VAT Flashcards
what is vat
Value added tax
tax charged on the supply of goods and services
what VAT can we reclaim
the vat we are charged on purchases
we must charge vat on
outputs
vat due is seen under
current liability
vat due to be refunded is seen udner
current assets
how do we calculate VAT element figure from the gross amount
VAT rate / 100 + VAT rate x gross amount
what does it mean if a company is fully registered for VAT
VAT charged on all outputs
VAT charged on all inputs
what does it mean if a company has Zero rated VAT
0% vat charged on all outputs
VAT can be claimed on inputs
what does it mean if a company is VAT exempt
no VAT on outputs
no VAT can be claimed on inputs
logically why should the vat figure always be a credit
sales figure > purchases figure for a company to make a profit
example of a case where the VAT would be on the debit side
expansion and the company bought a lot of new machinary
where does the VAT chain of transaction end
sale of finished goods
D/C
VAT on sales returns
Debit
D/C
VAT purchases
debit
D/C
VAT on other inputs
debit
