Example of posting tax amounts on advance payments

During the advance payments of purchase invoice procedure, LN creates the financial postings described in the following example. Similar postings are created during the processing of advance receipts for sales invoices.

Example Purchase invoice data
Purchase invoice $ 100.00
Tax 10%
Assumption Transaction types with Negative Amounts Allowed = Yes
Parameter Zahlungswesen (tfcmg0100s000) USt für geleistete/erhaltene Anzahlungen berechnen = Yes

To create financial postings:

  1. Create an advance payment with tax

    Note: Tax amounts on advance payments are only calculated if you select the USt für geleistete/erhaltene Anzahlungen berechnen check box in the Parameter Zahlungswesen (tfcmg0100s000) session.

    Debit/ Credit Ledger account Amount
    Debit Advance Payment $ 110.00
    Credit Cash $ 110.00
    Debit Net Advance Payment $ 100.00
    Debit Purchase Tax $ 10.00
    Credit Gross Advance Payment $ 110.00
  2. Register the purchase invoice
    Debit/ Credit Ledger account Amount
    Debit Costs $ 100.00
    Debit Purchase Tax $ 10.00
    Credit Accounts Payable $ 110.00
  3. Assign the advance payment to the purchase invoice
    Debit/ Credit Ledger account Amount
    Debit Accounts Payable $ 110.00
    Credit Advance Payment $ 110.00
    Debit Net Advance Payment - $ 100.00
    Debit Tax on Assigning the Advance Payment - $ 10.00
    Credit Gross Advance Payment - $ 110.00
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