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Tax Code Corrections

I accidentally used an incorrect tax code while processing an invoice. The cheque has already been processed. Is it still possible to correct the tax code?

Yes, a correction is possible when an incorrect tax code has been used, in any transaction, even after it has already been processed. You’ll need to process a journal entry to credit the incorrect tax code and debit the correct tax code. Please see the example below.

For detailed instructions on how to create a journal entry, please refer to the “Journal Entry Create” quick reference guide (QRG), which is available at the following URL:  http://finance.utoronto.ca/wp-content/uploads/2016/02/Journal-Entry-Create-Convertedfeb03-1.pdf

The following illustrates an example of a document correcting an incorrect tax code:


Original transaction containing the incorrect tax code:

Tax Code Correction Example of Original Transaction


Journal Entry required to correct the tax code/amounts:

Tax Code Correction Example of Correcting Transaction


Impact of the tax recalculations on the $1150.00 example above:

 

Tax Code Correction Tax Recalculation