3.1 VAT CONCEPTS Change the underlined parts in the following sentences to make the statements TRUE - NSC Accounting - Question 3 - 2016 - Paper 1

The correct statement should be: VAT is payable to the South African Revenue Services (SARS).

The correct statement should be: VAT is charged at 0% on fruits and vegetables.

Starting from the given amount of VAT payable R43 820:

1. Adjustments to the VAT:

   • Add back omitted sales invoices: $R10,830$
   • Subtract damaged goods returned (excluding VAT): $16,000 / (1 + 0.14) = R14,035.09$ (approx.)
   • Subtract VAT on sundry business expenses: $6,818$
   • Subtract VAT on discounts received from suppliers: $756$
   • Add back VAT on bad debts recovered: $184$
   • Subtract VAT on the wrong side of VAT Control Account: $R0$

2. The calculation becomes:

$ext{Correct VAT payable} = 43,820 + 10,830 - 14,035.09 - 6,818 - 756 + 184$

3. Simplifying this gives:

$43,820 + 10,830 - 14,035.09 - 6,818 - 756 + 184 = 41,620.91$

Thus, the final amount of VAT payable is approximately R41,621.