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Nov 15, 2012 at 02:10 PM

Withholding tax posting

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Hie Gurus

I am posting an outgoing payment of 4000 dollars for a vendor account. The process involves calculation of withholding tax at the point of payment.The withholding tax rate is 10%. The system document is as follows

DR Vendor 4000

DR Vendor 400

CR BANK 4000

CR Witholding tax 400

I feel this is a wrong. What wrong with my setting.

Regards

Jerry