If your company buys supplies and has to pay VAT it becomes tax payable, right? If you sell merchandise to another business/customer and the customer must pay VAT, it becomes tax receivable right?
tax payable is liability. but what about tax receivable?
What would the journal entries for tax payable and receivable be like?
for example what would the journal entries for these be:?
On May 5th Bought supplies on cash worth $5500 incl. tax (tax is $500)
On May 8th Sold goods on cash worth $8800 incl. tax (tax is $800)
Go to Source of this post
Author Of this post: /u/inu_shibe