Barron Company Sold Goods for $883,500 on Account

question 65

Multiple Choice

Barron Company sold goods for $883,500 on account.The company operates in a state that imposes a 9% sales tax.What is the amount of the sales tax payable to the state?

• A) $79,515
• B) $39,758
• C) $19,879
• D) $159,030

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Definitions:

Cash Discounts

A reduction in invoice price offered by sellers to buyers as an incentive for early payment.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including payment due dates, interest rates, and repayment schedules.

Credit Period

The time frame granted by a creditor within which payment for a purchase must be made; typically used in commercial transactions.

Credit Risk

The risk of loss resulting from a borrower's inability to repay a loan or meet contractual obligations.