Which of the following statements is not correct? (1) Bank charges are not zero-rated item. (2) Input VAT is claimable on bank charges. (3) Bank charges are not exempt supply. (4) Input VAT is not claimable on bank charges. (5) Finance costs are exempt supply.

Which of the following statements is not correct? (1) Bank charges are not zero-rated item. (2) Input VAT is claimable on bank charges. (3) Bank charges are not exempt supply. (4) Input VAT is not claimable on bank charges. (5) Finance costs are exempt supply.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 9MC: Which method delays recognition of bad debt until the specific customer accounts receivable is...

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Concept explainers

Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.

Question

Which of the following statements is not correct?
(1) Bank charges are not zero-rated item.
(2) Input VAT is claimable on bank charges.
(3) Bank charges are not exempt supply.
(4) Input VAT is not claimable on bank charges.
(5) Finance costs are exempt supply.

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Which of the following is a reason that banks may favor fee compensation over balance compensation? Balance compensation is not as visible as fees for budgeting purposes. The strategy involves attracting deposits to fund their loans. Earning credits used to determine the value of collected balances are taxable. Deposit balances increase liabilities on the balance sheet.
TRUE OR FALSE?Material overdraft in one bank must be deducted from the another bank's account that has a debit balance.
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