Help with Mock Test

dumutrobadumutroba AAT Student, AATQB Posts: 254
Hi can anyone help with question 1.2
I think the initial entry is Dr Entertaining Dr Vat Cr Bank
But I need help reversing this
I know the answer, but the logic escapes me




AAT Level 2. 2018 Distinction
AAT Level 3. 2018 Distinction
AAT Level 4. 2019 FSLC 100% MABU 93% MADC 82% PDSY 80%
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Comments

  • davealucasdavealucas LondonMAAT Posts: 59
    You don't need to make any adjustments to the bank account as the money has (in theory) already been paid. What is needed is an adjustment removing any recoverable VAT and converting it to an expense. You cannot recover VAT incurred for entertaining your clients (except overseas clients).

    The journal will need to debit the entertaining account and credit the VAT Control Account for the VAT element which would appear to be £210.
  • dumutrobadumutroba AAT Student, AATQB Posts: 254
    Thank you for your answer, much appreciated
    AAT Level 2. 2018 Distinction
    AAT Level 3. 2018 Distinction
    AAT Level 4. 2019 FSLC 100% MABU 93% MADC 82% PDSY 80%
    Xero Certified Advisor
  • dumutrobadumutroba AAT Student, AATQB Posts: 254
    Thank you for your answer
    Much appreciated
    AAT Level 2. 2018 Distinction
    AAT Level 3. 2018 Distinction
    AAT Level 4. 2019 FSLC 100% MABU 93% MADC 82% PDSY 80%
    Xero Certified Advisor
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