homework help: need help with accounting homework! - Help.com

As I understand it VAT is a tax you must pay when buying goods and then it can be deducted from your overall tax burden.

I am not an accountent,

But it seems to me that VAT would be a credit on your General Journal for your taxes. and it would be a Credit on your Cashbook because it reduces your cash.

well yes, more or less, thank you both very much.

keep watching a sec mate

It depends if its a sale or a purchase - remember, it all goes back to the bank!

Assuming VAT rate of 17.5%

So, if a purchase, on credit of £100 +vat

Dr Cr
VAT Account 17.50
Purchases(p&l) 100.00
Creditors(Bal) 117.50

and, if a sale of 200 + vat

Dr Cr
VAT Account 35.00
Sales(p&l) 200.00
Debtors(Bal) 235.00

so, when the debtor is paid here

Debtors(Bal) 235.00
Bank 235.00

Basicly, the gross amount (i.e net+vat=gross) - the gross goes to the balance sheet (debtors/creditors or bank), and the rest goes on the other side, split between the accounts

does this help?

heh! doesn’t like spaces! - sec..

So, if a purchase, on credit of £100 +vat

VAT Account 17.50dr
Purchases(p&l) 100.00dr
Creditors(Bal) 117.50cr

and, if a sale of 200 + vat

VAT Account 35.00cr
Sales(p&l) 200.00cr
Debtors(Bal) 235.00dr

so, when the debtor is paid here

Debtors(Bal) 235.00cr
Bank 235.00dr

MATHS….RUN AWAY>>>>

Thanks SlightlyUnique

hope it helps! shout me if you need any more help :)

oh..

and the other thing that might help

Output VAT - is vat on Sales (think sales go out)
Input VAT - is vat on purchases (purchases come in)

i remember getting that one muddled up when i took my exams years ago :P

thank you again!