Re: [SL] Handling prepayments

[<pe...@si...>]

To Eberhard,

at least in Estonia we have to pay VAT when Invoice is given out or 
money becomes to our account as prepayment whichever is first. So the 
tax must be paid even if we haven't earned the money yet. At least 
that's the way I have understood it :-/

All the Best and Happy Valetines Day,

Peeter Pärtel
Estonia

Dr Eberhard Lisse wrote:
> Michael,
>
> The money is in the bank. What we are discussing here, is how you
> *account* for it.
>
> It first is a liability, but still in the bank account. Once you "earn"
> it by "paying" an invoice, it still is in the bank account, but it
> becomes revenue.
>
> I would perhaps look at some reading material about accounting...
>
> Roy,
>
> I do not understand your contribution. We are not discussing expenses
> here, but revenue. And, you can not pay tax on pre-payment, because you
> haven't provided a service, sold anything, i.e. you did not generate an
> invoice. But then maybe I should read more ont he subject :-)-O
>
> greetings, el
>
> on 2/14/07 3:27 AM Roy Nicholl said the following:
>   
>> Prepaid expenses are treated pretty much the same as the sales tax/ 
>> VAT you collect on behalf of the government.   The money is paid into  
>> your operating account, but you also credit the Tax account (a  
>> liability) because the money does not belong to you.  When you remit  
>> the tax to the government, you pay it out of the tax account.
>>
>>
>> On 13-Feb-2007, at 20:32, Michael Hasse wrote:
>>
>>     
>>> Mkay, that makes sense, but if there's a GL debiting the bank
>>> account, how does the bank account get credited again?  (Maybe I
>>> should just try it and see what happens!  Nothing like the hands-on
>>> approach, eh?  :)
>>>       
>
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