You post a vendor invoice of 1,000 USD to the vendor account with tax code U1. The invoice amount does not contain taxes. The use tax rate is 7 percent. You make the offsetting entry with amount entry * and Calculate taxes to the account Payables. The document overview then looks as follows:

Document overview

Although the invoice amount did not contain any tax, the system determined the use tax by means of the tax code and posted it to the corresponding tax accounts. At the same time an offsetting entry increased by the amount of the use tax was posted to the account Payables.