I am the treasurer of our church. Our auditor wants me to record HST as follows:
Expense is $100. HST is $13. Total cost is $113.
He wants me to do this: expense is $100, hst is $13.
HST rebate is $9.06 therefore actual cost is $103.94.
This seems weird to me as I feel the expense is $100, HST exoense is $13. HST rebate is $9.06, so net HST is 3.94.
To my mind, the HST should be recorded in an HST expense account and rebate in an HST rebate account.
What is the correct way of handling this.
