Frequently Asked Questions
How do I account for the private use portion of a purchase?
Last Updated 7 years ago
One way is to book the entire cost to the business, and then do a journal entry for the private use.
Another is to enter the purchase with multiple line items, where each line item is either for business use or private use.
In Australia you need to be careful about the GST treatment as the private use is generally GST inclusive; check with your accountant for clarification in your particular circumstances.
The second approach tends to be the better approach if the GST treatment is important so that the different tax codes can be applied to the business and private components of the purchase.
e.g. It may be required to report the business use as GST and the private use as PVT on the Australian BAS statement.
Again, check with your accountant if you are unsure how you should be reporting the private use.
Another is to enter the purchase with multiple line items, where each line item is either for business use or private use.
In Australia you need to be careful about the GST treatment as the private use is generally GST inclusive; check with your accountant for clarification in your particular circumstances.
The second approach tends to be the better approach if the GST treatment is important so that the different tax codes can be applied to the business and private components of the purchase.
e.g. It may be required to report the business use as GST and the private use as PVT on the Australian BAS statement.
Again, check with your accountant if you are unsure how you should be reporting the private use.