14) Which of the following represents the impact of a taxable cash sale of $400

Question

14) Which of the following represents the impact of a taxable cash sale of $400 on the accounting equation if the sales tax rate is 5%? A) An increase to cash for $420, an increase to sales tax expense for $20, and an increase to sales revenue for $400 B) An increase to cash for $400, an increase to sales tax payable for $20, and an increase to sales revenue for $380 C) An increase to cash for $420, an increase to sales tax payable for $20, and an increase to sales revenue for $400 D) None of these answer choices is correct. 15) Monthly remittance of sales tax: A) Reduces liabilities. B) Is a claims exchange transaction. C) Reduces stockholders' equity D) All of these answer choices are correct.

Explanation / Answer

Answer to 14)

(C) An Increase to cash for $420, an increase to sales tax payable for $20, and an inncrease to sales revenue for$400

Answer to 15)

(A) Monthly remittance of sales tax Reduces Liabillities.

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