Yang Company Sold Merchandise for $4,000

question 65

Multiple Choice

Yang Company sold merchandise for $4,000. The event is subject to a state sales tax of 9%. Based on this information, Yang would be required to

• A)Recognize sales revenue on $4,360.
• B)Recognize sales tax liability of $360.
• C)Recognize sales tax expense of $360.
• D)Recognize sales revenue of $3,640.

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Definitions:

Balance Sheet

A financial summary indicating a company's assets, outstanding liabilities, and the total equity of its shareholders at a determined point in time.

Understated

Describes financial statements or figures that are reported as less than their actual values.

Purchase Price

The amount paid or to be paid by the buyer to acquire a good, service, or asset.

Net Income

The total earnings of a company after deducting all expenses, taxes, and costs from total revenue.