E-commerce
VAT Input Tax on Inventory Purchases
Recording recoverable 16% VAT paid to suppliers on inventory purchases.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Merchandise Inventory | Asset (+) | 5,000.00 | - |
| VAT Input Tax (16%) | Asset (+) | 800.00 | - |
| Accounts Payable (Supplier) | Liability (+) | - | 5,800.00 |
💡 Accountant's Note
VAT paid on inventory is a recoverable input tax — not part of the inventory cost. It is offset against VAT collected on sales when filing the monthly return.
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