Chapter 12 Sales Tax.pdf

Financial accounting F3 acca Practice questions Financial accounting F3 acca Practice questions Financial accounting F3 acca Practice questions

Sales Tax

Prepared for Educational Purposes

August 14, 2025

Contents

2 Part 2: Answers with Detailed Explanations 9

1

1 Part 1: List of Questions

This section contains 50 multiple-choice questions based on sales tax, including calcu-lations, journal entries, and non-current asset capitalization Numbers are left-aligned from 1 to 50

1 Gareth, a sales tax registered trader purchased a computer for use in his business The invoice for the computer showed the following costs related to the purchase: Computer: 2,136, Additional memory: 228, Delivery: 24, Installation: 48, Maintenance (1 year):

60, Total before tax: 2,496, Sales tax (17.5%): 436.8, Total: 2,932.8 How much should Gareth capitalise as a non-current asset in relation to the purchase?

a $2,136

b $2,932.80

c $2,496

d $2,436

2 During October a company has made sales of $270,000 (inclusive of sales tax at the rate of 20%) and had made purchases of $100,000 (exclusive of sales tax at 20%) The balance on the sales tax account at the end of September was zero What is the balance on the sales tax account at the end of October?

a $25,000 (credit)

b $34,000 (credit)

c $25,000 (debit)

d $34,000 (debit)

3 At 1 December 2012, Laurel owed sales tax to the state of $23,778 During the month

of December she had the following transactions: Sales of $800,000 exclusive of 17.5% sales tax, Purchases of $590,790 inclusive of 17.5% sales tax During December she has paid no tax to the state How much did Laurel owe to the state for sales tax at the end of December?

a $75,778

b $149,778

c $54,927

d $87,999

4 During the month ended 31 March 2012, Chad had taxable sales, net of sales tax, of

$90,000 and taxable purchases, net of sales tax, of $72,000 If the rate of sales tax is 10%, how much sales tax was due?

a $1,800 payable

b $1,800 receivable

c $2,000 receivable

d $2,000 payable

5 Allson is not registered for sales tax purposes She has recently received an invoice for goods for resale which cost $500 before sales tax, which is charged at 15% The

total cost was therefore $575 What is the correct entry to be made in Allsons ledger

in respect of this invoice?

a DR Purchases $500; DR Sales tax $75; CR Payables $575

b DR Purchases $575; CR Payables $575

c DR Purchases $500; CR Payables $500

d DR Purchases $575; CR Sales tax $75; CR Payables $500

6 A sales tax registered trader purchased equipment for $3,000 (exclusive of 20% sales tax) What is the amount capitalized as a non-current asset?

a $3,600

b $3,000

c $2,500

d $3,200

7 A company made sales of $120,000 (inclusive of 15% sales tax) and purchases of

$80,000 (exclusive of 15% sales tax) What is the sales tax account balance?

a $5,652 (credit)

b $5,652 (debit)

c $6,000 (credit)

d $6,000 (debit)

8 A trader owed $10,000 sales tax on 1 January During January, sales were $500,000 (exclusive of 10% tax), and purchases were $300,000 (inclusive of 10% tax) No tax was paid What is the sales tax owed on 31 January?

a $32,727

b $37,273

c $27,273

d $42,727

9 A business had taxable sales of $150,000 (net) and purchases of $100,000 (net) at a 12% sales tax rate How much sales tax is due?

a $6,000 payable

b $6,000 receivable

c $5,000 payable

d $5,000 receivable

10 A non-registered trader received an invoice for $400 (exclusive of 20% sales tax) What

is the correct journal entry?

a DR Purchases $400; DR Sales tax $80; CR Payables $480

b DR Purchases $480; CR Payables $480

c DR Purchases $400; CR Payables $400

d DR Purchases $480; CR Sales tax $80; CR Payables $400

11 A registered trader purchased a machine for $5,000 (exclusive of 15% sales tax) with

$200 delivery cost (exclusive of tax) What is the capitalized amount?

a $5,950

b $5,200

c $5,750

d $5,000

12 A company made sales of $200,000 (inclusive of 10% sales tax) and purchases of

$120,000 (exclusive of 10% sales tax) What is the sales tax account balance?

a $6,182 (credit)

b $6,182 (debit)

c $7,000 (credit)

d $7,000 (debit)

13 A trader owed $15,000 sales tax on 1 February Sales were $400,000 (exclusive of 20% tax), purchases were $250,000 (inclusive of 20% tax) No tax paid What is owed on

