level: Sales & Purchases (Sales Tax)
Questions and Answers List
level questions: Sales & Purchases (Sales Tax)
| Question | Answer |
|---|---|
| What are the key accounting standards examinable in this paper relating to sales and purchases? | IAS 18 & IFRS 15 |
| What are two of the main topics in the sales and purchases topic of Syllabus Section D? | - Accounting for discounts - Sales Tax |
| What is the net selling price? | The amount that the entity will recognise as sales income and is the amount exclusive of tax. |
| What is the gross selling price? | The price charged to the customer and the price that is inclusive of tax. |
| When sales tax needs to be accounted for what difference is there to the normal purchasing records? | There needs to be a sales tax account which is the payables/receivables account with the tax department. |
| How is sales tax paid recorded? | Dr. Purchases Dr. Sales Tax Cr. Cash/payables |
| How is sales tax charged recorded? | Dr. Receivables Cr. Sales Cr. Sales Tax |