Assumption

 

For the purpose of this article, the assumption is that your Tax Collected/Paid default GLs set under Setup -> Firm Settings -> Accounting -> Default Accounts for Sales & Service Taxes, are: 

 

  • 2201 for Firm Collected GST/HST.

  • 2202 for Firm Paid GST/HST

 

If your defaults are different, make appropriate corrections to the article below.


 To Remit a GST/HST Payment

 

Depending on your preference, there are two methods to prepare payments or refunds: 


1) to adjust both balances of each of the collected and paid accounts and offset the payment or receipt

2) to use the parent account to enter each payment or receipts leaving the contiguous transactions throughout the year.

 

If you wish to affect the ITC and the Collected 

  • Add an entry from the Operating Bank Transactions, to enter a Payment Transaction payable to CRA 
  • Enter the installment amount being paid in the “Amount” field 
  • Select “2201” in the “account” drop-down
  • Enter “Tax Period End Date” in the Memo portion of the transaction.

 

If you wish to let the amounts accrue through the year

  • Add an entry from the Operating Bank Transactions
  • Enter a Payment Transaction payable to CRA
  • Enter the installment amount being paid in the “Amount” field
  • Select “2200” in the “account” drop-down
  • Enter “Tax Period End Date” in the Memo portion of the transaction.

 Journal Entry to adjust GST/HST accounts at year end

 

In preparation for year-end, any liability account will not reset as it is a Balance sheet account and not an Income Statement account.

 

With every scenario in the previous section a year-end Journal entry to reset the GST/HST collected 2201 and the paid 2202 accounts will need to be offset to the 2200 account. This entry should be balanced to clear to zeros.

 

NOTE: If the Journal entry is not offsetting the three accounts to zero at fiscal year-end then an entry along the year has forced a change to the balance and need to be scrutinized.