Income Tax Receivable
Definition: Overpayment; refund expected
Scope:NarrowDifficulty:Moderate
Overpayment; refund expected
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Record tax overpayment | ||
| Estimated payments exceeded liability by $3,600. | ||
| Income Tax ReceivableAsset+ | $3,600 | |
| Income Tax ExpenseExpense− | $3,600 | |
| Receivable from government; tax expense adjusted. | ||
| 2. Receive refund | ||
| Government sends $3,600 refund. | ||
| CashAsset+ | $3,600 | |
| Income Tax ReceivableAsset− | $3,600 | |
| Receivable cleared. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
Income Tax ReceivableIncome Tax ReceivableAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$3,600.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$3,600.00
$0.00
Income Tax ExpenseIncome Tax ExpenseExpenseA cost incurred in the process of earning revenue. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$3,600.00
$3,600.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$3,600.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$3,600.00
DurationShort-Term
Related Subjects
Related
- Non-Trade ReceivablesTax refunds are classified as non-trade receivables
- Other ReceivablesMay be grouped under Other Receivables on the balance sheet
Contrast
- Accounts ReceivableA/R from customers; tax receivable from government
See Also
- Interest ReceivableBoth are non-trade receivables from accrued amounts
External Links
- Income tax#Overpayment — Wikipedia