{"id":163,"date":"2016-07-04T13:34:00","date_gmt":"2016-07-04T12:34:00","guid":{"rendered":"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/04\/a-basic-test-on-double-entry-part-2\/"},"modified":"2016-07-04T13:34:00","modified_gmt":"2016-07-04T12:34:00","slug":"a-basic-test-on-double-entry-part-2","status":"publish","type":"post","link":"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/a-basic-test-on-double-entry-part-2\/","title":{"rendered":"A BASIC TEST ON DOUBLE ENTRY : PART 2"},"content":{"rendered":"
\nScenario:<\/span><\/b>
\n
<\/span><\/b><\/div>\n
\n<\/a>Talat
\nLtd has just bought a machine for \u00a317,000 net for company use and paid VAT on
\nthe purchase and the total amount will be paid next month. What will be the
\ndouble entry posting for this?<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nDouble entry posting:<\/o:p><\/span><\/b><\/div>\n
\nDR:
\nMachine account                     \u00a317,000<\/o:p><\/span><\/div>\n
\nDR:
\nVAT account                            \u00a33,400<\/o:p><\/span><\/div>\n
\nCR:
\nPLCA                                       \u00a320,400<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nReason:<\/o:p><\/span><\/b><\/div>\n
\nThe
\nmachine account has been debited because machines are increasing and if an
\nasset is increasing we debit the relevant asset account and we have debited VAT
\naccount with 20% of \u00a317,000; because VAT on purchases is an asset which can be
\nclaimed back from HMRC and the amount to be claimed back is obviously
\nincreasing due to this additional purchase. <\/o:p><\/span><\/div>\n
\n<\/div>\n
\nPurchases
\nledger control account (PLCA) because the company hasn\u2019t paid for the machine
\nand the full amount is currently outstanding and this is a liability. Hence the
\nliability is increasing, and if a liability is increasing, we credit the
\nrelevant liability account.<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nREMEMBER:<\/o:p><\/span><\/div>\n
\nDEAD\/CLIC<\/o:p><\/span><\/b><\/div>\n
\n<\/div>\n
\nN\/B:<\/o:p><\/span><\/div>\n
\nPLCA
\nis also called Creditors Control Account\/ Trade Payables Account<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nYours Sincerely,<\/span><\/div>\n
\nThe Friendly Team<\/span>
\n
<\/span><\/div>\n
\nThe Training Place of Excellence Limited<\/span><\/div>\n

<\/p>\n

\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Scenario: Talat Ltd has just bought a machine for \u00a317,000 net for company use and paid VAT on the purchase and the total amount will be paid next month. What will be the double entry posting for this? Double entry posting: DR: Machine account                     \u00a317,000 DR: VAT account                            \u00a33,400 CR: PLCA                                       \u00a320,400 Reason: The … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-163","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"yoast_head":"\nA BASIC TEST ON DOUBLE ENTRY : PART 2 - The Training Place Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/a-basic-test-on-double-entry-part-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A BASIC TEST ON DOUBLE ENTRY : PART 2 - The Training Place Blog\" \/>\n<meta property=\"og:description\" content=\"Scenario: Talat Ltd has just bought a machine for \u00a317,000 net for company use and paid VAT on the purchase and the total amount will be paid next month. What will be the double entry posting for this? Double entry posting: DR: Machine account                     \u00a317,000 DR: VAT account                            \u00a33,400 CR: PLCA                                       \u00a320,400 Reason: The ... 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