Day: September 9, 2019

If the total of sales, including VAT at the rate of 10%, amounts to £1,800, the total of sales excluding VAT amounts to:

Select ONE answer:

1. £1,620
2. £1,636
3. £1,720
4. None of the above.

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

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

The answer is 2

Let Sales (excl. VAT) = 100%
Therefore, Sales (incl. VAT) = 110% = £1,800
Therefore, Sales excl. VAT (100%) = £1,800/ 110 * 100 = £1,636
Proof: £1,636 + 10% — £1,800

For exam purposes, you may find it quicker, and more foolproof, to do this question as follows:
Sales excluding VAT + 10% = £1,800

1. Incorrect – £1,620 + 10% = £1,782
2. Correct £1,636 + 10% = £1,800
3. Incorrect £1,720 + 10% = £1,892
4. incorrect

 

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