A company sells $180,000 (sales price) of goods and collects sales tax of 8%. What current liability does the sale create? A. Sales tax payable of $14,400 B. Sales revenue of $194,400 C. Unearned revenue of $14,400 D. None; the company collected cash up front

A company sells $180,000 (sales price) of goods and collects sales tax of 8%. What current liability does the sale create? A. Sales tax payable of $14,400 B. Sales revenue of $194,400 C. Unearned revenue of $14,400 D. None; the company collected cash up front

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company sells $180,000 (sales price) of goods and collects sales tax of 8%. What current liability does the sale create?

A. Sales tax payable of $14,400

B. Sales revenue of $194,400

C. Unearned revenue of $14,400

D. None; the company collected cash up front

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