Question

Smart Touch Learning sells a $300 tablet for cash with an 8​% sales tax rate. When...

Smart Touch Learning sells a $300 tablet for cash with an 8​% sales tax rate. When recording the journal entry for this​ sale, Smart Touch Learning will

A. Credit Sales Tax Payable for 24

B. Credit sales for 324

C. Debit Accounts Receivable for 300

d. Debit Sales Tax Payable for 48

Business   Accounting   
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Homework Answers

Answer #1

A) credit sales tax payable 24

Explanation:

Sales tax is levied on transaction price, Because sales tax is included in the total amount your customers pay, you will include the sales tax as part of the total sales revenue in your accounting books. Such collection of tax will be liability of entity to be remitted to government. So the accounting entry will be as follows:

Dr cash 300

Cr Sales tax liab 24

Cr sales revenue 276

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