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Most goods and services are taxable (10%):
- Accounting & Legal advice
- Computers, stationery, meals
- Repairs
=> Customers bear the whole GST tax
- Some goods are GST-free: export, food, medicine
- Some goods are input-taxed supply: services by banks, interest, account
keeping, rent
Example: landlord has to pay GST for services such as painting, maintenance, but
cannot claim credit for rent
II. General ledger:
General journal entries can be made for:
- Acquisition of another business
- Recording depreciation
- Correcting errors
- Balance day adjustments (accrued and prepaid expenses):
Ex: Paid for 12 months of insurance but only used 1
=> Dr. Prepaid expense Cr. Insurance
- Write off assets
- Record provision for doubtful debt
- DO NOT record bad debts in general ledger
- Periodic inventory system:
Dr Opening inventory (Cost of sale), Cr Inventory (Asset)
Dr Inventory (Asset), Cr Closing inventory (Cost of sale)
=> Use tax code N-T
III. Cash transactions:
Credit card receipts:
Can be grouped with undeposited funds, but must be deposited individually
American Express and Diners Club deposits are deducted from merchant fees BEFORE
being shown in the bank statement
Click on Deposit adjustment in Prepare bank deposit to record merchant fees. (Expense
account: Merchant fees)
Credit card payments: Use credit card accounts in Liabilities section
IV. Accounts receivable:
Record bad debt: use Miscellaneous layout, Dr. Allowance for doubtful debt
Combine 2 customer cards: Card File > Card List > Action > Combine cards
V. Accounts payable:
Record debit note (return, incorrect invoice, ): use Miscellaneous or Service (if a print is
Record contra accounts receivable and accounts payable: have a contra bank card, record
a receipt and a purchase payment with the LESSER amount
Discount after applying debit to payables will not be calculated correctly => Calculate
VI. Inventory:
Some expenses used regularly can be set up as an item (bought but not sold or inventoried)
Some items are bought and inventoried but not sold (materials)
Some services with a constant cost (consultancy fees) can be set as an item (sold but not
bought, inventoried)

When entering opening balance, exclude GST

When entering standard cost, include GST
Selling price can be inclusive or exclusive of GST, make sure the box is ticked correctly
When recording cash sales, enter the amount in Paid today field.