During the first quarter of Year 1, the company sold 4,000 batteries on credit for $150 each plus HST of 6%.
-Refer to the figure General Lighting.When the company records a transaction to accommodate federal excise tax,what is the impact on the accounting equation?

Question

Quizplus · Accepted Answer

The transaction of selling batteries on credit increases assets (accounts receivable or cash) by the total sale amount including HST, increases liabilities (due to the HST collected which is owed to the government), and increases shareholders' equity (through sales revenue).

During the First Quarter of Year 1, the Company Sold