2.1 VAT
2.1.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 2 - 2017 - Paper 1
Question 2
2.1 VAT
2.1.1 Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question number ((a)–(d)) in the ANSWER BOOK.
(a) VAT p... show full transcript
Worked Solution & Example Answer:2.1 VAT
2.1.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 2 - 2017 - Paper 1
Step 1
Choose the correct word(s) for (a)
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Answer
The correct word is input VAT as it refers to VAT the business can reclaim from SARS.
Step 2
Choose the correct word(s) for (b)
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Answer
The correct word is credit balance. A credit balance in the VAT control account means the business owes VAT to SARS.
Step 3
Choose the correct word(s) for (c)
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Answer
The correct word is decrease. VAT on drawings of stock reduces the overall VAT payable to SARS.
Step 4
Choose the correct word(s) for (d)
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Answer
The correct statement is that VAT on salaries/electricity will not be accounted for in the VAT calculations as they are not reclaimable.
Step 5
Calculate the VAT amounts for (a)
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Answer
For the credit note issued (i.e., DAJ), VAT will decrease the amount owed to SARS because it refers to a refund for goods. Therefore, the cross should be marked in the corresponding column.
Step 6
Calculate the VAT amounts for (b)
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Answer
The cash register tape (i.e., CRJ) will increase the amount owed to SARS. The cross should be placed in the increase column.
Step 7
Calculate the VAT amounts for (c)
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Answer
For the invoice received (i.e., CJ), it will increase the amount owed to SARS as this VAT input will be accounted for. Mark accordingly.
