Re: [SL] Handling prepayments

[Roy N. <RNi...@NB...>]

Sorry about the confusion Eberhard,   I was merely referring to the  
mechanics of recording prepayments and the similarity to recording  
collected tax - and action which Michael may already be familiar ...  
I did not imply, not intend to imply, that you were paying tax on the  
prepayment ... just that the patter was similar.


On 14-Feb-2007, at 00:20, 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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