A VAT-registered supplier issues a credit note for £300 plus 20% VAT. How is this recorded in the VAT Control Account?

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Multiple choice — select the best answer

ADebit £60
BCredit £60
CCredit £360
DDebit £360

✓ Correct answer: B. Credit £60 Original purchases create Input VAT (Debit). A return (credit note) reverses this. Therefore, you must Credit the VAT Control Account to reduce the recoverable Input VAT. The amount is $$$300 \times 20\% = 60$$$.

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A VAT-registered supplier issues a credit note for £300 plus 20% VAT. How is this recorded in the VAT Control Account?

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