Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / SALES TAX A sale of merchandise on account for 36000 is subject to an 8 sales tax a Shoul...

SALES TAX A sale of merchandise on account for 36000 is subject to an 8 sales tax a Should the sales tax be recorded at the time of sale or when payment is received Here is a tip

SALES TAX

A sale of merchandise on account for $36,000 is subject to an 8% sales tax. 

 

(a) Should the sales tax be recorded at the time of sale or when payment is received? 

 

Here is a tip:

Under the accrual method of accounting, revenue is recorded when earned, expenses are recorded when incurred, and liabilities are recorded when the amount is probable and can be estimated.

 

(b) What is the amount credited to Sales? 

 

Here is a tip:

Accounts receivable is the amount due from a customer, and a debit to accounts receivables increases the ledger account.

(c) What is the amount debited to Accounts Receivable? 

 

Here is a tip:

Sales taxes are payable to the government.

(d) What is the account to which the $2,880 ($36,000 × 8%) is credited?

 

Here is a tip:

$2,880 ($36,000 x 8%) represents an amount due to the state and local authorities at the time the sale occurs. 

Apr 14 2021 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions