Taxable Purchases

[Fred Bone]

On 6 July 2014 at 4:48, Donna Pfeifer said:

> 
> 
> Hi Derek, thanks for your response.
> 
> I haven't paid the sales tax on the purchase yet as it was from one my
> wholesale vendors for the use of my business rather than for resale as is
> the norm. I am required to pay it when I submit the sales tax I collected
> after the end of the month. The amount for 'taxable purchases' is listed
> separately from sales tax collected on the report form so I created a
> separate account for it.
> 
> 
> Would the attached image be a better way to record it? This gives me a
> positive balance in the Sales Tax Owed account.

Your previous illustration says you paid out 88.39 from your checking 
account, of which 83.00 was to purchase advertising and 5.39 went to pay 
off some sales tax you (presumably) owed.

In this one, you purchased some advertising for 83.00, on which 5.39 
sales tax was due; you paid the 83.00 from your checking account, leaving 
you liable to pay the 5.39 sales tax at some future time.

The second seems more likely to me, but IANAA.