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.
Leave a Reply
Your are not logged in . Please login to post replies