I would like to know how to bring in a GST increasing adjustment into the accounts correctly so that it will show on the GST reports.
The reason for the increasing adjustment is because of a change in creditable purpose.
Does anyone know how to do this properly in the software? I just have a desktop version.
Thanks in advance
If it relates to a current period transaction, then adjust the particular current period transaction.
If it relates to a prior period transaction, then create a Journal Entry.
Lets say, the original item was 110, 100 business expense and 10 GST. If that item is now only 50/50 business/private expense then you would have 110, business expense 50, private expense 55 and 5 GST.
So to make this adjustment you would do the following:
Note that for Journal Entries you must use tax inclusive amounts.
Now for the Private Expense account, depending on your entity type, you could use Drawings account or Shareholders/Directors Loan account.
If it is a change of creditable purpose for property assets, it may require a series of adjustments. As a solution, you can create a Custom Tax Code named - GST Inc Adj. Create a journal entry debiting the cost amount that has changed the creditable purpose, without GST, and credit the cost allocating the credit amount to the Custom Tax Code.
Custom Tax Codes are not linked to the GST Calculation Worksheet but are seen in the Tax Summary.
Thank you Tony, your response seems the closest to my issue. I will give that a go when I am next with my client and let you know how it works.
Thank you Brucanna. I appreciate your response.