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Dec 05, 2011 at 03:38 PM

Many debits/Credits in the Tax GL accounts when doing compensations

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Hello:

My company receives a monthly service during a year, and pays in advance for all the year receiving the relevant invoice from the vendor. Assuming that the tax percentage is 10% and that the annual amount is $120, the SAP Advance Payment operation generates the next open accounting document:

Vendor        108
Tax            12
   Bank             120

Every month it is necessary to declare the service expense and to close $10 (120 / 12), and the accounting documents generated every month are:

Reporting the expense of the service:

Cost of service     9
Tax                 1
     Vendor              10

Closing part of the open item:

Vendor             10
     Vendor               9
     Tax                  1

All is ok from the point of view of SAP, but audit people are criticizing the u201CTax accountu201D of the accounting ledger, it has u201Cmanyu201D debits and credits (as you can see above), they say that it should be registered only $12 in that account.

How can I avoid to register in the Tax account more than once and remove the audit observation?

Regards.

Edited by: Eduardo Gironas on Dec 8, 2011 3:03 PM