Accounting Multiple Choice Question – 7 September 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

A firm which sells goods, all of which are exempt from VAT . . .

Select ONE answer:

  1. A cannot be charged VAT by any of its suppliers.
  2. cannot be charged VAT by those who supply services to it.
  3. is charged VAT by its suppliers, but may reclaim all of this VAT from HMRC.
  4. is charged VAT by its suppliers and cannot recover all of this VAT from HMRC.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Incorrect – The firm will be charged VAT on the purchase of goods, services and other items which are not exempt or zero-rated.
  2. Incorrect – The firm will be charged VAT on the purchase of services which are not exempt or zero-rated.
  3. Incorrect – Firms selling goods which are exempt from VAT cannot reclaim VAT paid by them on purchases.
  4. Correct

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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