A company sells $180,000 (selling price) of goods and collects sales tax of 8%. What current liability does the sale create? a. Sales tax payable of $14,400 b. Sales revenue of $194,400 c. Unearned revenue of $14,400 d. None; the company collected cash up front.
A company sells $180,000 (selling price) of goods and collects sales tax of 8%. What current liability does the sale create? a. Sales tax payable of $14,400 b. Sales revenue of $194,400 c. Unearned revenue of $14,400 d. None; the company collected cash up front.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 25P
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A company sells $180,000 (selling price) of goods and collects sales tax of 8%. What current liability does the sale create?
a. Sales tax payable of $14,400
b. Sales revenue of $194,400
c. Unearned revenue of $14,400
d. None; the company collected cash up front.
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