Which one of the following statements regarding value added tax (VAT) is not true? Select one:a.VAT on credit sales is credited to the VAT output account.b.There are two rates of VAT for taxable supplies.c.VAT on the telephone account is credited to the VAT output accountd.VAT on cash purchases is debited to the VAT input account.
Question
Which one of the following statements regarding value added tax (VAT) is not true? Select one:a.VAT on credit sales is credited to the VAT output account.b.There are two rates of VAT for taxable supplies.c.VAT on the telephone account is credited to the VAT output accountd.VAT on cash purchases is debited to the VAT input account.
Solution
The statement that is not true regarding value added tax (VAT) is: "There are two rates of VAT for taxable supplies."
This is not necessarily true as the number of VAT rates can vary by country. Some countries have more than two rates, some have only one, and others have none at all. The rates can also change depending on the type of goods or services being sold. Therefore, the number of VAT rates is not universally two.
Similar Questions
Which one of the following statements regarding Value Added Tax (VAT) is incorrect?Select one:a.VAT is levied at 15% on the supply by a vendor of goods or services in the course or furtherance of any entity carried on by a vendorb.VAT is levied for purposes of generating services for the governmentc.VAT is often referred to as tax on consumption of goods or servicesd.VAT is tax added to the cost of a product or services
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