Out Of This World Income Tax Is Debit Or Credit In Trial Balance

If the balance sheet entry is a credit then the company must show the salaries expense as a.

Income tax is debit or credit in trial balance. Here income tax is RevenueIncome but we could list Interest Income and Income Taxes 38128 in Net Income before other items. Although income is considered a credit rather than a debit it can be associated with certain debits especially tax liability. Assets Expenses.

The debit and credit balances. The rule for asset accounts says they must increase with a debit entry and decrease with a credit entry. The normal balance of an asset account is debit.

I just dont get that because if this account is showing on the trial balance it must be a liability account and a debit here would be a reduction of the liability ie OVERprovision brought forward. It is compiled of taxes due to the government within one year. When you remit the tax payment to the government record the payment in your general ledger.

Income tax payable is a type of account in the current liabilities section of a companys balance sheet. If the sum of the debit entries in a trial balance in this case 36660 doesnt equal the sum of the credits also 36660 that means theres been. For example an accounts payable clerk records a 100 supplier invoice with a debit to supplies expense and a 100 credit to the accounts payable liability account.

Debit your Income Tax Expense account. The reports on a Trial Balance are categorized into two parts. If the sum of all credits does not equal the sum of all debits then there is an error in one of the accounts.

If the total of all debit values equals the total of all credit values then the accounts are correctat least as far as the trial balance can tell. Edit with Office GoogleDocs iWork etc. A decrease on the asset side of the balance sheet is a credit.