Sales Tax Payable Video Lessons

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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.

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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.

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