Hi Weston,

First I would say let's clarify the fundamental difference between "GL" and "general journal entry."

What you are trying to do is a "general journal entry"; your general journal is a log of your transactions as they happen, almost like a diary. As each transaction happens, they get logged, chronologically, into your general journal as a general journal entry.

The "Sales Taxes" button in the bottom left-hand corner will become 'active' when you have the account "2315 GST/HST Paid on Purchases" as part of your general journal entry.

"GL" (or "G/L" as it is often written), refers to your general ledger—not the same thing as a general journal. Come month end, all the transactions that were diarized in your general journal get posted to your general ledger to their respective accounts, for the purposes of seeing what the account balances are for month end.

Really simply, think:

General journal = chronological record of transactions, like a diary

General ledger = summary of transactions per account (per month or whatever fiscal period you are working with)

Hope that helps.

Best,

Kristine

Hey Kristine, 

Thank you very much for your response. That sums it up perfect. I kind of assumed that's how it went. I tried looking on the forum but couldn't find this. 

Have a wonderful day!

You're welcome!

Hey Kristine, 

Would you be able to provide me with some more guidance? I am doing the bookkeeping for a film company and they purchased camera equipment totaling $5281.28. Should I record this as a capital asset or as an expense? If it is a capital asset, can I still claim the HST on it?

Thanks!!

Hi Weston,

I'm away today - just popped into the office for a sec, but I'm about to head out for a Sage50 Boot Camp for the day... I'll give a reply later this evening if some else hasn't by then.

Short answers are: I would be inclined to record the camera as a capital asset, and yes, the GST/HST would be part of the "monthly" expense portion of the amortization/depreciation amounts.

Best,

Kristine

Awesome, Thank you so much Kristine. I am going to have to send you gift card for helping me with this haha. 

|I wish there was such thing as a Sage 50 boot camp where I live. I believe I have to fly away if I want to go to one of those. 

Thanks again!

Hi Weston,

Don't thank me yet, ha ha... I'm just learning like yourself hence the boot camp... I've done a few accounting courses and hope to eventually one day earn my accreditation, however, that's a ways a way at the rate I'm goin'. So, here's what I can say for now... I took a closer look at the general journal entries that would happen and the GST/HST is hit at the initial purchase, not the monthly entries that happen for the depreciation expense (as I initially thought). In other words, this GST/HST paid on your purchase would be considered an input tax credit and Sage50 would factor that into your tax reports when your are doing your GST/HST remittances.

Double check with an accountant, but I think the camera would be an asset you would capitalize. The accountant would likely ask you how long the camera can be used to generate income for the company, the rule of thumb being one year... if it's more than a year, then it will be capitalized.

The general journal entry for the initial camera purchase would look like this:

As you can see, the GST/HST is captured here. Following the initial purchase, it is only the asset itself that gets capitalized, that is, whatever falls into account 1820 Furniture & Equipment. Again, your accountant will let you know how that is to be depreciated (and that will probably look like a monthly journal entry hitting the accounts for the depreciation expense and accumulated depreciation, and/or an adjusting journal entry at year end.)

The monthly entries would be along the lines of (and I'm using $75 for the sake of this example)...

And you'd keep doing these every month for the duration of the "useful life" of the camera.

We have some office furniture the accountant has capitalized for us, but it was handled by year-end adjusting journal entry. Our furniture was purchased second hand and so is not such a huge asset, especially in light of the fact that its "useful life" is already pretty used LOL.

But, an asset like your camera also strikes me as something more 'definitive' in its role in generating revenue for the business.

Anyway, that's where I'm at with it for you, Weston. See if anyone else replies with additional info for you, and lastly, I would still suggest you have a conversation with the accountant about this, just to be on the safe side. I'm learning there's SO MUCH TO KNOW in accounting :) :) Onward and upward!!

Best,
Kristine