There is one other thing that Tony has asked for your help with. He has...
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Accounting
There is one other thing that Tony has asked for your help with. He has just received a call from a Canada Revenue Agency (CRA) auditor that plans to audit Handel's HST remittances for March 1, 2020 through February 28, 2021. The audit will start in April 2021 and is expected to take three months to complete. For this audit, Tony will need to provide detailed records related to all the store's inventory purchases and sales. While he is quite confident that everything will be fine, he is nervous that an unintended mistake could have been made that he is unaware of in recording HST collected on sales. He would like your advice on whether he should record a journal entry with a debit to 'Possible HST Audit Issues' and a credit to 'HST Audit Liability'.
WHAT IS THE ACCOUNTING ISSUE? SHOULD HE RECORD A JOURNAL ENTRY?
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