6. Accounting for indirect taxes and payroll Flashcards
1
Q
Output tax
A
VAT on sales
CREDIT sales tax account
2
Q
Input tax
A
VAT on purchases
Can be reclaimed
DEBIT sales tax account
3
Q
Net of output and input tax
A
paid or reclaimed from the HMRC
4
Q
Accounting for sales VAT
A
DR receivables/ cash with gross amount inc. vat
CR sales tax account
CR sales account with net amount
5
Q
Accounting for purchases VAT
A
DR purchases account with net amount
CR sales tax account
CR payables/ cash account with gross amount
6
Q
Rounding sales tax
A
must always be rounded down
7
Q
Payroll taxes
A
income tax
social security tax employees
social security employers
8
Q
Gross wages expense account
A
entered in statement of profit or loss
9
Q
Employers social security account
A
entered in the statement of profit or loss
