Sales invoices employing flat rate tax codes are showing incorrect amounts for line items. Therefore, they also show incorrect sub-totals. But tax amounts and totals are correct. Likewise, postings to income and tax liability accounts are correct. So the ultimate accounting results are correct, but the sales invoice contains errors. See the following illustration:
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A tax code is defined for 20% VAT chargeable rate with 16.5% remittance rate. The remittance differential is, therefore, 3.5%:
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A sales invoice is raised for an item with a 100 price. The tax code just defined is applied:
The resulting invoice charges the customer the correct total amount, 120, but incorrectly shows the recognizable income on the tax differential to be part of both the amount for the line item and the sub-total:
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The Tax payable liability account drill-down reveals the correct entries:
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And the Sales income account correctly includes the imputed revenue representing the remittance differential:
