VAT for Early Payments: Generated Transactions
As you adjust VAT for early payments of AR invoices, you create and process a taxable AR invoice, a payment for this invoice with a cash discount, and a credit memo to adjust the VAT amount. To update the customer's balance and adjust the output taxes, the system generates the GL transactions described in the following sections.
Transaction Generated for an AR Invoice
When you create and release an AR invoice, the system generates the following general ledger transaction:
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Accounts Receivable account | The AR account of the customer specified on the Customers (AR303000) form | Total invoice amount | 0.00 |
| Sales account | The sales account of the non-stock item specified on the Non-Stock Items (IN202000) form | 0.00 | Line amount |
| Tax Payable account | The tax payable account of the tax specified on the Taxes (TX205000) | 0.00 | Tax amount |
You can view the reference number of the GL batch on the Financial tab of the Invoices and Memos (AR301000) form.
Transaction Generated for an AR Payment with a Cash Discount
When you create and release a payment for the invoice within the cash discount period, the system generates the following general ledger transaction:
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Checking account | The cash account specified for the payment on the Payments and Applications (AR302000) form | Total payment amount | 0.00 |
| Accounts Receivable account | The AR account of the customer specified on the Customers (AR303000) form | 0.00 | Total payment amount |
You can view the reference number of the GL batch on the Financial tab of the Payments and Applications form.
Transaction Generated for a VAT Credit Memo
When you create and release a credit memo to adjust the output VAT, the system generates the following general ledger transaction:
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Cash Discount account | The Cash Discount account of the customer specified on the Customers (AR303000) form | Discount amount without the tax applied | 0.00 |
| Accounts Receivable account | AR account of the customer specified on the Customers form | 0.00 | Amount of the given discount |
| Tax Payable account | The Tax Payable account of the tax specified on the Taxes (TX205000) form | 0.00 | Full tax amount–tax on discounted amount |
You can view the reference number of the GL batch on the Financial tab of the Invoices and Memos (AR301000) form.