Invoiced and accrued taxes
This table shows the differences between tax types when processing taxed invoices:
| Tax Type | Description |
|---|---|
| Invoiced | Invoiced taxes are included in the amount of the invoice. For example,
an invoice for $106.50 may represent $100 of purchased goods and $6.50
of taxes on those goods. These taxes are examples of taxes that
generally show up as an additional charge on an invoice:
When creating an invoice with an invoiced tax, the invoice amount includes the tax amount. In the previous example, you would specify $106.50 as the invoice amount. The invoice amount and the total of your distribution lines must equal $106.50. |
| Accrued | Accrued taxes are taxes that you are responsible for paying, but which
are not included in the invoice. A common example of an accrued tax is a
use tax. Use tax is a tax that is imposed on the consumer for use or
consumption of goods that a company in the United States produces and
consumes. For example, a company that manufactures automobiles can add one of those automobiles to its company fleet. They are invoiced for $20,000, which represents the purchase price of the car. They are also liable for paying $2,000 in taxes for the car, but that amount is not included in the invoice. They are responsible for accruing those taxes and submitting them to the government. When creating an invoice with an accrued tax, the invoice amount and the total of your distribution lines will not equal the same amount. The accrued amount represents an additional charge that is not included in the invoice. |