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During the quarter ended 31 march 2022, a company received standard rated invoices totalling 56400 (inclusive of Vat) in respect of purchases and expenses. As at 31 march 2022, 11400 (inclusive of Vat) of the purchases were unsold and therefore included in inventory.
Why would the unsold purchases included in inventory of 11400 not be deducted from total invoices of 56400 for purchases and expenses when calculating the vat liability
Because they have been purchased and accounted for, so the total needs to be dealt with for VAT purposes