A company receives $200 for a sale,of which $8 is for sales tax and $12 is for excise tax.The journal entry to record the sale is:

Question

Quizplus · Accepted Answer

Option A is incorrect because it does not account for the sales tax and excise tax paid.
Option B is incorrect because it creates two new expense accounts for sales tax and excise tax, which are not required for this transaction. 
Option C is incorrect because it does not account for the sales tax and excise tax paid. 
Option D is the correct answer because it accounts for the sales tax and excise tax paid as liabilities (payable accounts). This accurately reflects the company's obligation to remit these taxes to the government. The Cash account is debited for the amount received, Sales Tax Payable and Excise Tax Payable accounts are credited for the amount of taxes collected, and the Sales account is credited for the net amount of the sale after taxes.

A Company Receives $200 for a Sale,of Which $8 Is