Hi,
I was wondering if somebody could explain how to properly prepare Accounts when VAT is on Cash Received Basis. I understand that the Accounts should show the sales for the year rather than the cash received. If preparing accounts from incomplete records, should the Debtors figure at the end of the year be debited to Debtors and Credited to the sales?
If this is the case, what happens at the start of the following year as the cash received for that year will include debtors amounts from previous year - are these amounts then deducted from the cash receipts/sales for that year?
Thank you.