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Post Info TOPIC: Accruals & Prepayments
Lisa


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Accruals & Prepayments
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Hi.  I'm having a completely blank moment and hope some-one can help me!

When preparing prepayments and accruals - what happens to the VAT on the invoice being adjusted?

Thanks!

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Wendy


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Hi Lisa. Quite simply nothing happens to the VAT. If the business is VAT registered you would provide for the net amount of the accrual/prepayment. If the business is not VAT registered you would provide for the gross amount of the accrual/prepayment. The VAT is only relevant when you provide for trade creditors or trade debtors, not provisions.

Wendy

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Lisa


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Hi Wendy,

Thank you so much for your help.  Thankfully this is exactly how I approached the journals so no further adjustments required.

I'm new to using forums but I think I will be using it much more!

Thanks again.

Lisa




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