Hi there,
Our client is in Canada. There are two types of input taxes: GST (5%), PST (7%)
In general, GST is 100% recoverable (deductible) while PST is not recoverable.
As an example, I have an invoice for $112, (100 net + 5 gst + 7 gst)
The accounting entry should be as follow
DR [Expense] $100
DR [GST] $5
DR [PST] $7
CR [AP] $112
The issue is that because PST is not recoverable, the account used should be the same as the expense account used in the transaction; that is, the PST is dynamic based on the expense account used. Is this functionality available out of the box or is this something we have to customize?
Thank you for your attention.