Double Entry

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:23AM in AAT student discussion
Very basic question, but nevermind - i'm just trying to get my head around this....<BR><BR>When posting entries made in the day book and cash book to the ledgers, what do you do about VAT? Do you post the net figure to the account and the vat to the vat account? How does this keep the double entry?<BR><BR>Could somebody explain this for me!!!!<BR><BR>Thanks

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Double Entry

    For example on the 1st January 2005 you sent out a sales invoices on a credit customer for £117.50 (inclusive of VAT). The entry that would have been posted at that time to your sales day book:<BR><BR>Step 1<BR>Debit Debtors £117.50<BR>Credit VAT £17.50<BR>Credit Sales £100.00<BR><BR><BR>On receipt of the cheque or cash in say 30 days time, it would be:<BR><BR>Step 2<BR>Debit Bank £117.50<BR>Credit Debtors £117.50<BR><BR>If they were cimple paying cash then use step one but replace Debtors with the bank account<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Double Entry

    say for a sales invoice, your double entry is debit debtors control account (in the detail write "sales and vat"), with the gross figure, and credit sales with the net figure (in the detail write "debtors") and vat with the vat figure (and iin the detail write "debtors")
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Double Entry

    when the cash book has a vat amount and a total amount - you have to put the vat in the vat account and deduct the vat off the total and put that in the subsidiary i.e<BR>cash book states - £14 vat and £94 stationery - thats gone out of the bank<BR>put £14 in DR VAT<BR>put £80 in DR Stationery

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