General Lighting

During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.
-Refer to General Lighting. When the company records this transaction, what is the impact on the accounting equation?

Question

General Lighting
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During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.
-Refer to General Lighting. When the company records this transaction, what is the impact on the accounting equation?

Quizplus · Accepted Answer

The sale of batteries on credit increases assets (accounts receivable) by the total sale amount including tax, increases liabilities (sales tax payable) by the amount of the sales tax collected, and increases stockholders' equity (revenue) by the amount of the sale before tax.

General Lighting ​

General Lighting