Bookkeeping transactions CH3 VAT & Discounts Flashcards
1
Q
What is the current rate of VAT in the UK?
A
20%
2
Q
What is a Trade Discount?
A
Discounts to loyal customers, new customers as an incentive or to develop good relationships
3
Q
What is a Bulk discount?
A
Discounts to customers with large orders as an incentive to purchase more
4
Q
What is a Prompt Payment Discount?
A
Discounts to credit customers who pay invoices early
5
Q
How is VAT calculated with Trade and Bulk Discounts?
A
VAT is calculated from the net value after bulk or trade values have been deducted
6
Q
How is VAT calculated with Prompt Payment Discounts?
A
A credit note should be issued showing the decrease in VAT
