Rounding error and Use Tax
David J. Bakeman
dbakeman at comcast.net
Wed Oct 23 20:50:17 EDT 2013
In my state a business is required to pay use tax on any purchase that
didn't include sales tax of real property for use in state of the
business.
OK so far so good. I found some old emails in the archive that
suggested the following:
Expenses:Equipment 10.95
Cash:Check 10.00
Liabilities:Taxes 0.95
I made a small change to:
Expenses:Equipment 10.00
Expenses:Taxes 0.95
Cash:Check 10.00
Liabilities:Taxes 0.95
I did this so I could see the price of the equipment separate from the
tax.
This works great except for I do my taxes quarterly and the state
return just wants a total for the quarter. In the above example
everything is fine but over time with real prices rounding error creeps
in. Fine I can deal with that except I don't know where the penny
should come from. If the total in Liabilities:taxes is more than the
states total would this be some kind of income? If its less is it an
expense? Of course I can just adjust one of the purchases by a bit but
that seems wrong.
Any Ideas?
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