Other adjustments Flashcards
1
Q
What is the double entry for accounting for vat sales?
A
Dr TR (gross) - because you are receveing everything from the customer
Cr sales (net) - because you are giving the government the difference
Cr VAT amount - liability as you owe the governemnt the VAT amount
2
Q
What is the double entry for accounting for vat purchases?
A
Dr Purchases (net) - you have reclaimed tax from the government
Dr VAT - because you have given the government the difference so the liability decreases
Cr TP (gross) -total amount due to be paid to suppliers
3
Q
When should you pay the difference on VAT to HMRC?
A
Output tax > Input tax
4
Q
When is a VAT refund due to the business?
A
Input tax > Output tax
