General Lighting ​

question 151

Multiple Choice

General Lighting
​
During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.
-Refer to General Lighting. The $150 price of each battery includes a $3 federal excise tax. Which of the following statements is true regarding the proper accounting treatment for the taxes related to this transaction?

• A)They are recorded as additions to revenue.
• B)They are recorded as unearned revenues on the company's balance sheet.
• C)They are recorded as a current liability owed to the taxing authority.
• D)They are recorded as expenses in the same period as the corresponding sales revenue.

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