- Joined
- Dec 16, 2022
- Messages
- 720
Here is a fictitious invoice for some car parts. "HST" is a tax here in Canada at 13 percent. Note how the line items have amounts which are greater than 2 decimals and the question is, at what point in the calculations do we round to two decimals?
Option 1) round each line item amount and add to subtotal, calculate hst on rounded subtotal, or
Option 2) add raw line item amounts to subtotal, calculate hst (leave unrounded), add raw subtotal to raw hst to get total, then round hst and subtotal
Question is more of a "how does this work on paper". I know accounting programs have this figured out, I'm just wondering when the rounding is applied.
Option 1) round each line item amount and add to subtotal, calculate hst on rounded subtotal, or
Option 2) add raw line item amounts to subtotal, calculate hst (leave unrounded), add raw subtotal to raw hst to get total, then round hst and subtotal
Question is more of a "how does this work on paper". I know accounting programs have this figured out, I'm just wondering when the rounding is applied.