looking at this post form ealier 2017, i have the similar satiation
we buy all our good for UAE where 5% AVT added on the purchase invoice to be paid by us to the supplier in the UAE.
How to make VAT amount allocate with inventory item “average cost”, since no VAT by the law in Yemen can be added in the sale invoice
For accountng perpose under libility we have VAT sub account and should show amount paid for VAT in the UAE, please advice
@ishtiaq.omer, please do not divert topics with unrelated questions. Your post had nothing to do with new expense accounts and has been moved to this new topic.
Your question is not clear. Are you and your supplier in the UAE, Yemen, or Lithuania (where your profile shows you are registered)?
Wherever you are, VAT should not be allocated to inventory cost. It shows up in Tax payable.
im in yemen, our suppliers in the UAE
I am sorry, but I am not qualified to offer assistance on Yemeni tax procedures. This is a matter for a local accountant or the tax authority.
could you advice how to add extra expense such and transport ,labors etc to the inventory item " average cost "
Read this Guide: https://www.manager.io/guides/9610.
By including it in the unit price of the item, not splitting it out.
If you purchase one item for 100 + 5%, then the unit price becomes 105 and hence the average cost is 105.
What is the point of this - what happens to the VAT accumulated in this liability account ?
Besides, VAT from purchase invoices is a debit, so the liability account would have a negative balance.
Also, putting the VAT to a liability account contradicts your previous request “How to make VAT amount allocate with inventory item “average cost”. You can’t allocate the one VAT value to both “average cost” and “liability account”.
Thanks for explanation