The journal entry for sales tax is a debit to the accounts receivable or cash account for the entire amount of the invoice or cash received, a credit to the sales account and a credit to the sales tax payable account for the amount of sales taxes billed.
How do you record tax journal entries?
To record received sales tax from customers, debit your Cash account , and credit your Sales Revenue and Sales Tax Payable accounts. When you remit the sales tax to the government, you can reverse your initial journal entry. To do this, debit your Sales Tax Payable account and credit your Cash account.
What is the journal entry for income tax?
Companies record income tax expense as a debit and income tax payable as a credit in journal entries. If companies use the same cash method of accounting for both financial and tax reporting, the completed journal entries include an equal debit and credit to income tax expense and income tax payable, respectively.
Is a refund an expense or income?
A refund is a special type of expense transaction because it reduces your business expenses (as though the original purchase was for a lesser amount). It should not be recorded as revenue.
What is depreciation journal entry?
The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets).
Is accounts payable a debit or credit?
In finance and accounting, accounts payable can serve as either a credit or a debit . Because accounts payable is a liability account, it should have a credit balance. The credit balance indicates the amount that a company owes to its vendors.
How do you record overpayment in accounting?
Use a credit balance adjustment to apply the overpayment as a payment to subsequent invoices. Use a negative invoice charge to apply the overpayment as a credit to a future invoice. Return funds to the customer and do not record any credit balance or negative invoice credit in Zuora.
What journal is paid with cash on account?
Which journal columns are used to record paying cash on account? The journal columns that are used when paying cash on account are cash which is credited and general which is debited.
How do I account for refund?
Recording a Refund on a Credit Sale
You will debit the Sales Returns and Allowances with the refund amount. Then you credit your Accounts Receivable. The customer cannot receive cash for a refund when a credit card is used. It is considered a fraudulent transaction and should be avoided at all costs.
How do you account for refund of expenses?
In expense refund accounting, the second account you must adjust is either cash or accounts receivable . If the customer has already paid for the item and you refunded her cash, credit the cash account for the amount of the refund in the same journal entry.
How do you record insurance refund in accounting?
- Determine the amount of the proceeds of the damaged property. This is the amount sent to you by the insurance company.
- Locate the entry made to record the cost of the repair. ...
- Debit insurance proceeds to the Repairs account. ...
- Record a loss on the insurance settlement.
Is depreciation a debit or credit?
Fixed assets are recorded as a debit on the balance sheet while accumulated depreciation is recorded as a credit –offsetting the asset. Since accumulated depreciation is a credit, the balance sheet can show the original cost of the asset and the accumulated depreciation so far.
Is depreciation an expense?
Depreciation expense is reported on the income statement as any other normal business expense, while accumulated depreciation is a running total of depreciation expense reported on the balance sheet. ... Depreciation expense is not an asset and accumulated depreciation is not an expense.
How do you do depreciation in accounting?
- Subtract the asset’s salvage value from its cost to determine the amount that can be depreciated.
- Divide this amount by the number of years in the asset’s useful lifespan.
- Divide by 12 to tell you the monthly depreciation for the asset.
Is accounts payable an asset?
Accounts payable is considered a current liability, not an asset , on the balance sheet.
What is accounts payable example?
Accounts payable examples include accrued expenses like logistics, licensing, leasing, raw material procurement, and job work . Accounts payable show the balance that has not yet been paid to the associated individual to complete the transaction.
