Question

Waterway Surplus made cash sales during the month of October of $395000. The sales are subject to a 6% sales tax that was also collected. Which of the following would be included in the summary journal entry to reflect the sale transactions? Credit Sales Revenue for $367483. Credit Sales Taxes Payable for $23700. Debit Accounts Receivable for $395000. Credit Sales Taxes Payable for $22358.

Answer 1

Credit Sales Taxes Payable for $23700

Step-by-step explanation:

The journal entry to reflect the sale transactions is:

- Account Cash, an asset account, which increases with debit. $395000 + $23700.

If you debit a cash account, then this means that the amount of cash on hand increases.

- Account Sales, an income account, which increases with credit. $395000.

Income accounts, a credit increases the balance.

- Account Sales Taxes Payable, a liability account, wich increases with credit. $23700.

If you credit an accounts payable account, this means that the amount of accounts payable liability increases.