Furniture World Is Required by Law to Collect and Remit

question 45

Multiple Choice

Furniture World is required by law to collect and remit sales taxes to the state.If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax,what is the journal entry to record the cash sales?

• A)Debit Cash $82,680;credit Sales $78,000;credit Sales Taxes Payable $4,680.
• B)Debit Sales Taxes Payable $4,680;debit Cash $73,220;credit Sales $78,000.
• C)Debit Cash $78,000;credit Sales $78,000;and record the taxes when paid.
• D)Debit Cash $78,000;credit Sales $73,320;credit Sales Taxes Payable $4,680.
• E)Debit Accounts Receivable $82,680;credit Sales $78,000;credit Sales Taxes Payable $4,680.

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Definitions:

MU ᵦ/P ᵦ Ratio

Represents the marginal utility of good B (MUᵦ) divided by its price (Pᵦ), used in consumer theory to analyze optimal consumption points.

TP or MP Curves

Total Product (TP) and Marginal Product (MP) curves are graphical representations in economics that illustrate the total output produced and the additional output from employing one more unit of a resource, respectively.

MR Curve

The marginal revenue curve, which shows how a firm's revenue changes with each additional unit sold.