Tax Rounding Adjustments Journal

I understand how there can be a discrepancy between the net sales amount and the tax, compared to doing a calculation on the total amount, as Manager calculated the tax on a line by line basis.

So, I am in New Zealand and I complete my GST return every 6 months. This time there’s a discrepancy of 6c between my refund as per Manager, compared to the calculation of the IRD (we complete our GST return electronically online).

No big deal, I’m just wondering how would I set up an account so I can create a journal entry to correct the rounding discrepancy and make the books balance again?

Yeah, just create new journal entry where you debit Tax payable liability account by 0.06 and credit Retained earnings.

Some businesses have accounts called Sundry income and Sundry expenses for these kind of income/expenses. So instead of crediting Retained earnings, you would credit Sundry income.