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?
Recording Payment of Back Taxes
May 04, 2005
1 Replies
Hi
When paying Sales tax, write a check selecting Sales Tax account (for the amount of tax) and Penalties or Interest account for the amount of Interest charged in the 'Account' column. As for the excess amount collected in form of special assessment, the complete will be treated as your income as and when the collection is made ie the set off between the tax paid and amount recovered as special assessment is not to be done.
Victor
myQBaccountant Team Free unlimited Quickbooks Support
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Bill wrote:
assessment
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