Microsoft Dynamics 365 Enterprise Edition - Financial Management - Third Edition

Sales tax business process

Sales tax is a tax paid to the government for the trading of some goods and services. As shown in the following diagram, the sales tax receivable is generated from vendor transactions, whether from a purchase order invoice or service invoice. The sales tax payable is generated from customer transactions, whether from a sales order invoice or a service invoice. Then, the net of the tax receivable and tax payable is settled to be paid to the sales tax authority: 

The generated financial entries in the sales tax cycle are as follows: 

• Tax receivable—accounts payable: The financial entries generated in the course of ...