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General Accounting Discussions: Purchasing Inventory

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  1.  
    • CommentAuthorJoeMicro
    • CommentTimeFeb 3rd 2010
     
    If I buy $106.00 worth of inventory and parts are $100 and sales tax is $106, would I credit Accounts Payable $106 and debit Inventory $106, or would I need to break out tax and only put $100 into inventory? If so, what account do I debot for the $6??

    Thanks!
    • CommentAuthorpk
    • CommentTimeFeb 3rd 2010
     
    The correct entry will be:

    Dr. Inventory : 106
    Cr. Accounts Payable : 106
    Cr. Tax Payable : 6


    savin.yakeep@yahoo.com
  3.  
    You are right Pk and thanks for sharing your answer!

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