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Hi John,
This isn’t directly linked with the F3 exam, but at my work we have two ledgers for sales tax.
We have a “VAT Recoverable” asset ledger and a “VAT Liability” ledger.
I can’t understand the logic behind having two separate ledgers.
Isn’t it just more work, when you would otherwise just balance off and have your amount “owing” or “owed”?
Just wondered if you might know why it’s done like that, as I didn’t get a good answer here. 🙂
Many thanks!
Andrew
In future please ask in the Ask the Tutor Forum if you want me to answer 🙂
You are correct in that they could achieve the same result by just using one account. I can only think that maybe they find it makes it easier to complete the VAT returns by having two ledgers.
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