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22 August, 14:41

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

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Answers (2)
  1. 22 August, 16:50
    0
    D) a debit to Accounts Receivable for $572,250

    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.
  2. 22 August, 17:11
    0
    D) a debit to Accounts Receivable for $572,250

    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
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