Essential Book Keeping - Qp4

10 Questions | By Jacksonmatthews | Last updated: May 30, 2014 | 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