Chapter 3 Keywords

Question 1

Discounts received day book

Answer 1

The book of prime entry where all the credit notes for prompt payment discounts received by the business are listed.

Question 2

Input Tax

Answer 2

VAT on purchases and expenses. Input VAT can be recovered from HMRC

Question 3

List Price

Answer 3

The seller’s standard price before any discounts have been deducted

Question 4

Net total

Answer 4

the total of the invoice before VAT is added

Question 5

Output Tax

Answer 5

VAT on sales.

Question 6

Who is Output VAT paid to?

Answer 6

HMRC

Question 7

Prompt Payment Discount

Answer 7

A percentage discount from the net total offered in order to. provide an incentive to pay the invoice amount early

Question 8

Trade Discount

Answer 8

A percentage discount deducted from the list price of goods and services

Question 9

VAT credit not

Answer 9

A credit not issued to a customer if the customer chooses to take prompt payment discount, showing the decrease in the invoice net, VAT and gross total due to the prompt payment discount.

Question 10

VAT return

Answer 10

A statement sent every three months to HMRC showing the total input tax suffered, the total output tax charged and the balance due for payment/ refund.