Summary of accounting entries

At any point in time, the generated tax applicable to those debts is reflected in the accrual account, regardless if those debts are paid.

The tax applicable to payments received for tax debts or fees/charges is reflected in the tax cash account, regardless if a debt is raised.

The reduction of accrued tax liability based on payments received for debts raised as accrual is reflected in the tax accrual reversal.

The tax cash account specified on the tax code applicable to Rates module must be set up the same as the tax accrual reversal account. This applies if a site prepares returns to the tax department on an accrual basis.

This account should not be the same as the tax cash account used on cash modules.

The tax cash and accrual reversal entries for rates is netted out to zero.

The tax accrual reversal account on the tax code applicable to rates is set up the same as the tax accrual account. This applies where a site prepares returns to the tax department on a cash basis.

Thus, the tax cash accounts are always used to prepare returns and the accrued tax liability are always represented in the tax accrual account.

Ledger entries generated are passed to financial systems as part of the standard general ledger interface output. The receipt or application reference that the tax applies to is detailed on these entries.

The source application is applicable to the type of receipt or debt.

We recommend that the tax accounts set up are different to those used within the financial system for other modules to enable reconciliation. However, this setup depends on each site.

To assist with reconciliation we recommended that the individual tax codes and accounts are created at least initially. If further discussion is required to assist with specific site set up to enable reconciliation, then refer to Infor support consultants.