Handling GST and PST from Credit Card tranactions

[Doctorcam]

* Russell Sutherland (russ at quist.ca) wrote:

> The GnuCash tutorial recommends that one simply record each
> purchase by performing a transfer from the Liability->Credit Card
> account directly to the Expense->Travel+Entertainment->Meals account.
> Then later in the month after reconciling a transfer is made
> from an Assest->Chequing Bank account to the Liability->Credit Card account.

I'll start by acknowledging that I have not responded to Linas'
request to put some of this in the Wiki - one of these days, I'll have
time.  

First question is: are these business-related?  If you are
charging HST (GST + PST, where there is a Federal-Provincial
agreement) or GST to customers, your best bet is to set HST up as a
Liability account, and then set up 3 sub-accounts: HST Payable (this
is what you charge your customers), HST Paid (this is what you pay on
eligible goods and services, and is signed negatively), and HST
Payments (what you have actually paid to Ottawa).  HST Paid is known
as a contra-account.

When you purchase something, split the transaction so that the HST
goes to Liabilities:HST:HST Paid. You can put a comment in the memo
field to identify it.

When you charge customers HST, put that in Liabilities:HST:HST
Payable.  

The sum in Liabilities:HST tells you what to pay the CRA.  This is
also a contra-account, and the entry comes up negative.

When you pay the CRA, that obviously goes into HST Payments.  

If you do this from the Credit Card account (the least complicated
way) the total remains unaffected by the split, and you pay your
credit card bill accordingly.

Using the Vendor approach with a credit card is too complicated.

Cheers

Cam


-- 
Cam Ellison  Ph.D.  R.Psych. #01417

Cam Ellison & Associates Ltd.
Management Psychology

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