October 30, 2016 admin

Income Taxes—Prior Years

Liabilities and Net Worth

INCOME TAXES—PRIOR YEARS	LIABILITY ACCOUNT
	2200

ACCOUNT EXPLANATION
TRANSACTIONS
COMMENTS

ACCOUNT EXPLANATION

Corporation income taxes due to governmental agencies on the earnings of prior years.

TRANSACTIONS

					Jrnl.	Dr.	Cr.

	Transfer of income tax liability for prior year to this account				G
		Income Taxes—Current Year				2205
			Income Taxes—Prior Years				2200

	Payment of prior year’s income tax				CD
		Income Taxes—Prior Years				2200
			Cash in Bank—General				1001

COMMENTS

Income taxes paid on behalf of partners or proprietors should be charged to Account 2840, Partners’ or Proprietor’s Drawing.
Accounts in the 2201-2204 series may be used if separate accounts for each governmental agency are necessary.