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I got the question like this:
Sales ( including tax) 109,250
Purchase (net of tax) 64,000Sales tax is charge at flat rate of 15%. Eva Co’s sales tax account showed an opening credit balance of 4,540 at the beginning of the month and a closing debit balance 2,720 at the end of month.
What was the total sales tax paid to authorities during the month.
I did:
I know how to do most of thing in this question except for a closing debit balance of 2,720 at the end of month why it is in credit side when we are accounting for it ?The balance is the figure that makes both sides of the t-account add up to the same total.
It is always carried forward to the opposite side. If the debits total more than the credits then you end up with a net debit balance; if the credits total more than the debits then you end up with a net credit balance.You really should watch the free lecture on double entry bookkeeping.
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