VAT Declaration Point Set to Delivery

This example applies when the VAT declaration point is set to delivery and no intermediate VAT is generated. The example has the following conditions:

  • An advance payment of 1,196.00 EUR is received, and the VAT rate is 19.6 percent.

  • An invoice with the total 1,196.00 EUR, including 19.6 percent VAT, is sent to the customer.

  • The advance payment is cleared against the invoice.

Here are the accounting entries:

  1. When advance payment is received:

    Accounting Entry Debit Credit

    Cash

    1,196.00

     

    Advance Payments Received (AR)

     

    1,196.00

  2. When the invoice is sent to the customer:

    Accounting Entry Debit Credit

    Accounts Receivable (AR)

    1,196.00

     

    User-defined (Revenue)

     

    1,000.00

    VAT Output Final

     

    196.00

  3. When advance payment is applied against the invoice on maintenance worksheet:

    Accounting Entry Debit Credit

    Advance Payments Received (AR)

    1,196.00

     

    Maintenance Control

     

    1,196.00

    Accounts Receivable

     

      1,196.00

    Maintenance Control

    1,196.00