The separation of price and tax means that the price and turnover tax of goods and corresponding services are reflected in invoices respectively in the daily circulation of goods. The purpose of price-tax separation is to separate the tax implied in goods from the price of goods and services, so that consumers and manufacturers can know the relevant prices and taxes for purchasing such goods and services. The method of separating price from tax in accounting entries is a simple mathematical method-division. Price excluding tax = total price plus tax ÷( 1+ tax rate), tax payable = price excluding tax × tax rate, price excluding tax = total price plus tax-tax payable.