A company receives $180 for a sale,of which $10 is for sales tax.The journal entry to record the sale is:

Question

Quizplus · Accepted Answer

The journal entry should include both the sales revenue and the sales tax payable, as the company will owe the government this amount. Therefore, the best choice is D, which shows Cash of $180, Sales Tax Payable of $10, and Sales Revenue of $170. Choice A is incorrect because it only reduces the sales revenue by $10 without recognizing the liability to pay the tax. Choice B is incorrect because it only records the cash received and not the full value of the sale. Choice C is incorrect because it does not account for the sales tax payable.

A Company Receives $180 for a Sale,of Which $10 Is