I'm the (new) treasurer for a club that was billed for sales tax that wasn't paid in previous fiscal years, plus interest. The bill was paid from cash on hand, but to replenish cash reserves, a special assessment was added to dues and fees for about two years. At the end of that time, the amount collected was more than the tax and interest paid. Current liability accounts were set up for the tax and interest and retained earnings debited for the amount paid. Is that OK? How should the special assessment be accounted for? What entries should be made and what type of accounts?
- posted
18 years ago