Newbie to Bookkeeping
I am currently running my own company which I have recently set-up. There is a question which I would like to seek your help on.
I am using another accounting software and am having trouble with my GST input. I have no idea if the GST I'm charging my customers is a liability? Also, how would I classify the GST Paid for expenses? Is it an expense as well?
Thank you in advance.
Take a look at my chat on How to Record GST/HST Using a Manual System
It will explain the various components of GST/HST so you can see how the data flows and provide you with all of your journal entries.
You will have to determine how to adapt the information for your use in your accounting system.
Generally, your GST/HST collected is a liability (credit balance) as you are holding the funds in trust for the government
until you remit it.
Your input tax credits (GST/HST paid) are debit entries as this money will be refunded to you by the government.
Whether these entries happen in one account or in three accounts depends on how you set up your accounting system.
If you have questions after following the two links above, just post back ... even if you don't have questions but this information was what you were looking, let me know. :0)P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.