Abbey Co. sold merchandise to Gomez Co. on account, $35,000, subject to a sales tax of 5%. The cost of the merchandise sold is $24,500. When recording the general journal entry, how much should be credited to the liability account called sales tax payable?

Abbey Co. sold merchandise to Gomez Co. on account, $35,000, subject to a sales tax of 5%. The cost of the merchandise sold is $24,500. When recording the general journal entry, how much should be credited to the liability account called sales tax payable?

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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Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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