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1)when the Co or Sole trader is non-registered for Sales tax then it records its purchases/sales at gross amount (comparing with registered),
So :
purchases – gross
payables – gross
(no record of sales tax on purchases since already paid and cannot claim back)
sales – net
receivables – gross
+sales tax
CO records sales tax since it should pay it to tax authorities.
2)what about income tax?
not registered company pays less amount since profit is understated comparing with registered (COS up, profit down) or it balanced when registered company adjust running costs (expenses)?
so theyre paying equal income tax?
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