Essential Book Keeping - Qp4

10 Questions | Total Attempts: 59

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Essential Book Keeping - Qp4

Questions and Answers
  • 1. 
    VAT is a direct tax which enables the Government to tax consumer expenditure on a very wide scale.
    • A. 

      True

    • B. 

      False

  • 2. 
    VAT can be described as: “A tax on final consumer spending, collected in stages, when goods change hands or services are performed”.
    • A. 

      True

    • B. 

      False

  • 3. 
    When sales turnover reaches a certain level, the business has to register with HMRC through their local VAT office. The registration threshold from April 2006 was ______.
    • A. 

      £41,000

    • B. 

      £51,000

    • C. 

      £61,000

    • D. 

      £71,000

  • 4. 
    In Britain, there are currently four broad categories of VAT. These are:
    • A. 

      Standard Rate

    • B. 

      Standard Term

    • C. 

      Zero Term

    • D. 

      Zero Rate

    • E. 

      Exempt Provides

    • F. 

      Exempt Supplies

    • G. 

      Special Higher Rate

    • H. 

      Special Lower Rate

  • 5. 
    • A. 

      True

    • B. 

      False

  • 6. 
    The main items of information required to complete the VAT 100 form are:  (Select three)
    • A. 

      Output tax charged to customers

    • B. 

      Input tax charged by suppliers

    • C. 

      Value of sales, inclusive of VAT

    • D. 

      Value of purchases, inclusive of VAT

    • E. 

      Sales and purchase information relating to the EU.

  • 7. 
    Under the Cash Accounting scheme, VAT is accounted for on the basis of cash paid and cash received in a period.
    • A. 

      True

    • B. 

      False

  • 8. 
    To qualify for the flat rate VAT scheme, a business must have: (Select two)
    • A. 

      They must have been registered for 12 months, and

    • B. 

      They must have a taxable turnover below £825,000

    • C. 

      No more than £150,000 taxable supplies, and

    • D. 

      No more than £187,500 total business income.

  • 9. 
    Taxable persons must keep their records and accounts up-to-date and are legally obliged to preserve them, with all supporting receipts etc., for a period of seven years.
    • A. 

      True

    • B. 

      False

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