ICAEW AF · Chapter 4 · Question 6 of 8
The sales day book for the month shows total net sales of £37,100, VAT of £7,420 and gross total of £44,520. What entry is made in the VAT account when the day book is posted?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Credit £7,420
Explanation
The day book totals are posted as: debit trade receivables control £44,520, credit revenue £37,100, and credit VAT £7,420. Output VAT on sales is owed to the tax authority, so it is a credit (liability) entry in the VAT account.
More Sales tax (VAT) MCQs
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