Hi I was wondering if anybody can clarify something for me please.
The issue I am having is that I have a motor vehicle that I use for personal and private use, I put all the invoices through the system and then adjust at the end of the qtr to take off a % of personal use.
I am recording a journal entry to transfer the cost to drawings under equity, some of the transactions are GST and some are not, Now when I put GST or GST free it then changes the total sales whereas the transaction is under expenses so why would this affect my sales? When i make the journal entry it adjusts my P&L expenses to be correct but it doesn’t change the GST on my purchases on the BAS and the sales on the BAS report and P&L don’t match.
Any comments would be much appreciated as this doesn’t seem correct.
There is an anomaly in the GST calculation worksheet. Credits to expenses are interpreted as sales on the worksheet but the net GST payable is not affected. You should extract the BAS figures from the Tax Summary which is more intuitive in the reporting of credits to expense accounts.
Thanks for the reply, so if the gst calculation sheet is wrong what is the reason for the report, is there any way I can edit as I need to send to my accountant.
I think you need to see that GST is not an Income / expense type transaction but a collected / paid type transaction.
So the “Sales” in the report reflects transactions in which GST was collected and they don’t have to be income.
Just as “Purchases” in the report reflects transactions in which GST was paid and they don’t have to be expenses. EG acquiring a fixed asset is a Purchase with GST paid but not an expense.
Therefore with your situation - GST was “paid” when you purchased the vehicle expense and GST was “collected” when you recovered / transferred part of that expense for private usage.
In GST terms, that private usage is a Sale (collecting GST), even though it was deducted from an expense account, or alternatively, you could have (1) created an income account called Vehicle Expenses Recovered or (2) created a Sales Invoice instead of the Journal, and got exactly the same report results.
