Sales Tax Payable Video Lessons

Concept

# Problem: Which of the following represents the correct journal entry to record a taxable cash sale of $800 if the sales tax rate is 5%? a. A debit to cash for$840, a debit to sales tax expense for $40, and a credit to sales revenue for$800. b. A debit to cash for $840, a credit to sales tax payable for$40, and a credit to sales revenue for $800. c. A debit to cash for$800, a credit to sales tax payable for $40, and a credit to sales revenue for$760 d. None of the above.

###### Problem Details

Which of the following represents the correct journal entry to record a taxable cash sale of $800 if the sales tax rate is 5%? a. A debit to cash for$840, a debit to sales tax expense for $40, and a credit to sales revenue for$800.

b. A debit to cash for $840, a credit to sales tax payable for$40, and a credit to sales revenue for $800. c. A debit to cash for$800, a credit to sales tax payable for $40, and a credit to sales revenue for$760

d. None of the above.