Canada getting rid of the penny—does that make “cents”? Apparently, yes. Each penny costs 1.6 cents to produce, according to the federal government.
Love ’em or hate ’em, pennies are a cause for conversation and lately, quite a few questions. Here is a little “q&a” on pennies related to finances at the U of S:
Q: When will we stop accepting them as a method of payment?
A: Pennies are a valid form of currency “forever” or until they are all out of circulation. However, university business units decide which forms of currency they accept; FSD recommends accepting pennies at least until fall 2012, which is when banks will stop supplying them.
Q: Are there system implications?
A: No. The base pricing unit in Canada will continue to be one cent. Non-cash sales (credit card, debit, cheques) can be made on this basis.
Q: Are there sales tax implications?
Q: In setting prices for goods &
services, do all prices have to end in $.05 increments after taxes?
Q: What if tax rates change? Do we
have to change our selling prices every time?
Cash sales – rounding down or up
The federal government recommends that for total, after-all-taxes-and-fees cash amounts, round to the nearest five cents.
When rounding cash sales, record it to Cash Overage and Shortage in account code 70604. For example, for $1.02 cash, charge customer $1.00 and record $.02 shortage to account code 70604.
So, for amounts ending in $.01, $.02, $.06 and $.07, round down, and for those ending in $.03, $.04, $.08 and $.09, round up (note: “0” in each can be any digit 0-9).
Units that only accept cash can: