17 Enter Journal Entries with Tax

This chapter contains the topic:

• Section 17.1, "Entering Journal Entries with Tax."

17.1 Entering Journal Entries with Tax

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From General Accounting (G09), enter 27

From G/L Advanced & Technical Operations (G0931), choose Journal Entry With VAT Tax

When you enter a journal entry with tax, you might know the gross amount or the taxable amount of the entry. If you enter the gross amount, the system calculates the taxable amount and the tax. If you enter the taxable amount, the system calculates the gross amount and the tax.

For journal entries with tax, the system calculates the tax based on the tax area. The following restrictions apply to journal entries with tax:

• The system posts each journal entry with tax to a single tax authority.

• You cannot create model or reversing journal entries with this type of journal entry.

• This type of journal entry can be used only for transactions that have a tax explanation code of V or VT.

Entering journal entries with tax consists of the following tasks:

• Entering a tax inclusive journal entry

• Entering a tax exclusive journal entry

17.1.1 Before You Begin

• Set up the applicable tax rates, areas, and authorities. See Overview to Setup in the JD Edwards World Tax Reference Guide.

17.1.2 Example: Journal Entry with Tax

If you have tax on a bank charge, your entry might look like this:

Account Number	Amount	Tax Amount	Ex	Tax Area
7001.8810	1000	60	V	BE6
70.1110.BBL	1060-

The resulting entry to the general ledger would look like this:

Account Number	Description	Amount
7001.8810	Bank Charges	1000
70.1240	Tax	60
70.1110.BBL	Bank Account	1060-

17.1.3 What You Should Know About

Journal Entry	Explanation
Tax-only journal entries	To enter a journal entry for tax only, provide a tax amount and a tax explanation code of VT. Do not enter a gross taxable amount.

See Also:

• Work with Basic Journal Entries in the JD Edwards World General Accounting I Guide.

To enter a tax inclusive journal entry

On Journal Entry With Tax

Figure 17-1 Journal Entry With Tax (Inclusive) screen

Description of "Figure 17-1 Journal Entry With Tax (Inclusive) screen"

1. Access the gross amount format by pressing F2 if needed.

2. Follow the steps to enter journal identifiers for a basic journal entry.

3. For each G/L distribution, complete the following fields:

   • Account Number

   • Gross Amount

   • Tax Amount

   • Tax Explanation Code

   • Tax Area

4. To add the record, do one of the following:

   • In World Software, press Enter

Field	Explanation
Gross Amount	The gross amount of the invoice payments. This is a total of the gross amounts of all scheduled payments.
Tax Amount	This is the amount assessed and payable to tax authorities. It is the total of the VAT, use, and sales taxes (PST). Screen-specific information Leave this field blank to have the system calculate the tax. Also, leave this field blank on the offsetting entry, where the Amount field includes the amount and the tax amount from the preceding lines. Enter the tax in this field for tax-only journal entries.
Tax Ex Code	A user defined code (00/EX) that controls how a tax is assessed and distributed to the general ledger revenue and expense accounts. You assign this code to a customer or supplier to set up a default code for their transactions.
Tax Area	A user-defined code that identifies a tax or geographical area that has common tax rates and tax distribution. The tax rate/area must be defined to include the tax authorities (for example, state, county, city, rapid transit district, or province) and their rates. Typically, the U.S. sales and use taxes require multiple taxing authorities per tax rate/area, whereas value added taxes often require only one simple rate.

To enter a tax exclusive journal entry

On Journal Entry With Tax

Figure 17-2 Journal Entry With Tax (Exclusive) screen

Description of "Figure 17-2 Journal Entry With Tax (Exclusive) screen"

1. Access the taxable amount format by pressing F2 if needed.

2. Follow the steps to enter journal identifiers for a basic journal entry.

3. For each G/L distribution, complete the following fields:

   • Account Number

   • Taxable Amount

   • Tax Amount (optional)

   • Tax Explanation Code

   • Tax Area

4. To add the record, do one of the following:

   • In World Software, press Enter

Field	Explanation
Taxable Amt	The amount on which taxes are assessed. Screen-specific information If you enter the taxable amount in this field, the system calculates the tax and gross amount for you.

17.1.4 What You Should Know About

Option	Explanation
Sales/Use/VAT Tax file (F0018)	When you enter transactions using the Journal Entry with Tax program (P09106), the system automatically updates the Sales/Use/VAT Tax file. The system ignores the tax processing options that you set up for the post programs.
Automatic accounting instructions	The AAIs for journal entries with VAT are in the format GTyyyy, where yyyy is the G/L offset for the tax authority. If you do not specify a business unit in the AAI, the system uses the business unit of the account number from the first line item of the journal entry.
Model journal entries	Although you cannot create model journal entries on Journal Entry With VAT Tax, you can access Index of Model Journal Entries to select a model. The system displays the model information on Journal Entry With VAT Tax, and you can add the VAT information.

See Also:

• Work with Basic Journal Entries in the JD Edwards World General Accounting I Guide.

17.1.5 Processing Options

See Section 34.1, "Journal Entry with Tax (P09106)."

17.1.5.1 What You Should Know About Processing Options

Processing Option	Explanation
Processing option 3	You can set the default format for this screen. Leave this processing option blank to display the taxable amount (the amount exclusive of tax) on the first line or enter one to display the gross amount (the amount inclusive of tax). The system calculates the value that you do not enter and the tax.