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31 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is the double entry for Sales returns |
Dr Sales/Sales Rtns Cr Receivables |
Opposite of a normal Sale double entry |
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What is a credit note |
Note showing them the amount they no longer own |
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What is the double entry for Purchase returns |
Dr Payables Cr Purchase/Purchase Rtns |
Opposite of normal double entry |
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What is a debit note |
Formal request for a credit note |
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Explain using a T account why sales will be £25,000 and purchases will be £18,000 on the accounts |
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What are the 2 types of discounts |
Trade and Early Settlement |
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What is the definition of trade discount |
Reduction in the cost of goods usually from bulk buying/certain type of customer |
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Do you apply the trade discount from the list price |
Yes, it is always deducted from the list price |
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What is a settlement discount |
A reduction in the amount in return for immediate or early cash payment |
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How is the Settlement discount applied to the customer |
If Expected then sale includes (Net) the settlement discount If not expected then sale doesn't include discounts |
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What happens if behaviour is not expected |
Accounts are adjusted at point of receipt |
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What would double entry be for credit sale of £1000 with 5% discount if paid within 7 days IF customer expected to pay early |
Dr Rec 950 Cr Sales 950 |
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What would double entry be for receipt of credit sale of £1000 with 5% discount if paid within 7 days IF customer pays early |
Dr Cash 950 Cr Rec 950 |
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What would double entry be for receipt of credit sale of £1000 with 5% discount if paid within 7 days IF customer pays late |
Dr Cash 950 Cr Rec 950 Cr Sales income 50 |
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What would double entry be for credit sale of £1000 with 5% discount if paid within 7 days IF customer expected to pay late |
Dr Rec 1000 Cr Sales 1000 |
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What would double entry be for receipt credit sale of £1000 with 5% discount if paid within 7 days IF customer pays late |
Dr Cash 1000 Cr Rec 1000 |
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What would double entry be for receipt credit sale of £1000 with 5% discount if paid within 7 days IF customer pays early |
Dr Cash 950 Dr Sales Income 50 Cr Rec 1000 |
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What is the double entry for refunds |
Dr Receivables Cr Cash |
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What is an example of indirect tax |
VAT |
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What is Vat tax (Number) |
20% |
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What is output tax |
Tax that businesses charge to customers, on behalf of HMRC |
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What is input tax |
Tax that businesses are charged when purchasing, that are recoverable against what they have to pay to HMRC |
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Enter the double entry for £100 Purchase on credit, with VAT @ 20% |
Dr Purchase 100 - Net Tax Cr Payables 120 - since you pay full amount Dr VAT Control - since HMRC owe you |
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Enter the double entry for £100 sale on credit, with VAT @ 20% |
Dr Receivables 120 Cr Sales 100 Cr VAT Control 20 - That's what you owe to HMRC |
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General Note |
Receivables and Payables are gross (with) of tax Sales, Purchases and assets are net (without tax) |
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What is the purpose of a sales/VAT Control account |
Shows amount owed to or from HMRC, this will be a Receivable or payable in SFP |
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What does VAT apply to |
Most goods and services |
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What does Zero rate apply to |
Non luxury foods, children's clothes and they can still recover VAT on their purchases |
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Who does Exempt apply to |
Health, burial. They cannot charge or recover VAT from HMRC |
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What does direct tax mean |
Directly charged at source eg Income |
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Complete question |
Net Pay 272.72 CoE 389.61 |
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