Accounting Multiple Choice Question – 13 February 2024

The VAT account in Alex Trading Ltd’s nominal ledger currently shows output tax and input tax for the quarter at £228,816 and £176,949, respectively.

A detailed review of the account highlights the following matters:

£8,301 of VAT on invoices received has been posted to output tax
VAT of £3,606 on sales has been posted to the debit of the VAT account

The correct amount payable to HM Revenue and Customs is?

Select ONE answer:

1. £47,172
2. £35,265
3. £59,079
4. £42,477

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. Not correct
2. Not correct
3. Not correct
4. Correct – VAT Balance is as follows: Dr Input tax £176,949 + Dr Purchases (£8,301 * 2) £16,602 = £193,551 == > Cr Output Tax £228,816 + Cr Sales (£3,606 * 2) £7,212 = £236,028 == > The difference is £42,477

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