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GST adjustment needed

Georgia_S1Georgia_S1 Member Posts: 5

Hi
I am preparing a year end adjusting journal to remove personal expenses from the Business Profit and Loss account and so need to adjust the GST - these items mostly have had a GST component. How does Wave handle this as other accounting systems allow for a one sided GST entry to be made which is then balanced off against the GST balance sheet account. Please advise on the transaction that I would need to input. Currently I have a general journal established with the net figures.
Look forward to a speedy response.
Thank you
Georgia

in Technical Support

Comments

  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey there @Georgia_S1

    Forgive me as we moderators in the community are not accountants. But I'm curious if you'd be able to benefit from our bulk edit tax tool by filtering our the transactions using the "filter" button at the top of your transactions page, pulling up the personal transactions and editing the GST if you wanted to do this?

    I am however a bit confused what you mean when you say "a one sided GST entry" if you wouldn't mind elaborating on that a bit.

    You may have better luck posting in the Wave Pro where we have some expert accountants who might be able to help.

  • Georgia_S1Georgia_S1 Member Posts: 5

    Hi BarsinA
    What I mean by a one sided general ledger entry is that when general ledger adjustments are made they only affect the net transaction (exclusive of GST). Some software packages allow you to only show the GST component (if you need to adjust the total transaction) on the side of the journal that is to be adjusted and the system then automatically allocates the balancing transaction to the GST account ensuring that this one general journal will take care of the total transaction and will ensure that the next BAS return and GST to be reconciled with the GST account. Xero is one of the packages that do this for you. Thank you for suggesting Wave Pro - I will check in there.

  • Georgia_S1Georgia_S1 Member Posts: 5

    Hi BarsinA
    I have not had a response from Wave Pro as yet - is there someone specifically that you can suggest I ask regarding my issue?
    Many thanks
    Georgia

  • CalliePCallieP Member Posts: 439 admin

    Hi @Georgia_S1 , thanks for getting back! I'm sorry to hear that there is not a Wave Pro available to help at the moment; there's not a specific person we can recommend as Wave Pros are volunteers from our Community and are under no obligation to reply, that's presented as an option. If there is an urgent need for in depth understanding on this, I would recommend proactively reaching out to an accountant to be sure.

    That said, as I understand it, you should be able to debit the GST Paid (Asset) and credit the Owner's Investment/Drawings (Equity) in equal amounts to indicate that this payment actually belongs in the equity account. You can then create an expense transaction from the Equity account to indicate that this draw was done (and then in your personal accounting, can do an expense on the account to which those funds were deposited to show the GST as paid there). This will result in your Balance Sheet showing that the GST liability has decreased by the amount debited from the GST asset. The journal would look like this:

    deb

    But again, I must emphasize that I'm not an accountant and can't officially offer this as advice - this is just based on my understanding as a Community moderator, and must disclaim that speaking to a certified accounting professional is recommended here.

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