Vat

Hello All,

When completing the double entrys for e.g. disposal of non current assets, am I correct in saying that we do not include vat?

I came across a question in the ACPR exam that stated that the machinery was purchased for £2480 excluding vat, was part exchanged for £1900 including vat. Because of the confusion I answered this question wrong as I deducted vat from the £1900 figure.
What is the difference between including vat, excluding vat and plus vat? And what points through accounting entries do I use them?

TIA

Answers

  • Adele69Adele69 CambridgePosts: 320AAT Student
    I can only guess if the company isn't VAT registered then they couldn't reclaim the output tax and therefore the full amount would be VAT inclusive as this came up in class when we did VAT for vehicles, but hope this doesn't come up in this exam. I'm doing the ACPR exam tomorrow, last day of revision.

    Seems deliberately mean of the examiners like the Irrecoverable debt not clearly worded as repayment so fretting over a credit balance where one isn't expected on an ETB.
  • rakeshsuwalrakeshsuwal LondonPosts: 79Registered
    Hello, in ACPR you only focus on disposal amount and date.
    Vat inclusive is the gross amount. Vat exclusive and amount plus vat are net figure (add vat).
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