Re: [GNC] Recording Tax Correctly
As I said before VAT:Input VAT receives only VAT on Purchases VAT:Output VAT receives only VAT on Sales VAT:VAT Return receives only periodic government VAT transfers The VAT parent account does not receive any splits; but its balance (including children accounts) will tell me, roughly, the VAT payable (or receivable). It will reset towards zero. On Sun, 16 Aug 2020 at 13:46, Omer Hayat wrote: > @Christopher Lam I'll show this to my > accountant. > In the meanwhile, I tried following: > > Created a 'TAX' account under 'Liability' parent account. Then created 2 > sub-accounts under the TAX account, Input VAT & Output VAT respectively. > Now, when I post the vendor bills or customer invoices, the VAT is recorded > properly in these sub-accounts, and their main account TAX also shows a > final figure. But, from here I'm not clear what to do. I passed an entry: > > DR TAX > CR Bank > > with the equivalent amount. This did make the amount to '0' for the TAX, > but the 2 sub-accounts still have the respective amounts in them. Although, > the Liabilities parent account was also showing a correct balance, as I > think it just picks up the amount from TAX. > > Not sure if this will be a correct way of doing, or maybe there are > multiple ways to do this. > -- > *From:* Christopher Lam > *Sent:* Sunday, August 16, 2020 2:00 PM > *To:* Omer Hayat > *Cc:* gnucash-user@gnucash.org > *Subject:* Re: [GNC] Recording Tax Correctly > > Hi Omer, my approach is: > >- VAT:Input VAT - an ASSET account >- VAT:Output VAT- a LIABILITY account >- VAT:VAT Return - an ASSET or LIABILITY account > > and run the "Income & GST Statement" periodically, posting the govt > returns as follows: > Dr VAT:VAT Return > Cr Bank > > HTH, C > > On Sun, 16 Aug 2020 at 07:55, Omer Hayat wrote: > > Hi. > We have a 5% VAT charged on all bills and invoices. To the government, we > pay the difference. > I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from > Customers)' accounts under Liabilities, and set them up. These are > recording the VAT paid & received from Bills/Invoices correctly. The Input > VAT account has negative values, and output VAT has positive values. We are > supposed to pay the difference of these. > For example: > > VAT paid to Vendor > (50.00) > VAT received from Customer 75.00 > FINAL VAT PAYABLE TO GOVT 25.00 > > Keeping the above example, I would like to pass one entry, and pay off the > difference amount. > Example: > DR Final Payable to Govt > CR Bank > But, how can I pass the Debit entry? Should I create a 'Tax' placeholder > account and pass it to that? But then the individual Input & Output VAT > accounts might have a balance. > > Please advise. > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > > ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Recording Tax Correctly
PS: Yes, as Christopher notes, could place VAT paid as an asset (which it properly is). I was following the set up you were describing instead, placing VAT paid as a contra account. Also sensible, as under normal conditions, the parent VAT is going to have a net credit balance << your business would be selling more than it pays or you would be operating at a loss* >> Michael D Novack * However that COULD be normal, and even profitable << not for the business itself, but operating/controlling the business might have "side effects" that were profitable >> ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Recording Tax Correctly
On 8/16/2020 3:54 AM, Omer Hayat wrote: Hi. We have a 5% VAT charged on all bills and invoices. To the government, we pay the difference. I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from Customers)' accounts under Liabilities, and set them up. These are recording the VAT paid & received from Bills/Invoices correctly. The Input VAT account has negative values, and output VAT has positive values. We are supposed to pay the difference of these. For example: VAT paid to Vendor (50.00) VAT received from Customer 75.00 FINAL VAT PAYABLE TO GOVT 25.00 Keeping the above example, I would like to pass one entry, and pay off the difference amount. Example: DR Final Payable to Govt CR Bank But, how can I pass the Debit entry? Should I create a 'Tax' placeholder account and pass it to that? But then the individual Input & Output VAT accounts might have a balance. Please advise. I am not SURE about your description of the accounts, but let's say that under liabilities you have an account VAT and under it children "VAT paid" and "VAT received" << set up that way, the amount shown for the parent will be the net >> Are you asking what the transaction would look like when you paid the net amount to the government? Worried (correctly) that if you did that by debiting the parent (correctly bring the net to zero) it still leaves balances in the children? What makes you think that a transaction has just one debit and one credit? Have you not yet entered any "split" transactions? Try doing that. The transactions would debit "VAT received", and credit "checking" and "VAT paid" << the amount of the credit to checking would be the amount of the net >> Michael D Novack ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Recording Tax Correctly
