How you record the earning and US Backup Withholding Tax (withheld) in accounting Profit and Loss Statement?

#1

For example, the amount is just example

Income Summary to Earnings Account

Net Sales $100.00
US Backup Withholding Tax (withheld) -$20
Envato Author Fees -$30

Total: USD $50
Net Change to Earnings Account

How you record it in the accounting Profit and Loss Statement?

My accountant record look like this

In Profit and Loss Statement:
Income
Net Sales $100.00
US Backup Withholding Tax (withheld) -$20
Envato Author Fees -$30

Net profit
Net profit $50

AND

In Balance Sheet:
Assets
Themeforest Earning $50

But i search on website seem that people say it should record like this

In Profit and Loss Statement:
Income
Net Sales $100.00

Expenses
Envato Author Fees -$30

AND

In Balance Sheet:
assets
Themeforest Earning $50
US Backup Withholding Tax (withheld) $20

Total $70 (but i only got $50…that $20 i never have it…)

which method is right?

Envato has fill 1099-misc, i am not from US, so which method i should do in my Profit and Loss Statement and Balance Sheet?

Please someone help me and give me some idea, sorry for my language skill, thanks everyone…i need help for my real life, thanks :frowning:

#2

Hi,

Here you will find about Envato author earning details

you can check all tab in left side hope you will undestand

Thanks!