Can cash purchases track suppliers and GST?

[Edward Doolittle]

You might try entering your first transaction something like this:

Description: Costco
Cr. Assets:Cash 61.28
Dr. Expenses:GST Charged 15.99+29.99
Dr. Assets:GST Paid 0.05*(15.99+29.99)
Dr. Expenses:GST Not Charged 13.00

You can tell which purchase belongs to which category (GST Charged vs. GST
Not Charged) by looking at the letters beside the itemized cost on the bill.

Note that GnuCash will do simple arithmetic like 0.05*(15.99+29.99) in the
register if you enter it like that.

If your transaction doesn't quite balance, you might also need to make
adjustments for rounding. I don't know the precise rules for rounding GST,
but if you are paying with a debit card instead of actual cash, any
rounding error for the transaction probably should be absorbed into the
GST. On the other hand, if you are paying with actual Sir John A's (i.e.,
cold, hard cash) there is another source of rounding: rounding to the
nearest nickel (i.e., 5 cent piece) since Canada did away with copper
pennies. The exact total will appear on the bill, so you can separate the
two kinds of rounding, but now we're getting a bit nit-picky and maybe the
error is "immaterial", especially since a large number of rounding errors
to the nearest nickel will tend to cancel one another out.

The transaction above will then be used as a template for the next
transaction with the description "Costco", saving you some work. You may
still have to mess around a bit if you want to use another level of
sub-account under expenses to further categorize your expenses. (But you
should have only one GST account and rounding errors should be adjusted in
that account.) If you typically shop for just two or three different types
of items, you could have templates for those types, e.g., I have "Costco
Groceries" and "Costco Gifts". (I sometimes group items at the cash
register and ask the cashiers for two or more transactions to save myself
some accounting work, but it is questionable whether there is a net time
savings.)

For those in provinces of Canada that also have provincial sales tax, there
are three or four categories (GST+PST, GST only, PST only, No Tax). I say
three or four because in my experience everything with PST also has GST,
but my experience is limited. Finally, in some provinces in Canada there is
no GST nor PST, but instead HST "Harmonized Sales Tax". I don't know much
about that, but I assume that in most cases the provincial part of HST and
the federal part of HST have been harmonized to apply to all the same
purchases, which should mean that there are only two categories once again.
On the other hand, it could be that some items for which one pays HST are
eligible for partial rebates, which would add back another category.


On 10 February 2015 at 11:10, Scott Rowed <scott.rowed at gmail.com> wrote:

> Is there any easy way to track vendors and GST (Canada) when making cash
> purchases? For example I shop at Costco for the following items and pay
> cash:
>
>
> Batteries....15.99 + 5% GST
> USB flash drive....29.99 + 5% GST
> Pizza for office party....13.00 (no GST)
>
>
> At the end of the year I'd like to access a report on my purchases at
> Costco. Also, of course, I need to find out my total GST for the government
> reports.
>
>
> In Gnucash, it seems that the best way I can do this is to open up a new
> bill to post in accounts payable, enter the data, then pay it after. This
> way it has the tax fields as well as linking the purchases to a specific
> vendor.
>
>
> I used to use Quickbooks and there it was quite easy and fast.
>
> Thanks.
>
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-- 
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI