Day: February 10, 2024

Alex is a VAT registered trader whose sales and purchases carry VAT at the standard rate of 20%.

Alex sells a customer goods on credit for £5,000 exclusive of VAT.

The double entry to record this transaction in Alex’s book is?

Select ONE answer:

1. Debit Sales £5,000, Debit VAT £1,000 and Credit Receivables £6,000
2. Debit Sales £4,000, Debit VAT £1,000 and Credit Receivables £5,000
3. Debit Receivables £6,000 and Credit Sales £5,000, Credit VAT £1,000
4. Debit Receivables £5,000 and Credit Sales £4,000, Credit VAT £1,000

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

1. Not correct
2. Not correct
3. Correct
4. Not correct

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