Basic accounting: When booking Invoice you actually tell the system:
PhoneCosts debit Prepaid tax debit AP credit When u PAY the invoice, you actually tell the system: AP debit Bank (or cash) credit. Now as long as the invoice is in A/P (unpaid) it is a liability. Am I making this any clearer? -----Original Message----- From: [EMAIL PROTECTED] [mailto:sql-ledger-users-bounce@;freelists.org] On Behalf Of Mark Hedges Sent: Thursday, October 31, 2002 2:00 AM To: [EMAIL PROTECTED] Subject: [SL] Re: Tax question.. On Wed, 30 Oct 2002, Marius Kjeldahl wrote: > > When I add transactions in AP from for instance the phone company, the > tax is already included in the bill from the phone company. So I cross > "tax included" and everything seems to be calculated correctly. > > However, the tax parts of these amounts are then being accumulated in > the 2320 "Current liabilities" account, which is somewhat strange to > me (not being an accountant). Having an account to keep track of how > much tax I've paid is fine, but I am not sure why it should be listed > under current liabilities since it has already been paid as part of > the invoice. I think it is supposed to be a liability because you paid it. When playing with accounts like this, the GL report listed the transaction as a whole balanced with one payment entry, plus the amount and tax transactions individually, balanced with the second instance of the same payment entry. (i.e. double-entry.) Does that help? Does the GL balance it out? --mark--
