October 30, 2016 admin

Accrued Taxes—Real & Personal Property

Liabilities and Net Worth

ACCRUED TAXES—REAL & PERSONAL PROPERTY LIABILITY ACCOUNT
2401

ACCOUNT EXPLANATION
Taxes accrued on real and personal property of the dealership.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly accrual of real estate taxes SE
    Taxes—Real Estate 8400
      Accrued Taxes—Real & Personal Property 2401
             
  Monthly accrual of personal property taxes SE
    Taxes—Excluding Real Estate & Income 8540
      Accrued Taxes—Real & Personal Property 2401
             
  Payment of real or personal property tax CD
    Accrued Taxes—Real & Personal Property 2401
      Cash in Bank 1001
COMMENTS
  • Real and personal property taxes become liabilities on dates specified by the applicable government authority. Various accounting methods are permissible in recording these taxes. Accounting advice and tax counsel should be obtained as to the method adopted for book and /or tax purposes, and it should be followed consistently from year to year.
  • Remittance of these taxes should be in conformity with appropriate government regulations.
  • A subsidiary record, such as Form FMC 61, Prepaid and Accrued Expense Schedule, should support this account and should be used in computing monthly accruals.