gst on prepaid income

Experienced Cover User Columbia1
230 Posts
Experienced Cover User
Australia
Columbia1
Experienced Cover User

230Posts

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gst on prepaid income

Hello,

 

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, 

1 REPLY
Ultimate Partner Seattle
1,412 Posts
Ultimate Partner
Australia
Seattle
Ultimate Partner

1412Posts

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Re: gst on prepaid income

@Columbia1

 

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

Duncan Smith
Business Advice + Tax
www.businessadviceplustax.com.au
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
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