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    kalipaint's Avatar
    kalipaint Posts: 5, Reputation: 1
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    #1

    Jun 25, 2007, 01:38 AM
    How do you compensate for sales tax miscalculated
    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's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jun 25, 2007, 10:52 AM
    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
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