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VAT stands for value added tax. it is simply a form of compensation tax.
Let suppose a firm paid $ 30,000.00 to the government under the head of value added tax on 30th June 2010. The journal entry will be as follow:
DR: Value Added Tax (VAT) Account $ 30,000.00
CR: Cash / Bank Account* $ 30,000.00
* If payment is made by cash, then Cash Account will be written on the credit side. And if bank draft or cheque is paid, then Bank Account will be written on the credit side.
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Who introduced VAT?
The government, it is a tax
How did the government overcome the Kiel Mutiny?
They paid their debt.
Why is VAT so complicated system?
There are many people, especially business owners, who would like to know why! It's complicated by being a paid in a sort of chain, passed from supplier to customer, on both goods and services. There are also many exemptions on a complex list of goods and services, or "zero-rate" VAT rates - the difference seeming absurd until you realise that the latter implies it would be relatively easy to change the rate - upwards. For example, if I were to buy fish-&-chips to eat at home I would not be charged VAT on them, but I would if I ate them as a meal in the cafe section of the same chip-shop. There are situations in which companies can claim refunds on VAT, or pass it on, paid on certain goods such as road fuel used in the course of the business. Then the VAT rate and exemptions differ markedly from country to country within the European Union - only an organisation like the EU could invent a tax system so wilfully and bewilderingly complicated!
What is the journal entry for salary payable and what when salary is paid to him?
Salary payable A/c Dr 5000 To Cash Cr 5000
Who paid for reconstruction?
The government paid for Reconstruction by increasing taxes throughout the country. This period took place after the American Civil War.
Why is vat collected?
Value Added Tax (VAT) is government applied tax on taxable supplies at different rates most of which is 15% in UK, while lower rate 5% and zero-rate are used as well. Let's say there is a company A,which manufactures cars and sells it to the distributors.Now the company A will charge VAT to distributor and include on the invoice. Now A has simply collected the VAT on behalf of government and has the liability to pay the VAT collected back to government. While the distributor can claim that paid VAT back from the government if the distributor is VAT registered.so by this point, government has actually received nothing,as it returned to the distributor whatever it received from the company A. Now, when the distributor sells the car to end-user, distributor charges VAT to that end-user and collects the VAT again on behalf of government, and pays the VAT collected to the government.As the end-user cannot be VAT registered, so he cannot claim the VAT paid from the government, so the government has now actually received the VAT inflow.
What is VAT output and VAT input?
VAT that is charged by a business and paid by its customers is known as "output VAT" (that is, VAT on its output supplies). VAT that is paid by a business to other businesses on the supplies that it receives is known as "input VAT
What is the Journal entry of Vat payable to bank?
debit bank accountcredit VAT payable
What is the Journal entry for sale on credit with VAT?
debit Accounts receivablecredit sales revenueCredit VAT payable
Journal entry of credit sale with vat?
simpleParty A/c Dr. (inclusive of vat)sale A/c Cr. (exclusive of vat)Vat output Cr.
Who introduced VAT?
The government, it is a tax
How much VAT is paid on Royalties in UK?
VAT in the UK will return to 17.5% from 1 January 2010. (Prior to that it is 15%)
What is the validity period for Form VAT 47 of Rajasthan government?
The validity period for Form VAT 47 of Rajasthan government six months.
Is VAT fixed?
The rate of VAT, and on which items and goods it is to be levied on, is decided by the Chancellor of the Exchequer and the Government.
What is the journal entry of vat adjustment and narration in tally 9?
Tally is a financial accounting with inventory and account only. The journal entry allows for notations, explanations and adjustments. This can be done through a narrative attached to the worksheet.
What is the definition of VAT Qualifying A UK car dealer has advertised a vehicle as UK Supplied Can Be Supplied Vat Qualifying Is there a circumstance where VAT would not be paid on the car?
value added tax
Is VAT direct or indirect?
VAT is an indirect tax as it is based on a tax applied to the manufacture or sale of goods and services. Basically, VAT is mainly added to and paid for by a customer when making a purchase.
