Accounting for GST/HST

by Small Business Owner
(Canada)

Accounting for HST/GST When Not An HST/GST Registrant



I have a small company and I don't collect GST. What do I do with the GST/PST on receipts when entering them into QuickBooks?

Thanks.



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Good Morning,

If you are not an HST / GST Registrant, you have two ways to approach this:

First option - you include the tax as part of the expense. For example, if you purchased office supplies for $75 plus tax, you would:

debit ... Office Supplies $75 plus tax
and credit ... Cash In Bank $75 plus tax

Second option - you create a separate Sales Taxes Paid expense account. For example, if you purchased office supplies for $75 plus tax, you would:

debit ... Office Supplies $75
debit ... Sales Taxes Paid $taxes paid
and credit ... Cash In Bank $75 plus tax

For more detailed information on accounting for GST/HST when you are not a registrant, see my chat, If You Are NOT An HST/GST Registrant. This chat also has links to explain how you are paying too much tax when you are not an HST GST registrant.

I hope this answer helps you out.

Comments for Accounting for GST/HST

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Oct 17, 2012
 GST/HST Embedded Expenses
by: Khalid Chowdhury

There are other areas where a business can claim credit for GST/HST embedded in the expense, such as the employee allowances.

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