Home For AAT student members AQ 2016 Advanced Diploma in Accounting Indirect Tax
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

Mock assessment question

JoannawangJoannawang Registered Posts: 3
Hi everyone, I've got a question from mock sample 1 of undetected tax, hope I can get some help here. So for task b, my understanding is we should take vat of van out of sales first as the business recorded gross sale in daybook. So I worked it as (137591.16-1040)*0.2+1040=28350.23, however AAT answer is simply 27518.23+1040. How come?


  • JoannawangJoannawang Registered Posts: 3
    awww the pics didn't show. how to do pic here? I will just type.
    a business has a sales of £137591.16 from daybook, and vat on sales is £27518.23 in vat account. the business sold a van of £6240, which includes vat of £1040. they recorded the gross in the sales account and made no entry in vat account. later they decided to correct the error. The question asks what would be in box 1 after necessary corrections to the ledge accounts have been made.
  • lannieloolannieloo Registered Posts: 95
    If the gross Amount is entered in your sales account you need to debit sales and credit vat thus adding the 1040 to your vat on sales (the vat your paying to hmrc) balance of 27518.23.
    On a vat return it would need deduction from box 6 and adding to box 1.
    Hope that helps
  • JoannawangJoannawang Registered Posts: 3
    thank you iannieloo
Sign In or Register to comment.