GST total paid and GST total invoiced that has to be paid back

[Cam Ellison]

Derek Atkins wrote:
> Quoting Bob Page <bpage104 at gmail.com>:
> 
>> Hello,
>>
>> I am a newbie and just trying to convert to Gnucash all my business
>> transactions. I am also completely new to any accounting program as I 
>> have
>> always let my Accountant look after that. Now I would like to do the
>> bookeeping in house and submit reports to my accountant.
>>
>> Can anyone help me with the following:
>>
>> 1) I need to know the total amount of 7% GST (Canada) that I have 
>> invoiced to
>> Customers as we have to collect these taxes and submit them to the
>> government.
> 
> 
> Set up a tax table for "GST Collected", and when you invoice, apply that
> GST to each lineitem in the invoice.  This tax table should go into some
> holding account (you can decide whether you want it to be a negative Asset
> or a Liability depending on whether you think you collect or pay more GST).
> This would be your GST Collected account.
> 
>> 2) I also need to know the total amount of 7% GST I have paid while 
>> purchasing
>> goods and services in all my expense accounts.
> 
> 
> Same as #1 except a "GST Paid" tax table..   Or for hand-entered expense
> transactions you need to manually split out the GST amount into the
> GST Paid account.
> 
>> 3) I then need to deduct the GST that I have paid in all my expense 
>> accounts
>> from the total that I have invoiced my customers. This will give me the
>> figure that I have to submit to the Tax department on a quarterly basis.
> 
> 
> Put the GST Paid and GST Collected into the same account hierarchy:
> 
>   ...:GST:GST Paid
>   ...:GST:GST Collected
> 
> Then you can look at the balance of the ...:GST account to see whether you
> owe are are owed GST.
> 
>> Can anyone visualize how this scenario above can be implemented in 
>> Gnucash in
>> any way, in full or in part?
>> Again, I am not too bright when it comes to accounting, as such a 
>> simple to
>> understand explanation would be appreciated.
> 
> 
> You might want to hire an accountant to help you get set up.
> 
>> Thanks in advance.


I actually use 3 Liability sub-accounts, like this:

Liabilities
   |
   --GST
      |
      |--GST Collected  (from clients)
      |--GST Paid  (paid for goods and services)
      |--GST Payments  (paid to CRA)

Instead of entering the GST you pay for goods and services as 
Expenses|Taxes|GST, enter it as Liabilities|GST|GST Paid, and so on.  It 
will automatically show as a negative (and so will GST Payments).  Your 
accountant can undoubtedly give you a better explanation than I can.

These two oppositely-signed accounts (GST Paid & GST Payments) are 
called contra-accounts.

Works like a dam for me, because the GST parent account always shows 
what I owe.

Cheers

Cam



--
Cam Ellison, Ph.D. R.Psych. #1417

Cam Ellison & Associates Ltd.
RR 22       3446 Beach Avenue
Roberts Creek BC      V0N 2W2
Phone:           604-885-4806
Fax:             604-885-4809