The Print Shoppe had sales on account of $7,000 which were subject to state sales tax of 6.5%. The entry to record the sales would be to: (Round your final answer to the nearest cent.)
A)debit Accounts Receivable $7,000; credit Sales Revenue $7,000.
B)debit Accounts Receivable $7,000; debit Sales Tax Payable $455.00; credit Sales Revenue $7,455.00.
C)debit Accounts Receivable $7,455.00; credit Sales Revenue $7,455.00.
D)debit Accounts Receivable $7,455.00; credit Sales Revenue $7,000; credit Sales Tax Payable $455.00.

Question

Quizplus · Accepted Answer

The sales revenue should be recorded for the full amount of $7,000, but a separate account for sales tax payable should be created with a credit of $455.00, which is the amount of state sales tax collected on the sales. The total amount owed by customers on account is $7,455.00, so the Accounts Receivable account should be debited for that amount. Therefore, the correct entry is to debit Accounts Receivable $7,455.00, credit Sales Revenue $7,000.00, and credit Sales Tax Payable $455.00.

The Print Shoppe Had Sales on Account of $7,000 Which