Some of the reciepts that I am journalizing, have miscalculations on sales tax. There was not enough sales tax figured in when the receipt was made. How do I adjust this for a general journal entry? It is throwing my books way off. Thank you for a response.

CaptainForest

Let’s say you sold an item for $100 and there should have been a 10% sales tax. You should have billed them for $110.

If you only billed them for $100, and need to adjust your books accordingly, what you need to do is:

Sales Prices x 1.10 = Final Price

In the first example, that would be 100 x 1.10 = 110

So, because of the error, the original sales price is:

SP x 1.10 = 100
SP = 100 / 1.10
SP = 90.91