The bank interest received is broken down on the bank statements into gross, tax deducted at 20% and net amounts. Which of these figures would I record and under which accounts?
Hi Sunita,
For the bank interest, record another Money Received transaction. Enter the net amount received and set the VAT Treatment to 'Out of Scope'. The From Account should have two lines:
1. 'Bank Interest' with the gross amount.
2. 'Tax Expense' with the tax amount as a negative number.
Cheers,
