Difference between revisions of "Alternate Australian GST setup"

Revision as of 10:40, 19 July 2011

The following GST scheme is used by MYOB BussinessBasics.

Since GST is money you owe the government (or visa versa) you create an account called:

• Liabilities:GST

Then, to make your balance sheet more informative, you create two sub accounts:

• Liabilities:GST:Collected
• Liabilities:GST:Paid

Whenever you receive income you record the GST component in Liabilities:GST:Collected and whenever you make a purchase you record the GST component in Liabilities:GST:Paid.

At the end of each accounting period if you owe the government money then you record the amount you paid it in Liabilities:GST:Paid. Or if the government owes you money then the amount you receive should be recorded in Liabilities:GST:Collected.

This simple scheme can easily be modified to be the same as the 3-account system. In this scheme Liabilities:GST:Paid is exactly the same as in the 3-account system, but Liabilities:GST:Collected is given the rather confusing name of Liabilities:GST:Payable. To move to the 3-account system all you need to do is create a new account called:

• Liabilities:GST:BAS

This is where all of the GST money you pay the government is recorded. In the 3-account system this account is called Liabilities:GST:Payments.

Another variation of the 3-account setup is to have the BAS payments (or refunds) as seperate sub-accounts, rather then entering the transactions directly in the Collected and Paid accounts.

• Liabilities
  • GST
    • Sales
      • Collected (gst received from sales)
      • BAS (net gst payments to ATO)
    • Purchases
      • Paid (on purchases)
      • BAS (net gst refunds from ATO)