Sales Taxes Collected from Customers Are Sent to the State

question 53

Multiple Choice

Sales taxes collected from customers are sent to the state at the end of each month.What journal entry is prepared?

• A)debit Accounts Receivable and credit Sales
• B)debit Sales Tax Payable and credit Sales
• C)debit Accounts Payable and credit Cash
• D)debit Sales Taxes Payable and credit Cash

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Definitions:

Ending Inventory

Ending inventory is the total value of goods available for sale at the end of an accounting period.

Net Markups

This term refers to the difference between the cost of a product and its selling price, minus any discounts or allowances.

Net Markdowns

The reduction in the selling price of goods, subtracted from the original or previous selling price, often to clear surplus inventory.