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    seodom3's Avatar
    seodom3 Posts: 1, Reputation: 1
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    #1

    Aug 14, 2014, 03:32 PM
    What are JE accounts for a Sales Tax Refund
    I received a Sales Tax (TPT) refund for overpaid taxes. What account does the check go to when deposited? What are off-setting accounts?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Aug 14, 2014, 10:40 PM
    Is the sales tax separately identified in your accounts?


    Depending upon the size of the refund and the period to which it relates, it could be treated as other income or as a prior period adjustment. If a material mistatement has been made in the accounts this may require special notes to the accounts
    K2Mookey's Avatar
    K2Mookey Posts: 8, Reputation: 1
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    #3

    Aug 28, 2014, 01:31 PM
    If the refund is current or prior period, you must record it as a credit to sales tax expense. Basically you need to correct your original entry you made when the sales were made. It will be a reversal by the amount of the refund. If it crosses your F/S year end, you will need to adjust retained earnings.
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