Read Each of the Following Transactions

question 66

Essay

Read each of the following transactions. Determine the accounts to be debited and credited.
A)Sold merchandise for $200 in cash plus sales tax of $14.
B)Collected $3,400 from credit customers on account.
C)Sold merchandise for $1,600 in cash plus sales tax of $112. There was a cash shortage of $6.

• A)Sold merchandise for $200 in cash plus sales tax of $14.
• B)Collected $3,400 from credit customers on account.
• C)Sold merchandise for $1,600 in cash plus sales tax of $112. There was a cash shortage of $6.

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Definitions:

Total Liabilities

The cumulative amount of debts or obligations a company owes to external parties, which can include loans, accounts payable, and bonds payable.

Total Assets

The sum of all assets owned by an individual or organization, including both current and non-current assets.

Owners' Initial Investment

The initial amount of money or resources contributed by the owners to start a business.

Profits

The profit made when the money earned from business operations is more than the expenses, costs, and taxes needed to maintain the operations.