VAT on the receipts (dr) side of cash book

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
Hi there,

I have been completing past exam papers in readiness in June and have come across a few where there has been VAT payments on the payments (CR) side of the cash book but have never come across any on the DR side of the cash book, would there be vat payments on the receipts (money in/DR) side and would i seperate the vat and deduct from the total as per the payments side, or would i add the vat on?

Basically, in an exam paper trial balance, would i ever see vat on the dr side of the cash book, and what would i do with it?

Thanks in advance!

Ben.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on the receipts (dr) side of cash book

    We were told you probably wont see VAT in a dr balance but I guess if you do you just put it on the Dr side of the trial balance...
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on the receipts (dr) side of cash book

    If there is a Vat on the DR side of the cash book,
    I Would seperate the Vat from the income account.

    For example in Dr Side of Cash book:

    On the 3rd of June Rent Recievable 235 including VAT of 35


    On the Rent RecievaLble A/C Cr 200

    On the VAT A/C Cr 35

    Bank would be to Dr 235

    although we don't do the other part of the double entry in the bank A/C because in the exam they would update all the transactions and give you the closing balance.
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