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September 1, 2022
Question

The company's accounting method is on accrual basis, and its GST reporting is on cash basis. Why accrued interest income is included in cash basis reports?

  • September 1, 2022
  • 1 reply
  • 0 views
Interest income $200 was accrued on 30 June 2022 via a journal entry.  This accrued interest income is included in the GST summary report and P & L both of which are on cash basis.  May I know why?  Accrued income/expenses should not be included in reports on cash basis. How to fix this problem?

1 reply

September 1, 2022

Hello ChristinaC,

 

You'll have to check the accounting method set in your Company settings and GST settings, making sure you've selected the correct Accounting method. Here's how:

 

To check the Company settings:

 

  1. Click on the Settings icon, and click on Account & Settings.
  2. Click on the Advanced tab.
  3. Locate Accounting, and check the setup for the Accounting method.

 

I'd recommend also checking your GST settings making sure you've selected the correct accounting method. 

 

  1. Click on the GST tab.
  2. Click on the Settings button.
  3. Select the Tax settings button, and check the accounting method selected.

 

Furthermore, accrued revenue makes up of income that has been earned from customers but no payment has been received. In other words, a good or service has been paid to a customer, but the customer hasn't paid for it by end of the accounting period. 

 

You can check this link to learn more about Choose between cash and accrual accounting methods in reports.

 

I'd also recommend checking in with your accountant if you need more help with checking the journal entry created to verify if you're date and account used are correct.

 

Feel free to reply to this post if you have more questions. The Community is here to help you!