3.1 VAT CONCEPTS Change the underlined parts in the following sentences to make the statements TRUE - NSC Accounting - Question 3 - 2016 - Paper 1

The correct reference should be the South African Revenue Services (SARS) as the authority responsible for collecting VAT.

The correct charge for VAT on most goods including fruits and vegetables is 15%, which reflects the rate established post-2018.

To determine the correct VAT amount, we first need to adjust the initial VAT payable of R43 820 based on the identified errors:

1. Start with the provided VAT amount:

   • $ext{Initial VAT Payable} = R43,820$

2. Adjust for omitted sales invoices (+):

   • $ext{Sales invoices omitted} = R10,830$

3. Adjust for damaged goods (-):

   • $ext{Damaged goods returned} = R16,600 ($ ext{excluding VAT} ightarrow 16,600 imes rac{14}{114}$)

4. Adjust for VAT on sundry expenses omitted (+):

   • $ext{Sundry business expenses omitted} = R6,818$

5. Adjust for discounts received (-):

   • $ext{Discounts received} = R756$

6. Add VAT to be recovered (+):

   • $ext{VAT to be recovered} = R184$

7. Correct for bad debts recorded (-):

   • $ext{VAT on bad debts} = R92$

Putting these adjustments together:

ext{Correct VAT payable} = 43,820 + 10,830 - (16,600 imes rac{14}{114}) + 6,818 - 756 + 184 - 92

Calculating gives:

• ext{Correct VAT payable} = R41,620.$