FAC with 100% correct questions and answers

Source Document Proof that a transaction occurred Cash Transactions effect? Bank Account, Petty Cash and or Cash Float Business Transaction a record of a large number of transactions an entity is engaged in . Business Document Details Date, amount, type of transaction and with whom Internal source document documents prepared by an entity to record transactions with external clients. Source documents are drawn up in... Duplicates (Internal Source Document) ... is given to the clients and ... is kept by the entity. Original - Diplicate Cash Register Roll (Internal/External Source Document) Internal Source Document Duplicate Cash Sales Invoice (Internal/External Source Document) Internal Source Document Duplicate Reciepts (Internal/External Source Document) Internal Source Document Cheque Counterfoils (Internal/External Source Document) Internal Source Document Petty Cash Vouchers (Internal/External Source Document) Internal Source Document Duplicate Bank Deposit Slips (Internal/External Source Document) Internal Source Document Internet Banking: Notice of Payment (Internal/External Source Document) Internal Source Document Signed Credit Card Slip (Internal/External Source Document) Internal Source Document External Source Documents also know as- Supporting Documents External Source Documents are prepared by... the other party and received as proof of payment. External Source Documents are usually originals Original Cash Purchases Invoices (Internal/External Source Document) External Source Documents Original Slips (Internal/External Source Document) External Source Documents Cheques (Internal/External Source Document) External Source Documents Cash Slips (Internal/External Source Document) External Source Documents What must be determined when opening a bank account. persons who are authorized to sign cheques issued by an entity. Who requires a sample of signatures before opening a bank account for an entity? The Bank VAT value added tax When is it compulsory to register as a vendor? Total value of his taxable supplies exceeds R 1 000 000 for a 12 month period. Who needs to register as a Vat vendor? the owner Tax Period How often a tax return must be completed and submitted to SARS Category A - Vendor Period Periods of 2 months beginning with January Category A - Vendor Taxable Supplies must not exceed R 30 Million Category A - Vendor Taxable Supplies (Farmers) Exceed... R 1.5 Million Category B - Vendor Tax Period 2 Months beginning with February Category B - Vendor Taxable Supplies not exceeding R 30 Million Category B - Vendor Taxable Supplies (Farmer) exceeding R 1.5 Million Category C - Vendors Tax Period One month Category C - Vendors Taxable Supplies exceed R 30 million Category D - Vendors Tax Period 6 Months beginning with February Category D - Vendors Taxable Supplies not exceeding R 1.5 million VAT value added tax VAT Definition tax levied on goods or services. Current VAT amount of South Africa 15% Previous VAT amount of South Africa 14% Input Tax VAT on purchases of goods and services. Claimed back from SARS Output Tax VAT charged on the supply of goods and or services. Amount paid to SARS Input Tax is larger than Output Tax - Claims the amount of the difference from SARS. (Refundable) Output Tax is larger than Input Tax - the difference is payable to SARS. Ledger Accounts of VAT (3) VAT Input Account VAT Output Account VAT Control Account Purpose of the VAT Control Account to determine the amount refundable/payable to SARS At the end of the month the VAT Input and Vat Output account is closed of to the VAT Control Account Name the two types of accounting basis used by a vendor to determine the tax payable: The Invoice Basis The Payment Basis Invoice Basis Output Tax and Input Tax is accounted for when an invoice is issued or on receipt of payment. Payment Basis when is Output Tax accounted for: when payments are received. Payment Basis when is Input Tax accounted for: when payments are made. When may the Payment Basis be used: Total value of the Taxable Supplies does not exceed R 2.5 Million What policy will determine the favorable cash flow advantage for the vendor. Debtors and Creditors Payment Policy If the payment basis is applied and the vendor grants credit to his customers__________ , once payment has been received from the debtor. a) Output Tax needs to be accounted for. b) Input Tax needs to be accounted for. c) Both need to be accounted for. a) Payment Basis - when a vendor acquires goods and services on credit, when can you claims input tax deductions according to VAT. When payment to the creditor is made. For a vendor to claim Input Tax deduction, the vendor needs to be in possession of: Tax Invoice Debit or Credit Note For a vendor to claim Input Tax deduction, the documentation requires: the legal or trading name of the vendor. A _________ is issued by a _________ vendor when delivering supplies to the clients, Tax Invoice Registered what's needed in order to claim an input tax deduction? Tax Invoice or Debit or Credit Note Tax Invoices for under R50 are ... Optional Tax Invoice used for supplies between R50 & R 5000 (Incl. Vat) Abridged Tax Invoice Abridged Tax Invoice contains: - the word Tax Invoice - Name, Address & VAT Registration no. - Serial No. - Date of issue - Description of goods & services. - Value of Supplies - Amount of Tax charged - Tax charged amount & percentage / rate Full Tax Invoice is issued for: Supplies exceeding R 5 000 (Incl. Vat) Full Tax Invoice includes- - Name and Address of recipient - Vat Registration no. - Quantity or Volume What currency should Tax Invoices be issued in: ZAR Debit & Credit notes should be issued when: - Supply is cancelled - Nature of supply has changed - Consideration (Price including VAT) has changed - Supply has been returned Credit Notes contain: - Value of supply that has been reduced - Excess Tax - Tax Charged by applying the Tax Fraction - Amount of excess Tax - Reason for issuing the credit note - Reference Zero-Rated Supplies goods including groceries, where no tax can be levied on the final product for human consumption. Can Input Tax / Output Tax be claims on Zero-Rated Supplies Input Tax Interest paid, Interest Received as well as educational services are ________ from Tax Excempt Formula to calculate VAT amount when the VAT inclusive amount is given- VAT Amount = (Vat Inclusive Amount / 1) * 15/115 Formula to calculate VAT amount when the VAT exclusive amount is given- VAT Amount = (Vat Exclusive Amount/1) * 15/100 Money deposited into the entity's bank account (What is credited & debited) Bank account (an asset) increases - Debited Capital account (equity) increases - Credited Duplicate receipts are used: to record transactions into the entity's books. Duplicate Deposit Slip is given to - the client Bought a toolbox for company use: (What is credited & debited) Tool & Equiptment (an asset) increases - Debited Bank (an asset) decreases - Credited Is a Cash Discount recorded in the books of the entity No