When I produce a report in MYOB, it shows dr/cr excluding GST - just wondering why? Trying to understand/get my head around the basics of GST. Thanks
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GST isn't part of the business's money, the net GST credits or debits would have been claimed or paid in the BAS or GST annual statement. So when you're making your Profit and Loss statement and Balance Sheet, generally the numbers are GST exclusive. If GST is kept it in, assuming all the income and expenses contained GST, then what has happened the profit or loss is inflated by 10%.
E.g. If you already paid the GST to the government and kept the GST in the reports, $110 sales with $11 expenses = $99 profit. When in reality it's $90 as $9 would have been paid to ATO for GST. pay ATO $10 GST for sales, ATO refunds $1 GST for expenses.
no GST in the reports, $100 sales with $10 expenses = $90 profit.
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GST isn't part of the business's money, the net GST credits or debits would have been claimed or paid in the BAS or GST annual statement. So when you're making your Profit and Loss statement and Balance Sheet, generally the numbers are GST exclusive. If GST is kept it in, assuming all the income and expenses contained GST, then what has happened the profit or loss is inflated by 10%.
E.g. If you already paid the GST to the government and kept the GST in the reports, $110 sales with $11 expenses = $99 profit. When in reality it's $90 as $9 would have been paid to ATO for GST. pay ATO $10 GST for sales, ATO refunds $1 GST for expenses.
no GST in the reports, $100 sales with $10 expenses = $90 profit.
Thanks for your helpful reply, @YellowPotato - much appreciated.
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