Cash Accounting for VAT

Cash Accounting for VAT

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We switched to the Cash Accounting scheme a couple of years ago to help with cash flow.

Can anyone tell me on what basis sales should be recorded in the accounts.  I am AAT qualified and my understanding was that the general accounting principle was on an accruals basis - does this change because we are using the Cash Accounting scheme?

Thanks in advance.

Jeanette 

Replies (4)

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By twj4789
17th Jul 2012 11:51

No

You still need to account on the accrual basis, you are correct in your thoughts.

Thanks (1)
Replying to jeremy28:
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By lfc4eva
17th Jul 2012 12:13

So, just for clarification - our trading profit and loss account for the period should include the ACTUAL sales invoiced which apply to this period and not just those sales invoices which have been paid, which might also include some which are for the following year?

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By twj4789
17th Jul 2012 13:06

Yes

Anything invoiced in the year would be included as sales for the period (paid or unpaid). Anything that was already paid at the year end but was not invoiced until the next accounting period would be a prepayment.

Hope this helps :-)

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By lfc4eva
17th Jul 2012 13:13

Thanks.  That is exactly what

Thanks.  That is exactly what I would expect. :^)

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