Sales Tax (part a) – ACCA Financial Accounting (FA) lectures
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Hi!! I wanted to thank you for amazing lectures, it helps me so much to understand. I wanted to know in what lecture i can see the explanation for discounts? Im having difficulties with settlment and trade discounts and their double entry :/
Discounts are dealt with in Chapters 16 and 19 (although the lectures are really supposed to be worked through in chapter order given they are a complete course for Paper FA).
hello tutor, thanks for the lecture. on example 2 and 3 me am getting 100.8 and 181.5. am wondering how your getting different answers.
I do not know how you got your answers because you have not shown your workings. What I show in the lecture is correct.
wow, amazing illustration mr Moffat!
Thank you 馃檪
dear tutor how about if i do 0.16*120=19.2(tax)
than subtract 19.2-120 =100.8(THE NET PRICE)
AND THAN IF Add the two values i get the gross figure
19.2+100.8=120
It doesn’t matter how you do your workings, as long as you get the correct answer 馃檪
thanks dear tutor
You are welcome 馃檪
John ‘Picasso’ Moffat should consider selling his immaculate drawing of the sheep as an NFT
Thank you 馃檪
I’m sorry, professor, but I don’t understand why when calculating the inclusive tax, you suddenly add 1 point to 1.16X, 1.175X uuu
Multiplying a figure by 1.16 is the same as adding 16% to the figure. Try it yourself and check 馃檪
Thank you sir,
This lecture was helpful and the sheep example given, made the whole concept easy to understand. Now I understood the sales tax perfectly. 馃檪
That’s great – thank you 馃檪
Thanks for this important video lecture sir, I finally understand the concept of VAT.
You know I was trying another calculation, and it was messing up my answer – maybe would know the reason.
For eg 2 for instance, To find the tax exclusive price, I tried this = 120 x 0.84 [Because to find value inclusive we can add 0.16 to 1 and make it 1.16 and then multiply to get the number 120, then why not the other way be possible 1-0.16= 0.84. Use this reversed number and multiply it with 120 to find the exclusive price?). And the answer was 100.8.
The correct answer was 120/1.16 = 103.45
120/116 x100 = 103.45.
I wonder where the logic went wrong…
Because you鈥檙e saying you鈥檙e taking 0.16 from 1 to make 0.84 of 120. But the tax isn鈥檛 0.16 of 120. It鈥檚 0.16 of the net price which is 103.45.
Thank you so much
The drawing really picasso haha,
John has a gift .
hello Sir!
Not your question but sales tax related. The following trans took place during Alan’s first month of trading
Credit sales of $121000 exclusive of sales tax
Credit purchases of $157110 inclusive of sales tax
Cash payments to credit suppliers of $82710 inclusive of sales tax
all transactions are subject to 20% sales tax- What was Alan’s sales tax account at the end of his first month of trading?
I answered : 15770 DR but answer was $1985 DR. Why was the cash payment sales tax not counted on Alan’s Sales tax account because he would have separated it so he could claim it back? I know its not your question but intrigued
In future please ask this sort of question in the Ask the Tutor Forum, and not as a comment on a lecture.
The cash paid is not for extra purchases. It is payment of part of the amount for the purchases on credit. The sales tax is accounted for then the purchases were made.
yusifbayli: Thank you for the comment 馃檪
All lessons very useful thanks for everything.
Hi,
Thanks for the lectures, they’re very helpful.
I am struggling with your example as in if the tax is on the final price of the product the your example doesn’t add up as 20% of 12 is 2.4 and 20% of 6 is 1.2 and so on.
Never mindI just realised this is VAT not normal tax.
I am pleased that you have sorted it out 馃檪