3.1 VAT CONCEPTS
Change the underlined parts in the following sentences to make the statements TRUE - NSC Accounting - Question 3 - 2016 - Paper 1
Question 3
3.1 VAT CONCEPTS
Change the underlined parts in the following sentences to make the statements TRUE. Write the answer next to the question number (3.1.1–3.1.3) in t... show full transcript
Worked Solution & Example Answer:3.1 VAT CONCEPTS
Change the underlined parts in the following sentences to make the statements TRUE - NSC Accounting - Question 3 - 2016 - Paper 1
Step 1
3.1.1 Input VAT is VAT charged to customers.
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Answer
Input VAT should be corrected to Output VAT since it refers to VAT charged to customers, not input received.
Step 2
3.1.2 VAT is payable to the South African Reserve Bank.
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Answer
The statement should read VAT is payable to the South African Revenue Services (SARS).
Step 3
3.1.3 VAT is charged at 14% on fruits and vegetables.
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Answer
This statement is corrected as VAT is actually charged at 0% on certain basic food items, including fruits and vegetables.
Step 4
Calculate the correct amount of VAT the business has to pay. Show ALL workings.
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Answer
Starting with the initially calculated VAT payable of R43 820:
Calculate the adjustments:
Add sales invoices omitted from the Debtors' Journal: R10 830
Subtract damaged goods returned to suppliers excluding VAT: R16 600
Subtract VAT on sundry business expenses omitted: R6 818
Subtract VAT on discounts received: R75
Add VAT on bad debts recovered: R112
Adjusting for the VAT Control Account difference: Varies depending on established amounts.