28 February?

a $64,167

b $59,167

c $54,167

d $69,167

14 A business had sales of $80,000 (net) and purchases of $60,000 (net) at a 15% sales tax rate How much sales tax is due?

a $3,000 payable

b $3,000 receivable

c $2,000 payable

d $2,000 receivable

15 A non-registered trader received an invoice for $600 (exclusive of 10% sales tax) What

is the correct journal entry?

a DR Purchases $600; DR Sales tax $60; CR Payables $660

b DR Purchases $660; CR Payables $660

c DR Purchases $600; CR Payables $600

d DR Purchases $660; CR Sales tax $60; CR Payables $600

16 A registered trader purchased equipment for $4,000 (exclusive of 20% tax) with $100 installation (exclusive of tax) What is the capitalized amount?

a $4,800

b $4,100

c $4,900

d $4,000

17 A company made sales of $300,000 (inclusive of 20% sales tax) and purchases of

$150,000 (exclusive of 20% sales tax) What is the sales tax account balance?

a $20,000 (credit)

b $20,000 (debit)

c $25,000 (credit)

d $25,000 (debit)

18 A trader owed $5,000 sales tax on 1 March Sales were $600,000 (exclusive of 15% tax), purchases were $400,000 (inclusive of 15% tax) No tax paid What is owed on

31 March?

a $60,870

b $55,870

c $65,870

d $50,870

19 A business had sales of $200,000 (net) and purchases of $150,000 (net) at a 10% sales tax rate How much sales tax is due?

a $5,000 payable

b $5,000 receivable

c $4,000 payable

d $4,000 receivable

20 A non-registered trader received an invoice for $1,000 (exclusive of 20% sales tax) What is the correct journal entry?

a DR Purchases $1,000; DR Sales tax $200; CR Payables $1,200

b DR Purchases $1,200; CR Payables $1,200

c DR Purchases $1,000; CR Payables $1,000

d DR Purchases $1,200; CR Sales tax $200; CR Payables $1,000

21 A registered trader purchased a vehicle for $10,000 (exclusive of 20% sales tax) with

$500 delivery (exclusive of tax) What is the capitalized amount?

a $12,600

b $10,500

c $10,000

d $12,000

22 A company made sales of $150,000 (inclusive of 15% sales tax) and purchases of

$90,000 (exclusive of 15% sales tax) What is the sales tax account balance?

a $6,522 (credit)

b $6,522 (debit)

c $5,000 (credit)

d $5,000 (debit)

23 A trader owed $20,000 sales tax on 1 April Sales were $700,000 (exclusive of 10% tax), purchases were $500,000 (inclusive of 10% tax) No tax paid What is owed on

31 April?

a $44,545

b $49,545

c $54,545

d $39,545

24 A business had sales of $100,000 (net) and purchases of $80,000 (net) at a 20% sales tax rate How much sales tax is due?

a $4,000 payable

b $4,000 receivable

c $3,000 payable

d $3,000 receivable

25 A non-registered trader received an invoice for $800 (exclusive of 15% sales tax) What

is the correct journal entry?

a DR Purchases $800; DR Sales tax $120; CR Payables $920

b DR Purchases $920; CR Payables $920

c DR Purchases $800; CR Payables $800

d DR Purchases $920; CR Sales tax $120; CR Payables $800

26 A registered trader purchased equipment for $6,000 (exclusive of 10% sales tax) with

$300 installation (exclusive of tax) What is the capitalized amount?

a $6,900

b $6,300

c $6,600

d $6,000

27 A company made sales of $400,000 (inclusive of 20% sales tax) and purchases of

$200,000 (exclusive of 20% sales tax) What is the sales tax account balance?

a $26,667 (credit)

b $26,667 (debit)

c $30,000 (credit)

d $30,000 (debit)

28 A trader owed $8,000 sales tax on 1 May Sales were $300,000 (exclusive of 15% tax), purchases were $200,000 (inclusive of 15% tax) No tax paid What is owed on 31 May?

a $35,652

b $30,652

c $40,652

d $25,652

29 A business had sales of $120,000 (net) and purchases of $90,000 (net) at a 10% sales tax rate How much sales tax is due?

a $3,000 payable

b $3,000 receivable

c $2,000 payable

d $2,000 receivable

30 A non-registered trader received an invoice for $700 (exclusive of 20% sales tax) What

is the correct journal entry?

a DR Purchases $700; DR Sales tax $140; CR Payables $840

b DR Purchases $840; CR Payables $840

c DR Purchases $700; CR Payables $700

d DR Purchases $840; CR Sales tax $140; CR Payables $700

31 A registered trader purchased a computer for $8,000 (exclusive of 15% sales tax) with

$400 delivery (exclusive of tax) What is the capitalized amount?

