QUICKBOOKS PREMIER 2008/09 AND THE GST

NOTES ON SETUP OF DATAFILES TO INCLUDE GST

  1. QuickBooks 2008/09 won’t accept some numbers keyed in as ABN’s unless they conform to the ATO system.Use the letters ACN in front of any number and the program will accept this. Alternatively, leave the field blank – it does work without the number.

2Set up the datafile to use accrual calculation for GST and use Grossfor the display of the tax if the business is selling direct to the public. Net is used if the business is selling mainly to registered businesses. (Even if ‘cash’ is selected as the basis of calculation for the GST, QuickBooks will still prepare reports on the accrual basis.)

3There are 17 tax codes provided by QuickBooks 2008/09. Most of these are unnecessary for school based exercises.

Open the data file for GST TUTORIAL in QuickBooks 2008/09.

Delete the unnecessary tax codes asthey make the reports unwieldy. It is suggested that you leave GST, FRE, NCG, CAG for exercises. To access the list of tax codes, at the top of the screen click on Lists > Tax code list.

Most of the unnecessary codes have already been deleted. To delete the code ADJ, select the code, click on Tax code at the bottom of the box, select Delete Tax Code. then click on OK.

4Set up the stock items so that the default tax code is shown as GST for sales and NCG for purchases of stock. To add another stock line, at the top of the screen, click on Lists > Item lists. At the bottom of the box, click on Item New.

From the Type list, select Inventory part.

Complete the form as follows:
Item name Surf board
Description on Purchase transactions Ox bow surf board
Click in the field Description on Sales transactions to copy the description from the Purchases box.
Gross Cost (Purchase price) 1000
Purchase tax code select NCG from the pull down list
Gross amount (sales price) 2000
Sales tax code select GST from the pull down list
Income account, select Sales from the pull down list.
Click on OK

Expense accounts can be formatted with the default code NCG. This is used for most of the payments to be included in an exercise in accounting (the VCE course stipulates that drawings, bank fees, interest received and paid, wages and capital contributions will not include GST).
To add the tax code as a default on the account, at the top of the screen, click on Lists > Chart of Accounts.

Select the account (eg Motor expenses), click on Account > Edit Account.

Select NCG from the pull down list for Usual Tax Code. Click on OK

RECORDING

If the tax codes have been entered when the details of purchases and sales were entered, then the amount of the tax will be calculated automatically on the invoices as the quantities are entered. If the default code was not entered, the tax code can be entered by selecting from the pull down list in the tax column on the invoice. If you want to use another tax code other than the default, this can be altered in the tax column. The amounts of tax are automatically posted to the Tax Payable account.

So that there are some details on the reports, process an invoice for a purchase and sale of one of the items of stock on hand. Write a cheque for Motor expenses.

REPORTS

1Tax liability – (Reports > Tax > Tax liability). Select This tax quarter to date from the pull down list of dates. This report summarises the total amount collected and paid as GST and shows the net amount owing to or by the ATO. (This amount will appear on the Balance Sheet as a current liability (or current asset if a refund is due).) The Tax Liability report also gives the total taxable sales and expenses for the period

2Tax summary – (Reports > Tax > Tax summary). Select This tax quarter to date from the pull down list of dates. This report shows the amount of each of the taxes by code, separately, with the total. This report is very wide if the tax code list isn’t edited!

3Business Activity Statement – (Reports >Tax >Simplified BAS/IAS). To set up the BAS for the appropriate reporting period, click on Config at the bottom of the form and select the required period. Click on OK.

On the BAS form, if the sales figures are not automatically included, click on the button for G1 and select GST, click on OK. The amount of the sales for the period will be shown in the box. If the purchases figures are not automatically included, click on G11, select NCG, click on OK. The amount of the purchases and other acquisitions for the period will be shown in the box.

At the top of the BAS screen, click on Debits and Credits. Click on the button for 1A and the amount of GST collected in the period will appear (if not already shown). Click on the button for 1B and the amount of GST paid in the period will appear (if not already shown). The amount of the tax payable to or owed by the ATO will be displayed in Box 9 at the bottom of the form.

PAYING THE TAX LIABILITY

Click on Suppliers Pay tax liability. A cheque form appears with the payee already filled in (ATO) and the name of the account to be debited filled in (Tax payable). The cheque is completed by entering the amount of the tax owing.

Refunds from the ATO are entered through Suppliers Receive tax refundswith the account to be credited Tax Payable automatically entered.

CHANGING THE TAX RECORDING STATUS OF AN EXISTING QUICKBOOKS FILE

On the menu bar, pull down Edit > Preferences. From the scroll list on the left of the Preferences box, select Tax

Click on the tab for Company Preferences.

Do you track tax?

Click on Yes and complete the preferences for the tax reporting basis. Click on OK.

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Notes prepared by Suzanne Collings