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Goods are ordered using a foreign currency and need to include GST as the supplier is in Australia. Any foreign currency purchase orders does not allow GST to be included.
Step-by-step guide
There are two results we need to have happen here - firstly to get the correct values for your BAS reports and secondly, raise the liability for the GST due. There are two options to enter the relevant data in for your BAS report and creditors - the Value Of Taxable Import tab in Landed Cost or Creditor Purchases and Creditor Credit Adjustments.
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This is the journal that gets created
Step 3 - Allocate the credit to the purchase and the
The balance is the GST amount due to the creditor
Net result is COGS in the P&L is 0
COGS for BAS Reporting is 10,000 G11
GST for BAS Reporting is 1,000 G11
GST in Balance Sheet is Debit 1,000
Creditors in Balance Sheet is Credit 1,000
Summary
Both options result with the same value in the Business Activity Statement
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