Statement of Cash Flow Direct Method
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moozy7
Registered Posts: 33 Regular contributor ⭐
To adjust for example Sales for cash flow purposes, we look at the sales control account.
My problem is that Sales are ex VAT and Sales Control Account is including VAT.
How does that work please?
My problem is that Sales are ex VAT and Sales Control Account is including VAT.
How does that work please?
0
Comments
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The VAT element goes to the VAT Control Account.
For example, if you sell an item for £100 plus VAT, the transaction will be:
Dr Sales £100
Dr VAT Control Account £20
Cr Sales Control Account £120
The Sales Control Account is a combined debtor account almost like a cash transaction.0 -
Just a slight nitpick Dave, I think you've got your debits and credits the wrong way round!Matthew Dearlove MAAT
Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.0 -
@Cheesypeesy How right you are. Mental note to self, don't give advise when tired.1
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