Hi,

New user.....question...year end is oct 31-08...last visa statement only has expenses to oct 10...do I wait for the next visa statement with the remainder of oct expenses and claim these in 07-08 or claim in new year 08-09....I've closed YE already!! ...thanks!

First things first. You should never post anything from a Visa statement.

All your postings should come from original receipts. When you purchase something and use a Visa card to pay for it, you should get two items - a receipt for the purchase (which shows what was actually bought) and a visa receipt which only shows how it was paid for.

You should make your posting from the receipt.

Next - if the Visa card is in a personal name the purchase should cr Shareholder's Loan. With an October year end you must be dealing with a corporation. If the company pays the Visa statement, that payment will be dr to the Shareholder's Loan.

Finally all purchases should be posted on the date they were actually made. So if you have purchases which are legitimate company expenses in the period between October 10th and October 31st they must be posted to the year ending October 31st.

You don't need the Visa statement, make your postings from the receipts.

Thanks for that Reg!!! ...what I usually do is wait for the statement/attach all receipts corresponding to that statement and post my receipts from there - and do one journal entry CR 1085 (Visa acc) and DR each individual accounts - is this way ok??? .....

Hi Reg,

another question - I'm fixing up mistakes from prior bookeeper - there was a couple of cheques to the Receiver General - Payroll (late payments - Payroll Rem for May 2007 and penalty) made in March 08 - right now it sits in the 2250 Payroll Clearing account in YE 07-08 - is this the proper account it should be in?? ....thanks a bunch!

The payroll remittances should have been posted to the appropriate balance sheet accounts to clear the amounts sitting there (CPP payable, EI payable, Income Tax payable).

The penalty and/or interest for late filing and remitting is not a legal deduction to the business. The owner/shareholders are going to have to eat it.

I've fixed up all the payroll rem by JE ....CR the acc is was in and DR the EI, CPP, & tax acc....just not sure what acc to Dr the interest to....thanks...

Hi: You need to have an account set up called "Interest & Penalties - Non-Deductible" to post the interest & penalty amounts to. These kinds of amounts are added back when preparing the corporate tax return and they are not allowed to be expensed for tax purposes, They are allowed to be shown in the Income Statement as an expense however. I have never seen these items charged to the Shareholder's Loan account. Rita Deering

 

Thank you so much for this Rita!!!! ...I will set this account up - I guess that's why I was confused as to where to put these charges  'cause this account was non-existing - once again - thanks!!!!! 

Hi Rita,

 Would I set up this account under Liabilities (2000) accounts????....thanks

Hi again: No, it is just another expense, the same as any other expense. Open the new account right under your other Interest & Bank Charges account. Liabilities are things that you OWE. When you record the payment for the Penalty & Interest it will be a Credit to Bank (for the amount of the cheque) and a Debit to the Interest & Penalties - Non-Deductible account. In other words, you would just pay this amount directly, you wouldn't set it us as a liability first. Does that make sense? Rita Deering

Hi again!!

...so I would create new account 5691 Interest & Penalty Charges - Non-Refundable (right under 5690 Interest and Bank charges) as a Group Account??? ...thanks Rita....

Hi again: Yes, that would be right. Rita

....you're the best!