Module 6

Question 1

What is input VAT and what do you do with it?

Answer 1

Debit it

From purchases

Question 2

What is output vat and what do you do with it?

Answer 2

Credit it

From sales

Question 3

Is vat in the P+L or balance sheet?

Answer 3

Only in the balance sheet

It isn’t an income

Question 4

Sales consists of what VAT?

Answer 4

Output VAT

Question 5

Purchases consist of what VAT?

Answer 5

Input VATH

Question 6

What goes into the Balance Sheet?

Answer 6

Assets
Liabilities
Capital

Question 7

What goes into the P+L

Answer 7

Income

Expenses

Question 8

Where does accrual go?

Answer 8

Current liabilities in balance sheet

Question 9

Where does accrued income go?

Answer 9

Current asset in balance sheet

Question 10

If in the same year do you debit or credit accrual?

Answer 10

Credit accrual

Debit payment e.g rent, cash

Question 11

If in the following year what do you do with accrual?

Answer 11

Debit accrual

Credit payment e.g cash, rent etc

Question 12

If in the same year what do you do with prepayments?

Answer 12

Debit prepayments

Credit the payment (rent bank etc)

Question 13

Credits in accrual are always from which year?

Answer 13

That year

Question 14

Debits in accruals are always from which year?

Answer 14

The previous year

Question 15

If in the following year what do you do with prepayments?

Answer 15

Credit prepayment

Debit the payment (rent bank etc)

Question 16

What do you do with accruals and VAT?

Answer 16

Accrual adjustments will not affect the VAT
Can’t normally be reclaimed until invoice received
(Not VAT line item)

Question 17

VAT registered companies means

Answer 17

Input vat not treated as expense as it can be reclaimed

Output vat not an income as it must be paid to HMRC

Question 18

Net amount is

Answer 18

Amount excluding VAT

Question 19

Gross amount is?

Answer 19

Total amount inclusive of VAT

Question 20

The cost that is capitalised for a fixed assets is recorded at the?

Answer 20

Net amount (excluding vat)

Question 21

Exception to fixed assets and vat?

Answer 21

Company cars, VAT can’t be reclaimed, so gross amount is capitalised (including VAT)