recording a tax payable adjustment

Julie Dinsdale

Hello everyone,

After taking over from a lady, I had to put two amended activity statements in. We received a refund into our bank account from the ATO. I put in a credit against the ATO, supplier, to the Tax Payable Liability account. I then did a 'record deposit' against the accounts payable account, against the ATO. When running a balance sheet and checking the Tax Payable Liabilty account, it has credited it, therefore shows an increase in the Tax Payable account. I did it to be a decrease, not an increase.

Can anyone help please.

Kindest regards Jules

Acctd4

Hi Jules

It feels incorrect – “increasing” the liability – but what it’s actually doing is reversing the original overpayment eg:

Correct GST Payable        $ 1,000

BAS/Amt Paid                    $ 1,100   

Refund Due on Revision   $     100

Originally, the GST payment would have overpaid the GST liability account by $ 100 (effectively making it a negative balance)

The increase (caused by the refund deposit) simply brings that back into line (to $ 0.00)

Personally, I don’t like using Bills & Bill Credits for ATO liabilities because the liability is already accumulated in the accounts.  I would just enter the Deposit.

(NB: Due to a long-term program glitch, the Deposit won’t automatically show in your Supplier’s transactions as the payee name drops out on stand-alone Deposits.

To correct this, simply go to your Bank Account register & enter/select the “Australian Taxation Office” Supplier name in the Payee column & save/record the transaction.

When you go back to your Supplier Centre, this Deposit will now show in the ATO’s transaction list)

 

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com