Question

A company receives $198, of which $18 is for sales tax. The journal entry to record the sale would include a

A. debit to Sales Tax Expense for $18
B. credit to Sales Taxes Payable for $18
C. debit to Sales Revenue for $198
D. debit to Cash for $180

Answer 1

The journal entry to record the sale would include a debit to Sales Revenue for $198, a credit to Sales Taxes Payable for $18, and a debit to Cash for $180.

Step-by-step explanation:

The journal entry to record the sale would include a debit to Sales Revenue for $198 because it represents the total amount received from the sale. Additionally, there would be a credit to Sales Taxes Payable for $18 to record the amount of sales tax collected from the sale. The remaining amount, which is $180, would be recorded as a debit to Cash to reflect the cash received from the sale. Therefore, the correct answer is D. debit to Cash for $180.