Question

A company receives $371, of which $21 is for sales tax. the journal entry to record the sale would include a ____

group of answer choices
A. debit to cash for $371.
B. debit to sales revenue for $371.
C. debit to sales taxes payable for $21.
D. debit to sales tax expense for $21.

Answer 1

The correct answer is A.The correct journal entry would include a debit to cash for $371, where $350 is credited to sales revenue, and $21 is credited to sales taxes payable.

Step-by-step explanation:

The journal entry to record a sale where a company receives $371, of which $21 is for sales tax, would include a debit to cash for $371.

Here's the breakdown of the journal entry:

• Debit Cash $371 (This reflects the total cash received)
• Credit Sales Revenue $350 (This is the amount excluding sales tax)
• Credit Sales Taxes Payable $21 (This is the amount collected for sales tax)

The debit to cash for $371. Because when recording a sale, the total amount received, including the sales tax, is debited to cash, while sales are credited for the amount excluding tax, and sales taxes payable is credited for the tax amount.