fra dec 2003

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Can anyone explain why in part 2 of FRA Dec 03 exam question b about writing off a bad debt of £560 does not need vat taking into account when they have told you on previous page the company are registered for vat and all sales are vatable? how are you supposed to know not to amend the vat account?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    fra dec 2003

    You can only reclaim the vat after the debt has been bad for 6 months I think!!!<BR><BR>Bad debts is a expense a company has to pay when the other company wont pay up so its there job to pay the full amount of debt.<BR><BR>How did you get on with this exam??<BR>I have just this minute finished marking it!!<BR><BR>Amanda
  • System
    System Posts: 100,534 🤖 Admin 🤖
    fra dec 2003

    Hi <BR><BR>To reclaim Vat the debt has to be 6 months over your usual credit terms, ie if you allow a customer 1 month to pay their debt, then you could only reclaim it after 7 months if they went out of business. Also you can only reclaim VAT if you have already paid your contribution to HM Customs & Excise, and the debt needs to have been written off in your accounts system.<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    fra dec 2003

  • System
    System Posts: 100,534 🤖 Admin 🤖
    fra dec 2003

    Amanda<BR>Did ok thanks. do know about the six month rule but it didn't state on the paper how old the debt was. i suppose you have to assume its less than six months if it crops up in the real exam. We've got very little revision material and its beginning to worry me.<BR>hope you do ok.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    fra dec 2003

    Have you been on the MSN site??<BR><BR>Do FRA Sims, there cover the unit in more detail so if you manage the sims you will easy manage the exam.<BR><BR>Amanda

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