Yang Company sold merchandise for $4,000. The event is subject to a state sales tax of 9%. Based on this information, Yang would be required to
A)Recognize sales revenue on $4,360.
B)Recognize sales tax liability of $360.
C)Recognize sales tax expense of $360.
D)Recognize sales revenue of $3,640.

Question

Quizplus · Accepted Answer

Yang Company would recognize a sales tax liability of $360, which is 9% of the $4,000 sales amount. The sales tax is collected from the customer and is not part of the company's revenue.

Yang Company Sold Merchandise for $4,000