Question 1

A business sells goods for $1,740, which is inclusive of sales tax at 20%. What is the net sales revenue amount that should be credited to the sales account? (Enter numbers only, no currency symbols)

Accepted Answer

Extract the net amount from a gross figure by dividing by (1 + tax rate).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating 20% of $1,740 and subtracting it ($1,740 - $348 = $1,392), which is incorrect because the tax is based on the net amount, not the gross.

A business sells goods for $1,740, which is inclusive of sales tax at 20%. What is the net sales revenue amount that should be credited to the sales account? (Enter numbers only, no currency symbols)

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FA — Financial Accounting Practice Exam 2

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