Retail
VAT Input on Inventory Purchases
Recording the recoverable VAT paid on inventory purchased from a registered supplier.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Merchandise Inventory | Asset (+) | 10,000.00 | - |
| VAT Input Tax (16%) | Asset (+) | 1,600.00 | - |
| Accounts Payable (Supplier) | Liability (+) | - | 11,600.00 |
💡 Accountant's Note
VAT on inventory is a recoverable asset, not a cost. It is offset against VAT collected on sales when calculating the monthly net VAT payment to the ISTD.
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