Unlimited Materials sold goods for $2,000 plus 6% sales tax to a charge customer,terms n/30.Which entry is required to record this transaction?

Question

Quizplus · Accepted Answer

The transaction involves a sale with sales tax, which needs to be recorded separately. The sale is made on credit with terms of n/30, hence creating an accounts receivable. Therefore, option A correctly records the transaction by debiting Accounts Receivable for the total amount due including sales tax ($2,120), crediting Sales Tax Payable for the sales tax amount deducted ($120), and crediting Sales for the merchandise amount sold ($2,000).

Unlimited Materials Sold Goods for $2,000 Plus 6% Sales Tax