Taxes
What is used to be
GST - Good and Services Tax 5% - Federal Government Tax PST - Provincial Sales Tax - 8% - Provincial Government Tax
HST
Harmonized Sales Tax - 13% (includes both the provincial and federal taxes) It is applied to most good and services. At the end of each quarter, the HST collected is reduced by any HST paid and then remitted to the Receive General of Canada.
Tax Exempt
It means that the company or consumer does not have to pay any taxes on a purchase
Tax Accounts
HST Payable
Taxes a company collects from selling good/services are recorded in a separate acount called HST Payable. It is a Liability account because it is money that the company owes to the government. It has a Credit balance.
Cash Membership Fees HST Payable
HST Refundable/Recoverable
Taxes a company pays when it buys good and services is recorded in a separate account called HST Refundable. It is a Contra Liability account because it reduced a liability account (HST Payable). It is listed in the liabilities section of the balance sheet, however it has a Debit balance.
Equipment HST Refundable Accounts Payable
Liabilities Section Example
In this example, The total is 16800
| Liabilities | |
|---|---|
| Accounts Payable | $1000 |
| HST Payable | 800 |
| HST Recoverable | (300) |
| Bank Loan | 5000 |
| Mortgage | 10000 |
| Total Liabilities | 16500 |