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

[Nicholas Lee]

On 4/4/06, Cam Ellison <cam at ellisonet.ca> wrote:
>
> 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.


If Canada uses a similar system to NZ, GST is purely a transactional tax. So
its never (or hardy ever) an expense.  You are only acting as an agent for
the tax man. Thus you simply track your liability to the tax man.

The end users pay the tax, and thus it is not an expense.


--
Nicholas Lee
http://stateless.geek.nz
gpg 8072 4F86 EDCD 4FC1 18EF  5BDD 07B0 9597 6D58 D70C
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