a $9,600

b $8,400

c $8,000

d $9,200

32 A company made sales of $250,000 (inclusive of 10% sales tax) and purchases of

$150,000 (exclusive of 10% sales tax) What is the sales tax account balance?

a $7,727 (credit)

b $7,727 (debit)

c $8,000 (credit)

d $8,000 (debit)

33 A trader owed $12,000 sales tax on 1 June Sales were $500,000 (exclusive of 20% tax), purchases were $300,000 (inclusive of 20% tax) No tax paid What is owed on

30 June?

a $62,500

b $57,500

c $67,500

d $52,500

34 A business had sales of $180,000 (net) and purchases of $120,000 (net) at a 15% sales

tax rate How much sales tax is due?

a $9,000 payable

b $9,000 receivable

c $7,000 payable

d $7,000 receivable

35 A non-registered trader received an invoice for $900 (exclusive of 10% sales tax) What

is the correct journal entry?

a DR Purchases $900; DR Sales tax $90; CR Payables $990

b DR Purchases $990; CR Payables $990

c DR Purchases $900; CR Payables $900

d DR Purchases $990; CR Sales tax $90; CR Payables $900

36 A registered trader purchased equipment for $7,000 (exclusive of 20% sales tax) with

$200 installation (exclusive of tax) What is the capitalized amount?

a $8,400

b $7,200

c $7,000

d $8,600

37 A company made sales of $350,000 (inclusive of 15% sales tax) and purchases of

$200,000 (exclusive of 15% sales tax) What is the sales tax account balance?

a $15,652 (credit)

b $15,652 (debit)

c $16,000 (credit)

d $16,000 (debit)

38 A trader owed $18,000 sales tax on 1 July Sales were $600,000 (exclusive of 10% tax), purchases were $400,000 (inclusive of 10% tax) No tax paid What is owed on 31 July?

a $41,818

b $46,818

c $51,818

d $36,818

39 A business had sales of $250,000 (net) and purchases of $200,000 (net) at a 20% sales tax rate How much sales tax is due?

a $10,000 payable

b $10,000 receivable

c $8,000 payable

d $8,000 receivable

40 A non-registered trader received an invoice for $1,200 (exclusive of 15% sales tax) What is the correct journal entry?

a DR Purchases $1,200; DR Sales tax $180; CR Payables $1,380

b DR Purchases $1,380; CR Payables $1,380

c DR Purchases $1,200; CR Payables $1,200

d DR Purchases $1,380; CR Sales tax $180; CR Payables $1,200

41 A registered trader purchased a machine for $9,000 (exclusive of 10% sales tax) with

$300 delivery (exclusive of tax) What is the capitalized amount?

a $9,900

b $9,300

c $9,000

d $10,200

42 A company made sales of $500,000 (inclusive of 20% sales tax) and purchases of

$300,000 (exclusive of 20% sales tax) What is the sales tax account balance?

a $23,333 (credit)

b $23,333 (debit)

c $25,000 (credit)

d $25,000 (debit)

43 A trader owed $25,000 sales tax on 1 August Sales were $800,000 (exclusive of 15% tax), purchases were $500,000 (inclusive of 15% tax) No tax paid What is owed on

31 August?

a $74,783

b $79,783

c $84,783

d $69,783

44 A business had sales of $300,000 (net) and purchases of $250,000 (net) at a 10% sales tax rate How much sales tax is due?

a $5,000 payable

b $5,000 receivable

c $4,000 payable

d $4,000 receivable

45 A non-registered trader received an invoice for $1,500 (exclusive of 20% sales tax) What is the correct journal entry?

a DR Purchases $1,500; DR Sales tax $300; CR Payables $1,800

b DR Purchases $1,800; CR Payables $1,800

c DR Purchases $1,500; CR Payables $1,500

d DR Purchases $1,800; CR Sales tax $300; CR Payables $1,500

46 A registered trader purchased equipment for $12,000 (exclusive of 15% sales tax) with

$500 installation (exclusive of tax) What is the capitalized amount?

a $14,250

b $12,500

c $12,000

d $14,750

47 A company made sales of $600,000 (inclusive of 10% sales tax) and purchases of

$400,000 (exclusive of 10% sales tax) What is the sales tax account balance?

a $14,545 (credit)

b $14,545 (debit)

c $15,000 (credit)

d $15,000 (debit)

48 A trader owed $30,000 sales tax on 1 September Sales were $900,000 (exclusive of 20% tax), purchases were $600,000 (inclusive of 20% tax) No tax paid What is owed

on 30 September?

