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:
- Debit Sales £5,000, Debit VAT £1,000 and Credit Receivables £6,000
- Debit Sales £4,000, Debit VAT £1,000 and Credit Receivables £5,000
- Debit Receivables £6,000 and Credit Sales £5,000, Credit VAT £1,000
- 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
- Not correct
- Not correct
- Correct
- Not correct
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