Proper Recording for Sales and Receipts Entries

For easier determination, reporting and schedules preparation of sales or receipts, it is better to use the titles listed in BIR Form 2550Q, to wit:

• Vatable Sales - Private
• Sale to Government
• Zero-Rated Sales
• Exempt Sales

In actual practice, usually, the entries made is as follows:

dr   Cash or Receivables    xxx

cr            Sales                            xxx

cr            Output Tax                    xxx

Why not segregate them right away, so it is easy to extract and breakdown what type of sales/receipts are made. Your entries may be broken down as follows:

a. For Sales to Private Entities

     dr   Cash or Receivables               xxx

     cr            Vatable Sales - Private           xxx

     cr            Output Tax                              xxx

b. For Sale to Government 

     dr   Cash or Receivables              xxx

     cr            Sale to Government                xxx

     cr            Output Tax                              xxx

c. For Zero-Rated Sales

     dr   Cash or Receivables              xxx

     cr            Zero-Rated Sales                   xxx

d. For Exempt Sales

     dr   Cash or Receivables             xxx

     cr            Exempt Sales                       xxx

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