Accrual Basis

[Herbie]

I'm new at QuickBooks sales tax, but I was thinking, is it best to do them
on cash basis or accrual basis? I am on accrual now and was wondering what
if my customer doesn't pay his invoice, and I have paid the taxes on it
already. Also can I switch to cash basis after doing the 1st two quarters
in accrual basis?

[S.M.Serba]

Personally, I would NOT recommend switching between cash and accrual except
on the advice of your accountant.

If you are already using accrual basis accounting, stick with it.

IF your customers do not pay their bills, then you recoup the taxes you have
already paid out when you write off the invoice to bad debts. You then have
a reversal of the taxes (deducted from the amount to be remitted to
government agencies), a reduction in your A/R and the gross amount of the
invoice is either written off to Bad Debts Expense, a reversal of Sales, or
to Allowance for Bad Debts, depending on what your accountant wants.

However, please do not take at face value adivce given to you here. Consult
your accountant.
--
Stephanie Wells, AICIA
Partner, Durham Business Outsource
Accounting & Technology
www.dbo.ca
smwells <at> dbo <dot> ca

Post by Herbie
I'm new at QuickBooks sales tax, but I was thinking, is it best to do them
on cash basis or accrual basis? I am on accrual now and was wondering what
if my customer doesn't pay his invoice, and I have paid the taxes on it
already. Also can I switch to cash basis after doing the 1st two quarters
in accrual basis?