I wonder if anybody can help me with my DE book keeping exercise? My homework is double entry (including entries into VAT ledger), where the VAT is calculated at 10%. Here is the scenario:
I sell goods on credit to Mr Brown for £80.00 (plus VAT) - I have therefore entered this as a credit in my sales account of £80.00, and a credit in my VAT a/c of £8.00 (totalling the sale of £88.00).
I have entered it as a Debit in the account of Mr Brown for £88.00.
Mr Brown then returns half of the goods to me. How do I enter this detail into the relevant accounts - I am completely lost!
Any help much appreciated. I hope my question makes sense.
Basically a part reversal of what you have already done.
does your system of learning use a Sales Return day book or is it all kept within a single ledger? Lets assue single ledger as it keeps it nice and simple to write out.
The basic principle is that you would issue a credit note for £40 (plus VAT).
Initial sale would be :
Cr Sales account £80
Cr VAT account £8
Dr Mr Brown £88
On receipt of the returned goods issue credit note and :
Dr Sales account £40
Dr VAT account £4
Cr Mr Brown £44
A sales returns ledger would have kept sales and returns separate but the reality is pretty much the same result as a single ledger approach.
How are you finding your study materials?
Which professional qualification are you working towards?
Which books are you using to study it? (BPP? Kaplan? Osbourne? training providers home brand? etc).
Talk later,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Many thanks for your reply. I am study City and Guilds, it all gets explained very quickly at college and it's not until I get home and do the exercises I can work it out. It would help if we were given the answers then I could understand it better.
for this level try buying the book "Accounting Skills" by Margaret Nicholson for additional reference material which will really help you with the course.
Hope that helps,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
sure that I'm going to sound dumb here Peasie but what is A/S/L?
Bet as soon as you tell me I have a Doh! moment.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
ignore me Peasie. Its Age / Sex / Location isn't it...
lol. See what you mean.
We'll have to coin a new one. CQM (Course / Qualification / Materials)... Nowt better than a good Mnemonic.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
