USA Sales Tax in Accounts Payable- Question

[KrissyDee]

I need to know if I should be putting the sales tax in a different account that is strictly for sales tax when inputting invoices from our vendor. I was advised to put the sales tax into the same account as I am putting the items in from the various vendors. I do not feel this is accurate information. Can we use the amount of sales tax paid as a deduction at the end of the year? If not, maybe that is why our CPA says to just lump all of it into the same account as the items purchased for each vendor. Please let me know so I can assure I am doing things correctly for our company. I do not trust our CPA.

Thank You.

 

[kirby]

Yes, do not blindly trust those CPA types. CPA standing for "couldn't pass arithmetic" or something like that. In this instance, CPA is correct. You can post the cost of the item and its related sales tax into one expense account. This is because the sales tax is considered an integral part of that expense (like keeping the sizzle with the steak). But continue to ask questions if things do not seem right.