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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