Needs help stuck on a question

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
Hi,
Please can any one help.

There is a new supplier without a credit account so payment will be made by cheque on delivery. Make notes on how this will be analysed in the cash payment book. Do you know which account I will debit and credit.

Thanks,

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Needs help stuck on a question

    Since this is a cash customer, you would post as follows;

    For example, cheque amount is £100 plus £17.50 VAT = £117.50 gross amount

    Debit the Cash Book Received (or bank) account with the £117.50 cash sale proceeds
    Credit the sales account with £100.00
    Credit the VAT account with £17.50

    If this was a sale made on credit you would;
    Debit the sales ledger control account (plus the relevant subsidiary account) for £117.50
    Credit the sales account for £100.00
    Credit the VAT account for £17.50

    Then once the credit customer pays the invoice you would;
    Debit the Cash Book received (or bank) account with the £117.50 credit sale proceeds
    Credit the sales ledger control account (plus the relevant subsidiary account) for £117.50

    Click the link below to read some of my other similar replies!

    http://www.aat.org.uk/forums/posts/list/14477.page

    Kind regards,

    Robert
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Needs help stuck on a question

    Hi would this be the same for Purchase ledger.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Needs help stuck on a question

    Yes, but the entries are the other way round for purchases. What's essential here is not that I/we simply give you the answers but that - in time - you can demonstrate and understand the logic behind them.

    Regards,

    Robert

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