Supplier credits

accounting of supplier account balance

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Hi please help with the following, Thanks for any help.

When suppliers give credit for the outstanding balance on their account excluding VAT as credit agreed how to account for the vat element remaining in the supplier account to bring the balance to nil.

My question is i have receied a supplier invoice which includes a credit as agreed amount excluding VAT. Now I have posted the credit amount to the supplier account but the account still showing a balance of the VAT element of the original invoice for which now credit agreed. What accounting entries required to be posted to make the balance nil. My understanding it is not correct to pay VAT on that as there is no VAT element in the credit.

regards

P

 

Replies (1)

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By johngroganjga
21st Oct 2016 10:14

Ask the supplier for a credit note showing the VAT.

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