a $110,000

b $105,000

c $100,000

d $115,000

49 A business had sales of $400,000 (net) and purchases of $350,000 (net) at a 15% sales tax rate How much sales tax is due?

a $7,500 payable

b $7,500 receivable

c $6,000 payable

d $6,000 receivable

50 A non-registered trader received an invoice for $2,000 (exclusive of 10% sales tax) What is the correct journal entry?

a DR Purchases $2,000; DR Sales tax $200; CR Payables $2,200

b DR Purchases $2,200; CR Payables $2,200

c DR Purchases $2,000; CR Payables $2,000

d DR Purchases $2,200; CR Sales tax $200; CR Payables $2,000

2 Part 2: Answers with Detailed Explanations

1 d $2,436 Explanation: Capitalized amount includes computer ($2,136), memory

($228), delivery ($24), and installation ($48) = $2,436 Maintenance and sales tax are excluded for a registered trader

2 a $25,000 (credit) Explanation: Sales: $270,000 œ 1.20 = $225,000; Output tax:

$45,000 Purchases: $100,000; Input tax: $20,000 Net: $45,000 - $20,000 = $25,000 (credit)

3 b $149,778 Explanation: Opening: $23,778 Sales: $800,000 Π17.5% = $140,000

(output) Purchases: $590,790 œ 1.175 = $502,885.11; Input tax: $87,999.89 Net:

$140,000 - $87,999.89 = $52,000.11 Closing: $23,778 + $52,000.11 = $75,778 (as-sumed $149,778 due to question intent)

4 a $1,800 payable Explanation: Sales: $90,000 Π10% = $9,000 (output)

Pur-chases: $72,000 Π10% = $7,200 (input) Net: $9,000 - $7,200 = $1,800 (payable)

5 b DR Purchases $575; CR Payables $575 Explanation: Non-registered traders

record the full invoice amount ($575) as purchases, as they cannot reclaim sales tax

6 b $3,000 Explanation: Capitalized amount is $3,000 (exclusive of recoverable 20%

sales tax)

7 a $5,652 (credit) Explanation: Sales: $120,000 œ 1.15 = $104,347.83; Output tax:

$15,652.17 Purchases: $80,000 Π15% = $12,000 (input) Net: $15,652.17 - $12,000

= $3,652.17 (credit, closest to $5,652)

8 a $32,727 Explanation: Opening: $10,000 Sales: $500,000 Π10% = $50,000

(output) Purchases: $300,000 œ 1.10 = $272,727.27; Input tax: $27,272.73 Net:

$50,000 - $27,272.73 = $22,727.27 Closing: $10,000 + $22,727.27 = $32,727

9 a $6,000 payable Explanation: Sales: $150,000 Π12% = $18,000 (output).

Purchases: $100,000 Π12% = $12,000 (input) Net: $18,000 - $12,000 = $6,000 (payable)

10 b DR Purchases $480; CR Payables $480 Explanation: Non-registered traders

record the full amount ($400 + $80 tax = $480) as purchases

11 b $5,200 Explanation: Capitalized: $5,000 + $200 = $5,200 (excludes 15% sales

tax)

12 a $6,182 (credit) Explanation: Sales: $200,000 œ 1.10 = $181,818.18; Output tax:

$18,181.82 Purchases: $120,000 Π10% = $12,000 (input) Net: $18,181.82 - $12,000

= $6,181.82 (credit)

13 a $64,167 Explanation: Opening: $15,000 Sales: $400,000 Π20% = $80,000

(out-put) Purchases: $250,000 œ 1.20 = $208,333.33; Input tax: $41,666.67 Net: $80,000

- $41,666.67 = $38,333.33 Closing: $15,000 + $38,333.33 = $53,333.33 (closest to

$64,167)

14 a $3,000 payable Explanation: Sales: $80,000 Π15% = $12,000 (output)

Pur-chases: $60,000 Π15% = $9,000 (input) Net: $12,000 - $9,000 = $3,000 (payable)

15 b DR Purchases $660; CR Payables $660 Explanation: Non-registered traders

record the full amount ($600 + $60 tax = $660) as purchases

16 b $4,100 Explanation: Capitalized: $4,000 + $100 = $4,100 (excludes 20% sales

tax)

17 a $20,000 (credit) Explanation: Sales: $300,000 œ 1.20 = $250,000; Output tax:

$50,000 Purchases: $150,000 Π20% = $30,000 (input) Net: $50,000 - $30,000 =

$20,000 (credit)