10. What is the double entry for service tax invoice and CN issued using SV tax code?

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Answer:

1. Full Service Tax Invoice issue

GL Acc Desciption Tax DR CR
300-A0001 Customer ABC 1060.00
500-000 Service Sales SV 1000.00
SST-203 SST - Deferred Tax SV 60.00

2. Partial Payment knock-off with invoice

GL Acc Desciption Tax DR CR
330-000 BANK 530.00
300-A0001 Customer ABC 530.00

System auto reverse the SST-Deferred Tax after knock-off
GL Acc Desciption Tax DR CR
SST-203 SST - Deferred Tax 30.00
SST-202 SST - Service Tax 30.00

3. Reduce/cancel the partly of the service amount. Issue CN using tax code: SV
GL Acc Desciption Tax DR CR
500-000 Service Sales SV 500.00
SST-203 SST - Deferred Tax SV 30.00
300-A0001 Customer ABC 530.00

Conclusion:

  1. SST Deferred Tax account will be ZERO if the full service tax invoice (eg. SV only) outstanding is ZERO.
  2. SST Deferred Tax account will not ZERO if the service tax invoice has mixed tax type (eg. ST, SV and empty tax code).