Hi I am trying to workout how to record GST payments to the ATO in Manager.
I currently have a liability account called tax payable… for some reason it shows as a negative liability (i.e. value is a negative dollar value)
Every transaction for which GST is applicable gets recorded in this account… both in and out.
When the business receives payment of an invoice for which GST is charged to my customer, it reduces the balance.
When the business makes a payment for which GST is charged, it increases the balance.
When I receive a payment from the ATO (i.e. when they own me money), it reduces the balance in the account (i.e. less negative)…
When I make a payment to the ATO (i.e. when I owe them money), it increases the balance in the account (i.e. more negative)…
My question is: Is this correct??
If not, what am I doing wrong here??