Cash Entries with Taxes: To Process a Cash Entry with a Sales Tax

This activity will walk you through the process of creating a cash entry with a sales tax applied to it.

Story

The SweetLife Fruits & Jams company provides juicer cleaning services for cash, and these services are subject to sales taxes. Accountants use cash entries to record cash receipts and update the income account. Suppose that on February 13, 2024, a customer of SweetLife paid $45 in cash for 3 hours of juicer cleaning services.

Acting as a SweetLife accountant, you need to process the corresponding cash entry and apply taxes to it.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Tax Categories (TX205500) form, the TAXABLE tax category has been configured.
  • On the Tax Zones (TX206000) form, the NYSTATE tax zone has been configured.
  • On the Taxes (TX205000) form, the NY State Tax has been configured and assigned to the TAXABLE category and the NYSTATE tax zone.
  • On the Entry Types (CA203000) form, the TAXSALES entry type has been created.
  • On the Cash Accounts (CA202000) form, the 10200WH cash account has been configured and the TAXSALES entry type has been added for this cash account on the Entry Types tab of this form.
  • On the Vendors (AP303000) form, the NYTAXDEP vendor has been configured as a tax agency.
  • On the Non-Stock Items (IN202000) form, the CLEANING item has been configured.

Process Overview

In this activity, you will create a taxable cash entry on the Cash Transactions (CA304000) form. You will then release the cash entry and review the GL transaction generated by the system on the Journal Transactions (GL301000) form.

System Preparation

Before you begin to work with taxable cash entries, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant Anna Johnson by using the johnson username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, click the Business Date menu button and select 2/13/2024. For simplicity, in this process activity, you will create and process all documents in the system on this business date.
  3. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu button to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.

Step 1: Creating a Cash Entry

To create a taxable cash entry, proceed as follows:

  1. Open the Cash Transactions (CA304000) form.
    Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
  2. On the form toolbar, click Add New Record, and specify the following settings in the Summary area:
    • Cash Account: 10200WH
    • Tran. Date: 2/13/2024 (inserted automatically)
    • Fin. Period: 02-2024 (inserted automatically)
    • Entry Type: TAXSALES
    • Document Ref.: 2132024
    • Description: Cleaning services
  3. On the Details tab, click Add Row and specify the following settings in the added row:
    • Branch: HEADOFFICE (inserted by default)
    • Item ID: CLEANING
    • Quantity: 3
    • Price: 15
    • Tax Category: TAXABLE
    • Project: X
  4. On the form toolbar, click Save to save the cash entry.
  5. On the Financial tab, review the Tax Zone box.

    The NYSTATE tax zone is specified for the cash entry, because the cash entry has the TAXSALES type and has been created for the 10200WH cash account.

  6. Review the Taxes tab.

    The NYSTATE tax zone is applied to the document (as you can see on the Financial Details tab), and the TAXABLE category is specified in the document line. Thus, the NYSTATETAX tax was applied to the cash entry. The taxable total is $45, and the tax total is $3.99.

Step 2: Releasing the Cash Entry and Reviewing the GL Transaction

To release the cash entry and review the GL transaction generated by the system, proceed as follows:

  1. While you are still viewing the cash entry on the Cash Transactions (CA304000) form, on the form toolbar, click Remove Hold.
  2. On the form toolbar, click Release to release the cash entry.
  3. On the Financial tab, click the link in the Batch Number box to review the GL transaction on the Journal Transactions (GL301000) form.

    On release of the cash entry, the system has generated a transaction with the following entries:

    • The cash account of the SweetLife Head Office and Wholesale Center branch (10200) is debited in the total amount of the received cash (the line amount plus the calculated tax).
    • The Tax Payable account (24100) is credited in the calculated tax amount to record the tax to be paid to the tax agency.
    • The offset account specified for the cash entry type (40000) is credited in the line amount to record the income.