AP Invoice - Recoverable Tax Accounting
One single PRIMARY LEDGER with MULTIPLE LEGAL ENTITIES(Companies)
AP Invoice is created for 110 AUD where:
LIABILITY : CO1 - ZZ-21101
ITEM EXPENSE : CO2 -CC1-54545
Tax rate(10%) used is having 100% recovery rate
When the invoice is validated and accounted , an additional line is generated for TAX RECOVERABLE class.
LIABILITY : CO1-ZZ-21101 110 AUD CR
ITEM EXPENSE : CO2-CC1-54545 100 AUD DR
TAX RECOVRABLE LINE : ****-ZZ-20600 10 AUD DR
Question is : As per accounting standards, what should be the **** above on TAX RECOV LINE - should it be the liability BSV i.e. CO1
or ITEM EXPENSE BSV i.e. CO2 ?