How VAT is recorded in the day books
Every invoice is split into net, VAT and gross in the day book. See how the VAT column total reaches the VAT account.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
Task 1The sales day book3 questions
A day book lists invoices before they reach the ledger. With VAT, each invoice is split across three columns: net, VAT and gross.
| Customer | Invoice | Net | VAT | Gross |
|---|---|---|---|---|
| Hopscotch Play Café | 3120 | 370.00 | 56.00 | 426.00 |
| Meadow Lane Hotel | 3121 | 1,250.00 | 250.00 | 1,500.00 |
| Fern Hill School | 3122 | 180.00 | 0.00 | 180.00 |
At the month end the three column totals are posted. The gross total is debited to Trade receivables. The net total is credited to Sales. The VAT total is credited to VAT, as output tax.
Task 2The purchases day book4 questions
Task 3Credit notes in the day books3 questions