Sales, Purchases & VAT
26 free practice questions with explanations
PassNova has 26 free AAT Level 2 Accounting practice questions on Sales, Purchases & VAT, each with a clear explanation. Practise them in the browser with instant feedback — 100% free, no sign-up, on any device. Updated for 2026.
Sales, Purchases & VAT: example questions & answers
Here are 6 example questions from this topic. Practise the full set of 26 free in the browser.
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A business makes a credit sale of goods for £1,000 plus standard-rate UK VAT at 20%. What is the total amount the customer owes?
- A £1,000
- B £1,200 ✓
- C £1,020
- D £800
Answer: VAT at 20% on £1,000 is £200, so the customer owes the £1,000 net plus £200 VAT, totalling £1,200 gross.
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On a standard-rate sales invoice, how is the output VAT charged to a customer recorded in the seller's books?
- A As a debit in the VAT control account
- B As a credit in the VAT control account ✓
- C As a debit to sales
- D As an expense in the income statement
Answer: Output VAT charged on sales is a liability owed to HMRC, so it is credited to the VAT control account. The customer's receivable is debited with the gross amount.
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A purchase invoice shows a gross total of £600 including standard-rate UK VAT at 20%. What is the VAT amount?
- A £120
- B £100 ✓
- C £60
- D £500
Answer: To extract VAT from a gross figure, divide by 6 (because 20% VAT means gross = 120% of net). £600 ÷ 6 = £100, leaving a net amount of £500.
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Which book of prime entry is used to record credit purchases of goods?
- A The sales day book
- B The purchases day book ✓
- C The cash book
- D The journal
Answer: Credit purchases of goods are first recorded in the purchases day book before being posted to the ledgers. The sales day book records credit sales.
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If input VAT on purchases exceeds output VAT on sales for a period, what does the balance on the VAT control account represent?
- A An amount payable to HMRC
- B An amount reclaimable from HMRC ✓
- C An expense to the business
- D Additional sales revenue
Answer: When recoverable input VAT exceeds output VAT, the business is owed the difference, giving a VAT control account balance reclaimable from HMRC (an asset).
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A credit customer returns goods. Which document does the seller issue and how is it recorded?
- A A credit note, recorded in the sales returns day book ✓
- B An invoice, recorded in the sales day book
- C A credit note, recorded in the purchases day book
- D A debit note, recorded in the cash book
Answer: When a credit customer returns goods, the seller issues a credit note, which is entered in the sales returns day book and reduces both sales and the customer's balance.