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The books of prime entry, discounts and sales tax

1.4 Key points

The primary objective is to provide an acceptable level of service to its key
stakeholders. Financial objectives will tend to focus on costs, and the efficient,
effective and economic use of resources.

 Output tax – this is the additional amount an entity will charge on sales of goods
and services to its customers.

 Input tax – this is the additional amount charged to an entity on goods and
services purchased.

 For a registered entity sales tax paid to suppliers (input tax) can normally be
reclaimed and offset against tax collected from customers (output tax). The net
amount of output sales tax is then paid to the tax authorities. If the input tax is
greater than the output tax then the entity will receive a refund from the tax
authority.

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