Personal Finance

J · Guest

I use QuickBooks Basic 2004 (Canadian Version) and very often enter
transaction using general journal entries (directly or indirectly, through a
register).

The problem is, whenever I split a transaction to enter GST (sales tax), the
following text appears: ‘Show on tax reports as” and then there’re two boxes
to check, ‘tax on purchases’ OR ‘tax on sales’. By default, the ‘tax on
sales’ box is checked.

When I make entries through a register, they are ‘processed’ through the
general journal as well and the tax is showed as ‘tax on sales’.

Since virtually all my general journal/register entries comprise of
purchases, I’d like to be able to change that default to ‘tax on purchases’
and unfortunately, I have not figured how to do it. So far, I have to go to
the general journal and manually change each transaction.

I’d appreciate any comments or assistance.

Jack

!-! · Guest

There is no way to change the default tax allocation from "sales" to
"purchases".

There are reasons why there are specialized entry screens for bill
entry, bill payment, writing cheques, recording sales tax adjustments,
etc. (modern equivalents of specialized "journals" in the days of
"manual" bookkeeping). Consistent collection and indexing of data -
including sales tax - and reporting are the most important. I
recommend to my clients the avoidance of Journal Entries and Register
entries when another type of transaction will work, reserving journal
entries for their most appropriate purposes - such as depreciation,
accruals, etc.

I suggest you reconsider the reasons you are using so many register
and general journal entries. If those reasons outweigh the
inconvenience of re-editing your transactions, that will be your
decision.

J · Guest

Hello,

I appreciate your reply.

I have a small corporation and I make a lot of purchases using my own cash
or credit cards; those purchases are considered to be loans by the
corporation and are entered through a register called 'shareholders loans'
(in effect, I credit shareholders loans, debit appropriate expense). I don't
know if there is another way of entering such transactions; if there is,
again, I'd appreciate your comments. And from time to time, I use the
general journal, as I feel quite comfortable with the double-entry
accounting.

Once again, thanks for your answer!

Jack

!-! · Guest

Using Bills and Bill Payments lets you record the Vendor and Vendor's
reference (Bill #) in searchable fields instead of in the memo of a
Journal Entry, lets you make reports by Vendor, etc. Cheques don't
have as many advantages, but are still better than journal entries.

I suggest a "bank" account called something like "shareholder
payments". Transfer the balance to shareholder loans once a month or
once a year by "making a deposit", or "transfer funds" (in the Banking
menu), or by Journal Entry if you prefer.

Recording these expenses by either Bill or Cheque will enter the GST
appropriately without the necessity of editing journal entries.

J · Guest

Thank you very much for your advice--I've just followed your instructions
and everything works perfectly!

Thanks!

Jack

!-! · Guest

You're welcome.
Although some users claim that register entries and/or journal entries
are "more efficient" than special-purpose entry forms such as bills
and cheques, I think that any small disadvantages of the latter are
more than compensated by other factors such as proper recording of GST
and improved reporting when you use appropriate forms.
Cheers!

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