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EUS
Kill cancer
Premium Member
join:2002-09-10
canada

EUS to elwoodblues

Premium Member

to elwoodblues

Re: The elusive penny

Start spending the pennies lying around your house, no rounding when using exact change.

Gone
Premium Member
join:2011-01-24
Fort Erie, ON

Gone

Premium Member

said by EUS:

Start spending the pennies lying around your house, no rounding when using exact change.

They'll still round even with exact change.

EUS
Kill cancer
Premium Member
join:2002-09-10
canada

EUS

Premium Member

The way this has been presented to Canadians, it's not very surprising.
The pages I pulled today have different rules than what was published not two months ago.
I see that even mint.ca/gc.ca is contradictory:
In one sentence
"Yes. The penny will retain its value indefinitely. As such, consumers can use pennies for cash transactions with businesses that choose to accept them."

Legal tender that the business can decide to accept or not?
And later on:

"For any cash payment, only the final amount (or equivalently, the change owed) should be subject to rounding. Individual items, as well as any duties, fees or taxes, should be tabulated in their exact amount prior to rounding. This includes the GST/HST."

So rounding should only be applied to change dispersed, not the invoiced amount.

Gone
Premium Member
join:2011-01-24
Fort Erie, ON

1 edit

Gone

Premium Member

said by EUS:

So rounding should only be applied to change dispersed, not the invoiced amount.

It doesn't make any difference. You can round the final amount, after all taxes and everything else are applied. Something sells for 99 cents. 99 cents plus HST is $1.12. You don't round the 99 cents to $1 before adding tax, you round the $1.12 down to $1.10.

For accounting purposes, the invoice would be posted to your revenue account for 99 cents and your HST paid on sales account for 12 cents. The payment would be posted as a $1.10 debit to your cash received account and two cents would then be debited to a rounding or cash short/over account. The customer would owe you $1.10, you'd give them change, everyone is happy.

If the item was $1 rather than 99 cents and the total after tax was $1.13 you would do the same thing, post $1 to revenue and 13 cents to HST paid on sales. $1.15 would be debited to your cash received account and two cents would be credited to your short/over account. The customer would give you $1.15, you'd give them their change and all is swell.

The short/over account should be near zero by the time year end comes around.