Yang Company sold merchandise for $10,000 cash. The event is subject to a state sales tax of 9%. Recognizing the sale will require Yang to

Question

Quizplus · Accepted Answer

Recognizing the sale will increase revenue (A) and assets (B) because cash is received. However, since the sale is subject to sales tax, Yang will also have to increase their sales tax liability as it is collected from the customer and held in trust until it is remitted to the state (C). Therefore, all of the answers are correct.

Yang Company Sold Merchandise for $10,000 Cash