accruing tax on a vendors invoice

[Debbie Paulson]

I am new to Peachtree. How do I set up Accounts Payables to accrue tax on an invoice to be paid to a vendor that can not collect tax for my state? county?

And how do I set up Accounts Payables to let me show taxes we are paying to vendors?

Like I said I am a newbee! Looking forward to some help. Thanks!

[David Palmer]

To accrue the sales tax liability on a purchase I would make the entry at the time of recording the vendor invoice to be paid. I would increase the dollar amount being distributed to the expense account by the amount of sales tax due. The next distribution line would be a credit to the sales tax payable account for the amount of the sales tax to be paid. The net amount should be equal to the invoice amount. At the end of the month the sales tax payable account will be the amount to be remitted to the state.

As to recording sales tax being paid to vendors, my experience has always been to include the tax in the expense distribution and not maintain any separate detail.

Dave