GST Payable and Recoverable?

Question

I'm doing my Accounting homework and forgot my textbook. So could someone please tell me if GST Payable & Recoverable goes on the balance sheet or the income statment or both? THNX!

Answer 1

The GST payable or recoverable should go to the balance sheet (BS), but not the income statement (IS).  For example, if you sell a product for $100, with additional GST of $5, the journal entry is as follows:

Dr. Bank or AR (BS)      $105

Cr. Sales Revenue (IS)   $100

Cr. GST Payable     (IS)       $5

If you pay $105 that entitles you to $5  GST input tax credit, the entry is:

Dr.  Purhase expense (IS)  $100

Dr.  GST recoverable (BS)     $5

Cr. Bank or AP (BS)           $105