the chapter we asked you several questions. During
the chapter, we asked you to STOP and answer some additional questions
to build your knowledge about specific issues. Be sure you answered
these additional questions. Below are the questions from the beginning of
the chapter with a brief summary of the key points relating to the
answers. Use your creative and critical thinking skills to expand on these
key points to develop more complete answers to the questions and to

determine what other questions you have that might lead you to learn
more about the issues.
1 Why is a business balance sheet important?
A business balance sheet is important because this statement
provides internal and external users with information to help
evaluate the business ability to achieve its primary goals of earning
a satisfactory profit and remaining solvent. A balance sheet provides
information about a business economic resources and the claims on
those resources (its financial position) on a specific date.
2 What do users need to know about a business classified balance sheet?
Users need to know that a business classified balance sheet shows
important subtotals, in related groupings, for the assets, liabilities
and owners equity of the business. The groupings include current
assets and non-current assets, as well as current liabilities and noncurrent liabilities. Current assets are cash and other assets that a
business expects to convert into cash, sell or use up within one year.
Current assets include cash, marketable securities, receivables,
inventory and prepaid items. Non-current assets are assets other
than current assets; these include items such as long-term
investments, as well as property and equipment. Current liabilities
are obligations that a business expects to pay within one year by
using current assets. Current liabilities include accounts payable and
salaries payable, unearned revenues and short-term notes (and
interest) payable. Non-current liabilities are obligations that a
business does not expect to pay within the next year; these include
items such as longterm notes payable, mortgages payable and
bonds payable.
3 What is a business liquidity, and how do users evaluate it?
A business liquidity is a measure of how quickly it can convert its
current assets into cash to pay its current liabilities as they become
due. Users evaluate a business liquidity by studying its working
capital (current assets minus current liabilities), current ratio (current
assets divided by current liabilities) and quick (acid-test) ratio (quick
assets divided by current liabilities).
4 What is a business financial flexibility, and how do users evaluate it?
A business financial flexibility is its ability to adapt to change.
Measures of a business financial flexibility are used to assess
whether the business can increase or reduce its operating activities
as needed. Users study a business current ratio and quick ratio to
evaluate its short-term financial flexibility. They study a business
debt ratio (total liabilities divided by total assets) to evaluate its
long-term financial flexibility.

5 Why and how do users evaluate a business profitability?


Users evaluate a business profitability to determine how well it has
met its profit objectives in relation to the resources invested. They
study a business return on total assets ([net income plus interest
expense] divided by average total assets) and return on owners
equity (net income divided by average owners equity) ratios to
evaluate a business profitability.
6 What is a business operating capability, and how do users evaluate it?
A business operating capability is it s ability to sustain a given level
of operations. Measures of a business operating capability are used
to assess how well the business is maintaining its operating level
and to predict future changes in its operating activity. Users study a
business activity ratios to determine the length of the parts of the
business operating cycle. These ratios include the inventory
turnover (cost of goods sold divided by average inventory) and the
accounts receivable turnover (net credit sales divided by average
accounts receivable).
7 What is a business activity statement?
A business activity statement (BAS) is a form that is submitted to the
Australian Taxation Office (ATO) by all businesses to report their
taxation obligations. These obligations include the goods and
services tax (GST), pay-as-you-go withholding (PAYGW), pay as you
go instalments (PAYGI), fringe benefits tax (FBT), wine equalisation
tax (WET) and luxury car tax (LCT). PAYGW is sometimes known as
income tax withholding (ITW). PAYGI is sometimes known as income
tax instalments (ITI).[1]

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