The city of Summerton has a sales tax rate of 8%. A local convenience store sells merchandise, and the customer pays a total of $38.34. What effect does this transaction have on total liabilities?a. Increase of $3.07.b. Decrease of $38.34.c. Increase of $2.84.d. No effect.

The city of Summerton has a sales tax rate of 8%. A local convenience store sells merchandise, and the customer pays a total of $38.34. What effect does this transaction have on total liabilities?a. Increase of $3.07.b. Decrease of $38.34.c. Increase of $2.84.d. No effect.

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

The city of Summerton has a sales tax rate of 8%. A local convenience store sells merchandise, and the customer pays a total of $38.34. What effect does this transaction have on total liabilities?
a. Increase of $3.07.
b. Decrease of $38.34.
c. Increase of $2.84.
d. No effect.

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