CIMA Fundamentals of financial accounting BA3 Question # 37 Topic 4 Discussion

CIMA Fundamentals of financial accounting BA3 Question # 37 Topic 4 Discussion

BA3 Exam Topic 4 Question 37 Discussion:
Question #: 37
Topic #: 4

A company that is VAT-registered has sales for the period of $245,000 (excluding VAT) and purchases for the period of $123,375 (including VAT). The opening balance on the VAT account was $18,000 credit. The VAT rate is 17.5%.

What will be the closing balance on the VAT account at the end of the period?


A.

$6,500 debit


B.

$42,500 credit


C.

$375 debit


D.

$36,375 credit


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