FRA unit 5

Emilie
Emilie Registered Posts: 37 ? ? ?
Hello,

I was just wondering. i am doing a journal on an invoice and the company is registered for vat but the vat is not recoverable how ould you do the journal.

Example

motor vehicle 25,000
VAt 4,375
admin expenses 1,000

Total 30,375

how would i record this as a journal if you can not recover the vat. would the vat be put in the journal and the account.

I was thinking it would be this
Debit motor vehicle 25,000
debit admin expenses 1000
credit sundry ceditors 26,000.

Please help.

xx

Comments

  • mikes
    mikes Registered Posts: 254
    although the vat is not recoverable, you will still need to pay it. so i would charge it to the vehicle account and credit, the creditors account.
  • Emilie
    Emilie Registered Posts: 37 ? ? ?
    There is no specific crditors account. so would you post to the sundry creditors. please could you give an example of how the journal would be done.
    Thanks,
  • mikes
    mikes Registered Posts: 254
    Sure in this case it would appear as;

    Debit Motor Vehicle 29375
    Debit Admin Expenses 1000
    Credit Sundary Creditors 30375
  • Emilie
    Emilie Registered Posts: 37 ? ? ?
    so you would post the journal to the accounts not using the vat account. so put the vat in with the motor vehocle and post all to the motor vehicle account.
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