Causes in double-entry accounting
In a transaction with a VAT recoverable code, the VAT amount is entered in debit unto the VAT account.
As a rule of thumb:
- The debit account can be part of the Profit and Loss Statement (BClass 3 or 4), or the Balance Sheet (BClass 1 or 2), if there is an acquisition of an Asset.
- The credit account is an account of the Balance Sheet (BClass 1 or 2).
In the transaction, it seems to be the opposite of what it should be because:
- The debit account is a Balance Sheet account (BClass 1 or 2)
- The credit account is an account of the Profit & Loss Statement (BClass 3 or 4).
Causes Income & Expense accounting
The transaction doesn't seem to be correct because there is a VAT recoverable code and:
- In the Category column, there is a category that is entered in positive.
- Or in the Catergory column, there is an account that is entered in negative.
Solutions
Verify:
- If the accounts that have been used are the correct ones.
- If the VAT code that has been used is the right one.
- If it concerns a credit note, but the VAT code has not been entered with minus sign preceding it.
It is a warning and not necessarily an error. The operation might also be correct:
- Ignore the warning.
- For this VAT code, indicate in the VAT codes table, "No Warning" column, that you do not wish to be warned.