VAT Flashcards
1
Q
what is output tax?
A
VAT on sales
2
Q
what is input tax?
A
VAT on purchases
3
Q
how must registered businesses show transactions in regards to VAT?
A
must show sales and purchases NET of VAT
must show trade receivables/payables INCLUDING VAT
4
Q
who cannot charge VAT on output?
A
traders like banks
5
Q
can unregistered traders reclaim VAT?
A
No
6
Q
what are the 3 VAT rates?
A
Zero Rate
Reduced rate (5%)
Standard rate 20%
7
Q
how is VAT treated on business entertaining and cars?
A
VAT is a genuine business expense so it is NOT recoverable
8
Q
double entry: VAT purchase
A
Dr Purchase
Dr VAT
Cr Trade Payable
9
Q
double entry: Irrecoverable VAT
A
Dr expense account
Cr cash
