Vats N Disvount Flashcards
What is VAT referred to as?
Sales tax or indirect tax
What is VAT referred to as?
Sales tax or indirect tax
How often is a statement sent to HMRC showing VAT?
Every three months
What is output tax?
VAT charged on sales
What is input tax?
VAT charged on purchases
What is a trade discount?
A discount offered because the customer is regular, and incentive for a new customer to buy or because the customers in the same trade is the supplier
When is the discount shown on the invoice?
A deduction from the list price before arriving at the net total
What is a bulk discount?
A percentage reduction offered because the customer order is large
When is the book discount shown on the invoice?
Shown as a deduction before arriving at the net
If trade and book discount is offered, which is calculated first
Calculate the book discount on the amount after the trade discount has been deducted
If trade and book discount is offered, which is calculated first
Calculate the book discount on the amount after the trade discount has been deducted
What is prompt payment discount?
A discount this is offered to encourage the customer to pay the invoice earlier
Where is the prompt payment discount displayed?
It is noted at the bottom of the invoice in the terms section
How do you work out VAT for trade and book discounts?
You work out the VAT after you have the net amount
What should should be issued in honour of a prompt payment disc
Credit note
