Example of Reporting Prepayments in the Tax Register
The following scenario illustrates the reporting of prepayments in the Tax Register.
Payables Prepayment Invoice
The following table shows the accounting entries to create a prepayment invoice in Oracle Fusion Payables. The example invoice number is AP-Inv-Test10.
Account |
Debit Amount |
Credit Amount |
Description |
---|---|---|---|
Prepaid Asset or Expense |
500.00 |
Asset or expense is half paid |
|
Tax |
50.00 |
Tax at 10% on asset or expense fully paid |
|
Liability |
550.00 |
Prepaid with tax |
Upon payment of the prepayment invoice, the following accounting entries are created:
Account |
Debit Amount |
Credit Amount |
---|---|---|
Liability |
550.00 |
|
Cash |
550.00 |
Tax Register for Prepayment Invoice
For the 10 percent tax, the Tax Register shows:
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
---|---|---|---|---|
AP-Inv-Test10 |
Invoice (prepayment) |
500.00 |
50.00 |
0.00 |
Payables Invoice
Assume invoice number AP-Inv-Test20 is created, and the prepayment is applied to this invoice. The following table shows the resulting accounting entries:
Account |
Debit Amount |
Credit Amount |
Description |
---|---|---|---|
Asset or Expense |
1000.00 |
Invoice amount |
|
Tax |
50.00 |
Tax at 10% on balance of invoiced amount |
|
Liability |
550.00 |
Liability for balance of invoiced amount |
|
Prepaid Asset or Expense |
500.00 |
Reverse prepaid asset or expense |
Tax Register
Using the accounting entries created in this example, the Tax Register with the tax at 10 percent appears as:
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
---|---|---|---|---|
AP-Inv-Test20 |
Invoice |
500.00 |
50.00 |
0.00 |