When inputting journal entries into subledgers for a vendor or client, should you record only the base price, or do you also account for taxes?

When recording journal entries in subledgers for a vendor or client, it is generally important to include both the basic price and any associated taxes as part of the entry. This approach ensures a more accurate and comprehensive financial record. Including taxes in the journal entries enables efficient reconciliation with invoices and financial statements. Furthermore, capturing both the base amount and taxes in the subledger helps maintain transparency and compliance with Accounting standards and tax regulations, providing a clearer financial picture for internal and external audits. However, it is crucial to verify the organization’s specific Accounting policies and the applicable tax laws to ensure that entries are consistently recorded and compliant.