@Christopher Lam<mailto:christopher@gmail.com> I'll show this to my accountant. In the meanwhile, I tried following: Created a 'TAX' account under 'Liability' parent account. Then created 2 sub-accounts under the TAX account, Input VAT & Output VAT respectively. Now, when I post the vendor bills or customer invoices, the VAT is recorded properly in these sub-accounts, and their main account TAX also shows a final figure. But, from here I'm not clear what to do. I passed an entry: DR TAX CR Bank with the equivalent amount. This did make the amount to '0' for the TAX, but the 2 sub-accounts still have the respective amounts in them. Although, the Liabilities parent account was also showing a correct balance, as I think it just picks up the amount from TAX. Not sure if this will be a correct way of doing, or maybe there are multiple ways to do this. From: Christopher Lam Sent: Sunday, August 16, 2020 2:00 PM To: Omer Hayat Cc: gnucash-user@gnucash.org Subject: Re: [GNC] Recording Tax Correctly Hi Omer, my approach is: * VAT:Input VAT - an ASSET account * VAT:Output VAT- a LIABILITY account * VAT:VAT Return - an ASSET or LIABILITY account and run the "Income & GST Statement" periodically, posting the govt returns as follows: Dr VAT:VAT Return Cr Bank HTH, C On Sun, 16 Aug 2020 at 07:55, Omer Hayat mailto:omer.ha...@outlook.com>> wrote: Hi. We have a 5% VAT charged on all bills and invoices. To the government, we pay the difference. I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from Customers)' accounts under Liabilities, and set them up. These are recording the VAT paid & received from Bills/Invoices correctly. The Input VAT account has negative values, and output VAT has positive values. We are supposed to pay the difference of these. For example: VAT paid to Vendor (50.00) VAT received from Customer 75.00 FINAL VAT PAYABLE TO GOVT 25.00 Keeping the above example, I would like to pass one entry, and pay off the difference amount. Example: DR Final Payable to Govt CR Bank But, how can I pass the Debit entry? Should I create a 'Tax' placeholder account and pass it to that? But then the individual Input & Output VAT accounts might have a balance. Please advise. ___ gnucash-user mailing list gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Recording Tax Correctly
Hi Omer, my approach is: - VAT:Input VAT - an ASSET account - VAT:Output VAT- a LIABILITY account - VAT:VAT Return - an ASSET or LIABILITY account and run the "Income & GST Statement" periodically, posting the govt returns as follows: Dr VAT:VAT Return Cr Bank HTH, C On Sun, 16 Aug 2020 at 07:55, Omer Hayat wrote: > Hi. > We have a 5% VAT charged on all bills and invoices. To the government, we > pay the difference. > I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from > Customers)' accounts under Liabilities, and set them up. These are > recording the VAT paid & received from Bills/Invoices correctly. The Input > VAT account has negative values, and output VAT has positive values. We are > supposed to pay the difference of these. > For example: > > VAT paid to Vendor > (50.00) > VAT received from Customer 75.00 > FINAL VAT PAYABLE TO GOVT 25.00 > > Keeping the above example, I would like to pass one entry, and pay off the > difference amount. > Example: > DR Final Payable to Govt > CR Bank > But, how can I pass the Debit entry? Should I create a 'Tax' placeholder > account and pass it to that? But then the individual Input & Output VAT > accounts might have a balance. > > Please advise. > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
[GNC] Recording Tax Correctly
Hi. We have a 5% VAT charged on all bills and invoices. To the government, we pay the difference. I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from Customers)' accounts under Liabilities, and set them up. These are recording the VAT paid & received from Bills/Invoices correctly. The Input VAT account has negative values, and output VAT has positive values. We are supposed to pay the difference of these. For example: VAT paid to Vendor (50.00) VAT received from Customer 75.00 FINAL VAT PAYABLE TO GOVT 25.00 Keeping the above example, I would like to pass one entry, and pay off the difference amount. Example: DR Final Payable to Govt CR Bank But, how can I pass the Debit entry? Should I create a 'Tax' placeholder account and pass it to that? But then the individual Input & Output VAT accounts might have a balance. Please advise. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
