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Level 1

Is there difference between Inclusive of Tax and Exclusive of Tax when we record transactions?

Is there difference between Inclusive of Tax and Exclusive of Tax when we record transactions? What is better to use for sales transactions and for expenses? Please explain how do I decide which one to use and why? 

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Level 3

Is there difference between Inclusive of Tax and Exclusive of Tax when we record transactions?

[mention://7323318 @maya.qipshidze] hi Maya, yes, there is a difference between inclusive and exclusive. If it's inclusive, the tax is included in the price, for example, $100 inclusive of tax would include $4.76 of tax. Exclusive would be $100 plus 5% and tax would be $5.00.

Can I suggest you test each method to see the result? You can always not save the entry! That's my favourite way of figuring out what to do.

Since you're in Canada, there are rules set out by the Excise Tax Act (that's where GST/HST rules are found) about how to record sales taxes found on the CRA website.

CRA guides are the best place to go for the rules regarding whether you must display the tax or not when you sell goods and services. Here's what CRA says about informing your customers in RC4022:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4022-general-info...

Depending on who you are, for how best to administer the GST/HST here's a complete list of all of the guides.
https://www.canada.ca/en/revenue-agency/services/forms-publications/gst-hst-guides.html

RC4070 Guide for Canadian Small Business is also helpful as it has a chapter on GST/HST
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4070-information-...

As for purchases, it's likely best, if you use the full method for GST/HST to record the sales taxes separately. If you're using the Quick Method, you'll include the tax unless it's for a fixed asset purchase, and for Simplified Method, you'd want to follow those rules...
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4058-quick-method...