Step 9 - GST Reconciliation Journal

You do not need to create this journal if you will be following the recommended procedure of using the End Period Wizard. (Recommended.)

However, it does not hurt to know what the Wizard is doing. Also, if you must do this journal manually, the procedure is explained in this topic.

At the end of each accounting period you should clear your GST Input Clearing balance by offsetting it against the balance in your GST Sales/Payables account. The remaining balance is what you remit (or, less likely, get refunded) from the government.

The following general journal entries should be made in your general ledger at the end of each period:

If you are operating CAPITAL GL Controller for Windows Version 7.1 or later you can now utilize the End Period Wizard to automatically create the above journal at the end of each period.

Entering The Journal Manually

Do not follow these steps if you will be using the End Period Wizard.

The procedure for manually creating this journal is:

1. Create a standing journal under Journals|Standing Journal Tables. Make the description: "GST Reconciliation".

2. Fill in the account codes listed in the above table. (Steps 1 and 2 only need to be done once.)

3. At the end of each period, after transferring your CAPITAL Office accounting data, return to Journals|Standing Journals Table.

4. Edit the GST Reconciliation batch. Enter the total amount of GST as recorded in your GST Input Clearing account, into both journal entries. (This amount may be obtained from your Goods and Services Tax Report for that period, or from the Trial Balance report of your General Ledger. Both amounts should agree!)

5. Save the batch.

6. Click on the Copy button and move the batch to General Journals. (Be sure to copy it into the correct accounting period. This will be the period you are working on. Usually last month.)

7. Leave the Standing Journal Tables section and go to Journals|General Journal Batches.

8. Post the GST Reconciliation Batch.