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Posted by Joe on December 1, 2006, 3:32 pm
Please log in for more thread options Thanks, that worked.
> The offset is Retained Earnings, but you have your debits/credits
> backward:
> - Your refund is reducing your expenses from last year, so your Retained
> Earnings balance is higher (therefore you CREDIT the account).
> - The refund from last year will give you a larger effective balance of
> tax installments this year, so you DEBIT your tax installment payments
> account.
>
> For reporting, it'll show up on your balance sheet (Change in Retained
> Earnings section) as a prior period adjustment.
>
> vcard
>
>> Rightly or wrongly I set up my tax installment payments as an expense
>> account. And recorded each months intallment payment as an expense. At
>> the end of the year received a $1000 refund. Having the option of
>> receiving a refund check or applying the $1000 to next years taxes, I
>> made the choice to apply the refund to next years taxes. So cannot run
>> the amount through the bank as no refund was actually received, just a
>> credit. (could, but then the bank transactions are fake...)
>>
>> Need to somehow move the refund amount from the prior year to this year.
>> So I can credit the tax expense account, but what do I debit?
>>
>
>
>
> --
> Posted via a free Usenet account from http://www.teranews.com
>
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