Balance Sheet - Cash Basis - Sales Tax Payable



I am seeing strange figures on my balance sheet. First, my company uses
cash-basis accounting. I'm trying to run a balance sheet for the end of
2008. Everything balances and seems correct, however, under liabilities, I
see a negative number for Sales Tax Payable. My company resells our services
mostly so we don't charge Sales Tax directly. Where I do incur costs is in
Sales and Use Tax (e.g. Sales Tax on internet purchased goods where I did not
pay tax). In my books, I increment the amount due each quarter using the
Company menu (which in turn creates a Journal Entry), and then I pay the
state. Looking at the book records, Sales Tax Payable is $0, however, on the
Balance Sheet, everything I've ever paid shows as negative under Liabilities
(up to the "As of date" 12/31/2008 in this case). This seems to be
incorrect. My net income (equity) should be less the sales tax amount since
it was paid. Can you explain what is going on? On my taxes balance sheet
(Schedule L and M-1) should I use the number from the Office Accounting
report or should I be doing something different?

Note, I am using Office Accounting 2009, just upgraded a few days ago hoping
this reporting issue would go away.


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