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 