VAT on the receipts (dr) side of cash book
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Hi there,
I have been completing past exam papers in readiness in June and have come across a few where there has been VAT payments on the payments (CR) side of the cash book but have never come across any on the DR side of the cash book, would there be vat payments on the receipts (money in/DR) side and would i seperate the vat and deduct from the total as per the payments side, or would i add the vat on?
Basically, in an exam paper trial balance, would i ever see vat on the dr side of the cash book, and what would i do with it?
Thanks in advance!
Ben.
I have been completing past exam papers in readiness in June and have come across a few where there has been VAT payments on the payments (CR) side of the cash book but have never come across any on the DR side of the cash book, would there be vat payments on the receipts (money in/DR) side and would i seperate the vat and deduct from the total as per the payments side, or would i add the vat on?
Basically, in an exam paper trial balance, would i ever see vat on the dr side of the cash book, and what would i do with it?
Thanks in advance!
Ben.
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Comments
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Re:VAT on the receipts (dr) side of cash book
We were told you probably wont see VAT in a dr balance but I guess if you do you just put it on the Dr side of the trial balance...0 -
Re:VAT on the receipts (dr) side of cash book
If there is a Vat on the DR side of the cash book,
I Would seperate the Vat from the income account.
For example in Dr Side of Cash book:
On the 3rd of June Rent Recievable 235 including VAT of 35
On the Rent RecievaLble A/C Cr 200
On the VAT A/C Cr 35
Bank would be to Dr 235
although we don't do the other part of the double entry in the bank A/C because in the exam they would update all the transactions and give you the closing balance.
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