Can any one explain me accounting enteries for sales tax paid on purchases & collected on sales and also while presenting financial statements sales tax paid on purchases is to be excluded from cost of purchase or not? can i include the sales tax paid on purchase in purchase a/c & sales tax collectedo on sales in sales a/c?
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Accounting for taxes
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| Originally posted by :manglam | ||
| " | Can any one explain me accounting enteries for sales tax paid on purchases & collected on sales and also while presenting financial statements sales tax paid on purchases is to be excluded from cost of purchase or not? can i include the sales tax paid on purchase in purchase a/c & sales tax collectedo on sales in sales a/c? | " |
Dear Manglam,
At the time of the purchase of the Vatable goods, input Vat should separtely debited form the amount for VAT paid on Purchase and Purchase should deduct from that amount. please write me
| Originally posted by :manglam | ||
| " |
At the time of Purchase Purchase A/C dr VAT Receivable A/C dr To Bank/ Cash A/C
At the time of Sale Bank/ Cash A/C dr To Sales A/C To VAT Payable A/C
At the time of VAT payment VAT Payable A/C dr TO VAT Receivable A/C To Bank A/C I hope it will help u |
" |
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