Lesson Five

Question 1

What are the positive figures on the debit side of a VAT account?

Answer 1

Purchases DB and Cash book (payments).

Question 2

What are the negative figures on the debit side of a VAT account?

Answer 2

Purchases return DB and Discount received DB.

Question 3

What are the positive figures on the credit side of a VAT account?

Answer 3

Sales DB and Cash Book (Receipts)

Question 4

What are the negative figures on the credit side of a VAT account?

Answer 4

Sales return DB and Discount allowed DB.

Question 5

What does a Vat account not have ?

Answer 5

A balance brought down and forward.

Question 6

What is another name for bad debt relief?

Answer 6

Irrecoverable debt

Question 7

Where would bad debt be on a VAT account?

Answer 7

Debit side

Question 8

What are the four conditions for bad debt relief ?

Answer 8

1. Debt has to be more than 6 months and less than 4 years and 6 months.
   2.Written off in our account
   3.Value of goods must not exceed market value
   4.Debt not been sold or factored to third party.

Question 9

Where would postponed import be on a VAT account?

Answer 9

Both debit and credit side of the VAT account.

Question 10

What side would a petty cash be on a VAT account?

Answer 10

Debit side

Question 11

If input is more than output in a VAT account , what does it mean?

Answer 11

It means that HMRC owes you.

Question 12

If output is more than input in a VAT account , what does it mean?

Answer 12

It means you owe HMRC.

Question 13

If you overpaid vat in the last quater what side do you need to put it on in the vat account?

Answer 13

debit side

Question 14

If you underpaid vat in the last quater what side do you need to put it on in the vat account?

Answer 14

credit side