When completing an activity statement, what do you in this situation?
Bought an item
Item gets refunded
Do you count the item purchased in purchases section and the refund as sales? As it's credited back to your account.
Thanks.
Accounting Question about Activity Statements
follow on 12/02/2019 - 18:05
Comments
Can you explain pls?
Do you not include it?
You include as a negative purchase. For example, you would book the original purchase as $1,000 (for example). If you then return $100 worth of that purchase, you would book that as a "negative purchase" of -$100. Therefore net purchases would be $900.
Depending on the chart of accounts you are using, you might have a "purchases" account and a "purchase refunds" account (or similar) and then record them separately at this level, but they would both roll up/sum up to $900 in overall purchases through the chart of accounts and this is what you would report on your statement.
By contrast, in this scenario, you would not show "purchases" as $1,000 and "sales" of $100. This is misleading.
Also if you put it as sales and you're trying to avoid becoming GST registered then that's less turnover you're allowed to have
By contrast, in this scenario, you would not show "purchases" as $1,000 and "sales" of $100. This is misleading.
Quite. This is what you do when attempting to sell a business.
No. It would be a (negative) purchase.