Struggling with Invoicing Prepaid Service

[Wm...]

Mon, 12 Oct 2015 19:57:03 
<CACxYGNYdCX6opVeEx3W=bUEfb_LJ65oXcDWuGmOpdva3uuG=-g at mail.gmail.com>
John A Brown <johnbrowngreybeard at gmail.com> wrote...

>In the solution above there still exists an 650.00 obligation (liability)
>to pay the sales tax and 650.00 in the bank account received when the
>customer paid.

BEEP!  Sales taxes and HST aren't the same. I may be wrong but I think 
HST is Canadian and falls under the umbrella of Value-added Tax, 
something most sensible countries implement :)

> When you pay the sales tax, it reduces the sales tax
>liability and also reduces the bank account. Thus the sales tax passed
>through you accounting system without affecting your balance sheet equity
>or your profit and loss (revenue and expenses).

Not quite true but that is how Value-added Taxes are meant to work.

>If you treated it as "sales
>tax revenue" and "sales tax expense" it would increase both revenue and
>expenses.

My advice is DO NOT DO THIS if you live in a country that is 
sufficiently advanced to have implemented VAT

> The US forms for sales tax request a revenue figure and then
>multiplies the revenue times sales tax percent and you owe the tax
>authority the resulting figure. So it is best not to record the sales tax
>as revenue as you could conceivably be paying sales tax on sales tax
>revenue.
>
>HTH

Not much in this case, I fear.

>Kind Regards

Ummm

One of the tenets of VAT is that the person that does stuff is only 
taxed on the value they add when they add it.  Are you suggesting the OP 
should not take advantage of this?

-- 
Wm...