On 7/1, the beginning balance in sales tax payable is a $50,000 credit. On 7/15, a $45,000 cash payment is made to the governing authority for the sales taxes collected, which results in which of the following: O Assets decrease and expenses increase. O Assets increase and stockholders' equity decrease. O Assets increase and liabilities decrease. O Assets decrease and liabilities decrease. O Assets decrease and stockholders' equity increase. O Assets decrease and expenses decrease.
On 7/1, the beginning balance in sales tax payable is a $50,000 credit. On 7/15, a $45,000 cash payment is made to the governing authority for the sales taxes collected, which results in which of the following: O Assets decrease and expenses increase. O Assets increase and stockholders' equity decrease. O Assets increase and liabilities decrease. O Assets decrease and liabilities decrease. O Assets decrease and stockholders' equity increase. O Assets decrease and expenses decrease.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 25P
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Transcribed Image Text:On 7/1, the beginning balance in sales tax payable is a $50,000 credit. On 7/15, a $45,000 cash payment is
made to the governing authority for the sales taxes collected, which results in which of the following:
O Assets decrease and expenses increase.
O Assets increase and stockholders' equity decrease.
O Assets increase and liabilities decrease.
O Assets decrease and liabilities decrease.
O Assets decrease and stockholders' equity increase.
O Assets decrease and expenses decrease.
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