Core Accounting & Tax Principles: A Student's Guide
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11 cards
Question: Which accounting statement records depreciation expense and interest expense?
Answer: Income statement
Question: Which sections of the cash flow statement record loan receipts and tractor purchases?
Answer: Financing inflows record loan received; Investing outflows record tractor purchases
Question: If a business buys a tractor for R1,000,000 plus VAT and the VAT paid is R150,000, what is the recorded tractor cost if the business is VAT-registered
Answer: The actual tractor cost is R1,000,000 (VAT is claimable and not included in asset cost)
Question: If VAT is claimable on a purchased asset, should VAT be included in the asset's depreciation base?
Answer: No — VAT should not be included in depreciation if it is claimable
Question: In the example: purchase price Tractor = R1,000,000 + VAT; VAT paid R150,000 — what happens to the R150,000 VAT if the buyer is VAT-registered?
Answer: The buyer claims the input VAT back from SARS (i.e., recovers the R150,000)
Question: When selling products for R500,000 plus VAT at 15%, how much output VAT is charged?
Answer: Output VAT charged is R75,000 (R500,000 × 15%)
Question: How is the VAT amount to pay to SARS calculated when a business has both input and output VAT?
Answer: Pay SARS the difference: Output VAT minus Input VAT
Question: What is the current corporate tax rate in South Africa mentioned in the content?
Answer: 37%
Question: How does higher depreciation affect taxable income and tax payable?
Answer: Higher depreciation leads to lower taxable income and lower tax payable
Question: How does lower depreciation affect profits and tax?
Answer: Lower depreciation leads to higher profits and higher tax payable