What is the difference between inclusive and exclusive method of accounting?
Anyone has any material regarding to it please share.
3 Replies
Prakash Gehani
(Consultant & Teacher(Whatsapp 8718057907))
(1306 Points)
Replied 02 January 2019
Are you asking about including or excluding tax in sales and expenses entries?
Prakash Gehani
(Consultant & Teacher(Whatsapp 8718057907))
(1306 Points)
Replied 02 January 2019
In inclusive method we will record sales, purchase and expenses inclusive of GST and GST deposited to department is debited to profit and loss account. And if there is carry forward i.e. Output GST is less than Input GST it will be deducted from purchase and expenses and transferred to GST receivable account which will be appeared in asset side of balance sheet.
However in exclusive method sales, purchase and expenses will be recorded excluding GST. Total of Output and Input GST will be transferred to GST Payable account. Whenever we make payment it will be Debited from GST payable account instead of Profit and Loss account.
However in exclusive method sales, purchase and expenses will be recorded excluding GST. Total of Output and Input GST will be transferred to GST Payable account. Whenever we make payment it will be Debited from GST payable account instead of Profit and Loss account.
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