Executive Accounts Interview Question:

What is VAT adjustment? What are premises in accounting sense?

Submitted by: Administrator

Premises is and Fixed Assed in the accounting sense which is shown in the balance sheet in final accounts Vat adjustment is out put tax - input tax the vat which is paid on purchase will be deducted from vat collected from sales this adjustment is known as vat adjustment.

premises is a tangible asset in accounting sense which is shown asset side in the balance sheet (applications of funds)
1.
purchase a/c dr 10000
input vat@14.5% dr 1267
To sundry creditors 11267

2.
sundry debtor a/c dr 15000
To out put vat@14.5% 1900
To sales a/c 13100

3.
out vat Vat@14.5% dr 1900
To input vat@14.5% 1267
To vat payable 633

4.
vat payable a/c dr 633
To cash or bank 633
Submitted by: