SLCA/PLCA double entry

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Rae
Rae Registered Posts: 3 New contributor 🐸
in General discussion
Hi,

I am a distance learner and started IA last week (Chapter 30)...

I'm a bit confused on debits and credits in the SLCA and PLCA accounts... I thought I had it but when I tried the workbook for Chapter 6 - Cash receipts, it is telling me that the VAT should be on the Cr side of the VAT ledger where as if the SLCA is showing on the cr side then surely the vat should show on the dr side????

Is there an easy way of remembering this?

Any help much appreciated!

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  • NeilH
    NeilH Registered Posts: 553 Epic contributor 🐘
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    Hi

    The entry for a sales ledger invoice in the SLCA would be to Dr SLCA with the total amount due and Cr VAT with the VAT amount and Cr sales with the net value. This would then show the full amount owed from the customer as an asset/Dr in the balance sheet, the VAT due to HMRC as a liability/Cr in the balance sheet and the net value as a sale/Cr in the P&L.

    Hope this helps.
    Neil

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