Tax Amounts on Balance Sheet compared to Tax GST Reports – Cash and Accrual


Aust Tax & GST, BAS what checks, Bookkeeping, ATO
Tax Amounts on Balance Sheet compared to Tax GST Report – Cash & Accrual
  1. The end of year Balance Sheet shows different figures to the GST Accrual (& Cash) report.  Why?            
  2. We thought that the GST Liabilities section of the Balance Sheet gets automatically updated when you enter a Spend Money purchase or raise a Sales invoice.  Is this the case?
  3. Or do we have a classification issue in our MYOB account set ups that we need to fix?

The answer is – The amounts in the GST accounts should reflect the way the transactions are created, and depend on whether cash recording (cheques and deposits or cash receipt sales) or accrual recording is used (invoice sales and purchases or bills).

Cash transactions recognise revenue sales and expenses when actual CASH is received and paid, ie when paid. The GST accounts will have the exact GST amount for each transaction.

Accrual transactions recognise revenue sales and expenses when the TRANSACTION occurs, not when paid. The GST accounts will have the GST on from the invoice or purchase.

If you report tax amounts for a period, keep in mind the way transactions are entered, as the GST on sales and the GST on purchases will not be picked up if reporting on Cash basis, and are not paid in the time frame. If they were paid, they would appear in the report.

Always check on screen the GST detail reports to see what transactions are picked up for the period, and after checking, if ok, PRINT to keep a record, then print the GST/Tax summary report.

The balance of the tax accounts also changes, as we post the amount reported to the ATO to them, reducing/increasing the account to reflect what is reported and paid (or refunded). So a tax payment during the period reported also changes the Balance Sheet amount. Look through the detail of the transactions in the tax accounts, and see what has occurred.

See also Cash and Accrual – will there be Debtors (Accounts Receivable – AR) and Creditors (Accounts Payable – AP)?

And for a quick summary of the reports suggested to check and use to prepare a BAS, go to MYOB – Aust. BAS Checks Reports & Entries

Or call to ask any questions, Aust 0407 361 596

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