We purchased a large 'repair' last year, and did not pay sales tax on it. This year, it was decided that it should be recorded as CapEx, and sales tax was directly expensed and paid to the BOE. I started a month ago taking over from the last bookeeper, and our CPA is asking me to reclass the sales tax expense (which has a credit balance now) to a liability account.
I'm trying to keep this simple, and not sure how to state it...basically, the P&L is showing a credit balance in the sales tax expense account, and the CPA wants to move it to the B/S as a liability - but it's already been paid. How do I get it back off the B/S if it's going into a payable account, and it's already been paid?
I'm trying to keep this simple, and not sure how to state it...basically, the P&L is showing a credit balance in the sales tax expense account, and the CPA wants to move it to the B/S as a liability - but it's already been paid. How do I get it back off the B/S if it's going into a payable account, and it's already been paid?