Setting up QuickBooks

by Stephen
(Guelph, ON)

Setting up previous year balances for accounts when starting in Quickbooks



I started using Quickbooks Pro 2010 at the beginning of the year and I am trying to setup the opening balances for my accounts correctly.

Where I am having problems is entering in the data for GST Rebates (and PST and HST as well).

Here is the entry from my previous year end balance sheet:

Current Liabilities
Accounts Payable $4,203.99
GST Paid on Purchases $(240.50)
Receiver General Payable $(240.50)
: etc..

It is the GST Paid on Purchases and the corresponding Receiver General Payable amounts that I do not know how to enter.

I did not enter/create a Tax report in Quickbooks for the previous year as there was no data to draw the ITCs from.

Is it as simple as creating a general journal entry? If so, what accounts would Quickbooks use for the debit/credit? Also, when the rebate comes back from the government, how do I record it to ensure it is accounted correctly?

Thanks in advance!

Hi Stephen,

Correct me if I'm wrong, but I think the balance in the account you've name GST Paid on Purchases represents the portion of GST paid that is not rebatable. If this is the case, this amount should be sitting in an expense account named GST Paid Not Rebatable, or something similar.

I also think the balance in the account named Receiver General Payable represents the portion of GST paid that is rebatable. If this is the case, this amount is a receivable (a refund to you), not a payable. The balance should be sitting in a current asset account named Receiver General Receivable, or something similar. You will also need to set up a customer with the same name Receiver General Receivable.

If that is the case, make a journal entry to clear your liability balances as follows:

DEBIT GST Paid Not Rebatable 240.50 (an expense account)
CREDIT GST Paid on Purchases 240.50 (your current liability account)

DEBIT Receiver General Receivable 240.50 (a current asset account for customer named Receiver General Receivable)
CREDIT Receiver General Payable 240.50 (your current liability account)

When you receive your rebate from the government, enter the amount in Receive Payments, found in the customer area. The customer name is Receiver General Receivable (or whatever you decided to call it). Don't use Make Deposits ... yet.

Then go to Make a Deposit and complete the bank deposit selecting the correct deposit.

When you recorded your original entry to the Receiver General Payable account, there should have been a credit to an income account, perhaps GST Rebate Income.

I hope understood your question/problem correctly.







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