Purchasing goods/services from foreign vendors require Canadian non-profit organizations to self-assess tax amount and remit the amount to the government. For instance, my organization purchased $100 CDN web design service from a US company, and the tax rate is 13% in Ontario. I need to post 1 invoice that will do the following:
Dr. Web Design Service Expense $100
Dr. Web Design Service Expense $13
Cr. Accounts Payable $100
Cr. Accrual $13
Basically I need to pay 2 vendors based on 1 invoice. I need to post these purchases throughout the month, and at the end of the month, I would enter 1 invoice for Canada Revenue Agency (equivalent to IRS in this context) where I debit the accrual and credit Accounts Payable.
When I tried doing this, I got error messages (see below). Is there any way of accomplishing this. Any suggestions?
**20010 - Accounts Payable; 20030 - Accrual; 600-53150 - Expense Account **
