VAT

Question 1

definition

Answer 1

consumption tax on the value added to goods and services

Question 2

output VAT

Answer 2

VAT you collect from customers when you sell
- holding for government (liability)

Question 3

output VAT credit sale entry

Answer 3

D: (430) Trade Recievables
C: (700) Sales on Merchandise
(477) Output VAT

Question 4

output VAT cash sale

Answer 4

D: (572) Cash in Banks
C: (700) sales of merchandise
(477) Output VAT

Question 5

Input VAT

Answer 5

VAT you paid on your own purchases (gov. “owes” you: asset)

Question 6

input VAT credit purchase

Answer 6

D: (600) Purchase of merchandise
(472) input VAT
C: (400) trade payables

Question 7

input VAT cash purchase

Answer 7

D: (600) Purchase of merchandise
(472) input VAT
C:(572) Cash

Question 8

input VAT expense invoices Transport Expense (example)

Answer 8

D: (624) transport expense
(472) input VAT
C: (410) creditors for services rendered

Question 9

input VAT buying fixed assets

Answer 9

D: (21) PP&E
(472) input VAT
C: (523) payables for fixed assets

Question 10

VAT payable

Answer 10

output VAT - input VAT

Question 11

case 1 end of period

Answer 11

Output VAT> Input VAT

Question 12

case 1 entry

Answer 12

1. self assesment
   D: (477) output VAT
   C: (472) input VAT
   (4750) VAT payable (difference)
2. when company pays
   D: (4750) VAT payable
   (572) cash

Question 13

case 2 entry

Answer 13

Input VAT > Output VAT (tax authority owes you)

Question 14

Input VAT > Output VAT entries

Answer 14

D: (477) output VAT
(4750) VAT recievable
C: (477) input VAT