Final answer:
To record cash sales of $6,800 and sales taxes of $340, a debit entry of $7,140 to Cash and credit entries to Sales for $6,800 and to Sales Tax Payable for $340 are made.
Step-by-step explanation:
When recording the cash sales and sales taxes in the journal, we make use of two accounts: the cash account and the sales tax payable account. The cash account includes both the sales and the collected taxes, as this is the total amount of money received. The sales account records just the sales without tax, and the sales tax payable account records the taxes that were collected and are to be paid to the government.
To make the journal entry for the cash register reading which shows cash sales of $6,800 and sales taxes of $340, the following entry would be made:
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- Debit Cash $7,140 (this is the sum of cash sales and the sales tax).
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- Credit Sales $6,800 (this represents the revenue earned from the goods sold).
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- Credit Sales Tax Payable $340 (this is the amount of sales tax collected and to be remitted to the government).