4 ledger accounting and double entry

Question 1

EXAM SMART: difference between gross and net VAT (calc)

Answer 1

gross = net x 1.2
gross includes vat (trade receivables, trade payable)
SFP

net = gross/1.2
net excludes vat (sales, purchases, most expenses)
SPL

Question 2

Which of the following best explains the imprest system of petty cash control?

The system ensures that there is always sufficient petty cash available Incorrect
The amount of petty cash in total must never fall below the imprest amount
Each month an equal amount of cash is transferred into petty cash
At any time petty cash in the box plus petty cash vouchers equals the imprest amount

Answer 2