Goods and Services Tax - GST

Ernest Nagy Logistics Solutions consultant ernestnagy at logisticssolutions.ca
Fri Aug 23 16:05:47 EDT 2013


Maf, thank you for your help, very much appreciated.
Regarding your invoicing module, is there a way to set the pre-sets so that I don’t have to go to options every invoice and set the items to display? I can’t find it anywhere.

Thanks & Regards
Ernest Nagy
Your Logistics Solutions consultant
Vancouver, BC
604-559-7686
www.logisticssolutions.ca

 

From: Maf. King 
Sent: Thursday, August 22, 2013 12:27 PM
To: Ernest Nagy ; gnucash-user at gnucash.org 
Subject: Re: Goods and Services Tax - GST

Hi Ernest,

Don't forget to include replies to the list, too.  maybe your email software 
has a "reply list" or "reply all" option - others may benefit from the 
conversation, and others will certainly be able to offer their own opinions 
and experiences, too.

You are missing the double-entry part of the transaction - the money you spent 
on the copy costs came from maybe a bank account, credit card or petty cash?

Within GC, money is never created (well, except for a cheat called 
Equity:OpeningBalances when you first set the accounts up) - it always flows 
from (at least) one account to at least one other.

Looking at your screenshots, I'd suggest that the transaction in 
Expenses:Printing&Repro should look something like this:

01/07/2013    74281   Staples copy costs - Business Plan
Expenses:Printing&Repro (expense)14.55
Assets:GSTITC (expense) 0.68
Assets:CurrentAssets:PettyCash (rebate) 15.23

You physically handed over $15.23 cash to Staples - they keep 14.55 of that 
for their income, and "give" 0.68 to the government.  At some stage, you tell 
the govenment that you have "loaned" them 0.68 via staples, and you'd quite 
like it back please (or at least, knocked-off what you need to pay them)

HTH,
Maf.


On Thu 22 August 13 10:30:58 Ernest Nagy wrote:
> Hi Maf
> 
> Thank you very much for your quick reply, very much appreciated. I wonder if
> you help me out just a little more?
> 
> I’ve attached the following snips from how I’ve set up the accounts and one
> expense entry just so I get it right. My total expense was $15.23 of which
> GST tax of $0.68 is included and this is what I get back as a credit.
> 
> Gnucash expense is how I initially entered the transaction, note the $29.10
> under rebate which is not right which is what automatically calculated.
> Gnucash expense 1 is when I manually deleted the additional line of $29.10
> and then that Orphan CAD was created? Gnucash accounts 1 is how I’ve
> entered my accounts and the GST tax under A/R asset as this is my Input Tax
> Credit, the tax I pay on purchases. Gnucash accounts 2 is the remaining
> list of accounts with my GST tax under A/P liability for the 5% GST I’ll be
> collecting on my sales and this is what I’ll owe the government with the
> two offsetting each other. Can you explain what the imbalance CAD of
> –$14.55 is and what the Orphan CAD is used for? Do I have to do double
> entries to get rid of these?
> 
> I very much appreciate your time and help in this regard
> 
> Best regards
> Ernest Nagy
> Your Logistics Solutions consultant
> Vancouver, BC
> 604-559-7686
> www.logisticssolutions.ca
> 
> 
> From: Maf. King
> Sent: Thursday, August 22, 2013 8:56 AM
> To: gnucash-user at gnucash.org ; Ernest Nagy
> Subject: Re: Goods and Services Tax - GST
> 
> On Wed 21 August 13 21:21:18 Ernest Nagy wrote:
> > Hi
> > 
> > I love the program and the ease of use with one major exception, how to
> > handle the Canadian GST
> > 
> > While I’m not an accountant, I do know that the GST paid on purchases
> > which
> > is called the GST ITC (Input Tax Credit) is what is owed to you by the
> > government as a credit to your purchases/expenses. The GST charged on your
> > sales invoices is a liability because this is what is owed to the
> > government. The two offset each other when reconciling and paying the
> > government your final dues.
> > 
> > I have created a GST collected liability account and a GST ITC asset
> > account.
> > 
> > When I enter a transaction for expenses, I get an imbalance. Is this
> > right?
> > How do I offset this imbalance?
> > 
> > Thanks for your help
> 
> Hi Ernest,
> 
> You have to manually split out the GST portion from transactions; it is only
> automatic from within the Vendor Bill (or Customer Invoice) workflow.
> 
> so if you are using A/P, set up a tax table and GC will auto allocate the
> GST to your liability account.
> 
> if it is a manual transaction, then you need an extra split line to put the
> GST bit to one side.  not that you can enter simple calculations in the
> numric box of the register - so in the UK where VAT (similar concept) is
> 20%, I can do
> Expenses:Widgets £100
> VAT:inputTax: £100*.2
> Assets:Bank            £120.00
> (sorry if the columns are messed up by email)
> 
> HTH
> Maf.

-- 
Maf. King
PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 C542





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