If, for any given accounting period, the total of the debit entries in a firm’s VAT account equals that of the credit entries, thus leaving no balance on the account at the end of the period . . .
Select ONE answer:
- the firm is not a VAT-registered firm.
- the firm deals exclusively in goods and/or services which are exempt from VAT.
- the firm does not owe any VAT to the HMRC on that date.
- None of the above.
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 3
- Incorrect – An unregistered firm would not have a VAT account in its ledger.
- Incorrect – A firm dealing exclusively in goods and/or services which are exempt from VAT would not have a VAT account in its ledger.
- Correct
- Incorrect
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