14 Which of the following represents the impact of a taxable

14) Which of the following represents the impact of a taxable cash sale of $400 on the accounting equation if the sales tax rate is 5%? A) An increase to cash for $420, an increase to sales tax expense for $20, and an increase to sales revenue for $400 B) An increase to cash for $400, an increase to sales tax payable for $20, and an increase to sales revenue for $380 C) An increase to cash for $420, an increase to sales tax payable for $20, and an increase to sales revenue for $400 D) None of these answer choices is correct. 15) Monthly remittance of sales tax: A) Reduces liabilities. B) Is a claims exchange transaction. C) Reduces stockholders\' equity D) All of these answer choices are correct.

Solution

Answer to 14)

(C) An Increase to cash for $420, an increase to sales tax payable for $20, and an inncrease to sales revenue for$400

Answer to 15)

(A) Monthly remittance of sales tax Reduces Liabillities.