Page 80 - F3 -FA Integrated Workbook STUDENT 2018-19
P. 80
Chapter 5
3.4 Accounting for sales tax
When an entity registered to account for sales tax makes a sale, the double-entry will
be:
Debit Receivables/cash account – gross amount
Credit Sales tax account – sales tax amount
Credit Sales revenue account – net amount
When an entity registered to account for sales tax makes a purchase from another
entity registered to account for sales tax, the double-entry will be:
Debit Purchases account – net amount
Debit Sales tax account – sales tax amount
Credit Payables/cash account – gross amount
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