Answer to Question #87875 in Accounting for Nhlaphu

Question

State in each case below whether the transaction includes VAT .give a brief exaplanation for each answer.

1-purchase of a delivery truck from TATA ,a VAT vendor .
2-purchase of fuel from a VAT vendor.
3-pay employees monthly salaries.
4-sell goods worth R10 000 to receivable D.
5-purchase of a computer for business use from a non-VAT vendor.

Answer 1

1-purchase of a delivery truck from TATA ,a VAT vendor - the transaction includes VAT because it is used for business;

2-purchase of fuel from a VAT vendor - the transaction includes VAT if a vehicle is used for business;

3-pay employees monthly salaries - the transaction does not include VAT because any goods and services do not participate;

4-sell goods worth R10 000 to receivable D.- the transaction includes VAT, which will pay buyer;

5-purchase of a computer for business use from a non-VAT vendor. - the transaction does not include VAT because the seller is a non-VAT vendor.