Home – New Forums Money matters another “where to put…” question

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  • #979068
    TehCamel
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    GST refund from the ATO dropped into my account.
    I could probably take it out and buy a coffee.. however, before doing that, I assume I need to account for it somehow.. but I can’t find a suitable line to put it against.

    I was going to just do a journal..but not sure whetre to put it.
    The way i figure, it’s not Income, but it might be “Other Income:” so I could create “Other Income: GST Refunds”

    ?
    It’s also not an expense, or a liability..

    #1111753
    MyGreatIdea
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    Depending on your accounting software, you will have under Liabilities either one “GST” account , or a “GST Collected” and “GST Paid”.

    If you have the one account, then the refund is banked against that general ledger account.

    If you have both collected and paid, then the refund needs to split to both general ledger accounts, they will offset each other and the difference is the money you received. You will get the amount against each from the figures you entered on your BAS.

    Confused? lol hope not.

    Wendy :)

    #1111754
    TehCamel
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    well confused :)

    #1111755
    MyGreatIdea
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    Which accounting software are you using?

    Wendy :)

    #1111756
    TehCamel
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    saasu.. I have since found “Liability: Tax Collected from Sales” but it strikes me as odd, to put a refund from the ATO into a liability column..

    #1111757
    MyGreatIdea
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    As well as Tax Collected from Sales you should have a Tax Paid on Purchases account (probably in Liabilities as well, since most packages keep the two GST accounts together).

    When you receipt the refund, you need to break up the apportionment based on the figures you entered on your BAS. Let’s say you claimed $250 as paid GST to your suppliers and $150 as GST collected from sales, your refund being $100. You would need to enter the receipt ($100 from ATO) against Tax Paid on Purchases as $250. The next line would be as a “-” (minus) $150 to Tax Collected from Sales. Your total receipt would then be $100 but both Tax Collected and Tax Paid accounts would be reduced by the transaction, effectively giving you a balance in each account for Tax Collected and Paid since 1 July.

    Is that less confusing, or have I made it worse? lol

    Wendy :)

    #1111758
    MyGreatIdea
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    TehCamel, post: 124434 wrote:
    saasu.. I have since found “Liability: Tax Collected from Sales” but it strikes me as odd, to put a refund from the ATO into a liability column..

    But you are effectively reducing your liability to the ATO, which is correct since they owed you money on the refund.

    Wendy :)

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