Example 1 - Payable On Due Date, Customer Pays In Full
The following is an example of the financial events that transpire when a customer is billed and full payment is received prior to the bill due date. The accounting method in this case is Payable On Due Date.
Event
GL Accounting
Tax Payable Balance
Tax Holding Balance
Bill segment created
A/R 110
Revenue <100>
Tax Holding <10>
0
(10)
Payment received
Cash 110
A/R <110>
0
(10)
Adjustment created on bill due date
Tax Holding 10
Tax Payable <10>
(10)
0