Question

Sales revenue for a sporting goods store amounted to $525,000 for the current period. All sales are on account and are subject to a sales tax of 9%. Which of the following would be included in the journal entry to record the sales?A) a debit to Sales Revenue for $525,000B) a credit to Accounts Receivable for $525,000C) a debit to Sales Tax Payable for $47,250D) a debit to Accounts Receivable for $572,250

Answer 1

D) a debit to Accounts Receivable for $572,250

Step-by-step explanation:

When revenue is earned but cash is yet to be received and sales tax are to be accounted for at 9%, the entries required are;

Debit Accounts receivable 109%

Credit Revenue account 100%

Credit Sales tax payable 9%

Hence the amount to be accounted in accounts receivable

= 109% * $525,000

= $572,25 0

Answer 2

D) a debit to Accounts Receivable for $572,250

Step-by-step explanation:

Journal entry

Dr Accounts Receivable 572,250

Cr Sales Revenue 525,000

Cr Sales Tax Payable 47,250

($525,000 × 9%)

Therefore a debit to Accounts Receivable for $572,250 would be included in the journal entry to record the sales.