Record Expenses with Sales Tax.

Discussion:

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Manny

2006-08-02 19:57:57 UTC

Hi there,

I'm having problems recording expenses and the tax paid on purchases made.
I'm in Canada so of course I'm using the Canadian version. When is time to
pay the GST collected and GST paid on purchases, the GST that paid on
business purchases are not making it into the report.

Can anybody out there help on this one please?

Thanks very much in advance for your help.

Manny

Des Perado

2006-08-03 01:40:41 UTC

Permalink

Don't know what Acctg Software you are using, but ideally, you should have
two General Ledger Liability accounts setup in your GL. One is titled "GST
Collected" the other is "GST Input Credits". When it comes time to remit
you GST payment to the Govt., simply print out the General Ledger entries
for the GST period for each of these General Ledger accounts and subtract
one balance from the other to give you the amount to pay or to request a
refund for.

Assuming that your GST Collected exceeds your GST Input Credits, setup a
Vendor "Receiver General - GST" and enter an Accts Payable invoice for the
amount owing.

Assuming: GST Collected $1,000.00
GST Input Credits 300.00

The Accounting entry would look like this:

Debit
Credit
Accts. Payable
$700.00
GST Collected $700.00
GST Input Credits
$300.00
GST Collected $300.00

This Accts Payable Invoice should be backdated to the last day of the GST
period you are paying.

When you pay the GST Invoice, the entry would look like this:

Accounts Payable $700.00
Bank
$700.00

This method zeros out the balances in the two GST accounts at the end of the
GST period.

Hope this helps! Des

Post by Manny
Hi there,
I'm having problems recording expenses and the tax paid on purchases made.
I'm in Canada so of course I'm using the Canadian version. When is time to
pay the GST collected and GST paid on purchases, the GST that paid on
business purchases are not making it into the report.
Can anybody out there help on this one please?
Thanks very much in advance for your help.
Manny

S.M. Serba

2006-09-01 14:27:25 UTC

Permalink

Post by Des Perado
Don't know what Acctg Software you are using, but ideally, you should have
two General Ledger Liability accounts setup in your GL. One is titled "GST
Collected" the other is "GST Input Credits". When it comes time to remit
you GST payment to the Govt., simply print out the General Ledger entries
for the GST period for each of these General Ledger accounts and subtract
one balance from the other to give you the amount to pay or to request a
refund for.

QB CAN doesn't work that way. You get a GST Payable account and that's
all. However, I do agree with you.

Post by Des Perado
Assuming that your GST Collected exceeds your GST Input Credits, setup a
Vendor "Receiver General - GST" and enter an Accts Payable invoice for the
amount owing.

<snipped>

Stephanie

nilsson

2006-08-03 21:31:02 UTC

Permalink

Check that your GST codes are setup to appear in the report.
You may have your codes setup as "outside scope of GST" and they wont
be reported on.

I am in Ireland and we use a similar tax system called VAT.
(Same principle of Inputs and Outputs)
You should have in your general ledger a GST a/c code (It is a Balance
sheet a/c). The balance in this a/c at the end of your GST reporting
period should be your GST liability for that period (provided you paid
the previous periods).

Check with your software support or look at how the other GST codes are
setup and see if your are missing something (a box not ticked, not
marked as a input GST code etc.)

-Nilsson

S.M. Serba

2006-09-01 14:27:29 UTC

Permalink

Have you run a quick report on the GST payable account? If not, do so,
leave it open and post another invoice.

Also, have you checked your dates? An error either with the date of
your report or with the date of the entry can make it appear that it
isn't posting correctly.

Stephanie