gst on prepaid income

Experienced Cover User Columbia1
230 Posts
Experienced Cover User

gst on prepaid income



I am processing a prepaid income, lets say $11,000 inclusive GST received in june.  The journal would be like this

Db. Bank 11,000

     Cr. prepaid income $5,500  gst

     Cr. income account $5,500  gst


Next month I will be processing an adjusting journal as follow:

Db. prepaid income 5,500  no allocation for gst

     cr income account 5,500  no allocation for gst


Please let me know if it is correct to allocate gst in the first journal for prepaid income or I should allocate gst in the prepaid income in the second journal.  We report BAS on cash basis.  I am just wondering if we should allocate gst for the full amount received for prepaid income.


Thanks in advance, 

Ultimate Partner Seattle
1,345 Posts
Ultimate Partner

Re: gst on prepaid income



I recall that you do the accounting for a Club.

If this is correct, you should be speaking with the Auditor.


I would suggest that GST is payable at the time you are legally entitled to the Income.



Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E T 02 9904 3672 7 days
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