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What would be the effect if any on the calculation of VAT if cash discount was introduced?
There will be less vat.
What is vat payable?
Vat payable is the amount of vat collected on behalf of the tax authority and payable to them. In other words vat payable is an output vat levied on organisation's customers through the organisation's sales invoices for onward remittance to the tax authority subsequently.
What is the Journal entry of Vat payable to bank?
debit bank accountcredit VAT payable
Where do you present the vat payable account in the financial statement?
VAT payable is liability for business and shown in liability side of balance sheet of business.
What is the accounting journal entry to record audit fees with VAT?
To record audit fees with VAT, you would make the following journal entry: Debit the "Audit Fees Expense" account for the net fee amount, debit the "VAT Input Tax" account for the VAT amount, and credit the "Accounts Payable" or "Cash" account for the total amount (audit fee plus VAT). For example, if the audit fee is $1,000 and VAT is $200, the entry would be: Debit Audit Fees Expense $1,000, Debit VAT Input Tax $200, and Credit Accounts Payable $1,200.
What is the Journal entry for sale on credit with VAT?
debit Accounts receivablecredit sales revenueCredit VAT payable
What is accounting treatment for 'vat'?
The accounting treatment for Value Added Tax (VAT) involves recognizing it as a liability when sales are made and as an asset when purchases are made. Businesses collect VAT from customers on behalf of the tax authorities, which is recorded as a liability until it is remitted. Conversely, VAT paid on purchases can be claimed back as input tax, recorded as an asset. Ultimately, the net VAT payable or receivable is reflected in the financial statements, impacting the cash flow and tax obligations of the business.
What are Vat control accounts?
VAT Control accounts are a nominal account used to track amounts of VAT payable and reclaimable by a business during its normal activities. For each purchase and sale an amount equal to the VAT due or receivable in respect of the transaction will be applied to the account. Reviewing the account balance will show the current total liability to HMRC, although that balance may be more than is actually payable if there is a VAT return due.
How do you calculate vat in Ghana?
In Ghana, Value Added Tax (VAT) is calculated by applying the VAT rate, which is currently 12.5%, to the taxable value of goods or services. To calculate VAT, multiply the taxable amount by the VAT rate (e.g., taxable amount x 0.125). For example, if the taxable amount is GHS 1,000, the VAT would be GHS 125. The total amount payable would then be the sum of the taxable amount and the VAT.
WHAT ARE ZRO-RATED ITEMS?
Zero rated items usually relate to goods that are normally subject to Value Added Tax (VAT), but which no VAT is currently payable. For instance, the British Chancellor of the Exchequer may decide not to levy a VAT tax on children's clothes, so children's clothes are rated as zero-rated for VAT.
What is output vat?
This is the value added tax on outputs. Any service or sale that the entity provides is considered an output. This is contrasted with Input Vat which is the tax on any inputs the entity acquires. Inputs being Inventory or Services recieved.For ExampleSales 100Cost of Sales 75VAT: 10%Output Vat100 x 10%= 10 PayableInput Vat75 x 10%= 7.5 ClaimableNet VAT Payable= 2.5 Payable
How do you calculate vat in tally with example?
If you want to find out what the VAT portion is of a sum, you multiply it by .85106. So if you have £117.50 (ie £100 + VAT) you multiply £117.50 x .85106 and that will bring you back to £100....
