I have a general accounting question. I was wondering about recording expenses which do not count as a 100% expense for tax purposes. How is this recorded in the ledger?
So I debit cash $100 and credit expenses $50, but where does the other $50 go?
If the answer to this question is that "I have it all wrong" and you simply record $100 debit cash and $100 credit expenses, then say you look at your balance sheet one day. It makes it quite hard to tell how much you actually owe in taxes at a glance.
I suppose taxes are just plain hard to figure?
Thanks for any input. Nick